(Peninsula Energy 100%)

Lance holds a defined JORC Compliant uranium mineral resource of 53.6 million pounds U₃O₈. Lance was licensed and constructed by Peninsula’s wholly owned US subsidiary Strata Energy Inc (Strata), with commercial uranium production operations commencing in 2015.

Commercial alkaline in-situ recovery (ISR) operations were suspended mid-year 2019 to allow the on-site team to focus on preparing for a transformation of the Project process chemistry applications. Over the 2018 to 2020 period, the Strata team successfully obtained the necessary amendments to its regulatory authorisations which allow Lance to operate using a low pH ISR process in addition to the originally authorised alkaline ISR process.

Approximately 57% of uranium produced globally in 2019 was extracted via the low pH ISR process. Companies which utilise this process populate the lowest quartile of cash costs for global uranium producers. Importantly, Lance is the only US-based uranium project authorised to use this industry leading method.

Laboratory tests using a low pH extraction solution have been conducted on Lance core samples since early 2017. The test protocols were designed to simulate the successful low pH ISR processes utilised in Australia and Kazakhstan.

Initial agitation leach tests with low pH solutions at Lance produced positive results, which led to a programme of column leach tests being conducted in 2018 and 2019. Column leach tests require a significantly longer time duration and are more costly than agitated leach tests, however, the design of the column test is regarded as more representative of the in-situ environment.

Overall, the laboratory testing results indicated that a low pH process would significantly benefit the Lance resource recovery rates, while also potentially improving the overall project cost profile.

A feasibility study was completed in September 2018 (the 2018 FS), which supported this conclusion.

The laboratory work was further validated in CY2019 by the positive results of a field leach trial (2019 FLT) conducted in an already mined area of Lance. The 2019 FLT focused on the impact of the acidification and neutralisation stages on mining and aquifer restoration, rather than technical optimisation. Subsequently, the Company has evaluated the technical performance of the 2019 FLT and has concluded the following:

1. Low pH ISR has been demonstrated to increase the resource recovery rates in an area at Lance that was previously mined to effective depletion using alkaline ISR processes
2. The operating cost and uranium recovery assumptions utilised in the 2018 Low pH Feasibility Study were reasonable and could be substantiated through the results of the 2019 FLT
3. The 2019 FLT was not operated to the economic endpoint of uranium recovery
4. Groundwater restoration can be effectively accomplished following active low pH ISR operations
5. Fine solids are generated during the process of lowering and raising the aquifer pH, as is typical in low pH ISR operations. The removal of the solids from the process stream could enhance the overall performance of the uranium extraction and recovery systems

Following the completion of the 2019 FLT, Peninsula undertook an evaluation of the entire body of low pH research and technical work which had been completed. It was recognised that an emphasis was placed on demonstrating the improvement in recovery and uranium grades over the alkaline chemistry and that little laboratory work had been completed on core samples obtained from fresh areas that were not affected by previous alkaline ISR operations. The Company determined that additional laboratory testing could provide valuable insight into potential process optimisation concepts.