Name of the Project
Kayelekera uranium restart project.

Location
Karonga district, northern Malawi.

Project Owner/s
Lotus Resources.

Project Description
Kayelekera, currently under care and maintenance, successfully produced uranium in the past, having delivered about 11-million pounds of uranium to the market from 2009 to 2014.

An accelerated restart plan completed in October 2024 has promised positive operational and financial outcomes, assuming a long-term uranium price of $90/lb.

Under the plan, the life-of-mine (LoM) production target is estimated at 19.3-million pounds of triuranium octoxide over a ten-year mine life.

Potential Job Creation
More than 600 jobs will be created for the local community.

Net Present Value/Internal Rate of Return
The restart plan promises a pretax and after-tax net present value of $439-million and $301-million, respectively, with a pretax and after-tax internal rate of return of 80% and 66% respectively. Payback should be achieved within two years.

Capital Expenditure
The October 2024 accelerated restart plan reduces initial restart capital through a phased approach by focusing on capital items essential to the restart, with the remaining capital expenditure (capex) continuing off the critical path to optimise operations and cost structure. 

As a result, the initial restart capex to first uranium production has been reduced to $50-million from $88-million.

Planned Start/End Date
In a statement issued by Lotus on October 8, it reported that the time to first uranium production had been reduced from about 15 months to between eight and ten months by phasing in the completion of nonessential site infrastructure, such as grid power and an acid plant rebuild, beyond first production.

Latest Developments
The accelerated restart plan for the Kayelekera project, following the completion of front-end engineering design, has provided the foundation for the company to optimise and accelerate its restart plans for the project, taking advantage of the existing plant and infrastructure.

Lotus is now advancing into detailed engineering and on-site works for Kayelekera’s low-capital-intensity but accelerated restart to ensure the company achieves its strategic objective of becoming a globally significant uranium producer by the third quarter of 2025.

Kayelekera’s production restart is derisked by 11-million pounds of historical uranium production, with $200-million capital invested into the plant and operations and four-million pounds of existing stockpiles supporting the ramp-up of the operation. 

The Lotus board has already approved long-lead item orders, the mobilisation of mobile equipment and construction crews, and early works.

The company’s A$34-million in cash as at June 30 has allowed it to proceed with the restart plan.

In parallel, Lotus is continuing to assess the optimal funding mix including debt, prepayment sources and strategic and cornerstone funding sources, and expects restart capital, post-production capital and working capital to come from a mix of these sources.

Lotus CEO Greg Bittar has said that by sequencing the capital spend and targeting the critical restart items the company has reduced the amount of initial restart capital, which enables it to turn the plant on much earlier than previously contemplated.

He further notes that by decoupling the restart timetable from the long-lead items, which are not on the operational critical path, the company will be able to start the plant well ahead of the original definitive feasibility study schedule of 15 months.

“Those capital items remain in the plan and will be brought on as soon as possible . . . to optimise the cost structure. However, we don’t need to wait for, or have the timetable to restart dependent on, those items.

“The plan was always to have full backup diesel power generation . . . and we can use this power while the grid connection is completed. Trucked-in sulphuric acid can be used until the acid plant is commissioned,” Bittar has said.

Key Contracts, Suppliers and Consultants
Orelogy Mining Consultants (pit optimisation, mine design and production scheduling ore reserve); Gill Lane Consulting (mineral resource estimate); Merrill Ford Independent Metallurgical Operations (metallurgical/process design); Steinert (ore sorting); Nagrom (metallurgical testwork); Senet (process plant and infrastructure, and cost estimate compilation); SLR Consulting (tailings and water); Mine Technics (openpit); SLR Consulting (plant); InfinityCorp (financial model); Dhamana (community and environment); and Mine Earth (mine closure plan and cost estimate).

Contact Details for Project Information
Lotus Resources, tel +61 89 2000 3427 or email info@lotusresources.com.au.