Name of the Project
Kayelekera uranium restart project.

Location
Karonga district, northern Malawi.

Project Owner/s
Advanced uranium developer Lotus Resources' 85%-owned subsidiary Lotus Africa.

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. Production of 2.4-million pounds of uranium is expected over the first seven years of operation.

Potential Job Creation
More than 600 jobs will be created in 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
Ahead of Lotus Resources restarting production at the Kayelekera uranium mine, the company has advanced with cold commissioning of the plant, with hot commissioning due for completion early in the third quarter of this year.

Lotus has selected an owner-operator mining strategy in favour of appointing a mining contractor to retain more control over production and run-of-mine management, as well as to contain costs.

It will first use existing mined-ore stockpiles for processing until first ore is delivered in the fourth quarter.

The strategy is also expected to deliver synergies in respect of a tailings storage facility that is under construction, road maintenance and other cost efficiencies.

Commenting on the company’s decision to undertake mining and processing operations itself, MD Greg Bittar has said Lotus undertook an exhaustive mining contractor tender process and a detailed examination of an owner-operated model.

“The opportunity to adopt this model presented strongly as we built out the site management and operational team with tremendous mining and maintenance experience, well suited for a relatively small openpit mining operation.

“With the very limited mining presence in Malawi and, hence, limited synergies available to mining contractors, the owner-operator mining model is the most cost-effective and flexible option,” he has explained.

Lotus now awaits deliveries of the last equipment ahead of starting mining at Kayelekera in the fourth quarter, while initial ramp-up of production will use the existing mined ore stockpiles.

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.