Boss Resources Ltd INITIATION REPORT Honeymoon begins for Boss...

Boss Resources Ltd INITIATION REPORT Honeymoon begins for Boss Resources Mining - Development Overview Boss Resources recently acquired the Honeymoon project in South Australia, which is one of only 4 Uranium projects in Australia to be fully permitted for Uranium mining. $170m has been spent on infrastructure at the project, as production commenced in 2011, however was later placed on care and maintenance in 2013 mainly due to the sustained low Uranium price caused by the Fukashima disaster. The infrastructure at site includes an 880,000lb per annum solvent extraction processing facility, 75km powerline to the power mains, camp and administration office, vehicles, spares and other significant infrastructure. All infrastructure has been maintained in excellent condition. In addition to the infrastructure, Boss acquired numerous intangible assets. These included all major licences and approvals (one of only 4 fully permitted Uranium projects in Australia), an approved export route (Flinders terminal is one of only two Uranium export terminals in Australia) as well as a significant carry forward tax loss position (combined entity ~$215m) which significantly reduce the company’s future tax liabilities. The Honeymoon Project is an In-Situ Leach or ISL mining operation. Whilst not common in Australia, ISL mining is the most common technique for Uranium production globally, and has numerous advantages compared to traditional hard rock mining such as lower costs (opex & capex) as well as having a lower environmental impact on the surrounding region. There are currently 65 nuclear reactors under construction across 14 countries. Like most commodities China is the principal driver for the future demand of Uranium, as there are currently 22 reactors under construction. In addition there is another 165 reactors planned to be built and a further 324 proposed for the future. Investment View The acquisition of the Honeymoon Project is potentially shaping up as the deal of the year. With infrastructure and approvals already in place, Boss could theoretically start production in the near term. Boss also appears to have timed the acquisition to perfection with supply & demand fundamentals pointing towards a higher uranium price in the medium/LT. We initiated coverage on Boss with a valuation of $0.14 / share.

We believe there is further upside in our valuation given the significant exploration potential (historical resources and limited follow up work on historical drilling) which could potentially see Boss increase the production capacity at Honeymoon in the future (TSI valuation - $0.30 / share).