Lotus Resources Ltd (ASX:LOT) has concluded a roadshow in Malawi where it spoke with senior government officials, the Malawian power utility and local communities about recommencing production at its Kayelekera uranium mine.
Following meetings with the Minister of Mining, the Honourable Dr Albert Mapondera Mbawala, and the Minister of Finance and Economic Affairs, the Honourable Sosten Alfred Gwengwe, Lotus said the Malawian Government indicated it was supportive of a production restart at Kayelekera as soon as possible.
Discussions were also held with ESCOM, the Malawian electricity utility, about how to connect the mine site to the national grid.
Rounding out the trip, Lotus took meetings with other key stakeholders, including the Karonga District Commissioner, non-government organisation (NGO) groups in Karonga and the local communities.
Looking ahead, the company said Kayelekera remained in a good condition, meaning a production restart could happen swiftly. A definitive feasibility study for the uranium mine is on track to release in mid-2022.
“Warm reception”
Speaking to the roadshow, Lotus Resources managing director Keith Bowes said: “After a two-year hiatus in travel due to COVID restrictions, it was great to get back in-country again to visit site and meet with various government officials.
“I was extremely pleased with the warm reception we received from all parties that we met, and it is obvious there is strong support from government, communities and NGOs for Kayelekera to restart production as soon as possible.
“The trip also provided the opportunity to visit site again and meet our local employees who have been doing a fantastic job in maintaining site while working with local communities and regional government officials to explain the process and requirements to be met before we can restart the mine.”
Advancing negotiations
During its trip to Lilongwe, Malawi’s capital, Lotus aimed to progress negotiations for an updated mine development agreement (MDA) for Kayelekera.
Essentially, the MDA will set Lotus’ fiscal regime and define the operating requirements when Kayelekera restarts.
The previous project owner, Paladin Energy Ltd (ASX:PDN) — which operated the mine between 2009 and 2014 — had an MDA with the Malawian government, which they negotiated in exchange for a 15% government stake in the uranium mine.
Lotus is seeking a similar arrangement and acknowledges the government will retain its 15% interest in Kayelekera.
During its trip, the company also met with local stakeholders and community groups to discuss a community development agreement (CDA).
Lotus managing director Keith Bowes and CFO Michael Ball meeting with members of the FOCUS NGO.
Bowes continued: “Communication is key and everyone is working hard to strengthen our social licence to operate.
“I was particularly happy to see the support from the local NGOs and the work they have been doing with the communities in formulating our community development agreement that will be key to ensuring our activities support all local communities in a fair and transparent manner.”
About Kayelekera
Lotus Resources owns an 85% interest in the Kayelekera Uranium Project in Malawi.
The project hosts a 46.3-million-pound triuranium octoxide resource and historically produced roughly 11 million pounds of uranium between 2009 and 2014.
Recently, the company completed a restart study, which demonstrated that Kayelekera can support a viable long-term operation and has the potential to be one of the first uranium projects to recommence production.
The mill at Kayelekera.