Prospects for reopening of Kayelekera Uranium Mine in Karonga anytime soon keep improving, with Lotus Resources Limited identifying two United States (US)- based off- takers for the yellow cake.
In addition, the Australian Stock Exchange-listed mining firm has also secured a $15 million (about K26.2 billion) unsecured loan facility to provide part of overall funding for Kayelekera restart.
In a statement to its shareholders last week, Lotus identified the off-takers as PSEG, a subsidiary of Public Sector Enterprise Group, a diversified energy company based in Newark, New Jersey, and Curzon Uranium Ltd, a leading international uranium market participant.
According to Lotus, together, these arrangements represent the sale of a minimum of 1.5 million pounds and up to 1.8 million pounds of uranium produced at Kayelekera from 2026 through until the end of 2032.
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It notes that the contract pricing achieved is the result of competitive discussions and secured to deliver strong margins, including for any optional quantities, for the uranium sold, adding that a fixed-price escalation percentage per annum applies from the time of delivery.
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The miner notes that the offtake arrangements, as with the others being negotiated, provide Lotus with the necessary commercial flexibility for Kayelekera key production restart milestones and early-stage production levels.
“The term sheet with PSEG is subject to execution of a definitive uranium sale and purchase agreement within four months and Lotus proceeding with the restart of Kayelekera.
“The binding agreement with Curzon is conditional on Lotus completing an equity raise in conjunction with the restart of Kayelekera,” the miner says.
Lotus CEO Greg Bittar said the first two sales contracts, coupled with unsecured financing with significant drawdown flexibility, mark a terrific milestone for Lotus and the Kayelekera Project demonstrating customers’ confidence in the strength of the uranium market as well as providing a strong endorsement of the firm’s plans for the project.
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“Through the initial offtake and prepayment/funding discussions, we have established critical knowledge and a breadth of long-term industry relationships with multiple substantial strategic customers.
“This will serve us well as we look to secure further contracts closer to the commencement of production,” Bittar said.
In July, the Malawi Government, through the ministry of mining and the Ministry of Finance, has signed mining development agreements with Lotus Africa Limited and Lancaster Exploration (BVI).
Finance Minister Simplex Chithyola Banda observed during the signing ceremony that the start of the mining operations would help to generate the much-needed foreign exchange for Malawi.
He added that the mining activities would help to create jobs for young people who will be working in the mines.
According to Lotus, its continued engagement with North American nuclear power utilities and commodity trading houses for offtake of more substantial volumes of uranium from Kayelekera is designed to leverage utilities continuing demand for contract pricing based on the long-term uranium price.
Recently, Lotus Resources Executive Director and major shareholder Grant Davey said the mining operations at the Karonga-based mine are expected to start mid next year.
The Kayelekera Uranium project produced 11MIbs over five-years between 2009- 2014, before it was shutdown to preserve its longevity due to a sustained low uranium price.
