Lotus Resources has secured a commercial outlet for uranium inventory produced during the restart of its Kayelekera mine in Malawi, agreeing to sell approximately 173,000 pounds of material to a US-listed critical minerals company.

The transaction gives the Australian-listed uranium producer an opportunity to convert previously unsaleable inventory into cash as it works to increase production at the Malawian operation and move towards positive operating cash flow.

The material was produced during the mine’s ramp-up phase but failed to meet delivery specifications because of elevated impurities.

Its quality meant it could not be supplied to a uranium converter at the time, leaving Lotus to consider alternative ways of handling the stock.

Rather than continue holding the inventory, the company has signed a sale and purchase agreement covering the entire 173,000 pounds.

The agreement follows an assessment of several possible options, including further processing, blending with other material or selling the product.

Namibia provides export route

The uranium will be delivered free on board at Walvis Bay in Namibia, providing Lotus with a route to market through the southern African country’s port infrastructure.

Although the agreed selling price is below conventional contract prices because of the material’s lower specification, the transaction is expected to generate near-term liquidity.

The proceeds will support the continued ramp-up of Kayelekera and help the company advance towards generating positive operating cash flow.

Shipment preparation underway

Lotus is packaging the uranium inventory for export and aims to dispatch it from the mine site within the next month, subject to shipping schedules.

The agreement provides a commercial solution for material that would otherwise have required additional processing or blending before meeting conventional delivery requirements.

For Malawi’s uranium sector, the transaction also highlights the commercial value of finding alternative markets for production that does not meet standard specifications, particularly as mining operations move through their early production stages.