PERTH (miningweekly.com) – Junior explorer Boss Resources has entered into an agreement with Canada-based Uranium One to acquire the Honeymoon uranium project, in South Australia.

Under the terms of the transaction, Boss would pay a A$200 000 site access fee, giving it exclusive access to the Honeymoon project to conduct a due diligence.

An initial cash payment of some A$2.44-million would be made, along with a further A$3-million under a promissory note and repayable within 24 months of the completion of the acquisition. A further A$4-million payment would be made under a promissory note issued and would be repayable within 48 months of completing the acquisition.

A further A$2-million would be payable in either cash or shares on the later of a restart of operations with commercial production, or five years after the completion of the acquisition.

Some 10% of the net operating cash flow of the Honeymoon project would also be payable to Uranium One on a yearly basis, capped at A$3-million.

The A$2.44-million closing amount had been guaranteed by Carbine Resources in exchange for ten-million unlisted options in Boss, exercisable at 2c each within three years.

Boss would form a joint venture with Wattle Mining to acquire Uranium One subsidiary Uranium One Australia, which holds the Honeymoon project. Following the completion of the transaction, Boss would own an 80% interest in Uranium One Australia, while Wattle would hold a 20% interest.

Boss had the option to acquire full ownership of Uranium One Australia following the completion of a bankable feasibility study on the Honeymoon project.

The terms of the acquisition would be mutually agreed or determined by an independent valuer and the purchase price could be payable in either cash or shares.

Boss told shareholders on Tuesday that, to fund the acquisition, the company would conduct a two-for-five nonrenounceable rights issue, priced at 1.5c a share, to raise some A$3.3-million before costs.

The company expected to issue around 220-million new shares under the entitlement offer.

The Honeymoon project comprises one granted mining lease, five exploration licences, eight retention licences and two miscellaneous purpose licences. The project is estimated to host a 5.3-million-tonne resource, averaging 0.14% uranium oxide, for 16.6-million pounds of uranium oxide.

The project includes a solvent extraction processing plant with the capacity to produce 880 000 lb/y, well fields, a 200-person mining camp, administration buildings, a 75 km power line connecting to mains power, a fleet of vehicles, a runway, an extensive geological database containing 17 000 drill holes and cash backed environmental bonds of A$8.7-million.

The project was placed on care and maintenance in November 2013, owing to high production costs and continued difficulties in reaching its design capacity.