Lotus Resources' Scoping Study Confirms Potential of Letlhakane Uranium Project
LOT (LOT) Share Update September 2024 Wednesday 18th
Lotus Resources Confirms Letlhakane as a Long-Life, High-Value Uranium Project
Lotus Resources Limited (ASX: LOT, OTCQX: LTSRF) has announced the results of its Scoping Study for the Letlhakane Uranium Project in Botswana, confirming the project's potential to support a long-life, economically viable uranium operation.
Instant Summary:
- Letlhakane can support ~3Mlbpa over an extended life-of-mine (LoM) with flexibility to adjust production.
- Base Case: 15-year LoM producing 3Mlbpa for total LoM production of 42Mlb.
- Optimized base case cash cost of US$36/lb compared to non-optimized US$42/lb.
- Favorable geology for in-situ recovery (ISR) operation.
- Botswana ranked highest mining jurisdiction in Africa, 4th globally in 2023 Fraser Institute survey.
- Lotus has $34.1 million cash at bank as of 30 June 2024.
Scoping Study Results
The Scoping Study for Lotus Resources Limited's Letlhakane Uranium Project in Botswana has confirmed the project's potential to support a long-life, economically viable uranium operation. The study indicates that Letlhakane can produce approximately 3 million pounds of uranium per annum (Mlbpa) over a 15-year life-of-mine (LoM), with a total LoM production of 42 million pounds (Mlb). The project also has the flexibility to adjust production based on uranium price fluctuations.
Optimized mining costs and acid consumption have demonstrated a base case cash cost of US$36 per pound of uranium, compared to a non-optimized cost of US$42 per pound. An independent assessment has determined that Letlhakane's geology is favorable for an in-situ recovery (ISR) operation, which could positively impact overall operating expenses (opex).
Comparative Advantage
The size, grade, and LoM of the Letlhakane resource compare favorably with other sub-Saharan Africa projects such as Deep Yellow's Tumas Project and Bannerman Energy's Etango Project. Lotus aims to deliver similar operating and capital expenditure structures to its peers through optimization.
Botswana is ranked as the highest mining jurisdiction in Africa and 4th globally according to the 2023 Fraser Institute global survey. This favorable ranking adds to the project's attractiveness.
Future Plans and Funding
Lotus has commenced trade-off studies and is progressing a Mineral Resource Estimate update for Letlhakane. The company is also planning an ISR assessment, starting with pumpability testing and potentially a field leach trial. An updated study incorporating remaining optimization work and potentially ISR is due in the first quarter of 2025 (1QCY25).
Lotus is well-funded to continue the development of both Kayelekera and Letlhakane, with $34.1 million in cash as of 30 June 2024.
The Scoping Study's positive results are likely to boost investor confidence in Lotus Resources. The potential for a long-life, economically viable uranium project at Letlhakane, coupled with the favorable mining jurisdiction of Botswana, positions Lotus well in the market. The optimized cash costs and favorable geology for ISR could significantly reduce operating expenses, making the project more attractive to investors.
Investor Reaction:
Analysts are likely to view the Scoping Study results positively, given the project's potential to become a significant uranium producer. The favorable comparison with other sub-Saharan Africa projects and the strong financial position of Lotus are additional positives. However, the project's reliance on future uranium price increases and the need for further optimization and funding may temper some investor enthusiasm.
Conclusion:
Investors should keep an eye on further updates from Lotus Resources, particularly regarding the trade-off study results and ISR work. The company's strategic approach to optimizing costs and leveraging favorable geological conditions could position Letlhakane as a key player in the global uranium market. With strong financial backing and a favorable mining jurisdiction, Lotus Resources presents a compelling investment opportunity.