(MENAFN - ProactiveInvestors - Australia) Peninsula Energy (ASX: PEN) has taken a major step forward in securing US70 million in bonds to partially fund development of its Lance Projects in Wyoming.
The Crook County Board of Commissioners has voted unanimously to provide authorisation to proceed toward the issuance of the Crook County Wyoming Industrial Development Revenue Bonds.
Peninsula's 70 million in requested Bonds represents 47% of the 148.1 million required to construct the Lance Projects Central Processing Plant, CPP expansion, Satellite Ion Exchange Plant
and initial well-field development.
The recommended purchase of the bonds will now be reviewed by the Wyoming Business Council, which will conduct a thorough due diligence review of the application, before it proceeds to approval by the State Attorney General, State Treasurer, and ultimately the Governor.
The bonds are allocated under the Industrial Development Projects Act, which allows cities and counties in Wyoming to issue Bonds to promote economic growth within the state, and to create jobs for in-state residents.
Funding of up to 600 million for the program is made through the State Permanent Mineral Trust
Fund at an interest rate equal to the present rate of return for the Fund.
In addition to the Bonds, Peninsula continues to advance several complimentary debt funding opportunities which are progressing on schedule and according to plan.
Peninsula had been required to demonstrate that the Lance Projects provide a clear and factual economic benefit to the County and local communities.
These included creating new jobs; expanding the tax base and creasing sales, property or other tax revenues to the County; maintaining and promoting a stable, balanced and diversified economy; and
promoting or developing use of agricultural, manufactured, commercial or natural resource products within or without the state.
Peninsula Energy is targeting production from its Lance Projects in Wyoming in the second half of 2013 at an initial rate of 750,000 pounds of uranium per annum, ramping up over three years to 2.2 million pounds per annum.
The Lance Projects cover an area of over 120 square kilometres within which there is a combined total of 312 line kilometres of known stacked roll fronts.
Of this total, only a small percentage has been explored, with over 90% of the drilling concentrated within the more advanced Ross and Barber resource areas.
Based on the historic conversion rate from roll front length to a drill-defined resource, the mineralised potential of the Lance Projects, which is in addition to the JORC-compliant resource, is assessed at between 104 and 163 million pounds of uranium.
This further confirms Proactive Investor's views that Peninsula Energy remains undervalued at current price.