PERTH (miningweekly.com) – ASX-listed Lotus Resources has reduced the care-and-maintenance cost at its recently acquired Kayelekera uranium project, in Malawi, by some 75%, as the company advances certain restart activities.
Lotus on Thursday told shareholders that care-and-maintenance costs for the mine have been reduced from $5-million set aside in 2019, to $1.2-million, with the number of full-time employees on-site reduced from 116 to 16.
Cost savings have been made by appointing contractors to undertake non-essential services, while Lotus has also negotiated a reduced diesel price.
Furthermore, water treatment activities have been completed, with dam levels reduced to the required levels, and a revised strategy for the next wet season is being developed which would allow for further cost savings.
“Our operations and regional teams have done a great job in taking timely action to introduce cost-effective, safe and environment-friendly and regulatory compliant measures at the project site,” said Lotus MD Eduard Smirnov.
“A key focus of this plan is on preserving cash and advancing our plans to build a new uranium supplier while coping with the restrictive conditions during the Covid-19 pandemic.”
Meanwhile, Lotus is also continuing a scoping work that will be used to support a restart study. The scope, timelines and cost associated with this work will be finalised in the September quarter, the junior company said, noting that the restart of Kayelekera would be subject to a ‘significant’ recovery in the uranium price, to a level providing for a sustainable and profitable production.
Lotus in March this year completed the acquisition of the Kayelekera mine from fellow listed Paladin Energy. The project was idled in 2014 on the back of low uranium prices, and includes a 1.5-million-tonne-a-year processing facility and is estimated to host some 28.7-million pounds of uranium oxide.
Lotus previously set an exploration target of between 6-million to 22-million tonnes, containing between 7-million and 14-million pounds of uranium oxide at the project.