Yellow Cake Share Discussion Threads

[yupawiese2010] 31/3/2020 20:00

Nuclear reactors under construction.



One key point - Between 2020 and 2026, 48 power reactors will be built globally. The peak will take place between 2020 and 2022, with 32 reactors due to begin operations. China will lead the way with 12 plans already underway, followed by India and Korea.

[bmcb5] 31/3/2020 15:26

Hi QP, Yupa & all

Nice to see some interest here, and thoughtful discussion. QP - I agree that a discount to NAV has been justified, but in my mind that discount is reflective of the generally over-supplied U market. Sure, if YCA were distressed sellers in volume, then achieving spot price would be unlikely.

But times are changing, and my gut feel (happy to be corrected) is that in an under-supplied market, a premium to NAV may be justified.

Regardless of discount or premium, I'm still a happy holder at these levels. And during these turbulent times, I still feel this is as good as (maybe even better than) cash. I'll be buying more over coming months, but for today I couldn't resist grabbing some GCL at the <10p I predicted last summer. Other than that, my only focus is gold.

@Yupa - tbh it's a while since I updated my nav calcs as I've been distracted by work. I'll dust them off at some point, I'm sure.

Take care all

[quepassa] 31/3/2020 08:54

1.

On the basis of your good and helpful research, finger in the wind tells me that YCA trades over time at an average Discount-to-NAV of circa 10%.

There clearly can be a growing and plausible case for a significant compression in the currently bloated discount back towards average discount.

2.

BIG BOUNCE yesterday for uranium companies on the TSX.

Cameco +8.2%
Denison + 8.6%
Energy Fuels +7.9%

Bodes well for the sector.



Good Luck All.

ALL IMO. DYOR.
QP

[yupawiese2010] 31/3/2020 08:24

QuePassa.

I have gone back & checked the discount to NAV we traded at in the recent past.

16/01/19 = 12.9% discount
26/04/19 = 5.0% discount
19/07/19 = 0.3% premium
29/10/19 = 9.0% discount
03/02/20 = 10.0% discount.

Therefore even with the token share buyback programme in force the discount has widened, I just asked if my current figures in my spreadsheet of a 25% discount to NAV could be checked, initially I thought it was 31% as you can observe which just seemed ridiculous.

[yupawiese2010] 30/3/2020 10:32

Semizbai mine in Akbola ( Kaz )which appears to produce 2.5 million lbs per year will suspend operations tomorrow due to coronavirus.




additional info = Is that not approximately 23% of global uranium production taken out of the supply chain due to coronavirus.

[quepassa] 30/3/2020 07:19

"they could definitely sell some of their position at spot"

exactly. quite right.

some but not all.

that is why their valuation metric of using spot price for their entire holding is somewhat artificial and merits a discount to NAV because of illiquidity.

Nothing unusual about any illiquid investment fund trading at a discount. That's standard. The question is the amount of the discount.

i haven't had time to chart the fluctuating discount to NAV since YCA floated.

but that's the real question whether the current discount has blown out too far and will revert to mean.

it seems that U3o8 is currently in demand and spiking, so looking buoyant and on the up.

This is good news for Yellow Cake whose price will of course track the rise of uranium.

The question remains what the fair value discount-to-NAV is for YCA relative to rising uranium prices.

Good Luck All.

all imo. dyor.
qp

[2xs] 30/3/2020 06:55

QuePassa, who knows if they could liquidate their whole position at spot? Given the uranium is stored at Cameco's facilities in Canada I'm sure Cameco would be happy to buy some product now that they have 2 of their mines shut. Especially as they have been signing term contracts at higher prices.The difference here between YCA and Woodfoods bullsh*t marks is they could definitely sell some of their position at spot and then use the cash to continue buying back shares. Would give us a great uplift in NAV at these discounts.

[yupawiese2010] 29/3/2020 18:58

QuePassa. Thank you for your input its always welcome when somebody inputs a rational case on the downside / risks involved to keep one alert, I will reply more comprehensibly in the next few days ( about to cook evening dinner otherwise husband wont be pleased ) LOL


As an aside Kaz have now quarantined additional cities making the total now 5 up from the previous 2.

[quepassa] 29/3/2020 14:51

yupa,

good posts but there is a fundamental reason , in my opinion, why there rightly is and should be a big discount to NAV.

Your thoughts on this matter would be of interest.

Yellow Cake value their holdings against the uranium spot price which, as you know, is a very shallow and thinly traded market. The real U3o8 action is in the long-term contract market.

The spot market is not deep enough for them to liquidate their holdings at the current spot price. If they tried to sell their holdings in big volume, it would almost certainly crash the spot price. Therefore their valuation against spot, is in my opinion, a slightly artificial valuation.

We see this conundrum time and time again with professional investors in illiquid markets. They build big holdings in illiquid situations (eg Woodford) and when they want to sell, they cannot do so at anything like the official/quoted price of the current spot market which they were using to value their positions.

Nothing against YCA and a fan of U3o8 as an energy source but realistically they deserve to trade at a discount to reflect the fundamentally illiquid nature of their holdings. And in adverse times like this, it is not unusual for discounts to balloon. The question is the size of the discount which is fair value for an illiquid portfolio.

Although your point about Namibia may stimulate spot prices but not necessarily.


Keep up the good posts.

ALL IMO. DYOR.
QP

[jonwig] 29/3/2020 12:34

yupa - do continue!

[yupawiese2010] 29/3/2020 12:19

YCA ` 29/03/20

lbs of u308 9,616,385
price per lbs $27.20
shares in issue 87,905,928
nav in $ 261,565,672
nav per share $2.980
exc rate $ - £ (google finance ) $0.80
nav per share £2.378

current share price (google finance ) £1.82
discount 30.66%.

bmcb5 - these are the figures I have entered into my spreadsheet, I believe you also track the NAV if you have the time or inclination due you agree with my figures.

Everybody If im posting to often on this thread & dominating it, politely say & I will take more of a backseat.

Edit error in calculations above forgot to include Kap derivatives / cash, new figure comes out at 25 % discount to NAV apologies for error I believe / hope figures are now correct.!!

[yupawiese2010] 28/3/2020 21:55

Namibia the fourth largest Uranium producer in the world now locked down with immediate effect for a minimum 21 days due to covid 19.

short video of the mammoth Husab uranium mine in the country.



Husab & Rossing mines combined will contribute to removing in excess of 1 million lbs per month into the supply chain.

[yupawiese2010] 27/3/2020 18:34

17 page Equity research analysis covering all aspects of Uranium by Red Cloud Securities. ( very comprehensive )

[yupawiese2010] 27/3/2020 17:51

Rossing Uranium the fourth largest uranium mine in the world, & located in Namibia & producing 5.5 million lbs per annum, announced today that they would suspend operations with immediate effect, with just essential maintenance work continuing due to covid 19.

[yupawiese2010] 26/3/2020 21:57

Kazatomprom’s uranium production sites are located in the remote southern regions of Kazakhstan. For this reason, it is required that staff stay on-site and live in company-provided housing close to the workplace.

The virus could create significant health and safety concerns for staff if there is still an outbreak in such an environment, or if employees are quarantined and unable to work, the company added.

( I don`t take any glee from people contracting covid 19 & possibly losing there lives but post purely for informative purposes only.)

[spectoacc] 26/3/2020 08:41

Out of YCA, good luck holders.

[trollwatch] 24/3/2020 10:44

Now the old troll tells us!

Spectoass has been shouting the odds and dungheap-crowing indiscriminately here for ages, 12,001 times to be precise.

I got one of my new people to look at his recent, i.e. post coronavirus, investing record. It's quite easy because he is extremely boastful.

This was what she found a couple of days ago, it's probably worse now.

NRR down 61%
MCLS down 60%
BBOX down 53%
Ediston down 50%
SQNG down 47%
AEWU down 45%
CCI down 41%
RLE down 38%
VSL down 35%

and, wait for it, his very favourite day-trade

SUPP down 29%

I told her to stop at 10, it was getting boring.


Thus spake the Master(b)Investor.

[spectoacc] 24/3/2020 10:03

Brilliant, the Woodford boys are back! Look at all those green ticks!

I'm a sceptical holder of YCA, not that trolls either know nor care.

A little scepticism on WPCT/SUPP would have saved them losing most of their money - tho obviously all the same poster.

[chuckol] 24/3/2020 09:34

Statistically encouraging stuff from YCA. This is performing much better post coronavirus than Spectoacc's frankly pathetic portfolio.

[harijan] 23/3/2020 11:45

He'd have been much better off if he'd bought YCA, actually. He gets everything wrong.

[spectoacc] 23/3/2020 08:24

"Uranium price holding up" - erm, yes, mainly because it barely trades methinks.

[jonwig] 23/3/2020 08:15

Update, informative and encouraging:

[sophia1982] 24/2/2020 11:03

mmmhhh...


The Company announces that on 21 February 2020, Non-Executive Director Sofia Bianchi disposed of 5,651 shares in the Company at a price of 196.8p per share.

Following this transaction, Sofia Bianchi holds 13,186 ordinary shares in the Company, representing 0.01% of the Company's issued share capital.