Boss Energy set for Honeymoon period with $120m

Boss Energy is in the market for up to $125 million to help fund the development of its Honeymoon uranium project in South Australia.

The West Australian understands Boss is seeking to raise $120m in a two-tranche placement priced at $2.15, representing an 11.2 per cent discount to its last traded price of $2.42.

It is believed the Duncan Craib-led company will also seek a further $5m in a share purchase plan at the same price.

Four Boss directors will sell down about $5m in shares as part of the raising and have each committed to hold their remaining shares until at least first production at Honeymoon.

The raising will lift Boss’ cash reserves to more than $200m, with the company saying it will allow production from the brownfields project within 18 months.

Mr Craib said the company had deliberately structured its funding to maintain a highly conservative and robust balance sheet with no debt, $135m of net cash and an additional $100m contingency from its existing strategic uranium inventory.

“We have not attained any debt as it requires fixing the uranium price through long term contracts,” he said.

“Boss anticipates that committing to long-term contracts in the current rising uranium price environment would adversely impact the long-term upside potential of Boss and we intend to wait for further increases in contract prices before making any offtake commitments.”

Mr Craib said Boss would be perfectly positioned to become Australia’s next uranium producer given Honeymoon was fully permitted and the uranium market’s ongoing recovery.

Honeymoon’s refurbishment is expected to cost just $US80m with the operation having an export licence for 3.3 million pounds a year.