Lotus Resources Limited says it has completed its front-end engineering and design (Feed) programme to resume uranium mining at Kayelekera Mine in Karonga District as the restart capital requirements drop.
In an announcement to shareholders, the miner said the comprehensive Feed programme lays the foundation for low capital intensity and accelerated restart of mine as it now projects first uranium production in eight months.
This comes a month after the company signed an off-take agreement with two United States firms and secured a $15 million (about K26 billion) loan facility to boost restart of mining operations.
Reads the statement: “The company is pleased to announce an accelerated restart plan for its Kayelekera project in Malawi, following completion of the Feed programme.
“Initial restart capital reduced from $88 million (about K154 billion) to $50 million (K87.5 billion).”
The statement further says that Lotus is moving into detailed engineering and onsite works for Kayelekera’s restart to ensure that it achieves its strategic objective of becoming the next significant global uranium producer in the third quarter of 2025.
Among others, Lotus says the time to the first uranium production has been reduced to eight or 10 months from previously 15 months, the accelerated restart plan has delivered outstanding operational and financial outcomes.
“Initial capital payback within two years of production restart, life of mine pre-tax and post-tax free cash flow generation of $698 million (K1.2 trillion) and $486 million (K850.9 billion),” it says
In a statement, Lotus chief executive officer Greg Bittar said thorough Feed process has provided the foundation for the company to optimise and accelerate restart plans for Kayelekera, taking advantage of the existing plant and infrastructure.
Bittar said: “By sequencing the capital spends and targeting the critical restart items we reduce the amount of initial restart capital, which allows us to turn the plant on much earlier than previously contemplated.
“This not only provides us with increased funding flexibility but critically allows us to be a producer next year and take advantage of the strong customer demand we are seeing by moving into production as soon as possible.”
In a separate interview, geologist Grain Malunga said this means Lotus, which already employed over 60 Malawians prior to the restart of the mine, would likely meet the September 2025 restart target while projecting growing economic activity in surrounding communities’.
“It is good news because the restart of Kayelekera means communities surrounding the mine will get job opportunities in addition to the anticipated increase of economic activity in the area because of business opportunities likely to emerge,” he said.
Earlier, Karonga district commissioner Frank Mkandawire said the council expects a community development agreement (CDA) with Lotus Resources Limited will cover commercial benefits of the district.
Lotus Resources Limited signed a mining development agreement with the Malawi Government on July 27 2024 resulting in the former having 85 percent stake while the latter has 15 percent shareholding.
