Australia-based mineral exploration firm Lotus Resources has signed an agreement with Kayelekera Resources to increase its ownership stake in the Malawi-based Kayelekera uranium project to 85%.
Lotus will exercise its option to acquire a 20% stake in the project through the purchase of all Kayelekera Resources’ shares in Lily Resources, which is a joint venture between Kayelekera Resources and Lotus.
Lotus, as a consideration, will issue 226.4 million of its shares to Kayelekera Resources to acquire the latter’s interest in Lily Resources.
The remaining 15% interest in the Kayelekera project is held by the Government of Malawi. Lotus chairperson Michael Bowen said: “Kayelekera is one of only a small number of uranium projects with a demonstrated track record of operations, having operated successfully from 2009 to 2014, when it produced almost 11-million pounds of uranium oxide.
“Consolidating the ownership of Kayelekera is an important milestone for the company as it positions for a recommencement of operations in an improving price environment.
“With work on the restart feasibility progressing, the increase in ownership comes at a time when the uranium price and sentiment in the industry are improving due to an impending supply deficit. As a proven uranium producer, Lotus is well placed.”
Last year, Paladin Energy divested its complete stake in the Kayelekera uranium project to Lotus Resources and Lily Resources.