Lotus Resources Limited announced that the company has completed the second stage of its preliminary exploration work at the company's Milenje Rare Earth Prospect (Milenje), located 2km from the company's Kayelekera Uranium Project (Kayelekera). While the Company remains firmly focused on the recommencement of uranium production at Kayelekera, the rare earth grades at Milenje are highly promising and as such the Company is considering undertaking an exploration program at Milenje during 2023 to better understand the potential for rare earth mineralization at the prospect. Highlights: The Company completed its second exploration program at the Milenje Hills Rare Earth Prospect, with work focusing on further trench sampling, an RC drill program and preliminary mineralogy studies.

The new samples from the trenching program confirmed high-grade rare earth elements (REE) including: Total Rare Earth Oxides (TREO) of up to 25.5%, Average TREOs 11.6% from the 11 samples, Critical REO of up to 5.6% (Dy, Eu, Nd, Pr, Tb, Y oxides) and average 2.48% across the 11 Samples. The RC drill program intercepted several anomalous zones of gneisses which, though showing some elevated REE mineralization, were lower than the surface (trench) samples. Further structural mapping and interpretation is required to better understand the mineralization controls.

A follow up exploration program is being considered at Milenje for the 2023 field season. Milenje Hills REO Prospect: The Milenje Hills prospect is located 2km to the north of Lotus's Kayelekera deposit in the Karonga region of northern Malawi. The Milenje Hills prospect was first identified through ground surveys and mapping in 2014 whilst the previous owners of the asset were undertaking an exploration program for uranium mineralization adjacent to the Kayelekera uranium resource.

Previous Exploration: Lotus followed up on this historical work with a geophysical and trenching program in late 2020. The 2020 program of work comprised of additional radiometric and magnetometer surveys with mapping undertaken to define the extent of the rare earth oxide (REO) and rutile mineralization (allanite and rutile bearing rocks) and to characterize the host rock in terms of mineralogy and chemistry. Based on this work 23 pits and trenches were then excavated, logged and sampled at one metre spacings.

The hand-dug trenches were excavated over three main lithologies: microgranites, pegmatitic granites, biotite granite gneisses. The mineralization is interpreted as being associated with allanite-rich pegmatite dykes and associated fluid alteration within associated granitoids. Importantly, the rare-earth assemblage identified includes significant portions of the high-value critical REOs of Neodymium (Nd), Europium (Eu), Terbium (Tb), Dysprosium (Dy), Yttrium (Y), and Praseodymium (Pr): up to 3.4% across all samples.

Of this, Neodymium and Praseodymium oxides represent on average ~20% of the TREO content of the assayed samples. These two elements, along with Dy and Tb are essential for the manufacture of permanent magnetics which make-up ~90% of the value of the REO market. 2022 Trench Sampling & Mineralogy: Eleven of the previously excavated trenches were selected for further assaying and mineralogical studies.

Two of the trenches sampled were excavated in the microgranites (MTR16 and 17) and four trenches were cut across the pegmatitic granites (MTR24A & B, 25A and 26). The remaining trenches were excavated in predominantly biotite granite gneisses. The samples from the eleven trenches were analyzed by ALS Laboratory Edenvale, Johannesburg using the XRF analytical method to confirm REO grades.

RC Drilling: An RC drill program consisting of a total of 15 RC holes for 2,035m was completed. The drilling was initially planned to intersect mineralization directly below the respective trench targets. However, due to very mountainous terrain it was not possible to place the drilling safely in the optimum locations.

Thus, the initial drilling was re-designed to test for down-dip extensions to the nearest point at which a rig could be placed. Samples were collected at 1m intervals and were analyzed by ALS Laboratory Edenvale, Johannesburg using XRF. Although no high-grade results were obtained, several zones that are anomalous in rare earth mineralization were intersected.

The current interpretation of the combined trench and drilling results suggests that mineralization may be associated with steeper oriented structures with a broadly south-west dipping units of alternating pegmatite, microgranite, and biotite gneiss.