Bearish Short Case - Stay Away If You Want Bullish News

Going to stick my neck out and see how well it stands the test of time.

The single biggest factor in this bear case is the operational risk around the honeymoon project at current valuation of $2.2b market cap.

• Previous owner Uranium one had production issues before placing mine site in care and maintenance. The back drop is the richest part of the deposit 1100ppm+ and conservative extraction technology (Solvent extraction)
• Current owner BOE on one field trial data turned to Ion Exchange technology (IX). IX is conventionally unsuitable for the ground conditions at honeymoon with high salinity and other background contaminants. There is good reason to shift to IX with on paper cheaper capex and opex. But the risk is very significant without large scale trial before production.
• The project went to FEED and now construction without a large scale trial data. High risk of spreadsheet engineering at work.
• On top the honeymoon project is utilising old infrastructure from Uranium one days (10+ years old). Adding another layer of operation risk.
• Company in Sep-23 quarterly stated planned first production in Dec-23 quarter. IX column was installed Nov-23. But Dec-23 quarter has come and went absent of first production announcement. Then today drilling report update state production of first drum is planned for Mar-24 quarter.

Bearish speculations.

• Company has difficulty restarting/commissioning a previously proven producing mine site. The major change being IX tech over previous SX tech.
• IX tech shows it is unsuitable for large scale production. Zero or sub par performance.
• Company either go back to SX technology. Delaying production.
• Or the company tries to figures out IX issues. During this time the company uses up the high grade orebody (high confidence measured) then moves into medium grade 600ppm part of the orebody.

Disclaimer: Short BOE at $5.5, looking at sub $2-3 covering