Yellow Cake Share Discussion Threads

[bmcb5] 23/8/2018 18:56

@kristini, hi. I would expect a correlation of 1, and it feels like the price has got ahead of itself. But looking at the volume today, it seems that institutions want in.
Market pricing in uranium is opaque, and the spot price is only an indicator. I suspect we will run at a premium to spot price for some time, due to expectation of future supply/demand crunch and resultant increases in the underlying price.
How much of a premium, and for how long, is anybody’s guess. I am relaxed about it, as I see it as a multi-year play and we’re only in the very early stages. It may well soften from here, but I’d rather be holding than watching.

[jonwig] 23/8/2018 17:42

@ kristini - is there a pure metal U etf, or are they all miner-holders?

As all the links I've posted recently point out, the spot price today doesn't represent long-term demand which will be through contracts negotiated separately. The spot market is no more than a clearing house for surplus, and when that surplus vanishes?

[kristini2] 23/8/2018 16:12

Jwig, an etf can track the spot price of uranium just like other commodity etf 's for example track gold, copper etc

why is this powering ahead of the commodity, you would expect a correlation of One as mentioned earlier by another poster

[jonwig] 23/8/2018 15:33

@ bmcb5 - yes, thanks, I'd be obliged. Send via a private message if you prefer. (Click on my name and follow the link.)

[bmcb5] 23/8/2018 12:37

There is a group of very knowledgeable people on twitter. Some fantastic insights and links. If you don't already, i'd recommend following a few. AlexMiningGuy was CEO of Paladin until recently, I believe. I'd be happy to post a list of my favs, if it helps. @quakes99 is a great place to start

[jonwig] 23/8/2018 11:33

Thanks - there seem to be some knowledgeable people on that thread!

Cameco could of course borrow ours ... for a small fee.

[bmcb5] 23/8/2018 11:05

Some big trades today. Already the highest volume day.

Looks like Cameco are in the market, wanting to buy. Small volume atm, but another nice bullish event :-)

[jonwig] 22/8/2018 06:14

"Uranium has endured a brutal decade-long bear market exacerbated by numerous calls for an imminent price rise over the last couple of years – and we’re still waiting for that to happen. The early stages of a bull market are often inconspicuous as the market gradually rises despite negative sentiment – it climbs the proverbial wall of worry. Are we starting to climb? The last nine months suggest that we are."

More:

[bmcb5] 21/8/2018 07:33

Cheers Jon. I read (somewhere) that Kazatomprom were planning to launch on AIM. I would have expected FTSE, but there you go. It will get some of my money, I'm sure.

[jonwig] 21/8/2018 06:06

@ bmcb5 - on your para 1, a doubling is my base level assumption, as I've read that the next long-term contracts are likely to span the $50-75 range. (It's in one of the links.)

On para 2, you're probably right. The prospectus has: ... purchase, sell and trade U3O8 in the spot market, through the Kazatomprom Contract and through any other long-term contracts entered into by the Company to generate value for Shareholders; ... [pdf p18]
There's also an option held by URC to purchase from YCA which then makes further purchases from Kazatomprom.

On para 3, Kazatomprom is planning an IPO (likely London) for Q4 2018 provided the spot price makes a share issue attractive. It's one of the lowest cost producers and might be worth looking at as an alternative investment.

[bmcb5] 20/8/2018 19:50

I expect the U price to bounce considerably higher than $50, even if only for a short time. Long term U price needs to be around $50, just to promote enough US-based production to meet their proposed s232 targets.

Pricing will likely split at some point, with a US price, and a global (ex US) price, to facilitate s232, AIUI. But I assume that the YCA stock, being sourced from KAZ, could only be sold at the global price.

It's still early days, with a lot of developments still to play out. I'm looking to buy more on weakness, but ultimately looking to recycle profits into GCL or specific companies

[jonwig] 20/8/2018 19:06

@ cbeadle - because the spot market is illiquid and doesn't reflect future demand relative to reducing supply. Most of the links I've posted recently explain why there's a convincing case for a much higher price level in the future. [EDIT: at least double: $50. So share price here around 400p.] Could be a two-year wait in worst case, though!

[bmcb5] 20/8/2018 19:03

U chart switched to Dec18

[cbeadle] 20/8/2018 18:20

This seems to just want to go one way, but it seems odd as the uranium price is not appreciating

[jonwig] 19/8/2018 10:38

@ kristini - from limited knowledge, the ETFs have two disadvantages from my point of view. First, they invest in the miners, which involves a layer of costs and risks and second, it's hard to get enough pure uranium plays into their portfolios. Look at URA for an example of this:



I think YCA is the largest fund which holds physical metal. I may be wrong.

[kristini2] 19/8/2018 08:55

just a thought but you could get the same result as holding YCake by buying a uranium ETF, it might be cheaper and in some ways less risk ?

[kristini2] 19/8/2018 08:11

Thankyou Jonwig, so all looks nice clean and uncomplicated.....

It'll be driven by the price of uranium. I bought Geiger Counter a couple of years ago and top sliced, this is interesting

[jonwig] 19/8/2018 05:44

@ kristini - it's all in the prospectus.

There are no management share options or share incentive arrangements in place. The Chief Executive Officer will be paid a salary of US$125,000 per annum. The Company will pay an annual fee of US$100,000 for the services of the Chief Financial Officer. (pdf p25)

Storage is held by Cameco (pdf p42ff) costing $0.12 per lb per year.

To my mind it all looks pretty straightforward, but if anyone can find otherwise, I'd be happy.

[kristini2] 18/8/2018 21:14

At this point in the investment cycle this is a nice potentially uncorrelated to equities play.

Does anyone have any idea of the management COMP packages here, also the management have a connected potential conflict of interest on that they own the uranuim storage concern that charge fees to yellow, any thoughts ?

[jonwig] 17/8/2018 08:49

Another comprehensive article. 11 pages (can see the whole thing in one page if you register and sign in):



This is linked to in the above:

[jonwig] 17/8/2018 08:48

It's not pausing for breath. Two trades of 200,000 and 225,000 just went through at full offer of 230p. ('O' trades, so no messing.)

I was counting on some progress within two years, not two months. I wonder how much of the current buying is 'hot' and will reverse if progress is slower than expected?

[bmcb5] 15/8/2018 11:16

I've topped up again this morning. Avg buy price is now 213p

[jonwig] 14/8/2018 06:52

"Why the Uranium Price Must go up."



Interesting point: State-run Kazatomprom is planning on doing an IPO on 25% of the company. They don't want to IPO with the uranium price in the low $20s. Instead, they're hoping to push it into the $30s or beyond, which would command a much higher IPO price.

[bmcb5] 12/8/2018 16:34

Thanks for the updates Jon. Nice developments here. Im back in U.K. time in a few days, and looking forward to catching up more thoroughly. Hopefully I’ll also have another chunk of money to invest then too. Looking at UEC, or maybe some of the tiddlers that are currently sitting on assets. I would expect some consolidation once the bull gets moving.

[jonwig] 12/8/2018 06:51

Thanks for links Marty. Midas has a big following.

Buying $100m a year for a further nine years means further fundraising, which I'm expecting soon. The price could easily be slower to rise than generally expected, so it will pay to be patient.

It's worth noting how few nuclear accidents there have been since Fukushima, and none of them serious:



(Maybe the chief risk to the price, though not quantifiable.)