Yellow Cake Plc · LSE:YCA
Yellow Cake — Investor Presentation (October 2020)
21 slides from Yellow Cake's investor presentation, October 2020
Slide 1: Investor Presentation October 2020
PURE EXPOSURE TO THE URANIUM COMMODITY INVESTOR PRESENTATION October 2020 0
Slide 2: Disclaimer
Disclaimer This presentation (the “Presentation”) is provided on a strictly laws of Canada that are “permitted clients” as defined in or on opinions communicated in relation thereto or otherwise private and confidential basis for information purposes only National Instrument 31-103 – Registration Re
Slide 3: Uranium Market Update September 2020
Uranium Market Update September 2020 ▪ UxC reports total spot market volume of 5.0 million pounds U3O8 for the month of September, well below the 2020 monthly average of 8.5 million pounds U3O8. Aggregate spot market volumes now exceed 75 million pounds U3O8 for the year, more than 40% higher than f
Slide 4: Uranium Market Update September 2020
Uranium Market Update September 2020 ▪ Kazatomprom implemented a gradual restart of full operations subsequent to the Covid-19 four month shut-down (April-July). Full year guidance (2020) indicates a loss of production approximating 10 million pounds U3O8, the majority in the second half of the year
Slide 5: Estimated Net Asset Value as at October 2020
Estimated Net Asset Value as at 01 October 2020 ▪ On 1 October 2020, the ordinary shares of Yellow Cake closed on the LSE at a value of GBP1.99 per share, which represents a 23% discount to the net asset value of GBP2.58 per share Investment in Uranium Units Uranium oxide in concentrates (“U3O8”) (A
Slide 6: Investment Case for Yellow Cake
Investment Case for Yellow Cake Industry Context Yellow Cake Investment Highlights Steady uranium demand growth from nuclear Holdings of physical U3O8 reactor build programme Additional supply risks due to COVID-19 No operating risks Sustained low uranium prices have led Low cost structure to supply
Slide 7: The Nuclear Fuel Value Chain
The Nuclear Fuel Value Chain Fuel Mining Conversion Enrichment Fabrication ▪ Mining methods; ▪ Physical U3O8 ▪ Commercial process ▪ Enriched UF6 is - In-situ leaching converted from for enrichment converted to - Open pit and powder form into involves gaseous uranium dioxide underground mining natura
Slide 8: The Uranium Market
The Uranium Market Miners Production of 139Mlb uranium oxide (U3O8) in 2019(1) Producers bought 9.9Mlb from the 2019 spot market(2) Secondary Supplies Spot Market Traders and Financial 64.3Mlb traded on the spot market in 2019(2) Buyers Utilities Utilities 2019 reactor requirements 169Mlb of U3O8(3)
Slide 9: Key contracts provide strategic advantage
Yellow Cake Key contracts provide strategic advantage Kazatomprom Framework 308 Services Agreement Kazatomprom 308 Services Ltd ▪ The world’s largest and lowest cost producer(1) ▪ A uranium specialist company focused on the ▪ 10-year Framework Agreement gives the uranium commodity market Company the
Slide 10: Yellow Cake Operations Summary
Yellow Cake Operations Summary Strategy To buy and hold physical uranium and to deliver maximum exposure to expected resurgence in the uranium market IPO: July 2018 ▪ Raised US$200M ▪ Purchased 8.1Mlb U3O8 at US$21.01 /lb August 2019 ▪ Purchased 350klb U3O8 at US$23.30 /lb April 2019 ▪ Raised US$33.
Slide 11: Yellow Cake Corporate Summary
Yellow Cake Corporate Summary Corporate Overview GBP Share Price and Uranium Price(3) 35.00 2.60 (1) Last Share Price £1.99 2.40 (2) 32.50 NAV per share £2.58 2.20 (1) Market Cap (M) £168 30.00 2.00 GBp /sh USD/lb Shares Out. (M) 88.2 27.50 1.80 (1) Shares Held in Treasury (M) 3.8 1.60 25.00 52 wk H
Slide 12: Uranium Market Overview
Uranium Market Overview 11
Slide 13: Nuclear is a Key Element of Global Energy Supply
Nuclear is a Key Element of Global Energy Supply Lowest non-carbon One of the lowest sources operating cost per MWh(1) of carbon emissions per MWh Nuclear energy provides reliable Nuclear energy base load power is sustainable Nuclear is increasingly being recognised Growing interest in as a contribu
Slide 14: Current Demand: U3O8 required by country
Current Demand The World Nuclear Association estimates a total of 177 Mlb of uranium is required to power today’s fleet of 441 operating Uranium requirements percentage of world demand(1) reactors(1) 50 29% 45 USA U3O8 required by country (Mlb) 95 operating reactors 40 35 22% France 56 operating rea
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 12 reactors under construction, 7 reactors under construction, 4 reactors under construction, 3 reactors under construction 44 planned 14 planned 24 planned Operati
Slide 16: Supply – Uranium Price Chart
Supply – Uranium Price Chart Historical Uranium Price(1) 160 2007: Uranium price 140 hits US$140 /lb 120 2007: Ranger Mine 100 damaged by cyclone 2008: Global Financial Crisis US$ /lb 80 2005: Cigar Lake 2011: Fukushima floods 60 2005: China 11th 5-year 2020: plan promotes nuclear COVID-19 2015: Kaz
Slide 17: Supply: Total Production Cost (US$/lb)
Supply Significant portion of supply loss making at current spot price 2018 Estimated Total Production Costs(1) (US$/lb) Highest Cost Producer 80 74 Total Production Cost (US$/lb) 70 60 75th Percentile 50 50th Percentile 40 40 25th Percentile 31 30 Lowest Cost Producer 21 Current uranium spot price:
Slide 18: Global Supply Cuts
Global Supply Cuts Producers have been taking self-help measures, exacerbated by COVID-19 Production cuts seen from 2016(1) 170 160 ▪ Supply side responses have been the major theme of the market 150 World U3O8 Mining Production (Mlb) since 2016 ‐ Cameco’s shut down of Rabbit 140 Lake in 2016, and s
Slide 19: 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 latest WNA nuclear fuel market report shows immediate global market supply deficit(1) Supply / Demand Imbalance (U3O8 tU) 120,000 100,000
Slide 20: 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 & European Utilities 140% 116% 115% 120% 107% 100% 88% 90% 94% 79% 80% 91% 73% 54% 60% 52% 52% 65% 40% 47% 38% 20% 21% 21% 8% - 2020 2021
Slide 21: Investment highlights and outlook
Yellow Cake 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 pr