Yellow Cake Plc · LSE:YCA
Yellow Cake — Investor Presentation (January 2024)
30 slides from Yellow Cake's investor presentation, January 2024
Slide 1: Pure Exposure to the Uranium Commodity – Investor Presentation
PURE EXPOSURE TO THE URANIUM COMMODITY INVESTOR PRESENTATION January 2024
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 Buy and hold strategy We purchase uranium and hold for the long-term Pure exposure to the No exploration, development or operating risk uranium commodity price Ability to purchase in Ability to purchase US$100m of U3O8 from Kazatomprom volume, at the spot price per year Inventory stored
Slide 4: Uranium market update – December 2023
Uranium market update December 2023 Spot Market Overview(1) ▪ Activity in the global spot market decreased during December 2023 with UxC reporting a total volume of 2.0 Mlbs., as compared to 4.9 Mlbs. transacted in November and 4.5 Mlbs. during October. Total spot market volume for CY2023 now stands
Slide 5: Uranium market update – December 2023
Uranium market update December 2023 Japan(1) ▪ On 27 December, the Nuclear Regulation Authority (“NRA”) of Japan authorized fuel loading in Units 6 & 7 at the Kashiwazaki-Kariwa nuclear power plant located in Niigata prefecture. Unit-6 (1,315 Mwe) entered commercial operation in January 1996 followi
Slide 6: Proforma net asset value as at January 2024
Proforma net asset value as at 16 January 2024 Investment in Uranium Units Uranium oxide in concentrates (“U₃O₈”)(1) (A) lbs. 21,682,318 U₃O₈ fair value per pound(2) (B) US$ /lb. 106.00 U₃O₈ fair value (A) x (B) = (C) US$ mm 2,298.3 Cash and other net current assets / (liabilities)(3) (D) US$ mm 33.
Slide 7: Yellow Cake corporate summary
Yellow Cake corporate summary Corporate overview GBP share price and uranium price L12M(1,3) Last share price(1) £7.45 120 10.00 9.00 NAV per share(2) £8.49 100 8.00 Market cap (mm)(1) £1,614.5 Uranium Spot Price (US$/lb.) Yellow Cake Share Price (£) 7.00 Shares outstanding less those held 80 216.9
Slide 8: U3O8 spot price is exceeding levels at the time of the Fukushima accident
U3O8 spot price is exceeding levels at the time of the Fukushima accident(1,2) Current spot price 120 16 January 2024 (Spot US$106.00) Fukushima accident 100 11 March 2011 (Spot US$68.08) SPUT completes UPC acquisition 19 July 2021 (Spot US$32.41) 80 U3O8 Spot Price (US$ /lb.) Yellow Cake IPO 5 July
Slide 9: Decarbonisation
Decarbonisation Climate change and energy transition supporting nuclear growth 8
Slide 10: Climate change and energy transition supporting nuclear growth
Climate change and energy transition supporting nuclear growth Nuclear power generates the least CO2 equivalent emissions compared to all other power sources CO2 equivalent emissions per GWh over the lifecycle of a power plant (tonnes)(1) 720 820 490 78-230 34 3 4 5 Nuclear Wind Solar Hydropower Bio
Slide 11: Global demand for nuclear increasing towards 2050
Global demand for nuclear increasing towards 2050 Market conditions and policies are shifting views on natural gas and limiting its role, while underlining the potential for nuclear power to cut emissions and strengthen electricity security(1) Global nuclear energy demand scenarios (GW)(1) 1,000 800
Slide 12: Uranium demand growth
Uranium demand growth Reactor build programs, life extensions, and small modular reactor developments 11
Slide 13: Reactor build programs and life extensions driving uranium demand
Reactor build programs and life extensions driving uranium demand Global nuclear reactor fleet will continue to grow, especially in China, India, and the Middle East China India Russia UAE 26 reactors 8 reactors 3 reactors 3 operating reactors, under construction, under construction, under construct
Slide 14: Countries re-engaging nuclear power
Countries re-engaging nuclear power Rather than declining, western demand for nuclear power is stable to growing through reactor life extensions and new construction ▪ Five operating reactors with another planned, will take nuclear contribution to 60% ▪ On 16 February, Finland’s government issued op
Slide 15: Small modular reactors are becoming a reality
Small modular reactors are becoming a reality SMR market value could reach US$1 trillion by 2050 76 SMR designs are being developed globally across 18 countries(1) Early Stage Middle Stage Final Stage Finished Stage 18 16 14 12 10 8 6 4 2 -- Source: 1) Barclays Research, European Utilities – “New Ho
Slide 16: Energy security
Energy security Energy independence and security of energy supply now becoming increasingly important 15
Slide 17: Energy independence and security of energy supply now becoming increasingly important
Energy independence and security of energy supply now becoming increasingly important Russia is a key player in both conversion and enrichment Front-end nuclear cycle overview (1) Mining Conversion Enrichment Fuel Fabrication Global conversion capacity (2) Global enrichment capacity (3) 16.0 15 15 3
Slide 18: Impact of the Russian invasion of Ukraine
Impact of the Russian invasion of Ukraine ▪ Western nuclear utility dependency on Russian nuclear fuel highlighted ▪ Sanctions have to date not yet been imposed on Russian nuclear fuel, but growing number of nuclear utilities are “self sanctioning” ▪ “Deglobalisation” of the nuclear fuel market, wit
Slide 19: Global utilities are exposed to escalating geopolitical risk of natural uranium supply
Global utilities are exposed to escalating geopolitical risk of natural uranium supply The United States, the largest consuming country, is currently at its lowest annual uranium production level in more than 70 years. Domestic suppliers are generally idled and commercial inventory is decreasing Tot
Slide 20: Contracting
Contracting Long term contracting has increased significantly, but is not yet close to replacement levels 19
Slide 21: Long-term contracts are being replaced
Long-term contracts are being replaced Increased term contracting activity during 2022 was one factor leading to the spot price rise Future contracted coverage rates of US and European utilities(1,2) 140% 125% 120% 113% 108% 100% 95% 90% 88% 75% 76% 80% 70% 75% 62% 62% 70% 60% 40% 45% 37% 20% 29% 10
Slide 22: Unfilled uranium requirements
Unfilled uranium requirements United States / European Union / Japan (31 Dec 2021)(1) 45 40 35 30 25 Mlbs. U3O8 20 15 10 5 -- 2022 2023 2024 2025 2026 2027 2028 2029 2030 United States European Union Japan Source: 1) USDOE-EIA / Euratom/ TradeTech 21
Slide 23: Long term contracting has increased significantly, but is not yet close to replacement levels
Long term contracting has increased significantly, but is not yet close to replacement levels ▪ Term contracting volumes identified for 2023 exceeded the 2022 level, continuing the upward trend which began in 2020 Term market buying trend - 2023(1) 180 159.6 160 140 Mlbs. U3O8 120 114.0 100 95.8 89.
Slide 24: Supply
Supply The supply side is being challenged to meet growing demand 23
Slide 25: 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 2021(1) Global production by company Production by country(1) (Mlbs. U3O8, 2022) (%, 2022) 45.0% 42.4% Kazatomprom 30.5 40.0% Orano 14.6 35.0% Cameco 13.7 30.0% U
Slide 26: Declining secondary supply
Declining secondary supply Secondary supply is expected to decline by 4% p.a. until 2033 due to decreases of available excess enrichment capacity Secondary uranium supplies, 2013-2033 (Mlbs. U3O8) (1) 60 HEU Tails Re-Enrichment / Underfeeding MOX/RepU 50 (9)% p.a. 40 30 (4)% p.a. 20 10 -- 2013 2017
Slide 27: Supply / demand balance
Supply / demand balance There is a growing supply deficit 26
Slide 28: The supply side is being challenged to meet growing demand
The supply side is being challenged to meet growing demand(1) 250 200 Uranium Price (US$/lb.) 150 100 50 -- 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Secondary Supply Operation Closed Operation Operation On Hold Probable P
Slide 29: Summary
‘YELLOW CAKEPLC Summary 28
Slide 30: Yellow Cake is well positioned to benefit from current market trends
Yellow cake is well positioned to benefit from current market trends ▪ Nuclear energy provides low emission power generation that is critical to decarbonisation ▪ Globally, demand for uranium is increasing due to aggressive nuclear plant build programs, reactor life extensions, and small modular rea