Duncan Craib says companies restarting dormant mines have an advantage in this uranium cycle because of the lengthy permits and red tape involved in starting a new project from scratch. “We believe restart projects have the edge,” he said. Honeymoon has been dormant since late 2013 and Boss aims to be producing uranium again in late 2023.
Mr Craib, who is flying to Montreal tonight to give a presentation to the World Nuclear Fuel Market conference, said there are big shifts underway as countries step up the push to cut carbon emissions, just as the uranium supply market has been rocked by geo-political turmoil with the Russian invasion of Ukraine. “The world is chasing net carbon zero emissions. There is a big climate move,” he said.
The Russian invasion of Ukraine had also prompted a big rethink by many countries and power utilities on where they were sourcing uranium. There had also been internal instability and curfews imposed in Kazakhstan earlier in 2022 which had troubled buyers. Kazakhstan is a big supplier of uranium.
“Governments are seeking energy independence. They are now looking further afield,” he said. The Honeymoon mine, located in northern South Australia about 80 kilometres north-west of Broken Hill over the border in New South Wales, has been through a series of changes in ownership over the past decade.
Boss acquired the mine in 2015 from a Canadian company called Uranium One, itself owned by the Russian state-owned nuclear company Rosatom. Honeymoon was put on care and maintenance in late 2013 because of low prices, after producing uranium between 2011 and 2013.
Other listed companies are also seeking to revive uranium projects as demand rises. Paladin Energy is aiming to restart the Langer Heinrich mine in Namibia in Africa.
Lotus Resources is aiming to restart the Kayelekera mine in Malawi in Africa.
Boss raised $125 million in a share placement and share placement plan in March. Mr Craib said the group had no debt and was in a strong position when negotiating off-take agreements.
“Our dance card is full,” he said. Mr Craib said Boss hadn’t signed any off-take agreements yet, but was having discussions with potential customers. “The best time to bring a mine on is at the beginning of a cycle,” he said.
Boss also has a 1.25 million pound uranium stockpile valued at US$59 million ($82 million). Mr Craib said when Honeymoon was at full production it would employ between 80 to 100 people.
The project has a mine life of 11 years, but there is potential to expand through nearby deposits. Boss outlined an internal rate of return of 47 per cent based on a uranium oxide price of US$60 per pound.
