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Lotus raises cash, increases stake in Kayelekera

24th February 2021

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – ASX-listed Lotus Energy will raise A$12.5-million through a share placement to fund work at the Kayelekera uranium project, in Malawi, and to fund exploration studies.

The uranium developer on Wednesday reported that it had received firm commitments for the placement of 100-million shares, at a price of 12.5c each, from sophisticated and professional investors.

The offer price represents a 17.6% discount to Lotus’ five-day volume weighted average share price, and a 16.7% discount to its last traded price.

The shares would be issued under the company’s existing placement capacity, and would not require shareholder approval, Lotus said.

“Funds raised from this placement, in addition to existing cash reserves and proceeds yet to be received from the exercise of the in-the-money options, could see the company fully funded through to early 2023,” said Lotus MD Keith Bowes.

“The company can now accelerate work on its restart feasibility study, as well as ramp-up exploration on a number of near mine, high priority uranium targets in order to support an extension of mine life beyond the current 14 years of estimated production.

“We also plan to undertake a low-cost assessment of the high-grade rare earth oxide Melenje Hills prospect later this year. Following this work, the company will assess the optimal path forward to crystalise value in this asset for shareholders.”

Lotus earlier this week announced that it has started the process to increase its ownership of the Kayelekera uranium project, following feedback from shareholders.

The company currently holds a 65% interest in the project, with 15% held by the government of Malawi, and 20% held by Kayelekera Resources, which is controlled by Lotus director Grant Davey.

Lotus will exercise its buy-out right with Kayelekera Resources, taking its interest in the project to 85%. Completion of this transaction would require shareholder approval.

Edited by Creamer Media Reporter

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