Lotus Resources Limited · ASX:LOT
Lotus Resources — Investor Presentation (October 2024)
54 slides from Lotus Resources's investor presentation, Oct 22, 2024
Slide 1: The Next Global Uranium Producer
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES THE NEXT GLOBAL URANIUM PRODUCER Kayelekera Restart and Equity Raising Presentation 22 October 2024
Slide 2: Important notices and disclaimers
Important notices and disclaimers This presentation has been prepared by Lotus Resources Limited (ABN 38 119 992 175) (Company or Lotus) (ASX: LOT) in connection with a proposed NOT A DISCLOSURE DOCUMENT equity raising by the Company comprising a two-tranche non-underwritten institutional placement
Slide 3: Important notice
Important notice JORC CODE LETLHAKANE TECHNICAL STUDIES It is a requirement of the ASX Listing Rules that the reporting of ore reserves and mineral resources in Australia comply with the Joint Ore Reserves No representation is made that, in relation to the tenements referred to in this presentation,
Slide 4: Important notice
Important notice FINANCIAL DATA The Joint Lead Managers and their respective affiliates are full service financial institutions engaged in various activities, which may include trading, All dollar values are in Australian dollars (A$ or AUD) unless otherwise stated. The information contained in this
Slide 5: Equity raising overview
Equity raising overview Kayelekera – Low capital intensity Lotus funding Strategic priorities brownfield uranium restart project strategy for Lotus ● Following a comprehensive FEED program, Lotus has ● A$125m (US$84m) equity raise structured as a non- ● Under the accelerated restart, Lotus to delive
Slide 6: Investment highlights
01 Kayelekera is a lower-risk brownfield restart project 02 Kayelekera is a high- margin project with pre – mining licence in place, and post-tax NPV8 of refurbishment underway US$439m and US$301m with first production and IRR of 80% and 66% within 8 to 10 months respectively1,2 03 The restart of Ka
Slide 7: Snapshot of Lotus Resources
Snapshot of Lotus Resources Near-term uranium producer with two strategic long-life projects KAYELEKERA, MALAWI1 PRE-EQUITY RAISE CAPITAL STRUCTURE ● 85% owned restart uranium project with existing plant and infrastructure; refurbishment works approved Shares on issue (ASX: LOT) 1,834m Management ●
Slide 8: Accelerated restart takes advantage of strong uranium price environment
Accelerated restart takes advantage of strong uranium price environment Kayelekera to deliver product into a strengthening long-term pricing environment IMMEDIATE EXPOSURE TO CURRENT PRICING ENVIRONMENT1 PHASED FUNDING APPROACH TO MULTI-ASSET URANIUM PRODUCER 110 Recent spot price ranging from ● Lot
Slide 9: Indicative funding strategy
Indicative funding strategy The equity raising proceeds, committed Curzon unsecured loan1 and existing cash provides Lotus with available liquidity of US$116m which is expected to fully fund2 Kayelekera through to first production INDICATIVE FUNDING PLAN FOR KAYELEKERA (US$M)3 FUNDING STRATEGY3 ● Lo
Slide 10: Highly experienced team to deliver the Kayelekera restart
Highly experienced team to deliver the Kayelekera restart Michael Bowen ● Mr Bowen is a partner of the national law firm Thomson Geer practising corporate, commercial and securities law Team experience ● Over 40 years of experience and emphasis on mergers, acquisitions, capital raisings and resource
Slide 11: Kayelekera Overview
1 KAYELEKERA OVERVIEW
Slide 12: Kayelekera highlights
Kayelekera highlights Kayelekera is a world-class uranium project with compelling economics KEY HIGHLIGHTS1,2 10 year 2.4Mlbs p.a. US$50m US$21/lb mine life avg. U3O8 production initial restart capex initial capital intensity5 targeting first production during first 7 years of production including c
Slide 13: Accelerated Restart Plan
Accelerated Restart Plan Accelerated production plan confirms world-class economics with one of the lowest capital intensity projects globally ● The comprehensive FEED program lays the foundation for the Accelerated Restart DFS ACCELERATED Plan to reduce initial restart capital and focus only on ess
Slide 14: Kayelekera initial capital cost
Kayelekera initial capital cost Accelerated Production Plan reduces initial restart capital from US$88m to US$50m DFS CAPITAL COST INITIAL RESTART DEFERRED CAPITAL ● Key updates to the initial capital schedule: ESTIMATES CAPEX5 (YEARS 1 – 2)5 − Grid connection and sub-station upgrades executed acros
Slide 15: Kayelekera Life of Mine metrics
Kayelekera Life of Mine metrics PRODUCTION AND OPERATING COSTS1 OPERATIONAL METRICS1,2,3 ● No change to LOM production of 19.3Mlbs over 10 years2 Ramp Up Mining Stockpile ● Steady-state C1 cash cost of US$34.5/lb compared to US$29.1/lb in the DFS2,3,4, the Phase Phase5 Phase primary drivers of the i
Slide 16: Kayelekera development plan
Kayelekera development plan Plant and equipment represents more than US$200m in sunk capital and a significantly higher replacement cost 1. ROM Feed / Ore Sorter 2. Jaw Crusher 3. SAG Mill 20 4. Process Water Tank 21 9 19 5. Pre-leach Thickener 12 15 6. Leach 11 8 14 7. Resin-In-Pulp Feed 10 16 7 8.
Slide 17: Kayelekera roadmap to production
Kayelekera roadmap to production The accelerated production plan brings forward first U3O8 production to Q3 20251,2 Q3 24 Q4 24 Q1 25 Q2 25 Q3 25 Q4 25 Q1 26 Q2 26 MDA Development FEED Initial offtake Mining contractor appointment Contracting Build contract portfolio ● Calciner Procurement
Slide 18: Next steps at Kayelekera
Next steps at Kayelekera Lotus has commenced site works at Kayelekera ● Lotus Board has approved long lead item orders, and the mobilisation of onsite operational and maintenance teams has commenced ● Tools, mobile equipment and construction crews have arrived on site − Early works at the camp and p
Slide 19: Offtake strategy
Offtake strategy Lotus is targeting a balanced offtake portfolio across fixed, market linked and spot prices LOTUS OFFTAKE PHILOSOPHY TARGET OFFTAKE CONTRACT DISTRIBUTION (% OF OFFTAKE PORTFOLIO) ● Fixed price escalated to cover more than half of expected cash operating costs Average over first 4 ye
Slide 20: Lotus has secured an MDA with the Government of Malawi
Lotus has secured an MDA with the Government of Malawi The MDA guarantees 10 years of protection against any detrimental changes to the fiscal regime1 MDA SECURES A STABLE FISCAL REGIME FOR THE OPERATIONS GOVERNMENT SUPPORTIVE OF DEVELOPMENT ● MDA guarantees a Stability Period of 10 ● Rio Tinto rece
Slide 21: Letlhakane Overview
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Slide 22: Letlhakane development to closely follow Kayelekera
Letlhakane development to closely follow Kayelekera A large/long life, high value uranium project in a resource friendly mining jurisdiction ● Globally significant uranium Mineral Resource (118Mlb U3O8, RPEEE basis) − In the top mining jurisdiction in Africa, and top 4 globally1 − Mining Licence and
Slide 23: Equity Raising Overview
3 EQUITY RAISING OVERVIEW
Slide 24: Equity raising overview
Equity raising overview Offer structure and ● Non-underwritten Institutional Placement to raise approximately A$110 million (“Placement or Offer”), comprising: size – A placement of up to 267.6 million New Shares to raise up to approximately A$66.9 million utilising Lotus’ existing placement capacit
Slide 25: Sources and uses
Sources and uses Lotus has announced a A$110m Placement which is expected to fully fund1 Kayelekera through to first production SOURCES AND USES2,3 USE OF FUNDS Sources of Funds A$m US$m4 ● Equity raising proceeds would be used to fund: − The initial capital to fund Kayelekera to first production Ca
Slide 26: Equity raise timetable
Equity raise timetable Event Date1 Record date for eligibility to participate in SPP 7:00pm (Sydney time), Monday, 21 October 2024 Trading halt Tuesday, 22 October 2024 Launch of Placement and Investor Presentation Tuesday, 22 October 2024 Trading halt lifted and announcement of completion of Capita
Slide 27: Proforma capital structure
Proforma capital structure Upon completion of the equity raise, Lotus will have a strong net cash position of A$150m1 (before Placement costs) Pro-Forma Pro-Forma Unit Current Impact of Offer (nil SPP) (A$15m SPP) No of Ordinary Shares2 m 1,834 440 2,274 2,334 Cash and Cash Equivalents3 A$m 25 110 1
Slide 28: Key Risks
4 KEY RISKS
Slide 29: Key risks
Key risks Introduction There are a number of risks, both specific to the Company and of a general nature, which may, either individually or in combination, affect the future operational and financial performance of the Company and the mining industry in which it operates, and the value of its shares
Slide 30: Key risks
Key risks 4. Speculative Nature of Mineral Exploration and Development The nature of exploration and development of mineral resources is speculative and by nature contains elements of significant risk which even a combination of experience, knowledge and careful evaluation may not be able to be adeq
Slide 31: Key risks
Key risks 7. Funding risk Exploration and development of the various properties in which Lotus holds interests depends on the Company’s ability to obtain funding through joint ventures, debt funding, equity financing or other means. In addition, Lotus is required in the ordinary course of business t
Slide 32: Key risks
Key risks 10. Regulatory The Company’s exploration and any future development activities are subject to extensive laws and regulations relating to numerous matters, including: resource extraction licence, protection of the environment and rehabilitation, taxation, employee relations, health and work
Slide 33: Key risks
Key risks 13. Reliance on Key Personnel The Group’s prospects depend in part on the ability of its executive officers, senior management and key consultants to operate effectively, both independently and as a group. The loss of any of the Group’s key personnel, the inability to recruit necessary sta
Slide 34: Key risks
Key risks 15. Environmental Liabilities Uranium exploration and mine development is an environmentally hazardous activity which may give rise to substantial costs for environmental rehabilitation, damage control and losses. The Company’s operations may use hazardous materials and produce hazardous w
Slide 35: Key risks
Key risks 18. Logistics Lotus depends on the availability and affordability of reliable transportation facilities, infrastructure (in particular the quality of roads and bridges) and certain suppliers to deliver its product to market. A lack of these could impact on Lotus’ production and development
Slide 36: Key risks
Key risks 21. Supply Chain and Counterparty Risk Kayelekera operates within a complex supply chain. Lotus depends on suppliers of raw materials, services, equipment and infrastructure to ensure its mine and process plant can operate and on providers of logistics to ensure products are delivered. Fai
Slide 37: Key risks
Key risks 25. Placement Risk Lotus has entered into a placement agreement with the Joint Lead Managers (Placement Agreement). If certain events occur, then the Joint Lead Managers may terminate the Placement Agreement. The events which may trigger termination of the Placement Agreement include (but
Slide 38: Key risks
Key risks General Risks 1. Share Price Fluctuations Lotus’ shares carry no guarantee in respect of profitability, dividends, return of capital, or the price at which they may trade. The value of Lotus shares will be determined by the securities market and will be subject to a range of factors beyond
Slide 39: Key risks
Key risks 5. Equity dilution Lotus may elect to issue Lotus shares or other securities in Lotus in the future. While Lotus will be subject to the constraints of the ASX Listing Rules regarding the percentage of capital that it is able to issue within a 12 month period (other than where exceptions ap
Slide 40: International Offer Restrictions
5 INTERNATIONAL OFFER RESTRICTIONS
Slide 41: International offer restrictions
International offer restrictions This document does not constitute an offer of New Shares of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or sold, in any country outside Austral
Slide 42: International offer restrictions
International offer restrictions Canada (British Columbia, Ontario and Quebec provinces) This document constitutes an offering of New Shares only in the Provinces of British Columbia, Ontario and Quebec (the “Provinces”), only to persons to whom New Shares may be lawfully distributed in the Province
Slide 43: International offer restrictions
International offer restrictions Cayman Islands This document may be distributed, and the New Shares may be offered and sold, only from outside the Cayman Islands to institutional and professional investors in the Cayman Islands. No offer or invitation to subscribe for New Shares may be made to the
Slide 44: International offer restrictions
International offer restrictions Liechtenstein This document has not been, and will not be, registered with or approved by the Financial Market Authority of Liechtenstein. Accordingly, this document may not be made available, nor may the New Securities be offered for sale, in Liechtenstein except in
Slide 45: International offer restrictions
International offer restrictions Singapore This document and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this document and any other document or materials in co
Slide 46: International offer restrictions
International offer restrictions United Arab Emirates This document does not constitute a public offer of securities in the United Arab Emirates and the New Shares may not be offered or sold, directly or indirectly, to the public in the UAE. Neither this document nor the New Shares have been approve
Slide 47: International offer restrictions
International offer restrictions United States This document does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States. The New Shares have not been, and will not be, registered under the US Securities Act of 1933 or the securities laws of any state
Slide 48: Annexure
7 ANNEXURE
Slide 49: Lotus Board of Directors
Annexure 1: Lotus Board of Directors The Board and Greg Bittar have agreed that Greg will join the Board (on revised terms to be agreed) as Managing Director at a mutually agreeable time during FY2025 Michael Bowen Grant Davey Keith Bowes Dixie Marshall Mark Hanlon Non-Executive Chairman Executive D
Slide 50: ESG and sustainability: Making a real difference in Malawi and Botswana
Annexure 2: Making a real difference in Malawi and Botswana ESG and sustainability Provides and maintains Continues to implement the Published our UDHR Statement: power and water to the mosquito abatement We value the fundamental human rights HEALTH ESG is a key focus for lotus Kayelekera Medical Cl
Slide 51: Consolidated uranium Mineral Resources & Ore Reserves
Annexure 3: Consolidated uranium Mineral Resources & Ore Reserves Grade U3O8 U3O8 1. See ASX announcements dated 15 February 2022 and 9 June 2022 for information on the Kayelekera and Livingstonia Mineral Resource Project Category Mt (U3O8 ppm) (M kg) (M lbs) Estimates. Lotus confirms that it is not
Slide 52: Malawi
Annexure 4: Malawi “The Warm Heart of Africa” ● Rio Tinto recently invested a further A$19m (now a 19.9% shareholder) in Sovereign Metals, which holds one of the largest rutile projects globally, following its initial US$40m investment ● One of the smallest countries in Africa with a population ~21
Slide 53: Botswana
Annexure 5: Botswana “Botswana is a top mining jurisdiction in Africa” ● 2023 Fraser Survey1 − Overall global ranking of 4, and top three ranking in Africa consistently over the last 5 years ● Mining accounts for 21% of current GDP2 and is critical for continued economic growth − Skilled mining work
Slide 54: Contact Us
Contact Us Greg Bittar For further information visit: www.lotusresources.com.au Chief Executive Officer www.lotusresources.com.au LOT:ASX | LTSRF:OTCQX
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