Australia-based Lotus Resources has secured two uranium offtake arrangements and a binding unsecured loan facility of $15m from Curzon Uranium for the restart of its Kayelekera uranium project in Malawi.
The agreements will facilitate the sale of a minimum of 1.5 million lbs of uranium produced at the Kayelekera project from 2026 through until the end of 2032. The total amount could reach up to 1.8 million lbs, which will be sold to PSEG Nuclear and Curzon Uranium.
PSEG Nuclear is a subsidiary of the US-based diversified energy company Public Sector Enterprise Group (PSEG).
According to Lotus Resources, the offtake agreements will provide it with the required commercial flexibility for the Kayelekera uranium project’s key production restart milestones and early-stage production levels.
The term sheet with PSEG Nuclear is contingent upon the execution of a definitive uranium sale and purchase agreement within four months and Lotus Resources proceeding with the restart of the Kayelekera project.
Curzon Uranium’s binding agreement is subject to Lotus Resources completing an equity raise in conjunction with the restart of the Kayelekera uranium project.
Lotus Resources 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. This will serve us well as we look to secure further contracts closer to the commencement of production.”
Located in the Karonga District of northern Malawi, the Kayelekera project is currently on care and maintenance. It is a past-producing asset that delivered about 11 million pounds of uranium between 2009 and 2014.
In July 2024, Lotus Resources and the Malawi government signed a mine development agreement (MDA) that guarantees a stability period of 10 years.
The definitive feasibility study released in August 2022 confirmed that the Kayelekera project will require an initial capital cost of $88m. The project is expected to quickly recommence production once a final investment decision is made.
