Name of the Project
Kayelekera uranium restart project.

Location
Karonga district, northern Malawi.

Project Owner/s
Uranium developer 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. The project’s workforce is expected to expand as work progresses, ensuring that the mine restarts on schedule.

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, 2024, 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
Lotus Resources has announced the signing of a binding contract with a major North American power utility for the sale of 600 000 lb of uranium. The contract covers deliveries scheduled from 2026 to 2029.

The offtake agreement is an important milestone as the company progresses production plans at Kayelekera, aiming to restart output in the third quarter of 2025, Lotus Resources MD Greg Bittar has said. 

Despite recent declines in spot prices, Bittar has noted that ongoing discussions with customers, particularly North American utilities, highlight the continued strength of the long-term contracting market: "Uranium customers continue to secure long-term contracts and actively seek to support new supply".

The agreement includes a fixed dollar price tied to published long-term prices from leading nuclear market research firms, with a minor discount. It also features a fixed-price escalation percentage for future deliveries, aligned with the Reserve Bank of Australia’s long-term inflation target.

In addition to the deal with the North American utility, Lotus has formalised its agreement with Curzon. The take-or-pay contract guarantees a minimum sale of 700 000 lbs of uranium from 2026 to 2029, with the potential to increase to one-million pounds by 2032. Including the Public Sector Enterprise Group offtake term sheets previously announced, Lotus now has agreements for up to 3.2-million pounds of uranium (with a minimum of 2.9-million pounds) to be produced at Kayelekera from 2026 and to 2032.

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.