Lotus Resources Limited says Kayelekera Uranium Mine in Karonga District has restarted the mill ahead of its first production this quarter following near completion of refurbishment works.
In an update published on its website on Monday, Lotus Resources said the plant is currently undergoing hot commissioning after successful mill refurbishment was completed and restarted.
Hot commissioning involves feeding the plant with mineralised waste before moving to the ore.
Reads the update in part: “The plant will run on mineralised waste until the correct densities are achieved in the leach and resin in pulp circuits.
“Following this, the feed will be changed to ore while reagents are added to start leaching the uranium.”
Lotus Resources managing director Greg Bittar is quoted in the report as having said that the firm remains fully funded with $50.7 million (K88.7 billion) cash at the end of June and no debt drawn at the time of restart.
He said: “Following the completion of extensive mill refurbishment, alignment and grinding media loading, we have restarted the Kayelekera mill.
“With the mill being such a critical aspect of the processing plant refurbishment, achieving its restart is a terrific milestone ahead of production at Kayelekera.”
Bittar said they already updated Malawi Government officials on the restart plans and the steps towards production this quarter.
Lotus Resources earlier announced that it will adopt the owner-operator mining model, which means the company will not subcontract the mining works to a contractor, a model deemed cost-effective and flexible.
In an interview on Monday, geologist and mining consultant Grain Malunga said the owner-operator model would make Kayelekera more profitable and efficient because the company will ensure optimal utilisation of resources and easily handle safety issues while saving from subcontracting.
He said: “I think the owner-operator model is the best option for Lotus because if the mining activity is subcontracted, it is difficult for the owner to effectively handle issues of safety and quality assurance but it is responsible for any query regarding them as the project owner.
“More importantly, contractors are mostly suitable for big ventures with long mining lifespan unlike Kayelekera. So the adopted model is indeed cost effective and would maximise Lotus profits.”
In a separate interview, geologist Ignatius Kamwanje said with the owner-operator model, the company will have tighter control of the run of mining materials and easily manage safety and quality control, but added it can expose the company to some operation risks as it will handle everything.
He said: “Some of the advantages of this model include provision of tighter control of run of mine materials, employees are offered long -term training to develop their skills and that the owner operator has also a direct control of mining operations which may reduce risks such as due diligence, quality control, health and safety.
“However, it exposes the company to high risk of costs, infrastructure, commercial terms and equipment purchases. The owner mining may be effective over a long term life of mine than over a short term. But sometimes owners carry the risk because the Mine Life is too short as well.”
Ahead of its restart in Q3, Lotus Resources said its mining workforce is approximately 200 people, which will be predominantly Malawian comprising a highly experienced core team to support the owner-operator model, blending experienced expatriate technical and supervisory specialists with local operational talent.
Lotus Resources has already 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.
Lotus owns an 85 percent interest in the Kayelekera Uranium Mine with 15 percent owned by the Malawi Government.
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.
In April this year, Lotus Resources finalised three agreements for the mine.
The agreements include a power implementation deal with the Electricity Supply Corporation of Malawi (Escom) to upgrade grid infrastructure and connect the project to the national grid.
Lotus will fund the $20.6 million (about K36 billion) project, which includes constructing a 45 kilometre transmission line and a substation.
A $4 million (about K7 billion) battery energy storage facility could potentially be integrated with the refurbished grid in future.
A 10-year power supply agreement with Escom will enable the provision of electricity to the mine, once the upgraded grid becomes operational in 2026.
