Uranium

Boss Energy cements the title as Australia's next uranium producer

Wed 01 Jun 22, 10:23am (AEST)
Uranium 1 Nuclear
Source: iStock

Stocks in article

boe
MktCap:
-

Commodities in article

Share article

Key Points

  • The Honeymoon Project is on track for first production in the December quarter of 2023
  • The project is fully funded and Boss has no debt
  • The project has a pre-tax NPV of US$309m at a uranium price of US$60/lb

Boss Energy (ASX: BOE) has cemented its title as Australia’s next uranium producer, having approved a Final Investment Decision for its Honeymoon Project.

Boss said Honeymoon remains on track for first production in the December quarter of 2023 and expects to ramp up to a steady-state of 2.45m lb within 3 years.

“We are fully-funded with no debt, fully-permitted and extensive infrastructure in place. Our front-end engineering studies are completed and we are ready to order key equipment and start construction immediately,” said Boss Managing Director Duncan Craib. 

“This puts us in an extremely strong negotiating position with utilities and ensures we can capitalise on the looming uranium supply deficit.”

Boss has no debt and raised $125m in March 2022 to fund project capital costs. The company also has a strategic 1.25m lb uranium stockpile valued at $59.4m (based on a spot price of US$47.5/lb as at 31 May).  

Project economics

Boss Energy completed a Front-End Engineering-Design study in the March quarter, which confirmed that the cost estimates in its June 2021 Feasibility Study were accurate. 

  • Nameplate production of 2.45m lb per annum

  • All-in sustaining cost of US$25.60 over life of mine

  • Potential to extend beyond initial 11-year mine life 

At a uranium price of US$60/lb, the project will have a pre-tax NPV of US$308.8m. 

Uranium prices

Uranium prices have slumped to US$47/lb from recent highs of almost US$65/lb.

Prices have mostly come under pressure due to broader macro headwinds such as volatile financial markets, rising interest rates and recession fears.

2022-06-01 09 45 07-Uranium - 2022 Data - 1988-2021 Historical - 2023 Forecast - Price - Quote - Cha
Source: TradingEconomics

Upside drivers

According to Boss Energy's March capital raising presentation, potential value add catalysts for Honeymoon include:

  • Resource expansion from nearby Gould's Dam and Jason Projects (combined resource of 36m lb of uranium)

    • Both projects are within pumping distance of Honeymoon's processing infrastructure

  • Potential increase of 35% to current annual production rate

  • Possible improved offtake terms for larger volumes

2022-06-01 10 03 27-Boss Energy Ltd (ASX BOE) Share Price - Market Index
Boss Energy share price chart

 

Written By

Kerry Sun

Finance Writer & Social Media

Kerry holds a Bachelor of Commerce from Monash University and was Vice President of the University Network for Investing and Trading (UNIT). He is an avid swing trader, and drawn to breakouts and technical set ups. Outside of writing and trading, Kerry is a huge UFC fan, loves poker and bouldering.

Get the latest news and media direct to your inbox

Sign up FREE