Base and precious metals developer Boss Resources has announced that it has agreed to buy the Honeymoon uranium project from Russia’s state-owned Uranium One Inc (U1) for a compensation package worth more than A$10 million.
The company will form a joint venture with Wattle Mining to acquire Uranium One subsidiary Uranium One Australia. Boss will own 80% in Uranium One Australia, while Wattle will own 20%
Honeymoon is one of the five Australian uranium mines in Australia. Four uranium mines are located in South Australia.
Honeymoon has not been operational for two years now due to the plunge in uranium prices which made it uneconomic to continue mining from the site.
Located about 75 kilometres north west of the town of Broken Hill, the Honeymoon uranium project has never been fully commissioned.
According to the ASX Announcement, the acquisition includes:
– A $200,000 site access fee (paid) which gave Boss the exclusive right to access the Honeymoon Uranium Project and conduct all its due diligence;
– An initial cash payment of approximately $2,442,000 (comprising an amount of $2,115,000 plus a care and maintenance contribution of approximately $327,000) (“Closing Amount”);
– $3 million under a promissory note and repayable within 24 months of completion of the Acquisition;
– $4 million under a promissory note issued and repayable within 48 months of completion of the Acquisition;
Boss will also make the following contingent payments to U1 upon successful recommissioning of the Honeymoon Uranium Project:
– $2 million payable in cash and/or shares upon the later of restart of the operations with commercial production or 5 years of completion of the Acquisition.
– 10% of the net operating cash flow of the Honeymoon Project payable annually up to a maximum of $3 million.