Lotus Resources (ASX:LOT) has begun cold commissioning ahead of the production restart next quarter at the Kayelekera Uranium Project in Malawi.
Cold commissioning entails testing each piece of equipment prior to introducing ore and reagents. It focuses on confirming the mechanical and functional integrity of the equipment and systems to ensure they are ready for operation.
This phase of work often includes dry runs and testing with water or other non-process fluids to simulate operating conditions.
The company has placed orders for the mining equipment and mining is planned to begin in Q4 2025. The initial ramp up of production will use existing mined ore stockpiles until mining delivers first ore, with the equipment for the run-of-mine stockpile management already onsite and operational.
Lotus, which has a market capitalisation of $414.7 million, has signed a revised non-binding term sheet for a US$30 million ($46 million) working capital facility with Standard Bank, via its 85%-owned subsidiary Lotus Africa.
The financing will be used to fund working capital requirements until expected positive cashflow from Kayelekera’s production.
The working capital term contains a two-year term from signing, 20-month tenor for drawdowns, an arrangement fee, commercial interest rate based on secured overnight finance rate, and monthly repayments from February 2026.
The company is close to finalising binding documentation for the previously announced equipment finance facility of US$8.5 million with First Capital Bank. This facility will fund the mobile equipment and mining equipment.
Further, Lotus is adopting an owner-operator mining strategy in favour of appointing a mining contractor.
With an initial investment of US$8 million in mining equipment and tools, the owner-operator mining is expected to reduce mining costs which are a third of the C1 cash costs.
This model offers enhanced control over mining production and run-of-mine management, alongside potential strategic synergies particularly in relation to ongoing tailings storage facility construction, road maintenance and other cost efficiencies.
Managing Director Greg Bittar says the opportunity to adopt this model presented strongly as the company built out the site management and operational team.
“With the very limited mining presence in Malawi and hence limited synergies available to mining contractors, the owner-operated mining model is the most cost effective and flexible option,” Bittar says.
The Kayelekera Project has a 10-year mine life with total production forecast to be 19.3 million pounds of triuranium octoxide. The project is expected to have an annual production of 2.4 million pounds over the first seven years.
Lotus Resources is a uranium-focused mining company headquartered in Perth, Western Australia.
Write to Aaliyah Rogan at Mining.com.au
Images: Lotus Resources
