Boss Energy announced it had signed off on a AUD113m (USD82m, €76m) upgrade of the mine near Broken Hill, after previous plans to revive the mine were shelved in 2013 because of low uranium prices and high production costs.
Production at the mine, which has been has been mothballed since 2013, is expected to begin by December next year, with the mine forecast to produce 2.5 million pounds of uranium per year by 2026.
Uranium prices this week hovered around USD45/lb U308 after topping out near USD65/lb in April. Uranium prices reached an all-time low in 2001 of USD7/lb U308.
In a statement to the Australian Stock Exchange, Boss Energy said it had raised capital for the project through AUD125m in share sales in March.
The company's managing director, Duncan Craib, and director Bryn Jones briefed South Australian Mining Minister Tom Koutsantonis on the project on Friday.
Uranium prices have almost doubled since the start of 2021, to more than $55 per pound today.
The company's managing director, Duncan Craib said: “This final investment decision puts Boss firmly on track to be Australia’s next uranium producer.”
“We are fully funded with no debt, fully permitted and have extensive infrastructure in place.
“Our front-end engineering studies are completed and we are ready to order key equipment and start construction immediately.
“This puts us in an extremely strong negotiating position with utilities and ensures we can capitalise on the looming uranium supply deficit.”
The Honeymoon deposit was discovered in 1972. Construction on the mine began in 2009 and production began in 2011, under the company Uranium One.
The mine has been mothballed since 2013. Boss Resources bought Uranium One in 2015 and changed its name to Boss Energy in 2020.
There are three other uranium mines in South Australia, including the world's second largest by production, at Olympic Dam.