Lotus Resources Limited has signed a four-year binding contract for the sale and purchase of 600 000 pounds (about 272 000 kilogrammes) of Kayelekera uranium with an American power utility company.
In an update, the mining firm said the contract, which will run between 2026 and 2029, is in line with its off-take strategy that focuses on ensuring that its sales are covered with contracts to minimise risks.
In addition to the fresh off-take signing, the company also said the previously announced agreement with Curzon now reflected in full form and signed take-or-pay agreement for a minimum 700 000 pounds (about 317 000kg) Kayelekera uranium for 2026 to 2029.
Reads the update: “Lotus now has entered into sale arrangements for up to 3.2 million lbs of uranium [minimum of 2.9m pounds] to be produced at Kayelekera from 2026.
“Off-take strategy focused on securing long-term linked prices with sales to be predominantly covered by contracts to minimise uncontracted spot exposure. Lotus continues to advance discussions relating to a series of additional contracts with other nuclear power utilities as part of its off-take strategy.”
Lotus Resources managing director Greg Bittar said formalising this off-take arrangement with a key customer is an important milestone as the company plans to restart production at Kayelekera in the third quarter this year.
“Notwithstanding the recent weakness in spot prices, our engagement with customers and potential customers, comprising mostly North American utilities, has demonstrated to us the continuing strength in the term contracting market, as uranium customers continue to secure long-term contracts and actively seek to support new supply,” he said.
Geologist Ignatius Kamwanje described the binding off-take signing and raising of Kayelekera restart capital as a plus for Malawi at a time the economic situation is worsening and needs an urgent boost.
“We should look at it that people will get employment, infrastructure development will improve especially in Karonga and the forex supply will improve when the mine finally reopens,” he said.
Last year, Lotus Resources Limited successfully raised $66.9 million (about K117 billion) through the first tranche of the share placement, adding up to $130 million (about K227.6 billion) to finance the reopening of the mine.
