Boss Energy share price dips despite quarter ending in ‘highly enviable position’

The uranium producer’s shares finished in the red on Tuesday.

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Key points

  • Boss Energy shares closed 2.91% lower today at $2.67 apiece
  • The company released its March quarterly results to the ASX
  • Management is looking to re-start its Honeymoon Project as soon as its final investment decision is made early next month

The Boss Energy Ltd (ASX: BOE) share price closed lower on Tuesday following the company’s latest quarterly results.

The uranium producer’s shares finished the day at $2.67 apiece, down 2.91%.

Boss Energy share price backtracks on quarterly result

Here are some of the key highlights for the three months ending 31 March 2022:

  • Net cash used for operating activities: $1.2 million (cash used for the nine months of FY to date: $3.48 million);
  • Net cash used for investing activities: $0.8 million (cash used for the nine months of FY to date $1.07: million);
  • Net cash used for financing activities: $89.71 million (cash used for the nine months of FY to date: $89.71 million); and
  • Unrestricted cash and cash equivalents at the end of the quarter of $106.01 million, up from $18.31 million in the previous quarter.

What happened in the March quarter for Boss Energy?

According to its statement, Boss Energy advised it will make a final investment decision (FID) early next month on the flagship Honeymoon uranium mine in South Australia.

During the quarter, the company completed its pivotal front-end engineering design (FEED) study.

It also secured $125 million through a capital raise to fund the development of its Honeymoon project. This includes $113 million of estimated capital development costs for re-starting Honeymoon.

The FID is expected after completion of the tranche two placement on or around 5 May 2022. Thereafter, the company will immediately begin with detailed engineering, procurement, and construction works.

Management is looking to produce the first uranium at Honeymoon within 12 to 18 months of FID.

What did management say?

Boss Energy managing director Duncan Craib commented on the company’s progress, saying:

We are moving even more rapidly than we expected towards achieving our goal of becoming Australia’s next uranium producer.

During the quarter, we completed the FEED study, which confirmed that the cost estimates in the Enhanced Feasibility Study remain accurate

This was followed by the $125m equity raising, which was heavily over-subscribed.

In parallel with these major achievements, the uranium price continued to increase sharply. As a result, the value of our 1.25M-pound stockpile of U308 has nearly doubled to A$95M since we acquired it a year prior in March 2021.

The combination of our highly successful raising and the valuable stockpile means we are fully funded through to production and cashflow at Honeymoon.

As a result of this rapid progress on numerous fronts, we have entered the June quarter in a highly enviable position with preparation underway to make a FID and begin negotiations on offtake contracts.

Despite today’s drop, the Boss Energy share price has gained almost 150% in the past 12 months.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. 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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