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Botswana|Design|Engineering|Mining|Power|PROJECT|Resources|Equipment
botswana|design|engineering|mining|power|project|resources|equipment

Lotus to raise $30m to accelerate Kayelekera restart, Letlhakane development

23rd February 2024

By: Sabrina Jardim

Creamer Media Online Writer

     

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ASX-listed Lotus Resources plans to raise $30-million through the issue of 100-million new shares at $0.30 apiece to strategic investors.

The placement funds will enable Lotus to accelerate the restart works at its Kayelekera mine, in Malawi, and advance works at its Letlhakane project, in Botswana.

As a participant in the placement, Paradice Investment Management will move to a 5.5% holding in the company.

In addition to the placement, the strategic investors will also acquire six-million shares from MD Keith Bowes and 4.7-million shares from nonexecutive director Grant Davey.

Bowes and Davey are selling some of their shares to comply with tax obligations.

Post the placement and the sell down, Davey will hold about 150-million Lotus shares, while Bowes will hold about 15-million shares.

“We are pleased to secure $30-million via this placement, allowing us to accelerate our activities around the restart at Kayelekera and development plans at Letlhakane. The placement has attracted significant interest from high calibre strategic investors who share our bullish view on uranium market fundamentals, including Paradice, which will now become a substantial shareholder in the company.

“Our key priority remains progressing restart plans for Kayelekera to benefit from the increased demand for Kayelekera product and current strong and increasing uranium prices, but we also recognise that moving forward quickly with Letlhakane will enhance the company’s valuation,” says Bowes.

Meanwhile, Lotus still plans to restart Kayelekera in the fourth quarter of 2025, with current priorities being the finalisation of financing and offtake for the project, including the appointment of a debt adviser to assist in the financing process and negotiating offtake agreements with suitable parties that can strengthen Lotus’ position.

The company is prioritising completion of negotiations and the signing of a power supply and power implementation agreement with Malawi’s electricity utility Escom, which it says is key to achieving reduced operating costs announced in the Restart Definitive Feasibility Study (DFS) in August 2022.

Lotus is also prioritising a front end engineering design programme leading directly into the detailed engineering design phase for the execution of the restart plan.

These studies will confirm the upfront capital cost estimate for the plant refurbishment and new equipment installations such that a control budget can be prepared for the restart; validate the 15-month timeline initially determined for the refurbishment programme; update the operating costs from the DFS, including incorporating new quotes from suppliers; and determine long lead items and early works programmes.

The placement funds will ensure the delivery of these items, as well as allow for the acceleration of the programme through the ordering of long-lead items and undertaking necessary on-site early works.

LETLHAKANE

Letlhakane is the large-scale, long-term uranium resource that complements the company’s project pipeline and growth strategy.

Lotus aims to complete a scoping study and also determine whether a more effective processing route can be identified to improve the 2015 feasibility study project economics, which had envisaged a heap leach process.

To achieve this, Lotus is planning various work programmes.

This includes an updated mineral resource remodelling incorporating tighter modelling constraints and shorter search parameters, aiming to reduce the amount of ‘smoothing’ that has occurred within the higher grade zones of the model, with a resource update planned for the second quarter of this year.

Moreover, the company is prioritising the preparation of a preliminary geometallurgical model to help optimise the mine plan based on acid consumption and uranium mineralogy; a preliminary mining study focused on pit optimisation work on the updated resource model to define the most economic pits within the project area; and an ore beneficiation test work programme to determine the potential for upgrading the ore prior to feeding to the main processing plant.

The company will also consider the preferred processing flowsheet based on the beneficiation results and overall grade/tonnage parameters.

Additionally, Lotus is preparing a scoping study, or preliminary economic assessment, based on the mine planning and beneficiation test results and a selected processing route, expected later this year.

The placement will allow the company to use the updated model and optimised pit shells to design an infill drill programme to target the most economic parts of the resource and convert these where required into measured and indicated (M&I) status; undertake the above infill drill programme to upgrade the resource; and prepare a new mineral resource estimate with increased M&I resources.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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