Lotus Resources Advances Toward First Uranium Production at Kayelekera

• High-grade ore processing commenced with all leach tanks operating at full capacity, with first uranium product expected this quarter
• Fixed-price contracts signed for power grid connection totalling US$19.7 million, with completion scheduled by end-2026
• Tailings Storage Facility expansion confirmed to support a further 12.8 million tonnes capacity over a 10-year operational life
• US$8.5 million equipment finance facility executed with First Capital Bank for mobile and mining equipment
• Cash position of A$75.9 million maintained at June end with restart remaining within US$50 million capital budget

Lotus Resources Limited (ASX:LOT) is a uranium development company with assets concentrated in Africa's established mining jurisdictions. The company's primary asset is an 85% stake in the Kayelekera Uranium Project in Malawi, complemented by full ownership of the Letlhakane Uranium Project in Botswana. The Kayelekera project represents the company's near-term production opportunity, having previously operated as a commercial uranium mine from 2009 to 2014 before closure due to low uranium prices.

Across its portfolio, Lotus controls total mineral resources of 164.8 million pounds of uranium, with Kayelekera contributing 46.3 million pounds supported by proven and probable ore reserves of 23 million pounds. The company's strategy centres on restarting production at Kayelekera to capitalise on improved uranium market fundamentals whilst advancing its broader African uranium portfolio for potential future development.

Kayelekera Restart Reaches Key Milestone

High-grade ore processing has commenced at the Kayelekera facility as part of the restart programme. All leach tanks are now operating at full capacity with reagents being actively dosed into the circuit to initiate and sustain uranium extraction. The hydrometallurgical operations have begun as the plant progresses through its commissioning phase.

Final commissioning of the precipitation, drying, and packaging circuits is currently underway, with first uranium product expected this quarter. The company reports that uranium leaching operations are now active following the completion of front-end processing systems.

Managing Director Greg Bittar commented:

"We continue to make great progress towards the production of our first uranium with high-grade ore now being processed."

The development moves the company closer to generating revenue from uranium sales as it transitions from development to production.

The processing commencement occurs within the allocated restart capital budget of US$50 million, according to company statements.

Power Infrastructure to Drive Long-Term Cost Reductions

Lotus Resources has executed fixed-price contracts for power grid connection construction, with work scheduled to commence and completion targeted by the end of 2026. The total contracted cost for the powerline and substations amounts to US$19.7 million, compared to the original estimate of US$20.6 million from the Accelerated Restart Plan.

Connection to Malawi's largely hydro-powered national grid is projected to reduce power costs by US$5-6 per pound of uranium produced and reduce diesel consumption and associated logistics requirements. The company states this will cut carbon emissions compared to diesel-generated power.

The power infrastructure will provide access to electricity for local communities along the powerline route through connections with Malawi's power utility, ESCOM. Bittar commented:

"Local communities along the powerline route will be able to work with the Malawi power utility, ESCOM, to connect to the powerline and have access to electricity for the first time."

A Battery Energy Storage System valued at approximately US$3.5-4 million will be installed in 2027 to provide power continuity during grid disruptions. The grid connection project will be funded through the company's balance sheet.

Advancing Tailings Storage and Site Readiness

Lotus Resources has accelerated its tailings storage facility expansion to deliver Phase 1A and Phase 1B concurrently. Detailed design work completed with SLR Consulting confirms that the existing facility can accommodate expansion by approximately 12.8 million tonnes through a six-phase development programme.

The company plans to complete Phase 1A and Phase 1B together rather than sequentially. Phase 1A provides sufficient capacity until June 2027, whilst Phase 1B completion is required by December 2026. Delivering both phases concurrently will advance approximately US$15.5 million in capital expenditure from 2027 into 2026.

The design complies with Australian National Committee on Large Dams guidelines and the Global Industry Standard on Tailings Management. The expansion supports the projected 10-year operational life of the mine.

Equipment and operators have been mobilised for infrastructure work, including foundation establishment, linings, and buttress construction. The initial restart capital budget allocated approximately US$4 million for Phase 1A completion.

Financial Position Supports On-Budget Restart

Lotus Resources reports cash holdings of A$75.9 million at the end of June with no debt currently drawn. The company has access to additional financing facilities totalling US$63.5 million, including working capital facilities and equipment financing.

The company has executed a US$8.5 million equipment finance facility with First Capital Bank. The facility provides 70% financing for mobile equipment and 80% for light vehicles, with interest rates below 10% per annum and a five-year term with 54-month repayments.

The facility structure includes no principal or interest payments in the first six months, aligning with the production ramp-up timeline. The arrangement allows the company to preserve cash whilst accessing equipment financing for operational requirements.

The company states that current funding arrangements enable it to fund the power grid connection through its balance sheet whilst maintaining liquidity for operational requirements.

Looking Ahead

Lotus Resources is positioned to achieve first uranium production this quarter, marking the successful restart of the Kayelekera operation after comprehensive recommissioning efforts. With high-grade ore processing underway and final circuit commissioning progressing, the company is on track to begin generating revenue from uranium sales within the established US$50 million restart budget. The subsequent completion of power grid infrastructure by end-2026 will unlock significant operational cost savings and position Kayelekera as a low-cost, environmentally sustainable uranium producer for the long term.

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