Yellow Cake Plc · LSE:YCA
Yellow Cake — Investor Presentation (April 2021)
21 slides from Yellow Cake's investor presentation, April 2021
Slide 1: Investor Presentation April 2021
PURE EXPOSURE TO THE URANIUM COMMODITY INVESTOR PRESENTATION April 2021
Slide 2: Disclaimer
Disclaimer This presentation (the “Presentation”) is provided on a strictly Requirements, Exemptions and Ongoing Registrant with the Company or its representatives as investment, legal private and confidential basis for information purposes only Obligations; (D) in Australia, are sophisticated inves
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 March 2021 ▪ March market volumes increased as potential uranium producers implemented a near-term purchasing strategy of physical uranium in addition to pursuing the restart/development of uranium production facilities ▪ Companies included Boss Resources, Denison Mines, EnCore
Slide 5: Uranium market update
Uranium market update March 2021 European Union ▪ The European Commission’s Research Centre draft report concluded that nuclear energy does not harm the European Green Deal sustainability objectives ▪ There is no science-based evidence that nuclear energy does more harm to human health or to the env
Slide 6: Estimated pro-forma net asset value
Estimated pro-forma net asset value On 6 April 2021 the ordinary shares of Yellow Cake closed on the LSE at a value of GBP2.75 per share, which represents a 14% premium to the net asset value of GBP2.42 per share Investment in Uranium Units Uranium oxide in concentrates (“U₃O₈”)(1) (A) lb 12,962,548
Slide 7: Yellow Cake corporate summary
Yellow Cake corporate summary Corporate overview GBP share price and uranium price(1,3) Last share price(1) £2.75 40 3.00 Uranium spot price (US$/lb) NAV per share(2) £2.42 35 Market cap (mm)(1) £353.6 2.00 GBp/share Shares out. (mm) 132.7 30 Shares held in treasury (mm)(1) 4.2 1.00 25 52 week high
Slide 8: 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 ▪ 10-year Framework Agreement with Kazatomprom ▪ Yellow Cake has the right to purchase up to US$100m of U₃O₈ annually ▪ Term of the option agreeme
Slide 9: 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 10: Investor interest in uranium equities increased significantly in the last quarter of 2020
Investor interest in uranium equities increased significantly in the last quarter of 2020 Uranium Equities Performance – LTM(1) – Global X Uranium ETF v Uranium spot price 100% 80% 60% 40% 20% 0% -20% Oct 20 Nov 20 Dec 20 Jan 21 Feb 21 Mar 21 Apr 21 Global X Uranium ETF Uranium Spot Price Source: 1)
Slide 11: 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 Premium (discount) to NAV Uranium spot price 20% 40 investor demand ▪ Yellow Cake able to fully 10% exercis
Slide 12: Strong investor interest in uranium has supported significant capital raises
Strong investor interest in uranium has supported significant capital raises US$750m raised since mid February Uranium equity raises in 2021 Company Equity raised February 2021 Bannerman Resources A$12m February 2021 Denison Mines US$25m February 2021 Deep Yellow A$40.8m February 2021 Nexgen Energy
Slide 13: New trend of project companies making spot uranium purchases
New trend of project companies making spot uranium purchases Mining companies Buying Physical U₃O₈ Uranium spot price(1) YTD (US$/lb) ▪ New strategy from uranium project companies to utilise equity raises to purchase uranium in the spot 32 market ▪ To date purchases totalling ~10.0mlb have been anno
Slide 14: 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 15: 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 38 planned 14 planned 21 planned Operabl
Slide 16: Increasing commitments to carbon neutrality includes nuclear
Increasing commitments to carbon neutrality includes nuclear Commitments to carbon neutrality ▪ 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 t
Slide 17: Growing interest in small Modular Reactors
Growing interest in small Modular Reactors ▪ SMR’s generate up to 300MW of electricity and Feedwater line(1) are more flexible and more affordable than large Steam line reactors Containment vessel ▪ SMR’s are ideal for smaller grids and remote locations Pressuriser ▪ Across 9 countries there are cur
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 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 19: 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 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: 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