Boss Energy Ltd (ASX: BOE) shares are sinking on Wednesday morning.
At the time of writing, the ASX 300 uranium stock is down almost 14% to $1.49.
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Why are Boss Energy shares crashing?
The company's shares are under pressure following the release of a production update that included a downgrade to its FY 2026 guidance.
According to the release, Boss Energy has reduced its FY 2026 production guidance for the Honeymoon operation to between 1.40 million and 1.45 million pounds of U3O8. This is down from previous guidance of 1.6 million pounds.
Management advised that the downgrade is largely due to ongoing disruptions caused by heavy rainfall.
Boss Energy had previously flagged that rain impacted third quarter production by restricting site access and limiting the delivery of key materials. However, further unexpected rainfall during March extended these disruptions beyond initial expectations.
As a result, production for the third quarter came in at just 203,000 pounds of U3O8. This is below the previously guided range of 240,000 to 270,000 pounds.
Looking ahead, fourth quarter production is now expected to be between 356,000 and 406,000 pounds, which is also below earlier expectations.
Infrastructure delays add to pressure
In addition to weather-related issues, Boss Energy experienced delays in commissioning key infrastructure.
This includes components required to support the ramp-up in production, such as NIMCIX columns and associated pumping systems, as well as the completion of wellfield infrastructure.
These delays, combined with restricted site access, have contributed to the lower production outlook.
Costs remain unchanged
One positive is that despite the downgrade to production, the company has maintained its cost guidance.
Boss Energy expects FY 2026 C1 costs to remain in the range of $36 to $40 per pound, and all-in sustaining costs between $60 and $64 per pound.
However, management noted that costs are now expected to come in toward the upper end of these ranges due to factors such as higher fuel and transport expenses.
Commenting on the update, Boss Energy's managing director, Matthew Dusci, said:
We recognise this downgrade is disappointing, particularly after maintaining guidance as recently as March. At that time, our expectation was that site access and reagent deliveries would normalise during the month. Subsequent unexpected rainfall, combined with the degraded baseline condition of access roads, extended disruption materially beyond that assumption. This has impacted both production and the timing of commissioning critical infrastructure during ramp-up.
While weather-related access constraints were a key factor, delays to certain infrastructure, mainly associated with the commissioning of the additional PLS and BLS pumps, have also contributed to the revised production outcome and guidance for FY26.
Despite this setback, Dusci remains positive on its outlook. He concludes:
These events have impacted performance in the short-term, however we anticipate rebounding to a normalised FY26 production run rate over the course of Q4 FY26. Our immediate focus is restoring targeted lixiviant chemistry, completing commissioning of additional capacity, and exiting FY26 with the operation better positioned for FY27.
