Mining
Lotus signs term sheets for US$38.5-M to finance Kayelekera restart
February 18, 2025 / Modester Mwalija
200t crane on site at Kayelekera - the largest crane in Malawi
ASX- listed Lotus Resources says it has signed term sheets with two leading Southern African banks for equipment finance and working capital facilities to support the restart and ramp up of its Kayelekera uranium project in Karonga through positive cashflow.
Lotus MD Greg Bittar says in a statement that Lotus has signed two equipment finance term sheets for up to US$18.5m in aggregate with Standard Bank Plc and First Capital Bank Limited to be used for the purchase or refinance of equipment including cranes, vehicles, machinery and other equipment and another term sheet for a US$20-million working capital facility with Standard Bank plc to finance working capital requirements until expected positive cashflow from Kayelekera production.
“The total current funding including these term sheets is US$135.5-million comprising cash on hand as of December 31, 2024 of US$82-million, US$38.5-million in equipment and working capital finance term sheets and US$15 million unsecured loan facility from Curzon Uranium,” says Bittar.
Bittar also says that Lotus has two conditional uranium offtake arrangements in place for Kayelekera totaling to 1.5-million lbs of uranium for 2026 – 2029, at an escalated fixed price with North American power utility PSEG Nuclear LLC and Curzon Uranium.
He says Lotus continues to advance discussions relating to additional contracts with North American power utilities as the Company is on track to restart uranium production at Kayelekera in the third quarter of 2025, with all key items of equipment ordered, construction crews and mobile equipment mobilised and works commenced, and over 200 workers on site.
Bittar says: “With the restart capital fully funded to first production by our recently completed A$130-million, two-tranche equity placement, these finance facilities provide Lotus with working capital liquidity and funding flexibility as we rapidly progress our accelerated restart program at the Kayelekera uranium mine.”
“The financing banks provided these facilities on very competitive pricing and terms because of the quality of the Kayelekera Project and their confidence in the progress of the restart program, which is on track for first production in third quarter of 2025.”
Meawhile, Lotus has completed the Kayelekera Front End Engineering (FEED) program and the Company in now well positioned to conduct a low capital intensity, accelerated restart of Kayelekera.
Bitter says in the Company’s quarterly activities report for the quarter ended December 31, 2024 that time to first uranium production was reduced to 10 months by phasing in the completion of non-essential site infrastructure, principally grid power and acid plant rebuild beyond first production, and initial restart capital expenditure to first uranium production reduced to US$50M providing an initial restart capital intensity of US$21.0/lb.
He also says Lotus has now ordered all of the key equipment needed, mobilised equipment and construction crews to site and completed the early works program.
Bittar says the Company has also signed a grid connection Memorandum of Understanding (MoU) with the Electricity Supply Corporation of Malawi (ESCOM) and completed the tender process for the appointment of an Engineering, Procurement and Construction (EPC) contractors for the transmission, substation and associated works required for the connection to the power grid.
“The Contracts are expected to be finalised during the current quarter of the year,” says Bittar.
Lotus signed a Mine Development Agreement (MDA) to resume uranium mining at Kayelekera last year which was in early January this year followed by the signing of a Community Development Agreement (CDA) with privileged communities surrounding the mine.
The CDA is the legislated structure by which the local communities will benefit from the mining operation. A minimum of 0.45% of the mine's revenue is allocated to the CDA fund, which is then used for specific projects that have been selected by the communities through the CDA steering committee.
“The CDA signing ceremony was a well-attended and publicised event that was recognised both locally and in the capital Lilongwe, including by Malawi’s Presidential Delivery Unit,” reads the report.
Key early works completed and long lead orders placed during the ended quarter include: • Camp infrastructure upgrades including water treatment, sewage system and rooms;
• Orders placed for calciner, scrubber and screw feeder for drying and packaging plant;
• Tools and mobile equipment and plant, including man-lifts and telehandlers for construction crew;
• Purchased 70-tonne and 200-tonne cranes for construction and operations and mobilised to site;
• Engineering, Procurement and Construction Management contract issued for acid plant relocation and refurbishment; and • Design package awarded for drying and packaging plant with design now largely complete and steelwork in fabrication.
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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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The cleanup of the contaminated area to safe levels by removing or isolating contaminants. At mine sites, remediation often consists of isolating contaminated material in pre-existing tailings storage facilities, capping tailings and waste rock stockpiles with clean topsoil, and collecting and treating any contaminated mine water if necessary.
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