Boss Energy to produce uranium from Honeymoon as next bull market emerges

Boss Energy (ASX: BOE) has reiterated it is fully-funded and remains on track for first uranium production from its Honeymoon mine in South Australia to take advantage of the next uranium bull market.

The company has $103 million in cash on hand to fund ongoing development at the project site, along with a strategic uranium stockpile worth US$63.13 million (A$96 million) based on current spot prices.

Commenting on progress at Honeymoon, Boss managing director Duncan Craib said it was “proceeding to plan”, including delivery of critical equipment, wellfield development and the evaporation pond.

“Committed expenditure now totals A$65 million, representing 62% of the total capital cost budget, meaning we are currently scheduled to be on track for first production as planned in the December quarter of this year.”

He said the timetable was designed to ensure Boss is producing from Honeymoon at the start of the next uranium bull market.

“With the outlook for the uranium price continuing to strengthen amid growing use of nuclear power and a shift away from Russian uranium, we are perfectly positioned as we prepare to move into the final stages of construction ahead of commissioning,” Mr Craib added.

Advancing Honeymoon to first production

In re-starting Honeymoon, more than 123 procurement packages have been issued and remain on track for delivery in-line with schedules.

The most critical pieces of equipment for the mine’s re-start are the ion exchange columns and Boss noted they would be delivered as planned.

Additionally, a recruitment program is underway to build a “highly experienced operational and project team”.

As part of this, all senior positions have been filled, with the exception of those relating to the processing plant.

Boss has also grown its full-time workforce to 62 employees.

The company also continues to mobilise construction personnel, with contractors assisting with drilling, earth moving and electrical works.

Contractors remain under the direction of Boss employees.

Other milestones at Honeymoon, include the three start-up wellfields progressing ahead of schedule. The 60,000 cubic metres of excavation works for the 25,000 tonne gypsum pond have been completed and the pond is ready for installation of lining.

This pond will have a five-year life.

Uranium market fundamentals

Mr Craib says the uranium market fundamentals are the strongest they have been since the early 2000s, with nuclear power recognised as a clean energy source critical to helping the world decarbonise.

Additionally, with Russia’s invasion of Ukraine, security of supply has been highlighted and is now at the forefront of most countries worldwide.

This includes limiting dependence on an individual company or geographical area.

“If utilities continue to work towards reducing dependence on Russian supplies, uranium demand could increase significantly during 2023, leading to higher term prices.”

He said the increasing tightness in the uranium market augurs well for prices increases in the second half of the year.

“ we are set to close in on production in an increasingly favourable environment for uranium, especially product which is sourced from western countries.”

Honeymoon has a resource of 52.4 million tonnes at 620 parts per million uranium for 71.6 million pounds.

The project is poised to become Australia’s next uranium producer to meet expected global demand.