Peninsula Energy (ASX: PEN; US-OTC: PENMF) saw its shares plummet 25% on Friday after lowering the uranium production forecast for its Lance project in Wyoming.
The Western Australia-based company now expects the project to produce 600,000 lb. of uranium oxide (U3O8) during its ramp-up year in 2025, down from earlier projections of 700,000 to 900,000 pounds.
The company has been working to restart the in-situ recovery (ISR) uranium project, a producer from 2015-2019, based on a 2023 mine plan.
The company attributed the revised guidance to delays in preconditioning the newly developed header house at Mine Unit 3, though it said these issues have now been resolved. CEO Wayne Heili said that the setbacks are limited to the initial ramp-up phase and will not affect production targets for 2026 and 2027, which remain unchanged.
“While some aspects of the project development are slightly lagging earlier projections, it is pleasing to know there are no indications that the impacts will extend beyond the initial ramp-up phase,” Heili said in a news release.
The Lance project is slated to restart production before the end of next month and holds a resource of 53.7 million pounds of uranium oxide, positioning it as one of the largest uranium projects in the United States.
CEO to step down
Peninsula also announced that Heili will step down next year.
Heili’s decision to step down comes after “considerable reflection” and a desire to adopt a “more moderately paced lifestyle” than his current role demands, the company said.
Peninsula is also in the final stages of hiring a new chief operating officer and expects to announce the appointment soon.
A 2022 definitive feasibility study for Lance estimated a life-of-mine capital cost of $290.6 million. Initial operations will need up-front capital of $2.7 million, with wellfield replacement and sustaining capital expenditures of $16.3 million.
Peninsula Energy currently has a market capitalization of $142 million.
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