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Lotus Resources buoyed by strong demand from institutional investors for A$12.5 million placement

The company is now fully funded out to early 2023 and plans to accelerate project development studies at its Kayelekera Uranium Project in Malawi.

Lotus Resources - Lotus Resources institutional investors drive strong demand for $12.5 million placement
The placement saw several new institutional investors become shareholders in the company

Lotus Resources Ltd (ASX:LOT) has received binding commitments to raise A$12.5 million (before costs) through the placement of 100 million shares at A$0.125 per share to sophisticated and professional investors.

The placement attracted strong demand both locally and abroad and has seen several new institutional investors become shareholders in the company, including a new major Australian investor which cornerstoned the placement.

The price of $0.125 per share represents a discount of 17.6% to the 5-day volume weighted average price of $0.152 and a 16.7% discount to the last traded price on February 19, 2021, of $0.15.

“Testament to project potential”

Lotus managing director Keith Bowes said: “I would like to thank both new and existing shareholders for their tremendous support through this capital raising process.

“The strong demand is testament to the potential of our Kayelekera Uranium Project, one of only two uranium assets on the ASX to have proven, commercial uranium production.”

“Accelerating re-start feasibility study”

Bowes said: “Funds raised from this placement, in addition to existing cash reserves and proceeds yet to be received from the exercise of in-the-money options, could see the company fully funded through to early 2023.

“The company can now accelerate work on its re-start feasibility study, as well as ramp-up exploration on a number of near-mine, high-priority uranium targets, in order to support an extension of mine life beyond the current 14 years of estimated production.

“We also plan to undertake a low-cost assessment of the high-grade rare earth oxide Milenje Hills prospect later this year.

“Following this work the company will assess the optimal path forward to crystallise value in this asset for shareholders.”

Funding project development

Canaccord Genuity (Australia) Limited and BW Equities Pty Ltd acted as joint lead managers to the placement.

Lotus will use proceeds from the placement to:

  • Accelerate project development studies including pilot test-work and complete a re-start feasibility study at the Kayelekera Uranium Project;
  • Expand uranium exploration efforts around near-mine targets and further evaluate the potential of the rare earth and rutile exploration opportunity;
  • Fund care and maintenance costs at Kayelekera; and
  • General working capital requirements.

Quick facts: Lotus Resources

Price: 0.13 AUD

ASX:LOT
Market: ASX
Market Cap: $106.66 m
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