The Boss Energy Ltd (ASX: BOE) share price hasn't exactly been setting the world on fire in recent months with the company in December announcing it would have to do a major rethink of its mining plans.
This came about following a review of its Honeymoon uranium mine in South Australia, which found "significant deviation from the assumptions underpinning the company's 2021 enhanced feasibility study (EFS)''.
The company added:
This in turn would be expected to impact life of mine production and cost from FY27 onwards, primarily due to less continuity of higher-grade mineralisation, mineralisation not overlapping, less leachability and smaller wellfields.
The company withdrew the EFS and said it should no longer be relied upon as a guide to future performance.
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Production still on track
Despite the setbacks, the company said it was still on track to deliver its expected FY26 production of 1.6 million pounds of uranium at an all-in sustaining cost of $75 to $80 per pound.
The company was also planning to complete a new feasibility study by the third quarter of calendar year 2026.
Shaw and Partners has taken all of this on board, and crucially, with new assumptions about the uranium price going forward, has upgraded its price target for Boss Energy shares.
That said, the Shaw analysts are keen to know more about the company's plans for the new mine designs.
As they said:
The Honeymoon review has identified that a change to the well field design, using larger well spacing, could result in a more efficient operation. We need to do more work to understand this. The concept appears to be that by slowing down the rate of flow through the orebody, the uranium will be under leach conditions for longer, which means higher recovery and lower reagent consumption. This will also allow Boss to lower the cut-off grade, and recover more of the lower grade uranium. However – this will also mean more well fields will need to be in operation at the same time to deliver the same overall production rate.
Bullish on the uranium price outlook
Crucial to the share price upgrade, the Shaw team said, was a sharp spike in the uranium price in January – from US$85 per pound to US$102 per pound in just three days – which they said was a sign that "the coming uranium super-cycle is likely to see extremely quick and outsized moves''.
They added:
The coming uranium supply deficits could exceed 300Mlb/yr, and supply of uranium may become the rate limiter for nuclear power generation. We were already above market, but we upgrade our uranium price forecast to US$175/lb in 2027 (from US$150), US$200/lb in 2028 (from US$150) and lift our long-term price from US$90/lb to US$120/lb from 2032.
Feeding this into their model, the Shaw team has upgraded its 12-month share price target for Boss Energy from $2.63 to $3.15.
This compares with just $1.65 currently, and would be a 91% return if achieved.
