The Peninsula Energy Ltd (ASX: PEN) share price is having a bumper day, surging 19.57% to 27.5 cents.
Peninsula Energy owns the Lance Uranium Projects in Wyoming, in the United States. The company is currently transitioning its production method from alkaline to an industry-leading low pH in-situ recovery process.
According to Peninsula Energy, companies that utilise this process populate the lowest quartile of cash costs for global uranium producers.
Peninsula Energy share price jumps on uranium boom
The broader ASX-listed uranium sector is surging on Wednesday following a strong overnight move from international uranium peers.
The largest ASX-listed uranium player, Paladin Energy Ltd (ASX: PDN), is currently up 23.47% to 90.8 cents.
The strength across the uranium sector was reflected through the strong overnight performance of the Global X Uranium ETF. The Global X ETF jumped 11.92% on the back of its highest ever volume since inception.
In addition, uranium spot prices have rallied by around US$2.75/lb or 7.3% to US$40.5/lb overnight, according to Numerco.
How does this impact Peninsula?
Peninsula Energy made the decision to raise $15 million in May to fund its purchase of 300,000 pounds of uranium at US$31.35 per pound.
Management believed this acquisition of physical uranium was “strategically aligned with the planned preparations for the Company’s flagship Lance Project transition to low pH ISR operations.”
As well, it was a potential “source of funding for the restart of operations at Lance following a final investment decision.”
With uranium prices holding above US$40/lb, this means that Peninsula is sitting on a tidy $2.75 million profit for its physical uranium investment.
Peninsula Energy share price in 2021
The Peninsula Energy share price has boomed in 2021. Peninsula Energy shares are up more than 120% year to date thanks to the resurgence of uranium spot prices.
Peninsula marked a 2.5-year high of 35 cents on 15 September.