Boss Energy produces first uranium drum at Honeymoon

The jump has pushed the market capitalisation of Boss to almost $2bn from just $37m in 2015, when the company took on the abandoned mine site about 400km northeast of Adelaide.

Production at the mine is expected to ramp up to 2.45 million pounds of uranium for export each year from a total resource 71.6 million pounds and comes as global uranium prices surge, moving from about $77 per pound in January 2023 to about $140 per pound this week.

Boss managing director Duncan Craib said the milestone showed “conclusively” the company’s mining and processing strategy was working.

“This is pivotal because it paves the way for strong organic production growth by unlocking the value of our large resource and leveraging the infrastructure we have in place,” he said on Monday.

“We have also made extensive provision in the Honeymoon plant for increased throughput.

“Increased utilisation of these highly valuable assets will enable us to further capitalise on the strong outlook for the uranium price.”

Uranium is used as an fuel for nuclear power generation.

Nuclear energy is a low carbon power source and governments around the world are looking more closely at energy option to reduce reliance on fossil fuels and hit net zero targets.

Australia does not have domestic nuclear power and so miners export abroad.

Boss holds a uranium mineral export license for 3.3 million pounds per year and in December, it announced a binding sales contract to supply uranium to an unnamed US power company.

Boss will sell a million pounds of uranium to the public utility over a seven-year period, commencing in 2025.

The agreement is based on market-related pricing with a ceiling and floor price that is above Boss’ forecast production costs at Honeymoon, the company stated at the time.

The company is also pursuing growth outside of Australia.

In February, Boss announced the acquisition of a 30 per cent stake in the Alta Mesa uranium project in South Texas for about $90m, which Mr Craib said would grow the company’s inventory, production and cashflow in “tier-one locations”.

“The Alta Mesa project has many key similarities to our Honeymoon project in South Australia, where the commissioning process is well on track,” he said.

“Alta Mesa will also enable us to diversify our production on both a project and geographical basis.

“Our strong production and growth outlook is underpinned by a robust balance sheet with no debt and a strategic uranium stockpile now worth US$195m ($302m) based on current spot prices.”

Stock in Boss was trading at $4.74 per share on Monday afternoon.