Peninsula Energy secures Uranium sales contract with EU nuclear fuel buyer

• Peninsula Energy (ASX:PEN) discloses the execution of a new sales contract for the provision of uranium yellowcake through its wholly owned subsidiary, Strata Energy, the operator of the Lance Projects located in Wyoming, USA
• Under the agreement, the company is will sell 1.2 million pounds (Mlbs) of uranium over six years, commencing in 2028, to Synatom
• PEN last traded at 11.3 cents, at 10:30am AEDT

Peninsula Energy (ASX:PEN) has disclosed the execution of a new sales contract for the provision of uranium yellowcake through its wholly owned subsidiary, Strata Energy, the operator of the Lance Projects located in Wyoming, USA.

Under the agreement, the company is will sell 1.2 million pounds (Mlbs) of uranium over six years, commencing in 2028, to Synatom, a European nuclear fuel purchaser, contingent upon approval by the European Supply Agency (Euratom).

“The strength of the uranium market dynamics in recent months has allowed Peninsula to consider adding sales commitments with improved pricing structures to our sales portfolio,” Peninsula Managing Director and CEO Wayne Heili said.

“This new long-term agreement adds financial security to our uranium production facilities while capitalising on the current robust price environment. We are pleased to be establishing this relationship with another significant utility customer.”

The pricing structure includes both a base price (escalated) and market-priced elements.

Projections indicate that the resultant pricing is will surpass the forecasted production costs at Lance, outlined in the August 2023 Life-of-Mine Model (LOM Model).

This contract is expected to yield gross revenue ranging between US$88 million (AUD$135 million) and US$117 million throughout its duration.

The company foresees uranium production levels of 14.8 Mlbs during the same timeframe.

Beyond the financial aspects, the deal also underscores the significance of Australia’s role in supplying uranium to Europe.

Against the backdrop of geopolitical tensions in Russia, and considering that Kazakhstan has been the largest global producer of uranium, this agreement helps diversify the uranium supply chain, positioning Australia as a key player in the global uranium market.

PEN last traded at 11.3 cents, at 10:30am AEDT.