Lotus Raises A$132M, Targets Q3 2025 Uranium Production Restart at Kayelekera
Lotus Resources has fast-tracked the restart of its Kayelekera uranium project in Malawi, targeting production by Q3 2025, backed by a $132 million capital raise. Meanwhile, its Letlhakane project in Botswana reports a 65% increase in measured and indicated uranium resources.
- Kayelekera uranium production restart accelerated to Q3 2025 with reduced capital expenditure
- Strategic equity placement and share purchase plan raised A$132.3 million to fully fund restart
- Letlhakane uranium project mineral resource estimate increased by 65% to 113.7 million pounds
- Community Development Agreement signed, marking first such agreement in Malawi mining sector
- Key management appointments including new Managing Director and CFO
Accelerated Restart at Kayelekera
Lotus Resources Limited (ASX: LOT) has made significant strides in advancing its Kayelekera uranium project in Malawi, announcing an accelerated restart plan that targets first uranium production by the third quarter of 2025. This revised timeline shortens the previous estimate by five months and reduces the initial capital expenditure to US$50 million, down from US$88 million. The company has mobilised over 200 personnel on site and ordered all key equipment, signaling strong operational momentum.
The accelerated restart plan phases non-essential infrastructure, such as grid power connection and acid plant rebuild, beyond the initial production phase, enabling a leaner capital outlay upfront. Lotus projects a 10-year mine life with a life-of-mine production target of 19.3 million pounds of U3O8, steady-state cash costs of US$34.5 per pound, and an impressive pre-tax net present value of US$439 million at an 8% discount rate.
Robust Funding and Financial Position
To underpin this ambitious restart, Lotus successfully raised A$132.3 million through a two-tranche strategic equity placement and a share purchase plan, exceeding the initially planned A$110 million placement due to strong investor demand. The capital raise was completed without incurring debt, positioning the company with a robust closing cash balance of A$132.8 million (unaudited) as of December 31, 2024, exclusive of US$10 million in restricted cash.
With the final investment decision approved in mid-December 2024, Lotus has committed to the restart project fully funded by equity, while continuing to explore debt financing options for equipment and working capital related to the powerline and battery energy storage system.
Letlhakane Resource Expansion and Processing Innovations
In Botswana, Lotus reported a substantial 65% increase in the measured and indicated mineral resource estimate for its Letlhakane uranium project, now totaling 113.7 million pounds of U3O8 at an average grade of 363 ppm. This update incorporates results from an extensive 164-hole infill drilling program and expands the resource base across several deposit areas, including Gorgon, Serule West, and the newly defined Marotobolo zone.
Lotus is advancing metallurgical testwork focused on a two-stage leaching process designed to reduce acid consumption and simplify downstream uranium recovery. Early testwork at ANSTO has demonstrated promising results, with further samples en route for more definitive analysis. While initial permeability tests suggest limited potential for in-situ recovery (ISR) at the Gorgon deposit, deeper targets may still offer ISR opportunities, keeping this option open for future development.
Community Engagement and ESG Progress
A key milestone was the signing of a Community Development Agreement (CDA) in January 2025, the first of its kind in Malawi’s mining sector. The CDA formalises the commitment to allocate a minimum of 0.45% of mine revenue to community-selected projects, ensuring local benefits in health, education, and infrastructure. This agreement follows years of extensive engagement with local leaders, government officials, and residents, reflecting Lotus’ focus on sustainable and responsible mining practices.
Lotus also advanced its environmental approvals, securing an Environmental Social Management Plan for the transmission line connecting Kayelekera to Malawi’s predominantly hydropower-based grid. This connection is expected to significantly reduce greenhouse gas emissions from the mine’s operations.
Leadership and Corporate Developments
Supporting its growth trajectory, Lotus appointed Greg Bittar as Managing Director and, post-quarter, Hayden Bartrop as Chief Financial Officer. These leadership changes align with the company’s transition to a global uranium producer. The Board anticipates further changes to ensure the right expertise is in place to support operational ramp-up and project development.
Operationally, Lotus reported ongoing expenditures related to the Kayelekera restart, care and maintenance, and Letlhakane project studies, with a strong cash position providing a runway of nearly 11 quarters at current burn rates. The company has also terminated its previous debt advisory mandate following the successful equity raise but remains open to equipment finance and working capital facilities.
Bottom Line?
Lotus Resources’ swift progress and strong funding position set the stage for a pivotal year ahead as it aims to re-enter uranium production and capitalize on rising market demand.
Questions in the middle?
- Will Lotus secure binding offtake agreements to underpin financing and production ramp-up?
- How will uranium market price volatility impact the economics of the Kayelekera restart?
- What are the timelines and capital requirements for advancing Letlhakane’s two-stage leaching and potential ISR development?
