Post Mortem | Boss Energy Thesis, page-2

This is the summary of the bear points and negativity in greater depth.

Wellfield Design & Mineral Continuity Concerns

• Due to this discontinuity, more injection and extraction wells might be required to reach target uranium volumes, raising sustaining capital costs per pound of production beyond original plans.
• Recent delineation drilling at the East Kalkaroo domain (wellfields B6–B9) revealed less continuity of uranium mineralisation and potentially lower leachability than assumed in the January 2020 Feasibility Study (FS) and June 2021 Enhanced Feasibility Study (EFS)

• Boss has initiated an independent expert review to assess the impact of these findings on the EFS assumptions and its future production guidance

Implications for Nameplate Capacity (2.45 M lbs)

• While Boss Energy maintains FY26 production guidance of 1.6 million lbs, it dismissed earlier targets for nameplate capacity of 2.45 M lbs/year as potentially unachievable under current wellfield constraints unless additional wells/capex are deployed.
• The entire ramp plan—from wellfields B1–B5 and B6–B9—now faces uncertainty regarding throughput yield and cost efficiency.

Cost & Execution Ramifications

• C1 cost guidance for FY26 has been revised upward to A$41–45/lb (US$27–29/lb), with all-in sustaining costs (AISC) now pegged at A$64–70/lb (US$41–45/lb), significantly higher than Citi’s estimates of A$34/lb and A$48/lb respectively.
• Sustaining capital expenditure for FY26 is now forecast at A$56–62m, reflecting increased drilling, wellfield engineering, and infrastructure adjustments.
• Management emphasised that resource volumes still exist; the challenge is ensuring economic recovery under revised field domains—not absence of resource per se.

Summary

	Issue	Potential Impact
1	Discontinuity in uranium horizons	Lower extraction volumes per well; more wells needed
2	Weaker leachability	Reduced uranium recovery efficiency
3	Higher sustaining capex	Elevating long-term unit costs
4	Revised FY26 cost guidance	Increased cost assumptions vs earlier forecasts
5	Nameplate capacity now uncertain	Original 2.45M lbs capacity may require revision (down to 1.6m)

If I have missed anything please let me know.c