Boss Energy’s ambitious growth strategy fuelled by investor enthusiasm

Boss Energy’s (ASX: BOE) upcoming uranium production opportunity at Honeymoon and recent growth strategy has received a big “thumbs up” from investors in the form of a significantly oversubscribed share purchase plan (SPP).

The SPP, targeting $10 million, closed with $29.6 million in applications.

Boss Energy’s managing director Duncan Craib said the board had elected to increase the offer size by only $5m to $15m so as to minimise the dilution for retail shareholders.

Mr Craib said the additional funds raised in the SPP will be allocated to growth opportunities for the company.

Market’s show of faith

“The Boss team has been humbled by the extraordinary show of shareholder support for our share purchase plan and we sincerely thank all those who participated,” Mr Craib said.

“The number and value of applications is a strong endorsement of our growth strategy for Boss becoming a near-term multi-mine uranium producer in the tier 1 jurisdictions of Australia and the US.”

“We move into 2024 in an exceptional position, with a robust balance sheet and both Honeymoon and Alta Mesa uranium projects continuing on time and on budget for 1H 2024 production, with significant potential to grow their existing resources.”

US sales deal

In late December, the potential of Boss Energy’s rapid growth strategy was further validated with the company entering into its first binding sales agreement for the supply of uranium from the Honeymoon project in South Australia.

The restart of the Honeymoon project, Australia’s first new uranium operation for a number of years, will see the historic development come into production in early 2024.

Under the offtake agreement, Boss will sell 1 million pounds of uranium to an unnamed major publicly-listed US power utility over a seven-year period commencing in 2025 and continuing until the end of 2031.

South Texas project acquisition

The Honeymoon offtake agreement came in a highly active period for Boss.

Earlier in the month, the company agreed to pay $60m in cash to acquire 30% of enCore’s high-grade Alta Mesa In Situ Recovery project in South Texas.

The Alta Mesa project has 3.41Mlb at 0.109% triuranium octoxide measured and indicated and 16.97Mlb at 0.120% triuranium octoxide inferred compliant resources.

It also offers significant exploration upside potential and drying capacity to expand the 1.5Mlb-capacity plant after the expected recommencement of production in 1H 2024.

Successful capital raising

The company’s busy December included the successful raising of $205m through a single-tranche placement of new fully paid ordinary shares to institutional, professional and sophisticated investors at an issue price of $3.95 per share.

Proceeds raised from the offer were allocated to fund the Alta Mesa transaction, the Alta Mesa project restart, exploration activities and working capital, enCore equity investment and spend on prompt fission neutron technology as well as production and resource growth initiatives for the Honeymoon project.