Why is the Boss Energy (ASX:BOE) share price sinking 6% today?

The Boss Energy ASX: BOE) share price is sinking in morning trade, down 6%. We look at what’s moving the ASX uranium share’s price.

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The Boss Energy Ltd (ASX: BOE) share price is sinking in morning trade, down 6.45% at 14 cents.

Boss Energy emerged from a trading halt this morning after entering the pause of trade on Thursday.

Below we take a look at the ASX resource share’s latest announcement on its uranium inventories.

What did Boss Energy report on its uranium inventory?

The Boss Energy share price is falling this morning after the company reported it had completed a $60 million capital raising at 14 cents per share. Boss Energy shares closed on the last trading day (Wednesday 24 March) at 16 cents per share.

The company will use the funds to acquire 1.25 million pounds (568,000 kilograms) of U-3 O-8 on the uranium spot market at US$30.15 (AU$39.67) per pound. The uranium is warehoused at the ConverDyn Facility in Metropolis, Illinois and will remain stored there following the deal’s completion.

Boss Energy said it would acquire 0.25 million pounds of uranium by the end of April, with the other 1 million pounds acquired by the end of June. The company plans to use the remaining funds from the capital raise to cover uranium storage costs and for general working capital.

Why the stockpile?

Citing tight supply amid strong demand for uranium and the potential for further future price rises, Boss said its increased stockpiles represented a “clear strategic value and upside” for its shareholders. Boss also reported the acquisition puts it in a better financial position for its planned re-start of the Honeymoon Uranium Project.

Commenting on the uranium stockpile increase, Boss Energy’s Managing Director Duncan Craib said:

We have been able to create this unique opportunity thanks to our highly experienced and well-connected operatives in the global uranium market. The stockpile will be highly valuable to us on several levels as we secure offtake agreements, finalise project funding and move into production.

Boss Energy share price snapshot

Despite today’s fall, Boss Energy shares are up 263% over the past 12 months. By comparison, the All Ordinaries Index (ASX: XAO) is up 36% in that same time.

So far in 2021, the Boss Energy share price is up 45%.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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