Boss Energy moves closer to first uranium production from Honeymoon project re-start

Boss Energy (ASX: BOE) has reported a “highly productive” quarter which saw it move closer to its target of achieving first uranium production before year end at the re-started Honeymoon project in South Australia.

Committed expenditure at the project now totals $83 million and represents 79% of the budgeted total of $105 million, excluding a $7.6 million contingency.

Key achievements during the quarter were the completion of the first wellfield and related gypsum pond, as well as continued progress at the almost-finalised water treatment plant.

The project comprises three startup wellfields which involves 86 drilled and cased new production wells and 31 re-completions of existing wells.

Boss has finalised pressure testing and line flushing of the first wellfield and commissioned a 3 kilometre-long liquid disposal line and associated pumps and instrumentation.

The next stage is to run structured pumping tests to ensure the pump set-points are correct, and the wells are hydraulically connected to one another in the orebody.

This will pave the way to start wellfield flushing and commissioning.

Ground and raw water

Ground water extraction and construction of the new raw water system is also on target to begin delivering to the processing plant in coming weeks.

The necessary reagent areas are in the final stages of preparation for receiving their first fill.

All critical path items remain on track for delivery in line with the project schedule, with more than 170 procurement packages issued to date.

The packages awarded are in line with cost estimates outlined in the project’s front-end engineering design (FEED) study released in early 2022.

On budget and schedule

Managing director Duncan Craib said June activities had kept the re-start project on budget and schedule.

“We are extremely encouraged by the strong progress being made on-site and the ongoing tightness in the uranium market, which augurs very well for the spot price over coming months,” he said.

“We are completely focused on executing our plan to become Australia’s third uranium producer in the coming quarter and we are experiencing a rising level of inbound inquiries in respect to offtake and long-term contracts generally.”

Fully-funded to production

Boss remains fully-funded through to production with cash on hand of $89 million, which excludes a fully cash-backed environmental bond of $8.9 million.

It also holds inventory of 1.25 million pounds of uranium concentrate, which has a current spot market value of $106 million.

Combined with unrestricted cash, Boss has liquid assets of $195 million, no long-term debt obligations and a remaining estimated capital spend of $68.8 million.

Mr Craib said strong financials leave the company well-positioned to transform Honeymoon into production.