Boss’ Honeymoon mine in South Australia started production in April and has been ramping up ever since.
The operation produced 89,516 pounds of uranium oxide during the September quarter, a jump up from 28,844lb in the June quarter, while the company also achieved its first shipment of 57,000lb of uranium oxide.
Two NIMCIX ion exchange columns have now been commissioned with a third due to be commissioned before the end of the year, after which Boss will provide an update on costs.
Each column is expected to produce 420,000-540,000lb of uranium oxide each year.
Guidance for the 2025 financial year for Honeymoon is 850,000lb of uranium oxide, with the company confirming at its annual general meeting last week that it remained on track to achieve that target.
The fourth, fifth and sixth columns will be commissioned next year to enable ramp-up to Honeymoon’s nameplate capacity of 2.45 million pounds per annum of uranium oxide.
Argonaut analyst George Ross has modelled Honeymoon production to increase to around 3.3Mlbpa from the 2027 financial year.
“Our scenario integrates production from both the Jason’s and Gould’s Dam regional resources over a 16-year mine life,” he says.
“With the majority initial restart capital requirements now out of the way, we estimate a current net present value (8% discount rate) of A$1.078 billion for our upscaled Honeymoon scenario.”
Meanwhile, Boss acquired a 30% stake in Toronto-listed enCore Energy Corp’s Alta Mesa project in Texas, which, like Honeymoon, was a previous producer.
Alta Mesa was officially opened last month after achieving first production in July.
It is now ramping up to full capacity of 1.5Mlbpa by 2026, of which Boss’ share will be 450,000lbpa.
Argonaut upgraded Boss from hold to buy following the recent weakness in the company’s share price. Its price target is A$3.60.
“Future catalysts could include strengthening in uranium pricing, positive news on commissioning of Honeymoon’s second and third Ion Exchange columns and regional exploration success,” Ross said.
“We would expect Boss to respond favourably to improvement in uranium spot pricing. Regional exploration success or a clever M&A outcome could provide further upside in the medium term.”
Checking in on uranium
The uranium price has weakened in recent weeks to around US$77 per pound, the lowest point this year.
It’s a far cry from the early days of January, where the price surged above US$100/lb.
Uncertainty over the US election is one reason. The Biden Administration was supportive of nuclear power but Donald Trump’s stance isn’t yet clear.
Citi said Trump could “neutralise” uranium prices in the short term.
“Nuclear energy appears set to continue to benefit from bipartisan support in the US, while the reasoning for such support could slightly differ amongst policy makers,” analysts said last week.
“Policy makers on the right side could potentially favour nuclear energy due to its energy security and independence features, while for the ones on the left, support is driven by its low-emission and clean energy features.
“Subsequently, we don’t expect the momentum from the last 3-4 years for nuclear energy to subside anytime soon and it could perhaps increase under the second Trump term.
“However, higher volatility in uranium prices, along with the increasing uncertainty in global markets should be expected under the second Trump presidency.”
Citi is forecasting 2025 uranium prices to trade in the range of US$70-90/lb and rise to an average of US$110/lb in 2026.
Perennial Value Management portfolio manager and resources analyst Sam Berridge said last week that the world was reacquainting itself with nuclear energy and it was “slowly and steadily establishing itself as the solution for carbon-free energy”.
“I think the risks to demand are on the upside,” he said. “The bull case for uranium is quite clear.”
Morgan Stanley’s latest take on uranium last week was notable.
The bank admitted last week that it had been bearish on uranium all year.
“We see signs that uranium’s risk-reward is improving,” it said, pointing to the fact that the term price had risen to US$81/lb, the first time it had been above the spot price in nearly two years.
“Supply is tightening with production guidance cuts and challenges in Niger, while Russia’s temporary uranium export ban to the US may also bring some challenges.
“Furthermore, while utility contracting volumes are down 63%, we may see a sequential recovery with the Russian ban now in place and the US election behind us. This may limit further downside to spot prices from here and even drive some recovery.”
