Honeymoon Project Summary

  • Boss Resources (ASX:BOE) recently acquired the Honeymoon Uranium Project in South Australia.  The project is one of only four fully permitted uranium projects in Australia.
  • Approximately $170m has been spent on infrastructure at the project, as production commenced in 2011, however was later placed on care and maintenance in 2013 due to the sustained low uranium price because of the Fukashima disaster.  However the infrastructure has been kept in excellent condition and we believe only a minimal amount of capital would be required for production to recommence in the future.
  • We initiated coverage on Boss with a valuation of $0.14 / share.  We believe their is further upside in the share price given the significant exploration upside that could lead to an increase in the production profile in the future, as well as the strong fundamentals for the uranium price.

Valuation Analysis

  • Financial Analysis of Boss to determine our base case valuation.
  • Explain reasons for the key assumptions used to determining our valuation, including:
    • Uranium Price;
    • Mine life;
    • Exploration valuation (peer analysis); and
    • Sensitivity Analysis.

Investment Analysis

Identify the key drivers for our valuation and future share price catalysts, including;

  • Infrastructure & intangible asset;
  • Uranium price;
  • Exploration; and
  • Increase production potential.

 Risk Assessment

  • Analysis of the key risk we associate with a potential investment in Boss, including:
    • Operational;
    • Price – uranium;
    • Political; and
    • Finance.

Honeymoon Uranium Project

  • The Honeymoon Uranium Project is located in South Australia.
  • The Project was put into care & maintenance during 2013 due to the fall in the uranium price post the Fukashima disaster.
  • Approximately $170m was spent on infrastructure at the Project which remains in excellent condition.
  • The SX facility has a current production capacity is 880,000 lbs pa.

Honeymoon vs Kazakhstan

  • Kazakhstan is the largest producer of uranium globally producing 50Mlbs / annum.
  • The majority of uranium production in Kazakhstan is from ISL mining.
  • We interview Dr Marat Abzalov to compare and contrast the differences between Honeymoon and Kazakhstan ISL assets.
  • Dr Abzalov has extensive experience in the ISL industry and was previously Head of Exploration for Rio Tinto Eurasia, with a focus predominantly on ISL opportunities.

Logistics – Export of uranium

  • There are only two ports in Australia where uranium can be exported – The Port of Darwin and the Flinders terminal in Adelaide.
  • Yellow cake will be transported from Honeymoon to the Flinders Terminal via a government maintained sealed highway.
  • We interview Frank Boulton, a Uranium Logistics Expert, to discuss the exports of uranium in Australia as well as the Flinders Terminal in detail.

Resource potential – Honeymoon

  • Interview with Dr Marat Abzalov to discuss the resource potential at Honeymoon.  Topics discussed include:
    • Upside potential from historical drilling;
    • Untested zones despite limited historical drilling; and
    • 80km of strike length along the paleochannel.

Exploration overview – Honeymoon

  • Interview with Neil Inwood to review the exploration potential at Honeymoon.  Topics discussed include:
    • The 2016 exploration program;
    • Review of historical results and extensive database; and
    • Highlight the key exploration regions at Honeymoon.

Uranium – Demand, supply & pricing

Detailed review of the fundamentals for uranium.  Includes analysis on the:

  • Supply – Current & future;
  • Demand  – Current & future;
  • Unique pricing characteristics – spot vs. long term contracts.

Ask the Question – Keith Bowes

Interview the management team to discuss the history of the Honeymoon project, highlight the exploration potential, a review of the corporate strategy for 2016 as well as an overview on the uranium sector.

Ask the Question – Grant Davey

Interview the management team to discuss the history of the Honeymoon project, highlight the exploration potential, a review of the corporate strategy for 2016 as well as an overview on the uranium sector.

The Sophisticiated Conversation

Interviews with Bosses management team to discuss their relevant work experience as well as their interests and passions away from the office.

Paydirt: Honeymoon start for Boss in SA

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