Lotus Resources hits uranium at Chilumba satellite target, considers expanding regional program
Initial drilling at Chilumba has confirmed uranium is present with an interval of 3m at 382ppm uranium from 43m.
In June last year, Lotus Resources (ASX: LOT) began the first uranium drilling program in more than 15 years at the mothballed Kayelekera uranium mine in Malawi, and has since launched greenfields exploration campaigns to firm up satellite deposits.
The southern project area at Kayelekera contains the Livingstonia deposit (4.8 million pounds of uranium oxide) and the Chilumba prospect, which is 8km away.
In today’s announcement Lotus revealed a maiden greenfield drilling program at Chilumba has intersected uranium.
Southern area poorly explored in past
Assay results from a seven-hole (1,140m) reverse circulation drilling program at the prospect included 3m at 382 parts per million uranium from 43m and 3m at 138ppm uranium from 38m.
Lotus noted that its southern project area has historically been poorly explored, but believes this area has strong long-term potential to contain additional uranium mineralisation that could be the basis for a future satellite operation.
In August, Lotus reported that a revised definitive feasibility study showed that Kayelekera was one of the lowest capital cost projects of its kind in the world.
It also confirmed the project has the ability to recommence production within 15 months once a final investment decision has been made.
Kayelekera has an ore reserve estimate of 15.9 million tonnes at 660 parts per million uranium for 23Mlb.
Lotus is expecting average production of 2.4Mlbs uranium per year for the first seven years of a 10-year mine life.
Review under way on expanding exploration effort
Managing director Keith Bowes says that, while the company’s focus has been on the definitive feasibility study for Kayelekera, it recognises the opportunity for new discoveries across its entire tenement package.
“This potential is perhaps greatest in our southern project area, where little or no exploration work has been undertaken,” he continued.
Chilumba was identified and tested through a surface radiometric anomaly and uranium has been confirmed by this first drill program.
“While further work is required at Chilumba, as well as our other regional targets, the opportunity for new uranium discoveries is clearly there.”
Mr Bowes says Lotus is now reviewing whether further work should go ahead, including drilling at both Chilumba and Livingstonia as well as more broadly over the company’s ground.
Kayelekera was formerly owned by Paladin Energy (ASX: PDN) and it produced 10.19Mlbs of uranium between 2009 and 2014 when continuing low uranium prices forced Paladin to place the mine on care and maintenance.
During that time, 4.5Mlbs was sold to utility customers and the remainder to nuclear fuel market intermediaries. In all, 63% of Kayelekera output was sold under multi-year contracts.