Boss Resources Ltd (ASX:BOE) is to place $1.25 million worth of stock at $0.04 per share to professional and sophisticated investors.
Proceeds will be used to progress the Honeymoon Uranium Project, located 75 kilometres northwest of Broken Hill.
An institutional fund manager will take 40% of the placement shares.
Since acquisition of the project in December 2015, Boss has increase the Honeymoon global resource by 330%.
A drill program is planned to expand the resource size of the Honeymoon project.
Honeymoon Uranium Project
The project contains the Honeymoon and Goulds Dam Resources, a high-grade sandstone hosted uranium deposit amenable to insitu-leach mining techniques.
The 2600 square kilometres project includes the granted Honeymoon mining lease making it 1 of 4 fully permitted uranium projects in Australia.
The mine has been on care and maintenance since 2013 and was acquired by Boss for $9 million in staged payments.
The overall resource inventory at the Honeymoon project is 52.5 million pounds of contained U3O8 at 640 parts per million.
The global exploration target for the Honeymoon uranium project is currently estimated to be between 42 million pounds and 100 million pounds of contained U3O8 in addition to the current global resource.
The project has A$170 million worth of plant and infrastructure already in place.
Reducing operating costs
Recently, Boss identified resin technology which may reduce operating costs at Honeymoon.
ANSTO, a world leader in uranium technology, was appointed to undertake additional test work on usage of the resin technology.
The use of resins at Honeymoon has potential to play an integral role in the expansion and recommissioning of the Honeymoon uranium project.
Expansion study
Boss is has commenced an expansion study at Honeymoon following the 330% increase in the global uranium resource.
The expansion study is aimed at reducing operating costs through larger volumes, with results expected in August.
Analysis
Boss being able to secure strong market support for this placement validates their strategy to transition the Honeymoon Uranium Project into production.
With 40% of the placement going to an institutional fund manager, this further exhibits the potential of the Honeymoon project.
Honeymoon is one of the highest grade un-mined uranium resources in Australia, and 1 of 4 fully permitted.
Given the time it takes to attain permits, this theoretically places them 3-5 years ahead of peers.
Boss has shown ambition to lower costs, exemplified already by lowering care and maintenance costs at Honeymoon from $2.5 million a year to $650,000.
Upcoming news flow is expected surrounding further resource estimation and exploration and updates on the option and expansion study.
Upcoming milestones for Boss include:
- Converting the Jasons exploration target into JORC resource;
- Target known mineralised areas for low cost additional resources (Q3, 2016);
- Complete expansion definitive feasibility study by 2017; and
- Commence expanded production mid 2019.
Global nuclear generation capacity will increase 70% over the next decade from 374,067 electrical megawatts to 636,693 electrical megawatts.
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