Kayelekera restart to cost $50m

Lotus Resources told shareholders that the scoping study estimated that the restart project would cost some $50-million, given the existing infrastructure at Kayelekera, which includes a 1.4-million-tonne-a-year processing facility, an on-site acid plant and accommodation plant.

The study assessed two production scenarios, the first of which was Kayelekera producing some 16.4-million pounds of uranium oxide (U3O8) over a mine life of eight years, while the second would see the mine produce 23.8-million pounds of U3O8 over a mine life of 14 years.

The second scenario incorporated the treatment of stockpiles at Kayelekera from the eighth year of operation.

Lotus said on Tuesday that the company has also defined an exploration strategy focused on extending the mine life and replacing the stockpiled material with higher-grade ore, earlier in the project life.

“Lotus’s restart scoping study clearly demonstrates Kayelekera has potential to be one of the first operations globally to recommence uranium production to meet the impending and growing shortfall in supply,” said Lotus MD Eduard Smirnov.

“Kayelekera’s existing infrastructure and mineral resources gives Lotus a significant advantage, providing for a low restart capital expenditure and significant long-term production. The estimated C1 cash cost is on par with current term price indicators, which have been trending upwards in recent years, reaching $33/lb in 2020.”

The scoping study identified multiple opportunities to reduce the anticipated C1 cash cost of $33/lb with average production of 2.4-million pounds a year, including upgrading of feed materials, acid recovery, improved options around power supply, and optimised tailings disposal options.

“Our pathway to production is evolving at an opportune time. The nuclear fuel industry started this decade with a growing supply deficit, fast declining utility coverage rates and no time to permit and build new mines. Lotus is well positioned to move quickly, developing Kayelekera’s restart plans while marketing our product across the globe. We have commenced discussions with nuclear power plant operators in North America, Asia and Europe, re-introducing the project and updating them about our restart and baseload contracting strategy,” said Smirnov.