(MENAFN - ProactiveInvestors - Australia) Peninsula Energy (ASX:PEN) has logged a JORC resource of 50.1 million pounds of eU3O8 at the Karoo Projects in the Cape Provinces of South Africa.
Executive chairman Gus Simpson said "The Board is excited about the Karoo Projects maiden resource and drilling is now underway to convert some of the other areas of historic mineralisation to JORC status.
A scoping study has commenced and the company intends to quickly progress the projects to feasibility."
This estimate includes an indicated resource of 15.7Mlbs grading 1,020ppm eU3O8 above a cut off of 600ppm eU3O8 and Inferred Resource of 34.4Mlbs eU3O8.
The estimate is based on a historical database comprising 7,163 holes and an additional 1,245 holes probed or drilled by Peninsula since 2011, including 16 diamond holes and 730 reverse circulation holes.
Previous exploration conducted by Esso Minerals Africa (Esso), JCI and Union Carbide at the Karoo Projects in the 1970s included 1.6 million metres of drilling together with trial open-cut and trial decline mining programs.
Based on the results of these programs, the previous explorers estimated approximately 99Mlbs U3O8 and 61Mlbs Molybdenum (Mo).
Peninsula focussed on bringing approximately half of this total, for which drilling data is available, to a standard suitable for reporting under the Joint Ore Reserves Committee guidelines.
The remainder, comprising up to 48Mlbs U3O8 in historical estimates, which drilling data is not available, will be targeted in on-going exploration with the objective of converting as much as possible to JORC Code-compliant resources.
Peninsula has a 74% interest in a total of 42 prospecting rights (PR's) covering 7,800 km of the main uranium-Molybdenum bearing sandstone channels in the Karoo Basin.
Completion of the acquisition of some of these prospecting rights is subject to conditions precedent as detailed in the previous Karoo announcement. The residual 26% interest remains with the BEE partners as required by South African law.
In the Eastern Sector, Peninsula has freehold ownership over an area of 322 km2 which covers a significant proportion of the reported resource and allows unlimited surface access.
Interestingly, significant amounts of Molybdenum are associated with the known uranium deposits.
Currently, Peninsula does not have sufficient data with which to estimate a Molybdenum resource. However, historic information and studies suggest a ratio of 1:0.6 U3O8/Mo.
This amount of Molybdenum potentially associated with U3O8 is materially and commercially significant.
The Karoo Projects cover a significant proportion of the Karoo Basin Permian sandstones, which are believed to represent an Exploration Target of between 250 and 350Mlbs U3O8.
Consultants DRA International (Cape Town) have been engaged to undertake an initial scoping study.
Given the significant amounts of historic mining and metallurgical data, Peninsula anticipates that this will accelerate the scoping study process.
Historically, many of the known Karoo deposits were evaluated in isolation. With consolidation the various deposits offer several potential large-scale development options, including simultaneous open pit, adit-access and decline-access mining operations feeding through a single central processing plant.
Following additional sampling and metallurgical test work, Molybdenum will also be included in future mining and recovery optimisations.
The large combined area of prospecting rights cover the most prospective sedimentary channels of the Karoo Basin and hence provides potential to increase the total resource inventory beyond the known resources.
On a EV/pounds comparison with its peers, Peninsula was undervalued based on its Lance projects in the U.S. Add in the new resource in Karoo and the undervaluation becomes more acute. Proactive Investors has increased its target price for PEN to 0.10 per share.