Boss Energy Limited

If you have additional questions, you're welcome to rejoin the queue and we'll be able to ask further questions if time permits. If we run out of time and you do not have time for your question, we ask that you please call our office on 0862634494 or email boss at bossenergy.com and speak to our team. I would now like to hand the conference over to Mr. Duncan Crabe, Managing Director. Please go ahead.

Thanks, Ashley. Good morning, everyone. Thank you for taking the time to dial into our second quarterly call. During the previous January quarterly presentation, we recognised a milestone event for the company when we declared commercial production and we published our first cost guidance. This quarter, we are proud to declare that we've started generating free cash flow from Honeymoon. which is the culmination of a highly successful ramp-up where we saw drummed production of uranium doubling from the previous quarter to just shy of 300,000 pounds and associated C1 costs outperforming our guidance at 21 US per pound. So to be generating robust margins at current prices and delivering free cash flow within one year of starting production is a respectable outcome for any mining operation, particularly uranium where the pool of talent and expertise is more limited than other sectors. Our team has worked tirelessly to ensure that we meet our undertaking to the market and results such as today is testament to the skills and commitment of our people. As I stated in our announcement, we're achieving exactly what we said we will do. Joining me on today's call is our CFO, Justin Laird, and our COO, Matt Doocy. So I'll now walk you through key achievements of the March quarter, as well as providing an update on our investment in the Alta Mesa mining operation in Texas and our disciplined deployment of capital, representing about 3% of our market cap, into strategic uranium opportunities to generate future growth. At the end of the call, Justin, Matt and I are readily available to take your questions. So if we turn to the presentation to slide two, as mentioned, it was a really positive quarter, pivotal in fact, where we delivered outstanding operational and financial results. In summary, Honeymoon continued to deliver on our round-up plan. For the quarter, we produced 296,000 pounds of uranium, which represented a 116% increase from the prior quarter. The NIMS 6 columns were brought into production, the column 3, as well as Wellfield 3. C1 costs were at Australian dollars, 33 US a pound, or 21 US, which is below our guidance. And globally, a C1 cost of 21 US per pound is an enviable position to be in. We, as mentioned, generated our first free cash flow quarter for Honeymoon, and that's in the history of Honeymoon's production, given the robust margins. We also finished the quarter with $229 million in liquid assets, being cash, physical uranium and investments. And that, we also sold 268,000 pounds in uranium at a realised price of US$84 a pound. So the best news of all is that we now remain on track to deliver our £850,000 production guidance and cost guidance for the full year 25. And this was coupled with the continued growth of the company, with construction of columns 4 to 6 underway, and we also during the quarter acquired a strategic investment of 19.7% in Laramud Resources. So really pleasing quarter, a great quarter, and we'd like to go into those highlights in more detail. So turning to slide four of the presentation, really the March quarter was characterised by those strong production results, with 296,000 pounds of drummed uranium, 249,000 of uranium production, representing a 116% increase and 15% increase from the prior quarter. The graph on this slide shows the quarter-on-quarter growth of production as we continue to ramp up at honeymoon. During the back end of the quarter, Columns 3 and Wellfield 3 were brought into production as planned. We did, however, encounter some commissioning challenges, which we raised in previous announcements, with the second kiln and baghouse resulting in some unplanned downtime. But despite these challenges, they're above surface in an operating plant. And we achieved a monthly record production rate in February of 123,000 pounds of uranium. And that, if you annualise it, represents a run rate of 1.5 million pounds. So bearing in mind our full year 26 production guidance next year is 1.6 million pounds. So we're well on track to meet next year's guidance as well. The focus for the coming quarter is to now increase flow rates and resolve any associated bottlenecks, improving runtime of the kilns and evolving the precipitation circuit from a batch to a continuous operation as intended. Construction activities on columns four to six increased during the quarter. The focus currently is on the steelworks for the foundations, along with pipe spooling and assembly. Construction activities will largely be complete by the end of the June financial year, so in the coming months, with commissioning and production of columns four and five in the first quarter of the next financial year. Looking at the cost update on slide five, coupled with the strong production performance, we also had a good control on costs. C1 costs, as mentioned, were an enviable US$21 a pound or AU$33 a pound, which is below that second half 25 guidance. That implies a C1 margin of 68% to 71% based on the current term uranium price. Such results as these demonstrate the quality of the honeymoon asset and the technical advancements we have made to the processing plant and optimising wellfield operations since taking control of the asset. We are forecasting an increase in C1 costs next quarter to finish the second half at the lower end of our C1 cost guidance. Wellfield capital for the quarter totalled $8 million Australian dollars as we progress the wellfield development. This included $3.5 million for the first full cost of wellfields 1, 2 and 3 and $4.9 million for wellfields development of 4 to 9. The construction capital for columns 4 to 6 totaled $4 million Australian dollars for the quarter. That expenditure will significantly increase during the coming quarter, which is aligned with construction activities and an increase in man hours with construction. We, having given all that and sort of explained that background, we really do remain confident that we'll achieve both our full year 25 production and cost guidance for Honeymoon. When we look at our investment in Alta Mesa on the following slide, production for the quarter on a 100% basis totaled £98,000. So the next slide, please. This includes 50,000 pounds of uranium captured between March 6 to March 31. A total of 29,126 pounds was delivered to BOSS's account in the quarter to sell as our own inventory as per the JV agreement. So by that, it's unencumbered. We can sell into our own sales mix. As reported during the quarter, the ramp-up to achieve 1.5 million pounds of uranium per year was impacted by Wellfield's development. In turn, Encore, as the manager of the project, has taken a number of steps to accelerate Wellfield development and improve Wellfield planning during the quarter. The second IEX circuit at Alta Mesa also commenced operations during the back end of the quarter, and that effectively is doubling the project's total flow capacity. The combination of the second IEX circuit and Wellfield's expansion effectively utilised 75% of the current processing capacity. On the following slide, slide eight, BOSS continues to add to its growth pipeline. So we're really pursuing organic and inorganic opportunities whilst remaining disciplined on capital allocation. Several of those opportunities that BOSS progressed during the quarter on the slide before you are our satellite deposits on the honeymoon tenements, being Jason's and Gould's Damned, Having completed the infill drilling on those deposits in previous quarters, we formally engaged consultants, AMC consultants in Perth, Australia, to update the York Mineral Resource, which we expect to be done towards the end of Q3, Q4 this year. We also entered into an earning agreement with Eclipse Group, whereby our minimal commitment is $250,000 in the first year, with gated options to go forward at BOSS's election to increase its ownership if technical due diligence proves positive. So it's a very strictly disciplined approach to proving up that potential asset. Heading that is Penny Sinclair and Andy Wild, our chief geologist, but notably Penny was Cameco's lead geologist in Australia during the previous cycle and Cameco owned these tenements for two years from 2006 to 2008, so we're already head deep in reviewing all those old files. We also increased our stake in Laramide resources to 19.7%. So this is a really exciting project. We believe there's a lot of opportunity here and a lot of potential to develop Laramide further. And their flagship asset of particular attention to us is the Westmoreland Uranium Project in Queensland, which has a total JORC resource of £65 million that contains uranium. We believe our investment so far in telaramide, representing only 3% of our market cap, provides us with asymmetric upside should the monitorium in Queensland be lifted. Onto the market, and it's been some interesting developments, particularly overnight. We found that Bloomberg is now reporting that China has now committed to a further 10 nuclear power plants, which is wonderful news and really shows that the depth of the industry continues to grow. That commitment by China is significant, up to $27 billion, and it represents the third year in succession of committing to that growth. So worldwide, we are seeing, from a medium to long-term perspective, that fundamental supply and demand forecast looking very positive, as it has been for decades. And that's really reflected in the term price, which in the March quarter actually reached an all-time high in Australian dollars of $127 per pound. So if you think that Boss Energy's operating expenditure is 95% linked to Australian dollars, then we're in a very good place earning the US revenue. We see this underlying strength on a day-to-day basis with utilities continuing to invite BOS to tender for the supply of uranium from 2026 onwards. From a short-term perspective, we continue to also see geopolitically uncertainty regarding Russian sanctions and the potential for US tariffs as having an adverse impact on spot uranium price, which is a measure of the current sentiment and in fact worldwide affecting all markets. But positively, following the recent declines in spot price, we've started to see an increase in buyer interest in the short to mid-term. And that can be seen in the spot price, which has recently stabilised at a mid-65, 60 US per pound, to today's spot price of 67.5 US a pound. So it's risen two and a half US dollars in the past week. Notably, in the past two weeks as well, we've received two substantial RFPs from globally significant fuel buyers. So what I would explain is the market is beginning to thaw. Fuel buyers are now beginning to come back to the market. They've been able to rely on their own inventories. but they do need to keep acquiring new inventory. So the large strategic utilities with strong cash balances and strong buying power and savvy teams are now entering the market, seeing the prices are reasonable to contract out. When we look at our financial position on the following slide, BOSS remains in a very strong position, sorry, the following slide, with a robust balance sheet that is supported by $229 million in cash and liquid assets on hand as at 31 March 25. This represents a decrease of $22 million from the prior quarter, but please do keep in mind this was primarily driven by marked-to-market movements in inventory and listed investments. Revalued today, one would see that balance increase. During the quarter, BOSS also received cash for £268,000 at an average realized price of US$83.5 per pound. That price was higher than the prevailing spot price, which was also supported by 118,000 of those pounds reflecting a repayment of a loan to Encore at 100 US a pound, the prevailing price at which the loan agreement was entered into just over a year ago. Positively, as mentioned, this quarter represents the first quarter that Honeymoon in its history has recorded positive free cash flow. Given that Honeymoon is still only in its first year of ramp up, we believe this reinforces the decision to bring the mine online when we did. The following slides really just to summarise how honeymoon is placed. And really becoming free cash flow positive in the first year ramp up, we're really chuffed about. And it's a full credit to the team, particularly on site, for achieving these healthy C1 margins. Production and costs remain on track to meet production guidance. We continue to invest in honeymoon development of oil fields. Columns 4 to 6 are underway, and you can see pictorially in the announcement today of the steel structure that provide the foundations. And again, it's the same installation teams that built the first three, so we're getting quicker at rolling these out. And column 4 is scheduled to be in production in the first quarter of the next financial year. We are also developing a strong asset portfolio, but remaining very disciplined on capital allocation, and I can't emphasise that enough. Our focus to date, and it still continues to be, Honeymoon, and now we're supporting Altamesa with their ramp-up. The company has a strong balance sheet of $229 million in cash and liquid assets. So with that, I would like to take this opportunity to really, again, acknowledge the BOSS team, particularly on site. Throughout the organisation, there has been a considerable work and effort in getting the company to this point. It's a great result to see today's announcement come through, highlighting the continued success of the ramp-up at Honeymoon. The team's current focus is now hitting guidance for the year at £850,000 in this coming quarter of produced uranium, and we're doing our best to achieve that. So with that, it concludes the presentation and we can now turn to Q&A. Thanks, Ashley.

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