Boss Energy: Reframing Value After the Honeymoon Review
Boss Energy (ASX: BOE)
Equity Research Update | Goldrock Capital
Recommendation: Buy
12-month Price Target (Base Case): A$1.75 per share
Current Share Price: A$1.56
Implied Upside: ~12%
Goldrock Capital position: Long
Average entry price: A$1.32 per share
Model Extract 1: T1 Model Summary
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Why This Is Interesting Now
Boss Energy has undergone a meaningful reset following the Honeymoon operational review. Guidance has been pulled back, the Expanded Feasibility Study withdrawn, and market expectations have repriced sharply.
Goldrock Capital has taken a position through this reset at an average cost of $1.32 per share. While uncertainty around Honeymoon has increased, we believe the market reaction has gone too far. The stock now reflects a high degree of pessimism, despite a balance sheet and asset base that materially limit downside and preserve upside optionality.
Our A$1.75 base-case price target is intentionally conservative. It is built using consensus uranium pricing, explicit risk-weighting beyond guidance, and a clear separation between bankable value and optionality. It does not rely on a return to nameplate capacity, aggressive commodity assumptions, or long-dated mine life extensions.
The withdrawal of the Expanded Feasibility Study and the decision to guide production only through FY27 marked a clear change in management posture. The share price fell sharply, short interest remains, and longer-dated assumptions were rapidly unwound.
In our view, this has shifted Boss Energy from a growth-assumed producer to a valuation-anchored opportunity. The stock is now priced for disappointment, which matters because outcomes that are merely less bad than feared can drive meaningful upside from here.
How We Value Boss Energy
Our A$1.75 price target reflects a blended valuation approach:
NAV-based valuation: ~A$1.70 per share
NTM EV/EBITDA valuation: ~A$1.80 per share
(8.0x multiple versus a sector median of ~12.4x)
We apply a discount to sector multiples to reflect:
Limited mine life visibility at Honeymoon,
Cost pressure following the operational review, and
Capital allocation uncertainty in the near term.
The result is a base-case valuation that we believe is achievable without optimistic assumptions.
Commodity and FX Assumptions
To avoid embedding macro optimism, we anchor the model to consensus assumptions:
AUD/USD: ~0.64–0.70
Uranium pricing:
US$90/lb through FY26–FY28
US$94/lb in FY29
US$90/lb thereafter
At these levels, uranium pricing equates to ~A$130–140/lb, supporting solid margins even under conservative cost assumptions.
Operating Assumptions and Asset Framework
Honeymoon: Conservative and Explicitly Risk-Weighted
For Honeymoon, we anchor assumptions to guidance and avoid embedding unproven mine life extensions:
Production ramps to ~1.6 Mlb per annum, with no return to nameplate
AISC averages ~A$70–75/lb from FY26 onward
No expansion capital or revised mine plan assumed
Production beyond guidance is explicitly risk-weighted:
FY26–FY27: 100%
FY28: 75%
FY29 onward: 50%
This reflects geological uncertainty identified in the review while acknowledging the existence of resources and satellite deposits. Near-term cash flow is valued; long-dated certainty is not assumed.
Model Extract 2: Honeymoon U308 Valuation
Model Extract 3: Honeymoon U308 Valuation
Alta Mesa: Diversification Matters
Alta Mesa provides important diversification. Operated under a different geology, jurisdiction, and operator, it reduces reliance on a single asset outcome.
In our model, Alta Mesa ramps toward ~1.5 Mlb per annum (100% basis), with Boss’s 30% share contributing meaningfully from FY26. Unit costs trend to the mid-A$50s per pound, supporting robust margins at consensus pricing.
Model Extract 4: Alta Mesa U308 Valuation
Exploration Assets: Optionality, Not Assumed Value
Exploration assets are treated as option value, not assumed mine life.
Boss controls approximately 70.4 Mlb of contained U₃O₈, equating to ~49.3 Mlb recoverable after ISR recovery. Only ~16.0 Mlb is monetised in our Honeymoon DCF.
The remaining ~38.1 Mlb represents an unmonetised exploration pool. These pounds are JORC-defined and represent the pathway to extending Honeymoon’s life, but are not yet supported by post-review economics.
We value this optionality at A$2.50 per recoverable pound, implying ~A$95 million, without assuming reserve conversion, timing certainty, or development approval.
Model Extract 5: Alta Mesa U308 Valuation
Inventory and Cash: Tangible Value and Time
At FY26, Boss is expected to hold ~A$236 million of cash and liquid assets (~A$0.57 per share), including:
~A$100 million of cash and liquid investments, and
~1.44 Mlb of drummed U₃O₈, worth ~A$130 million at consensus pricing.
This inventory is already produced and saleable, carries no operating risk, and provides direct uranium exposure. We view it as a strategic asset, not working capital.
The balance sheet gives management time. It allows technical work and mine planning to progress without pressure to raise equity or rush decisions. In the current environment, that flexibility has real value.
Financial Profile
Under our base case:
Underlying EBITDA rises to ~A$150m in FY26
Free cash flow turns sustainably positive from FY26
Net cash builds steadily, exceeding A$300m by FY30
No dividends assumed; capital is retained to preserve flexibility
What Drives Upside (and Risk)
Upside drivers
Outcomes at Honeymoon that are less bad than feared
Short covering given elevated short interest
Continued strength in uranium pricing
Key risks
No viable pathway beyond FY27 at Honeymoon
Persistently higher costs
Exploration failing to convert into bankable mine life
These risks are explicitly reflected in our assumptions.
Conclusion
Boss Energy is no longer a simple growth story. It is now a valuation-driven opportunity with asymmetric upside
At current levels, the stock is priced for disappointment. Our A$1.75 base-case price target does not require optimism, only outcomes that exceed the market’s now-lower expectations
If you want to understand exactly how this valuation is built and test the assumptions yourself, we encourage you to download the Goldrock Capital model
Disclaimer
Goldrock Capital and its partners hold shares in Boss Energy (ASX: BOE). This article is not financial advice and is published for discussion and educational purposes only. Readers should conduct their own research and seek independent advice before making investment decisions.
