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

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.

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

Boss Energy share price chart