Yellow Cake Plc · LSE:YCA
Yellow Cake — Investor Presentation (September 2021)
20 slides from Yellow Cake's investor presentation, September 2021
Slide 1: Pure Exposure to the Uranium Commodity – Investor Presentation
PURE EXPOSURE TO THE URANIUM COMMODITY INVESTOR PRESENTATION September 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
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 August 2021 Spot Market Overview ▪ On 17 September the UxC Spot U3O8 price reached a 9 year high of US$51.12 /lb(1) ▪ Following quieter spot market activity during the month of July and early August, the near-term market surged during the latter half of August with UxC Spot U3O
Slide 5: Uranium market update
Uranium market update August 2021 United Nations Economic Commission for Europe(1) ▪ In a recent report issued by the United Nations Economic Commission for Europe (“Technology Brief – Nuclear Power”), the UNECE concluded that nuclear power is an important source of low-carbon electricity and heat t
Slide 6: Proforma estimated net asset value as at September 2021
Proforma estimated net asset value as at 21 September 2021 Investment in Uranium Units Uranium oxide in concentrates (“U₃O₈”)(1) (A) lb 15,855,601 U₃O₈ fair value per pound(2) (B) US$/lb 49.94 U₃O₈ fair value(2) (A) x (B) = (C) US$ mm 791.8 Payout if Kazatomprom option is exercised (D) US$ mm (6.5)
Slide 7: Yellow Cake corporate summary
Yellow Cake corporate summary Corporate overview GBP share price and uranium price(1,3) Last share price(1) £3.60 55.00 4.00 NAV per share(2) £3.85 50.00 3.50 Market cap (mm)(1) £550 45.00 Shares out. (mm) 153.6 3.00 Shares held in treasury (mm)(1) 4.2 40.00 2.50 52 week high £3.93 35.00 52 week low
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(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 9: 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 10: 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 160.00% 140.00% 120.00% 100.00% 80.00% 60.00% 40.00% 20.00% 0.00% ( -20.00% ) Sep-2020 Oct-2020 Nov-2020 Dec-2020 Jan-2021 Feb-2021 Mar-2021 A
Slide 11: 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 12: Significant increase in trading volumes since February 2021
Yellow Cake has seen a significant increase in trading volumes since February 2021 ▪ 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$87m f
Slide 13: 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 12
Slide 14: 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 15: 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 3 reactors under construction, under construction, under construction, under construction, 1 37 planned 14 planned 27 p
Slide 16: 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 17: 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 18: 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 19: 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 20: 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.