Lotus Resources : Quarterly Activities & Appendix 5B cash flow report

ASX Announcement

29 April 2022

QUARTERLY ACTIVITIES REPORT

Quarter Ended 31 March 2022

Lotus Resources Limited (ASX: LOT, OTCQB: LTSRF) (Lotus or the Company) is pleased to provide its quarterly activities report for the quarter ended 31 March 2022. During the Quarter, the Company's activities focused on the advancement of the Company's Kayelekera Uranium Project (Kayelekera or the Project), located in Malawi.

HIGHLIGHTS

• • The Mineral Resource Estimate (MRE) for the Kayelekera Project increased by 23% to 46.3Mlbs at 500 ppm U3O8 (Table 1)

  - The Measured and Indicated resources account for 81% of the total MRE (31.8Mt at 530ppm U3O8 for 37.4Mlbs U3O8)

• • The updated MRE will be incorporated in the new mine plan for the Definitive Feasibility Study (DFS) which remains on track for mid-2022

• • Completion of a 35-hole (4,533 metre) reverse circulation (RC) drill program at Kayelekera (with results included in the updated MRE), which included the following:

  • - 2m at 2,541ppm U3O8 from 9m (LRC021)

  • - 3m at 829ppm U3O8 from 13m (LRC022)

  • - 3m at 919ppm U3O8 from 53m (LRC023)

  • • Subsequent to the end of the quarter, the Company received exploration results from a 29-hole (3,395 metre) RC drill program at the Livingstonia prospect, located 90km from Kayelekera. Results included:

    • - 3m at 733 ppm U3O8 from 94m (LIV003)

    • - 4m at 983ppm U3O8 from 87m (LIV007)

    • - 4m at 636ppm U3O8 from 74m (LIV011)

• • Preparation of an MRE for Livingstonia has commenced

• • The Company made solid progress on the DFS, which remains on track to be released by mid-2022

• • Further strengthening of the board and management team, with the appointment of a new Non-Executive Director (Dixie Marshall), CFO and Company Secretary

• • As at 31 March 2022, Lotus had cash of $8.5 million (unaudited), exclusive of restricted cash of $13.5 million

-

The cash position decreased by $5.0m compared to the previous quarter with expenditures focused on positioning Kayelekera for a timely restart of operations and a $2.7 million scheduled payment relating to the acquisition of the Project

KAYELEKERA RESOURCE INCREASES BY 23% TO 46.3MLBS

During the quarter, the Company announced an increase in the MRE for Kayelekera to 46.3Mlbs at 500ppm U3O8, a 23% increase compared to the previous MRE.1

The updated MRE is summarised in Table 1 below, with 9% (by metal content) classified as Measured, 72% classified as Indicated and 19% classified as Inferred.

The updated MRE represents a 3% increase on the reported global metal content to the previous MRE (see ASX announcement 26 March 2020) when using the previous 300ppm U3O8 reporting cut-off grade and a further 20% increase when using the updated cut-off grade of 200ppm U3O8 as shown in Table 2.

The in-situ Mineral Resources have been estimated at a number of cut-off grades using Multiple Indicator Kriging with block support correction (refer Table 3 for in-situ pit resources exclusive of stockpiles). The primary model panel dimensions are 20mE x 20mN x 2mRL. The estimates assume that final grade control sampling at approximately 3.5mE x 3.2mN x 1mRL spacing will be available prior to final mining and a selective mining unit of approximately 3mE x 3mN x 2mRL. Stockpile values have been taken from surveyed stockpiles with average grades based upon grade control tracking.

In all tables that contain details of the MRE, metal content is based on contained metal in the ground and take no account of mining or metallurgical recoveries, mining dilution or other economic parameters.

Table 1: Kayelekera Updated MRE - February 20221

Reported above a 200ppm U3O8 lower cut-off for in-situ material and the low-grade stockpiles

Mt	Grade (U3O8 ppm)	U3O8 (M kg)	U3O8 (M Lb)
Measured Measured - RoM Stockpile1 Indicated Inferred	0.9 1.6 29.3 8.3	830 760 510 410	0.7 1.2 15.1 3.4	1.6 2.6 33.2 7.4
Total	40.1	510	20.4	44.8
Inferred - LG Stockpile2	2.4	290	0.7	1.5
Total All Material	42.5	500	21.1	46.3
1 RoM stockpile has been mined and is located near mill facility. 2 Low-grade material has been mined and placed on the low-grade stockpile and are considered potentially feasible for blending or beneficiation, with studies planned to further assess this optionality. Figures have been rounded. Grade has been determined from a combination of XRF and downhole logging derived eU3O8 grades. Insitu Mineral Resources are depleted for mining to 31 December 2013 when mining ceased; stockpiles have been depleted to the end of processing in June 2014. Metal contents are based on contained metal in the ground and take no account of mining or metallurgical recoveries, mining dilution or other economic parameters. An insitu bulk density of 2.29g/cm3 was applied for Arkose material and 2.20g/cm3 for mudstone material to all blocks within the model

1 ASX announcement 15 February 2022.

Table 2: Kayelekera Previous Superseded Mineral Resource (note: JORC 2012)1

Reported above a 300ppm U3O8 cut-off (note: figures have been rounded)

Mt	Grade (U3O8 ppm)	U3O8 (M kg)
Measured	0.7 1.6 18.7	1,010 760 660	0.7 1.2 12.3
Measured - RoM Stockpile
Indicated
Inferred	3.7	590	2.2
Total	24.6	660	16.3
Inferred - LG Stockpile	2.4	290	0.7
Total All Material	27.1	630	17.0
1 ASX announcement 26 March 2020.

Table 3: 2022 Kayelekera Mineral Resource In-Situ Resource1 Reported above various U3O8 cut-offs (note: figures have been rounded)

cut-offMeasured Mineral Resource

Indicated Mineral Resource

Inferred Mineral Resource

Total In-Situ Mineral Resource;

ppmMtGrade (U3O8 ppm)

M kg U3O8

Mt

Grade (U3O8 ppm)

M kg U3O8

Mt

Grade (U3O8 ppm)

M kg U3O8

MtGrade (U3O8 ppm)M kg U3O8

Mlb U3O8

100 200 250

1.2 0.9

650 0.8

830 0.7

51.4 29.3

350 18.2

510 15.1

24.3 8.3

230 5.6

410 3.4

76.9 38.5

320 500

24.6 54.2 19.2 42.3

0.8

920 0.7

23.5

590 13.8

5.6

490 2.8

29.9

580

17.2 38.0

0.7

1,010 0.7

19.2

660 12.6

4.1

570 2.4

24.0

650

15.6 34.5

0.6

1,090 0.7

16.0

720 11.6

3.2

640 2.0

19.8

720

14.3 31.4

0.5

1,170 0.6

13.5

790 10.6

2.5

720 1.8

16.6

790

13.0 28.8

0.5

1,300 0.6

9.9

910 9.0

1.7

840 1.4

12.1

910

11.0 24.3

0.4

1,430 0.6

7.5

1,030 7.7

1.2

960 1.2

9.1

1,030

9.4 20.7

0.3

1,550 0.5

5.8

1,140 6.6

0.9

1,060 1.0

7.0

1,150

8.0 17.7

0.3

1,660 0.5

4.5

1,250 5.6

0.7

1,170 0.8

5.5

1,260

6.9 15.2

0.2

1,890 0.4

2.8

1,470 4.1

0.4

1,370 0.5

3.4

1,490

5.0 11.1

0.1

2,410 0.3

0.9

2,030 1.8

0.1

1,850 0.2

1.1

2,060

2.3 5.0

0.1

2,820 0.2

0.3

2,600 0.8

0.0

2,350 0.0

0.4

2,630

1.1 2.4

1 These figures include only in situ pit mineral resources, no existing RoM stockpiles are included. Figures have been rounded. Grade has been determined from a combination of XRF and downhole logging derived eU3O8 grades. In situ Mineral Resources are depleted for mining to 31 December 2013 when mining ceased. Metal contents are based on contained metal in the ground and take no account of mining or metallurgical recoveries, mining dilution or other economic parameters.

Figure 1: Mineral Resource showing summary classification

The updated MRE will form the basis of a revised mine plan to be incorporated in the Definitive Feasibility Study (DFS), that remains on track for mid-2022.

KAYELEKERA EXPLORATION DRILL RESULTS

During the quarter, the Company received exploration results from a 35 hole, 4,533 metres RC drilling program completed during 2021. Drilling targeted areas peripheral to the existing Mineral Resource to test the margins of the resource for further extensions, together with limited exploratory testing of radiometric anomalies located within 3km of the existing processing facility.

Significant results from the Kayelekera exploration program are listed in Table 4 below, with the location of these holes highlighted in Figure 2.

Table 4: Kayelekera Drilling - Significant Intersections2

Hole ID	Easting	Northing	RL	Depth (m)	From (m)	To (m)	True Thickness (m)	U (ppm)	U (%)	U3O8* (ppm)
LRC012	576730	8895913	883	100	3	5	2	481	0.05	567
includes	4	5	1	506	0.05	597
LRC015	576611	8895760	885	121	10	11	1	551	0.06	650
LRC018	576402	8895639	922	139	46	50	4	457	0.05	539
includes	48	50	2	596	0.06	702
LRC020	576402	8895639	922	139	45	46	1	558	0.06	658
LRC021	576664	8896006	893	52	9	11	2	2,155	0.22	2,541
LRC022	576709	8895962	894	70	13	16	3	703	0.07	829
LRC023	576299	8895604	939	142	53	56	3	780	0.08	919
includes	53	55	2	954	0.10	1,124
LRC025	576020	8895648	968	169	52	54	2	372	0.04	438
and	122	123	1	1,480	0.15	1,745
LRC027	576317	8895697	931	130	61	68	7	413	0.04	488
includes	62	63	1	522	0.05	616
and	65	67	2	587	0.06	692
LRC029	575829	8895733	968	145	111	112	1	604	0.06	712
LRC030	575671	8895859	960	145	84	86	2	481	0.05	567
and	92	94	2	458	0.05	540
includes	92	93	1	532	0.05	627
LRC033	575895	8894045	977	166	28	30	2	693	0.07	817
includes	28	29	1	1,010	0.10	1,191

* calculated U3O8

Note: combined reporting criteria of minimum thickness 1m at 200ppmU cut off

Results from this program were subsequently included in the updated MRE for Kayelekera (46.3Mlbs at 500ppm U3O8), as outlined above.

2 ASX announcement 15 February 2022.