Since mid-2015, Peninsula Energy Limited and Strata Energy Inc. has been party to a resin processing agreement under which loaded resins generated at the Company's Lance Projects (Lance) are treated at Uranium Energy Corp.'s (UEC) Irigaray Central Processing Plant to produce a finished yellowcake product. Peninsula has received notification that UEC is terminating the Agreement. The Agreement contains a mutual 270-day notice of termination provision.

Considering the unanticipated notice of termination, Peninsula will not plan to use UEC's resin processing capacity during the remaining term of the Agreement. The Company has instead adopted a plan to accelerate the in-house development of an expanded and fully optimised production plant to produce a high-quality yellowcake product free of impurities, aligning with the re-start of production at Lance. The decision to accelerate the in-house development of resin processing and yellowcake production, as outlined in Stage 2 of the 2022 Definitive Feasibility Study (DFS), is likely to result in a significant delay to the previously announced imminent re-start of production at Lance.

Initial analysis indicates the revised plan will ultimately deliver a faster ramp-up to full capacity under a more efficient and capital-effective operation. Implementing in-house processing from the start of production will ensure the Company can independently execute its business plan which includes producing uranium at an expanded rate, without a reliance on services from industry competitors. The Ross process plant at Lance was constructed in 2015 as a satellite production facility.

Although fully licensed for production of a finished uranium yellowcake product, the facility was only built to produce uranium-bearing ion-exchange resins. The prior business strategy, based on the 2022 DFS for the Ross & Kendrick areas of Lance, anticipated a move toward in-house resin processing following an approximate two-year period of third-party processing. Work has now started on requirements to bring forward this timetable for the construction of additional process plant circuits to enable in-house yellowcake production.

Having been on the verge of a production restart, the Lance team will continue to advance plant site preparation and wellfield development activities for the future restart of commercial uranium production operations. A full evaluation of the capital and timing requirements of the revised business plan is underway and will be advised to the market once completed. Peninsula remains in a strong pre-production position.

As at 30 June 2023, Peninsula had a cash balance of USD 21.5 million and a strategic inventory balance of 210,000lbs U3O8 valued at USD 11.8 million (UxC 30JUN2023 price $56/lb). Combined, Peninsula has liquid assets of USD 33.4 million and no long-term debt obligations.