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DIGGeRs & DeALeRs ReVIeW Comprehensive Supply
Chain Solutions

Bags packed for Honeymoon

s a black sheep among the presenter tralia. Craib said one of the main catalysts
Alist of battery minerals explorers and for a potential restart was the attractive
gold producers, Boss Energy Ltd manag- premiums attached to bubbling contract
ing director Duncan Craib had an arguably prices, as opposed to the basic spot prices.
tough crowd to win over. “It’s the term ‘contract’ that we’re interest-
Uranium still has a lot of ground to cover ed in, which typically commands a premium
in making its way back to the industry rec- of 20-25% to the spot price,” he said. “Spot
ognised incentive price of $US60/lb, but price today is $US32.5/lb. Our all-in cost is
Craib steered audience members towards below that at $US31.9/lb.
what he believes is an imminent uptick for “We believe prices will rise to the mid-30s
the long-labouring yellowcake sector. or high-30s on a spot price level by the cal-
“It would appear that the market is quiet endar year end and with that, a real uplift in Duncan Craib
and why hasn’t the spot price taken off the actual term contract, which is when we’ll Honeymoon is currently undergoing a
yet?” Craib said. start getting excited. 10,000m resource drilling programme over
“What I can tell you is that there is some- “We’re engaging with fuel buyers con- the next 8-12 months, while Boss progress-
thing happening right now in the uranium stantly, daily, weekly, worldwide, so that we es equipment selection and production
market…there is a hell of a lot of activity can respond rapidly to those price move- schedule optimisation.
going on off-market. Right now, buyers are ments… we want to be there at the begin- “This mine is ready to be brought back
renegotiating contracts. ning, layering in contracts as the price be- on,” Craib said.
“It’s that off-market activity that’s taking gins to move.” “There will be a lot of interest in projects
place and, in our experience, is generally a A recently enhanced feasibility study for such as Honeymoon as they’re switched
precursor to more general contracting with Honeymoon presented a 12-year mine life back on and generating cash flow, so
which we’ll be entering into.” at 2 mlbpa, along with the required permits whether it’s us or some other uranium pro-
Boss has been quietly chipping away at for the restart. Estimated cash costs of ducer – please don’t miss the boat.”
the Honeymoon uranium project, currently $US18.50/lb are among the lowest in the
on care-and-maintenance, in South Aus- industry. – Fraser Palamara

Paladin at the starting gate

upport is rapidly building from all the right tential customers now that we’ve cleaned arrival to have Langer Heinrich in a shovel-
Scorners for a now debt-free Paladin En- the balance sheet. They’re ready to deal with ready position within two years had been
ergy Ltd to restart operations at its Langer us, it just comes down to pricing.” completed six months ahead of schedule.
Heinrich uranium mine in Namibia, accord- Langer Heinrich was placed on care-and- “When we restart Langer, we will be the
ing to chief executive Ian Purdy. maintenance in 2018 due to prolonged low world’s third largest listed non-state-owned
The only sticking point appears to be the uranium prices which no longer justified uranium producer and a top-10 producer
uranium price. continued production. Paladin has used the globally. Uranium producers are rare as
“The global utilities would love to see us past three years wisely to finetune a restart hen’s teeth,” he said.
back on market, but there is a debate about plan for an operation often described as the “We’ve got over 360 mlb of uranium re-
at which price,” Purdy told Diggers & Deal- benchmark for aspiring yellowcake produc- sources in the ground and that puts us
ers. ers, while also getting a handle on its legacy third amongst listed companies, just behind
“One of their concerns was we were car- debt burden. Cameco [Corp] and Kazatomprom. We’ve
rying a debt balance and the debt balance Paladin officially cleared its debt obliga- got a strategic footprint in the world’s most
had tripped up Paladin previously, but we’ve tions last quarter after raising $218.7 million attractive uranium mining jurisdiction, which
found incredible support from all of our po- amid the growing sentiment for uranium’s re- we intend to grow, and we’re ready to fuel
vival following a decade-long slumber. The the global decarbonisation through supply-
placement and entitlement offer were heav- ing product to clean nuclear energy.”
ily supported by existing shareholders and Purdy said the company also carried
more than 100 new institutions from both the advantage of producing uranium from
Australia and overseas. Langer Heinrich for a decade, as well as
When the company does decide to push never once missing a shipment to its loyal
the button on the Langer Heinrich restart, customer base.
a capex of $US81 million will be required to “We’re starting to see some activity where
turn the lights back on and drive production the utilities are moving back into the long-
up to a peak output of 5.9 mlbpa, with esti- term market and taking the view that they
mated C1 production costs of $US27/lb over need to start locking in contracts,” he said.
the 17-year mine life. “We’re expecting that momentum to pick up
Purdy, who joined the company at the start over the next few quarters.”
of last year, said the plan he and the Paladin
Ian Purdy board had embarked on at the time of his – Michael Washbourne

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