Kayelekera Uranium Mine parent company, Lotus Resources Limited, has said it wants to obtain a loan to enable it restart production at the mine in late 2025.

Without disclosing the actual amount they are looking for, the company said in an update that the Kayelekera re-start Definitive Feasibility Study (DFS) showed $88 million (about K152.6 billion) upfront restart capital and expenditure requirement, to enable 2.4 million pounds production for 10 years.

Kayelekera Uranium Mine in Karonga District

Further, pre-production costs (including first fill) and working capital require $40 to $50 million (about K86.7 billion) additional funding, depending on uranium product payment terms.

In an announcement dated March 28 2024, Lotus said it has since appointed Orimco Private Limited to arrange debt for the company’s flagship Kayelekera project in Malawi.

It reads: “Lotus’ objective in appointing a debt adviser is to help reduce dilution of shareholders by arranging cost-effective debt to cover a portion of the re-start capital and working capital requirements.”

Recently, Lotus completed Australian $30 million (about K33.9 billion) share placement which has allowed rapid ramp-up of planned Front-End Engineering Design (Feed) programmes, which encompass all aspects of detailed design to prepare Kayelekera for execution.

This means the company requires a combined K239 billion to restart production, but has raised K33.9 billion, and still needs roughly about K205 billion.

Lotus managing director Keith Bowes said the appointment of a debt adviser is a key step in advancing Kayelekera towards financial investment decisions.

He said: “Orimco will assist Lotus in arranging cost-effective debt to help finance Kayelekera’s restart while reducing dilution of existing shareholders.

“Orimco brings a high level of expertise and deal experience, and we look forward to working closely with them.”

Currently, the Malawi Government and Lotus Resources Limited are still holding discussions on how much tax the government has to impose before a mine development agreement is issued.

The two issues will form part of the fiscal regime which the mining agreement has to set in which the project will operate and is one of the inputs the company is seeking prior to making its final investment decision for Kayelekera to resume operations.

The company wants to start production in 2025. Uranium spot price increased during the December 2023 quarter from a low of $69 per pound to finish the quarter at $91 per pound.

Lotus owns an 85 percent interest in the mine.

The post Lotus seeks K205bn to restart Kayelekera Mine first appeared on The Nation Online.

The post Lotus seeks K205bn to restart Kayelekera Mine appeared first on The Nation Online.