Yellow Cake Plc · LSE:YCA
Yellow Cake — Investor Presentation (October 2021)
21 slides from Yellow Cake's investor presentation, October 2021
Slide 1: Investor Presentation: Pure Exposure to the Uranium Commodity
PURE EXPOSURE TO THE URANIUM COMMODITY INVESTOR PRESENTATION October 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 No exposure to exploration, Sustained low uranium prices
Slide 4: Uranium market update
Uranium market update September 2021 Spot Market Overview ▪ The spot uranium price as reported by UxC ended the month of August at $33.75/lb which was a slight increase from the end of July level ($32.30/lb). Substantial spot market transactional volume (aggregate volume during September reached 17.
Slide 5: Uranium market update: World Nuclear Association
Uranium market update September 2021 World Nuclear Association ▪ On 8 September, the World Nuclear Association released the latest edition of its biennial nuclear fuel cycle assessment and forecast, “The Nuclear Fuel Report” (World Nuclear Association press release, 8 September 2021). The industry t
Slide 6: Uranium market update: Japan
Uranium market update September 2021 Japan ▪ On 29 September, the ruling Liberal Democratic Party of Japan selected ex-foreign minister, Fumio Kishida as the new head of the party and Japan’s Prime Minister ▪ Kishida has voiced his support for the restart of Japan’s idled commercial nuclear reactor
Slide 7: 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 8: Yellow Cake uranium purchases since IPO
Yellow Cake uranium purchases since IPO Kazatomprom Purchases ▪ 8.1 Mlb at US$21.01 /lb – July 2018 ▪ 350 klb at US$23.3 /lb – August 2018 ▪ 1.3 Mlb at US$25.88 /lb – May 2019 ▪ 3.5 Mlb at US$28.95 /lb – June 2021 ▪ 2.0 Mlb at US$32.23 /lb – Delivery in Q4 2021 2021 Spot Market Purchases ▪ 1.4Mlb at
Slide 9: Proforma estimated net asset value as at October 2021
Proforma estimated net asset value as at 13 October 2021 Investment in Uranium Units Uranium oxide in concentrates (“U₃O₈”)(1) (A) lb 15,855,601 U₃O₈ fair value per pound(2) (B) US$/lb 47.00 U₃O₈ fair value(2) (A) x (B) = (C) US$ mm 745.2m Payout if Kazatomprom option is exercised (D) US$ mm (6.5) C
Slide 10: Yellow Cake corporate summary
Yellow Cake corporate summary Corporate overview GBP share price and uranium price(1,3) Last share price(1) £3.70 $60.00 £4.00 NAV per share(2) £3.63 £3.50 $50.00 Market cap (mm)(1) £510 £3.00 Yellow Cake Share Price Uranium Spot Price $40.00 Shares out. (mm) 153.6 £2.50 Shares held in treasury (mm)
Slide 11: Market Capitalisation and trading volumes
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 US$87
Slide 12: Q4 2020 marked the turning point for the uranium market
Q4 2020 marked the turning point for the uranium market Uranium market impacts 2020 ▪ 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
Slide 13: 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% 0% (-20% ) Oct-2020 Nov-2020 Dec-2020 Jan-2021 Feb-2021 Mar-2021 Apr-2021 May-2021 Jun-2021 Jul-2021
Slide 14: 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 13
Slide 15: 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 16: 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 17: 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 Tsinghiu University HTR-PM 2026 Constructed CNNC ACP-100 2026
Slide 18: 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 19: Global supply cuts
Global supply cuts Production curtailments have removed an estimated 77.6 Mlbs U3O8 from the market since 2014(1) Idled uranium mine capacity (cumulative) Metal contained, Mlbs U3O8 North America CIS Oceania Sub-Saharan Africa China North America ▪ Cameco has removed ~30Mlbs from the market (10) (3)
Slide 20: Global uranium supply side is concentrated
Global uranium supply side is concentrated Global Producers of uranium mining 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 (Mlbs U3O8, 2020) (#, majority owned, 2020) (Mlb
Slide 21: 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 Mlbs 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.