Boss Resources Ltd (ASX:BOE) have plans to resume production at their newly purchased Honeymoon uranium mine and processing plant 75 kilometres northwest of Broken Hill.
Boss has already increased the project resources by 330% since its purchase in December 2015 and is targeting resuming production at the mine by 2019 but with a much larger operation.
The company plans to commence a targeted exploration and drilling program next quarter to continue expanding the project’s current resource.
Honeymoon, despite its current status, remains a fully permitted uranium operation – one of only four such in Australia.
The project also has A$170 million worth of plant and infrastructure already in place, with unique option of commencing production with low capex and very quickly.
Honeymoon uranium project
The Honeymoon uranium project consists of the granted Honeymoon mining license, four exploration licenses and eight retention leases.
The mine has been on care and maintenance since 2013 and was acquired by Boss for $9 million in staged payments.
Most recently Boss delivered its maiden JORC Resource at the Gould’s Dam project which lifted overall resource inventory at the Honeymoon project to 52.5 million pounds of contained U3O8 at 640 parts per million.
The global exploration target for Boss’s Honeymoon uranium project is currently estimated to be between 42 million pounds and 100 million pounds of contained U3O8 in addition to the current global resource.
Exploration success and a larger resource would then underpin a definitive feasibility study to be completed in 2017 to commence an expanded production schedule from mid 2019.
Boss has embarked on an option study to look at how new metallurgical technology may be used with existing plant and infrastructure.
Boss is targeting cash costs of less than US$25 per pound.
Honeymoon is one of the highest grade un-mined uranium resources in Australia, and 1 of 4 fully permitted. Given the time it takes to attain permits, this theoretically places them 3-5 years ahead of peers.
The Honeymoon mine was closed in November 2013 after 2 years in production due to economies of scale - it was the smallest plant in the world.
By expanding the high grade resource and lowering costs by using an in-situ leaching mining method, Boss have the strategy in place to make this project economically feasible.
Boss has already shown its ability to lower costs by taking care and maintenance costs at Honeymoon from $2.5 million a year to $650,000.
Honeymoon is located in the uranium friendly state of South Australia and stands to gain from a growing global energy demand.
There are 71 reactors under construction and 173 new reactors planned with nuclear power offering the world a non-polluting baseload power source.
The Boss share price has appreciated 140% to $0.053 over the past 12 months with the following strong price drivers ahead:
- Further resource estimation underway.
- Convert exploration target into JORC resources at Goulds Dam Target and Jasons Target.
- Commence exploration Q2 2016 - Targeting known mineralised areas for low cost additional resources.
- Option Study - Commencing a process option study SX, IX, Eluex and expansion options depending on resource size.
Proactive Investors is a global leader reporting financial news, media, research and hosts events for listed emerging growth companies and investors across four continents.