Lotus Resources lifted Kayelekera’s uranium recovery to 80% in September after recommissioning its sulphuric acid plant, while securing the approvals and funding needed for its first shipment since the restart. The company still faces power, acid capacity and cash-flow risks as it moves from restarting production to generating sales.
- 101.8klb of U₃O₈ produced over 31 operating days
- September recovery reached 80%, up from 52% in the June quarter
- First shipment of approximately 145klb targeted for November
- Cash rose to A$57.4 million after equity and convertible note funding
- Mercuria facility provides access to up to US$30 million in inventory-backed funding
Kayelekera recovery reaches 80% in September
Lotus Resources Limited (ASX:LOT, OTCQX:LTSRF) has moved Kayelekera materially closer to a functioning uranium operation, producing 101.8 thousand pounds of U₃O₈ during the September quarter despite running the processing plant for only 31 days. Recovery improved to 69% for the quarter, compared with 52% in the June quarter, and reached 80% in September as process-control and plant-optimisation work took effect.
The result followed the recommissioning of Kayelekera’s sulphuric acid plant, which had been affected by a partial refractory-brick failure during commissioning in June. Heat-up began on 1 August and sulphur was introduced six days later. By quarter end, the plant was operating reliably at roughly 50% to 60% of design capacity, allowing uranium processing to resume midway through August.
Acid and power constraints remain operational tests
Lotus says production performance improved progressively through the quarter, helped by Resin-in-Pulp optimisation, leach-circuit improvements, elution work, laboratory upgrades and tighter tails-stream control. The company expects nearly all product made during the quarter to fall within specification, although production figures for ore milled, head grade and recovery were adjusted using the same methodology applied in the prior quarterly report because of plant-feed measurement and sampling inaccuracies.
Kayelekera was not yet running at full operational reliability. Power-generation issues affected plant availability, while acid output remained below nameplate capacity. Lotus is adding critical spares, major overhauls and rental generation capacity, with grid energisation targeted for early 2027. A permanent furnace relining is also planned during a future scheduled shutdown, leaving the interim acid-plant repairs as an important dependency for the ramp-up.
First 145,000-pound shipment cleared for November
The export pathway has now cleared its key regulatory hurdles across Malawi, Zambia and Namibia. Post quarter end, Namibia’s National Radiation Protection Authority issued the final transport authorisation, enabling the planned first shipment of approximately 145 thousand pounds of U₃O₈ in four containers. The shipment is scheduled to proceed in November through Walvis Bay, following the final export approval reported earlier this month.
The material forms part of approximately 159.5 thousand pounds previously accepted by Orano CE against customer specifications before the June production pause. Product made after that period remains subject to third-party assay results. Lotus is also negotiating the sale of approximately 173 thousand pounds of off-specification inventory, which could provide another route to convert stock into cash, but the sale has not been completed.
Funding package lifts cash but runway remains tight
Lotus finished the quarter with A$57.4 million in cash, up from A$30.1 million at 30 June, after completing a A$60.1 million entitlement offer and issuing A$35 million of convertible notes. The funding came at a cost: the company reported A$45.2 million of net operating cash outflow and A$13.6 million of investing outflow, including A$13.3 million on Kayelekera capital projects.
The Appendix 5B calculates available funding at A$59.0 million, including unused facilities, equivalent to 1.30 quarters based on the latest cash outflow. Lotus says that quarter included one-off payments for accrued expenses, take-or-pay settlements and capital expenditure, and does not expect operating cash flow to remain at that level. Even so, the company’s immediate financial plan depends on uranium sales beginning in the coming quarter and on the funding arrangements connected to inventory.
Full-form documentation with Mercuria provides access to up to US$30 million of inventory-backed funding and a marketing platform covering up to 3.0 million pounds of U₃O₈ over 30 months, extending the Mercuria funding arrangement announced earlier in October. The company also deferred approximately 160 thousand pounds of 2026 delivery obligations into 2027 and agreed to financially settle approximately 300 thousand pounds, reducing near-term delivery pressure while production recovers.
Grid and tailings projects continue alongside restart
Mining produced 126.3 thousand tonnes of ore and 661.3 thousand tonnes of waste during the quarter, leaving ROM stockpiles at 1.6 million tonnes at period end. The inventory gives Kayelekera feed flexibility as wet season approaches, while work continued on the Phase 1 tailings-storage expansion and the grid connection project. To date, Lotus has spent US$17.0 million on the grid connection, US$12.5 million on TSF Phase 1 and US$12.1 million on the acid-plant refurbishment.
That combination of improving recovery, available ore and completed export approvals gives Lotus a clearer path to revenue than it had at the end of the June quarter. The next test is less about whether Kayelekera can restart than whether it can sustain higher throughput and recovery while the acid plant remains below design capacity and power reliability is still being upgraded.
Bottom Line?
The November shipment could mark the shift from restart funding to operating cash generation, but the investment case still turns on sustained production, reliable power and the timing of customer receipts.
Questions in the middle?
- Will Kayelekera maintain September’s 80% recovery as throughput increases in the December quarter?
- When will the first uranium shipment convert into customer cash receipts, and will the off-specification inventory sale proceed?
- Can the Mercuria facility and operating revenue close the funding gap before the grid connection and permanent furnace relining are completed?