Yellow Cake Plc · LSE:YCA
Yellow Cake — Investor Presentation (February 2021)
22 slides from Yellow Cake's investor presentation, February 2021
Slide 1: Investor Presentation February 2021
PURE EXPOSURE TO THE URANIUM COMMODITY INVESTOR PRESENTATION February 2021
Slide 2: Disclaimer
Disclaimer This presentation (the “Presentation”) is provided on a strictly securities laws of Canada that are “permitted clients” on opinions communicated in relation thereto or otherwise private and confidential basis for information purposes only as defined in National Instrument 31-103 – Registr
Slide 3: Uranium market update
Uranium market update January 2021 • UxC reports total spot market volumes of 4.2 Mlbs U3O8 for the month of January “with much of the month’s volume resulting from off-market activity including several larger-than-average spot transactions to start the year.” • The month-end January U3O8 spot price
Slide 4: Uranium market update: Kazatomprom and Cameco
Uranium market update January 2021 Kazatomprom • Implemented a gradual restart of country-wide uranium operations subsequent to the Covid-19 four month shut-down (April-July). It was reported that well-field development and facility operations were impacted due to the Covid-19 shut-down. Uranium pro
Slide 5: Uranium market update: US Congress and IEA
Uranium market update January 2021 US Congress • On 21 December 2020, the US Congress passed the consolidated appropriations bill including US$75 million to fund a national uranium reserve program in FY2021 (ends 31 October) • The legislation directs the US Department of Energy to submit within 30 d
Slide 6: Estimated net asset value
Estimated net asset value On 5 February 2021, the ordinary shares of Yellow Cake closed on the LSE at a value of GBP2.26 per share, which represents a 5% discount to the net asset value of GBP2.38 per share Investment in Uranium Units Uranium oxide in concentrates (“U3O8”) (A) lb 9,316,385 U3O8 fair
Slide 7: Investment case for Yellow Cake
Investment case for Yellow Cake Industry context Investment highlights Steady uranium demand growth from nuclear reactor build Holdings of physical U₃O₈ programme Additional supply risks No operating risks due to COVID-19 Sustained low uranium prices Low cost structure have led to supply cuts Restri
Slide 8: The nuclear fuel value chain
The nuclear fuel value chain Mining Conversion Enrichment Fuel Fabrication • Mining methods: • Physical U₃O₈ converted • Commercial process for • Enriched UF₆ is converted - In-situ leaching from powder form into enrichment involves to uranium dioxide powder - Open pit and natural uranium gaseous ur
Slide 9: The uranium market
The uranium market Miners Production of 139 Mlbs uranium oxide (U₃O₈) in 2019(1) Producers bought 29.6 Mlbs Secondary supplies from the 2020 spot market(2) Miners Traders and Production of 139 Mlbs uranium oxide (U₃O₈) in 2019(1) financial buyers Utilities Global 1. Utilities 2020 reactor requiremen
Slide 10: Yellow Cake: key contracts provide strategic advantage
Yellow Cake Key contracts provide strategic advantage 308 Services Kazatomprom Framework Agreement 308 Services Ltd Kazatomprom • A uranium specialist company focused on the uranium • The world’s largest and lowest cost producer(1) commodity market • 10-year Framework Agreement gives the Company the
Slide 11: Yellow Cake operating history
Yellow Cake operating history Strategy IPO: July 2018 August 2018 Raised US$200m Purchased 350 klb U3O8 To buy and hold physical uranium Purchased 8.1 Mlbs U3O8 at US$23.30 /lb and to deliver maximum exposure at US$21.01 /lb to expected resurgence in the uranium market April 2019 June 2019 Raised US
Slide 12: Yellow Cake corporate summary
Yellow Cake corporate summary Corporate overview GBP share price and uranium price(3) Last share price(1) £2.26 GBP Share Price and Uranium Price NAV per share(2) £2.38 35.00 2.60 Market cap (m)(1) £188 32.50 2.40 2.20 Shares out. (m) 88.2 30.00 2.00 Shares held in treasury (m)(1) 4.2 GBp /sh $US/lb
Slide 13: Uranium market overview
YELLOW CAKE PLC = 24 Uranium
Slide 14: Nuclear is a key element of global energy supply
Nuclear is a key element of global energy supply Lowest non-carbon One of the lowest sources operating cost per mWh(1) of carbon emissions per mWh Nuclear energy provides Nuclear energy reliable base load power is sustainable Nuclear is increasingly being Growing interest in recognised as a contribu
Slide 15: Nuclear demand growth
Nuclear demand growth Uranium requirements percentage of world demand(1) The World Nuclear Association 29% estimates a total of 177 Mlbs of uranium is required to power today’s fleet of 442 operable 22% U₃O₈ required by country (Mlbs) reactors(1) USA 94 operable reactors 15% 13% France 56 operable r
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 16 reactors 6 reactors 2 reactors 3 reactors under construction, under construction, under construction, under construction 39 planned 14 planned 21 planned Operabl
Slide 17: Supply – uranium price chart
Supply – uranium price chart Historical uranium price(1) 2007: 150 Ranger Mine damaged by cyclone Uranium price hits US$140 /lb 120 2008: 2011: 2016: Global China Kazakh financial buying, production cut 90 crisis Fukushima 2005: China 11th 2015: 2017: 2019: 2020: 5-year plan Kazakh McArthur River Se
Slide 18: Supply: total production cost (US$/lb)
Supply Significant portion of supply is loss making at current spot price 2018 estimated total production costs(1) ($US/lb) 100 Total production cost (US$/lb) Highest cost producer 80 74 60 75th percentile 50th percentile 40 40 25th percentile 31 Lowest cost producer 21 Current 20 14 uranium spot pr
Slide 19: Global supply cuts
Global supply cuts Producers have been taking self-help measures, exacerbated by COVID-19 Supply side responses have been Production cuts seen from 2016(1) the major theme of the market 175 since 2016 World U3O8 mining production (Mlbs) • Cameco’s shut down of Rabbit Lake in 2016, and suspension at
Slide 20: 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 21: 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 140% 116% 115% 120% 107% 100% 90% 88% 94% 79% 91% 80% 73% 60% 52% 54% 52% 65% 40% 47% 38% 20% 21% 21% 0% 8% 2020 2
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