Boss Energy welcomes positive news from Texan uranium acquisition target

Up-and-coming Australian uranium miner Boss Energy (ASX: BOE) has welcomed news of a number of positive developments at its proposed Alta Mesa project acquisition in Southern Texas.

Boss announced in early December that it had entered into a master transaction agreement with American firm enCore Energy (TSX-V: EU) to acquire a 30% stake in Alta Mesa.

While the deal is still going through the normal paperwork and approvals, Boss has received reports that enCore has successfully completed important drilling and refurbishment activities at the project.

enCore has also reported it is making good progress with work at the Alta Mesa in-situ recovery (ISR) uranium central processing plant (CPP).

It has confirmed that the work is on schedule for the planned early 2024 resumption of uranium production at Alta Mesa.

enCore reported that it has met most of the key objectives for the refurbishment of the processing circuits necessary for the imminent planned restart of the Alta Mesa CPP.

Prior to the restart, enCore will require further work including final inspection of the ion exchange columns, testing the precipitation tanks, completing tie-in of the scrubber system and installation and testing of the process circuit instrumentation.

At the same time enCore is advancing refurbishment and testing work for the yellowcake drying circuit upgrades with the filter press support infrastructure on site.

Well-field drilling progress

enCore has also provided a positive update on well-field drilling with increasingly positive high-grade results from a delineation drill program within production authorisation area 7 (PAA-7).

The drilling operations, which commenced in March 2023, are delineating the roll-front mineralisation within PAA-7 and are advancing rapidly with 78 holes drilled since the previous update.

As at 4 January 2024, a total of 445 drill holes have been completed. There are currently six drill rigs in full operation at the Alta Mesa CPP and well-field, with contracts pending for three more.

enCore continues to undertake refined delineation drilling within PAA-7 to establish the exact pattern of injection and recovery wells from which to maximize production efficiency.

To date, 99 holes have been cased with 36 injection and production wells completed. Two drill rigs are currently casing wells, with another focused on well-completion activities.

enCore has confirmed that an additional drill rig will be moving to well-completion activities in the coming weeks.

The company is installing injection and production wells in PAA-7.

Installation of the electrical transmission lines necessary for initial start-up has been completed and pipelines are currently being laid connecting the well-field to the Alta Mesa CPP.

Delivery of the necessary equipment for the start-up of production in the PAA-7 well-field is on schedule.

Significant upside

Boss has offered approximately $913 million in cash to enCore to acquire the 30% stake in the high-grade uranium ISR mine.

The Alta Mesa CPP and well-field hosts a fully licensed and constructed ISR uranium plant, located on more than 200,000 acres of private land.

Total operating capacity at the Alta Mesa CPP is 1.5 million pounds of uranium per year.

The Alta Mesa CPP historically produced nearly 5Mlb of uranium between 2005 and 2013, when full production was curtailed as a result of low uranium prices.

The restart is timed to commence as global uranium prices are surging.