Lotus Resources Ltd (ASX: LOT) shares are catching the eye on Wednesday.

In morning trade, the ASX uranium stock is 4.5% to 17.25 cents.

Why is this ASX uranium stock racing higher?

Investors have been buying the uranium developer's shares today after it announced the results of an updated scoping study for its Letlhakane Uranium Project in Botswana.

According to the release, the scoping study has confirmed the project's potential to become a significant uranium operation and complements its production at the Kayelekera Uranium Project in Malawi, which is on track to restart in the third quarter of 2025.

Management believes that Lotus will become a globally significant U3O8 producer when combining both assets.

It estimates that the two projects could turn the ASX uranium stock into a 5.5Mlb per annum (pa) producer, which potentially makes it one of the largest uranium producers on the Australian share market.

Scoping study

The updated scoping study is based on the December 2024 mineral resource estimate and supports the potential of Letlhakane in a stronger long-term uranium price environment.

Management notes that Letlhakane can support ~3Mlb pa of U3O8 production with the flexibility to align its production with the uranium price.

Another positive is that the optimisation of mining costs and acid consumption demonstrates an optimal cash cost of US$35/lb. This compares to a non-optimised cost of US$41/lb.

Lotus highlights that it is well funded to continue development at Kayelekera and Letlhakane with $133 million cash at bank as at 31 December 2024.

Commenting on the news, the ASX uranium stock's managing director, Greg Bittar, said:

Our updated Scoping Study validates Letlhakane's merits as our second uranium project that can meet the longer-term supply shortfall. In a strong long-term uranium price environment, which experts have forecast, Letlhakane has a potential production life of 10 years.

Coupled with Kayelekera, where we aim to restart production in Q3CY25, this positions Lotus as a ~5.5Mlb per annum producer, potentially making it one of the largest uranium producers on the ASX.

Bittar also points out that there is still further mineral resources that has not been included in the scoping study. He adds:

Our optimisation programs have delivered promising results to potentially decrease the cash cost from US$41/lb to US$35/lb for this selected case. We also recognise there is further mineral resources not yet included in the production schedule that could be incorporated in the future, namely ~23Mlb uranium contained within Indicated Resources and 46Mlbs in Inferred Resources.