Uranium Mining and Exploration

[Lone Clone]

Boss looks at larger output for Honeymoon uranium project

https://www.miningweekly.com/article/boss-looks-at-larger-output-for-honeymoon-2021-06-21

21st June 2021

By: Esmarie Iannucci
Creamer Media Senior Deputy Editor: Australasia

PERTH (miningweekly.com) – An updated feasibility study (PFS) into the Honeymoon uranium project, in South Australia, has resulted in a 22.5% increase in production capacity, compared with last year’s PFS.

ASX-listed Boss Energy on Monday reported that the updated PFS incorporated planned changes to the Honeymoon processing plant in an effort to lower costs and increase financial returns.

The initial PFS was broken into two parts, with Stage 1 of the operation based on the refurbishment of the existing solvent extraction plant, with significant process improvements, while Stage 2 consisted of the addition of an ion exchange circuit, to achieve an annual production of two-million pounds of uranium oxide (U3O8) equivalent.

The Stage 1 project can be completed over a 12-month period, after which production would increase to a rate of two-million pounds a year.

The original study estimated that the restart project would generate more than A$492-million in pre-tax free cash flow over the 12-year mine life, while the net present value (NPV) has been estimated at $163-million and the internal rate of return (IRR) at 42.9%.

The updated PFS has estimated that Honeymoon would have a nameplate capacity of 2.45-million pounds of U3O8, with the capital cost of the expanded production estimated to be some $80-million.

All-in sustaining costs for the Honeymoon project have fallen by 16% compared with the original PFS to $25.62/lb, with cash costs falling by 21% to $18.46/lb.

The project’s pre-tax NPV has increased by 35% to an estimated $309-million, while the forecast IRR has been estimated at 47% and the earnings before interest, taxes, depreciation and amortization margin at 62%.

“The study demonstrates that Boss is perfectly placed to capitalise on a strengthening uranium market with an existing plant and mine in a tier one location with low cost and strong financial returns,” said Boss MD Duncan Craib.

“In conjunction with these outstanding results, the recently acquired strategic inventory of 1.25-million pounds of uranium enables Boss to continue to de-risk the planned re-start of Honeymoon and provide increased flexibility as we continue to progress project funding and offtake negotiations.”

Boss will now look to progress offtake negotiations and project financing efforts while advancing the project towards development, while also developing a plan to increase the production profile and extend the mine life through the development of satellite resources.