Lotus secures off-take, finance deal
Lotus Resources Limited, the Australian Stock Exchange-listed miner, says it has signed agreements to supply uranium to two firms and has secured a $15 million (about K26 billion) loan facility to boost restart of mining operations.
In a statement on Tuesday, the firm, which is expected to start mining at Kayelekera Uranium Mine in Karonga District next year, indicated that it has signed an agreement with a London-based Curzon Uranium to supply 1.8 million pounds or 816 tonnes of uranium. It has also signed an agreement with Public Sector Enterprise Group (PSEG) of New Jersey, United States of America to supply it with about 1.5 million pounds or 630 tonnes of uranium.
The firm said the agreements are for supplies of uranium between 2026 and 2032.
Reads the statement in part: “The contract pricing achieved is the result of competitive discussions and secured to deliver strong margins, including for any optional quantities, for the uranium sold.
“A fixed-price escalation percentage per annum applies from the time of delivery.”
It further said the off-take arrangements, as with the others being negotiated, provide Lotus Resources with the necessary commercial flexibility for the mine’s key production restart and early-stage production levels.
The miner said the agreement with PSEG is subject to execution of a definitive uranium sale and purchase agreement within four months.
“The binding agreement with Curzon is conditional on Lotus completing an equity raise in conjunction with the restart of Kayelekera,” reads the statement.
It said the $15 million unsecured loan facility provides that the repayment must occur 12 months from the first utilisation date.
Lotus Resources Limited chief executive officer Greg Bittar said the first two sales contracts, coupled with unsecured financing, mark a milestone for Lotus and Kayelekera project.
“It demonstrates customers’ confidence in the strength of the uranium market as well as providing a strong endorsement of our plans for the project,” he said.
Bitter also said through the initial off-take and funding discussions, the firm has established critical knowledge and a breadth of long-term industry relationships with multiple strategic customers.
He said this will serve the firm well as it looks to secure further contracts closer to the commencement of production.
Lotus Resources country manager Theo Keyter said in an interview last week that there were ongoing negotiations in the off-take agreements and was positive that adequate deals would anchor sustainable production of uranium at Kayerekera.
He said the miner was pushing to restart sooner than is required by the mining development agreement signed on July 27 this year.
Karonga district commissioner Frank Mkandawire said in an interview that they expect a community development agreement (CDA) with Lotus Resources to cover commercial benefits of the district to maximise economic impact of the mine.
He said the council would be meeting the company to discuss the CDA, adding that the contents of their proposal emanates from the district development plan that already sets development and investment priorities.
“We have priorities already set out in the district development plan to ensure the aspirations of the people of Karonga are respected,” he said,
Lotus Resources Limited, the successor of Paladin Energy Limited, signed the MDA which provides for 0.45 percent of annual revenue to be ploughed back to Karonga.
