Shares of the company climbed almost 8 percent on Monday following the positive announcement.
Thanks to a 30-percent increase in its mineral resource estimate, Australian uranium explorer Boss Resources (ASX:BOE) is moving full steam ahead towards restart at its Honeymoon uranium project in South Australia.
Shares of the company climbed almost 8 percent on Monday (February 25), following the positive announcement.
Boss purchased the Honeymoon uranium mine in 2015. Prior to the new ownership, the south Australian uranium project had been in production for a short period between 2011-2013.
Since acquiring the site, Boss has worked to advance the mine in order to initiate a restart. This latest measured and indicated mineral resource update is a key step in that process.
“Today’s announcement provides further validation that Honeymoon is one of the few uranium projects worldwide positioned to participate in the early stages of a new bull market,” Managing Director Duncan Craib said in the company announcement.
The newly updated mineral resource is a result of infield drilling in conjunction with historical data. The revised totals cover the Honeymoon area, as well as the Brooks Dam and the East Kalkaroo deposits for a combined total of 24 million tonnes at 660 parts per million (ppm) U308 for 36 million pounds U308, using a cut-off grade of 250 ppm.
“Through additional drilling, revised interpretations, and management of the disequilibrium for the gamma data, approximately 70 percent of the existing inferred mineral resource was converted to indicated mineral resource, resulting in a significant 149 percent increase in the proportion of combined indicated and measured mineral resource that can now be considered for potential conversion to ore reserve through an updated feasibility study,” explained the update.
Restarting Honeymoon is an important milestone for the Australian uranium industry, a sector that is heavily regulated. In fact, there are only five permitted uranium mines on the continent, two of which are not operational.
As Boss moves closer to turning Honeymoon back online, one of Australia’s oldest uranium mines is inching closer to its permanent closure.
The Ranger mine, owned by Energy Resources of Australia (ASX:ERA), has been one of the country’s largest producers of uranium since it was opened in the early 1970s. Production at the mine located in the Northern Territory is winding down ahead of the January 2021 closure, full rehabilitation of the uranium site is expected to conclude by January 2026.
The impending closure of Ranger, one of the three operational mines, makes the restart efforts at Honeymoon all the more critical.
Last October, the Minerals Council of Australia called on the country to end what it dubbed, “unfair and discriminatory treatment of uranium mining projects in the Environment Protection and Biodiversity Conservation (EPBC) act.”
The council would like to see the process of green-lighting future projects sped up, and the timing is right. Due to its proximity to Asian nations like Chin and Japan, a robust Australian uranium sector could fuel the expanding nuclear reactor and clean energy movement that is taking shape.
There are some 50 nuclear reactors being constructed in 15 countries around the world, 13 of which are in China alone. Australia could play a key role in the future of the clean energy sector if uranium mines become easier to construct on the continent.
Shares of Boss Resources were up 5 percent on Monday, trading at AU$0.058.
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.