Boss Energy’s rebooted Honeymoon uranium mine in Australia counts days to first metal

Boss Energy (ASX: BOE) is two weeks away from producing its first drums of uranium as it restarts its Honeymoon mine in New South Wales, Australia, after low metal prices shut the operation in 2013. 

Having reached a final technical milestone this week, Boss Energy is focused on filling its first uranium shipment while ramping up production to full capacity, it said.

“Since acquiring Honeymoon, Boss’ strategy has been to increase the uranium tenor in the wellfield feed solution to the plant and develop a larger processing facility utilizing ion exchange technology,” managing director Duncan Craib said in a statement.

At capacity, Honeymoon will produce 2.45 million lb. of uranium a year at all-in sustaining costs of US$25.60 per oz. and all-in costs of US$32 per lb., it said.

The company in February bought a 30% stake in enCore Energy’s (TSXV: EU) Alta Mesa in situ recovery mine in Texas for US$60 million, giving Boss a second horse in the uranium race. It conducted a US$215-million capital raising to pay for the deal.

Australia has two active uranium mines — BHP‘s (LSE: BHP; NYSE: BHP; ASX: BHP) Olympic Dam and the Four Mile mine owned by Heathgate Resources, a unit of San Diego-based General Atomics. 

Boss’ acquisition of Honeymoon in 2015 could potentially contribute an additional 1,225 tonnes of production per year to a market that currently demands around 67,500 tonnes annually, according to data from the World Nuclear Association. 

For over 60 years, uranium has served as a fuel to power nuclear plants and reactors. Nearly two-thirds of the world’s uranium production originates from Kazakhstan, Canada and Australia.

Shares in Boss Energy closed 4% higher on Thursday in Sydney at A$5.13 ($4.58) apiece, valuing the company at A$2.1 billion. The stock, held by Denver-based Paradice Investment Management and Tribeca Investment Partners in Sydney among others, has risen 20% this year as the price of uranium set 16.5-year records in January and February of around US$109 a pound. It was US$87 a lb. on Thursday. 

Other major producers such as Canada’s Cameco (TSX: CCO; NYSE: CCJ) and Paladin Energy (ASX: PDN) of Australia have seen their shares rise by 19% and 47%, respectively.