Yellow Cake Plc · LSE:YCA
Yellow Cake — Investor Presentation (March 2021)
24 slides from Yellow Cake's investor presentation, March 2021
Slide 1: Investor Presentation: Pure Exposure to the Uranium Commodity
PURE EXPOSURE TO THE URANIUM COMMODITY INVESTOR PRESENTATION March 2021
Slide 2: Disclaimer
Disclaimer This presentation (the “Presentation”) is provided on a strictly securities laws of Canada that are “permitted clients” on opinions communicated in relation thereto or otherwise private and confidential basis for information purposes only as defined in National Instrument 31-103 – Registr
Slide 3: Yellow Cake Strategy
Yellow Cake Strategy To buy and hold physical uranium and Industry context Investment highlights to deliver maximum exposure to the expected resurgence in the uranium Steady uranium demand growth market from nuclear reactor build Holds physical U₃O₈ programme No exposure to exploration, Sustained lo
Slide 4: Why purchase additional uranium now? Macro Drivers
Why purchase additional uranium now? Macro Drivers Investor Sentiment ▪ There has been renewed investor interest in the uranium sector as generalist investors increasingly take note of the attractive supply demand fundamentals ▪ Uranium equities performed well towards the end of Q4 2020 and have con
Slide 5: Why purchase additional uranium now? Renewed Investor Interest in Uranium Equities
Why purchase additional uranium now? Renewed Investor Interest in Uranium Equities Uranium Equities Performance – LTM(1) 140% 120% 100% 80% 60% 40% 20% - 0% -20% -40% Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Global X Uranium ETF (ARCA:URA) Uranium Pr
Slide 6: Yellow Cake trades at a premium to NAV
Why purchase additional uranium now? Yellow Cake trades at a premium to NAV Uranium Spot Price and YCA Premium (Discount) to NAV(1,2) 15% 40.00 10% 35.00 5% 30.00 -- Premium (Discount) to NAV 25.00 (5%) Uranium Spot Price (10%) 20.00 (15%) 15.00 (20%) 10.00 (25%) 5.00 (30%) (35%) 0.00 Jul Aug Sep Oc
Slide 7: Yellow Cake Operating History
Yellow Cake Operating History ▪ 9.32 Mlb of U3O8 acquired at an average price of US$21.71 /lb 2018 ▪ Successful US$140M equity raise ▪ Yellow Cake raises US$200m at IPO ▪ Pruchased 8.1 Mlb U3O8 at US$21.01 /lb ▪ US$100 M to be used to acquire ▪ Purchased 350 klb U3O8 at US$23.30 /lb 3.5 Mlb from Kaz
Slide 8: Uranium market update February 2021
Uranium market update February 2021 ▪ UxC reports total spot market volume of slightly more than 5.1 Mlb U3O8 for the month of February ▪ A large single deal with spot delivery helped push up the overall monthly volume close to average levels for February ▪ In general, spot market demand has been mo
Slide 9: Uranium market update February 2021
Uranium market update February 2021 ▪ A draft outline of China’s 14th Five Year Plan (covering the period, 2021-2025) reportedly indicates the government plans to increase installed commercial nuclear generating capacity from the current 49 reactors (50.6 Gwe) and 16 units (16.5 Gwe) under construct
Slide 10: Estimated net asset value
Estimated net asset value On 9 March 2021, the ordinary shares of Yellow Cake closed on the LSE at a value of GBP2.27 per share, which represents a 4% premium to the net asset value of GBP2.19 per share Investment in Uranium Units Uranium oxide in concentrates (“U3O8”) (A) lb 9,316,385 U3O8 fair val
Slide 11: Yellow Cake corporate summary
Yellow Cake corporate summary Corporate overview GBP share price and uranium price(1,3) Last share price(1) £2.27 35.00 2.60 NAV per share(2) £2.19 2.40 32.50 Market cap (mm)(1) £292 2.20 30.00 Shares out. (mm) 132.7 2.00 GBp /sh USD/lb Shares held in treasury (mm)(1) 4.2 27.50 1.80 1.60 52 week hig
Slide 12: Key contracts provide strategic advantage
Yellow Cake Key contracts provide strategic advantage 308 Services Kazatomprom Framework Agreement 308 Services Ltd Kazatomprom • A uranium specialist company focused on the uranium • The world’s largest and lowest cost producer(1) commodity market • 10-year Framework Agreement gives the Company the
Slide 13: Uranium market overview
Uranium market overview
Slide 14: 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 Nuclear energy reliable baseload power is sustainable Nuclear is increasingly being Growing interest in recognised as a contribut
Slide 15: The nuclear fuel value chain
The nuclear fuel value chain Mining Conversion Enrichment Fuel Fabrication • Mining methods: • Physical U₃O₈ converted • Commercial process for • Enriched UF₆ is converted - In-situ leaching from powder form into enrichment involves to uranium dioxide powder - Open pit and natural uranium gaseous ur
Slide 16: The uranium market
The uranium market Miners Production of 139 Mlb uranium oxide (U₃O₈) in 2019(1) Producers bought 29.6 Mlb Secondary supplies from the 2020 spot market(2) Miners Traders and Production of 139 Mlb uranium oxide (U₃O₈) in 2019(1) financial buyers Utilities Global 1. Utilities 2020 reactor requirements
Slide 17: Nuclear demand growth
Nuclear demand growth Uranium requirements percentage of world demand(1) The World Nuclear Association 29% estimates a total of 177 Mlb of uranium is required to power today’s fleet of 442 operable 22% U₃O₈ required by country (Mlb) reactors(1) USA 94 operable reactors 15% 13% France 56 operable rea
Slide 18: Future demand
Future demand Global nuclear reactor fleet will continue to grow, especially in China, India and the Middle East China India Russia UAE 16 reactors 6 reactors 2 reactors 3 reactors under construction, under construction, under construction, under construction 39 planned 14 planned 21 planned Operabl
Slide 19: Supply – uranium price chart
Supply – uranium price chart Historical uranium price(1) 2007: 150 Ranger Mine damaged by cyclone Uranium price hits US$140 /lb 120 2008: 2011: 2016: 2020: Global China Kazakh COVID-19 supply financial buying, production cut impacts crisis Fukushima 90 2005: China 11th 2015: 2017: 2019: 2021: 5-year
Slide 20: Significant portion of supply is loss making at current spot price
Supply Significant portion of supply is loss making at current spot price 2018 estimated total production costs(1) ($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 20 14 Current uranium spot pr
Slide 21: Global supply cuts
Global supply cuts Producers have been taking self-help measures, exacerbated by COVID-19 Supply side responses have been Production cuts seen from 2016(1) the major theme of the market 175 since 2016 World U3O8 mining production (Mlb) • Cameco’s shut down of Rabbit Lake in 2016, and suspension at M
Slide 22: 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% 91% 80% 73% 60% 52% 54% 52% 65% 40% 47% 38% 20% 21% 21% 0% 8% 2020 2
Slide 23: 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 24: 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