Yellow Cake Share Discussion Threads

[jonwig] 26/7/2018 13:27

@ Thoms ... The key phrase from your link?

“It is likely that if the tariffs are enacted, it would drive up the price of uranium,”

[thomscm2] 26/7/2018 13:19

bmcb 5

Here is the catch 22 situation.

[thomscm2] 26/7/2018 12:28

bmcb5

Cameco do not need to build inventory because they make money by buying uranium
at today's prices from sellers of uranium and fulfilling their contracts which
were done at far higher prices. They do not see their sources drying up any time
soon hence the shutting of tier-one assets.

[bmcb5] 26/7/2018 12:14

I hear you Thoms, and you may be right. I'm encouraged that the supply side is taking action to rebalance the supply/demand.

Cameco corporate slides:

• Will not produce from tier-one assets for oversupplied spot market
• Do not intend to build inventory of excess uranium
• Will capture demand in the market where value
• Will decide how to source material to satisfy demand
• Leverage to higher market prices in sales portfolio expected to exceed exposure in sources of supply

[thomscm2] 26/7/2018 12:06

Somehow I don't think that Cameco are closing down for indeterminate duration
and paying off all these people if there was any possibility of a large rise
coming in the price of Uranium. You need new contracts for that and Cameco don't
think they will be forthcoming any time soon.
All we are seeing is "pass the parcel" with what is around at the moment.

[bmcb5] 26/7/2018 11:16

Cheers Jon. I've gone big too. GCL is my largest ever single holding. Overall, I have about 70% of my portfolio in U-related investments. :-O

[jonwig] 26/7/2018 10:52

@ bmcb5 - thanks for the links.

I bought (quite big, for me) on Monday after reading the prospectus more fully. I'm actually not at all interested in mines or commodities, but U is single-use and unrelated to wider global economies. YCA eliminates mining risk and concentrates on a single variable.

In theory, a U etf ought to work, but the ones I've seen are for miners, and some of them are only vaguely connected with U.

[bmcb5] 26/7/2018 10:44

If you haven't listened to these, i would recommend them.

Listen to hedge fund veteran and one of the best short-sellers in the world, Mike Alkin from Curzio Research, as he talks to CEOs, Corporate Managers, and Hedge Fund Managers to expose price imbalances and money-making opportunities “hidden in plain sight.” (720693)

He's a massive U bull











I'll put a link to the website in the header

[bmcb5] 26/7/2018 10:38

Thanks for the links

Thomscm2 - this is one of the news items I've been waiting for. Of course, it's terrible news for those employees, but imo it's an important bullish development for the U market. Lots of U bears had been assuming McArthur would be back on line next year. I'm optimistic that this could be the trigger event for the bull to emerge. The next few days will show.

Jonwig - I initially calculated the NAV at about 180p/sh. I ignored storage costs, and took the front month price. I assumed that the contango in the price will offset storage costs. I'm not totally sure what my rationale for this investment is. I have a load in GCL where I see higher returns due to operational gearing, but i really don't like the fee structure over there. I just wanted some direct exposure to U price, and i suspect this will provide more immediate gains than GCL. We'll see.

[jonwig] 26/7/2018 10:29

@ Thomscm2 - but that will remove supply and help the metal price to rise!

(And the share price here is probably moving for just that reason!)

[thomscm2] 26/7/2018 10:04

Things are maybe not as rosy as some people think.

[jonwig] 26/7/2018 07:03

The uranium market explained (dated 13 July):

Utilities have been buying spot supplies for several years now to take advantage of low prices. But in the last six months, the spot market has been turned upside-down – and those supplies have basically vanished.

In very short order, the spot market will dry up completely and utilities will have to face the music and sign new long-term supply contracts… in the shadow of a looming deficit.

Many investors have been waiting for those contracts as a clear sign that uranium is back. But when uranium moves, it moves fast. By the time contracts are announced, the sector could already have made massive moves.

That’s why the spot market shift is so important. The disappearance of spot supplies is the force that will make utilities sign contracts. Acting now means being ahead of the crowd.

And the crowd will pile in, because uranium bull markets are a favorite of legendary investors. The last uranium supply squeeze pushed the spot price from US$20 per lb. to US$138 per lb. in just two years. Uranium stocks multiplied that rise: leading producers gained tenfold while top explorers and developers doubled that.
...
To add fuel to the fire, several large new funds are being established to hold physical uranium.
Their rationale is twofold. First, such funds give investors the chance to own direct exposure to a rising uranium price. Second, by holding physical uranium these funds will remove even more supply from the spot market, helping to bring forward the very bull market on which they are based.

The biggest such fund is Yellow Cake ...

[jonwig] 20/7/2018 07:35

OK, storage costs are initially $0.12/lb/yr which is negligible in p/sh deduction.

Initial take of ore constitutes 88.7% of initial proceeds at a 9% discount to U spot price - ie. worth 96.7% of initial NAV. There's transportation of first shipment which the prospectus doesn't tell us about, and cost of share issue which is about 11p/sh.
So let's say (generously) that the initial NAV/sh is 185p.

This means, simplistically, that the U price would have to rise by around 8% to make up the initial shortfall. I suppose conviction U bulls would see that as small beer. And anyone looking for 'uncorrelated assets' would want to consider it.

[aim0raider] 15/7/2018 08:29

Still nice and quiet, which suits me. Need to move some funds across and add here. Happy still at iPo price for now.

[bmcb5] 09/7/2018 08:19

Just tucked a few more away

[bmcb5] 06/7/2018 21:42

Thanks riverman. I agree with aimraider. The u price has been rock bottom for long enough. The fundamentals of the market are turning. The question for me is when, rather than if.

[aim0raider] 06/7/2018 17:41

River, I've been following and trading u for 2 years now, this is far from speculative nor a punt. Not now.

[riverman77] 06/7/2018 16:42

Thanks for setting up this thread. This is highly speculative but I think definitely worth a punt given the massive demand/supply imbalance discussed in detail in the admission documents.

[bmcb5] 06/7/2018 10:23

Nice. Looks to be strong initial demand

[aim0raider] 05/7/2018 18:10

Got a couple of batches today, both under ipo price.

[bmcb5] 05/7/2018 10:40

I've picked up an initial slug at 1.97, I'll scale into a larger position as the price moves.

[bmcb5] 05/7/2018 09:01

Uranium trader Yellow Cake debuts on AIM after raising £150mln in its IPO

activeinvestors.co.uk/companies/news/200187/uranium-trader-yellow-cake-debuts-on-aim-after-raising-150mln-in-its-ipo-200187.html

[bmcb5] 05/7/2018 08:59

Ex-City banker readies £150m float of uranium venture Yellow Cake