Lotus Resources (ASX:LOT) announces Accelerated Restart Plan for Kayelekera Project in Malawi

Lotus Resources Limited (ASX:LOT) has announced an Accelerated Restart Plan for its Kayelekera Project in Malawi, following the completion of Front-end Engineering and Design (FEED). The company is moving into detailed engineering and onsite works for Kayelekera's restart to ensure Lotus achieves its strategic objective of becoming the next significant global uranium producer in Q3 CY2025.

Executive commentary on the Accelerated Restart Plan

CEO Greg Bittar commented on the announcement, stating, 'Our thorough FEED process has provided the foundation for us to optimize and accelerate our restart plans for Kayelekera, taking advantage of the existing plant and infrastructure. By sequencing the capital spend and targeting the critical restart items, we reduce the amount of initial restart capital, which allows us to turn the plant on much earlier than previously contemplated. This not only provides us with increased funding flexibility but critically allows us to be a producer next year and take advantage of the strong customer demand we are seeing by moving into production as soon as possible.'

Summary of the Accelerated Restart Plan and outlook

Lotus Resources' Accelerated Restart Plan for the Kayelekera Project in Malawi aims to achieve low capital intensity and reduced initial restart capital for uranium production. The plan targets first uranium production in Q3 CY2025, with initial restart capital expenditure reduced to US$50M, down from the previous US$88M. The company anticipates a 10-year mine life, targeting an average production of 2.4Mlbpa for the first seven years, with competitive cost estimates maintained. The plan also includes an offtake strategy to contract up to 25%-30% of planned production over the first four years to lock in current uranium market term pricing. Lotus intends to remain flexible with the remainder of planned production to ensure substantial exposure to the expected strong long-term uranium price. The company has signed conditional uranium offtake arrangements and is in advanced negotiations with other Tier-1 utility counterparties to secure offtake for production between 2026 and 2029. Lotus has also signed a grid connection Memorandum of Understanding with Malawi's state-owned power utility and is in the final stages of selecting its preferred mining contractor. The company has concluded that it has a reasonable basis to expect it will be able to fund the development and working capital of the project in due course.