Yellow Cake Plc · LSE:YCA
Yellow Cake — Investor Presentation (February 2022)
22 slides from Yellow Cake's investor presentation, February 2022
Slide 1: Investor Presentation February 2022
PURE EXPOSURE TO THE URANIUM COMMODITY INVESTOR PRESENTATION February 2022
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 and Investment Highlights
Yellow Cake Strategy Investment Highlights To buy and hold physical uranium and to deliver maximum exposure to the Holds physical U₃O₈ resurging uranium market No exposure to exploration, development, mining or processing risks Low-cost structure Access to US$100m p.a. of uranium at the spot price L
Slide 4: Uranium market update: Spot Market Overview
Uranium market update January 2022 Spot Market Overview(1) ▪ Spot market volumes increased during January reaching 6.4 mlbs., compared to only 2.7 mlbs. for the month of December but still short of the November quantity of 7.5 mlbs. ▪ The volume increase seemed to be spot market buying in response t
Slide 5: Uranium market update: Kazatomprom
Uranium market update January 2022 Kazatomprom(1) ▪ On 2 January 2022, civil unrest surfaced in Kazakhstan related to an increase in fuel prices, which in turn led to the declaration of a two-week nationwide state of emergency on 5 January ▪ Kazatomprom reassured its global uranium customers that ur
Slide 6: Uranium market update: Netherlands, UK, Brazil
Uranium market update January 2022 Netherlands(1) ▪ In mid-December, the Netherlands announced the formation of its new government accompanied by a revised climate change commitment to at least 55% CO2 reduction by 2030 ▪ The Dutch government aims to reduce CO2 emissions by 70% by 2035 and 80% by 20
Slide 7: Yellow Cake corporate summary
Yellow Cake corporate summary Corporate overview GBP share price and uranium price(1,3) 60 4.50 Last share price(1) £3.20 4.00 NAV per share(2) £3.36 50 3.50 Market cap (mm)(1) £586 Uranium Spot Price (US$/lb.) Yellow Cake Share Price (£) 40 3.00 Shares out. (mm) 183.7 2.50 Shares held in treasury (
Slide 8: 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 US$87
Slide 9: Proforma estimated net asset value as at February 2022
Proforma estimated net asset value as at 15 February 2022 Investment in Uranium Units Uranium oxide in concentrates (“U₃O₈”)(1) (A) lb. 18,805,601 U₃O₈ fair value per pound(2) (B) US$/lb. 43.25 U₃O₈ fair value (A) x (B) = (C) US$ mm 813.3 Cash and other net current assets/(liabilities)(3) (D) US$ mm
Slide 10: 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 11: Yellow Cake uranium purchases
Yellow Cake uranium purchases Kazatomprom Purchases Since IPO ▪ 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. – December 2021 ▪ 950klb. at US$47.58 /lb. – Delivery
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: Nuclear is a clean reliable base load energy source
Nuclear is a clean reliable base load energy source ▪ Lifecycle emissions of natural gas generation are 15 times greater than nuclear ▪ Lifecycle emissions of coal generation are 30 times greater than nuclear Summary of Lifecycle GHG Emission Intensity 1,200 1,000 800 Tonnes CO2e/GWh 600 400 200 0 L
Slide 14: Increased focus on climate change and ESG
Increased focus on climate change and ESG Investor-led climate action steering committee ▪ Represents over 600 global investors and US$65 trillion in assets ▪ Issued letters to 167 global businesses with market cap of $10.3 trillion, requesting they commit to net-zero business strategies Nearly a qu
Slide 15: Increasing national commitments to carbon neutrality include nuclear
Increasing national 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 ▪ Canada, China, Finland, France, Japa
Slide 16: Future demand for uranium is growing
Future demand for uranium is growing Global nuclear reactor fleet will continue to grow, especially in China, India and the Middle East China India Russia UAE 18 reactors 8 reactors 3 reactors 2 operating reactors, under construction, under construction, under construction, 2 reactors under 35 plann
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 Tsinghua 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 77.6mlb. 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)
Slide 20: 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) Kazat
Slide 21: Uranium supply-demand balance
Uranium supply-demand balance 250.0 200.0 150.0 Uranium (mmlb) 100.0 50.0 0.0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Axis Title Probable Project Operation On Hold Closed Operation Operation Secondary supply Demand Source: 1) MineSpans (Dec
Slide 22: 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 combination of new projects and idled capacity (1,2) Primary supply Secondary supply mlb. U3O8 +1.5% p.a. +2.0% p.a. 38.1 26.1 23.2 173.0 10.0 148.9 (30.1) (7.1) 18.9 (30.5) 26