Lotus Resources Builds Operational Momentum at Kayelekera as Production Ramp-Up Advances

• Kayelekera produced 78,300 pounds of uranium in the March 2026 quarter, with ore milled rising 40% from the prior quarter to 119,800 tonnes
• Mining has expanded to three active fronts, with a run-of-mine ore stockpile exceeding 200,000 tonnes at quarter end, representing over two months of plant throughput
• A new General Manager and Processing Manager, with a combined 55-plus years of African mining and uranium-specific experience, joined the site during the quarter
• Kayelekera uranium product received formal acceptance from Orano's conversion facility in France, enabling delivery flexibility across all contracted sales
• Sulphuric acid supply was fully restored and inventories were near storage capacity at quarter end; the on-site acid plant rebuild has been completed and commissioning is scheduled for the June 2026 quarter

Lotus Resources Limited (ASX: LOT, OTCQX: LTSRF) is an Australian-based uranium producer with operations and development projects across two countries. The company holds an 85% interest in the Kayelekera Uranium Mine in northern Malawi, which was restarted in August 2025 on time and on budget after more than a decade in care and maintenance, and a 100% stake in the Letlhakane Uranium Project in Botswana. Kayelekera has a proven production history, having yielded approximately 11 million pounds of uranium between 2009 and 2014, and currently hosts total mineral resources of roughly 46 million pounds. Letlhakane holds a total mineral resource of approximately 114 million pounds. Together, the two projects represent a combined uranium resource base approaching 165 million pounds.

Kayelekera Production Ramp-Up Progress and Operational Challenges

Mining at Kayelekera gained considerable pace during the March 2026 quarter, with total material movement reaching 537,000 tonnes and ore mined rising to 80,200 tonnes from just 5,100 tonnes in the December 2025 quarter. The operation has now expanded across three simultaneous mining fronts, and the company reports that ramp-up to full mining performance is well advanced. At quarter end, higher-grade ore immediately available for processing exceeded 200,000 tonnes.

Processing throughput also improved, with 119,800 tonnes of ore milled and uranium production reaching 78,300 pounds for the quarter. All ore milled during the period was drawn from existing historical stockpile material. The transition to processing predominantly freshly mined ore is expected to begin in the current June 2026 quarter.

Plant stability was affected by reagent shortfalls, scheduled maintenance shutdowns, and the replacement of leach circuit instruments during March. As part of refining its production measurement processes, the company identified discrepancies in previously reported mined grade and recovery data and retracted those figures, while implementing a remediation plan. Uranium production volumes and ore milled figures were unaffected and remain consistent with prior disclosures. Interruptions continued into April, with improved throughput and production expected in May and June as conditions stabilise.

Strengthened Site Leadership and Infrastructure Investment

The quarter brought key additions to Kayelekera's site leadership. Gustav Du Toit commenced as General Manager, bringing 30 years of experience in operational performance and stakeholder engagement across multiple African mine sites, most recently as General Manager of Barrick's Central and East African operations. Sarel Malan joined as Processing Manager with more than 25 years in the mining industry, including 15 years of specialised experience in uranium processing at Paladin and CGN Uranium, covering pre- and post-commissioning through to full steady-state operations.

Alongside the leadership changes, Lotus invested in upgrades across key areas of the processing plant, including instrumentation and process controls and critical spare parts inventory. A specialist third-party contract was also awarded for the management and operation of the on-site laboratory.

Managing Director Greg Bittar commented: 

"Kayelekera's technical capability has been significantly bolstered in recent months. This includes investment in people, equipment and technical support: new site and processing leadership; a new specialist third-party laboratory management contract, supported by continued investment in equipment and training; and expanded mining, engineering and metallurgical capability."

Product Acceptance, Supply Chain and Capital Projects Progress

A commercial milestone during the quarter was the formal acceptance of Kayelekera uranium by Orano Chimie-Enrichissement (Orano CE), a uranium conversion facility in France. In the nuclear fuel supply chain, uranium concentrate must pass through a conversion facility before it can be enriched for use in power reactors. The ability to swap or exchange product between converters means that an Orano CE account provides delivery flexibility across all contracts, sales and deliveries, while Lotus continues to work towards accreditation with the other two western converters, ConverDyn and Cameco.

Reagent supply, which had been a production constraint in earlier months, was fully restored during the quarter. Lotus expanded its sulphuric acid supplier base to include South African sources alongside existing supply from Zambia, bringing on-site inventory to near storage capacity. The on-site acid plant, which will produce sulphuric acid from sulphur and reduce the volumes and truck movements required for reagent supply, completed its rebuild and is expected to begin hot commissioning during the June 2026 quarter. First product export is planned via the port of Walvis Bay in Namibia, with permitting processes across Malawi, Zambia and Namibia underway.

Capital project activity continued across multiple fronts. Grid connection works progressed with initial component shipments arriving on site and substation construction commencing at both the Karonga and Kayelekera locations, though shipping delays linked to global disruptions are being monitored. Construction of the Tailings Storage Facility (TSF), the engineered structure that contains and manages processed residues from the mine, continued in line with plans, with the north wall raise on track for completion ahead of when the additional capacity will be required. Total capital expenditure for the quarter across the restart programme, powerline, TSF and other sustaining items was US$11.9 million, as set out in Table 2 of the quarterly report.

Outlook

Lotus closed the March 2026 quarter with a cash balance of A$85 million (unaudited), up from A$56.2 million at the end of December, following the completion of an A$76 million equity placement and a A$3 million Share Purchase Plan. Inventory financing discussions are at an advanced stage and are intended to align with first shipment timing. All 1,000,000 pounds of Lotus's 2026 contracted uranium commitments are scheduled for delivery in the second half of calendar 2026, with first shipment timing subject to final permitting approvals. Management expects the operation to trend towards steady-state throughput during the June 2026 quarter, with grade and recovery optimisation continuing to improve the production run rate. At Letlhakane, Phase 2 of the infill drilling programme is expected to conclude later in 2026, followed by an updated mineral resource estimate, with a preliminary feasibility study now targeted for the first half of 2027. 

As Managing Director Greg Bittar stated: 

"The Board and management are confident in the depth of capability and technical expertise now in place at Kayelekera to complete the ramp-up and deliver sustained long-term steady-state production."

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