Yellow Cake Share Discussion Threads

[skyship] 23/5/2020 14:01

QP - thanks for that. Seems to me that further discount compression is quite likely; couple that to the fundamentals and YCA surely likely to make further progress after this brief consolidation around the 220p level.

I would suggest a brief pause at the historic 240p/250p resistance, then on into new ground toward 300p.

[quepassa] 23/5/2020 08:17

Already discussed recently.

See 243 to 249.

[skyship] 23/5/2020 07:39

Hi all....I hold Uranium Participation in Canada; but only recently learnt of YCA - so need to take a look at the stats.

I see that the last NAV statement was as follows:

"Yellow Cake's estimated net asset value as at 20 March 2020 was GBP2.31 per share [3] .
As at close on 20 March 2020, the Company's share price was GBP1.60 per share, which represents a 31% discount to the above estimated net asset value of GBP2.31 per share."

Since then YCA has jumped 38% to 220p; but does anyone have a handle on the current NAV and current discount?

Thnx

[bmcb5] 23/5/2020 00:14

Yes, this is what I’m doing on a Friday night!


How’s your lockdown going?

[bmcb5] 23/5/2020 00:08

Bit more depth on the above, with comment on YCA toward the end



“ One quick comment on the physical holding vehicles. We have seen some questions on why Yellowcake has not just sold their material at CMC and bought material at CVD, thereby enhancing NAV. First, this is a logical fallacy – their current pounds are worth ~$34 at CMC and they would be trading those for equivalent pounds worth ~$30 at CVD and $4/lb cash. The only way this would create value would be if the price at CVD then rises to match CMC which as outlined above may happen but is far from a certainty in the short term. You could argue that as a holding vehicle with no immediate need for pounds the gamble is still worthwhile – we’d just note that Yellowcake has traded at a 20-30% discount to NAV (~$100mm in mkt cap) lately and we’re highly skeptical that adding even $5-10mm to that value via an arbitrage trade really changes the value proposition for investors. Their discount is simply a function of having more sellers than buyers in a relatively illiquid stock – when that changes you’ll see the NAV discount disappear (and it will likely trade into a premium as holding vehicles have done in past rising uranium price environments).”

[bmcb5] 21/5/2020 12:15

Tend to agree with that. Boost to spot price is welcome, but it needs more than just Cameco to come to the party, otherwise there is no party

[bmcb5] 21/5/2020 12:14

Interesting comments by AlexMiningGuy this morning

#uranium - All is not well in the spot market! 3 issues:

1. By my numbers, Cameco was 40% of all spot buying in Q1.

2. The headline spot price everyone is getting excited about is the price for delivery at Cameco's converter but the price for delivery at the other major converters has not moved as much. Price at Converdyn or Orano is US$3.50-4.00/lb lower. Thats highly unusual. I've never seen an arbitrage of more than 25-50c between major converter delivery locations.

3. The forward curve has flattened markedly, ie, the 12 and 24 month prices are not moving up as quickly as the front month (where Cameco buying is concentrated).

...all this tells me the spot price has ONLY moved over US$30/lb due to Cameco buying. Admirable work by Cameco but they're now in a bind. They need US$40-45/lb+ to restart their mines, which will require more of an effort... what if utilities continue to hold back?... can Cameco muster the resources to punch through US$40/lb?... or does the price fall back?

...some musings. We're fairly defensively positioned at the OAM Uranium Opportunity fund!

[bmcb5] 19/5/2020 16:22

@JAF - I just hosted the images in imgur. Should be able to do it directly from twitter, but as you found, it wouldn't work

[jaf111] 18/5/2020 08:05

U price appears to have paused for breath......but NAV should still be rising on the back of sterling weakness

[jaf111] 16/5/2020 17:35

Great job bmcb5
Dare I ask how did you manage to copy the twitter graphs?

[yupawiese2010] 15/5/2020 19:34

20 page comprehensive Uranium report.

[bmcb5] 13/5/2020 08:51

Credit:








thanks for highlighting these, Jaf

[jonwig] 13/5/2020 07:30

I can't find the way either.

[jaf111] 13/5/2020 07:24

for anyone using Twitter.....some interesting comments (musings!) from numerco re YCA mispricing
(If i knew how to copy the charts over from Twitter I would!!!)

[hiddendepths] 06/5/2020 09:34

We'll catch up! The discount to asset value is already high and the supply deficit (around 20%?) for this year is liable to drive the U price higher still, especially given the longer term outlook for continuing shortages. I suspect all the stocks which have acted as a lid on the price for a year or two will be drained rather quickly, if they haven't been already.

This mispricing in YCA is a golden opportunity to buy into, or increase exposure to, the uranium bull case at a significant discount. I for one have been taking advantage of it.

[jaf111] 06/5/2020 06:51

...and Uranium Participation up another 3% last night....

[jaf111] 05/5/2020 12:32

mmmmm....ok but take out the March dip..... and Yellowcake have certainly under underperformed Uranium Participation.

My key point was the disparity....both companies being uranium holders......and over the past couple of weeks Ur P has risen well over 10% whilst YCA has done nothing!

[quepassa] 05/5/2020 10:13

Flat?

It's risen a whopping 50% since March!!

[jaf111] 05/5/2020 09:49

Share price remains surprisingly flat.....

I see Uranium Participation which holds 15.7m lbs of U has a market cap of just under US$ 500m
Yellow Cake less than half of that but holds 9.6m lbs of U

If nothing else there seems a bit of a pricing anomaly with Uranium Participation?

[hiddendepths] 04/5/2020 09:35

I guess there'll be buybacks again this afternoon. Interesting to see if they move the price - I don't know how many ready sellers are around at present. Friday's buybacks did not paint a clear picture imo, although the price paid steadily rose from 218 to 221. My gut feel is that there's not much stock around but there's nothing like a buyback program to flush a few sellers out of the woodwork!

[quepassa] 04/5/2020 06:23

This morning's Trading Update from Kazatoprom makes interesting reading about the sector backdrop and outlook (ticker LSE:KAP) and includes the following:-

"In total, the mine curtailments and suspensions related to COVID-19 (announced to date) are expected to push the supply-demand balance to an annual deficit for 2020. Third-party estimates indicate primary uranium supply could decrease by more than 10% compared to 2019, which was a year when supply-demand was generally in balance."

See RNS for context and full details.

ALL IMO. DYOR.
QP

[kr01] 03/5/2020 12:33

Looks like YCA is forming a decent flag and suggests a move up which ties roughly with the ATH of 260p. Having said that the wider market looked very shaky towards the end of the week so could see the discount widen further before following U price up.

[hiddendepths] 03/5/2020 07:39

The U price had to correct a technically overbought condition before moving ahead again. Glad it corrected without more of a pullback. I imagine that the RSI and OB/OS indicators have fallen back enough now to allow our more technically minded brethren to start buying again (and there are plenty of them). Anyway, agreed that $34.05 close suggests a new break-out, to what level I'm not sure but it's at times like this that a good chartist is useful. Any on here?

As long as the share price doesn't spike up tomorrow morning, I'm in for a few more.

[kr01] 02/5/2020 13:03

Nice 5% lift in swap price on Friday to over $34. Next leg up?