Malawi renewed uranium mining licence for Kayelekera amid surging uranium prices
(Kitco News) - Lotus Resources (ASX: LOT) today announced the renewal of the company's mining and exploration licences for its Kayelekera project in Malawi.
According to the company's statement, the Mining Licence, ML0152, which was signed by the Honourable Rashid Abdul Gaffar, Minister of Mines, on 1 September 2021 in accordance with the Mines and Minerals Act, has been renewed for 15 years.
Managing Director Keith Bowes commented, "We are delighted to have received an extension of our Mining Licence for an additional 15 years. This is a critical step, as it provides certainty and confidence to our investors that Lotus has the full backing of the Government to continue our on-going development of Kayelekera, as we position the project to be one of the first assets to recommence production in an ever- improving uranium price environment."
Kayelekera is located in northern Malawi, 52km west (by road) of the provincial town of Karonga and 12km south of the main road that connects Karonga with the township of Chitipa to the west.
The Kayelekera mine was officially opened in April 2009 and produced 10.9Mlb between 2007 and 2014. The mine is currently in care and maintenance since 2014 due to the sustained low uranium spot price and to preserve resource and shareholder value, Lotus explained.
Lotus Resources owns an 85% interest in the Kayelekera uranium project which hosts a current resource of 37.5M lbs U3O8. The company noted that once uranium prices offer sufficient incentive for restart, production, with some RIP/elution upgrades, is expected to be approximately 3Mlbpa.
The company added it completed a positive 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 in the future.
The uranium spot price has risen 46% in the past four weeks to its highest level since 2015, primarily driven by uranium purchases by the Sprott Physical Uranium Trust.