Boss Energy targets final investment decision next month for Honeymoon uranium mine re-start

Boss Energy ASX BOE Honeymoon Uranium Project Final Investment Decision 2022 South Australia
Boss Energy managing director Duncan Craib says the company has “entered the June quarter in a highly enviable position with preparations underway to make a final investment decision and begin negotiations on offtake contracts”.

Boss Energy (ASX: BOE) is readying to make a final investment decision early next month for the re-start of its flagship Honeymoon uranium mine in South Australia after workstreams have progressed “more rapidly” than expected.

The company’s managing director Duncan Craib said work on the mine re-start had advanced faster than expected.

“During the quarter, we completed the FEED (front end engineering design) study [for Honeymoon], which confirmed that the cost estimates in the enhanced feasibility study remain accurate.”

He said this achievement was followed by a heavily oversubscribed $125 million equity raising.

“In parallel with these major achievements, the uranium price continued to increase sharply.”

“As a result, the value of our 1.25 million pound stockpile of uranium has nearly doubled to $95 million since we acquired in in March 2021.”

Mr Craib added the combination of the valuable uranium stockpile and its successful equity raising provides the funding required to first production and cash flow at Honeymoon.

“As a result of this rapid progress on numerous fronts, we have entered the June quarter in a highly enviable position with preparation underway to make a final investment decision and begin negotiations on offtake contracts.”

In readiness for the final investment decision, Boss has approved the project execution plan for re-starting the mine.

This plan outlines the objectives, processes and strategies to be implemented as the project is developed.

Honeymoon economics

The FEED study that was completed in the March quarter estimated capital development costs of $113 million for re-starting Honeymoon, which includes an 8% contingency.

First uranium output is expected within 12-18 months of the final investment decision.

Nameplate production of 2.45Mlb of uranium annually has been estimated over an initial 11 years.

Under the enhanced feasibility study, Honeymoon has a 47% internal rate of return based on a US$60 per pound uranium price.

Drilling builds inventory

In line with Boss’ strategy to build resources at Honeymoon and extend the mine life, drilling has continued at the project.

The project’s current resource totals 71.67Mlb, with the production re-start economics based on only 35.9Mlb of this estimate.

In February, Boss revealed drilling results that could underpin a higher production rate, as well as extending mine life.

Highlight intercepts outside the current resource were 0.75m at 1,715 parts per million uranium, 1m at 1,727ppm uranium and 2.25m at 774ppm uranium.

OTCQB listing and uranium market outlook

To boost the company’s visibility in the US and internationally, Boss listed on the OTCQX exchange under the symbol BQSSF in February.

The listing comes amid a shake up in the energy sector with Russia’s invasion of the Ukraine, growing unrest in Kazakhstan and the resulting economic sanctions and supply shortages.

These events led to what Boss describes as a “pivotal period” for the uranium sector and Boss as an emerging miner as countries fast-track the transition to independent and clean energies.

The uranium price is currently sitting around US$55/lb, which is an increase from US$42/lb in December last year.

Boss noted the uranium price will “likely continue rising”.

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