RESOURCE STOCKS

Boss Resources' Honeymoon set to last

The Honeymoon uranium project creates an exciting new chapter for Boss Resources, and its existing mining licence advances it ahead of the pack.

MiningNews.Net
Boss Resources' Honeymoon set to last

The project makers behind Boss Resources have worked quickly to ensure their new flagship Honeymoon uranium project ticks all the boxes.

Within two months of the Honeymoon acquisition in November 2015, Boss has substantially increased the uranium resource and is now investigating expanding the current plant’s production capacity.

Honeymoon has a proven history of producing uranium and Boss has also acquired the fully permitted production facility and mining licence – making it just one of a handful of companies fully licensed to mine and export uranium from Australia.

Executive director Grant Davey said the project was hard to fault.

“Its production facility is constructed, it’s permitted, it has produced yellow cake, it is a high-grade resource which we’ve already substantially increased, and it has plenty of exploration upside,” he said.

“Honeymoon is in the uranium-friendly state of South Australia and with energy requirements increasing and 71 new reactors being built around the world, our product should be in demand.

“The other beauty of it is that it’s an Australian project and we can add huge value in our back garden rather than overseas.”

Davey said the key issue to address was why Honeymoon had been closed in November 2013 by its previous owners, Uranium One Australia, after just two years in production.

“It was the smallest plant in the world, the economies of scale weren’t competitive enough, the uranium price was low and its parent company was focused on Kazakhstan where it had a 10 million pound rather than an 800,000-pound production capacity,” Davey said.

“But Honeymoon does work, it has produced yellowcake and it has a passionate team behind it now that is able to make it work.

“It’s all about getting the economies of scale right – we’ve got the grade, the cheap mining method of in-situ leaching (ISL), the deposit is shallow and has the right geology for ISL so comparatively we should be in the bottom 25% for cost structure.

“We’ve got a constructed plant so to turn it on is easy, we can do it relatively cheaply – the question is whether we turn it on or expand our production capacity and that’s what we’re deciding (at the time of going to press).”

Honeymoon’s economy of scale has already been beefed up by the substantial mineral resource increase announced in January, making Honeymoon the highest grade mineral resources held by an ASX-listed uranium developer.

The significant mineral resource upgrade was thanks to rigorous assessment of existing data using new 3D geostatistical modelling by Boss’s experienced team.

The upgrade was a 31% increase in the high-grade mineral endowment using a 500ppm cut-off, or a 66% increase in total endowment using the industry preferred cut-off of 250ppm U3O8.

The global mineral resource estimate at Honeymoon now totals 15.2 million tonnes at 820ppm eU3O8 for 27.6 million pounds of uranium at a 250ppm cut-off.

Yet Davey is confident of significantly more uranium within the 2600sqkm tenement package, which lies 80km north-west of Broken Hill near the New South Wales border.

“We’ve set a global exploration target across our entire tenement package of up to 100Mlb of uranium so we are dealing with a significantly under explored uranium province,” Davey said.

/

Honeymoon tenement.

 

The team is working to convert the Goulds Dam and Billeroo prospects to JORC-compliant mineral resources and will start an infill drilling program in the second quarter of 2016 at Jasons prospect, 15km northwest of Honeymoon.

The executive director geology, Marat Abzalov, has done a lot of work in the Kazakhstani ISL uranium mines with Rio Tinto and is extremely excited about Honeymoon and its potential to be a world class uranium mine with operating costs comparative to the Kazakhstan operations. The geology, permeabilities and recoveries of Honeymoon is similar the deposits in Kazakhstan with the major exception being that the deposit at Honeymoon is a lot (300-400m) shallower than the deposits in Kazakhstan.

Geologist Neil Inwood, who has consulted on uranium projects around the world including Extract’s Husab deposit, compared Boss’s situation to the rise of the Kazakhstan uranium industry. 

“Boss has locked up a uranium province in South Australia which can be mined by the cost efficient ISL method, just like in Kazakhstan,” he said.

“By growing the resource we can produce more uranium and if we do it at the same scale as the Kazakhstanis this will make us competitive with their cost of production which is around US$15/lb.” 

As the world’s power needs grow, Davey expects global annual uranium demand to increase 58% by 2020.

“There are 71 reactors under construction and 173 new reactors planned – and nuclear power provides the best solution for a non-polluting baseload power source,” he said.

Boss has acquired 80% of Honeymoon with the option to acquire the remainder from joint venture partner Wattle Mining, which is being free-carried until the completion of a bankable feasibility study.

Existing shareholders have shown their support for Boss’s uranium direction and the rights issue to fund the Honeymoon acquisition was overwhelmingly over-subscribed in October.

“It shows we have a quality asset that has some value in it,” Davey said of the support.

“We have enough money in the bank to fund our program for this year and we are also fortunate to qualify for the Research and Development tax incentive which will provide further funding.”

The company has also made a strategic saving on the care and maintenance costs at Honeymoon.

“Those costs were A$2.5 million a year and we’ve managed to get that down to $650,000, due clever engineering and better scheduling of people,” Davey said.

“We needed to do that because we’re a junior mining company and we wanted to put the money into the ground rather than spend it on care and maintenance.”

He said the mining licence at Honeymoon was a significant benefit to Boss, which put the company well ahead of its uranium developer peers.

“We’re one of four fully permitted uranium mines in Australia so theoretically, that puts us 3-5 years ahead of everyone else,” he said.

“I think we’ve locked up what I call a big, under-explored uranium province of 2,600sqkm and our job is to get the potential out of those tenements through drilling and assessing previous work, then expanding production so that we are sustainable uranium producer.

“To be a sustainable uranium producer, we’d like to see ourselves in the bottom 25% of the cost structure and we believe that is very possible because we’ve got the grade, a cheap mining method, the infrastructure is there, the mining licence is current and there is huge upside potential. 

“Within the next three years, we could very well be producing and that will tie in with a growing demand for uranium.

“The team is very passionate about the project, we have a stake in the project and we’ll be driving to make it work.”

 

Boss Resources – at a glance 

alt=''

HEAD OFFICE: Suite 23, 513 Hay Street, Subiaco WA 6008

Phone: +61 8 6143 6730

Fax: +61 8 9388 8824

Email: admin@bossresources.com.au

Web: www.bossresources.com.au

DIRECTORS: Evan Cranston, Marat Abzalov, Grant Davey, Peter Williams

QUOTED SHARES ON ISSUE: 855 million

MAJOR SHAREHOLDERS: Antonius Joseph Smit, 9.36%; Kingslane Pty Ltd, 7.63%; James David Taylor, 4.86%; The Purple Bougainvillea Pty, 3.80%; Somas Super Pty Ltd, 2.93%

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining News Intelligence team.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining News Intelligence team.

editions

MiningNews.net Research Report 2024

Access a multi-pronged tool to identify critical risks and opportunities in Australia’s mining industry.

editions

Mining Journal Intelligence Investor Sentiment Report 2024

Survey revealing the plans, priorities, and preferences of 120+ mining investors and their expectations for the sector in 2024.

editions

Mining Journal Intelligence Mining Equities Report 2023

Access an exclusive, inside look on the quarterly mining IPOs and secondary raisings data and mining equities performance tables with an annual Stock Exchange Comparisons supplement.

editions

Mining Journal Intelligence World Risk Report 2023 (feat. MineHutte ratings)

A detailed analysis of mining investment risks across 121 jurisdictions globally, built on 11 ‘hard risk’ metrics and an industrywide survey.