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Russian state nuclear corporation Rosatom has finally decided to sell the Honeymoon uranium project in northern South Australia to ASX-listed Boss Resources. Boss is a Subiaco, Australia-registered minerals exploration company that has nickel and copper projects in Sweden and Finland and gold projects in Burkina Faso, West Africa. Boss said it had entered into an agreement with Rosatom subsidiaries Uranium One Inc and Uranium One Australia Pty Ltd to acquire 100% of the issued share capital in Uranium One Australia, which owns the Honeymoon project.

Honeymoon - one of the five Australian uranium, four of which are located in South Australia - has been mothballed for the past two years because low uranium prices made it uneconomic to continue mining. The mine has undergone several changes in ownership, the most recent being the takeover of Canadian firm Uranium One by Rosatom uranium mining subsidiary ARMZ in June 2010.

Boss is forming a separate entity with privately owned Wattle Mining to buy the Honeymoon project subject to several conditions. Boss will own 80% and Wattle will hold 20% of Uranium One Australia. Boss has an option to acquire Wattle's 20% after completion of a bankable feasibility study. The complex buyout involves several components including a $2.4m cash payment, a $200,000 "site access" fee and several milestone payments into the future if the mine does go into production again.

Although Honeymoon has been on "care and maintenance" for two years, Boss is optimistic. It has resources up to 2100 ppm that are amenable to in-situ leach processing with "excellent exploration potential to identify further resources". A processing plant on site has a capacity to produce 880,000 pounds of uranium a year. There is a 75km power line connecting the operations to mains power, a mining camp capable of housing 200 people and a fleet of vehicles and spare equipment. Honeymoon's various owners have invested around $170m into the project over the years.

South Australia is currently holding a royal commission into whether the state should expand from just being a uranium miner and also delve into nuclear enrichment, power generation and waste storage. Royal commissioner Kevin Scarce is due to hand down a final report by May, 2016.


Date: Thursday, 03 September 2015
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