Kayelekera Uranium Production Revised Down 57% for Ore Mined; Steady State Now Q3 2026

Operational Hurdles Delay Uranium Output at Kayelekera

Lotus Resources Limited (ASX:LOT) has pushed back the timeline for achieving steady-state uranium production at its Kayelekera mine in Malawi to Q3 CY2026, revising earlier guidance that targeted Q2. The company cited a confluence of operational challenges including disruptions in sulphuric acid supply, ongoing capital upgrades, and complexities in grade reconciliation and recovery calculations as key factors behind the delay.

Initially, Lotus announced an accelerated restart plan in October 2024, budgeting US$49.7 million to bring Kayelekera back online after a decade-long care and maintenance period. First uranium drummed was achieved in September 2025, with steady-state production of 200,000 pounds per month originally forecast for Q1 2026. However, the ramp-up phase has proven more complex than anticipated, with the company acknowledging that the plant's age and condition, alongside refurbishment risks, have impacted operational reliability.

Supply Chain and Capital Works Impact Production

Disruptions to the supply of sulphuric acid, first disclosed in December 2025, affected production through November and December 2025. While the company anticipated a recovery in supply and a production increase in early 2026, ongoing plant maintenance and capital upgrades have contributed to intermittent downtime and lower recoveries. For example, upgrades to the tailings thickener required bypassing the unit, leading to higher losses and reduced uranium output. Compressor issues further hampered the elution circuit’s efficiency, directly impacting recovery rates.

Despite these setbacks, Lotus has maintained that the capital upgrades are not material in cost relative to the overall restart plan but have been a significant factor in the ramp-up challenges. The company reported processing plant utilisation at 80% for the latter half of February 2026, indicating progress but still short of full steady-state operation.

Revised Production Metrics and Retractions

In a significant revision, Lotus lowered its December 2025 quarter ore mined figure from 11.9kt to 5.1kt, a 57.1% decrease, and waste mined from 265kt to 232.1kt, a 12.4% decrease. These adjustments stemmed from updated survey measurements and a change in mining strategy from contractor to owner mining. The company emphasised that these figures represent a small fraction of expected steady-state mining volumes and that production has not been constrained by ore availability, relying instead on substantial stockpiles.

More notably, Lotus retracted previously reported mined grade, head grade, and recovery numbers from several announcements between December 2025 and March 2026. Investigations revealed assay biases and sampling inconsistencies, including a potential positive bias in uranium assays and challenges in accurately measuring uranium inventory within the processing circuit. These factors rendered the earlier recovery rates; which ranged between 82.1% and 87%; unreliable. The company has engaged metallurgical consultants to support reconciliation efforts and expects to provide more accurate recovery data in future disclosures.

Compliance and Market Impact

Lotus affirmed that all disclosures were prepared and released in accordance with its Continuous Disclosure Policy and ASX Listing Rules, stating the revisions and retractions were made promptly upon becoming aware of inaccuracies. The company also confirmed compliance with Listing Rule 3.1 and emphasized ongoing transparency in updating the market about operational progress and challenges.

The announcement followed a sharp share price drop of 35.6% on 30 April 2026, reflecting market reaction to the revised production outlook and retractions. This comes after a series of capital raises earlier in the year, including a A$76 million placement to fund the Kayelekera ramp-up and related projects, illustrating the high stakes involved in meeting production targets.

Lotus continues to expect a trajectory towards steady-state throughput during Q2 2026 but acknowledges that full steady-state production is unlikely within that quarter, now targeting Q3 CY2026. This revised timeline is subject to operational improvements, potential maintenance shutdowns, and final budget approvals.

Meanwhile, the company’s broader uranium portfolio remains active, with recent drilling at Letlhakane confirming higher-grade uranium intercepts and plans for a resource upgrade in H2 2026, indicating ongoing growth ambitions beyond Kayelekera’s immediate challenges. The company’s ability to navigate these operational setbacks while advancing other projects will be critical to watch in the coming months.

Lotus Resources’ detailed response to ASX’s inquiry sheds light on the complexities of ramping up a long-idled uranium operation amid supply chain constraints and technical challenges. The company’s forthcoming metallurgical consultancy reports and quarterly updates will be pivotal in clarifying recovery rates and production forecasts, with direct implications for investor confidence and market valuation.

Notably, this episode underscores the difficulty in forecasting steady-state production in mining projects with aged infrastructure and variable ore stockpiles, where initial guidance is often subject to revision as operational realities unfold. The market will be keen to see how Lotus manages these risks while capitalising on its expanding uranium resource base.

Investors tracking the Kayelekera ramp-up should also consider the company’s recent A$76 million placement to bolster ramp-up and the Orano acceptance paving way for exports, which remain key elements in the company’s near-term operational and commercial strategy.