Yellow Cake Share Discussion Threads

[7kiwi] 21/3/2022 23:10

Numerco closed at $58 tonight. I put NAV at 459 at that price. So, despite today's surge in share price, there's still a 10% discount.

[mjneish] 21/3/2022 14:07

Thanks for your comments. :)

[7kiwi] 21/3/2022 13:20

Looks like Russia and the USA are in a race to ban the export of Uranium from Russia to USA

[baby brain] 21/3/2022 13:20

Also, to add to 7Kiwi's post, Kazatomprom have never failed to honour a contract. They want to be seen as a reliable partner for utilities, so will go to great lengths to make sure this never happens

In the very unlikely event that Kazatomprom were to fail to honour a contract/delivery, this would undoubtedly lead to panic among the utilities who already have an existing contract with Kazatomprom, about whether or not their contract is even worth the paper it's printed on. This is the sort of environment which would propel spot to $200+ in short order. So the minor risk that 7Kiwi alluded to, would actually a very bullish prospect for YCA shareholders.

[7kiwi] 21/3/2022 13:01

Here's the US Bill before the Senate Energy and Natural Resources Committee calling for a ban on imports of Russian Uranium.



Russia supplies ~20% of America's enriched Uranium. If this is cut off, they will have to source material from Western sources instead. In fact many players may be "self-sanctioning" in anticipation of the legal moves.

Until recently, western enrichers have been running below capacity leading to "underfeeding" the centrifuges. This allows them to use the otherwise idle capacity, and get more enriched Uranium out for a given input of raw material. So, they end up with excess UF6 material that they can sell on the spot market, that in turn leads to lower demand for U3O8. This is the source of 15-20m lbs/yr of "secondary supply" on the market.

These western enrichers are going to move to running at or above capacity which will either remove underfeeding, or perhaps more likely move to overfeeding for a while. This will dry up a big source of secondary supply and turn it into secondary demand instead.

With primary production this year forecast around 135m lbs, and primary demand around 180-200m lbs, a shift from underfeeding to overfeeding will exacerbate the already significant supply deficit.

Hold on to our hats as the market adjusts to this new reality.

[7kiwi] 21/3/2022 11:57

mjneish,

As kinbasket says, there's little impact on YCA, whatever Putin does, or the Kazakh Government.

There's a risk that KAP can't get their material out through their usual port of St. Petersburg. But on the recent earnings call, they said they had tested an alternative route across the Caspian, and eventually to a Turkish port on the Black Sea.

As kinbasket said, all of YCA's U3O8 is stored in safe locations.

The only minor risk is that they can't get the ~3m lbs contracted to be received in April (2m lbs) and June (0.95m lbs). KAP have said they have not had any disruptions yet, and the material may already be in a safe jurisdiction, awaiting transfer of ownership to YCA.

Worst case is they don't get it, and they keep their cash. So, the NAV might be slightly diluted because they won't have participated in the upside since they bought it around $42. But overall, I think it's a small risk, and even the max impact of the risk doesn't justify the massive discount that still prevails.

[kinbasket] 21/3/2022 10:54

Russia have no influence on YCA beyond the effect their actions in Ukraine are having on the price of Uranium. Uranium YCA have taken delivery of is in storage in France or Canada (IIRC). There is no requirement for constant "supply" as they aren't using it up or trading it. If they can't get any more it's a ballache but doesn't ultimately matter.

[mjneish] 21/3/2022 10:25

Just wondering, just how far outside Russia's sphere of influence is YCA, considering that they get their U3O8 from Kazatomprom in Kazakhstan and Russia could (in theory) lean on the Kazakhs if they want to?

[7kiwi] 19/3/2022 10:36

New GCL update out:



The unfolding energy crisis is driving a reappraisal of nuclear power’s inherent value and the sector is recapturing credence as a competitive source of clean, baseload generating capacity. Impetus to this favourable shift in sentiment may be sustained, given nuclear power’s improved competitive positioning. “Spark spreads”, a theoretical measure of gas fired utility gross profit margins, calculated as the wholesale price of electricity minus the cost of gas used to produce it, have been squeezed significantly by the rise in fossil fuel prices; in some countries, such as Germany, they have moved progressively more negative since summer 2021.

As with fossil fuels, possible supply disruption to nuclear power markets, given Russia’s influential position in the nuclear fuel cycle, proved extremely beneficial for sentiment towards uranium mining equities over the month, particularly for those with assets outside Russia’s sphere of influence.


These factors point towards further supportive commentary for a greater nuclear power contribution in evolving energy policies.

Also updated holdings. SPUT has slipped out of the top-5. Not sure if it's because they have sold down some holdings, or more likely the miners have outperformed spot, and so have become progressively overweight. It's also increased the number of open positions to 42 from 36 in the January update.

Name ..................(% of Gross Assets)
Nexgen Energy........21.5
UR-Energy............12.5
IsoEnergy.............7.2
Uranium Energy........6.7
Cameco................6.6

Top 5 Holdings Represent 54.5%

The Company has exposure to 42 issues.

[jonwig] 18/3/2022 13:47

From this week's IC ref Ukraine:

The US is considering sanctions against Russian state company Rosatom, which accounts for over a third of global uranium enrichment, according to Saxo Bank. “A decision to sanction Rosatom…would tighten an already tight market further,” said Saxo Bank head of commodity strategy Ole Hansen.

The spot uranium price has come down from its $60-plus per pound (lb) level in early March but is still well ahead of the $40 per lb level seen just a month ago. The move away from Russian energy exports in Europe is also helping the sector, said Rob Crayfourd, co-portfolio manager of the New City Investment Managers Geiger Counter fund.

“The unfolding energy crisis is driving a reappraisal of nuclear power’s inherent value and the sector is recapturing credence as a competitive source of clean, baseload generating capacity,” he said.

[yellowcake22] 18/3/2022 07:32

Yellow Cake is trading at 12% discount to Net Asset Values, you can buy Uranium for 47$ / Pound, this is the last chance to buy Uranium < 50$ in this cycle

[7kiwi] 17/3/2022 22:44

Canuck shares finished strongly tonight.

Probably a result of new bill being introduced to the US Senate calling for Russian Uranium to be sanctioned.

[7kiwi] 17/3/2022 00:03

Seems the nuclear power plants have escaped damage from the earthquake

[rawcliffe1] 16/3/2022 18:49

No sign of sell off in Canuc shares yet

[bmcb5] 16/3/2022 15:03

Earthquake off the coast of Fukushima is a reasonable cause for sell off, i guess

[7kiwi] 16/3/2022 09:53

Thanks Jon.

2022 forecast costs ($16-17.50/lb AISC) up a lot from 2021 ($12.63 USD/lb AISC). They're seeing inflation and supply chain difficulties.

[jonwig] 16/3/2022 08:25

KAP has produced its 2021 financial results;



For the most part, production has been stable, and the projection for 2022 is mostly unchanged.
They seem to be dealing with unsanctioned Russian banks and so far have avoided snarl-ups. A major problem could arise if Rosatom gets sanctioned.
They don't make any contentious political points, but want to appear to keep a distance from Russian affairs.

KAP's share price is marginally up this morning. (About 29-30.)

[bpdon] 14/3/2022 17:14

Ouch - tough day for commodities. YCA is back to a circa 16% discount whilst SPUT still has $80M to burn on the bid and the U supply risks remain unchanged (as far as I know).

[7kiwi] 14/3/2022 00:15

TD Securities: "In our view, the #uranium and #nuclear fuel markets are facing potentially the most severe supply dislocation since 2005-06. There is also uncertainty surrounding potential logistical challenges facing the delivery of Kazakh uranium production to customers."

[bountyhunter] 12/3/2022 19:40

Yes thanks, on YCA

Yellow Cake: Maintaining Buy rating and raising target price to £5.75/share from £4.75/share previously. This price target increase is entirely driven by our revised near-term spot uranium price forecast of $75/lb U3O8.

[7kiwi] 12/3/2022 10:41

Thanks Yupa.

[yupawiese2010] 12/3/2022 08:40

Cantor Fitzgerald issued a research note on the Uranium sector yesterday.

[zcaprd7] 11/3/2022 14:46

https://www.telegraph.co.uk/world-news/2022/03/11/vladimir-putin-planning-terror-attack-releasing-radioactive/

[7kiwi] 11/3/2022 00:10

Fascinating interview with Grant Isaacs, CFO of Cameco about the current developments in the Uranium market.

Very bullish.

[7kiwi] 10/3/2022 22:50

Interesting analysis from Merrill Lynch. The new FAANGs. The N is nuclear.