Commenting on this milestone, Lotus managing director Keith Bowes mentioned “the related ministries together with mining, finance and justice have all been very supportive in our negotiations as we have now gone by way of a number of iterations of the MDA.”
The MDA comes with internationally acknowledged rules regarding authorized safety on safety of tenure, dispute decision and expropriation. Key phrases embrace a royalty fee of 5% and company tax fee of 30%, each of which align with the mission’s definitive feasibility examine (DFS) printed in August of 2022.
Lotus may have exemptions for import and export duties, excise and VAT on capital items and specified consumables straight associated to mine manufacturing. There can even be withholding tax reduction on dividends to the corporate for almost all of the mine life.
Vital uranium mine
The previous-producing Kayelekera represents probably the most important mining operation in Malawi. Throughout its operational years (2009-2014), it produced about 11 million lb. of uranium oxide, till low uranium costs compelled its closure.
With the latest revival of the uranium market, the mine is getting a second likelihood at manufacturing from its reserve base that’s estimated at 15.9 million tonnes grading 660 components per million uranium oxide for 23 million lb. of yellowcake.
The 2022 DFS estimated a complete manufacturing of two.4 million lb. uranium over 10 years at money prices of $29.1 per lb. and an all-in-sustaining price of $36.2 per lb. for the primary seven (uranium is buying and selling at $85/lb. at press time). The mine restart is anticipated to price $88 million.
Lotus presently holds an 85% curiosity within the mission, with the Malawian authorities proudly owning the remaining 15%. The mine’s majority possession was beforehand held by Paladin Power (ASX: PDN).
Following the MDA signing, Lotus’ administration lauded the dedication by Malawi to develop its mining business, pointing to Rio Tinto’s elevated shareholding in Sovereign Metals (ASX: SVM), which holds a graphite mission within the nation, as one other indication.
The corporate’s subsequent steps are to finish offtake negotiations for the primary part of contracting and finalize the mission’s financing. It beforehand focused a mine restart by late 2025.