Lotus Resources Ltd (ASX:LOT) has completed a restart scoping study in December quarter that confirms the potential for the Kayelekera Project in Malawi to support a viable long-term uranium operation and also identified multiple near-mine exploration targets.
After completing restart scoping study and identifying targets for drilling, the company has chalked out plans for a number of activities for the current quarter it includes finding ways to reduce power cuts and ore sorting.
During the quarter, the company also completed a $5 million capital raising exercise, which was supported by both new and existing shareholders in Australia and North America.
Restart Scoping Study
The company completed a Restart Scoping Study, which demonstrated that the Kayelekera Uranium Project can be one of the first operations globally to restart uranium production to meet the impending and growing shortfall in supply.
Kayelekera’s existing infrastructure and mineral resources represent a considerable 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 US$33 per pound U3O8 in mid-2020.
The study assessed two scenarios:
- 8-year life of mine, producing 16.4 million pounds U3O8 with an average head grade of around 900 parts per million U3O8; and
- Scenario 2: 14 years life of mine, producing 23.8 million pounds U3O8 with the treatment of stockpiles from year 8 (average head grade around 680 parts per million U3O8).
Activities planned for the current quarter
Lotus is working to identify and optimise options to improve the operation and expand the resource base through targeted exploration activities to support an extension of the mine life.
The company has identified several opportunities have been identified prepared a detailed concept plan involving five stages:
- Develop the programs of work to verify the activities, cost estimates and timeframe required to restart the existing operation;
- Investigate the potential to implement operating cost-saving technologies in the front-end of the circuit, focused on upgrading the ore feed grade and/or rejecting high acid consuming gangue minerals;
- Identify further process improvements to reduce operating costs, with a focus on resin-in pulp circuit, acid recovery options, yellow cake dryer, tailings disposal and power supply options;
- Complete a Restart Feasibility Study (RFS) with a revised mining schedule incorporating results from programs above; and
- Complete further detailed design work to increase the level of confidence in engineering design and cost estimates of the RFS.
Kayelekera airborne radiometrics and key targets
Near mine exploration targets
A review of historical exploration data identified two priority target areas – Kayelekera South and Mpata, both are within trucking distance of the Kayelekera mine site
The Kayelekera South Prospect is on the south-west of the Kayelekera pit which has a combined mineral resource endowment of approximately 5 million pounds U3O8 comprising of the current resource of 37.5 million pounds and historical production of 11 million pounds.
A total of six target areas have been identified ranging between 500 metres and 4 kilometres from the existing Kayelekera pit.
These exploration targets were identified through a review of airborne radiometric data which clearly shows that a number of anomalous radiometric responses exist over the areas of the outcrop.
The Mpata Prospect
The Mpata Prospect represents the largest cluster of radiometric anomalies outside of the Kayelekera Resource and comprises several high priority anomalies associated with arkose units identified over a 3 kilometres strike length, all contained within Karoo sediments.
A total of 76 historic drillholes have been completed within the Mpata Prospect area for a total of 9,070 metres.
The drilling has defined several small, narrow bodies of low to medium grade mineralisation.
A total of 23 of the holes encountered grades above 250 parts per million U3O8.
Significant intercepts include 10 metres at 690 parts per million U3O8 and 5 metres at 410 parts per million.
Mineralisation appears to be open along strike, with approximately 600 metres of trend untested and is open at depth.
Recent structural re-interpretations concerning the genesis of uranium mineralisation and late-stage faulting has identified a potential focal region for higher-grade mineralised fluids.
The newly identified exploration target areas provide further confirmation of uranium resource growth potential in the underexplored near-mine areas and the company is confident that there is an opportunity to extend the current life of mine.