15-July-2019:  Boss welcomes US decision on Section 232 Petition

The Uranium sector is much smaller than even the very small gold market and as new buyers enter the market, any companies involved will do exceptionally well. A number of other companies have also purchased Uranium as an investment and it has the added benefit of reducing the amount available on the spot market, which will further fuel the price rise and increase the urgency to sign long-term contracts.

Boss acquires strategic uranium inventory after completing $60m capital raising
Strategic acquisition will strengthen Boss Energy’s position in offtake and project funding negotiations
Highlights
• Boss has entered into Binding Agreements to purchase 1.25 million pounds of uranium on the spot market at a weighted average price of US$30.15 per pound
• Strategic acquisition to be funded by a well-supported A$60M share placement
• Placement price of 14 cents per share, representing a discount of 9.7% to the last closing price and 10.6% to the 10 day-trading volume-weighted average market price (VWAP)
• Acquisition of uranium inventory will deliver several significant benefits for Boss as it becomes Australia’s next uranium producer:
? Provides greater flexibility for financing and off-take negotiations
? De-risks the Honeymoon restart as it will ensure Boss can meet offtake obligations, providing initial customers with confidence of supply
? Clear strategic value and upside for Boss Energy shareholders given forecasts of tight supply-demand fundamentals in the uranium market

The Smallcaps podcast is great. Kerry Stevenson is good interviewer; I like the way she stops guest and gets them to explain concepts. One of the latest was with CEO, Duncan Craib.

Craib talks a great game of the prospect of nuclear, and therefore uranium return. Clean, efficient, carbon free*. 

The interview also followed the recent rise in price and how ready they are for the return, or possibly more accurately for Boss, the commencement of production. They certainly seem to have their ducks in a row. 

• Building a competent team
• Selecting a site that has access to services
• Process improvement to drive down cost of production
• Acquisition of permits
• Production readiness

Uranium as Craib indicated is sold over term contracts which lock in producers – and generally these terms are 3, 5 or even 10 years. The issues though, the generators lock in the price, meaning any further upside is lost. Is it a gamble of spot vs lock.

And while spot price has been on the increase it appears it is a waiting game until the price is right. It seems to be to be an investor, you need to trust the management team to:

• Get the price lock in price right
• Have production costs established
• Maintain the team
• Stay the course and deliver as expected

Could this one go 10x. Absolutely. Is there a better place for your investment dollars…your choice.

*with potential risks which he did not discuss.

Podcast is here if you are interested https://webplayer.whooshkaa.com/show/10156

Boss board is pushing forward with a restart of the Honeymoon uranium site in South Australia, ambitiously looking toward production in the next 18 months.

This will be funded by the $125M capital raise 2 months ago.

Once back the project is expected to sun 2.45Mlb uranium oxide per annum at an all-in sustaining cost of US$25.60/lb over the current 11 year anticipated mine life.

Boss is also sitting on a 1.25 Mlb stockpile valued at almost US$60M based on the current spot price.