Lotus Resources Ltd (ASX: LOT) shares are having a strong session on Thursday.
In morning trade, the ASX uranium stock is up 9% to 17.5 cents.
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Why is this ASX uranium stock jumping?
The catalyst for today's strong gain has been the release of a production update for the Kayelekera Mine in Malawi.
According to the release, in November, the processing plant achieved pleasing throughput and recovery levels.
As a result, management advised that steady state operational production level remains targeted for the first quarter of 2026.
One slight disappointment is that the initial ramp-up of processing in November and December has been impacted by sulphuric acid availability and supply chain challenges.
Management notes that the sulphuric acid supply issues have arisen due to production challenges in Zambia, which was the primary source of supply. The company has actively increased the number of suppliers contracted for the supply of sulphuric acid and additional supplies are now being sourced out of South Africa.
In addition, the ASX uranium stock's acid plant rebuild project will address these acid supply constraints. The acid plant rebuild remains on schedule, with commissioning expected to commence in early 2026. It will allow the production of sulphuric acid from sulphur, which is more reliably supplied.
The company has used the shutdown time to address routine plant commissioning items, undertake plant optimisation initiatives, and regular maintenance, which is supporting pleasing throughput and recovery levels.
It also advised that product qualification is progressing with its first shipment of product now expected to occur late in the first quarter of 2026 and full qualification with at least one converter expected early in 2026.
The ASX uranium stock remains in a strong position financially. It had a strong balance sheet at the end of November, with $73.9 million in cash.
Production confidence
Commenting on the company's progress at the Kayelekera Mine, Lotus' managing director, Greg Bittar, said:
Production for the planned operating time in November has been very pleasing and provides us with the confidence that nameplate throughput levels and other key production parameters can be achieved. We also continue to work with the converters and look forward to our first converter account being opened which we expect in early 2026. This then allows the final preparations for despatch of inventory from site.
