TIDMYCA
RNS Number : 6277R
Yellow Cake PLC
08 November 2021
8 November 2021
Yellow Cake plc ("Yellow Cake" or the "Company")
QUARTERLY OPERATING UPDATE
Yellow Cake, a specialist company operating in the uranium
sector with a view to holding physical uranium for the long term,
is pleased to report its performance for the quarter ended 30
September 2021 (the "Quarter").
Highlights
-- Following the completion of an oversubscribed share placing
and retail offer in June 2021, raising gross proceeds of
approximately GBP62.5 million (US$86.9 million), the Company:
o Purchased and took delivery of 550,000 lb of additional U(3)
O(8) in the spot market during the Quarter at an average price of
US$32.35/lb for a total consideration of US$17.8 million, bringing
the Company's holdings to 13.86 million lb of U(3) O(8) as at 30
September 2021; and
o Signed an agreement with JSC National Atomic Company
Kazatomprom ("Kazatomprom") on 26 August 2021 to purchase a further
2.0 million lb of U(3) O(8) at a price of US$32.23/lb for a total
consideration of US$64.5 million for agreed delivery between
October and December 2021. The completion of this transaction will
increase Yellow Cake's current holdings of 13.86 million lb of U(3)
O(8) to 15.86 million lb of U(3) O(8) .
-- Increase in value of U(3) O(8) held by Yellow Cake by 39%
over the Quarter from US$427.1 million(1) as at 30 June 2021 to
US$595.8 million(2) as at 30 September 2021.
-- Increase in value of U(3) O(8) held by Yellow Cake by 76% to
US$595.8 million (2) as at 30 September 2021, relative to the
average acquisition cost of US$337.8 million (US$24.38/lb)
(assuming a first in first out methodology).
-- Estimated net asset value on 30 September 2021 was GBP3.26
per share(3) or US$675.2 million, comprising 13.86 million lb of
U(3) O(8) valued at a spot price of US$43.00/lb(4), a uranium
derivative liability of US$6.5 million, and cash and other current
assets and liabilities of US$85.9 million as at 30 September
2021.
-- Subsequent to the end of the Quarter, the Company
successfully completed an oversubscribed share placing on 29
October 2021, raising gross proceeds of approximately GBP109
million (US$150 million) (the "October Placing").
-- The Company intends to use the proceeds of the October
Placing to fund purchases of physical uranium of approximately 3.0
million lb of U(3) O(8) , expected to bring Yellow Cake's holdings
of U(3) O(8) to 18.80 million lb on completion and comprising:
o 2.0 million lb of U(3) O(8) from Curzon Uranium Limited
("Curzon"), at a price of US$46.32/lb with agreed delivery to take
place before the end of November 2021; and
o 950,000 lb of U(3) O(8) from Kazatomprom, pursuant to
Kazatomprom's offer of 26 October 2021, at a price of US$47.58/lb,
with delivery expected to take place by June 2022.
-- Estimated proforma net asset value on 5 November 2021 was
GBP3.39 per share(5) or US$840.8 million(5), assuming 18.80 million
lb of U(3) O(8) valued at a spot price of US$43.50/lb(7), a uranium
derivative liability of US$6.5 million and cash and other current
assets and liabilities of US$85.9 million as at 30 September 2021,
plus net proceeds from the October Placing of US$145.7 million less
an estimated US$202.3 million applied to uranium purchases.
-- Under an existing arrangement (as previously disclosed in the
Company's admission document and the 2021 annual report),
Kazatomprom has an option to repurchase, 25% of the initial
purchase volume which the Company purchased from Kazatomprom in
July 2018 under the Framework Agreement, at the uranium spot price
less an aggregate discount of US$6.5 million (the "Repurchase
Option"). The Company has a corresponding buyback option to
purchase from Kazatomprom, at the prevailing spot price, all or a
portion of the volume repurchased by Kazatomprom under the
Repurchase Option (the "Buyback Option"). Following the conditions
being met for Kazatomprom to exercise its Repurchase Option, the
parties have entered into discussions regarding arrangements for
the exercise of the Repurchase Option and the Buyback Option. These
discussions are ongoing and are subject to agreement. It is
expected that the net impact of these transactions will be a net
pay-out by the Company to Kazatomprom of US$6.5 million. Further
details on these arrangements can be found in footnote 24 to the
Net Asset Value Update in this announcement.
Andre Liebenberg, CEO of Yellow Cake, said:
" 2021 continues to be a year of considerable growth for Yellow
Cake, with momentum continuing throughout the third quarter.
We successfully raised GBP62.5 million in June to increase our
uranium holdings by 20%. After the period end, we have extended
that strategy, raising a further GBP109 million, and agreeing to
purchase an additional 3 million pounds of uranium from Curzon and
Kazatomprom, bringing our total holdings to nearly 19 million
pounds once these transactions and deliveries are complete, more
than double our holdings since the start of the year. Our net asset
value is now over $800 million, compared to $200 million when we
first floated three years ago.
Our conviction in the case for holding uranium and the longer
term price outlook remains very strong, driven by the combination
of supply demand characteristics and the growing appreciation of
the role of nuclear in our clean energy future. On the demand side,
for the first time since 2011, the IAEA forecasts a potential
increase in nuclear power capacity during the coming decades, with
nuclear generation capacity set to more than double by 2050 in a
high case scenario. Yet supply side constraints remains deep
rooted, with the World Nuclear Association's "Nuclear Fuel Report"
noting the sharp drop in world uranium production and the need for
considerable investment in new production.
COP26 has clearly highlighted not just the need, but the global
will to address the challenge of climate change and nuclear energy
has a vital role to play. We continue to believe our investment
case is strong"
Uranium M arket Developments and Outlook
Uranium Market Developments
Subsequent to relatively subdued spot market activity during the
month of July (5.6 million lb) and early August in 2021, the
near-term market increased during the latter half of August 2021
with the UxC spot U(3) O(8) price reaching US$33.75/lb at month end
(30 August 2021)(8), a 4.5% rise from the previous month's spot
price of US$32.30/lb.
Following the establishment of an initial US$300 million
"At-The-Market" (ATM) funding facility, implementation of the
newly-formed Sprott Physical Uranium Trust ("SPUT") resulted in
August 2021 spot market volumes totalling 13.0 million lb U(3) O(8)
(9), more than double the July 2021 aggregate of 5.6 million
lb.
On 13 September 2021, SPUT announced a US$1 billion upsizing of
the ATM to allow the trust to issue new units and accumulate
physical uranium(10). Further near-term purchases drove the
September 2021 spot market volume to 18.0 million lb, with the high
level of market activity being reflected in the intra-month (16-17
September 2021) price peak of US$50.50/lb U(3) O(8) before
declining to US$43.00/lb by the end of September 2021(11), a
percentage increase of over 27% for the month.
Prices in the forward market as reported by UxC remained
relatively stable through July and August 2021, having ended in
June 2021 at Long-Term - US$32.00/lb, 3-year forward - US$34.00/lb,
and 5-year forward - US$38.00/lb with slight increases by the end
of August 2021 (US$33.50/lb, US$35.75/lb and US$39.50/lb
respectively). However, the unprecedented rise in the spot market
price beginning in August 2021 led to upward price pressure in the
forward market, resulting in end of September 2021 forward prices
reaching US$40.00/lb, US$43.00/lb and US$47.00/lb respectively. UxC
reported that as of the end of September 2021 "more than" 52.6
million lb had been contracted in the term market thus far in
2021(12).
The World Nuclear Association annual report, "World Nuclear
Performance Report," published in September 2021 reflected the
decrease in nuclear generated electricity during the pandemic year
of 2020. Global nuclear generation was down by almost 4% with the
average capacity factor declining to 80.3% from the 2019 level of
83.1%. A total of six nuclear reactors (5,165 Gwe) were permanently
shut-down during 2020 for a variety of reasons including for policy
reasons (Fessenhein 1 & 2 in France) and due to market
conditions (Duane Arnold), but five new reactors (5,521 Gwe)
entered commercial operations including units in China (2
reactors), Russia, Belarus and the United Arab Emirates(13).
The Illinois General Assembly passed clean energy legislation
(13 September 2021) which provides for the preservation of the
Byron and Dresden NPPs(14). Subsequent to the enactment of the
legislation, Exelon announced capital investment programs totalling
US$300 million in support of the commercial reactors and hiring to
fill 650 vacant positions(15).
The International Atomic Energy Agency (IAEA) distributed its
annual outlook for nuclear power and, for the first time since the
Fukushima Daiichi accident (March 2011), forecasts a potential
increase in nuclear power capacity during the coming decades. In
the High Case scenario, the IAEA now anticipates world nuclear
generating capacity to double to 792 Gwe by 2050 from 393 Gwe in
2020, representing a more than 10% increase from the 2020 forecast.
The IAEA Low Case scenario indicate that world nuclear capacity by
2050 would remain essentially the same as the current
capacity(16).
On 29 September 2021, the ruling Liberal Democratic Party of
Japan selected former foreign minister, Fumio Kishida, as the new
head of the party and Japan's Prime Minister. Mr Kishida has voiced
his support for the restart of Japan's idled commercial nuclear
reactor fleet and the assessment of new nuclear technology, such as
mall Modular Reactors for future incorporation in the Japanese
electric generating system(17). The new Prime Minister addressed
the Japanese Parliament on 11 October 2021 and reiterated his
support for nuclear power stating that restarting nuclear power
plants mothballed since the 2011 Fukushima accident was "vital"
(18).
On 8 September 2021, the World Nuclear Association released the
latest edition of its biennial nuclear fuel cycle assessment and
forecast, "The Nuclear Fuel Report" (World Nuclear Association
press release, 8 September 2021). The industry trade association
noted that "world uranium production dropped considerably from
63,207 tonnes of uranium (tU) in 2016 to 47,731 tU in 2020.
Unfavourable market conditions, compounded by the Covid-19
pandemic, led to a sharp decrease in investment in the development
of new and existing mines." Looking to the future uranium needs of
the anticipated increase in commercial nuclear power, the report
states "intense development of new projects will be needed in the
current decade to avoid potential supply disruptions." Furthermore,
"there will have to be a doubling in the development pipeline for
new projects by 2040. There are more than adequate project
extensions, uranium resources and other projects in the pipeline to
accomplish this need, but it is essential for the market to send
the signals needed to launch the development of these projects (19)
."
In a recent report issued by the United Nations Economic
Commission for Europe ("Technology Brief - Nuclear Power")(20), the
UNECE concluded that "Nuclear power is an important source of
low-carbon electricity and heat that contributes to attain carbon
neutrality. They have played a major role in avoiding carbon
dioxide (CO(2) ) emissions to date. Decarbonising energy is a
significant undertaking that requires the use of all available
low-carbon technologies. Analyses indicate that the world's climate
objectives will not be met if nuclear technologies are excluded"
(emphasis added).
The New Nuclear Watch Institute (NNWI) released its study (28
July 2021) entitled "Energy Security in the Age of Net-Zero
Ambitions and the System Value of Nuclear Power." The
European-based think tank concluded that establishing and
preserving a diversified, low-carbon generation mix during the
transition to a decarbonised energy system is crucial, and that
nuclear technology is necessary to back up variable renewables
without increasing exposure to the risks of price volatility and
supply insecurity of an imported transitional fuel (i.e. natural
gas).
Kazatomprom reported that Q2 2021 production (100% basis)
totalled 14.4 million lbs as compared to 13.6 million lb
year-on-year. Uranium output reached 27.2 million lb for the first
six months of the year, virtually equivalent to the same period in
2020 (27.1 million lb). Current 2021 guidance foresees total
production in the range of 58.5 - 59.3 million lb U(3) O(8) which
would be substantially above the 2020 output of 50.6 million lb. In
its announcement of 2 July 2021, Kazatomprom advised that uranium
production during 2023 would remain at the planned 2022 level of
22,500-23,000 tU (58.5-59.8 million lb), which is approximately 20%
below the expected production rate under the Subsoil Use Contracts
(27,500-28,00 tU; 71.5-72.8 million lb). Full implementation of the
production restraint plan would remove 5000 tU (13.0 million lb)
from the previously anticipated global primary supply in 2023.
In its 28 July 2021 Second Quarter Result Conference Call,
Cameco reported that Cigar Lake production could be as much as 12.0
million lb in 2021 (subject to any further disruptions due to
Covid-19 or forest fires in the area) with Cameco receiving "up to
6.0 million lb". Regarding 2021 market purchases, the company is
forecasting 11 - 13 million lb which includes volumes which have
already been delivered, those that are already under contract for
2021 delivery, pounds purchased from its equity position (40%) in
JV Inkai (Kazakhstan) as well as "purchase of excess inventory from
NUKEM" (it should be noted that during 2021 Cameco is entitled to
purchase as much as 5.3 million lb from JV Inkai, representing
59.4% of the 2021 planned production of 9.0 million lb). Regarding
the term market, the company reported an additional 7.0 million lb
having been added to their contract portfolio supplementing the 9.0
million lb secured earlier in the year bringing the aggregate of
new term contracts executed since 2019 to "over 60 million
pounds".
On 2 July, the Euratom Supply Agency (ESA) released its "Annual
Report - 2020" (21) which documents nuclear fuel activities by the
commercial nuclear power industry within the European Union and the
United Kingdom. Gross uranium requirements totalled 41.1 million lb
in 2020, with the utilities purchasing 32.7 million lb (97% under
multi-year/term uranium agreements). The five principal uranium
suppliers to the European Union included Niger, Russia, Kazakhstan,
Canada and Australia which, in the aggregate, provided 91.3% of the
total uranium acquired during the year. Uranium inventories fell
slightly from the 2019 level to 110.2 million lb, down considerably
from the 2016 inventory level of 133.9 million lb. Forward uranium
coverage ranges from 116% in 2024 declining to 57% by 2029 (Euratom
Supply Agency, "Annual Report 2020," 2 July 2021).
Market Outlook
Looking forward, in Yellow Cake's opinion, the spot uranium
price will remain highly volatile for the foreseeable future. The
18 October 2021 announcement by Kazatomprom that the world's
largest uranium producer will be participating in a newly-formed
physical uranium fund, ANU Energy OEIC Ltd., initially funded at
US$50 million with the expectation of raising a further US$500
million in capital to acquire physical uranium from the market is
expected to add increased price pressure.
UxC's most recent market outlook published 18 October 2021
concluded that "although there is no imminent shortage of uranium
expected in the near-term, the clear limitation of expected primary
production over the next few years relative to declining
inventories and other secondary supplies will undoubtedly
contribute to sustained high prices in the months ahead."(22)
Net Asset Value
Yellow Cake's estimated net asset value on 30 September 2021 was
GBP3.26 per share or US$675.2 million, consisting of 13.86 million
lb of U(3) O(8) , valued at a spot price of US$43.00/ lb(23), a
uranium derivative liability of US$6.5 million(24), and cash and
other current assets and liabilities of US$85.9 million(25)(.)
Yellow Cake Estimated Net Asset Value as at 30 September
2021
-----------------------------------------------------------------------------
Units
Investment in Uranium
Uranium oxide in concentrates
("U(3) O(8) ") (A) lb 13,855,601
U(3) O(8) fair value per pound
(23) (B) US$/lb 43.00
(A) x (B)
U(3) O(8) fair value = (C) US$ m 595.8
------------
Uranium derivative liability
(24) (D) US$ m (6.5)
Cash and other net current
assets/(liabilities) (25) (E) US$ m 85.9
(C) + (D)
Net asset value in US$ m + (E) = (F) US$ m 675.2
------------
Exchange Rate (26) (G) US$/GBP 1.3484
(F) / (G)
Net asset value in GBP m = (H) GBP m 500.7
Number of shares in issue
less shares held in treasury
(27) (I) 153,671,232
Net asset value per share (H) / (I) GBP/share 3.26
Yellow Cake's estimated proforma net asset value on 5 November
2021 was GBP3.39 per share(28) or US$840.8 million, assuming 18.80
million lb of U(3) O(8) valued at a spot price of US$43.50/lb(29),
a uranium derivative liability of US$6.5 million and cash and other
current assets and liabilities of US$85.9 million as at 30
September 2021, plus net proceeds from the October Placing of
US$145.7 million less an estimated US$137.8 million of the proceeds
from the October Placing applied to uranium purchases.
At market close on that date, the Company's share price was
GBP3.56 per share, which represents a 5% premium to the above
estimated proforma net asset value per share.
Yellow Cake Estimated Proforma Net Asset Value as at 5 November
2021
-----------------------------------------------------------------------------
Units
Investment in Uranium
Uranium oxide in concentrates
("U(3) O(8) ") (30) (A) lb 18,805,601
U(3) O(8) fair value per pound
(29) (B) US$/lb 43.50
(A) x (B)
U(3) O(8) fair value = (C) US$ m 818.0
------------
Uranium derivative liability
(24) (D) US$ m (6.5)
Cash and other net current
assets/(liabilities) (31) (E) US$ m 29.3
(C) + (D)
Net asset value in US$ m + (E) = (F) US$ m 840.8
------------
Exchange Rate (31) (G) US$/GBP 1.3490
(F) / (G)
Net asset value in GBP m = (H) GBP m 623.3
Number of shares in issue
less shares held in treasury
(33) (I) 183,671,232
Net asset value per share (H) / (I) GBP/share 3.39
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) no 596/2014 which is part of UK law
by virtue of the European Union (Withdrawal) Act 2018.
ENQUIRIES:
Yellow Cake plc
Andre Liebenberg, CEO Carole Whittall, CFO
Tel: +44 (0) 153 488 5200
Nominated Adviser and Joint Broker: Canaccord Genuity Limited
Henry Fitzgerald-O'Connor James Asensio
Georgina McCooke
Tel: +44 (0) 207 523 8000
Joint Broker: Berenberg
Matthew Armitt Jennifer Wyllie
Varun Talwar Detlir Elezi
Tel: +44 (0) 203 207 7800
Financial Adviser: Bacchus Capital Advisers
Peter Bacchus Richard Allan
Tel: +44 (0) 203 848 1640
Investor Relations: Powerscourt
Peter Ogden Linda Gu
Tel: +44 (0) 7793 858 211
ABOUT YELLOW CAKE
Yellow Cake is a London-quoted company, headquartered in Jersey,
which offers exposure to the uranium spot price. This is achieved
through its strategy of buying and holding physical triuranium
octoxide ("U(3) O(8) "). It may also seek to add value through the
acquisition of uranium royalties and streams or other uranium
related activities. Yellow Cake seeks to generate returns for
shareholders through the appreciation of the value of its holding
of U(3) O(8) and its other uranium related activities in a rising
uranium price environment. The business is differentiated from its
peers by its ten-year Framework Agreement for the supply of U(3)
O(8) with Kazatomprom, the world's largest uranium producer. Yellow
Cake currently holds 13.86 million pounds of U(3) O(8) , all of
which is held in storage in Canada and France.
FORWARD LOOKING STATEMENTS
Certain statements contained herein are forward looking
statements and are based on current expectations, estimates and
projections about the potential returns of the Company and the
industry and markets in which the Company will operate, the
Directors' beliefs and assumptions made by the Directors. Words
such as "expects", "anticipates", "should", "intends", "plans",
"believes", "seeks", "estimates", "projects", "pipeline", "aims",
"may", "targets", "would", "could" and variations of such words and
similar expressions are intended to identify such forward looking
statements and expectations. These statements are not guarantees of
future performance or the ability to identify and consummate
investments and involve certain risks, uncertainties and
assumptions that are difficult to predict, qualify or quantify.
Therefore, actual outcomes and results may differ materially from
what is expressed in such forward looking statements or
expectations. Among the factors that could cause actual results to
differ materially are: uranium price volatility, difficulty in
sourcing opportunities to buy or sell U(3) O(8) , foreign exchange
rates, changes in political and economic conditions, competition
from other energy sources, nuclear accident, loss of key personnel
or termination of the services agreement with 308 Services Limited,
changes in the legal or regulatory environment, insolvency of
counterparties to the Company's material contracts or breach of
such material contracts by such counterparties. These
forward-looking statements speak only as at the date of this
announcement. The Company expressly disclaims any obligation or
undertaking to disseminate any updates or revisions to any forward
looking statements contained herein to reflect any change in the
Company's expectations with regard thereto or any change in events,
conditions or circumstances on which any such statements are based
unless required to do so by applicable law or the AIM Rules.
(1) Based on the month end spot price of US$32.10/ lb published
by UxC, LLC on 28 June 2021 and 13,305,601 lb U O held by the
company as at 30 June 2021 .
(2) Based on the daily spot price of US$43.00/ lb published by
UxC, LLC on 30 September 2021 and 13,855,601 lb U O held by the
company as at 30 September 2021 .
(3) Estimated net asset value per share on 30 September 2021 is
calculated assuming 157 ,740,730 ordinary shares in issue less
4,069,498 shares held in treasury, the Bank of England's daily USD/
GBP exchange rate of 1.3484 on 30 September 2021 and the daily spot
price published by UxC, LLC on 30 September 2021.
(4) Daily spot price published by UxC, LLC on 30 September 2021.
(5) Estimated net asset value per share on 5 November 2021 is
calculated assuming 187 ,740,730 ordinary shares in issue less
4,069,498 shares held in treasury, a US$/GBP exchange rate of
1.3490 and the daily spot price published by UxC, LLC on 5 November
2021.
(6) Yellow Cake's estimated pro-forma net asset value on 5
November 2021 was US$840.8 million, consisting of 13,855,601 lb of
U(3) O(8) held at that date, plus a purchase commitment of 2.0
million lb of U(3) O(8) from Kazatomprom for delivery between
October and December 2021, plus a purchase commitment of 2.0
million lb of U(3) O(8) from Curzon for delivery in November 2021,
plus 0.95 million lb of U(3) O(8) to be purchased from Kazatomprom,
subject to contract, for delivery in June 2022, valued at the daily
spot price of US$43.50/ lb published by UxC, LLC on 5 November
2021, a derivative liability of US$6.5 million and cash and other
current assets and liabilities of US$85.9 million as at 30
September 2021, plus net proceeds from the October Placing of
US$145.7 less a cash consideration of US$64.5 million to be paid to
Kazatomprom in respect of 2 million lb of U(3) O(8) to be delivered
in 2021, less a cash consideration of US$92.6 million to be paid to
Curzon in respect of 2 million lb of U(3) O(8) to be delivered in
2021, less a cash consideration of US$45.2 million to be paid to
Kazatomprom (subject to contract) in respect of 0.95 million lb of
U(3) O(8) to be delivered in 2022.
(7) Daily spot price published by UxC, LLC on 5 November 2021.
(8) UxC Weekly, Vol. 35 No. 34, 30 August 2021.
(9) UxC Weekly, 6 September 2021.
(10) Sprott press release: SPROTT PHYSICAL URANIUM TRUST
ANNOUNCES FILING OF AMED AND RESTATED BASE SHELF PROSPECTUS, 10
September 2021.
(11) UxC Weekly, Vol. 35 No. 39, 27 September 2021.
(12) UxC Weekly, Vol. 35 No. 40, 4 October 2021.
(13) World Nuclear Association, "World Nuclear Performance Report 2021," September 2021.
(14) Exelon press release, "Passage of Illinois Energy
Legislation Preserves Nuclear Plants and Strengthens State's Clean
Energy Leadership,"13 September 2021.
(15) Exelon Press Release, "Illinois Clean energy Legislation
Spurs Exelon Generation to Fill 650 Jobs, Invest $300 Million in
Capital Projects," 29 September 2021.
(16) IAEA press release, "IAEA Increases Projections for Nuclear
Power Use in 2050," 16 September 2021.
(17) Argus Media article, "Japan's Potential New Premier
Supports Nuclear Power, 29 September 2021.
(18) The Straits Times, "Japan's new PM Kishida defends
pro-nuclear stance in parliamentary debate," 11 October 2021.
(19) World Nuclear Association, "The Nuclear Fuel Report - 2021 Edition," 8 September 2021.
(20) https://unece.org/sites/default/files/2021-08/Nuclear%20power%20brief_EN_0.pdf .
(22) Ux Weekly, "Third Quarter Spot Uranium Market Update," 18 October 2021
(23) Daily spot price published by UxC, LLC on 30 September 2021.
(24) Yellow Cake purchased of 8,091,385 lb of U(3) O(8) from
Kazatomprom at IPO on 5 July 2018 for a cash consideration of
US$170,000,000 under the Framework Agreement (the "Initial
Purchase"). As part of the Initial Purchase, the Company benefited
from a purchase price which was 2.5% below the spot price,
resulting in the Company receiving an aggregate discount of
approximately US$ 4.3 million. In exchange for this discount, the
Company provided to Kazatomprom an option to repurchase up to 25%
of the Initial Purchase volume of 8,091,385 lb U(3) O(8) at the
prevailing uranium spot price less an aggregate discount of
approximately US$6.5 million (the "Repurchase Option"). The
Repurchase Option could only be exercised if the U(3) O(8) spot
price exceeded US$37.50 /lb for a period of 14 consecutive days
(the "Pricing Condition"), starting three years from 5 July 2018
and expiring on 30 June 2027 and was exerciseable within 60 days of
the Pricing Condition being met. The Company had a corresponding
option (the "Buyback Option") to purchase from Kazatomprom all or a
portion of the volume repurchased by Kazatomprom under the
Repurchase Option at the prevailing spot price. The Pricing
Condition was met on 17 September 2021 and the parties are in
discussion regarding arrangements for the exercise of the
Repurchase Option and the Buyback Option. It is expected that,
subject to final agreement, Yellow Cake and Kazatomprom will agree
that Kazatomprom will exercise its Repurchase Option at a price of
US$43.25/lb less an aggregate discount of US$6.5 million, after
which Yellow Cake will exercise its Buyback Option for the same
quantity at a price of US$43.25/lb, resulting in a net pay-out to
Kazatomprom of US$6.5 million.
(25) Cash and cash equivalents and other net current assets and
liabilities as at 30 September 2021.
(26) Bank of England's daily USD/ GBP exchange rate of 1.3484 on 30 September 2021.
(27) Net asset value per share on 30 September 2021 is
calculated assuming 157,740,730 ordinary shares in issue less
4,069,498 shares held in treasury. The shares held in treasury take
into account the treasury shares used for the settlement of the
option exercise announced by the Company on 26 July 2021.
(28) Estimated net asset value per share on 5 November 2021 is
calculated assuming 187 ,740,730 ordinary shares in issue less
4,069,498 shares held in treasury, a USD/ GBP exchange rate of
1.3490 and the daily spot price published by UxC, LLC on 5 November
2021.
(29) Daily spot price published by UxC, LLC on 5 November 2021.
(30) Comprises 13,855,601 lb of U(3) O(8) held 5 November 2021,
plus a purchase commitment of 2.0 million lb of U(3) O(8) from
Kazatomprom for delivery between October and December 2021, plus a
purchase commitment of 2.0 million lb of U(3) O(8) from Curzon for
delivery in November 2021, plus 0.95 million lb of U(3) O(8) to be
purchased from Kazatomprom, subject to contract, for delivery in
June 2022.
(31) Includes cash and other current assets and liabilities of
US$85.9 million as at 30 September 2021, plus net proceeds from the
October Placing of US$145.7 million less a cash consideration of
US$64.5 million to be paid to Kazatomprom in respect of 2 million
lb of U(3) O(8) to be delivered in 2021, less a cash consideration
of US$92.6 million to be paid to Curzon in respect of 2 million lb
of U(3) O(8) to be delivered in 2021, less a cash consideration of
US$45.2 million to be paid to Kazatomprom (subject to contract) in
respect of 0.95million lb of U(3) O(8) to be delivered in 2022.
(32) Bank of England's daily USD/ GBP exchange rate of 1.3484 on 30 September 2021.
(33) Net asset value per share on 30 September 2021 is
calculated assuming 157,740,730 ordinary shares in issue less
4,069,498 shares held in treasury.
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MSCUWVNRANUARRA
(END) Dow Jones Newswires
November 08, 2021 02:00 ET (07:00 GMT)
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