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Boss wedded to Honeymoon

ather than chasing further resources at dream to be realised. According to some uranium analysts,
Rits Honeymoon uranium project, Boss Boss has a lead debt mandate with a long-term (2023) uranium sport price in
Resources Ltd has drawn a line in the sand Tribeca Investment Partners (one of the the mid-$US40/lb will incentivise restarts,
and produced a feasibility study on the back company’s largest shareholders) for the while new projects would need $US60/lb to
of a 36 mlb uranium resource. full capital amount estimated to restart the justify a build.
There is a further 36 mlb uranium be- project. “When the market turns, restart projects
lieved to exist outside the immediate restart “There must be 40% institutional holding are ahead of the curve and because of the
area at Honeymoon where the broader ex- in us, as well as a number of large retails. low capital outlay at Honeymoon it is not
ploration target is some 290 mlb. They have taken a longer-term view of the insurmountable. There are other projects
For now, Boss has settled on a resource market and it is what I call patient capital; out there that need $500 million-$1 billion;
that sits on a granted mining licence ac- they know the project and a lot of them where do you get that kind of money from?”
companied by an export permit, making have been to site,” Craib said. Craib said.
Honeymoon fit for a restart when uranium “They are comfortable with manage- “We have all the pieces of the jigsaw we
market dynamics demand it. ment and know sentiment can swing pretty are just waiting for the price to rise.”
“We have historical drill results out there quickly. The uranium market can move There appears to be better acceptance
and geophysical work to prove up addi- pretty quickly and when it does, they will for the uranium industry, particularly in
tional resources, but it just doesn’t make be able to enjoy a decent return on their Australia, where the SA, Western Aus-
sense to me in the current uranium market investment.” tralia, Queensland and New South Wales
prices [$US25/lb] to keep diluting share- Some pundits have predicted a bull mar- governments are seemingly onboard with
holders and pursuing a bigger resource,” ket for uranium this year as primary pro- the sector.
Boss managing director Duncan Craib told ducers pull back on output and oversupply There are almost 30 countries using nu-
Paydirt. is curtailed putting pressure on spot prices. clear power, which accounts for about 11%
“The market is not supporting that and Spot prices for uranium showed promise of the world’s energy mix.
that is why we did what we did and hope- in the first half of 2019 and were nearing Craib said nuclear power needed to be
fully prices will pick up and we can lock the $US30/lb mark, which is believed to be considered as part of any country’s energy
in an offtake agreement or term contract somewhat of a catalyst for renewed inter- make-up and encouraged greater consid-
which would underpin the debt in the next est in the sector. eration from Australia to adopt the option.
12 months. If it takes a bit longer than that, However, the strength in spot pricing “If 28 countries around the world have
then so be it, but in the meantime we are tailed and is currently about $US25/lb, with got it wrong then we are right to do nothing,
getting ourselves prepared for a restart.” average all-in cost at Honeymoon over the but we need to be pragmatic about it and it
Fast tracking to production at Honey- life-of-mine estimated to be $US32.30/lb. needs investigating,” he said.
moon can be done given there is $170 mil- Operating costs at Honeymoon are con- “I am not saying it is the be all and end all,
lion worth of infrastructure in place, includ- sidered at the lowest end of any project but base load power and carbon-free wind,
ing a plant. worldwide. solar, hydro and nuclear have a role to play.
Capital expenditure estimated to reju- There are few projects in the world ready In the US, nuclear accounts for 20% of their
venate Honeymoon, which was placed on to react to the need for uranium on demand energy mix, 60-65% in France, its used in
care-and-maintenance in 2013 without be- like Honeymoon is. Sweden, Finland and the UK is building
ing fully commissioned, is $US63.2 million It is expected that Honeymoon ISR two big nuclear power plants. Furthermore,
for a two-staged run-up to an initial life-of- project, 80km north-west of Broken Hill in it is being driven in developing countries
mine production of 12 years at 2 mlbpa. South Australia, can be brought into opera- like India and China; why can’t Australia at
Boss has Federal Government approval tion within 12 months of a decision to pro- least engage and analyse it to see if it is
to export up to 3.3 mlbpa and has all per- ceed. a viable option, particularly as we have a
mits in hand for production and export. A conservative base case of $US50/lb significant amount of the world’s [uranium]
As has been the case for several years, a uranium price was used in the Honeymoon reserves.”
change in sentiment in the uranium sector feasibility study, with pre-tax cash flow over
is the trigger needed for the Honeymoon project life of $492 million guided. – Mark Andrews

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