Lotus Resources Delays Full Uranium Output to Q2 2026 Amid Acid Supply Issues

Operational Progress at Kayelekera

Lotus Resources Limited continues to advance its uranium production ambitions at the Kayelekera mine in Malawi, with mining activities well underway following the restart in August 2025. The company successfully delivered its first high-grade ore to the Run-of-Mine pad and has established all necessary mining equipment and in-pit grade control systems. Despite some delays relative to the original schedule, mining is settling into a more predictable rhythm, with over 11,900 tonnes of ore mined during the December quarter.

However, processing throughput has faced headwinds due to sulphuric acid supply disruptions, primarily linked to production issues in Zambia and secondary supply challenges from South Africa. These constraints limited plant availability in November and December, although the plant achieved near nameplate throughput during a 15-day continuous operation period in November. The company has since secured contracts with three acid suppliers and mobilised transport fleets to alleviate these bottlenecks.

Acid Plant Rebuild and Production Outlook

To address the acid supply challenge more sustainably, Lotus is on track to commission a rebuilt acid plant by March 2026. This facility will produce sulphuric acid on-site from sulphur, reducing reliance on external suppliers and lowering transport volumes. While the company initially targeted steady-state production of approximately 2.4 million pounds of uranium per annum by March 2026, it now anticipates achieving this milestone in the second quarter of 2026, contingent on acid plant commissioning and stable supply.

Product qualification with uranium converters is progressing, with results expected shortly. This step is critical to initiating the permitting process for the first shipment of uranium product, now forecast for Q2 2026.

Letlhakane Project Advances

In Botswana, Lotus has completed the first phase of a 13,500-metre infill drilling program at its Letlhakane uranium project. The drilling aims to upgrade a significant portion of inferred mineral resources to higher confidence categories, with results pending. Meanwhile, metallurgical testwork conducted by the Australian Nuclear Science and Technology Organisation has demonstrated a potential 70% reduction in acid consumption through a novel two-stage leaching process. This innovation promises to simplify processing and reduce operating costs, enhancing the project's economics.

Financial Position and Market Context

Lotus maintains a robust cash balance of A$56.2 million at the end of December 2025, supplemented by an equipment finance facility. The company is actively exploring additional financing options, including inventory financing structures, to support its working capital needs as production scales. Safety remains a priority, with no lost time injuries recorded during the quarter and a milestone of two million LTI-free person days anticipated by the end of January.

The uranium market backdrop remains supportive, with spot prices near US$82 per pound and term prices rising to US$87 per pound. Global nuclear developments, including new reactor projects and government support in key markets such as the US, China, and Japan, underpin demand growth. Lotus is strategically preserving uncontracted uranium pounds to maximise exposure to potential price upside.