Lotus Resources Ltd (ASX: LOT) shares could offer major upside potential for investors over the next 12 months.
That's according to analysts at Macquarie Group Ltd (ASX: MQG), which are feeling very bullish on the ASX mining stock.
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What did the broker say?
Macquarie was pleased to see that the uranium miner's Kayelekera operation has been processing stockpiled ore. It said:
Kayelekera mill has been processing stockpiled ore from its prior life (initially lower grade to reduce losses). Mining fleet mobilising and set to commence mining fresh ore in 4QCY25. Grid connection expected by end of CY26 (which cuts power costs by US$5-6/lb), and acid plant refurbishment targeting for 1QCY26 completion. LOT has confirmed the existing TSF can be expanded by 12.8Mt, supporting a 10-year operational life.
But arguably the biggest positive is that its metallurgical test work looks to have made its operation for economical. It adds:
Metallurgical test work has supported a 70% reduction in acid reduction (at the cost of a 6-8% reduction in uranium recovery vs A-Cap's 2015 technical study), which would enhance project economics. Infill & extension drilling has commenced (180 holes), targeting advancement of Inferred resources to Measured & Indicated. This will support the PFS, expected to complete in 2HCY26.
In light of the above, the broker has made a major upgrade to its earnings estimates for FY 2026. It said:
Our FY26e EPS estimate is +163% on capitalisation of Kayelekera production costs, and <1% downgrades thereafter on very minor cost adjustments.
Big potential returns for this ASX mining stock
According to the note, Macquarie has reaffirmed its outperform rating on the ASX mining stock with an improved price target of 28 cents.
Based on its current share price of 19.5 cents, this implies potential upside of approximately 44% between now and this time next year.
Commenting on its outperform recommendation, the broker said:
Outperform. LOT offers strong leverage to a rising uranium price via Kayelekera ramp and progress at Letlhakane.
Valuation: Our SOTP-based TP is +4% to $0.28/sh. Catalysts: Uranium prices, Kayelekera offtake contracts, Kayelekera first shipment (late CY25), Letlhakane PFS (2HCY26).
Overall, the broker appears to see Lotus Resources as a great option for investors that are looking for exposure to a uranium market that many are tipping to grow strongly in the future as demand for nuclear power increases to fuel the artificial intelligence boom.
