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.