Lotus Resources (ASX:LOT) has signed a sale and purchase agreement for approximately 173,000 pounds of off-specification uranium ore product inventory, with delivery to be made on Free on Board terms ex Walvis Bay, Namibia, to a US-listed global critical minerals company.

Key Points

  • Sale of approximately 173,000 lbs of uranium ore product to a US-listed global critical minerals company
  • Delivery on Free on Board (FOB) terms ex Walvis Bay, Namibia
  • The sale has been agreed at a discount to contract prices due to the product's lower specification
  • Based on current schedules, the transaction is anticipated to be Kayelekera's second product shipment

Off-Specification Product Background

The approximately 173,000 lbs of uranium ore product was produced during the Kayelekera mine's ramp-up period and was determined to be off-specification due to higher levels of product impurities, rendering it not deliverable to a converter in the near term. This determination was previously disclosed by the company in updates dated 30 July 2026 and 8 October 2026. The majority of the material classified as off-specification was produced during the early stages of commissioning and restart activity at the Kayelekera operation.

Sale Terms and Shipment Timeline

The sale and purchase agreement has been executed on commercial terms, with the sale price agreed at a discount to contract prices reflecting the product's lower specification. The FOB delivery terms at Walvis Bay, Namibia apply to the transaction. The company is currently packaging the product for shipment and is targeting despatch from site within the next month to align with shipping schedules. Based on current schedules, the shipment is anticipated to represent Kayelekera's second product shipment.

Product Quality and Operational Improvements at Kayelekera

According to the filing, the company considered a range of options to process, blend or sell the off-specification material before executing the sale and purchase agreement. The filing states that product quality performance has improved significantly as operational improvements and optimisation initiatives have been implemented and continue to be pursued. The FOB delivery terms at Walvis Bay were noted in the filing as providing near-term liquidity that further supports the ramp-up and accelerates the company's transition to positive operating cash flow.