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  • Peninsula Energy (PEN) could get a huge boost if the new guidelines from the U.S. Nuclear Fuel Working Group’s (NFWG) strategy report are enacted
  • The collaborative interagency report details a strategy to shore up the production and supply of nuclear fuel in the U.S.
  • Among the recommendations are a five-fold increase in the U.S. nuclear fuel stockpile and deregulation to allow easy land access for uranium production
  • As a U.S.-based producer, Peninsula stands to gain much, especially if an embargo on Russian and Chinese imports decreases competition
  • Peninsula Energy is down in early trade, dropping 13.6 per cent to 19 cents a share

Peninsula Energy (PEN) stands to gain a huge boost if the new guidelines from the U.S. Nuclear Fuel Working Group’s (NFWG) strategy report are enacted.

The brief

The collaborative interagency report details a strategy to shore up the production and supply of nuclear fuel in the U.S. This is aimed at ensuring long-term stability in the energy sector and making sure the U.S is producing enough uranium “in-house” to guarantee its stockpiles into the future.

Among the key recommendations are a five-fold increase in the U.S. nuclear fuel stockpile and industry deregulation to allow the easy expansion of land access for uranium production.

What’s in it for Peninsula?

Peninsula wholly owns the Lance uranium projects in Wyoming, U.S. Given the NFWG is recommending the U.S. have a top-to-bottom strategy for nuclear fuel production on home soil, any U.S.-based producer stands to gain much from the strategy’s implementation.

The strategy recommends the purchase of 17 to 19 million pounds (approximately 7.7 to 8.6 million kilograms) of U.S.-produced uranium over the next ten years, starting immediately. An artificially inflated demand increase like this would mean Peninsula could operate at maximum capacity and most likely find an immediate home for its product.

Given there are also recommendations to severely limit or suspend imports from Russia and China, well … we all know what happens when demand increases on a limited supply of something.

Up and atom

Peninsula recently completed a feasibility study in switching its Lance operations from an alkaline in situ recovery (ISR) operation to a low pH ISR operation. This change in recovery method would make Lance more profitable by lowering costs, and enable Peninsula to become a globally competitive uranium producer.

This increased profitability coupled with increased local demand in the U.S. could give PEN a serious boost over the next decade.

Peninsula Managing Director and CEO Wayne Heili says the NFWG report has big implications for the company.

“Peninsula is in an excellent position to rapidly re-start production from our two fully-developed mine units at our flagship Lance Project, using the low pH method, to supply these needs.”

“This looks to be a very good outcome for Peninsula and all U.S. uranium producers.”

Peninsula Managing Director and CEO Wayne Heili

In the Trump era of environmental deregulation and increased focus on “made in the U.S.”, one might imagine the NFWG recommendations would be taken up in full.

For Peninsula, the added insurance of a ten-year, US$1.5 billion investment in nuclear fuel stockpiles means Lance could be virtually guaranteed its maximal production would be snapped up by the Department of Energy at a tidy profit.

In aiming to become globally competitive via the low pH ISR conversion at Lance, Peninsula might have stumbled on a gold mine. Given it most likely won’t even be competing with Chinese and Russian producers, if Lance was feasible before, now it’s the bomb.

Peninsula Energy is down in early trade, dropping 13.6 per cent to 19 cents a share as at 10:45 am AEST.

PEN by the numbers
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