The Lotus Resources share price is tumbling today, down 7% in early afternoon trade. We take a look at the company’s latest announcement.
The post Lotus Resources (ASX:LOT) share price tumbles 7% today but is still up 170% in a year appeared first on The Motley Fool Australia. –
Lotus Resources Ltd (ASX: LOT) shares are tumbling today, down 6.9% in early afternoon trade after falling as much as 13% earlier in the day. But even with the partial bounce back of the Lotus share price, its falls are still significantly greater than the 2.7% loss seen on the wider All Ordinaries Index (ASX: XAO) at time of writing.
Today’s share price moves come following the release of the company’s quarterly activities report for the quarter ending 31 December.
What did Lotus Resources report this morning?
In an announcement to the ASX this morning, Lotus reported it had completed its restart scoping study, confirming the potential for its Kayelekera Project to support long-term uranium production.
The company indicated a low initial capital cost of US$50 million (AU$66 million), with an initial capital intensity of US$21 per pound of annual production. According to the release, this would make Kayelekera one of the lowest capital cost projects ready to restart uranium production.
Lotus estimates the mine could produce for 14 years, or yield 23.8 Mlbs of U3O8. The company also sees opportunities to lower costs by reducing power and acid recovery costs and upgrading feed ore.
Lotus Resources stated it has identified two priority targets where no historical drilling has yet taken place. Both are within “easy trucking distance” of the mine.
Looking ahead, Lotus plans new exploration work in the next quarter to assess rare earths and rutile potential north of its Kayelekera Project.
Lotus completed a US$5 million capital raising during the reported quarter, with both Australian and North American shareholders taking part. As at 31 December, the company had $19.5 million of cash (restricted and unrestricted).
Lotus share price and company snapshot
Lotus Resources is a uranium and minerals explorer with a 65% interest in the Kayelekera Uranium Project, located in Malawi. According to a scoping study conducted by the company, Kayelekera has the potential to be a long-term uranium mining operation. From 2009 through to 2014 the mine produced approximately 11Mlb of uranium.
Despite today’s sharp fall, the Lotus share price remains up 4% in 2021. Since this time last year, Lotus shares are up an eye-popping 170%. As for investors who had the foresight (or luck) to buy on 24 March following the COVID inspired selloff? They’ll be sitting on a share price gain of 575%.
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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.