Yellow Cake Plc · LSE:YCA
Yellow Cake — Investor Presentation (December 2020)
15 slides from Yellow Cake's investor presentation, December 2020
Slide 1: Pure Exposure to the Uranium Commodity – Investor Presentation
PURE EXPOSURE TO THE URANIUM COMMODITY INVESTOR PRESENTATION Proactive Investor Presentation December 2020 2020
Slide 2: Disclaimer
Disclaimer This presentation (the “Presentation”) is provided on a strictly laws of Canada that are “permitted clients” as defined in on opinions communicated in relation thereto or otherwise private and confidential basis for information purposes only National Instrument 31-103 – Registration Requi
Slide 3: Investment case for Yellow Cake
Investment case for Yellow Cake Yellow Cake Yellow Cake provides investors holds and stores with pure exposure physical uranium to the uranium in regulated commodity price storage facilities Yellow Cake does not speculate The Company on the underlying uranium does not have price, but creates a vehic
Slide 4: Low cost structure and ability to grow
Low cost structure and ability to grow • Yellow Cake has a low cost structure by outsourcing transactional activities to specialist service providers (accounting, IT, secretarial) • The company has a strategic contract with Kazatomprom which allows it to significantly grow its physical holdings of u
Slide 5: Yellow Cake's inventory is stored in regulated facilities in Canada and France
Yellow Cake’s inventory is stored in regulated facilities in Canada and France Storage contracts Supply framework agreement BLIND RIVER, CANADA MALVÉSI, FRANCE KAZAKHSTAN 4
Slide 6: Yellow Cake operating history
Yellow Cake operating history Strategy IPO: July 2018 August 2018 Raised US$200m Purchased 350klb U3O8 To buy and hold physical uranium Purchased 8.1Mlb 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$33
Slide 7: Yellow Cake's balance sheet and net asset value
Yellow Cake’s balance sheet and net asset value On 30 November 2020, the ordinary shares of Yellow Cake closed on the LSE at a price of GBP1.95 per share, which represents a 21% discount to net asset value of GBP2.47 per share Investment in Uranium Units Uranium oxide in concentrates (“U3O8”) (A) lb
Slide 8: Industry context supporting the Yellow Cake investment thesis
Industry context supporting the Yellow Cake investment thesis Nuclear power Nuclear power is increasingly being recognised is a reliable base load as a contributing technology source of electricity to a low-carbon future A sustained period of low prices Uranium demand is growing, has resulted in sup
Slide 9: Nuclear demand growth
Nuclear demand growth Global nuclear generating capacity to 2040(1) 600 500 400 Gigawatts Electricity 300 200 100 0 2019 2020 2021 2022 2023 2024 2025 2030 2035 2040 Source (1) World Nuclear Association Fuel Report 2019. Reference case projections to 2040 8
Slide 10: Growing interest in small modular reactors
Growing interest in small modular reactors Feedwater line(1) SMRs generate Stream line up to 300MW of electricity SMRs are ideal and are more flexible for smaller grids Containment vessel and more affordable and remote locations than large reactors Pressuriser Steam header Reactor vessel Steam gener
Slide 11: Long-term contracts need to be replaced
Long-term contracts need to be replaced Contract covering has the potential to create a rapid tightening of the spot market Future contracted coverage rates of US and European utilities 140% 116% 115% 120% 107% 100% 90% 88% 94% 79% 80% 91% 73% 60% 52% 54% 52% 65% 40% 47% 38% 20% 21% 21% 0% 8% 2020 2
Slide 12: Significant portion of supply is loss making at current spot price
Supply Significant portion of supply is loss making at current spot price 2018 estimated total production costs(1) (US$/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 13: Global supply cuts
Global supply cuts Producers have made significant supply cuts, exacerbated by COVID-19 Supply side responses have been Primary Production(1) the major theme of the market 175 World U3O8 mining production (MLB) since 2016 Production cuts • Cameco’s shut down of Rabbit seen since 2016 Lake in 2016, a
Slide 14: Growing future supply gap
Growing future supply gap Underinvestment in exploration and development is leading to a potential future supply gap (1) Supply/demand imbalance (U3O8 tU) 120,000 100,000 80,000 60,000 40,000 20,000 0 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036
Slide 15: Investment highlights and outlook
Yellow Cake Investment highlights and outlook Yellow Cake • Yellow Cake provides pure exposure to the uranium price, without any operating or technical risks • The Company has a low cost structure • Yellow Cake has access to significant quantities of uranium at the spot price Market Outlook • The ur