Capital Raising

$120m equity raise puts Boss Energy on track to becoming Oz's next uranium producer

Fri 18 Mar 22, 11:06am (AEST)
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Key Points

  • Boss Energy looks to kick off construction in the next few months
  • The company expects production within 18 months from commencement
  • Boss plans to wait for higher uranium prices before locking in any offtake agreements

Boss Energy (ASX: BOE) has successfully raised $120m to fund the development of its Honeymoon Uranium Project in South Australia.

The company's shares are down -5.8% in early-trade, weighed by the discount on new shares and director selldown.

Capital raising in a nutshell

  • Raising price at $2.15 per share (11.2% discount to last closing price of $2.42 prior to placement)

  • Placement will take place in two tranches:

    • Tranche 1 will issue circa $92m

    • Tranche 2 will issue circa $28m in late-April 

  • Boss Energy directors will sell down approximately $5m of shares at the offer price

“The capital raising will ensure Boss is funded through to the start of production at Honeymoon,” said Managing Director Duncan Craib.

Next steps 

Boss Energy said that Front-End Engineering Design (FEED) studies due at the end of March are “practically complete”, with only minor works outstanding. 

Post FEED, the company plans to commence construction with production expected within 18 months from commencement.

Project developments costs are forecast to be around $82.1m.

Offtake partners 

“Boss anticipates that committing to long-term contracts in the current rising uranium price environment would adversely impact the long term upside potential of Boss and we intend to wait for further increases in contract prices before making any offtake commitments,” said Craib. 

The capital raising was therefore used to ensure Boss Energy is not reliant on an offtake agreement to fund the development of Honeymoon.

Near-term catalysts 

Boss Energy believes there’s “substantial scope to add significant value and mine life” beyond its initial feasibility mine plans. This includes: 

  • Mine life expansion from ongoing exploration efforts

  • Expand production capacity

  • Improved technologies to optimise output/costs 

  • Uranium price upside

At US$60/lb, the Honeymoon Project has a pre-tax net present value (NPV) of $412m. At US$80/lb, NPV pushes up to $729m.

Boss Energy price chart
Boss Energy price chart

 

Written By

Kerry Sun

Finance Writer & Social Media

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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