MNN Awards: Can-do Craib a uranium survivor

EVEN at almost 50, Boss Energy managing director Duncan Craib recognises he’s a relative youngster in the uranium sector, especially in Australia, having kept the faith in a sector that has spent a decade in the doldrums.
MNN Awards: Can-do Craib a uranium survivor MNN Awards: Can-do Craib a uranium survivor MNN Awards: Can-do Craib a uranium survivor MNN Awards: Can-do Craib a uranium survivor MNN Awards: Can-do Craib a uranium survivor

Duncan Craib at Diggers & Dealers 2021

Haydn Black


"When you're at the conferences it was almost all grey hairs, especially post-Fukushima, and a lot of experienced personnel have since drifted sideways into more stable commodities," he told MNN.
One of the issues Craib faces as he worked to restart the Honeymoon in-situ recovery project in South Australia, which was shut down by its former after Japan's nuclear crisis, was that general lack of specific sector experience.
For years the sector has been winnowed away by a lack of support, so one of his big challenges has been trying to get new blood into the sector, both the skills to support the redevelopment of Honeymoon, and in the investor space.
Even the AusIMM uranium conference, traditionally highly technical and focused on exploration technologies and innovations such as small modular reactors, has become ‘more retail' to stay relevant.
Fortunately for Craib, that work has paid off as the price of yellowcake has recovered over the past 12-18 months, so he stands at the head of one of a new generation of producers that is ahead of the game and is perfectly positioned to benefit.
Craib didn't start out to be in the somewhat polarising and opaque uranium sector specifically, but it's where he's spent the past 12 years.
A chartered accountant by training, he eventually found himself in London helping get mining companies off the ground.
"I didn't want to be an audit partner, so I ended up in commodities, but its boom and bust cycle, and during one setback a gentleman walked in with a job offer," he recalled.
That man was Mark Hohnen, then chair of London-listed Kalahari Minerals, which was the dominant shareholder in ASX-listed Extract Resources, owner of an advanced uranium project in Namibia.
"Husab just grew and grew, and was eventually acquired for US$2.2 billion by China General Nuclear Power Corporation, which is one of the biggest developers of nuclear power plants in the world," Craib said.
China Nuclear offered Craib a role as finance director for Namibia, so he packed his young family off and relocated to Africa to help develop the successful $2.5 billion dollar Husab mine build.
"Then, one day, out of the blue I was phoned up by Boss, which was looking for a CEO for the restart project," he said.
"The opportunity grabbed me, because it's hard to find a permitted project, so I came home, but the price was in the doldrums, so we worked on reducing the costs while waiting for the price to recover."
Like Hohnen, Craib put his own money into Boss, buying shares at A4c as a show of faith, and while he guided efforts to position Honeymoon for a restart, he also helped the company become a buyer of physical uranium - and it wasn't a hard sell to the board.
Working with Boss's head of strategy and marketing, uranium veteran Sashi Davies (who's not only a trader in the fuel but on board of World Nuclear Fuel Market) the pair saw the pressure that was building on supply and demand, and the entry of financial players in the market such as Sprott Physical Uranium Trust, so it became evident it was the ideal time to acquire physical uranium.
Boss acquired 1.25 million pounds of uranium for $37.7 million, or US$30.15/lb, which gives significant flexibility during the restart.
"When you are negotiating with utilities, who you want to secure sales contracts with, when you have physical supplies they treat you as a physical producer," he said.
"They also have confidence in your ability to supply during production during ramp up, which is your most vulnerable time.
"It also underpins your working capital requirements. Right now, we have a cash position of about A$110 million cash, and we have about $92 million worth of uranium on the balance sheet.
"Miners sometimes underestimate their working capital requirements during ramp-up. We are funded for what we think the restart should cost, and we have a more than we need."
While he's focused on guiding the restart, Craib also has an eye on exploration with the plan to develop up satellite operations such as Jason's and Gould's to boost production to its maximum permitted exports of some 3Mlb and make new discoveries.
He's also interested in the right M&A opportunities, particularly in Australia, which may make it easier to attract skilled workers to help build further mines compared with alternative job opportunities in more remote areas, such as deserts in Africa.
Craib said the time was right for Honeymoon to resume production, particularly with recent issues in Kazakhstan and Russia that have shaken the confidence in buyers in securing reliable supplies.
Under Hohnen and Craib's watch, Boss is positioned to reap the rewards of counter-cyclical investments.
The Honeymoon in-situ recovery mine, which was reportedly developed at a cost of $170 million, was put on care and maintenance in late 2013 principally due to the low uranium price. 
Boss snapped it up two years later for effectively done at the cost of the environmental bonds, around $9 million, in staged payments.
Under Craib it has defined a 72Mlb resource, and approved a $113 million restart based on just half of that. 
Honeymoon is expected to be producing late in 2023, ramping up to 2.45Mlbpa at all in sustaining costs of US$25.60/lb by the end of 2026. Assuming it can get $60/lb under contract, the project should achieve an internal rate of return of 47%.
Its most recent infill drilling has defined high-grades within the restart area, and a mix of highly promising step-out and exploratory results at areas such as Brooks Dam and Eaglehawk Dam, providing a wealth of geological data that continues to suggest that Honeymoon can grow substantially if required by the markets. 
"This is one of the most regulated industries in Australia, and if we could unleash it more, we could see huge benefits to Australian mining," Craib said.
*Boss Energy managing director Duncan Craib is a nominee for CEO of the year in the 2022 MNN Awards.


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