Ahead of ASX-listed Lotus Resources restarting production at the Kayelekera uranium mine, in Malawi, the company has advanced with cold commissioning of the plant and is due to complete hot commissioning early in the third quarter.

The company 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.

Lotus will first use existing mined ore stockpiles for processing until first ore is delivered from the mine in the fourth quarter.

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

Lotus’ 85%-owned subsidiary Lotus Africa is nearing finalisation of binding documentation for an $8.5-million finance facility with First Capital Bank, while the subsidiary also has a $30-million revised working capital facility and $10-million equipment finance facility with Standard Bank.

Commenting on the company’s decision to undertake mining and processing operations itself, MD Greg Bittar says 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 explains.

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.

Lotus in October 2024 released an accelerated restart plan that confirmed Kayelekera as one of the lowest capital cost uranium projects globally, with initial restart capital expenditure requirements to first production of $50-million and an all-in sustaining cost of $44.8/lb of triuranium octoxide (U₃O₈) during steady-state production.

The Kayelekera project historically produced about 11-million pounds of U₃O₈-equivalent between 2009 and 2014 before the asset was shut owing to a sustained low uranium price.

Lotus plans to produce 19.3-million pounds of U₃O₈ from the mine over a ten-year life-of-mine, with production averaging 2.4-million pounds a year over the first seven years.