Good morning, everybody. Just wait for a few people to come in. A little bit of the black sheep of the family here at Precious Metals, offering a uranium story just to diversify from Precious Metals. Lotus is now the next uranium producer in the global uranium space, having started production in September from our Kayelekera project in Malawi. We have two projects, Kayelekera in Malawi and Letlhakane in Botswana. Kayelekera, 85% owned by ourselves, alongside 15% with the government. First production was achieved in September, on budget and on restart timetable as outlined 12 months ago. We have a 10-year mine life, looking to produce 20 million lbs over that 10 years.
We've started up on the processing of stockpiles with our mining expected to start in the coming weeks, looking to achieve steady-state production of 2.4 million lbs per annum, so monthly 200,000 lbs per month by the first quarter of calendar 2026. We see ourselves achieving that run rate. Production upside comes from exploration and also some metallurgical work that we'll do that will allow us to improve the throughput of the certain geological structures, the clay, mudstone structures that we have in the resource base, that we are currently restrained on how much we can put through the plant without reducing the throughput. We do think over time we will get geological, metallurgical upside to this project. Terrifically, in a terrific project, fully funded, into production, supported by contracts to North American utilities that we'll talk about shortly. Letlhakane, we own 100% of.
This is in Botswana, so a much better, much better known mining jurisdiction. This is a larger, longer life uranium opportunity. It's there for a larger uranium, for a higher uranium price, but we are progressing through to a PFS, which we will deliver late next year. At the moment, it's a 114 million lb resource at 360 ppm. We produced a scoping study. We've recently talked about the asset optimisation. We're now drilling again to support the resource upgrade for the PFS. In a stronger uranium price environment, this project has terrific value and terrific strategic appeal. Sorry, let's just—we lost the screen here, but that's fine. From a market cap perspective, like many Australian junior companies, we've got a large number of shares on issue. We'll look to consolidate that shortly. Market cap of about AUD 500 million, $320 million-$340 million U.S.
We've done two equity capital raises in the last 12 months. Most recently, we raised $45 million at $0.19. That really was to move away from relying on debt to fund the restart of Kayelekera. We did not want the restrictions that debt brings, principally around the contracting and off-taking discussions that we are having. We want to remain as uncontracted as we can to take advantage of the view around the uranium price outlook. Kayelekera restart achieved on budget. This was a project that Paladin owned years ago and was put into care and maintenance in 2014. During its time in production, it produced about 10 million lbs. We have got at least another 20 million lbs to go.
We moved quickly late last year to lock in about 35% of our production for four years, 2026 - 2029, under base escalated price contracts, so fixed price contracts, three North American utility counterparties and one trading house, Curzon. We have named one of the North American utilities Public Service Enterprise Group, which has a couple of reactors out in New Jersey. The two others are the larger end of town, but even the PSEG contract, they are investment-grade contracts. Terrific validation around Malawi, terrific validation around the product. The dual asset strategic positioning that we have got with the large resource base, the cash flow from Kayelekera, which we expect to be cash flow positive by the middle of next year, first sales or first dispatch of product later this year or early next year, but there is a long working capital cycle for uranium.
That cash flow will fund the work we need to do on Letlhakane, plus give us plenty of growth capital or capital management flexibility. Organic growth, a lovely, a nice complementary set of two projects and an equity-funded balance sheet. We do not really want to lean heavily on the debt side of the equation. We have all seen how that can unravel, and we want the flexibility around contracting to avoid so we can avoid debt. Terrific team that has been built up both in Perth, where the company's based, but in Africa, where the two projects are based, led by a number of highly skilled engineering personnel with terrific African experience. That allowed us to deliver this restart on the 10-month timetable that we had indicated and on budget. It allowed first production in September.
We've given ourselves until first quarter calendar 2026, so by March next year, to be at our run rate, 200,000 lbs per month. The thematics couldn't be stronger for the uranium sector, whether it be the decarbonisation aspects and what nuclear brings, the demand side of the equation through the China rollout, the potential future demand that comes from SMRs and data-driven and AI-driven demand themes. Terrifically strong on the demand side. Unfortunately, we're seeing, or fortunately, we're seeing supply being challenged. The two largest, Cameco and Kazatomprom, have announced recent pare-backs in their production. Cameco's being very patient around how they approach marketing. They're fully contracted. You've seen a number of stumbles in the junior space. On the supply side, there is nothing else coming to market now until probably 2030 or 2031 when NexGen, which is a magnificent project in Canada, will come online.
That is still years away. There was this window for us to take this care and maintenance project that we acquired, spend $50 million initially on it. We have got another $40 million, which we continue to deploy to optimize the operation and reduce our cost base. We will get our cost base down to about $45 a pound, all-in sustaining cost. The balance sheet equity funded gives us flexibility on the contracting side. We want to continue to ride what you see on the right-hand side. That is, we are seeing a slow tick up in the term price. It is now at $86 a pound. It sat at about $80 for about six months. Before that, it was a lot lower.
Despite the vagaries of the very illiquid, financially driven spot market, you are seeing a constant strengthening of the term market, which is the market that we're interested in. We are not pursuing any more term prices. Whilst the contracting price, whilst that term price is at $86, we think there is higher to go. We are participating in RFPs for market-linked contracts with utility buyers. Terrific balance sheet now. We do need to work up maximum liquidity to fund working capital. There is a four- to five-month payment cycle for uranium by the time it's built up as inventory, dispatched as cargo on ships, landed at converters, and then ultimately transferred to the end buyer.
From the cash-on balance sheet to a very respectable, very modest level of debt that we see on the balance sheet over time, at the moment, we're less than $3 million drawn on an equipment finance facility. Liquidity that will fund the remaining capital will refund other work that we need to set this project up for the long term and give us good working capital flexibility. Where do we sit with our peers? As a developer into production, we've got to demonstrate that we can join the ranks of the producer, but we do see a terrific re-rating potential. We do see consolidation and acquisition opportunities as we become quite unique as a junior company, cash flow positive, and a largely ungeared balance sheet. This is the plant as it looks today.
It certainly wasn't as clean from an aerial perspective when we picked it up some years ago, but a tremendous amount of work. We have 600 people on site at the moment, and all aspects of the plant have been refurbished from where you see one and two on the left, which is the ROM pad, the milling circuit, through to the bottom right-hand corner, which is the sort of drying and packaging output area. Fabulous infrastructure there. That's not a tailings dam. That's a water reclaim pond. Beyond the photo, there's a vast amount of more water infrastructure, tail storage facilities, clean water ponds, and a massive camp that we've got here in northern Malawi. We've delivered on the milestones. First production there in the middle. We continue to work with—we continue to work on the milling and the ramp-up and the throughput side.
We will turn our own acid plant on in first quarter next year. That is an important step change in the cost profile. It is also an important simplification of logistics from having to import your own import sulfuric acid. A big step change at the end of next year in the order of $5-$6 a pound is when we connect to a power grid. It is hydro-sourced power. We are constructing a 55 km high-voltage power line and doing all of the associated substation works to support that grid connection. In the meantime, we are diesel operated, which is the way the previous owner operated, and we have refurbished those on-site diesel power units. Just some photos as to the fleet. We start our mining in the coming weeks, which will be a big news event.
That shows the progress, the rapid progress of the acid plant from the foundations in June, step changing through August, September, and November. We will be producing our own sulfuric acid on site early next year. Our off-take strategy underpinned by about a third of four years' production to utility customers, plus this group, Curzon, and Trading House. These give us essentially locked-in prices of $75, $76 in year one, escalating to over $80 at the end of the contract price on our all-in sustaining cost profile of $45, $46 a pound, terrific margin. We think that gives us enough validation, that gives us enough cash flow certainty from a C1 perspective to now just think about market-linked contracts. A quick minute on Letlhakane. This is Botswana, 114 million pounds at 360 ppm. A great mining jurisdiction. We own 100% of this.
The strategic value from this only increases as the uranium outlook strengthens. We are drilling, infill drilling now to support the upgrade of the resource for the PFS. We announced some column leach metallurgical test work recently that simplifies the flow sheet. It gets rid of the solvent extraction component of the circuit, and it reduces the acid consumption. It has a big impact on the future cost profile. Similar to Kayelekera, this is an open pit mining operation. We are not talking about the challenges of ISR or in-situ leach. These are traditional mining operations. This project will be processed by way of heap leach, whereas Kayelekera is a tank leach. We are not going near. We are not talking about the—we are not talking about ISR and the challenges we have seen some of our contemporaries have. With one minute to go, potentially any questions?
Any questions still?
Yeah, we've got one there. The mic should be coming around.
Why do you think did the share price not react to the construction or like to the—to going into production, actually?
It actually did react, and then we raised the capital at $0.19. So it did actually react. The share price has been very frustrating because we've suffered from all of the bad news that the restart stories have delivered. Whether Paladin with their stockpile variability, their water issues. Then you had Peninsula and other issues in the US with ISR. Back in Australia, Boss Energy with their ISR, massive downgrade. There is huge skepticism about us delivering on our restart. There is the unknown around Malawi, and there is always the concern around Cum Capital. I think slowly we've been ticking off the production milestones.
I think our next step up in credibility comes when we get our first converter account opened. Each of the three Western converters now has the representative samples needed for them to test. We've completed all of the documentation and all of the contracts with them. That will be terrific validation. It will be seeing—showing the market that we're ramping up according to our first quarter timetable. We've always said that the closer we get to having pounds in the drums and pounds on ships, prepayments and other balance sheet opportunities come alive. Very frustrating, but I think we've been hit by all the bad news, skeptics, and the unknown of the jurisdiction.
Excellent. That's all we've got time for.
Thank you.
Very good. Thank you.