Lotus Resources Limited (ASX:LOT) has received binding commitments to raise $5 million before costs to fund the restart study of its Kayelekera Uranium Project in Malawi and for near-mine exploration potentially increase the existing 37.5 million pounds uranium resource.
The company will issue 62.5 million placement shares at 8 cents per share to professional and sophisticated investors, including new and existing shareholders in Australia and North America.
Lotus directors have demonstrated their support for the company's strategy by subscribing for 1.4 million shares.
Use of funds
Lotus will use proceeds from the placement to:
➢ Undertake development studies to support a restart of operations at Kayelekera;
➢ Investigate near-mine uranium exploration opportunities;
➢ Satisfy payments due to Paladin Energy Limited in connection with bond repayments;
➢ Fund care and maintenance costs at the Kayelekera project; and
➢ Review of rutile and rare earths prospects on the Kayelekera tenement package.
No shareholder approval required
Shares will be issued under the company's issuance capacity in accordance with ASX Listing Rule 7.1 and no shareholder approval is required in connection with the placement.
The placement price of 8 cents per share represents a discount of 11.1% to the 30-day volume-weighted average price (VWAP) of $0.09.
BW Equities acted as lead manager to the placement.
The new shares will rank equally with the company's existing fully paid ordinary shares.
Lotus has started discussions with major global utilities to reintroduce the Kayelekera project, which has been on care and maintenance since 2014.
It is targeting utilities with open near-term requirements and previous customers of Kayelekera, which is positioned as a proven quality uranium product supplier.