Kayelekera, which was operated between 2009 and 2014 before being shuttered due to weak uranium prices, now hosts 27.1 million tonnes at 630 parts per million for 37.5 million pounds of uranium oxide, up from 28.7Mlb estimated a year ago when Lotus agreed to buy the project.
The measured or indicated estimates comprise 83%, or 31.2Mlb, leaving 6.3Mlb in the less certain inferred category.
The primary driver for the resource upgrade was the identification of a previously unmodelled high-grade basal arkose unit beneath the pit, and inclusion of existing run-of-mine and low-grade stockpiles created while Kayelekera was in production.
Given the stockpiles have already been mined and sit near the processing plant, they would be a low-cost obvious source of initial ore.
Lotus said the increased resources would extend the life of the operation, if it is successful in resuming operations, leveraging off the existing plant and infrastructure.
Kayelekera has had more than $200 million invested to date, but the junior secured a 65% stake for just $1.8 million in cash and shares and a promise of a further $3 million in three years.
Paladin owns 14.5% of Lotus.
While Lotus has defined several regional exploration targets, its most immediate plan is to conduct mining studies with a focus on reducing costs and potential use of beneficiation and sorting
techniques for the low-grade ore.
The restart, which is estimated to cost around US$60 million, comes at a time when there is some price action in uranium spot prices, with Cameco's recent decision to suspend its Cigar Lake mine in Canada due to COVID-19, helping push the spot price to $26/lb.
Canaccord Genuity is forecasting a 45% jump in uranium demand by 2035 and a rise in prices to $50/lb from 2025.
Contract prices are typically higher than the spot price.
In operation, Kayelekera had cash costs estimated at $40/lb, higher than the expected $30/lb - in part because importing sulphur was more costly than expected, and the yellowcake was railed across Africa to Namibia for export. A grid power connection could also reduce costs.
A feasibility study is expected in the September quarter.
BW Equities last week initiated coverage of Lotus, describing it as a lower risk option on higher uranium prices.
BW values Lotus at A7.5c, well above current pricing of 2.7c, which values the mining hopeful at $16.8 million.