Lotus Resources Ltd (ASX: LOT) shares could be a great way to gain exposure to uranium.
That's the view of analysts at Macquarie Group Ltd (ASX: MQG), which are bullish on the uranium developer.
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What is the broker saying?
Macquarie notes that Lotus Resources has been battling sulfuric acid supply issues, which is slowing the ramp up of the Kayelekera operation.
However, it was pleased to see that the company's acid plant is making good progress and will be onstream soon. It said:
LOT has experienced sulfuric acid supply issues from its Zambian supplier, which appears to be due to lower Zambia & Congo copper production, truck shortages and we expect also an element of demand pull from the gold sector. LOT now has a second supplier out of South Africa (10 days' drive) to supplement its Zambia contract (5 days' drive) which should help to stabilise its acid supply chain, however in any event LOT's relocated Kayelekera acid plant (now relocated to better ground) has made good progress and is due to onstream in February.
As a result of the above, Macquarie has pushed back its export expectations. It adds:
Given the slower ramp in December quarter (acid issues) and the time still required for product accreditation (by western converters), we push back first export to the June quarter 2026 (Apr-Jun) for modelling purposes. We acknowledge LOT may be able to enter into commercial arrangements (eg. physical swaps or loans) to bring this forward but at this stage we don't factor this in.
Should you buy this ASX uranium stock?
Macquarie remains positive on the uranium developer despite this little hiccup, noting that it doesn't materially impact its investment case.
According to the note, the broker has retained its outperform rating and 28 cents price target on Lotus Resources shares.
Based on its current share price of 17.2 cents, this implies potential upside of almost 65% for investors over the next 12 months.
Commenting on its outperform rating, Macquarie said:
Outperform. Delays to first sales at Kayelekera now validates LOT's decision to raise additional equity in September, in our view. Given the additional capital was already raised, the cut to production ramp doesn't materially alter the investment case.
Valuation: Our SOTP-based TP is overall unchanged. Catalysts: Uranium prices, Kayelekera offtake contracts, Kayelekera first shipment (late CY25), Letlhakane PFS (2HCY26).
