Boss Energy has acknowledged significant upward revisions to operating and capital costs at its Honeymoon Uranium Project, alongside challenges in achieving production targets, prompting an independent review.
- Updated FY26 operating costs significantly exceed prior feasibility estimates
- Capital expenditure per pound of uranium increased due to geological complexities
- Challenges identified in achieving nameplate capacity from wellfield variability
- Independent expert review initiated to assess impact on prior feasibility assumptions
- Company confirms compliance with ASX continuous disclosure obligations
Context and Background
Boss Energy Limited (ASX, BOE) recently responded to an ASX Aware Letter following its FY26 Guidance Announcement, which revealed notable revisions to cost and production forecasts for the Honeymoon Uranium Project in South Australia. The company confirmed that updated operating costs, capital expenditure, and production capacity estimates materially affect the value of its securities, explaining the basis for these changes and outlining the timeline of internal awareness and disclosure.
Rising Costs and Operational Challenges
Boss Energy disclosed that cash operating costs for FY26 are now expected to be between USD 27-29 per pound of uranium oxide (U3O8), with all-in sustaining costs (AISC) rising to USD 41-45 per pound. These figures represent a substantial increase from the Enhanced Feasibility Study (EFS) estimates of USD 18.46 and USD 25.62 per pound respectively, published in 2021. The company attributes the cost escalation primarily to geological factors such as less continuity in mineralised horizons and adjustments in lixiviant chemistry to optimize extraction.
Capital expenditure guidance was also revised upward, with FY26 expected to require USD 56-62 million, reflecting additional drilling and wellfield design work. The initial wellfields (B1 to B3) have provided operational data that revealed variability in mineralisation and leachability, complicating efforts to achieve the previously forecast nameplate capacity. Wellfields B4 to B9 are planned but face similar uncertainties, particularly in the East Kalkaroo domain.
Disclosure and Compliance
Boss Energy detailed the internal process leading to the disclosure, noting that the updated information emerged from the FY26 budgeting exercise that began in May 2025 and incorporated 12 months of operational data. The company emphasized that the FY26 Guidance Announcement was the first occasion it provided annual AISC guidance and that the updated figures were disclosed promptly once sufficient certainty was achieved. The company confirmed full compliance with ASX Listing Rules, including continuous disclosure obligations.
Market Impact and Next Steps
The announcement triggered a sharp market reaction, with BOE shares falling 44% on heavy trading volume immediately following the guidance release. To address ongoing uncertainties, Boss Energy has commissioned an independent review by subject matter experts to assess the full implications of the updated operating and geological data on the assumptions underpinning the 2021 feasibility studies. This review will inform future guidance and operational planning.
Investors and analysts will be watching closely as the independent review progresses, seeking clarity on the long-term viability and cost structure of the Honeymoon project amid these emerging challenges.
Bottom Line?
Boss Energy’s updated guidance underscores the complexities of uranium mining at Honeymoon, with an independent review set to clarify the path forward.
Questions in the middle?
- How will the independent review reshape Boss Energy’s long-term production and cost forecasts?
- What operational adjustments might be necessary to mitigate geological variability in upcoming wellfields?
- Could further cost escalations or production delays impact Boss Energy’s financial outlook and share price?