Lotus Resources Ltd (ASX:LOT) has raised A$30 million in a share placement to strategic investors to accelerate the company’s restart activities for the Kayelekera uranium mine in Malawi, and support development plans at the Letlhakane uranium project in Botswana. This comes amid increasing prices for the commodity.
Lotus confirms that Paradice Investment Management will participate in the placement, investing $20 million to become a substantial shareholder with a ~5.5% interest.
Lotus managing director Keith Bowes said: “We are pleased to secure $30 million via this placement, allowing us to accelerate our activities around the restart at Kayelekera and development plans at Letlhakane.
“The placement has attracted significant interest from high calibre strategic investors who share our bullish view on uranium market fundamentals, including Paradice who will now become a substantial shareholder in the company.
“Our key priority remains progressing restart plans for Kayelekera to benefit from the increased demand for Kayelekera product and current strong and increasing uranium prices, but we also recognise that moving forward quickly with Letlhakane will enhance the company’s valuation.”
Lotus will issue around 100 million new shares at A$0.30 per share to strategic investors. As a participant in the placement, Paradice Investment Management will move to a 5.5% holding in the company.
The strategic investors will also acquire 6 million shares from managing director Keith Bowes and 4.7 million shares from non-executive director Grant Davey who are selling down for tax obligations. Post the placement and the sell down, Davey will maintain an interest of around 8% in Lotus holding ~150 million shares, while Bowes will hold around 15 million shares.
Kayelekera uranium project restart
Kayelekera is the fourth largest uranium asset globally, by historical annual production, but is currently on care and maintenance.
Lotus continues to target Kayelekera operation restart in the fourth quarter of 2025. It summarises its current priorities as:
- Finalise financing and offtake for the project, which involves appointing a debt advisor to assist in the financing process, and Negotiating offtake agreements with suitable parties that can strengthen Lotus’s position.
- Completion of negotiations and signing of a Power Supply and Power Implementation Agreement with Malawi’s electricity utility ESCOM — key to achieving reduced operating costs as announced in the restart definitive feasibility study (DFS).
- A FEED program leading directly into the detailed engineering design phase for the execution of the restart plan. These studies will confirm the upfront capital cost for the plant refurbishment and new equipment installations so a control budget can be prepared. This will also validate the 15-month refurbishment program timeline, update the operating costs from the DFS, and determine long lead items and early works programs.
The placement funds will ensure the delivery of these items, and accelerate the program by ordering long-lead items and undertaking necessary onsite early works.
Letlhakane uranium project development
The Letlhakane project is the large-scale, long-term uranium resource that complements the company’s project pipeline and growth strategy. Lotus aims to complete a scoping study and determine whether a more effective processing route can be identified to improve the 2015 feasibility study project economics, which had envisaged a heap leach process, consideration of the preferred processing flowsheet, and preparation of a scoping study, or preliminary economic assessment (PEA) that’s expected in late-2024.
The placement funds will also allow Lotus to:
- Use the updated model and optimised pit shells to design an infill drill program to target the most economic parts of the resource and convert these where required into M&I status.
- Undertake the above infill drill program to upgrade the resource.
- Prepare a new mineral resource estimate with increased M&I resources.
Lotus advises that further details of Letlhakane planned works are expected during the current quarter.