New onwers of Kayelekera Uranium Mine in Karonga, Lotus Resources Limited have raised $66.9 million (K117 billion) through the first tranche of the share placement, adding up to $130 million (K227.6 billion) to finance reopening of the mine in next year.
The mining company says after raising funds through placement shares, it will give other shareholders an opportunity to acquire shares through the share purchase plan and all the proceeds will be used as restart capital for Kayelekera.
In a statement on Tuesday, Lotus Resources Limited said the $66.9 million (K117 billion) under the first tranche of placement was raised from 267.6 million shares at an issue price of $0.25 (about K437.75), which it issued to new and existing investors on October 28.
Reads the statement in part: “The second tranche representing approximately 252.4 million shares at an issue price of $0.25 [K437.75] per share to raise approximately $63.1 million [K115 billion], is subject to shareholder approval at an extraordinary general meeting on or December 9 2024.”
The statement, signed by company secretary Hayden Bartrop, says after the second tranche of the placement shares, it will offer eligible shareholders an opportunity to participate in the share purchase plan to buy up to $30 000 (K52.5 million) worth of shares.
He said: “The issue price for each new share under the share purchase plan will be $0.25, the same issue price as the placement.
“The proceeds from the share purchase plan and placement will be used to advance the restart of the Kayelekera project in Malawi, working capital requirements and general corporate purposes.”
The development comes almost a month after the company completed its front-end engineering and design (Feed) programme, which reduced the restart capital requirements.
It said the feed programme reduced the restart capital from the initial $88 million (about K154 billion) to $50 million (about K87.5 billion) with projection of commencing mining activities in eight months.
In an interview on Tuesday, former ministry of Mining geologist Ignatius Kamwanje described the raising of Kayelekera restart capital as a plus for Malawi at a time the economic situation is worsening and needs an urgent booster.
He said: “We should look at it in order that people will get employment, infrastructure development will improve especially in Karonga and the forex supply will improve when the mine finally reopens next year.
“Such developments are critical to the country’s gross domestic product because as of now there are no large scale mining operations in the country.”
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 the 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.
On Sunday, Lotus Africa Limited general manager Theo Kyter confirmed that with the progress registered so far, the miner will resume production of uranium at Kayerekera in the second half of 2025.
He said about 0.45 percent of gross revenue will go back to the communities surrounding the mine every year through a special account which the company will open for them.
