Lotus Resources Secures Debt Advisor to Restart Kayelekera Uranium Project

Lotus Resources Ltd (ASX: LOT, OTCQB: LTSRF) has taken a significant step towards restarting its Kayelekera uranium project in Malawi by appointing a debt advisor, Orimco Pty Ltd.

This move paves the way for securing debt financing, a crucial step for a late-2025 restart.

Strategic Investment and Funding Boost

Lotus recently completed a successful $30 million capital placement with strategic investors at $0.30 a share. Notably, Paradice Investment Management became a substantial shareholder with a $20 million investment and a 5.5% holding.

Lotus last traded at $0.37.

These funds will accelerate pre-restart activities at Kayelekera and advance exploration at the Letlhakane project in Botswana.

Priorities for the Funding

  • Fast-track Front-End Engineering and Design (FEED): This crucial stage involves detailed engineering plans for the project.
  • Secure long lead items: Securing equipment with long lead times ensures a smoother restart process.
  • Commence early works on-site: This could include preparatory construction and infrastructure development.
  • Deliver a Scoping Study for Letlhakane: This study will assess the project’s viability and optimize the mine plan. Funding additional infill drilling will support an upgraded resource estimate.

Growing Uranium Market Fuels Offtake Interest

With the global uranium market strengthening, Lotus reports increased interest from utilities for securing future production (offtake) from Kayelekera.

The spot price of uranium is trading at about US$81.32 a pound.

About the Kayelekera Project

  • Proven resource of 51.1 million pounds of uranium oxide (U3O8).
  • Historically produced 11 million pounds of U3O8 between 2009 and 2014.
  • A positive restart study confirmed a viable operation with a 23 million pound U3O8 Ore Reserve.
  • Kayelekera re-start Definitive Feasibility Study (DFS) showed a US$88m upfront restart capex requirement, to enable 2.4Mlbpa production for 10 years.
  • Pre-production costs (including first fill) and working capital require US$40-50m additional funding, depending on uranium product payment terms.

Lotus managing director Keith Bowes said:

“Our appointment of a debt advisor is a key step in advancing Kayelekera towards a final investment decision.” Orimco will assist Lotus in arranging cost-effective debt to help finance Kayelekera’s restart.

Bowes said it would reduce the dilution of existing shareholders with an end 2025 start date for the mine.

 

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