Lotus Resources Ltd.

Lotus Resources Ltd. is a junior uranium development company headquartered in Perth, Australia, operating primarily in Africa. The company's portfolio consists of 2 development projects. Key assets include Letlhakane and Kayelekera. The organization's business model is centered on a dual-asset approach, combining a production-ready asset with a large-scale, long-term growth asset. The operational strategy for the near-term asset leverages existing plant and infrastructure from a previous operational period, aiming for an accelerated and cost-effective restart of production. Processing capabilities and technological advantages are being advanced through a Front-End Engineering and Design program and various process optimization workstreams, including ore beneficiation and acid management assessments. This approach is designed to lower operating costs and enhance project economics. The company's competitive positioning is built on its potential to become a long-term supplier with a multi-decade production profile, supported by one of the largest undeveloped mineral resources globally. Operational synergies are sought by applying technical knowledge gained from one asset to refine the processing route for the other, particularly as they share similar regional geology. Risk management is addressed through securing stable fiscal regimes via government agreements and diversifying its project pipeline across different development stages.

Strategic focus centers on advancing core objectives across 2 key areas: preparing a primary asset for a production restart and executing a resource growth plan for a second major asset. Near-term priorities include securing offtake agreements with global utilities and traders, with a strategy to balance revenue certainty for debt providers with price exposure for equity investors. The enterprise is progressing a preferred financing strategy, having appointed a debt advisor to assess cost-effective debt options for restart capital and working capital requirements. A key initiative involves connecting the near-term asset to a national grid to access cheaper, predominantly hydro-sourced power, which is a critical component of both the low-cost and low-carbon strategy. For the long-term growth asset, the strategy involves a significant infill drilling program aimed at converting inferred resources to higher-confidence classifications. This is complemented by process optimization work, including ore beneficiation assessments and metallurgical test work, to define a preferred processing flowsheet and development pathway through a new scoping study.

Executive leadership and board structure were recently reorganized to align with the transition from development to the project delivery phase. The management team was strengthened with the appointment of Greg Bittar as Chief Executive Officer, an executive with significant experience in capital markets, debt advisory, and project development. Keith Bowes, the former Managing Director, transitioned to Technical Director to focus on project execution and development, while Grant Davey assumed an Executive Director role to leverage his project development and operations experience. The board is composed of 5 directors, including a Non-Executive Chairman with extensive corporate and securities law experience. Governance is managed through 3 board committees: Audit and Risk; Nomination and Remuneration; and Environment, Social, and Governance. The Nomination and Remuneration Committee was recently reconstituted to consist entirely of independent directors. The board has acknowledged the importance of strengthening independence and plans to appoint additional suitably qualified and independent directors as the company matures.

The organization's sustainability approach is formalized through its annual Sustainability Report, with the third edition prepared in reference to the Global Reporting Initiative Sustainability Standards. The company is advancing its alignment with the Taskforce for Climate-related Financial Disclosure framework and has begun transitioning to the Australian Sustainability Reporting Standards. In its first S&P Global Corporate Sustainability Assessment, the entity achieved an ESG Score of 37, placing it in the 64th percentile of its industry in February 2024. Governance is overseen by a board-level ESG Committee, supported by an ESG Manager. Community engagement initiatives include sponsoring teachers at local schools, providing power and water to a village health center, undertaking mosquito spraying programs, grading local roads, and supplying seedlings for vegetation restoration. The company also provided essential school furniture, uniforms, and textbooks to several schools. Workplace safety remains a key focus, with a pro-active approach to incident prevention through work permits, risk assessments, and daily safety talks, although a TRIFR target was not met in the financial year, prompting further management focus.

In November 2023, the company completed a merger with A-Cap Energy Limited through a Scheme of Arrangement, a transaction designed to create a leading, focused player by combining a production-ready asset with a large-scale development asset. This acquisition brought A-Cap Energy's subsidiaries, including Lotus Marula Pty Ltd, Wilconi Pty Ltd, and Lotus Marula Botswana Proprietary Limited, under the group's control. Following the merger, the board determined that the interest in the Wilconi Nickel-Cobalt Project, held by subsidiary Wilconi Pty Ltd, was non-core to its strategy. Consequently, the group withdrew from the associated Joint Venture Agreement, with the withdrawal becoming effective on 30 May 2024, to maintain focus on its primary projects. The group's operational structure includes an 85% ownership interest in its key operating subsidiary, Lotus (Africa) Limited. The remaining 15% is held by the government of the host country, as per the finalized Mine Development Agreement.