JOHANNESBURG (miningweekly.com) – ASX-listed Boss Resources has entered into a binding conditional agreement to buy Wattle Mining – the owner of 20% of the shares in the Honeymoon uranium project – in a move that will give the company full ownership of the South Australian project.
Consolidating the ownership sets the Honeymoon project on the path to be Australia’s next uranium producer, with production of about 3.2-million pounds of uranium oxide (U3O8) a year.
“Boss Resources is one of a few independent uranium projects ready to participate in the early stages of a new bull market; it is truly a product for this time,” MD Duncan Craib said on Thursday.
The uranium market received a boost this week when the world’s largest producer, Kazakhstan’s State-owned Kazatomprom announced it plans to cut its U3O8 output by 20% or about 28.5-million pounds over the next three years. The removal of supply is expected to strengthen the U3O8 spot price, with forecasts of prices rising to the mid-$20/lb or touching $30/lb, from about $23/lb currently.
Boss did not provide an update on when it plans to restart production at Honeymoon, but the company previously indicated that the mine could be back in production in 2018.
Craib said that the past 12 months had been “transformational” for Boss as the restart strategic milestones have been overwhelmingly achieved.
“Final technical confirmation has been provided by outstanding field leach trials results, following the highly successful preliminary feasibility study, and the reported upside in feed tenors achieved from the improved leaching and/or wellfield performance is expected to result in increased efficiency and therefore even lower operating costs. The culmination of these staged development steps can ensure that Honeymoon can operate in the lowest cost quartile of competitive global producers.”
The overall staged development approach for the project is based on restarting the operation with the existing facilities in conjunction with constructing the first stage of an ion exchange plant. After successfully ramping up and verifying the new process, a further ion exchange upgrade is planned.
Boss will acquire all the shares in Wattle from Grant Davey by issuing 300-million shares, which will be held in escrow for 12 months. On completion of the transaction, Davey’s relevant interest in Boss will increase to 311.48-million shares, or about 22.70% of the Boss shares on issue.
Boss will seek shareholder approval to appoint Davey as a director of the company.