Boss Energy to restart Honeymoon uranium project

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Boss Energy has announced that it has raised $125 million at $2.15 a share to fund the restart of mining operations at its Honeymoon uranium project in South Australia.

The equity raising will also allow the company to complete its FEED study, fund the development of the project, secure long-lead items, including IX columns and water treatment plant, have a well-balanced sheet and continue its exploration focus.

“The capital raising will ensure Boss is funded through to the start of production at Honeymoon. We have deliberately structured our funding to maintain a highly conservative and robust balance sheet with no debt, $135m of net cash and an additional $100m contingency from our existing strategic uranium inventory,” said Boss Managing Director Duncan Craib in an ASX Announcement.

“We have not attained any debt as it requires fixing the uranium price through long term contracts. 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.”

Adertisement

The company acquired the Honeymoon uranium project from Russia’s state-owned Uranium One Inc. (U1) for a compensation package worth more than A$10 million in 2015.

Honeymoon is one of the five Australian uranium mines in Australia.

“We are cognisant of the working capital issues that single asset developers before us have come across, and hence we have worked relentlessly towards de-risking Honeymoon. This includes the current advanced FEED study, compiling our best-in-class development and operational team, the purchase of our 1.25Mlb strategic inventory and now through our conservative funding structure with no debt and significant balance sheet flexibility,” Mr Craib said.

“With the uranium market’s continuing recovery, Boss to be funded (post equity raising) and Honeymoon having a unique short timeframe to production with all permits in place, Boss will be perfectly positioned to become the uranium producer of choice for investors and customers alike”.

Based on its JORC Resource at the Honeymoon Restart Area (HRA) of 36Mlbs of U3O8, Honeymoon has a Life of Mine (LOM) of plus-10 years at a forecast production rate of 2.45Mlb/annum.

According to the Enhanced Feasibility Study (EFS), Honeymoon is well on track to be Australia’s next uranium producer.

Image credit: https://www.bossenergy.com/honeymoon/