Honeymoon uranium feasibility study proves up for Boss

21st January 2020 By: Esmarie Iannucci - Creamer Media Senior Deputy Editor: Australasia

PERTH (miningweekly.com) – A feasibility study into the Honeymoon uranium project, in South Australia, has estimated that a capital investment of $63.2-million would be required to restart the operation.

ASX-listed Boss Resources said that the feasibility study base case had been limited to the restart area only, which comprised 36-million pounds of Joint Ore Reserves Committee-compliant resource.

Stage 1 of the operation was based on the refurbishment of the existing solvent extraction plant, with significant process improvements, while Stage 2 consisted of the addition of an ion exchange circuit, to achieve an annual production of two-million pounds of uranium oxide (U3O8) equivalent.

The Stage 1 project can be completed over a 12-month period, after which production would increase to the two-million-pound-a-year rate.

The feasibility study estimated that the restart project would generate more than A$492-million in pre-tax free cash flow over the 12-year mine life, while the net present value has been estimated at $163-million and the internal rate of return at 42.9%.

“Our feasibility base case results confirm we will be Australia’s next uranium producer. The 100%-owned Honeymoon uranium project offers an unparalleled investment opportunity, an impressive internal rate of return with low capital intensity and short time to restart production, with excellent leverage to the anticipated upswing in uranium fundamentals,” said Boss CEO and MD Duncan Craib.

“Reflecting a conservative base case uranium price of $50/lb U3O8 over the life-of-mine, the feasibility study demonstrates Honeymoon’s advanced development can rapidly respond to a market rally, given the low capital barrier.”

Craib noted that its average all-in sustaining cost of $32.3/lb U3O8 also positioned the project as one of the lowest operating production costs world-wide.

“With A$170-million of historical expenditure on infrastructure and plant in place, which previously produced and exported uranium, Honeymoon has one of the lowest restart capital intensities in the uranium sector,” he added.

Craib pointed out that the base case used only a portion of the Honeymoon resource, and excluded the 36-million tonnes of resource outside of the restart area, which could further expand the mine life and increase the production profile.

Federal approvals currently in place allow the Honeymoon operation to export more than three-million pounds of U3O8 equivalent a year.