Lotus Resources has signed financing and offtake agreements to advance the Kayelekera Uranium Project in Malawi.
These agreements include binding uranium offtake arrangements and a $15m (A$22.28m) unsecured loan facility, marking a pivotal step towards the project’s restart.
Lotus has secured agreements for the sale of 1.5–1.8mlb of uranium to North American power utility PSEG Nuclear and Curzon Uranium, with deliveries scheduled from 2026 to 2032.
The pricing terms achieved through competitive discussions ensure profitability for the uranium sold, including any optional quantities.
This term sheet with PSEG is contingent on finalising a definitive sale and purchase agreement and the project’s restart, while the agreement with Curzon is dependent on an equity raise by Lotus.
The unsecured loan facility stipulates repayment within 12–18 months from the first utilisation date, providing Lotus with additional financial leverage. The facility is instrumental in supporting the early stages of the Kayelekera Project’s restart.
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Lotus is also engaging with North American nuclear power utilities and commodity trading houses to secure offtake agreements for larger volumes of triuranium octoxide (U3O8).
These efforts aim to capitalise on the long-term demand for uranium and potentially facilitate debt funding for the project’s recommencement.
Lotus CEO Greg 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.”
The Kayelekera Uranium Project reported production of around 11mIb of U3O8 equivalent over five-years between 2009 and 2014, prior to its closure to preserve its longevity due to a sustained low price of uranium.
Earlier this year, Lotus unveiled plans to raise $30m through a share placement to accelerate the development of its uranium projects.
