Boss Energy Ltd (ASX: BOE) shares are bouncing back strongly from yesterday's selloff.
In morning trade, the ASX 200 uranium stock is up 14% to $3.24.
Why is this ASX 200 uranium stock jumping?
Investors have been buying the uranium producer's shares for a couple of reasons.
One is a rebound in the uranium industry today following a better night of trade for miners of the chemical element on Wall Street.
The other reason is that Boss Energy has released its quarterly update this morning and it doesn't appear to have been as bad as some were expecting.
As a reminder, this ASX 200 uranium stock is the most shorted on the Australian share market. Concerns that its costs could be significantly higher than expected have been blamed for this.
However, today's update appears to have eased concerns and could have led to short sellers buying back shares to close positions.
Quarterly update
For the three months ended 31 December, Boss Energy revealed a strong operational performance from its Honeymoon project. Production was up 96% to 215,319lbs and U3O8 drummed was up 53% to 137,084lbs.
In light of this, the Honeymoon project remains on track to meet its FY 2025 production guidance of 850,000lbs U3O8.
Another big positive is that the ASX 200 uranium stock has released its maiden cost guidance for Honeymoon.
Its C1 costs for the second half of FY 2025 are expected to be $37-$41/lb U3O8 (US$23-25/lb). Management notes that this is in line with inflationary increases recorded since the June 2021 Enhanced Feasibility Study (EFS). Importantly, it compares favourably to other projects.
Elsewhere, the 30% owned Alta Mesa project's ramp up was strong. The Texas based project is expected to reach full operational capacity of 1.5Mlbs of U3O8 a year by 2026. Boss Energy's share of Alta Mesa production is 450,000lbs U3O8 a year at nameplate capacity.
Management commentary
Boss Energy's Managing Director, Duncan Craib, was pleased with the quarter. He commented:
Outstanding progress was made at Honeymoon during the December 2024 quarter. The ramp-up of operations continued to proceed on schedule across all key production metrics.
Given this success, we have officially declared Commercial Production, with C1 cost guidance provided for 2H FY25 of $37-41/lb U3O8 (USD $23-25/lb). This compares favourably to other uranium development projects and is in line with inflationary increases recorded since the June 2021 Enhanced Feasibility Study.
At the end of the period, the company had a very strong balance sheet with no debt and liquid assets of $252 million.
