Boss eyes Honeymoon period for SA uranium project

Among the raft of ASX-listed uranium players that have enjoyed a long-awaited lift in investor sentiment in recent months, Boss Energy looks a stand-out (reports The West Australian).
29th January 2021
Resources Rising Stars

Among the raft of ASX-listed uranium players that have enjoyed a long-awaited lift in investor sentiment in recent months, Boss Energy looks a stand-out (reports The West Australian).

The uranium price has been in the doldrums since the Fukushima nuclear disaster in Japan in 2011.

But last year the market began to re-awaken to nuclear’s potential as a zero-emissions energy source that can also provide baseload power — and the price of yellowcake began to tick up.

Like many of its peers, Boss has been patiently waiting for the fortunes of the energy metal to change.

However, the Perth-based company’s Honeymoon project in South Australia has a host of advantages that could place it at the front of the pack to develop the country’s next operating uranium mine.

Honeymoon is a brownfields site with existing infrastructure previously operated by Canada’s Uranium One, meaning the capex required to bring it back online is expected to be considerably less than $100 million.

While uranium mining is controversial in some jurisdictions, in South Australia it has the backing of both major political parties and the project is already fully permitted, including approval to export 3.3Mlbs per annum through Port Adelaide.

In fact, South Australia is the only State with operating uranium mines after the closure of ERA’s Ranger mine in the Northern Territory earlier this year. The State’s mines include BHP’s Olympic Dam and Heathgate Resources’ Beverley operation.

Boss has 34 million pounds of uranium within its existing mining permit, while the broader project hosts 71.6Mlbs and the company has an exploration target of 190Mlbs.

The shallow nature of its deposit at a depth of 90-120m allows for in-situ recovery which is the cheapest method of resource extraction.

Boss plans to change the processing method of its plant from the solvent extraction used by the previous operator to the more efficient system of ion exchange.

It already has a feasibility study for Honeymoon that features a capex of $US63.2m, an aspirational annual production rate of 2.3Mlbs and operating costs of about $US32/lb. But the company hopes to improve on each of these metrics.

Boss is led by 14-year veteran of the uranium industry Duncan Craib, chaired by long-serving Northern Star Resources director Peter O’Connor and has a wealth of industry experts on staff.

It believes it could be in production within 12 months, subject to offtake agreements and financing.

Mr Craib notes long-term uranium contracts between producers and global utilities are typically struck at a 20-25 per cent premium to the spot price, which is sitting about $US30/lb.

Delivery is typically expected 18-24 months after contracts are struck, which places Boss perfectly with the restart of Honeymoon should the forecast increase in the uranium price materialise.

 

Image: Boss Energy

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