Uranium Developer's Past Success Prompts Lotus Resources to Target Timely Restart

• Lotus Resources owns two uranium projects - the Kayelekera mine in Malawi and the Letlhakane project in Botswana
• They aim to restart production at Kayelekera by the end of 2025 to take advantage of expected uranium supply shortages
• Seeking advisors to assist with financing strategies to support development plans
• Have had more interest recently from utilities and investors due to uranium price increases
• Plan to put some of future Kayelekera production under long-term contracts to satisfy debt providers

The Time is Right for Uranium Investors to Take Note

With uranium prices on the rise amid a positive demand outlook, investors are taking a fresh look at the beaten-down uranium sector. Companies with quality assets and clear paths to near-term production are likely to be key beneficiaries of the upswing. One such company, Lotus Resources, stands ready to capitalize on improving market dynamics through the targeted restart of its previously producing Kayelekera uranium mine in Malawi.

Lotus Resources (OTCQB:LTSRF) is an Africa-focused uranium company that positions itself as a leading advanced player in the industry with sizable scale and resource assets. While Lotus seeks to create value for its shareholders and customers, the company also claims to work with local African communities to provide meaningful, long-term social impact. Part of Lotus' stated focus is on the future sustainability of its operations.

The company's main asset is an 85% stake in Malawi's Kayelekera Uranium Project, which hosts a reported resource of 51.1 million pounds of U3O8 uranium and historically produced about 11 million pounds between 2009-2014. Lotus recently completed a positive study that found 23 million pounds in ore reserves that could support economically viable uranium production at Kayelekera going forward.

Interview with Managing Director, Keith Bowes

Reviving the Kayelekera Mine

Owned by Lotus since 2019, the Kayelekera mine is a prime example of a brownfield project with extensive historical production data that enhances confidence in future success. Operational from 2009 to 2014 under Paladin Energy, the mine produced over 10.5 million lbs of uranium during that period. Ore was processed onsite and uranium was shipped to major converter facilities around the world.

According to Keith Bowes, Managing Director of Lotus, “There is confidence from utilities that the mine will produce and can operate and deliver a high-quality product into the market.”

With uranium prices now over $100/lb compared to under $30/lb just two years ago, Lotus sees fresh potential in restoring Kayelekera. An updated feasibility study supports a 15-month timeline for refurbishment to enable production restart by the end of 2025. The target start aligns well with widespread forecasts for deepening supply deficits in the coming 3-4 years as secondary supplies wane and new production fails to fill the void. Bowes explains Lotus’ strategic outlook: “With this higher price and opportunity for a sweet period between 2026 and 2029...where we think there could be even higher prices we are focused on getting Kayelekera up and running by the end 2025.” Hitting that schedule will allow Lotus to “maximize the price and the profits.”

Strengthening Finances

Bringing Kayelekera back online carries an initial capital cost estimate of around US$90 million. With uranium prices now tripling their 2020 lows, Lotus sees a greater opportunity to utilize debt as part of an optimal financing mix, hence their recent move to appoint project debt advisors. Bowes indicates initial 40-50% equity financing models have shifted: “Kayelekera can handle a large amount of debt if that's what we want to do going forward.”

He also notes that utilities have shown more openness to possible upfront uranium purchase prepayments which were not seriously considered when prices languished.

Such evolving market dynamics look set to ease Lotus’ path to funding its uranium ambitions. As Bowes relates, “With today's prices...there’s certainly a lot of interest in terms of the financing of the project”, not just from specialist uranium investors but also generalist funds “that have picked up that uranium is the only commodity in which there could be a significant increase in price moving forward.”

First Mover Advantage

Beyond advantageous prices and financing trends, Lotus enjoys another key advantage in its sector - being well-positioned to achieve production ahead of scores of competing development projects.  Bowes casts doubt on overly ambitious timelines across the industry: “There are some companies out there that perhaps are selling a good story with...maybe...more substance behind it that I certainly agree with.” He cautions that “the cost structures that [some companies] have put forward both in terms of capital and maybe operating costs are realistic.” Ultimately, firms lacking concrete operational experience often present higher risk profiles to investors and customers alike.

In contrast, as Bowes emphasizes, “We are fortunate again with Kayelekera...we can reference back to historical production data so I do believe we have a lot more confidence around our cost structures.” That confidence comes from real “operating history” rather than mere speculative assumptions. Such tangibility counts when utilities shop for new reliable sources of uranium fuel. As Bowes indicates, “Brownfield projects with past producing history...are certainly the first companies that utilities want to go to.” With sector analysts widely forecasting major supply/demand imbalances emerging mid-decade, being early helps lock in higher returns. Starting in 2025 position Lotus to fully exploit those pending shortfalls.

The Investment Thesis for Lotus Resources

• Past production success at Kayelekera enhances confidence in the restart timeline and costs
• Targeting production start in 2025 aligns with the forecast supply squeeze
• Higher uranium prices expand the ability to utilize lower-cost debt financing
• Possible off-take prepayments offer non-dilutive funding source
• First mover production advantage over competing projects with later start dates

With improving uranium market dynamics as a backdrop, Lotus Resources offers investors a timely production growth story leveraging a thoroughly de-risked brownfield asset. The company exhibits a clear focus on working towards a 2025 restart at Kayelekera supported by diverse funding options. If executed successfully, the calibrated strategy can deliver strong shareholder returns as the anticipated wider supply deficits take hold. Scarcity favors the early responders - and Lotus has set its sights on seizing that coveted first-mover pole position.