As the uranium price continues rising, Boss Energy (ASX: BOE) is making “strong” progress towards re-starting its Honeymoon uranium mine in South Australia.
The company revealed front-end engineering design (FEED) work was now more than 50% complete and is expected to finish in the March quarter of next year.
Boss managing director Duncan Craib described the company’s progress at Honeymoon as “outstanding”, saying the project was set to be Australia’s next uranium producer.
“Our strategy is aimed at ensuring Boss can move from a final investment decision into execution and production as rapidly as possible.”
Mr Craib said this would enable the company to capitalise on the rising uranium price at the right moment.
Project execution plan to guide Honeymoon re-start
To develop the project as fast as possible following the investment decision, Boss has approved the project execution plan (PEP) for the re-start.
The PEP outlines objectives, processes and strategies for the company and its appointed engineer.
It is expected the plan will provide a framework to ensure project expectations and key performance indicators are met.
Additionally, it will be the governing control document for all parties managing the project to ensure Honeymoon meets production targets.
Power and wellfield design
To safeguard Honeymoon’s power requirements, Boss has executed a high-voltage power connection agreement for the operation.
New South Wales Government-owned Essential Energy will provide the power for Honeymoon via an overhead transmission line from the national electricity grid via old mining town Broken Hill.
Boss noted that upgrading Honeymoon’s nameplate production of 2.45 million pounds per annum required a new high-voltage connection agreement.
Meanwhile, optimisation of the wellfield design for the project has been completed. The wellfields will now have a “very precise production zone” that transmits the injected leach solution into contact with target ore horizons.
The improved design has the advantage of minimising wellfield development costs and providing a flexible layout for optimising leach performance.
Feasibility studies have estimated to re-start Honeymoon the capital requirement would be US$80 million, which Boss says is industry competitive.
The initial mine life is 11 years for total production of 21.81Mlb – a lot less than the 71.67Mlb in resources. Ongoing exploration is expected to expand this figure even more.
Life of mine revenue from the operation of US$1.28 billion is anticipated and this will produce about US$580 million in pre-tax cash flow.
Boss estimates Honeymoon will be producing within 12 months of the final investment decision.