Yellow Cake Plc · LSE:YCA
Yellow Cake — Investor Presentation (November 2021)
19 slides from Yellow Cake's investor presentation, November 2021
Slide 1: Pure Exposure to the Uranium Commodity – Investor Presentation
PURE EXPOSURE TO THE URANIUM COMMODITY INVESTOR PRESENTATION November 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: Strategy, Industry Context, Investment Highlights
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 resurging uranium market build programme Recent history of sustained low No exposure to exploratio
Slide 4: Uranium market update – October 2021
Uranium market update October 2021 Spot Market Overview ▪ The UxC month-end spot uranium price reached $47.40/lb. at the end of October (25 October) having increased from the end-of-September level of $43.00/lb., slightly greater than 10% ▪ During the month, the Daily UxC U3O8 Spot Price traded in a
Slide 5: Uranium market update – France and China
Uranium market update October 2021 France ▪ French President Emmanuel Macron announced on 12 October that nuclear power must continue to play a major role in that country’s energy program as he presented the France 2030 plan for re-industrialisation(1) ▪ Further, on 9 November, he stated that France
Slide 6: 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 7: Yellow Cake uranium purchases since IPO
Yellow Cake uranium purchases since IPO Kazatomprom Purchases ▪ 8.1mlb at US$21.01 /lb – July 2018 ▪ 350klb at US$23.30 /lb – August 2018 ▪ 1.3mlb at US$25.88 /lb – May 2019 ▪ 3.5mlb at US$28.95 /lb – June 2021 ▪ 2.0mlb at US$32.23 /lb – Delivery in Q4 2021 ▪ 950klb at US$47.58 /lb – Delivery in Q2
Slide 8: Proforma estimated net asset value as at November 2021
Proforma estimated net asset value as at 23 November 2021 Investment in Uranium Units Uranium oxide in concentrates (“U₃O₈”)(1) (A) lb 18,805,601 U₃O₈ fair value per pound(2) (B) US$/lb 47.25 U₃O₈ fair value (A) x (B) = (C) US$ mm 888.6 Uranium derivative liability(3) (D) US$ mm (6.6) Cash and other
Slide 9: Yellow Cake corporate summary
Yellow Cake corporate summary Corporate overview GBP share price and uranium price(1,3) Last share price(1) £3.32 60 4.5 NAV per share(2) £3.71 4 50 Market cap (mm)(1) £608.0 3.5 Yellow Cake Share Price Uranium Spot Price 40 3 Shares out. (mm) 183.6 2.5 Shares held in treasury (mm)(1) 4.2 30 2 52 we
Slide 10: Significant increase in trading volumes since February 2021
Yellow Cake has seen a significant increase in trading volumes since February 2021(1) ▪ Main drivers for the increase are: - Increased number of shares on issue and increased market capitalisation - Increased retail volume - Significant improvement in uranium market sentiment US$140m fundraise 2 US$
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 180% 160% 140% 120% 100% 80% 60% 40% 20% - (20%) Nov-2020 Dec-2020 Jan-2021 Feb-2021 Mar-2021 Apr-2021 May-2021 Jun-2021 Jul-2021 Aug-2021 Sep
Slide 12: Nuclear is a key element of global energy supply
Nuclear is a key element of global energy supply One of the cleanest Nuclear energy provides sources of energy reliable baseload power Climate change and Nuclear is increasingly being ESG becoming a global recognized as a contributor to focus point a lower carbon future 11
Slide 13: Increasing commitments to carbon neutrality include nuclear
Increasing commitments to carbon neutrality include 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-joined
Slide 14: Future demand is growing
Future demand is growing Global nuclear reactor fleet will continue to grow, especially in China, India and the Middle East China India Russia UAE 18 reactors 7 reactors 3 reactors 2 reactors under construction, under construction, under construction, under construction, 2 37 planned 14 planned 27 p
Slide 15: Small Modular Reactors are advancing
Small Modular Reactors are advancing Reactor Name Commercial Operation Development Stage Nuscal NuScale 2027 Licensing GE/Hitachi BWRX-300 2027 Licensing Holtec SMR-160 Licensing Rosatom RITM-200 2028 Constructed Rosatom BREST Built Ready Tsinghua University HTR-PM 2026 Constructed CNNC ACP-100 2026
Slide 16: 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% 120% 103% 104% 99% 100% 93% 98% 80% 71% 84% 70% 67% 72% 57% 60% 61% 55% 40% 42% 39% 20% 21% 14% 0% 2021
Slide 17: Global supply cuts
Global supply cuts Production curtailments have removed an estimated 77.6mlb U3O8 from the market since 2014(1) Idled uranium mine capacity (cumulative) Metal contained, mlb U3O8 North America CIS Oceania Sub-Saharan Africa China North America ▪ Cameco has removed ~30mlb from the market (10) (3) (5)
Slide 18: Global uranium supply side is concentrated
Global uranium supply side is concentrated U3O8 production is concentrated with the top 5 companies producing 59% of the total supply in 2020(1) Global production by company Mining assets Global production by mine attributable share (mlb U3O8, 2020) (#, majority owned, 2020) (mlb U3O8, 2020) Kazatom
Slide 19: Significant supply deficit forecast by 2030
Significant supply deficit forecast by 2030 By 2030, additional supply is needed to come online to offset demand growth; by a combination of new projects and idled capacity(1) Primary supply Secondary supply mlb U3O8 +0.3% p.a. +2.0% p.a. 26.1 19.1 23.2 10.0 148.9 154.0 (30.1) (7.1) 18.9 (49.5) 26.0