Lotus Resources has executed key documentation for a Mercuria facility providing up to US$30 million in inventory-backed prepayment funding, while only one major approval remains before Kayelekera’s first uranium shipment. Operations are improving, but production remains tied to acid availability and power reliability.
- Up to US$30 million Mercuria inventory-backed prepayment facility
- Marketing platform covering up to 3.0 million pounds of U3O8 over 30 months
- Only Namibian NRPA transport approval remains for the export route
- First shipment prepared with approximately 144,000 pounds of uranium
- Acid plant operating at 50% to 60% of design capacity
Mercuria funding package moves to execution
Lotus Resources Limited (ASX:LOT) has taken a significant step towards converting Kayelekera’s restart into cash flow, executing key full-form documents with Mercuria Energy Trading for an inventory-backed prepayment facility of up to US$30 million. The arrangement also provides a marketing platform covering up to 3.0 million pounds of U3O8 over 30 months.
The company says it intends to begin using the facility from its first uranium shipment, accelerating cash conversion and supporting working capital. The announcement does not disclose any initial drawdown, pricing, security terms or financial covenants, so the headline facility size should not be read as cash already received. The agreement completes the strategic funding package first announced in July, when Lotus had secured a Mercuria funding commitment amid the mine’s restart and financing pressure.
One Namibian permit stands between Kayelekera and export
Export preparations are also nearing a practical milestone. Lotus has received approvals from Namibia’s Ministry of Environment, Forestry and Tourism and Ministry of Industries, Mines and Energy, alongside the Malawian and Zambian approvals needed for the route through to Walvis Bay and Orano CE’s conversion facility in France.
The remaining key approval is transport authorisation from Namibia’s National Radiation Protection Authority. Warehouse storage approval at Walvis Bay has already been granted, and Lotus is preparing a first shipment of four containers containing approximately 144,000 pounds of U3O8. Once the transport permit is secured, remaining requirements are described as shipment-specific notifications and approvals.
Production remains constrained by acid and power
Kayelekera produced approximately 100,000 pounds of drummed uranium over 31 operating days in August and September after processing resumed in mid-August. September recoveries improved materially, according to Lotus, but production was constrained by acid availability, interruptions to onsite power generation and planned optimisation work.
The acid plant is now producing high-concentration sulphuric acid at about 50% to 60% of design capacity. Lotus says further optimisation and full furnace repair works are planned for early 2027, while uranium production is expected to broadly track acid output in the near term. The plant’s restart followed the Kayelekera acid plant repairs, but the current update makes clear that the operation has not yet reached nameplate performance.
Off-specification inventory remains an unresolved cash question
Lotus is also in discussions with several parties over the potential near-term sale of approximately 173,000 pounds of product classified as off-specification by Orano CE. Most of that material came from early commissioning and restart activity, and the company says product quality has improved materially as optimisation initiatives take effect.
The sale is not yet complete, leaving its timing, price and cash contribution uncertain. At the same time, repairs to onsite power generation have largely been addressed and additional rental generators are being mobilised until grid connection works are completed. Substation construction at Kayelekera and the Karonga tie-in point is well advanced, with commissioning still expected in the first quarter of 2027.
Bottom Line?
The next hard test is whether the final Namibian permit converts a prepared first shipment into cash, while acid output determines how quickly production can scale.
Questions in the middle?
- When will the Namibian NRPA transport approval be granted and the 144,000-pound first shipment depart?
- How much of the Mercuria facility will Lotus draw, and on what commercial terms?
- Can acid plant optimisation and grid connection lift production beyond the current acid-constrained level?