Lotus Resources, a uranium miner, has been singled out by hedge funds, becoming the Australian sharemarket’s most heavily targeted stock. Short interest in Lotus has more than doubled over the past two months, with nearly 23 per cent of shares held by short sellers, up from 11.5 per cent in April. This surge has seen the small-cap miner surpass fast-food chain Domino’s Pizza as the most targeted ASX stock. This contrasts with other ASX-listed uranium producers, where short interest has begun to ease. For instance, short positions in Boss Energy have decreased to about 13 per cent, while Paladin Energy has seen its short interest fall to less than 12 per cent.
Lotus Resources is a uranium mining company with projects in Malawi and Botswana. It focuses on uranium exploration, development, and production. The company has faced a combination of macro headwinds and specific operational issues, according to Tribeca’s Guy Keller. Rising diesel and sulphuric acid prices, exacerbated by the US-Iran conflict, impacted uranium producers. Lotus referenced a sulphuric acid shortage from the Middle East conflict after temporarily pausing production at its Kayelekera mine in Malawi. The company, in a trading halt since June 18, also faced operational setbacks at both its Kayelekera and undeveloped Letlhakane mines, raising investor scrutiny.
Despite these challenges, the broader uranium sector shows recovery signs, driven by higher spot prices, government nuclear energy backing, and growing power demands. However, analysts are closely watching Lotus’s next steps. Mr Keller suggested a flagged capital raise to complete Kayelekera’s restart could be a turning point for concentrated short positions. John So of VP Capital noted future short interest in Lotus would likely hinge on any capital raise’s terms. A discounted raise could pressure the share price, while a credible plan might prompt investors to close shorts.
