Peninsula Energy Ltd (ASX:PEN) has signed a new uranium toll milling agreement for the Lance Projects in Wyoming, US with its existing toll milling service provider Uranium One Americas, Inc.
The agreement commences on January 1, 2019 and has an initial term of 5 years with the ability for Peninsula to extend the term at its option for an additional 5-year period thereafter.
Since production operations commenced at the Lance Projects in December 2015, Peninsula has transported uranium-rich resin to the Irigaray Central Processing Plant owned by Uranium One Americas, Inc.
At Irigaray, uranium is eluted from the resin, and is then precipitated, filtered, dried and drummed.
Commercial terms of the new toll milling agreement have been modified to reflect conditions in the global uranium market and the production ramp-up of Peninsula following the planned transition to low pH operations at the Lance Projects.
The net effect of the revised commercial terms is a projected average toll milling cost rate that is less than the rate used in the recently completed low pH feasibility study.
Peninsula's managing director and chief executive officer Wayne Heili said: "We are very pleased to have negotiated a new agreement with the team at Uranium One Americas, Inc.
"This new agreement allows the existing process plant infrastructure at Irigaray to continue to be utilised, allows Peninsula to defer the requirement to invest near term capital in additional uranium processing at the Lance Projects and delivers a more favourable commercial outcome than the previous agreement."