How Will Lotus’s A$76M Raise Fuel Kayelekera’s Uranium Surge?

Strategic Capital Raise Amid Uranium Market Optimism

Lotus Resources Limited (ASX – LOT) has announced a significant capital raising initiative, launching a non-underwritten placement to raise approximately A$76 million at a discounted price of A$2.15 per share. This move is designed to bolster the company’s financial flexibility as it accelerates production ramp-up at its flagship Kayelekera uranium mine in Malawi. Complementing the placement, Lotus plans a non-underwritten share purchase plan (SPP) targeting up to A$5 million from existing shareholders.

The placement price represents a 25.3% discount to the previous closing price, reflecting the company’s urgency to secure working capital to support operational milestones. The funds will underpin critical infrastructure projects, including the completion of an acid plant and grid connection, both aimed at optimising operating costs and enhancing production efficiency.

Production Ramp-Up and Market Positioning

Lotus is targeting a monthly nameplate production rate of approximately 200,000 pounds of uranium, equating to around 2.4 million pounds annually, by the second quarter of 2026. This ramp-up is a pivotal step toward achieving steady-state operations and positive cash flow. The company anticipates its first shipment of uranium product in Q2 2026, with initial cash receipts expected in the following quarter.

Product qualification is progressing well, with at least one western converter confirming that initial samples meet key specifications. Final product acceptance is anticipated imminently, which will clear the way for commercial shipments. This progress is critical given the supportive uranium market outlook, which Lotus aims to capitalise on by maintaining a disciplined and patient approach to offtake agreements, thereby maximising exposure to potential price upside.

Financial Position and Shareholder Participation

Following the placement and SPP, Lotus expects to hold pro-forma unaudited cash reserves of around A$145 million. This strong liquidity position not only supports the ongoing ramp-up but also provides a buffer for the typical 5-6 month uranium working capital cycle. The company is also negotiating potential inventory pre-payment facilities to further enhance liquidity if required.

The SPP offers eligible shareholders the opportunity to participate at the same discounted price, with a maximum application limit of A$30,000 per shareholder. However, the SPP is subject to a waiver from the ASX due to the discount exceeding 20% of the five-day volume weighted average price. If the waiver is not granted, shareholder approval will be sought.

Looking Ahead

Lotus CEO Greg Bittar emphasised the strategic importance of the capital raise, highlighting that the enhanced liquidity runway will support the company through the critical ramp-up phase and position it to benefit from improving uranium market fundamentals. Beyond Kayelekera, Lotus continues to advance its Letlhakane project in Botswana, signalling a broader growth trajectory for the company in the uranium sector.

Investors will be watching closely as Lotus navigates the operational challenges of ramping up production while managing market risks and capital discipline. The success of this capital raise and subsequent operational milestones will be key indicators of the company’s ability to deliver on its ambitious growth plans.