Yellow Cake Plc · LSE:YCA
Yellow Cake — Investor Presentation (May 2021)
22 slides from Yellow Cake's investor presentation, May 2021
Slide 1: Investor Presentation: Pure Exposure to the Uranium Commodity
PURE EXPOSURE TO THE URANIUM COMMODITY INVESTOR PRESENTATION May 2021
Slide 2: Disclaimer
Disclaimer This presentation (the “Presentation”) is provided on a strictly Requirements, Exemptions and Ongoing Registrant Recipients of this Presentation are not to construe its private and confidential basis for information purposes only Obligations; (D) in Australia, are sophisticated investors
Slide 3: Yellow Cake
Yellow Cake Strategy Industry Context Investment Highlights To buy and hold physical uranium Steady uranium demand and to deliver maximum exposure growth from nuclear reactor Holds physical U₃O₈ to the expected resurgence in the build programme uranium market No exposure to exploration, Sustained lo
Slide 4: Uranium market update
Uranium market update April 2021 ▪ The UxC U3O8 Spot price ended March at US$30.65/lb. as near-term demand generated principally by junior uranium companies buying resulted in the price increasing by US$2.45/lb. (almost 9%) during the month ▪ During April the month-end Spot U3O8 price declined to US
Slide 5: Uranium market update
Uranium market update April 2021 ▪ Under its restructured Inkai JV agreement with Kazatomprom, Cameco is entitled to purchase 4.9 Mlb from the production facility at a discount to the spot price Kazatomprom ▪ Kazatomprom’s first quarter operating results 2021 operating results showed total output fe
Slide 6: Uranium market update
Uranium market update April 2021 UPC and Sprott Asset Management ▪ On 28 April, Uranium Participation Corporation (UPC) announced an agreement with Sprott Asset Management to create the “Sprott Physical Uranium Trust,” a newly-formed entity to be managed by Sprott Asset Management. UPC would become
Slide 7: Estimated pro-forma net asset value
Estimated pro-forma net asset value On 7 May 2021, the ordinary shares of Yellow Cake closed on the LSE at a value of GBP 2.65 per share, which represents a 13% premium to the net asset value of GBP 2.35 per share Investment in Uranium Units Uranium oxide in concentrates (“U₃O₈”)(1) (A) lb 13,305,60
Slide 8: Yellow Cake corporate summary
Yellow Cake corporate summary Corporate overview GBP share price and uranium price(1,3) Last share price(1) £2.65 40 3.00 NAV per share(2) £2.35 Uranium spot price (US$/lb) 35 Market cap (mm)(1) £340.7 GBp/share Shares out. (mm) 132.7 30 2.00 Shares held in treasury (mm)(1) 4.2 52 week high £2.85 25
Slide 9: Strategic relationship with Kazatomprom allows for value accretive growth
Strategic relationship with Kazatomprom allows for value accretive growth Option Agreement with Kazatomprom, the world’s largest and lowest cost producer(1) ▪ 10-year Framework Agreement with Kazatomprom ▪ Yellow Cake has the right to purchase up to US$100m of U₃O₈ annually ▪ Term of the option agre
Slide 10: 2020 was a transition year for the uranium market
2020 was a transition year for the uranium market Uranium market impacts ▪ COVID-19 pandemic highlighted the supply side vulnerability ▪ Nuclear energy demonstrated its resilience as a reliable, low-cost electricity supply source ▪ US policy issues overhanging the market were resolved ▪ A number of
Slide 11: Investor interest in uranium equities increased significantly since Q4 2020
Investor interest in uranium equities increased significantly since Q4 2020 Uranium Equities Performance – LTM(1) – Global X Uranium ETF v Uranium spot price 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% -20.0% October 2020 November 2020 December 2020 January 2021 February 2021 March 2021 April 2021 May 2021
Slide 12: Yellow Cake raises c.$140m on the back of strong investor demand
Yellow Cake raises c.$140m on the back of strong investor demand ▪ Equity raise upsized to c.$140m Uranium spot price and YCA premium (discount) to from NAV(1,2) – LTM from $110m due to strong 20% 40 investor demand ▪ Yellow Cake able to fully 35 10% exercise its 2021 Kazatomprom 30 option of $100m
Slide 13: Strong investor interest in uranium has supported significant capital raises
Strong investor interest in uranium has supported significant capital raises US$797m(1) raised since mid February Uranium equity raises in 2021(2) Company Equity raised February 2021 Bannerman Resources A$12m February 2021 Deep Yellow A$40.8m February 2021 Yellow Cake US$140m March 2021 Nexgen Energ
Slide 14: New trend of project companies making spot uranium purchases
New trend of project companies making spot uranium purchases Mining companies Buying Physical U₃O₈ Uranium spot price(1) YTD (US$/lb) ▪ New strategy from uranium project companies to utilise equity raises to purchase uranium in the spot $32.00 market ▪ To date purchases totalling ~10.34mlb have been
Slide 15: Nuclear is a key element of global energy supply
Nuclear is a key element of global energy supply One of the lowest sources Lowest non-carbon of carbon emissions operating cost per mWh(1) per mWh Nuclear energy provides Nuclear energy reliable baseload power is sustainable Nuclear is increasingly being Growing interest in recognised as a contribut
Slide 16: Future demand
Future demand Global nuclear reactor fleet will continue to grow, especially in China, India and the Middle East China India Russia UAE 17 reactors 6 reactors 2 reactors 3 reactors under construction, under construction, under construction, under construction 40 planned 14 planned 25 planned Operabl
Slide 17: Increasing commitments to carbon neutrality includes nuclear
Increasing commitments to carbon neutrality includes nuclear Commitments to carbon neutrality(1) ▪ Canada – 2050 ▪ China – 2060 ▪ European Union – 2050 ▪ France – 2050 ▪ Japan – 2050 ▪ United Kingdom – 2050 ▪ U.S.A. – 2050 Carbon Free Energy Initiatives ▪ United States of America officially re-joine
Slide 18: Growing interest in small Modular Reactors
Growing interest in small Modular Reactors ▪ SMR’s generate up to 300MW of electricity and are Feedwater line(2) more flexible and more affordable than large Steam line reactors(1) Containment vessel ▪ SMR’s are ideal for smaller grids and remote locations Pressuriser ▪ Across 9 countries there are
Slide 19: Long-term contracts need to be replaced
Long-term contracts need to be replaced Contract covering has the potential to create a rapid tightening of the spot market Future contracted coverage rates of US and European utilities 150% 125% 116% 115% 107% 100% 90% 88% 94% 79% 91% 75% 73% 54% 65% 52% 52% 50% 47% 38% 25% 21% 21% 0% 8% 2020 2021
Slide 20: Global supply cuts
Global supply cuts Producers have made significant production cuts, exacerbated by COVID-19 Production cuts seen from 2016(1) 180 World U3O8 mining production (mlb) 150 120 90 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (2) Source 1) World Nuclear Association, World Uranium Mining Pr
Slide 21: Growing mine supply gap
Growing mine supply gap Underinvestment in exploration and development is leading to a potential future supply gap. The Reference market scenario incorporated in the latest WNA nuclear fuel market report shows an immediate global market supply deficit(1) Supply/demand imbalance (U₃O₈ tU) 120,000 100
Slide 22: Investment highlights and outlook
Investment highlights and outlook Yellow Cake ▪ Yellow Cake provides pure exposure to the uranium price, without any operating risks ▪ The Company has a low-cost structure ▪ Yellow Cake has access to significant quantities of uranium at the spot price Market outlook ▪ The uranium spot price has perf