Yellow Cake Share Discussion Threads

[sea7] 16/5/2022 15:22

stage 1 and 1.1 completed, they go on to say...

The second stage of the Fund’s development is expected to be carried out through an additional public or private offering, with the timing and details to be determined by market conditions. At the second stage, the Fund is expected to raise capital of up to US$500 million from institutional and/or private investors, with the proceeds planned to be used for additional uranium purchases and uranium-related investment.

Stage 2 Q4 2022 – Q1 2023 In Progress In Progress PREPARATION

[sea7] 16/5/2022 15:21

thanks kiwi...

nice and simple...

OUR INVESTMENT STRATEGY
ANU Energy purchases and holds uranium in the form of U3O8 (triuranium octoxide) at the certified warehouses and/or converters. The Fund’s primary investment aim is long-term capital growth.

[7kiwi] 16/5/2022 15:12

ANU Energy now has its own website.

[sea7] 16/5/2022 14:11

I expect they will be pretty aggressive in raising and buying now

[7kiwi] 16/5/2022 10:22

Kazakh Uranium stockpiling company, Anu Energy oversubscribed on its first fundraising. At today's spot price, $74m would have bought around 1.4m lbs.




When they launched this idea, they floated the sum of $500m as the estimate for subsequent rounds of funding. SO, now it's off the ground, we might expect further fund raising targeting Asia and the Middle East.

[zcaprd7] 16/5/2022 08:13

Back into yellow cake and geiger counter this morning chaps...

[mrnumpty] 16/5/2022 06:04

7Kiwi . A belated thank you for a thorough and very informative reply to me . Numpty

[sea7] 14/5/2022 10:38

Russia uranium ban getting closer



In addition to the export ban on Russian industrial services, the US also sanctioned Promtekhnologiya LLC, which makes weapons, including rifles used by Russian forces in Ukraine. The Nuclear Regulatory Commission will also no longer permit the export of uranium, plutonium or other nuclear-related products.

[7kiwi] 13/5/2022 13:19

mjn,

Sput out of the market because it too is trading well below NAV. So, traders free to move the price where they like in thinly traded market.

[mjneish] 13/5/2022 12:32

Anyone know why the price of uranium is falling at the moment?

[7kiwi] 13/5/2022 10:18

Any ban on Russian enriched material will be very bullish for U3O8. Presently, enrichers have been under-feeding their centrifuges, because they have been operating under capacity. Essentially, they put in less UF6 and spin it for longer to get out the same enriched product.

They then sell the surplus UF6 on the market which reduces demand for conversion services and for U3O8. This is what is called secondary supply, running at about 20-25m lbs per year.

If Russian enrichment is off limits for western utilities, suddenly, there's massive demand for western enrichment. To meet demand, they need to overfeed the centrifuges, using more UF6 for less time to get the same enriched product output.

This leads to more demand for UF6, for conversion and for U3O8. Suddenly, the source of secondary supply dries up, and becomes a source of secondary demand.

According to the Cameco con call last week, they are already seeing "panic" in the market to secure western enrichment services. They said, the next stage will be conversion and then U3O8. It's only a matter of time imho.

[bountyhunter] 13/5/2022 10:08

So there has been a fear based sell off across the markets generally recently. The Russian situation has lead to some confusion as discussed above which has resulted in the significant disparity of around 20% between the YCA market cap and NAV, which is surely an arbitrage trading opportunity.

[7kiwi] 13/5/2022 10:04

Mr N.

Allow me to try and answer your questions.

1) The US does not import U3O8 from Russia (or only very little). It imports both UF6 (after conversion) and enriched Uranium for fuel rods. There is talk of the US banning the import of Russian product and banning the export of U3O8 to Russia for conversion. Separately, there is talk in Russia of banning the export of Uranium products to "unfriendly" countries like US/Europe.

2) There is no talk of the US banning Uranium imports from Kazakhstan. However, the main route of Kazakh material to the west is through St. Petersburg. Even though that route is not yet formally sanctioned, the risk of sanctions and lack of ships willing to go to Russia is effectively blocking exports by that route (see Cameco announcement last week). They do have another route across the Caspian and Black Sea, avoiding Russian territory. They say they have used it before. However, practically speaking, it's difficult to get marine insurance for ships on the Black Sea at the moment, so that route is effectively blocked as well, probably until the Ukraine war ends. KAP already exports material to China, indeed it is a big customer. CGNC owns a stake in its Ortalyk mine. Plus, KAP is working on a massive stockpile/trading hub on the border with China. However, exports to the West through China have not been tried, and my understanding is that it would be difficult to obtain licenses to export from China. So, practically speaking, exports to the west from Kazakhstan look "difficult" at the moment. The first sign we have seen is that Cameco have delayed a shipment from its Inkai JV. KAP have not so far admitted any difficulties.

3) YCA has obtained most of its material from KAP. However, last year it did buy some from a Chinese trading company.

4) Whilst it would be good if YCA can keep adding material from KAP, or indeed anyone else, it isn't necessary. As others have said, it's effectively an investment trust and its pounds of U3O8 are stockpiled. The share price fluctuates around the NAV according to market sentiment.


I did ask the IR people the other day about whether there are any risks that the ~3m lbs of U3O8 YCA is due to receive over the next couple of months will not arrive. I also asked whether the material they are due to receive was already in a safe country, just awaiting title transfer. The response I got just referred me to prior RNSs and didn't really answer my questions.

So, my interpretation is that there is a risk that they aren't yet ready to disclose to the market. However, the impact is relatively small. Essentially, the NAV will be reduced by a small amount. They contracted the most recent purchases at ~$42/lb from memory. Spot now around $50. So, we would "lose" the appreciation in the U3O8 price on those 3m lbs. 3m * $8/lb difference = $24m reduction in NAV or ~2.5%. Plus they retain cash to buyback more shares or enter into deals with other parties.

[j5ack5k] 13/5/2022 09:54

It is discounted 20% or so now. They have good relationship with cameco too. I think sell off is 100% to do with spec money running for the exits and wider market fear/sentiment. In two years this could easily get over 8 quid if U price overshoots in next wave up. I'm just kicking myself for not selling more at 470 and buying too soon on way down. This is definitely not a stock I'm going to lose any sleep over. Same with CCJ at 20.

[kinbasket] 13/5/2022 08:30

Mr N,

YCA is not a trading company and doesn't need to buy or sell Uranium. YCA stockpiles U so investors can effectively own the commodity by owning the shares. More like an ETC. However, If there is no more U available to buy, it doesn't matter. They don't need to issue more shares to raise more money and could use spare cash to buy back shares. Or just sit on what they have.

There is also no reason to sell any. It's not an ETF needing to provide cash for redemptions. It functions like an Investment trust. If an investor wants to sell, they sell their shares in the market. The underlying is unaffected.

The market price of YCA shares is set by the markets opinion of where the price of U is going and the balance of buyers and sellers. Currently the market is puking up an opportunity if you think the price of U will be higher in the future.

Whats happening in Kaz, Russia, the US or anywhere else is of no relevance beyond its ability to effect the price of U and therefore the value of our stockpile.

[bountyhunter] 13/5/2022 08:15

Yes YCA is trading at more than a 10% discount to NAV and has been for a while now triggering the recent buybacks as a way of gaining discounted exposure to Uranium.

[mrnumpty] 13/5/2022 08:08

Bounty hunter . Thanks . I note that , on 31st March , Yellow Cake stated that the value of its current stock of U308 was $ 916.6 million which , with the current exchange rate of £ 1.00 = $ 1.22 equates as £ 751.4 million . In contrast , current market cap of Yellow Cake is £ 639 million . Finally , having read up on the rail network of Kazakhstan ( something of which was previously ignorant ! ) , it seems that there is a rail link to China , but that the rail guages of the two countries aren’t quite the same , but that is not a real problem in transporting goods by rail between the two countries .

[jonwig] 13/5/2022 08:07

China appears to be gradually building up stockpiles of ore for its own benefit, by-passing Russia. (Doing much the same with discounted oil.) "Our friendship with Russia knows no bounds, but we'll still take them to the cleaners."

This covers some of the issues and is recent:

[bountyhunter] 13/5/2022 07:43

Also to the best of my knowledge the US bill applies to US imports from just Russia, not including Kazakhstan (and KAP have already said they can export avoiding crossing Russian territory if the need arises). The US will be hard pushed to replace lost supply from Russia alone.

The United States has over 90 nuclear reactors, more than any other country, and is heavily reliant on imported uranium. Russian uranium made up 16% of U.S. purchases in 2020, according to the Energy Information Administration, with Canada and Kazakhstan each providing 22%.

[bountyhunter] 13/5/2022 07:32

I don't think that YCA is planning on selling off current stock anytime soon?

[mrnumpty] 13/5/2022 07:27

Jonwig . Thanks for the prompt and informative reply . I recognise your name from various other chat sites . So , forgive me for being a Numpty , and we will only really know the actual details of the anticipated import ban by the USA of U308 from Russia if and when it is announced but , from your reply , it seems that the ban by Washington might / will only apply to exports from Kazakhstan which actually transit through Russia . The only feasible route out of Kazakhstan , excluding Russia , seems to be via China , presumably trucking exports ( can U308 be transported in ordinary lorries ? ) to the nearest railhead in China . I note from recent RNSs by Yellow Cake that it has a current contract to purchase stock from Kazakhstan and there has so far been no information from the Company to suggest any interruption to these new supplies . The recent fall in Yellow Cake’s share price seems to have been on fairly small volumes . Nonetheless , it would be interesting if anyone here can enlighten us about alternative sources of stock for the Company other than Kazakhstan .

[jonwig] 13/5/2022 06:58

mr n - Kazatomprom's latest statement (03/05) was encouraging on that point;



Kaz's position is one of determined neutrality, but it also has a route for export which doesn't transit through Russia. (China, I think.)

The above statement also describes the bigger factors which work in favour of uranium demand.

[mrnumpty] 13/5/2022 06:53

It was only a few days ago , on 9th May , that Yellow Cake issued an RNS , stating that it had completed the recent share buy-back programme of a total of 566,833 shares at an average of £ 4.15.4 which , even then , represented a discount to net average value of 10.4% which has obviously increased with the recent reduction in the share price . Although the Company would not have actually known at the time of the share buy-backs that the USA might ban the import of U308 from Kazakhstan , the directors are surely very aware that geo-politics plays a fundamental role in this market , and it was at the turn of the year , maybe a couple of months before Russia attacked Ukraine , that Moscow sent a military force ( 5000 paratroopers ? ) to Kazakhstan in order to shore up the government there and yet , notwithstanding the political instability in that country , Yellow Cake continued with the share buy-back programme . So , this all gives confidence in the Company but , to return to my previous post here a few minutes ago about alternative sources of stock , does anyone know whether Yellow Cake has previously obtained U308 from countries other than Kazakhstan and , furthermore , how feasible it would be for the Country to find alternative sources of stock to replenish stocks as the current supply is sold off ?

[mrnumpty] 13/5/2022 06:26

Forgive me a stupid question regarding the fall in the share price , which seems irrational given that the price of U308 seems to be holding up ( $ 56.70 at the moment ) . If the US bans the import of Uranium from Kazakhstan , then obviously that significantly reduces the already limited sources from which the West can obtain Uranium . As Yellow Cake’s supply of it is already safely stored in the West ( France and Canada ) , then surely the value of the Company’s existing stocks must increase . Presumably the share price of Yellow Cake has fallen because of concerns about sourcing new supplies from alternative territories if Kazakhstan is to be locked out . So , does anyone know how easy it will be for Yellow Cake to obtain supplies from alternative territories such as Australia . Otherwise we’ve only got our existing stock to sell .