Name of the Project
Kayelekera uranium project.

Location
Karonga district, in northern Malawi.

Project Owner/s
Lotus Resources.

Project Description
Kayelekera is one of five brownfield uranium projects on care and maintenance that historically achieved commercial uranium production of more than two-million pounds.

The project has a current resource of 37.5-million pounds of uranium and has significant existing infrastructure, including a 1.4-million-tonne-a-year processing facility, an on-site acid plant and an accommodation camp, allowing for a quick and low-capital restart to production.

A restart scoping study has highlighted the project’s potential to support a viable long-term operation in a favourable uranium price environment.

The study assessed two production scenarios, both of which assumed 97% of production from the measured and indicated mineral resource category.

Scenario 1 envisages the production of 16.4-million pounds of uranium and an average head grade of about 900 parts per million (ppm) of uranium over an eight-year life-of-mine (LoM). Only high-grade material is proposed to be processed.

Scenario 2 envisages the production of 23.8-million pounds of uranium over a 14-year LoM, with treatment of stockpiles from Year 8 at an average head grade of about 680 ppm uranium. Scenario 2 incorporates the lower-grade materials mined from the pit and contained on the existing surface stockpiles into the production schedule.

In both scenarios, mining continues for six years, after which plant feed is sourced solely from stockpiled material.

Processing at the project will incorporate conventional crushing, milling, high-density ion exchange (resin-in-pulp), membrane-based acid recovery and conventional yellow cake and tailings operations.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
Not stated.

Capital Expenditure
The project has a low initial capital cost of $50.2-million, owing to Kayelekera’s existing infrastructure.

Planned Start/End Date
Not stated.

Latest Developments
Lotus Energy reported on February 24 that it would raise A$12.5-million through a share placement to fund work at the Kayelekera uranium project and exploration studies.

The company has received firm commitments for the placement of 100-million shares, at 12.5c each, from sophisticated and professional investors.

The offer price represents a 17.6% discount to Lotus’ five-day volume weighted average share price, and a 16.7% discount to its last traded price.

The shares will be issued under the company’s existing placement capacity and will not require shareholder approval, Lotus said.

“Funds raised from this placement, in addition to existing cash reserves and proceeds yet to be received from the exercise of the in-the-money options, could see the company fully funded . . . to early 2023,” Lotus MD Keith Bowes has said.

The company can now accelerate work on its restart feasibility study, as well as ramp up exploration on several near mine, high-priority uranium targets to support an extension of mine life beyond the current 14 years of estimated production.

Lotus also plans to undertake a low-cost assessment of the high-grade

rare-earth oxide Melenje Hills prospect later this year. Following this work, the company will assess the optimal path forward to clarify value in this asset for shareholders.

It has also started the process to increase its ownership of the Kayelekera uranium project, following feedback from shareholders.

The company currently holds a 65% interest in the project, with 15% held by the government of Malawi, and 20% held by Kayelekera Resources, which is controlled by Lotus director Grant Davey.

Lotus will exercise its buy-out right with Kayelekera Resources, taking its interest in the project to 85%. Completion of this transaction will require shareholder approval.

Key Contracts, Suppliers and Consultants
Orelogy Mining Consultants (openpit optimisation and mine planning)

Contact Details for Project Information
Lotus Resources, tel +61 89 278 2441 or email info@lotusresources.com.au.