Mining
Lotus secures first two uranium offtake arrangements for Kayelekera Mine
September 17, 2024 / Marcel Chimwala
By Marcel Chimwala
ASX-listed Lotus Resources has announced that it has signed a binding agreement and a term sheet for uranium sales, as well as a binding unsecured loan facility for the restart of its Kayelekera Uranium Project in Karonga.
Lotus CEO Greg Bittar said in a statement that together, the offtake arrangements represent the sale of a minimum of 1.5 million lbs and up to 1.8 million lbs of uranium produced at Kayelekera from 2026 through until the end of 2032 to PSEG, a subsidiary of Public Sector Enterprise Group which is a diversified energy company based in Newark, New Jersey, and Curzon Uranium Ltd, a leading international uranium market participant.
Bittar explained that the contract pricing achieved in the arrangements is the result of competitive discussions and secured to deliver strong margins, including for any optional quantities, for the uranium sold.
“A fixed-price escalation percentage per annum applies from the time of deliver,” he said.
He said the offtake arrangements, as with the others being negotiated, provide Lotus with the necessary commercial flexibility for Kayelekera’s 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,” he said.
The unsecured loan facility provides that the repayment of the facility must occur 12 months from the first utilisation date (unless extended to 18 months from the first utilisation date as elected by Lotus).
Lotus’s 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. It will also support any potential debt funding for Kayelekera’s restart.
Bittar said: “Our first two sales contracts, coupled with unsecured financing with significant drawdown flexibility, mark a terrific milestone for Lotus and our Kayelekera Project, demonstrating customers’ confidence in the strength of the uranium market as well as providing a strong endorsement of our plans for the project.”
“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.”
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The establishment of a stable and self-sustaining ecosystem, but not necessarily the one that existed before mining began. In many cases, complete restoration may be impossible, but successful remediation, reclamation, and rehabilitation can result in the timely establishment of a functional ecosystem.
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