Lotus Resources Limited, managers of Kayelekera Uranium Mine in Karonga, has put up a share placement on the Australian Stock Exchange to raise about $16.8 million (about K17 billion) to enable the company progress on the uranium project.

The $16.8 million represents 33.6 percent of the $50 million initial capital cost estimates for its plant refurbishment.

Kayelekera Uranium Mine in Karonga

The share placement, according to a statement dated September 2, will comprise the issue of 104.2 million new fully-paid ordinary shares at an offer price of 0.24 Australian dollars (about $0.16) per share.

In business terms, a placement is the sale of securities to a small number of private investors and it is a less expensive way for a company to raise capital.

The company said the proceeds together with existing capital, will be applied to progressing the development of the Kayelekera Uranium Mine project, including finalising the mine development agreement.

Reads the statement in part: “Proceeds from the placement, [will also help in] advancing off-take negotiation, front end engineering design and project financing prior to a final investment decision.”

The money will also fund the final instalment of rehabilitation bond repayment to Paladin Energy Limited in March 2023 and general maintenance and corporate costs for at least 18 months in 2024.

“Upon completion of the placement, Lotus will be well-funded with $28 million [about $25 million] in unrestricted cash,” the statement reads.

The statement quotes Lotus managing director Keith Bowes, as saying the placement has strongly been supported by domestic and international investors, reflecting the strong investor interest in the Kayelekera project.

Bowes said: “In particular, the demand received from global sector specialists during the book build provides significant validation for the company’s restart strategy and underscores the value of the project as one of the nearest term producers globally.

“I would also like to thank our existing shareholders for their strong, ongoing support, and welcome all our new shareholders aboard. We look forward to providing further updates on our activities in the coming weeks and months.”

Chamber of Mines chief executive officer Grain Malunga in an interview yesterday said the share placement is a huge opportunity for Malawian investors.

He said: “One can simply arrange with their bank and buy shares on the Australian Stock Exchange, and then you will have shares in Lotus.

Ac c o r d i n g t o L o t u s , infrastructure at the project is significant and includes a 1.5 million tonnes per year processing facility, administration offices, an existing open cut mine, tailings dams, accommodation camp and other mine infrastructure that historically cost more than $200 million (K200 billion). Lotus Resources Limited owns an 85 percent interest in the Kayelekera Uranium Project, while the remainder is owned by the Malawi Government.

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