Boss to Restart Production at Honeymoon Uranium Project

Boss Resources reported results of Honeymoon’s feasibility study for the base case restart and expansion of its Honeymoon uranium project.

Boss Resources (ASX:BOE,OTC Pink:BQSSF) reported results of Honeymoon’s feasibility study (FS) for the base case restart and expansion of its Honeymoon uranium project in South Australia.

Outstanding FS results, based on a conservative uranium price, position Honeymoon as one of the world’s most advanced uranium development projects that can be fast-tracked to re-start production in 12 months with low capital intensity to seize an anticipated rally in the uranium market.

Highlights are as follows:

  • Boss’ FS provides a base case to fast-track uranium production from the Honeymoon restart area to achieve a 12-year life of mine (LOM) at 2 million pounds per annum U3O8 equivalent, from only 35.9 million pounds of the project’s global mineral resource of 71.6 million pounds. A total of 94 percent of the restart area measured and indicated resource is located within the boundaries of mining licence 6109, which has mining approval. ML6109 has a uranium mineral export permission for 3.3 million pounds per annum U3O8 as renewed by the Australian Federal Government in April 2019.
  • The FS indicates a technically sound and financially viable project, capable of generating more than AU$492 million in pre-tax free cash flow over the project life. Total pre-production capital is estimated at AU$92.9 million, including a project contingency of AU$8.1 million. The FS is based on in-situ recovery (ISR) mining with an average uranium tenor of 49 mg/l targeted over the LOM from the wellfields. All base case financial analyses were completed assuming an average US$50 per pound U3O8 price over the LOM.
  • Sensitivity analysis at a lower and higher industry referenced prices of US$40 per pound U3O8 and US$60 per pound U3O8 demonstrates downside and upside to the project. The company considers a base sales price of US$50 per pound U3O8 over the LOM is reasonable given that current spot and term uranium prices are well below the price required to guarantee viability of a large proportion of the world’s existing production. Uranium analysts predict that a long-term spot price in the mid US$40’s
    will incentivize restarts whilst a price closer to US$60 per pound will be needed for most new mines.

Duncan Craib, managing director & CEO, commented:

Our FS base case results confirm we will be Australia’s next uranium producer. The 100 percent-owned Honeymoon uranium project offers an unparalleled investment opportunity; an impressive IRR with low capital intensity and short time to re-start production, with excellent leverage to the anticipated upswing in uranium fundamentals.

Reflecting a conservative base case uranium price of AU$50 per pound U308 over LOM, the FS demonstrates Honeymoon’s advanced development can rapidly respond to a market rally, given the low capital barrier. It’s average all-in-cost of US$32.3 per pound U308 over LOM positions Honeymoon as one of the lowest operating uranium production costs world-wide. Completion of the FS milestones offers investors a real and near-term uranium supply prospect and allows us to progress off-take contracts with utilities world-wide.

Click here to read the whole Boss Resources (ASX:BOE,OTC Pink:BQSSF) press release.

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