Kayelekera Restart Over 80% Complete with A$112.7M Cash and Binding Uranium Sales
Lotus Resources is on track to restart uranium production at its Kayelekera project in Malawi by Q3 2025, backed by strong funding and binding offtake agreements covering up to 3.8 million pounds of uranium from 2026. Meanwhile, its Letlhakane project in Botswana advances with an updated scoping study supporting robust production potential.
- Kayelekera uranium project restart on schedule for Q3 2025 with >80% mechanical and electrical completion
- Closing cash balance of A$112.7 million, fully funding the restart program with no debt
- Binding offtake contracts secured for up to 3.8 million pounds of uranium production from 2026
- Electricity grid connection planned for 2026, with interim diesel power station refurbishment underway
- Updated Letlhakane scoping study supports ~3 million pounds per annum uranium production
Accelerated Kayelekera Restart Progresses on Track
Lotus Resources Limited (ASX: LOT) has reported significant progress in its accelerated restart of the Kayelekera uranium project in Malawi, aiming for first uranium production in the third quarter of 2025. Mechanical and electrical refurbishment works are over 80% complete, with all key operational roles filled and a workforce exceeding 300 personnel already mobilised on site. The company has ordered heavy mobile equipment and plans to mobilise the fleet by May 2025.
Critical infrastructure upgrades include civil works across processing areas, power station servicing with refurbished diesel generators, and assembly of drying and packaging facilities. The refurbishment of the acid plant is nearing completion, reflecting a focused effort to restore full operational capacity.
Strong Financial Position and Binding Offtake Agreements
Lotus closed the quarter with a robust cash position of A$112.7 million, exclusive of restricted cash, and carries no debt. This financial strength fully funds the Kayelekera restart program. Additionally, the company has converted previously non-binding offtake arrangements into binding contracts covering a minimum of 3.5 million pounds and up to 3.8 million pounds of uranium production from 2026 onwards. These contracts, primarily with North American nuclear utilities including PSEG Nuclear LLC, are priced on a fixed US dollar basis linked to long-term uranium prices with inflation escalations aligned to the Reserve Bank of Australia’s targets.
Lotus continues to engage with potential customers to expand its offtake portfolio, focusing on securing long-term contracts that mitigate exposure to spot market volatility.
Infrastructure and Community Engagement
Electricity supply to Kayelekera is set to transition from an interim diesel power station to a grid connection by 2026. Lotus has signed Power Implementation and Supply Agreements with Malawi’s ESCOM and is managing the construction of transmission infrastructure. The company is also evaluating a battery energy storage system to enhance power reliability.
Community relations have been strengthened through the signing of Malawi’s first Community Development Agreement for a mining operation, allocating a minimum of 0.45% of mine revenue to local development projects. This milestone underscores strong government and community support, critical for sustainable operations.
Letlhakane Project Advances with Updated Scoping Study
In Botswana, Lotus has advanced its Letlhakane uranium project with an updated scoping study based on the December 2024 Mineral Resource Estimate. The study supports a 10-year life of mine producing approximately 3 million pounds of U3O8 annually, with flexibility to adjust production in line with uranium market conditions. Operating costs are estimated at US$41.1 per pound, with capital expenditure of US$465 million. The company is pursuing optimisation studies to improve processing efficiency and reduce acid consumption.
Corporate and Governance Developments
Lotus has completed a board and management transformation to support its transition to a global uranium producer. Experienced directors Leanne Heywood and Simon Hay joined the board in early 2025, while founding members Grant Davey and Mark Hanlon have stepped down or are scheduled to depart. These changes reflect a strategic shift towards enhanced governance and operational expertise.
Chief Financial Officer Hayden Bartrop, appointed in January 2025, brings extensive mining sector experience and continues to oversee commercial and corporate functions.
Market and Sustainability Context
The uranium market remains steady with long-term prices around US$80 per pound and spot prices fluctuating between US$63 and US$75 per pound during the quarter. Global nuclear developments, including new reactor constructions and life extensions, underpin demand growth.
Lotus reported no health and safety incidents during the quarter and improved its S&P Global ESG score to 39/100, reflecting ongoing commitment to environmental and social governance. Community initiatives such as tree planting at local schools further demonstrate the company’s engagement with host communities.
Bottom Line?
As Lotus Resources advances toward uranium production restart and expands its offtake portfolio, market watchers will keenly observe ESIA approvals and execution of financing agreements shaping its next growth phase.
Questions in the middle?
- Will the Environmental and Social Impact Assessment (ESIA) approval for Kayelekera be secured on schedule in Q2 2025?
- How will Lotus finalise and draw down on the conditional equipment and working capital financing facilities?
- What further offtake contracts can Lotus secure to cover uncontracted uranium volumes beyond 2026?
