Lotus Resources has launched a A$81 million equity raising to support the ramp-up of its Kayelekera uranium mine to steady state production targeted in Q2 2026, while advancing development of its Letlhakane project.
- A$76 million institutional placement plus A$5 million share purchase plan
- Kayelekera mine ramping to ~2.4Mlb uranium production per annum by Q2 2026
- Strong offtake contracts cover ~18% of production with ~80% uncontracted exposure
- Capital projects include acid plant commissioning and grid connection
- Letlhakane uranium project progressing towards pre-feasibility study in 2H 2026
Equity Raise to Support Critical Ramp-Up Phase
Lotus Resources Limited (ASX, LOT) has announced a significant equity raising comprising a non-underwritten institutional placement of approximately A$76 million, alongside a non-underwritten share purchase plan (SPP) targeting up to A$5 million. This capital injection aims to provide enhanced financial flexibility as the company accelerates the ramp-up of its flagship Kayelekera uranium mine in Malawi.
The Kayelekera project is on track to reach steady state production of around 200,000 pounds of uranium concentrate per month (approximately 2.4 million pounds per annum) by the second quarter of calendar year 2026. The first shipment of uranium concentrate is expected in Q2 2026, with initial cash receipts anticipated in Q3 2026, subject to final product qualification and permitting.
Operational Progress and Capital Projects
Lotus has achieved several key milestones, including first production in Q3 2025 and successful owner-operator mining implementation. The company is progressing critical capital projects such as the commissioning of an on-site acid plant, scheduled for completion by the end of Q1 2026, which will reduce reliance on volatile third-party sulphuric acid supply. Additionally, the grid connection project is underway, with completion targeted by the end of 2026, promising a lower-cost and more reliable power source for operations.
Further capital expenditure includes sustaining works on the tailings storage facility to support a 10-year mine life. These investments are designed to optimise operating costs and maximise margins during steady state production.
Offtake Strategy Balances Margin and Market Exposure
Lotus has secured binding offtake agreements covering approximately 18% of its life-of-mine production with fixed or base-escalated pricing, ensuring attractive margins over the company’s all-in sustaining costs. Importantly, about 80% of production remains uncontracted, preserving significant exposure to potential upside in the uranium market as global demand strengthens.
The company is finalising product qualification with multiple western converters, a critical step for product dispatch and revenue generation. Preliminary confirmation from one converter indicates the product meets key specifications, with final acceptance expected in February 2026.
Advancing Letlhakane Project Development
Beyond Kayelekera, Lotus is advancing its 100%-owned Letlhakane uranium project in Botswana, which hosts a globally significant mineral resource of 114 million pounds of uranium oxide. Mining has commenced with high-grade ore delivered to the run-of-mine pad. The company is undertaking optimisation studies and infill drilling to support a pre-feasibility study scheduled for the second half of 2026, aiming to position Letlhakane for development in a favourable uranium price environment.
Navigating Risks Amid Market and Operational Challenges
While the uranium market fundamentals remain strong, Lotus acknowledges several risks including uranium price volatility, operational ramp-up challenges, funding uncertainties, regulatory and geopolitical factors, and environmental liabilities. The equity raising is intended to mitigate funding risk and provide a buffer during the critical ramp-up phase.
Investors should note the non-underwritten nature of the placement and SPP, with proceeds from the SPP not guaranteed. The timing of product qualification and export permits may also affect cash flow projections.
Bottom Line?
Lotus Resources’ equity raise positions it to capitalise on tightening uranium markets as Kayelekera nears steady state production, with Letlhakane development poised to add scale.
Questions in the middle?
- Will Lotus secure final product acceptance and export permits on schedule to meet Q2 2026 shipment targets?
- How will uranium price fluctuations impact the company’s uncontracted production exposure and revenue forecasts?
- What progress will be made on Letlhakane’s pre-feasibility study and potential capital optimisation in 2H 2026?