S&P/ASX 300 Index (ASX: XKO) uranium stock Lotus Resources Ltd (ASX: LOT) looks well-placed to deliver some outsized returns in the year ahead.
That's according to a new research report from the team at Macquarie Group Ltd (ASX: MQG).
Lotus Resources shares are currently valued at 22.5 cents apiece.
And they won't be going anywhere today.
The ASX 300 uranium stock entered a trading halt this morning after posting a three-day share price gain of 21.6%. Lotus Resources requested the trading halt pending an announcement regarding a capital raise.
Shares are expected to resume trading no later than Friday.
Despite the big run higher over the last three trading days, Lotus Resources shares remain down 2.2% over the past 12 months.
But if Macquarie has it right, the year ahead should be much more rewarding for shareholders.
Here's why.
ASX 300 uranium stock kicks off yellowcake production
The Lotus Resources share price rocketed 10.0% on Monday after the miner reported that it had produced the first U3O8 (yellowcake) from its 85% owned Kayelekera Uranium Mine, located in Malawi.
This marked the first yellowcake at Kayelekera since the project was put on care and maintenance by its previous owner in 2014.
Management said this was the final key step in Kayelekera's successful processing plant commissioning. Lotus Resources plans to ramp up the project's uranium production to 2.4 million pounds of yellowcake a year in the first quarter of 2026.
That represents a steady-state production level of 200,000 pounds per month.
Commenting on the maiden production news that sent the ASX 300 uranium stock soaring on Monday, Lotus Resources managing director Greg Bittar said, "We are positioned to join the ranks of global uranium producers with the first yellowcake from Kayelekera."
Bittar added:
We can now commence sending our yellowcake to the converters for qualification. Samples are expected to be dispatched in the coming weeks. While these qualification and account reopening processes are finalised, we will continue to focus on ramping up production and building inventory in anticipation of our first uranium shipment later this year.
Why Macquarie expects Lotus Resources shares to outperform
Commenting on Monday's announcement that sent the ASX 300 uranium stock up 10%, Macquarie said:
On the eve of the World Nuclear Association (WNA) conference week in London, LOT announced first drum of uranium from the restarted Kayelekera processing plant in Malawi. It expects to achieve first sales by year-end (i.e., December quarter) via Dar es Salaam port in Tanzania (i.e., different route to the Walvis Bay route taken previously by Paladin when the asset was originally developed).
The broker maintained its outperform rating on Lotus Resources shares but dropped its target price to 35 cents a share from 38 cents a share.
Still, that represents a potential upside of 55.6% from current levels.
Connecting the dots on its bullish outlook for the ASX 300 uranium stock, Macquarie said:
LOT remains the cheapest producing uranium stock in our coverage (on DCF [discounted cash flow] implied price); we believe a re-rating vs peers (closing the gap) should occur as Kayelekera proves its ramp up, delivery & cashflow.
