Honeymoon over for Boss Energy after $600m market rout
Shares in Boss dropped more than 40 per cent on Monday when the miner warned it was unlikely to hit the production target for the Honeymoon project in South Australia and flagged concerns about the quality of its uranium.
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The chief of Boss Energy has shied away from media scrutiny while his incoming counterpart Paladin Energy braved a press pack following a bruising month for both uranium majors. Boss Energy's outgoing CEO Duncan Craib declined to speak to media after his Diggers and Dealers presentation on Monday morning. Shares in Subiaco-based Boss have lost 55 per cent within the past three weeks after publishing a bleak output forecast for its flagship Honeymoon uranium project in South Australia. The forecast shock on July 28 came just four days after it was announced Mr Craib would step down from the top job by the end of September. He will stay on as a non-executive director from January 1 next year 'at the board's request'. Last May, just weeks after Honeymoon produced maiden uranium, Mr Craib sold 3.75 million of his 4.24 million shares for an average of $5.63 each to rake in $21.1m. Mr Craib's presentation on Monday immediately followed the presentation from Paladin Energy's incoming chief — Paul Hemburrow — who is currently the Perth-based company's chief operating officer and starts his new job on September 1. Paladin's shares have sunk 19 per cent over the past month after facing its own production guidance headaches at the Langer Heinrich uranium mine in Namibia. Boss and Paladin are the two most shorted stocks on the Australian Securities Exchange — 17.3 per cent of Paladin's shares are in the hands of short sellers and Paladin is not far behind with 17.1 per cent. Boss and Paladin both restarted their uranium mines last year after long periods of dormancy as the radioactive commodity's price languished. Mr Hemburrow told media on Monday after his presentation that restarting a uranium mine had proven to be 'a really difficult proposition'. 'I can't comment on what's happening with Boss, but in our particular circumstance, we had a number of complexities during the ramp up that were quite challenging,' he said. '(Paladin had) the unexpected grade variance from our medium grade stockpile and then in March we had a one-in -50-(year) flood event. And a week later we had another one-in-50-year flood event. 'So we had, we had quite a few very specific challenges.' Mr Hemburrow also took a veiled dig at Boss, which uses an in-situ leaching process to extract uranium, implying Paladin's operational hurdles would be easier to overcome. 'I'm not an in-situ leaching expert, but that looks really tricky,' he said. 'We're open cut mining in Langer Heinrich — it's very, very traditional. Diggers, trucks moving lots of dirt and processing using a pretty basic alkaline leaching process.'
