Lotus Resources (Lotus) has announced the signing of a new term sheet for triuranium octoxide (U3O8) sales with North American utility PSEG Nuclear, a subsidiary of Public Sector Enterprise Group based in Newark, New Jersey, US.
The new agreement, along with prior deals, secures the sale of at least 2.3 million pounds (mlb) and potentially up to 2.6mlb of uranium from the Kayelekera Uranium Project in Malawi, covering the period from 2026 to the end of 2032.
The contract pricing reflects ongoing competitive negotiations and is designed to ensure strong margins, including for any additional U3O8 quantities sold.
An annual fixed-price escalation percentage will be applied from the delivery date.
Lotus managing director Greg Bittar said: “Each sales contract, coupled with our strong capitalisation and liquidity comprising circa $135m in cash and undrawn facilities, mark terrific milestones for Lotus and our Kayelekera Project.
“We look forward to finalising the binding agreement with PSEG Nuclear and announcing further offtake progress.”
Lotus is working with North American nuclear utilities to secure more offtake of U3O8 from the Kayelekera Project, meeting their need for contract prices that include both fixed rates and long-term uranium prices.
In September last year, the company revealed a binding agreement and a term sheet for U3O8 sales, along with a secured loan facility to support the restart of the Kayelekera Project.
The previous agreements involve the sale of at least 1.5mlb, and potentially up to 1.8mlb, of uranium from Kayelekera, spanning from 2026 to the end of 2032, to PSEG and Curzon Uranium, a prominent player in the global uranium market.
The Kayelekera Uranium Project produced around 11mlb of U3O8 equivalent over five years, from 2009 to 2014.
The project was then temporarily shut down to ensure its long-term viability due to prolonged low uranium prices.
In October 2024, the company unveiled an accelerated restart plan, highlighting that Kayelekera is one of the lowest-capital-cost uranium projects worldwide.
The initial capital expenditure for restarting the project, leading to first production, is estimated at $50m (A$80.31m), with uranium production expected within eight to ten months.
The Kayelekera Project is estimated to contain reserves of 15.9mt grading 660 parts per million U3O8.
