Kayelekera Uranium Restart on Track for Q3 2025 with 3.9M lbs Offtake Secured

Restart Momentum at Kayelekera

Lotus Resources Limited continues to make significant strides in bringing its Kayelekera uranium project in Malawi back into production, targeting first uranium output in the third quarter of 2025. The company recently completed refurbishment of the SAG mill and has commenced processing high-grade ore as part of the hot commissioning phase. While the acid plant construction has faced some delays due to wet season earthworks, it is now expected to be operational by early 2026.

Strategic Shift to Owner-Operator Mining

In a notable operational pivot, Lotus has adopted an owner-operator mining model rather than contracting out mining services. This approach is designed to enhance control over mining production and reduce costs by eliminating contractor margins and duplicated administrative expenses. With a mining workforce predominantly composed of Malawian personnel, the company is blending local talent with experienced expatriate specialists to ensure a smooth ramp-up.

Securing Future Sales with Binding Offtake Contracts

Lotus has converted previous non-binding agreements into binding contracts covering a minimum of 3.6 million pounds and up to 3.9 million pounds of uranium production from Kayelekera starting in 2026. These contracts are priced on a fixed US dollar basis, linked to long-term market prices with inflation escalations aligned to the Reserve Bank of Australia’s targets. Additionally, the company has placed 100,000 pounds in the forward market for 2026 delivery at prices above term contracts, underscoring confidence in market demand.

Powering Efficiency with Grid Connection

To reduce reliance on diesel generators and lower operating costs, Lotus is progressing a powerline project to connect Kayelekera to Malawi’s electricity grid by 2026. This initiative, supported by agreements with the Electricity Supply Corporation of Malawi (ESCOM), is expected to yield annual electricity cost savings of US$12–14 million and provide environmental benefits through reduced carbon emissions. The infrastructure will also offer electrification opportunities for local communities, enhancing Lotus’s social license to operate.

Financial Position and Market Outlook

Lotus maintains a strong cash position of A$75.9 million, exclusive of restricted cash, and carries no debt. The company has secured an US$8.5 million equipment finance facility and upsized its working capital facility to US$30 million to support operations through the restart phase. Meanwhile, the uranium market shows positive momentum, with spot prices rising to US$78.50 per pound and long-term prices steady at US$80 per pound, buoyed by global nuclear energy developments and increased contract activity.

Looking Ahead

While the restart capital budget remains on track, the delay in acid plant commissioning may temper the pace of full production ramp-up. Lotus’s strategic decisions, including the owner-operator model and binding offtake contracts, position the company well to capitalize on a strengthening uranium market. Investors will be watching closely as the company moves toward first production and grid connection milestones in the coming quarters.