Lotus Resources Updates Market on Kayelekera Production Pause, Mercuria Funding Progress and Suspension Extension

• Production at Kayelekera has been temporarily paused following a disruption to third-party acid supply, linked to Middle East geopolitical tensions, and ongoing repair work at the on-site acid plant.
• Monthly output reached 73.6 thousand pounds of U3O8 in May, up from 47.3 thousand pounds in April, prior to the pause.
• Lotus has signed a non-binding term sheet with Mercuria Energy Trading S.A. for a marketing agreement and a prepayment facility of up to US$30 million to support working capital.
• The company holds a cash balance of US$26 million and continues to progress export permits, with first shipment from Namibia's Walvis Bay port anticipated in September 2026.
• Lotus has requested an extension of its voluntary suspension from the ASX until the earlier of a finalised funding announcement or 16 July 2026.

Lotus Resources Limited (ASX:LOT, OTCQX:LTSRF) is an Australia-based uranium developer that holds an 85 percent interest in the Kayelekera uranium mine in Malawi. The project previously operated before being placed on care and maintenance, and the company has been working to restart production at the site.

Production Pause at Kayelekera Due to Acid Supply Disruption and Acid Plant Repairs

Kayelekera's processing plant has relied on acid supplied by third parties while the company's own on-site acid plant is being commissioned. Tensions in the Middle East have disrupted the availability, reliability and cost of sulphur and sulphuric acid, resulting in delayed or unfulfilled deliveries to the site. This has led to a temporary halt to production while Lotus works with suppliers to manage the situation.

Separately, during final commissioning of the on-site acid plant, several refractory bricks, the heat-resistant lining inside the plant's sulphur furnace, showed signs of wear. Lotus has identified the cause and is carrying out repairs using spare bricks already held on site. This interim fix is intended to allow the acid plant to reach full commissioning and continue operating until a complete lining replacement takes place during a planned maintenance shutdown expected in the fourth quarter of 2026. The cost of this longer-term repair is not expected to be material.

To align with these repairs, Lotus has brought forward planned maintenance originally scheduled for the third quarter. Production in May reached 78.3 thousand pounds for the quarter to date, reflecting benefits from process optimisation, site leadership changes and equipment upgrades. Subject to resolving acid supply and funding, the company expects to reach steady-state production later in the year.

Mercuria Marketing Agreement and US$30 Million Prepayment Facility Supporting Working Capital

Following due diligence, including an independent technical review and site visits, Lotus has signed a non-binding term sheet with Mercuria Energy Trading S.A. Binding documentation is being finalised, with execution expected within the next two months. Under the proposed agreement, Mercuria would market three million pounds of uranium over 30 months at prices linked to the spot market, while Lotus retains control over which customers receive the product, including its existing offtake partners.

Alongside the marketing agreement, Mercuria would provide a prepayment facility of up to US$30 million. This funding becomes accessible once uranium is loaded for shipment at port, meaning the earliest drawdown is expected around September 2026, in line with the anticipated first shipment. The facility carries a financing cost tied to the Secured Overnight Financing Rate plus a margin.

Lotus is also progressing equity and quasi-equity funding options, which remain subject to acid plant commissioning, a demonstrated pathway to steady-state production, and resolution of 2026 offtake commitments. The company has engaged Gresham Partners and Canaccord Genuity as financial advisers to support this process.

Voluntary Suspension Extension Pending Resolution of Funding Process

Lotus has asked the ASX to extend its voluntary trading suspension until the earlier of an announcement confirming a finalised funding option, or the resumption of normal trading on 16 July 2026.

The company has stated that discussions with equity investors, underwriters and offtake customers are ongoing, though it remains difficult to predict a precise timetable for their conclusion.

The company has stated it is not aware of any reason the extension should not be granted, and has committed to providing a further market update by 16 July 2026 if a funding outcome has not been finalised by that date. In the meantime, Lotus is reviewing the timing and prioritisation of discretionary expenditure.

Milestones and Next Steps

Near-term steps include completing acid plant repairs, finalising binding documentation with Mercuria, and progressing broader funding arrangements. Export permitting continues to advance, with approvals received from Malawian and Zambian authorities and shipping contracts finalised through to Walvis Bay. Permitting is expected to take one to three months from the date of the announcement. The company anticipates its first shipment in September 2026, with proceeds expected to be credited to its account in October or November 2026.

‍