The Lotus Resource Ltd (ASX: LOT) share price has jumped out of the starting blocks this week and landed firmly in the green in early trade on Monday.
Lotus shares are now exchanging hands at 27.5 cents apiece, an 14.58% gain from the open after racing up 18% earlier this morning.
While the S&P/ASX 200 Index (ASX: XJO) has slipped 2.3% into the red over the last month, Lotus shares are 72% in the green.
There is a number of catalysts in Lotus’ growth narrative that have led us to this point – let’s cover them now.
Quick recap on Lotus Resources
Lotus is in the business of exploration and development of minerals and has projects in both Malawi and Australia.
Its main interest is its 85% interest in the Kayelekera Uranium project in Malawi. The company’s recent studies have demonstrated this site has the potential to be a uranium project that can recommence production in the future.
At the time of writing, Lotus has a market capitalisation of $263 million.
What tailwinds have been driving the Lotus Resources share price?
To understand the picture of what’s behind Lotus Resources shares, we have to zoom out a few months.
Back in April, Lotus confirmed the divestment of its Hylea Cobalt project to Sunrise Energy Metals Limited (ASX: SRL).
The sale was for a $2.5 million cash and share consideration for which the company realised a blend of $1 million in cash and $1.5 million Sunrise shares.
Lotus then announced “highly encouraging” results from its “ore sorting testwork” at its Kayelekera Project.
This kind of testing is not essential for production, however, has the “potential to materially improve the project”.
In July, the company advised that testwork results from ore sorting had “exceeded expectations”, with “uranium grades of the ore increasing by up to 100%” when compared to “the feed sample”.
Finally, in late August, Lotus advised that its “second phase of ore sorting testwork” had “improved the initial strong results” announced above.
Specifically, it stated that “recoveries also improved to 92%” alongside the increase to feed sample in the first ore sorting testwork.
From here, the company expects to start a feasibility study using the results from its ore sorting regime.
Lotus Resources share price snapshot
The Lotus Resources share price has climbed 120% over this year to date, extending the return over the last 12 months to 175%.
These results have far outpaced the S&P/ASX 200 Index (ASX: XJO)’s gain of around 25% over the past 12 months.
The post Why the Lotus Resources (ASX:LOT) share price is jumping 18% on Monday appeared first on The Motley Fool Australia.
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The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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