ASX-listed uranium developer Lotus Resources has received binding commitments to raise $5 million through the placement of 62.5 million shares at $0.08 per share to professional and sophisticated investors.
Lotus Resources plans to use the funds from the placement for a restart study for its Kayelekera uranium project in Malawi, which is on care and maintenance, and for near-mine exploration to potentially increase the existing 37.5 Mlb U3O8 resource.
Work will include:
- Undertake development studies to support a restart of operations at Kayelekera;
- Investigate near-mine uranium exploration opportunities;
- Satisfy payments due to Paladin Energy Limited in connection with bond repayments;
- Fund care and maintenance costs at the Kayelekera project; and
- Review of rutile and rare earths prospects on the Kayelekera tenement package.
As announced in August 2020, Lotus has commenced discussions with major global utilities to reintroduce the Kayelekera project, which has been on care and maintenance since 2014. The company is targeting utilities with open near-term requirements and previous customers of Kayelekera, which is positioned as a proven quality uranium product supplier.
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In October 2020, the company announced a Restart Scoping Study, which highlighted the project’s potential to support a viable long-term operation in the right uranium price environment.
The Scoping Study assessed two production scenarios, both of which assumed 97% of production from the measured and indicated mineral resource category.
- Scenario 1: 8-year life of mine, producing 16.4 Mlbs U3O8 with average head grade of ~900 ppm U3O8.
- Scenario 2: 14 years life of mine, producing 23.8 Mlbs U3O8 with treatment of stockpiles from year 8 (average head grade ~680 ppm U3O8).
Given the positive outcome of the study, the company plans to advance to a Restart Feasibility Study.
Lotus directors subscribed for 1.4 million shares under the placement, the issue of which is subject to shareholder approval, while the placement was also supported by both new and existing shareholders in Australia and North America.
The placement price of $0.08 per share represents a discount of 11.1% to the 30-day VWAP of $0.09. BW Equities acted as lead manager to the placement.