Lotus Delays Full Uranium Production to Q2 2026 Amid Supply Chain Fixes

Supply Chain Challenges and Progress

Lotus Resources Limited (ASX, LOT) has announced a pivotal update on its Kayelekera Uranium Mine in Malawi, highlighting progress in overcoming critical sulphuric acid supply chain constraints. These improvements are essential for the mine’s planned ramp-up to steady-state production, originally targeted for March 2026. The commissioning of the company’s acid plant remains on track for that date, a key milestone expected to stabilise acid availability and support sustained uranium output.

Despite these advances, the company has adjusted its production timeline, now forecasting full steady-state uranium production of approximately 200,000 pounds per month to be achieved in the second quarter of calendar year 2026. This delay is primarily due to earlier acid supply limitations, which had slowed the ramp-up pace.

Product Qualification and Market Strategy

Lotus is actively progressing product qualification with converters, a necessary step before initiating the permitting process for its first uranium shipment. Results are expected in February 2026, with the inaugural shipment now anticipated in Q2 2026. This timeline aligns with the revised production ramp-up, signalling a coordinated approach to market entry.

On the commercial front, the company reports a steady increase in uranium term prices, reaching US$87 per pound by the end of December 2025. Notably, 90% of its 2026 contracted uranium commitments, amounting to one million pounds, are scheduled for delivery in the second half of the year. Lotus is focusing on North American power utilities as key counterparties, aiming to secure contracts with market-linked pricing that could benefit from rising uranium prices. The company also maintains flexibility by preserving uncontracted pounds and building inventory, positioning itself to capitalise on favourable market conditions.

Financial Position and Future Outlook

Financially, Lotus remains robust with a closing cash balance of A$56.2 million as of the latest quarter, exclusive of US$10 million in restricted cash. An additional A$7.2 million equipment finance facility drawn post-quarter end lifts the pro-forma cash balance to A$63.4 million. The company is actively exploring further financing options, including prepayment and inventory financing structures, which could monetise product during shipment periods and enhance working capital efficiency.

Managing Director Greg Bittar emphasised the significance of resolving acid supply logistics, noting that this progress allows the company to refocus on production ramp-up. While acknowledging the delays caused by acid availability, Bittar reaffirmed the commitment to achieving steady-state production in the near term.

Resource and Reserve Base

Lotus’s update also reiterates the substantial mineral resource and ore reserve inventory underpinning its operations. The Kayelekera Mine, where production restarted in August 2025, holds significant measured and indicated uranium resources, complemented by the Letlhakane Uranium Project in Botswana. These assets provide a solid foundation for the company’s growth ambitions in the uranium sector.

Overall, Lotus Resources is navigating operational challenges with a clear strategy to stabilise production and capitalise on improving market dynamics. The company’s focus on supply chain resilience, contract flexibility, and financial strength positions it well for the evolving uranium market landscape.