Boss Energy Ltd (ASX: BOE) shares are having a positive start to the day on Wednesday.
In morning trade, the ASX 200 uranium stock is up 3.5% to $3.16.
Why is this ASX 200 uranium stock charging higher?
Investors have been buying the uranium miner's shares after it released an update on recent drilling activities.
According to the release, the infill drilling campaign at the Gould's Dam and Jason's satellite deposits within the Honeymoon Project in South Australia is now complete.
Management notes that the program has returned strong drilling results as well as high-quality modern downhole geophysical data. This will be used to build an updated geological and mineralisation model which will feed into a resource update.
Gould's Dam is located ~80km northwest of the Honeymoon Mine and currently contains a JORC-compliant resource of 25Mlbs of indicated and inferred U308. Whereas the Jason's deposit is located ~13km north of the Honeymoon mine and contains a JORC Resource of 6.2Mt at 790ppm U308 for 10.7Mlbs contained U308 (Inferred).
The two deposits have combined resources of 36.7Mlbs of contained U308. As a comparison, Honeymoon is producing under its current mining licence covering 36Mlbs.
The company will now seek government endorsement for the mining of the two satellite deposits, effectively doubling the allowance under its license. It highlights that this will pave the way for the ASX 200 uranium stock to assess potential increases in the annual production rate and mine life at Honeymoon.
Boss Energy's managing director, Duncan Craib, was pleased with the news. He said:
With the production ramp-up at Honeymoon progressing so well, we are eager to press ahead with our plans to grow the annual output, cashflow and minelife. These satellite deposits have the potential to drive growth as well as enabling us to leverage existing infrastructure and further capitalise on the opportunity presented by growing global demand for uranium from tier-one locations.
Should you invest?
Analysts at Bell Potter are very positive on the ASX 200 uranium stock.
While they have yet to respond to today's news, the broker currently has a buy rating and $5.70 price target on the company's shares. This implies potential upside of over 80% for investors. It said:
Uranium fundamentals continue to support our thesis being 1) advancement in Nuclear energy across the globe (64 reactors currently under construction) filtering through to a growing demand for U3O8 and 2) a lack of nearterm supply as producers exited the market post Fukushima. The recent acquisition of a 30% interest in the Alta Mesa joint venture, diversifies BOE's operations and revenue streams, making BOE one of only a handful of geographically diversified uranium producers in CY24.
