The Boss Energy Ltd (ASX: BOE) share price is riding the recent uranium boom, rallying another 7% to a 13-year high of 30 cents.
Boss Energy is a uranium explorer operating the Honeymoon uranium project in South Australia. Honeywell was moved into care and maintenance in 2013 due to weak uranium prices. The company is now pushing towards the restart of mining with a final investment decision to be made within the next 12-months.
Australia’s next uranium producer?
The Boss Energy share price is picking up where it left off and coined itself as Australia’s next uranium producer.
The company’s August Diggers and Dealers presentation described the Honeymoon project as a “technically proven, low-cost re-start operation in a uranium friendly jurisdiction”. Key highlights include:
- Industry competitive upfront capital requirement of US$80 million
- Fast track to production, <12 months from Final Investment Decision of first uranium production
- Low-cost producer, life of mine average all-in sustaining cost of US$25.6/lb
- Fully permitted with native title agreements in place
- Ready to go when uranium price rebounds
Within the presentation, Boss Energy said that project finance and offtake negotiations were underway, seeking to maximise its exposure to a uranium price recovery.
Looking ahead, key milestones for the company included plans for increasing production profile and extending mine life through the development of satellite resources.
What’s driving the Boss Energy share price ?
Uranium prices have skyrocketed to above US$44/lb, the highest since December 2012.
This has in turn translated to a significant re-rate for the Boss Energy share price, which has been patiently waiting for higher uranium prices.
The sudden jump in uranium has been driven by the Sprott Physical Uranium Trust, which began trading on Canada’s Toronto Stock Exchange in July this year.
The fund has been actively and aggressively buying physical uranium off the spot market, tightening supply and sparking renewed interest in the energy metal.
Uranium is a relatively illiquid commodity that does not trade on an open market like gold or copper. Instead, buyers and sellers typically negotiate private contracts.
On 8 September, Bloomberg reported that the fund had purchased over 24 million pounds of uranium.
By comparison, uranium investment firm Yellow Cake PLC reported total spot volume for 2020 of 92.2 million pounds.
Sprott hasn’t stopped there, with the fund’s Twitter announcing another 1.25 million lbs added on Wednesday.
Boss Energy share price making up for lost time
The Boss Energy share price is in a hot space right now, after trading mostly sideways between 2012 and 2022.
It’s honing in on 2007 highs of 50 cents after rallying 87% in the last month and 200% year-to-date.