Thank you and good morning, everyone. Thank you for dialing into Boss Energy's June 25 quarterly conference call. Joining me on today's call is Justin Laird, our CFO, and Matt Dusci, our COO, who will also be available during the Q & A session at the end. There is a lot of content in the release and I've taken quite a few phone calls already this morning. In essence, what I'll talk through is the strong performance we delivered during the fourth quarter and for FY 2025, our current FY 2026 year guidance being on set to deliver 1.6 million lbs . What we are facing in FY 2027 and to round out a talk just regarding management changes. At the end of that we'll have Q& A. Before commencing, it's worth reflecting on the past year, which was our first year of production at Honeymoon.
It really has been a tremendous achievement that since the start of commissioning in April of last year, we've produced over 1 million lbs of uranium to date. If you compare that back to the previous operations under Uranium One, who achieved 640,000 lbs in nearly a two and a half year operation. To technically beat our first year of production, cost guidance then hit a million pound milestone, a really big achievement and full credit to the team on the ground at Honeymoon. I’d like to thank them for their commitment and hard work. Our margins are strong. If you compare our costs to global production, we really are in an enviable position. As demand rises for uranium, we're in a good position to capitalize upon it. With production on track, we're still on target to ramp up significantly over FY 2026.
We're seeing that in our results to date for July of over 130,000 lbs being produced, which annualized already. If we keep going as we are in July, we'll hit the 1.6 million lbs. We're driving our exploration program forward. We're updating our resource estimates for Goulds Dam and Jason’s, our satellite deposits, and there's a lot more work to be done with Greenfield Target. In all, a very promising start for a new mining operation. Turning to slide three of the presentation key ramp up milestones, I'll start with our fourth quarter in FY 2025 r esult. We're delighted to announce that Honeymoon exceeded FY 2025 production cost guidance with 872,000 lbs of uranium produced. That's drummed and a C1 cost of AUD 35 or $23 per pound, again reflective of the hard work and commitment of our team on site.
From a processing plant perspective, we successfully dealt with the small challenges encountered with the drying and packing area during the quarter, and that has led to consistent performance since the commissioning of NIM6. Columns 1 - 3 are all operating in line with design in terms of flow, capacity, and loading and unloading of resin beads. We've also pleasingly seen positive progress for our 30% joint venture relationship in Alta Mesa, managed by enCore Energy, with over 200,000 lbs of uranium produced, an increase of 98,000 lbs in the prior quarter. It's terrific to see Alta Mesa's turnaround. From a financial position, we remain strong with a strong balance sheet, AUD 224 million in cash and liquid assets, no debt, and during the quarter we sold 100,000 lbs of inventory at a price of $71.15 .
Boss was able to achieve a relatively high realized price during the quarter due to being strategically under-contracted, which really enables us to sort of step away from the market when we believe the market price isn't representing fundamental long-term value. That is one of our core strategies going forward. As mentioned, we also exceeded our C1 cost guidance, recording $23 or AUD 36 Australian dollars per pound, which is a terrific result. In addition, which I'll expand upon during the presentation, we're also going to provide 2026 guidance which will go for 1.6 million lbs uranium drum this financial year with a C1 cost guidance of up to $27 - $29 or AUD 41-AUD 45 and an all-in sustaining cost of AUD 64-AUD 70 or $41- $45 .
Looking at further ramp-up and growth initiatives that are underway, our ramp-up continues with the construction of future wellfields and completion of NIM6 columns 4 - 6. All of those columns 4, 5, and 6 have been installed and are currently undergoing commissioning, with column 4 also having completed its hydro testing. We've also increased our investment in Laramide Resources from 19.7% - 19.9%, and after several years of submission and government application, it was terrific news received in the last week or two with Laramide receiving a mineral development license for their Westmoreland uranium project in Queensland, which is a hugely positive milestone for the company. Turning to the following slide, Slide four, Honeymoon's production results. Boss continues to ramp up production at Honeymoon, delivering 349,000 lbs of uranium and 396,000 lbs of IX production, and that represents a growth of 18% or 60% respectively.
The accumulation of inventory in the circuit during the quarter has also put Boss in a strong position to start this current financial year. In fact, as mentioned, during the July month to date, this month to date drum production of 138,000 lbs, which annualized surpasses our 2026 guidance of 1.6 million lbs. As mentioned, those challenges we had with drying and packing, which we've previously disclosed to the market, have been resolved and we're seeing consistent performance since. The key activities for this current quarter are to focus on the ramp up plan and commission those NIM6 columns 4 - 6, bring Wellfields 4 to 5 online, and continue to build out Wellfields 6 - 9 to support future production. Turning to the following slide on Alta Mesa, with regards to our 30% stake, we've seen positive operational results as that operation turns the corner and improves their efficiencies.
Their production for the quarter of 200,000 lbs is up from 94,000 lbs in quarter three, and as such we received 44,000 lbs reflecting our pro rata share of production, which is also up from 29,000 lbs in the prior quarter. On the 4th of July, we also announced to the market that we had entered into an amendment to the existing uranium loan agreement with enCore, pursuant to which Boss extended the repayment date of the existing loan, providing basically $10.4 million outstanding at the time of the announcement, 27th of December, and providing an additional cash facility of $3.6 million . We really do look forward to working continually with our joint venture partner enCore and ramping up Alta Mesa.
Knowing their great operational team and seeing how well ours work together, it's been terrific sharing some of our ideas and looking at our progress to date on the various operations and how we can share best knowledge to guide both companies through to achieving higher production results. For the following slide, slide six, this sends out our results against guidance. As you'll recall, Boss provided guidance for the second half of FY 2025 only, and that was given that we're only in the early stages of ramp up at the beginning of FY 2025, and pleasingly Boss exceeded that second half guidance. Again, repeating, C1 cost for the half was AUD 35 per pound , which was below the guidance range of AUD 37-AUD 4 1. That underspend was due to provisions we sort of provided as best we could, putting contingencies in place for unexpected ramp-up costs that weren't realized.
In terms of quarter-on-quarter results, the C1 in 34 was an increase of AUD 3 per pound, and that increase in C1 cost was flagged in our previous quarterly result announcement, which was mainly a result of a decline in average PLS, or pregnant leach solution tenor. As forecasted previously in our feasibility study, CapEx for the year was AUD 25 million, which was below the guidance range of AUD 38 million- AUD 43 million. The underspend represents a deferral of around AUD 15 million in CapEx rather than realized savings. That plan has underpinned the CapEx spend, which represented an internal accelerated plan and a shift to the right that is not expected to impact the FY 2026 guidance. Looking at slide seven, the financial position at the 30th of June, and please note these numbers are currently unaudited.
You'll see our annual report at the end of August, but we're pretty confident that they won't be changed. This slide really does provide additional detail on the key balance sheet movements during the quarter. As mentioned, we've got a very, very, very strong financial position: AUD 224 million in cash and liquid assets and no debt. We've got a Honeymoon project that's net positive cash flow producing, and we expect during the course of this year that the company itself will be in a net positive cash flow position. Cash did, however, decline during the quarter from AUD 34 million -AUD 37 million, and that was mainly due to Boss producing via Honeymoon and Alta Mesa 294,000 pounds more than it sold. Effectively, we increased our inventory levels up to around 1.4 million lbs during the quarter.
The market price for uranium, as we know, fell below a price target price really that we believe represents fundamental value. By being strategically under-contracted and having that strong balance sheet, we're able to sort of step away from the market in times like this and achieve a stronger realized price for the pounds that we did sell. Please recall that our inventory is valued at the lower of cost or net realizable value. When inventory is accumulated, the full market value of that inventory is not reflected in the inventory valuation. Following slide nine, we are continuing to pursue additional growth opportunities while remaining disciplined on capital. In terms of opportunities around Honeymoon, we're on track to deliver Goulds and Jason’s mineral resource.
I've seen the initial flash results on Jason’s, we're waiting on Goulds and we need to double check that and review, and we're also having that assessed as we did with our mineral resource initially by AMC Consultants as our competent persons. We're also utilizing low cost and innovative drilling for prospects around Honeymoon, with the more recent being drilling at Lake Constance, and further targets will continue to be identified. We also, as mentioned, increased our shareholding in Laramide Resources to 19.9%. As mentioned, Laramide has just announced receiving that mineral development license for the Westmoreland project in Queensland, giving it a strong foundation to advance the project. Following slide, market update. There is so much commentary out there on the market and everyone's quite well versed, so slide 10 please. The uranium. The slide's stuck, but if we can move to slide 10. Thank you.
With the uranium market forecasted to continue towards a more structurally undersupplied position, the Honeymoon remains in a very strong position to capitalize on an upswing. The long term fundamentals of the market remain robust with long term price holdings firm at around $80 per pound, and as mentioned previously, it's one of the highest prices ever at the start of a new cycle. As mentioned as well, 95% of our costs are in Australian dollars. There have been several positive catalysts during the quarter, particularly coming from the U.S. to reinvigorate nuclear as a source of clean energy, and we can see that in some of the U.S. stocks and how their equity prices are responding. If we turn now to the next slide. Slide 12, FY 2026 Guidance.
Basically, this slide sets out our guidance for FY 2026 production guidance, as mentioned, 1.6 million lbs, which is consistent with what was set out in the 2021 Enhanced Feasibility Study. The cash cost is AUD 41 -AUD 45 per pound, which is an increase of AUD 4 per pound as compared to the second half 2025 guidance. This increase in cash cost is primarily attributed to the expected decline in grade as we move out into the expanded resource away from the Honeymoon domain. That increase in cash cost is with the declining grade, and that's what we had previously flagged as a result that we need to offset that by optimizing the lixiviant. Lixiviant being the fluid that we inject through the ore body, a combination of ferric and acid. We're tinkering with those components to optimize what we can actually leach.
The current work underway indicates that that optimized lixiviant will rather deliver value through improved recoveries that actually result in higher reagent consumption in the short term. The benefit and cost of the optimized lixiviant has been reflected in our FY 2026 guidance. The sustaining capital expenditures is AUD 29 million-AUD 32 million , which reflects the capital to build four to five wellfields and bring the total number of wellfields built to nine, which is required to deliver the FY 2026 production guidance. In addition, that built infrastructure also provides an additional 900,000 lbs of production for FY 2027. For good reference, we believe the FY 2027 guidance will be a lot higher than that 900,000 lbs. As noted in the quarterly results, the initial drilling for Wellfield six to nine has shown less continuity of mineralized horizons than what was assumed in the enhanced feasibility study.
The result of that potentially means that additional injection and extraction wells will need to be installed, which is what's driving that increase in sustaining capital expenditures per pound as compared to the enhanced feasibility study. This has been reflected in the FY 2026 guidance. The project and supporting infrastructure capital guidance is around AUD 27 million-AUD 30 million. As noted, AUD 15 million is a carryover from FY 2025. The remaining cost is mostly wellfield supporting capital, which is the cost to build the trunk line and high voltage extensions as we extend into the ore body into East Kalkaroo. The small amount of remaining spend is really plant improvement capital as one would ordinarily expect. If we turn to the following slide, it provides a good visual of where these costs are being incurred.
For slide 13, you can see basically this is that in the purple box outline is the mining license. Goulds Dam is one domain to our west. The Honeymoon domain's in the central part. To the east, you've got East Kalkaroo. The Honeymoon domains where our processing plant's located, that's where we've been focusing initial wellfield construction efforts and where we've been deriving the initial supply of pregnant leach solution. We did that because a lot of the infrastructure was already in place from the predecessor's uranium operations. The black line that you can see extending to the far east of East Kalkaroo is the trunk line. There we've started our wellfield constructions of Wellfield six to nine , which is providing that infrastructure for FY 2026. The plan is to work back through that trunk line back to the Honeymoon domain. There's a plan underway.
In this slide you can really see those initial B1 to B9 wellfields being constructed. Slide 15 is the one that we've had a few calls on this morning, but essentially what's come about of this CY guidance review and having been able to assess the numbers and look at estimated costs that we need to work through, looking at our initial 12 months of actual performance and design for Wellfields obe to five , and now we're assessing the recent delineation drill results for wellfield development at East Kalkaroo, we have identified potential challenges that may arise in achieving nameplate capacity as outlined in the EFS. This is largely due to that potential for less continuity of mineralization and leachability. As always, we keep the market informed.
We did so when we encountered challenges with the performance of the kilns in the drying and packing area, and we thought it prudent to sort of flag this as a potential issue that we're working through now. As mentioned, we've got infrastructure already supporting 900,000 lbs in FY 2027. As a continuation, as we expand with in situ recovery mining, we bring new wellfields on at least six months in advance of when we actually need them. We're already ahead of the curve. We've got the next 18 months of production accounted for, and it's now a matter of just doing this work and comparing and reanalyzing our assumptions and prudently looking at our cost basis. To do that and to assist us with that process, we are doing an independent review.
We're bringing back subject matter experts who helped compile the feasibility study as well as looking at some international expertise in Australian on operating ISR and wellfields to determine the extent of how this may differ to the EFS. As we stand, we're ahead of the curve. We've got time, we've got a strong balance sheet, and we're working through these issues. The following slide on slide 17 really covers management transition. On the 2nd of June, we announced the appointment of two highly experienced directors to help bolster our board capability and further enhance the company's overall investment credentials. Ms. Joanne Palmer was appointed Non-Executive Director and Chair of the Audit Committee. Ms. Palmer is a former partner at the international accounting firm Ernst & Young and a former Executive Director at Pitcher Partners.
She led EY's Financial Accounting Advisory Services team in Perth with a very strong focus on the resources sector. Also, Ms. Carolyn Keats was appointed Non-Executive Director. Ms. Keats has 20 years of strong corporate and commercial experience and has served in various executive roles for nearly 15 years. She worked in the mining industry in Australia and foreign jurisdictions. The company has also announced the retirement of long-serving Non-Executive Director Bryn Jones, who was previously a Technical Director of the company. I have also informed the board that I'll step down as Managing Director and CEO as of 30 September. The board has requested that I remain in the company as a Non-Executive Director, which I of course agreed to do. From 1 January 2026, I'll serve that role as a NED, Non-Executive Director.
I do want to take the opportunity to thank all our supporters, shareholders, and stakeholders for their support to date. It's been a long and very challenging but fruitful journey over the last eight and a half years, and I've been discussing for a number of months now with the Chairman as to an appropriate transition point. It was decided, having built a strong executive team over the past 12 - 18 months with the likes of Justin Laird, Matt Dusci, Andy Wild as Chief Geologist, and Lara as our HR Manager, that with a strong team in focus to afford some time off, the COO Matt Dusci will be appointed Managing Director and CEO as of 1 October, subject to the company agreeing terms, which is well underway and benchmarked according to current data. I'll continue closely working with Mr.
Dusci and the whole team during the intervening period and going forward, as this company really means a great deal to me. Matt, any comments from you to round out the call?
No, thanks. Thanks, Duncan. As an introduction, my name's Matt Dusci, if you don't know who I am. Been working closely with Duncan over the last 10 months since joining Boss in the COO capacity and during that time I've got a good understanding of the operation and also the uranium market as I'm building that understanding. A little bit about my background, 25 years experience in the resource sector and a number of executive roles. Prior to joining Boss, I was with IGO for the last 10 years in multiple roles including the COO and Acting CEO position. Hand back to Duncan.
Matt, thanks very much. With that, we're happy to go into Q& A. Thank you.
Thank you. If you wish to ask a question, please press Star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press Star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Alistair Rankine from RBC . Please go ahead.
Good morning, Duncan, Justin, and Matt. Thanks for taking my questions. Just firstly, on the independent review that you're conducting, what's the specific challenges that you've seen so far that's led you to start this process?
Really, it's thanks, Alistair. It's going back to that continuity of resource. A nice way to describe it is when we're developing the wellfields in East Kalkaroo, in the feasibility study predominantly we had assumed that one well would intersect sort of three horizons, so the lower, the middle, and the upper. That one well would start actually extracting resource from the lower horizon, and then you grout or concrete that up to the middle horizon. At the middle horizon, you then mine that area, grouted up to the upper horizon. What we're seeing is that we actually in some areas need to put in, say, two wells, one to intersect the upper, one to intersect the lower horizon. In essence, what that means is that we need to reassess some of that continuity. I think really that comes from a lot of the feasibility studies we went out into.
The inferred indicated area was sort of at a 60m, 70 m drill spacing. Now we're going into more delineated drilling, looking at sort of 15m- 20 m spacing, and that's where we're seeing some of these challenges. It's really now going back to assess the deviation or a deviation from EFS and how widespread that is. That's something that we'll keep the market informed with.
Right.
It sounds like the additional wells that you mentioned during your comments, Duncan, that you needed some additional injection and extraction wells in the wellfield configurations. Is that mineralization continuity issue driving those additional wells as well?
Yes. Yep.
Okay, cool.
I'll leave it at that.
Thank you.
Thank you. Your next question comes from Daniel Roden from Jefferies. Please go ahead.
Yeah, thanks. Thanks, Frank and Justin and Matt for taking my questions. Just following up on that, I assume the impacts of that continuity and legibility are non-linear with grade, and the financial impacts of that. I just wanted to ask, when are you starting to expect those impacts? Is that from 2027? Can you just elaborate on the life of mine impacts going forward? It sounds like you are potentially going to have a big hit to mine life and life of the asset, as well as sustaining CapEx over the profile. Is that the right way to think about it?
It really is too early to clearly understand and quantify those impacts, and that's why we've commissioned this review. If you look back at where we are as an operating asset, we're yet to deplete one wellfield. Wellfields one to three are working very well. Wellfield four has just come into production. We're yet to actually lay down the infrastructure for wellfields six to nine. There's a lot of work to be done. We're not really in a position currently to comment on the life of mine, but we need to do this work, and continuous disclosure and being transparent as a company, we just want to flag that this is an area that we're now working down on. We've locked down our guidance for FY 2026. We're confident we're going to replicate that in 2027. We do want to do more work understanding our resource.
I think as I mentioned, it's prudent to assess our actual results against what we did as a feasibility study and challenge those assumptions as any mining operation would. That's really where we stand. A lot of work to be done before we can come out with statements such as that.
Okay. I just wanted to touch on, I guess, the undersold relative to production in the June quarter. I just wanted to touch on what the strength of the spot market has been over that time. You note that you're selling or unwilling to sell at lower prices, but we are reverting back into a lower price environment. Looking forward over the short term, the next three months, I think it's widely expected that the spot market liquidity is not going to meaningfully improve until later in the year. What liquidity do you see over the next three months, and is that going to be sufficient? Just as a follow up to that as well, I note that you're marking to market your inventory at AUD 85 a pound. If you were to mark that at spot, I'm calculating that at AUD 100 million.
Do you think that's a fair assessment of your near term liquidity given if you try to liquidate the 1.4 million lbs over the next month or two? I assume that's transacting at a pretty hefty discount even to the AUD 72 price.
Now I'll ask Justin to respond to this. Just before we start, when we say strategically how we manage our inventory and our sales, we really look at a combination of factors. At one element you have the spot market. We're yet to trade in the spot market. What we do is really focus on carry trades, so selling strategically three to six months in advance and also our contracted volumes. We do have, as you know, what's publicly known, the three contracts that are in existence. They do provide a floor and a ceiling and provide us with some understanding that we're a sustainable mining operation. Justin, do you want to allude on or expand on?
Yeah. Hi Daniel. In terms of the liquidity of spot, we don't see any issues with liquidity in terms of the spot market or the forward market as Duncan described. During the quarter, particularly the first part of the quarter, the spot price drifted down to the low AUD 60s. If you kind of calculate what the forward price would be factoring in cost of capital and holding costs, that's substantially below where the term price is. We didn't believe that that price represented fundamental long term value. We do believe that there is a lot of liquidity in the market at the moment and more than enough liquidity for us to achieve our sales objectives. In terms of your point around liquidation or discount to market price, we don't see any of that.
We believe that our value, our inventory can be sold at a market price when we choose to.
Okay, thanks guys. I'll hand it over, Becky.
Thank you. Your next question comes from Regan Burrows from Bell Potter. Please go ahead.
Hi Duncan, team, thanks for taking my questions. Just back on that independent review, is that going to focus on all deposits? I guess between East Kalkaroo back to Honeymoon, is it going to sort of expand from there out to those satellite deposits? Like, where do we sort of draw this line of sort of question marks around the resource continuity? Also, do you have sort of a rough timeline as to when that independent review will be finalized?
Yeah, thanks Regan. No, it will be all encompassing. I think we need to look at the resource and satellite deposits as a whole. Yeah, it's really testing our assumptions and what we've made in wellfield design. We do have a mineral resource that was independently assessed by a competent person at, say, you know, 36 million lbs on the mining license. In addition, 36 million lbs at Goulds and Jason's, so the mineral resource is there. It's just looking at the continuity and wellfield placement over it. Yes, it will be all encompassing in terms of when that study will get underway. You know, shortly. There's a couple more members of the team to pull in. In terms of the timing, we'll give updates during the course of the year as we progress it.
I mean, the good thing is we've got line of sight for our production this year and going into, really until now, until Christmas next year, which is already under infrastructure. The resource is there for remaining. We just need to prove it up. Yeah, it's been quite hard to give guidance FY 2027 beyond other than what we can point to in the feasibility study.
Thanks. I guess sort of going on from that, even if you take that 1.6 million lbs guidance for FY 2026, I guess you're assuming rough capacity across all six NIM6 columns of 57% at a 50 mm per liter leach tenor. I guess you're basically assuming that the leach tenor is going to come down quite drastically from that 88 that you experienced in 4Q. Is that how we interpret that?
The leach tenor, like we've given. I've got what the average grade of leach tenor is of the life of mine, but the leach tenor hasn't changed. Sorry, Justin.
Yeah, I'll just quickly jump in there. In terms of FY 2026, we expect leach tenor to be around 55 mg-60 mg per liter as an average across the year.
Okay, so that assumes that you're running, I guess, the additional columns at a lower capacity initially or a slower ramp up then.
Column four will come in sometime over the next three months, and then column five will come in back end of December. We may not need to bring column six into that production profile in FY 2026.
Okay, that's a big change there.
All right, thanks, guys.
I'll rejoin the queue.
Thank you. Your next question comes from Rahul Anand from Morgan Stanley. Please go ahead.
Hi, Duncan, Matt and team. Thanks for the opportunity. I've got two questions. I'll start with the first. The continuity issue. What in your opinion, in hindsight, has led to this? Is it lack of drilling and testing? Is it a lack of drilling at depth? Is it drill spacing? What in your opinion is the driver for this and when is the independent report due by?
Thanks, Rahul. That's where. Nice. We haven't actually set a timeframe. It's really one that we'll work through to the best of our abilities as quickly as we can during this year. In terms of, yeah, I guess it is probably closer draw spacing on delineation drilling. I mean, you know, when we started, we did an extensive drill program back in 2018, 2019, basically encompassing the whole of the resource. We had that independently reviewed as mentioned. We had block modeling done. We looked at our lift model, strap model. A lot of work went into it, and it's now just marrying up how those assumptions compared to what we're actually seeing. Probably, yeah, in hindsight, it's just not practically feasible to drill it 15 m, 20 m space across a whole resource when you start a project.
Now that we're getting into these outer regions, sort of the inferred material, indicated, we're just seeing a bit of discontinuity. It's just a matter now of looking at it. The resource is there. It's just how leachable it is and how one can look at constructing wellfields across it and the economics that are associated with that. Yeah, Matt, yeah.
I think it also comes down to when you're doing the detailed design and the wellfields too, that you recognize some of that continuity.
And.
That's what we're seeing.
Just a quick follow up there perhaps for Matt. Matt, this kind of reminds me of NOVA in a way and I think what was done at NOVA post having, you know, resource that wasn't continuing was that it was heavily drilled and the entire reserve life was drilled out. Is that something that you guys are going to consider to actually have tighter drill spacing and try to define and spend a bit more on exploration and basically get a bit more confidence in what you've got in the ground?
Yes, yeah, I think that's prudent. Particularly now that you've got, as mentioned, the mine is net positive cash flow producing. I mean, we do have the self finances, there's no debt. I think greater understanding of resource push pull tests, testing the porosity of the actual basal sands, you know, it may even lead to a few more field leach trials. Certainly, all those aspects will be considered as part of this review. What we're really seeing, and please don't lose sight of this, is the actual lixiviant that we're using now and the technical success of that's proven to show great results as to introduction of ion exchange and our resin loading and capabilities. The mine itself is off to a flying start. We're probably being a bit prudent and conservative giving comments FY 2027 and beyond.
Our thought process was that, yes, seeing an increase in sustaining capital in FY 2026, the natural question one would have is how would this extend further? To respond to that and preempt that, we are now flagging to the market continuous disclosure that that is an area that we'll be looking at.
Sure.
Look for the second one. Just a continuation of the first, I guess. What are some of the critical factors that you need to determine really to know whether you get to that nameplate in the medium term beyond FY 2027? I mean, I guess you'd be looking to run equipment and plant at basically capacity in order to minimize costs. Are there some other limiting factors that are not making the outcome as linear as it should be?
It's probably a bit early to tell, but Matt?
Yeah, it's a little bit early to tell and that will have to come out of the program of work. You may look at trying to re-optimize your wellfield on margins, not just flow as well. It's a little bit too early to tell. Given we're seeing changes in mineralization to EFS with less continuity, we've just got to go back and work through that.
Okay, sure.
That would basically mean a lower amount of reserve, and then if you so choose that path. Okay, that's well understood.
Thank you.
We don't know that yet. We've got to work through it.
It's about getting that cost structure right for wellfields so that we can actually do that. That's where Duncan was talking about continuity realization stacked. There's a bit of work to also look at cost structure for wellfields to ensure that we can get those cutoff grades.
Right.
Sure.
No, that makes sense. Thank you, gentlemen.
I'll pass it on.
Thank you.
Thank you. Your next question comes from George Ross from Argonaut. Please go ahead.
Morning guys. Thanks for taking the call. Most of my questions have been answered, I guess just in regards to the Goulds Dam and Jason’s drill out areas. Are we going to see any infill or sort of, I guess, spatial variability infill drilling completed on those in the near term, like prior to, I guess, publishing the new resources so that we, I guess, have confidence on the continuity of neither .
We did complete our first major stage of infill drilling in the last calendar year, I think in November, December last year. We handed that body of drill results across to our competent person, AMC Consultants, who have then done some of the block modeling work. We have handed that across to hydrogeologists with wellfield design to see what the mineable resource could be. That work is nearing completion, but haven't yet quite finished. The infill drilling has been done. We did that last year.
George, I think the difference here is that we'll also try and provide some form of outline of what wellfields would look like over that total resource, and that's that second part of this work stream.
Okay, cheers.
From an overall recovery perspective with East Kalkaroo, for example, are we expecting a fairly significant hit from overall recoveries of uranium from the wellfields, or do you feel comfortable doing drilling at a, I guess, a denser spread will enable you to sort of maintain those overall recoveries?
Yeah, I'll try and answer that. One, recovery. The recovery, the variance may be between EFS and what's planned as a wellfield. Generally, the recovery once we've got plant to plant, which is the 70% recovery over 70 pore volumes, will still probably remain true, but we'll retouch that, and that's why ultimately we have confidence on that 1.6 as part of that FY 2026 guidance, which is still far East Kalkaroo.
Great.
Okay, thanks.
Thank you. Your next question comes from Glyn Lawcock from Barrenjoey. P lease go ahead.
Morning, Duncan.
Duncan, I'm still a little bit.
I'm still a little bit confused. You say you've identified challenges that may arise in achieving nameplate capacity, which is the 2.45. You talk about continuity of the resource. Is that leading to less volume coming out or less grade or less recovery?
What do you.
Which one of those three must be causing you to make that statement?
Volume would be the volume aspect, like pounds under leach. We have to look at the wellfield design and the pounds under leach, and what you want is continuity and resource to give you that sort of confidence in your wellfield design. What we're seeing now is the resource is there. Additional wells are required, and that's leading to an increase in sustaining capital that we're seeing in our all-in sustaining cost for FY 2026. The challenge there could lead to volume under leach.
Is that because you max out what you can put down the pipe back to the plant? I mean, if it's more CapEx for more wellfields and you need more wellfields to get the volume ultimately wanted, doesn't that still get you the nameplate? What else is missing?
Yes, you're right, it can and that's where that can still get used to nameplate. That's where we want to do this assessment and just see what that economic cost outlay is and the capital costs around wellfield infrastructure so the resources are there. It's just a question of, as you say, the cost to do so. You know, at the moment the margins are still healthy. For 1.6 million going to FY 2027, we're confident that we'll get at least 1.6 million lbs. It's just a question now of how we go about that. We just wanted to flag that we need to do a review and assess against our enhanced feasibility study assumptions.
Is this an assessment of the economics then? More or less, you know, like more wellfields, more CapEx, more OpEx. Can you still then make an economic model? I would have thought with an AUD 80 per pound uranium price and even with the costs and CapEx you're now incurring for 1.6 million lbs, surely it would be economic, or do you think there's going to be even more costs to come?
No, Glyn, certainly that can be the case. Absolutely. I mean, we.
That would likely be the case. The challenge there is still a deviation off the EFS plan from what we're seeing now, and we've got to go back and re-challenge ourselves on cutoff grades and how we apply that and how that production profile would look.
Yeah, clearly if the uranium price rose as well, that would be of benefit.
It may be a little bit.
Premature to say you can't get to nameplate, then if the economics stack up, you could still get there.
I think it feels premature, but we just, under advice, have a feasibility study that's out there with the life of mine. We are seeing deviation to that feasibility study, and it warrants further investigation, but we are looking further ahead. In terms of wellfield construction, as mentioned, we've basically got wellfields under construction that take us through to at least Christmas next year, and we want to be ahead of the curve. You can look around at sort of North American operations, etc., and some of the challenges they've faced are not being in front of their wellfield development plans and sort of falling behind. We are in front of it, and we're just picking up that there's a bit of deviation to the feasibility study, and more work is required. We want to go back and retest those assumptions and really apply best talents to do so.
You're not wrong; it's just a question of us getting a firmer understanding as we go forward, but certainly we've got line of sight this current year, very comfortable with the costs. They've been conservatively put forward. As mentioned, this current month of July, we're already at 138,000 lbs drum to uranium, which if you annualize that over 12 months, it surpasses the 1.6 million lbs. That's the frustrating thing. No, we're yet to deplete a wellfield; wellfield one's still functioning and well to December. What we want to do is really also not only look at the delineation drill results but also reassess how our initial wellfields are performing against what was planned and just make those assessments. It's a continuation of learning as we go forward.
Sorry Duncan, just looking at Jason’s and Goulds Dam, your future prospects resources outside of close-spaced drilling, is there anything you can glean from what’s transpired and getting us to this point that you can say whether or not Jason’s and Goulds Dam will have issues, or is it we won’t know until you’ve done the close-spaced drilling in all your resource?
I think close-spaced drilling is really important. We have done infill drilling as mentioned on Goulds Dam and Jason’s, and we've block modeled that. Now it's a question of putting wellfield designs over that block model, taking into account, of course, lithology and stratigraphy, so we're doing all the steps we can. It's just one of proving.
Sorry, just last one then. Any early signs of issues at Jason’s or Goulds Dam?
No, we've only just got the first report through on Jason’s, but no issues as such, we're just yet to properly assess it. It came in a week ago. We're yet to get Goulds Dam, but again, we want to apply our learnings from what we're currently encountering and just really test those assumptions, but there is economic resource there.
All right, thanks very much.
Thank you.
Thank you, your next question comes from Alistair Rankine from RBC . Please go ahead.
Thanks for the follow up question. Further on that satellite deposit, assuming the mineral resource update is favorable enough to pursue development, what are the next steps there for taking it through development? I guess, what are your ambitions around timeline on getting a mining license?
With regard to mining license, a flag before. You're really looking at a sort of a three year period, which is largely predicated on environmental approvals with your flora and fauna and groundwater study. That's no dissimilar to any other mining operation in Australia. We're already at least one year into assessing the groundwater component, which is the large sort of time delay really. We're involving government, both state and federal government. We've had visitations to the Honeymoon site, so they're ahead of the curve in terms of the other work. The infill drilling has been completed. We're now looking at wellfield design. The next component is then just looking at the feasibility study around that in terms of trucking or trunking that resource back to the Honeymoon site. The steps are in place, the study teams do that. Work's in place and we're just walking through it.
We're confident that those resources can be brought to line in the near term once we go through this work.
Yep. Okay.
In fact, I think it won't. Whether it be August or September, we'll be coming out with results on Goulds Dam and Jason’s. It's not far off. We just need to do a proper integral review of what we've seen.
Sure. Okay. Just one more on the wellfield development costs. You've got the sustaining costs of AUD 29 million-AUD 32 million for FY 2026. Let's call it anywhere from AUD 6 million-AUD 8 million per wellfield. Does that AUD 6 million -AUD 8 million assume you're trying to keep recoveries in line with your EFS targets? That includes the additional injection and extraction wells.
Yeah, Alastair said those. It's a little bit tricky to just perfectly marry up the sustaining capital per wellfield. We're currently standing a little bit lower than the numbers. We're probably closer to around AUD 4.5 million -AUD 6 million per wellfield, and the cost per wellfield is a little bit higher than what was in the EFS given inflation and then a small amount of scope changes. Really, the cost per wellfield isn't really a driving factor for that comparison to the EFS. It's more the pounds under leach per wellfield and the ability to re-screen those wells to access the kind of stacked horizons
Okay, thank you.
Thank you. Your next question comes from Regan Burrows from Bell Potter. Please go ahead.
Hi, Duncan.
Guys.
Yeah, just following up on that inventory on hand question that was asked earlier. How do we read into that 100,000 lbs sale? Is that a working capital timing issue? Are we going to see additional sales come through this quarter? How do we think, marry up, I guess, that production level.
Versus the actual sales?
Sure.
Over to Justin.
Hey, Regan. Yes, I think we'll probably end up, while the market is assuming it's supportive in FY 2026. I assume that we'll probably sell more than we produce in FY 2026 as a bit of a catch up on that working capital drawdown in FY 2025.
Okay.
Just looking at Alta Mesa as well. It looks like you received less than the pro rata share there, AUD 43,000 on 2023. Just curious, is that a timing issue as well?
Yeah, Regan, it's just a timing issue. We do true ups regularly. It's just a timing issue.
Okay, great. I'll leave it there.
Thank you very much.
Thanks.
Thank you. Your next question comes from Daniel Roden from Jefferies. Please go ahead.
Hey guys, just a quick follow up on the Alta Mesa. Are you providing guidance for FY 2026 for Alta Mesa as well as part of the NAV or not.
No, Daniel, that's really their prerogative. They, Alta Mesa, are the managers of the project and it's up to them to provide guidance and then we'll incorporate that. It's not something we can engineer or drive from our side, unfortunately.
Probably just follow up on that then, noting that the asset, I guess if you take the dream quarter production and actuals out of that, it's loss making at current production rates and pricing. If you fast forward into December, you're potentially in a position to become, I guess, the driving managers of the asset. How do you think about that? Like you do see that scenario eventually. Clearly something's gone wrong with the asset and you're effectively inheriting a liability at that point in time, I guess. How do you kind of balance that? Would you not prefer to take, I guess, the loan repayable at AUD 100 a pound?
I think jumping to conclusions a bit there really. What we're seeing is a real uptick in actual production with Alta Mesa. The guys are performing. They did have a hiccup in the start. In essence, they ran into a difficulty that they weren't getting wellfields online quick enough due to lack of drill rig availability. I think they've now focused on their management insight and restructuring some of their operational teams. What we have seen is a real uplift in production. We think that they're on the right track really to increase their production. In light of our loan, we feel very comfortable with our loan. I mean enCore Energy is a mid cap, well financed, a lot of backing in the market. We've got no problems with security over our loan.
Okay. I guess just on the sales element, is the potential that Alta Mesa has contracts that might not be delivered into that you could potentially vend into as well and kind of almost do a swap on contract for spot.
No, I mean I guess you could, we could consider that. Where we stand really is that we have, we're independent. You know, the 30% that we get pro rata from production we can sell into our own sales mix. We've operated very independently on all our sales to date. That's not going to change in the near term. We prize our independence in our own sales strategy. Whatever enCore or Alta Mesa have contracted into, that's their prerogative. We get our 30% of production and we deal with it accordingly.
Okay. Thanks, guys.
Thank you.
Thank you. Your next question comes from Branko Skocic from E&P.
Please.
Go ahead.
Morning guys.
Expansion was previously discussed at Honeymoon.
Getting towards that 3.3 million lbs number.
Should we be thinking about the Goulds Dam, Jason’s deposits as backfill instead?
Just given the issues that have been released to market today.
Am I potentially thinking about this the wrong way?
Branko, thanks for your question. I think it's just too early to tell at this stage. What we do know is that we've got some mineralized resource at the satellite deposits. We're still quantifying what will be a minable resource to feed into the plant. We know that Honeymoon itself has got an export permit around 3.3 million lbs. There may be also additional resources coming from greenfield exploration or from projects circumflexing tenement boundaries. It's a bit too early to tell, but you know, at the moment we've got, as mentioned, we've got clear line of sight on this year's production. We've got a healthy start in FY 2027. We're flagging to the market that we need to do more work on continuity and firming up our numbers before we can give guidance in excess of one year in advance. It's too early to tell on that. 3.2 million lbs, 3.3 million lbs.
A quick one, perhaps.
Matt obviously taking over the CEO role in the coming months.
Just wanting to understand the strategic direction of the company from here under his leadership, and whether M&A potentially becomes a bigger focus for the company.
Just given some issues at Honeymoon.
Yeah, Branko, I'll talk a little bit more about that once I come closer to that transition period.
No worries. Thanks, guys.
Thank you. There are no further questions at this time. I'll now hand back to Mr. Craib for closing remarks.
Thank you very much for your attendance today. Please, we'll handle any calls or queries that come through. As it stands, Matt and I are heading to South Australia tomorrow and then up to the mine site, and we'll get this body of work underway. Thank you for the call.
Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.