Australia’s Honeymoon mine to resume production
The board of Boss Energy Limited has made a “final investment decision” to develop the Honeymoon in situ uranium project in Australia, the Perth-based company announced last week. Boss said it will now accelerate engineering, procurement, and construction to ensure that Honeymoon—located in South Australia, near the border with New South Wales—remains on track for first production by December 2023, ramping up to a steady-state rate of 2.45 million pounds of U3O8 per year.
According to the June 1 announcement, the forecast A$113 million (about $82 million) capital cost of the development, including contingency, is fully funded. Boss raised A$125 million (about $90.7 million) via a share placement and share purchase plan in March 2022 and holds a strategic 1.25-million-pound uranium stockpile valued at $59.38 million (based on a spot price of $47.50/lb as of May 31), the announcement added.
From the boss: “This final investment decision puts Boss firmly on track to be Australia’s next uranium producer,” said Duncan Craib, Boss’s managing director. “We are fully funded with no debt, fully permitted, and extensive infrastructure in place. Our front-end engineering studies are completed, and we are ready to order key equipment and start construction immediately. This puts us in an extremely strong negotiating position with utilities and ensures we can capitalize on the looming uranium supply deficit.”
Background: Australia’s second operating in situ recovery uranium mine, Honeymoon began production in 2011 but was placed on care and maintenance by then owner Uranium One (a Rosatom subsidiary) in 2013. The pause was on account of high costs and low uranium prices, and the mine was never fully commissioned. (The uranium market has since recovered, to put it mildly.)
Boss acquired Honeymoon from Uranium One in 2015 and in June 2021 announced the completion of an enhanced feasibility study (EFS) that reinforced the strength of the project, according to Boss. Key findings included that Honeymoon is economically robust, with an internal rate of return of 47 percent at a $60/lb U3O8 price, as well as technically robust, with a nameplate production of 2.45 million pounds of U3O8 per annum at an all-in sustaining cost of $25.60 over the life of the mine. The EFS also indicated that Honeymoon has the potential to operate beyond its initial 11-year mine life through near-mine satellite deposits.