Yellow Cake PLC Exercise of Option, Purchase of Additional Uranium (1878S)
March 15 2021 - 2:00AM
UK Regulatory
TIDMYCA
RNS Number : 1878S
Yellow Cake PLC
15 March 2021
15 March 2021
Yellow Cake plc ("Yellow Cake" or the "Company")
Exercise of Full Kazatomprom 2021 Option and Purchase of
Additional Uranium
Yellow Cake, a specialist company operating in the uranium
sector, with a view to holding physical uranium for the long term,
is pleased to announce that following the completion of the upsized
US$140 million share placing on 2 March 2021, it has informed NAC
Kazatomprom JSC ("Kazatomprom") that it has elected to exercise its
full 2021 US$100 million uranium purchase option under its
agreement with Kazatomprom (the "Framework Agreement") and expects
to take delivery of the U(3) O(8) between April and August
2021.
Additionally, Yellow Cake has agreed to purchase a further
440,000 lb of U(3) O(8) at a price of $27.34/lb for total
consideration of US$12 million.
These uranium purchases will increase Yellow Cake's U(3) O(8)
holdings from 9.3 million lb to 13.2 million lb.
To the extent that additional uranium can be sourced for value,
Yellow Cake intends to continue with further uranium market
purchases.
Kazatomprom Option
Under its Framework Agreement with Kazatomprom, Yellow Cake has
the option to purchase up to US$100 million of U(3) O(8) per year
from Kazatomprom at an undisturbed spot price, through to 2027.
Yellow Cake has now fully exercised its 2021 option to purchase
US$100 million of U(3) O(8) from Kazatomprom under the Framework
Agreement at a price of US$28.95/lb.
The purchase price was agreed on 19 February 2021 (using spot
market indicators), enabling the Company to subsequently complete
its U$140 million share placing and then exercise the option at the
agreed price under the Framework Agreement.
This represents 3.5 million lb of additional U(3) O(8) which
will be delivered into storage as part of Yellow Cake's long term
buy and hold strategy.
This material will be delivered to Cameco's Port Hope / Blind
River facility in Ontario, Canada. A delivery schedule between
April and August 2021 will be agreed between the parties.
Additional Uranium Purchased
In addition to fully exercising the 2021 Kazatomprom purchase
option, Yellow Cake has agreed to purchase a further 440,000 lb of
U(3) O(8) at a price of US$27.34/lb and will take delivery of the
additional U(3) O(8) at Cameco's Port Hope / Blind River facility
during March 2021. This removes material from the already
tightening spot market.
Andre Liebenberg, CEO of Yellow Cake, said:
"We believe there is a clear shift in sentiment around the
outlook for uranium. Significant investor demand enabled us to
considerably increase the size of the share placing. We now see
real opportunity for shareholders to benefit from the pending
rebalancing of the uranium market. The larger placing also provides
strategic benefits to Yellow Cake. We can now fully exercise the
Kazatomprom option for 2021, and also actively look for further
selective market opportunities to increase our exposure to the
uranium price."
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
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-listed company founded and established
by Bacchus Capital and 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
9.32 million lb 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.
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