Why is ASX 200 uranium stock Boss Energy flying higher on Friday?

ASX 200 investors are snapping up Boss Energy shares today. But why?

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The S&P/ASX 200 Index (ASX: XJO) is down 0.3% in early trade today, but that's not holding back ASX 200 uranium stock Boss Energy Ltd (ASX: BOE).

Shares in the Aussie uranium producer closed yesterday trading at $4.08. At time of writing on Friday morning, shares are swapping hands for $4.22 apiece, up 3.5%.

This comes following news that Boss Energy's second uranium project has kicked off production.

Here's what's happening.

ASX 200 uranium stock lifts off on production milestone

The Boss Energy share price is charging higher after the company announced that production has started at its Alta Mesa In-Situ Recovery (ISR) Central Processing Uranium Plant and Wellfields, located in the US state of Texas.

The ASX 200 uranium stock owns 30% of the project. Its joint venture (JV) partner, enCore Energy Corp (NASDAQ: EU), owns the other 70%.

The Alta Mesa Project comprises more than 200,000 acres, along with the central processing plant and wellfields. Boss Energy expects production at the project to ramp up to a steady-state rate of 1.5 million pounds per year.

Today's announcement comes just eight weeks after Boss Energy kicked off production at its 100%-owned Honeymoon project in South Australia. Honeymoon's production is forecast to ramp up to 2.45 million pounds per year.

Commenting on the milestone sending the ASX 200 uranium stock sharply higher today, Boss Energy managing director Duncan Craib said, "The start of production at the Alta Mesa Project is another key milestone in the implementation of our strategy to be a global uranium supplier with a diversified production base in tier-one locations."

Craib added:

With operations now ramping up at both Honeymoon and Alta Mesa, we are on track to hit our combined nameplate production target of 3 million pounds of uranium per annum. Our timing could hardly be better given the increasingly tight supply and demand fundamentals in the uranium market.

This highly favourable outlook was underpinned by US President Joe Biden's recent signing of legislation to ban the importation of uranium products from Russia. This was a game-changing event for the uranium market and in particular for uranium projects in North America and Australia.

Craib said that with the ASX 200 uranium stock ramping up production at Honeymoon and Alta Mesa and both projects enjoying strong growth prospects, Boss was "very well positioned to continue capitalising on this huge opportunity".

Motley Fool contributor Bernd Struben 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 Scott Phillips.

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