A definitive feasibility study (DFS) into the restart of the Kayelekera uranium project, in Malawi, has confirmed that the project would rank as one of the lowest-capital cost uranium projects globally.

ASX-listed Lotus Resources reported this month that the project would require a capital investment of $88-million, with cash costs estimated at $29.1/lb and an all-in sustaining cost of $36.2/lb during the first seven years of production of a ten-year mine life.

The capital cost estimates to restart the operation were up from the $50-million estimated in the 2020 scoping study.

Based on an ore reserve estimate of 15.9-million tonnes, at 660 parts per million uranium oxide (U3O8), for 23-million pounds of U3O8, the DFS estimated that the project would produce an average of 2.4-million pounds of U3O8 over the mine life.

Lotus also told shareholders that the company has been able to significantly reduce the power-related carbon dioxide (CO2) emissions by 72%, or 21 000 t/y, compared with the historical operations, through a number of new initiatives.

“Having an asset with low technical risk and low restart capital, which can quickly commence production, are key characteristics that investors look for in a mining project. The results of the restart DFS clearly put Kayelekera in this category and this provides an opportunity for the company to leverage off the strongest fundamentals for the nuclear/uranium industry in many years,” said Lotus MD Keith Bowes.

“The standout features of the restart DFS are the low capital costs and attractive operating costs, which consider the current high inflation environment, whilst also ensuring a positive legacy as we have significantly reduced our carbon footprint, in line with the company’s environmental, social and governance (ESG) strategy.

“The initial upfront capital costs remain one of the lowest in the industry, both from a headline and an initial capital intensity perspective. This is an excellent achievement given current inflationary pressures. The number is higher than that originally announced in the scoping study, but includes three new items – ore sorting, grid connection and a new acid plant – which are critical for lowering our operating costs,” said Bowes.

He said that Lotus was also pleased with the success of having put together a power supply strategy that not only provides electricity at $0.106/kWh, but also reduces the project’s power-related CO2 emissions by over 70%, compared with the previous operation.

“This is a key step in the company strategy towards our long-term goal of becoming a leader in ESG in the uranium sector. Additional details regarding our ESG commitment and the multiple initiatives we are undertaking will be outlined in our Sustainably Report, due to be released towards the end of 2022.

“With the restart DFS now complete, the company looks forward to continuing its work with the Malawian government to secure a mine development agreement that will support the project financing and shareholder returns appropriate for the scale of investment.

“At the same time, the company plans to increase engagement with the various nuclear energy utilities to secure offtake agreements at the necessary volumes and pricing to support the restart of Kayelekera. This work will be undertaken in parallel with our work on securing funding for the restart.”