Lotus Resources Limited (ASX: LOT) announced that multiple work programs are currently underway at the Kayelekera Uranium Project in Malawi that will position Kayelekera for an accelerated restart of the operation.
LOT said that the work programs include Technical Studies and Feasibility Study; Uranium and Rare Earth Exploration ~5,000 metre RC drilling program; and numerous corporate related activities.
The company reported that a highly regarded Environmental, Social, and Governance (ESG) consultant has been engaged to assist in performance measurement, reporting methods, and a communication strategy related to ESG considerations.
Kayelekera project
Kayelekera is a proven uranium operation having successfully produced 11Mlbs U308 over 5 years, ceasing operations in 2014 due to sustained low uranium prices. The company has now commenced multiple work programs at the Kayelekera mine in preparation for a restart of the mine.
Technical studies and feasibility study
The Scoping Study in October 2020 had helped identify four key areas that preliminary investigations have shown could substantially reduce the operating costs.
LOT said that the development Study – Operational cost reduction initiatives identified in the 2020 Scoping Study are being assessed in individual Technical Studies that will form part of a Feasibility Study.
The company said that the technical Studies include a power assessment study, ore sorting, acid recovery, and tailings facility assessment. LOT said that all studies are either underway or will shortly commence.
Exploration programs
Lotus reported that Uranium and Rare Earth Exploration ~5,000 metre RC drilling program is expected to commence next month to test near mine uranium targets (2-4km from the Kayelekera processing facility).
The company said that the RC drill program is planned to test the five individual anomalies (targets 1- 5) as well as the step-out target (target 6) adjacent to the current resource. LOT said that a smaller infill drill program on the western edge of the resource outside the current mine plan has also been included in this program.
LOT said that once the uranium exploration program is completed, a smaller drill program will be undertaken at the high-grade Milenje Hills Rare Earth’s prospect to gauge the depth profile of the mineralisation.
Corporate related activities
The company said that it has advanced numerous corporate related activities. LOT said that the USA OTC Listing is expected to be completed in the coming weeks. This listing aims to increase shareholder diversity as well as global market awareness.
The company is also finalising a high calibre appointment as the Marketing Consultant as the Company continues to build relationships with global utilities.
LOT said that a shareholder meeting is expected to be held later this quarter for increased Project ownership to 85%. The company said that it is currently completing the necessary work regarding the roll-up of increased interest in the Project to 85%.
Management statements
Keith Bowes, Managing Director of Lotus said: “With renewed optimism in the uranium sector due to the ever-increasing supply-demand gap, brownfield uranium projects with proven production history, such as Kayelekera, are well placed to be the first to respond and meet this demand.
Given these factors, as well as our strong existing cash position of more than $17m, the Company is accelerating a number of work programs aimed at positioning Kayelekera to quickly and economically restart operations.
Whilst the Company is working on a number of initiatives, including the first exploration program in more than a decade, outlining a long term ESG strategy as well as expanding our North American investor base with an OTC listing, the key short-term focus is the testwork program that has been developed to test the cost reduction strategies identified in the 2020 Scoping Study.
The Scoping Study cost assumptions were largely based on actual operational data achieved over the Project’s five-year period of production. Since its closure in 2014, there has been a number of proven technological advancements not available at the time, as well as a number of other relevant initiatives that the Company is considering. We believe that if all of the initiatives prove to be successful, there is potential for savings in the order of10-20% from the previous estimate.
The Company looks forward to keeping shareholders updated through the year, in what will be a very busy second half to 2021.”
Image Source: Lotus Resources Limited