Rising Costs and Safety Concerns Shadow Boss Energy’s Honeymoon Production Ramp-Up

Operational Milestone Achieved at Honeymoon

Boss Energy Limited (ASX: BOE) has marked a significant milestone by declaring commercial production at its Honeymoon Uranium Project in South Australia, effective 1 January 2025. This declaration follows a robust ramp-up phase, with the December 2024 quarter seeing a 53% increase in uranium oxide (U3O8) drummed to 137,084 pounds and a near doubling of ion-exchange (IX) production to 215,319 pounds.

The ramp-up has been underpinned by the successful commissioning of Kiln 2 and the operation of NIMCIX columns 1 and 2 at nameplate capacity, with column 3 recently commissioned and expected to reach full capacity by February 2025. These developments have positioned Honeymoon on track to meet its full-year 2025 production guidance of 850,000 pounds of U3O8.

Cost Guidance and Technical Efficiency

Boss Energy has provided maiden C1 cost guidance for the second half of FY25, estimating cash costs between AUD $37-41 per pound (USD $23-25 per pound). This cost profile aligns with inflationary trends since the 2021 Enhanced Feasibility Study and compares favourably with other uranium projects globally.

Central to this efficiency is the ion-exchange technology at the heart of Boss' re-development strategy, which has proven highly effective. Improvements in lixiviant chemistry and processing have contributed to operational gains, reinforcing Honeymoon's competitive positioning on the cost curve.

Progress at Alta Mesa and Financial Strength

Complementing Honeymoon's progress, Boss Energy's 30% stake in the Alta Mesa Uranium Operation in Texas has begun to yield production, with the company receiving its first shipment of 35,181 pounds of U3O8 during the quarter. Alta Mesa is ramping towards an annualised production capacity of 1.5 million pounds by 2026, with Boss' share expected to reach 450,000 pounds per annum at full capacity.

Financially, Boss Energy maintains a robust balance sheet with $252 million in liquid assets and no debt, supporting ongoing ramp-up activities without the need for external capital. The company reported sales of 200,000 pounds of U3O8 in the quarter at an average realised price of USD $77.50 per pound, generating revenue of approximately AUD $25.2 million.

Exploration and Growth Prospects

Exploration efforts continue to focus on expanding the resource base around Honeymoon, with infill drilling at satellite deposits Gould's Dam and Jason's yielding promising results. These will feed into upcoming scoping studies and mining lease proposals, potentially extending mine life beyond the current forecasts.

Boss Energy is also advancing exploration within an 80 km radius of Honeymoon, targeting high-priority areas that could unlock additional resources. Early drilling at the Cummins Dam prospect has defined a mineralised zone approximately 1 km by 1 km, with further drilling planned.

Market Context and Strategic Outlook

The uranium market backdrop remains supportive, with global nuclear capacity expected to more than double by 2050, driven by decarbonisation efforts and growing demand for reliable energy sources, including from data centre operators. Boss Energy's multi-mine, tier 1 status positions it well to capitalise on this evolving market.

However, geopolitical risks and supply-side uncertainties persist, underscoring the importance of operational resilience and cost competitiveness. Boss Energy's recent operational achievements and financial discipline provide a strong foundation as it navigates these dynamics.