Red hot uranium project developer Lotus Resources also has exposure to another burgeoning thematic – rare earths.

While Lotus (ASX:LOT) remains firmly focused on the development and recommencement of production at the ‘Kayelekera’ uranium mine (85% LOT), it believes the nearby ‘Milenje Hills’ rare earths prospect has the potential to add real value to the company for minimal expenditure.

Exploration has now kicked off at Milenje Hills – about 2km north of the Kayelekera open pit — following discovery of high-grade rare earth oxide (REO) material mineralisation grading up to 16% total REO and 3.4% critical REO earlier this year.

The exploration program includes geophysics, mapping and trenching and then 1,000-2,000 metres of RC drilling to follow up on priority anomalies and mineralised zones.

Mineralogical test work to better understand the REO host minerals, associations, and sizing, as well as physical beneficiation tests to confirm if producing a physical concentrate is viable, are expected to commence in 4Q21.

“Clearly, the initial results encountered at Milenje Hills were extremely encouraging, given both the grade and assemblage of rare earth minerals,” Lotus managing director Keith Bowes says.

“The current work program will provide us with an enhanced understanding of the overall potential of Milenje Hills, prior to determining the optimal path forward to realise value for shareholders.”

Lotus launches into uranium DFS

Lotus has launched into an advanced definitive feasibility study (DFS) for Kayelekera, which is positioned for a rapid restart as prices boom.

Kayelekera is a proven uranium operation in Malawi, having successfully produced 11Mlbs over five years.

It shut down in 2014 due to sustained low uranium prices and was placed on care and maintenance. That means Lotus can ostensibly get into production quickly once prices improve to a certain level.

The DFS – the most advanced of all project studies — follows strong results from multiple technical studies being undertaken which show an opportunity to significantly improve on the scoping study released in October last year.

This scoping study was based on real operating data from previous operations (2009 to 2014) and as such, provided an accurate estimate of potential production rates and costs, the company says.

It confirmed low initial capital expenditure of $US50M — due to Kayelekera’s existing infrastructure — and C1 production cost of US$33/lb.

This is well below current spot prices, which are US$40/lb and growing fast.

Lotus believes it can improve on these numbers in the DFS, due for completion mid-2022.

 

 

 

This article was developed in collaboration with Lotus, a Stockhead advertiser at the time of publishing.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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