Slide 1: Kayelekera – Proven Uranium Producer
For personal use only Kayelekera Proven Uranium Producer AUGUST 2020
Slide 2: Important Notice
Important Notice For personal use only FORWARD LOOKING STATEMENT Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from those expressed or implied by such forward-looking information, including
Slide 3: Lotus Resources – Why invest? Capital Structure
Lotus Resources – Why invest? CAPITAL STRUCTURE For personal use only 710.9m $64m • Kayelekera is a proven 3Mlb pa uranium operation that can rapidly and SHARES ON ISSUE MARKET CAP efficiently recommence production At $0.09 / share • US$200m spent on capital development • 37.5Mlb uranium resource1 $
Slide 4: Kayelekera is a Proven Uranium Producer
Kayelekera is a Proven Uranium Producer For personal use only 3Mlb pa processing Proven production Significant Resource Permitted for Low C&M costs facility 10Mlbs of 37.5Mlb Resource 1 production US$1.2M pa 2 US$200m spent on production over 5 ~83% M&I with strong guidance to minimise infrastructur
Slide 5: Established and Proven Producers will be the First to Respond
Established and Proven Producers will be the First to Respond For personal use only Top 10 brownfield C&M assets that achieved commercial production (2010-2018) 25.0 100.0 11.0 11.0 404 102 90.0 9.0 80.0 72 70.0 Installed Plant Capacity 7.0 60.0 Resource 5.9 50.0 5.0 40.0 38 33 3.0 3.0 30 3.0 30.0 2
Slide 6: Pathway to Production
Pathway to Production For personal use only • Proven production and existing infrastructure • Multiple areas identified for improvement compared to previous operation • Study completed by Paladin Energy estimated US$49.3m1 capex to recommence production • Intercompany loans / potential carry forward
Slide 7: Untouched Exploration Potential
Untouched Exploration For personal use only Potential • Kayelekera has 37.5Mlb U3O8 Resource1 with potential to significantly extend mine life • Exploration target of 7 – 14MLbs U3O8 Note that the potential quantity and grade of the Exploration Target is conceptual in nature, there has been insuffic
Slide 8: Attractive Upside Valuation Compared to Peers
Attractive Upside Valuation Compared to Peers2 For personal use only EV / Att. Resource1 EV / Att. Installed production capacity1 $4.00 $120 $3.50 $100 Average – US$94 / lb $3.00 Average – US$2.50 / lb $80 $2.50 (US$ / lb) (US$ / lb) $2.00 $60 $1.50 $40 $1.00 $20 $0.50 $0.00 $0 Paladin Energy UR Ene
Slide 9: Uranium Market is Poised for a Significant Re-rating
Source: WNA, The Nuclear Fuel Report, Uranium Market is Poised for a Significant Re-rating September 2019 For personal use only STRUCTURAL SUPPLY DEFICIT AND GROWING UTILITIES FACING RAPID PURCHASING 120% 105% 98% Target coverage rate 100% 95% 94% 87% 94% 91% 80% 77% EU Utility Coverage 73% 60% 65%
Slide 10: Significant Price Increase Required to Meet Growing Demand
Significant Price Increase Required to Meet Growing Demand For personal use only 2024 2028 ST Demand Mine Supply LT Demand Mine Supply 190Mlb 160Mlb 210Mlb 150Mlb Annual Deficit Annual Deficit 30 M lbs U3O8 60 M lbs U3O8 Source: WNA, The Nuclear Fuel Report, September 2019; Note: Values based on the
Slide 11: Long-term Contracted Pricing During the Last Bull Market
Long-term Contracted Pricing During the Last Bull Market For personal use only UTILITY LONG TERM CONTRACTING AND VOLUME AND PRICING (2006 – 2010) >$90 205 754M lb U308 sold at prices Utility LT Contract Price Category (US$/lbs U3O8 ) $81-90 59 greater than US$60 / lb U308 $71-80 324 $61-70 166 $51-6
Slide 12: Peak Cycle Valuation Outweighed Commodity Prices
Peak Cycle Valuation Outweighed Commodity Prices For personal use only 4.2x MARKET CAP. ($M) / GROWTH TO PEAK (X) 10x 10x $138 20x $5,300 $380 $2,200 $37 $220 $260 Peak Cycle1 Today3 Peak Cycle1 Today3 Peak Cycle1 Today3 Paladin Energy Bannerman Resources Denison Mines 9.5x 4.6x 3.3x $33 $550 $19,60
Slide 13: Lotus well Positioned for the Next Uranium Cycle
Lotus well Positioned for the Next Uranium Cycle For personal use only Significant existing Proven production Board & Valuation Upside infrastructure 10M lb of historical Management team Significant valuation Low capex to with sales to major Major African and discount compared recommence utilities u
Slide 14: Contact
For personal use only CONTACT Eduard Smirnov Managing Director 1202 Hay St West Perth WA 6005 For further information visit: www.lotusresources.com.au
Slide 15: Appendix – Board and Senior Management
Appendix 1 – Board and Senior Management For personal use only Production, offtake, redevelopment and financing experience in uranium industry Eduard Smirnov John Sibley Grant Davey Stuart McKenzie Keith Bowes Managing Director Non-Executive Chairman Non-Executive Director Non-Executive Director Hea
Slide 16: Appendix – Brownfield Uranium Assets
Appendix 2 – Brownfield Uranium Assets For personal use only Project Name Kayelekera Langer Heinrich Alta Mesa Project Azelik Project Nicholas Ranch Project Rabbit Lake McArthur River Smith Ranch Highland Crown Butte Willow Creek Country Malawi Namibia USA Niger USA Canada Canada USA USA USA Major O
Slide 17: Appendix – Valuation Peer Comparison
Appendix 3 – Valuation Peer Comparison For personal use only Company Lotus Resources Paladin Energy UR Energy Energy Fuels Uranium Energy Corp Ticker LOT PDN URE EFR UEC Exchange ASX ASX TSX TSX NYSE EV (US$ m) $44 $315 $85 $183 $192 Hub & Spoke - Texas ISR & Wyoming Project Name Kayelekera Langer H
Slide 18: Appendix - Kayelekera Ownership Structure
Appendix 4 - Kayelekera Ownership Structure For personal use only Kayelekera Resources Pty Ltd Lotus Resources Limited (23.5%) (76.5%) Lily Resources Pty Ltd (85%) Government of Malawi Paladin (Africa) Limited (15%) Kayelekera Uranium Mine August 2020 lotusresources.com.au ASX: LOT | 18
Slide 19: Appendix – Kayelekera Project Development Milestones
Appendix 5 – Kayelekera Project Development Milestones For personal use only 1982 The Central Electricity Generating Board of Great Britain discovered the Kayelekera sandstone uranium deposit 1992 The project was abandoned due largely to the poor uranium outlook, as well as privatization of CEBG and