Yellow Cake Share Discussion Threads

[return_of_the_apeman] 29/7/2022 08:43

Anyone have any idea why buy backs have not been resumed?
Correct me if wrong, but the discount recently of approx. 25% is above the discount seen in mid Jan and even the current discount should trigger buy backs?

A precedent has clearly been set that if the discount hits levels seen in mid Jan then buy backs should re-commence


"Given that the Company's shares traded at a material discount to its underlying net asset value since mid-January this year"

From their own quarterly report
-" On 4 April 2022, Yellow Cake announced the initiation of a share buyback programme to purchase up to US$3 million of the Company's Ordinary Shares over 30 calendar days (the "Programme"). Given that the Company's shares traded at a material discount to its underlying net asset value since mid-January this year, the Yellow Cake Board resolved to implement the Programme as a means of effectively acquiring exposure to uranium at a discount to the commodity spot price. Under the Programme, the Company acquired 566,833 shares between 4 April and 6 May 2022, at a volume weighted average purchase price of GBP4.15 per share or US$3.0 million in aggregate and at a volume weighted average discount of 10.4% to the Company's pro formanet asset value."

[bootie64] 29/7/2022 07:20

Bullish news for Uranium market as Uranium Energy announces receipt of a competing offer from Denison Mines to acquire UEX Corporation.hTTps://www.juniorminingnetwork.com/junior-miner-news/press-releases/1620-nysemkt/uec/125575-uranium-energy-corp-announces-receipt-of-a-competing-offer-to-acquire-uex-corporation.html

[bmcb5] 28/7/2022 17:21

Thanks for those notes kiwi. I didn’t hear the call, so very useful for me. Bullish

[7kiwi] 28/7/2022 16:03

Numerco mid ticks up to $48.75/lb. Widening the gap to NAV again.

[7kiwi] 28/7/2022 15:43

Some interesting insights from Grant Isaacs on the Cameco con call. He was asked about the incentive price to bring new greenfield capacity on line. Here is his response:

"Well, Brian, we wouldn’t quarrel with those in the industry that say that the Western supply is probably - if the global is the last marginal town from a cost curve basis, prior to a bifurcated market was somewhere in the mid-70s.

We wouldn’t quarrel with those who have said that the price probably needs to be $20 a pound higher than that we see that analysis being done by some and we wouldn’t disagree with it. It makes sense, when you factor in."

In other words the incentive prices has gone from the mid-70's to mid-90's. Or $95/lb in round figures to bring on western green field development.

He was also asked about whether over-feeding is happening now and whether that is leading to additional uranium demand this year.

Here is his answer;

"Yes. But let me back it up into a couple of components. So obviously, you get the first demand outlook that uplift that just comes from the fundamentals, right. It is the improving clean energy focus, the energy security focus, the energy affordability focus.

And we are seeing that come as demand in the short-term, reactor programs being saved. In the medium-term reactor programs, getting life extensions. And in the long-term, it is new builds, not just a big reactors, but also advanced reactors, small modular reactors.

So, you have got that demand uplift that is driving the need for uranium right through to fuel fabrication. Then you add to this, the bifurcated market challenge, which I think is at the heart of your question.

The only way for the Western market to bridge through the Russian replacement challenge in the short-term awaiting additional capacity installed at Western enrichers is overfeeding. So the only way to get more out of an enrichment plant that is at capacity is to throw more uranium into it. So, there is more uranium demand that is going to come from that overfeed.

So that is kind of a shorter to medium term lift on uranium demand. But I don’t think people are even really paying a lot of attention, we are, but I don’t think enough people are paying attention to that overfeed piece.

And then don’t forget there is a third uplift in demand, and that is everybody’s inventory is going to go up because of the higher commitments. So you see that our purchases are going to go up in year because we have got more commitments. We have got more commitments. We need to carry more inventory, Cameco going to need to buy more, but that is going to happen all along the supply chain.

The converters, the enrichers, the fabricators everybody is working capital is going to go up. And by the way, utilities going through a supply crisis, inventory tends to be pro-cyclical. We will actually see demand come into - the one time demand for inventory at probably higher inventory targets than they were ahead of time.

So I think you are absolutely right in layering in these components to say that the only way for us effectively to do this is demands going up right across the fuel cycle. But actually there is going to be some shorter term pressures that are required in order to exclude Russia on a very rapid base, until such a time, as there is more enrichment capacity.

We are looking out into 2028, into that window before you have effectively expanded enrichment capacity, which says to us, there is a bulge of uranium demand just related to overfeed that is going to have to come in order to bridge through that exclusionary process.

So I think you are thinking about it the right way. I would just articulate it from that buildup. There is the fundamental demand. There is the exclusionary demand, and then there is the inventory demand and you add that all up and it explains why we are bullish."

So, yes demand now. Plus extra demand in the medium term. The extra demand coming from saving existing plants, extending the life of power plants and new builds both conventional and SMRs. Then an additional layer of demand from over-feeding, starting now and a third component of re-stocking across the supply chain.



#UraniumSqueeze

[return_of_the_apeman] 28/7/2022 12:19

I make sput 4.4% from nav, will be interesting if it closes the gap today - it gained over 6% yesterday
Discount here is 13.4% so looking for a move to £4.15 to begin with

[rimau1] 28/7/2022 08:17

I thought they may announce another buyback given the discount to NAV, its not really a buyback its actually buying more uranium at a discounted price. If no buyback they must be looking at further on market purchases?

[bountyhunter] 28/7/2022 07:32

Net Asset Value

"Yellow Cake's estimated net asset value on 30 June 2022 was GBP4.34 per share or US$964.5 million, consisting of 18.81 million lb of U(3) O(8) , valued at a spot price of US$50.50/lb [7] and cash and other current assets and liabilities of US$14.8 million. [8]"

[7kiwi] 27/7/2022 21:07

Numerco now reporting $48.50/lb mid. Up $1.50 on the day.

[7kiwi] 27/7/2022 20:50

SPUT closing in on NAV. Surely, it won't be long before it starts to turn on the ATM again, especially as the broader market seems to be thinking that the Fed is close to finishing this hiking cycle.

Hopefully, that will create some impetus for YCA to close the NAV gap and maybe even go to a premium to take advantage of the $100m option with Kazatomprom.

[7kiwi] 27/7/2022 15:52

Looks like the market likes Cameco's Conference Call.

SPUT and the major miners up strongly this afternoon. YCA belatedly getting the memo and showing some strength too.

[7kiwi] 27/7/2022 12:17

Cameco Results:


1. Still no deliveries from JV Inkai and no date for first delivery this year.

2. Delays to bringing McArthur River mine/Key Lake Mill on line, reducing production estimate for 2022 from 5m lbs to 2m lbs. Offset a bit by increasing Cigar Lake production.

3. Strong pricing in conversion activity. +8% y-o-y

4. Added 5m lbs to contract book in the quarter. Strategic patience, waiting for the market to come to them.

#UraniumSqueeze

[7kiwi] 26/7/2022 21:18

SPUT up quite strongly, although still below NAV.

Spot price ticked up again. Miners mixed.

Big day tomorrow with Cameco announcing their 2Q22 results.

[7kiwi] 26/7/2022 15:39

Justin Huhn of Uranium Insider gives his run down on what is happening in the nuclear fuel cycle, now that Russian enrichment is effectively off limits. He is talking of a swing in demand of 30-50m lbs per year as a result of western enrichers switching from under-feeding to over-feeding. He can barely contain himself. Note that global demand form reactors is ~180-200m lbs.



P.S. Justin's channel is also worth dipping into for his regular Uranium Market Minutes.

[7kiwi] 25/7/2022 22:17

Numerco's mid-price ticked up a bit tonight to $46.75. And miners closed strongly.

[lovewinshatelosses] 25/7/2022 21:34

That would make sense. Perhaps a government purchase to bolster national reserves at some point in the challenging future, for example. Nothing for immediate consideration anyway. Hopefully!

[7kiwi] 25/7/2022 21:00

I did see an interview with Andre a while ago where he was asked the question.

The stock answer is that it's a perpetual vehicle. However, he did raise the possibility of being taken out at a premium at some point if shareholders agreed.

31 mins.

[jonwig] 25/7/2022 19:59

I can't find anything in the prospectus about procedure for winding-up or any similar event. It does leave open the option of dividends and talks of "realising" the appreciation in the value of its uranium holdings.

[lovewinshatelosses] 25/7/2022 18:52

I always assumed it would eventually be bought out, but I assume this question has been asked previously?
My reason for buying this stock was as a Uranium play and hedge of sorts. I have a few producers on my watch list, but have not pulled the trigger on those yet. Definitely interested to hear the thoughts of others though - a good question, riverman.

[riverman77] 25/7/2022 18:29

I understand it would be nonsensical to pay dividends, but what is the actual endgame here? Is the plan for this to be eventually liquidated once uranium price hits a certain level, and return all the proceeds to shareholders? If not, then it would just become a perpetual holding vehicle, sitting on stores of uranium but not generating any actual realised returns.

[return_of_the_apeman] 25/7/2022 17:56

"These factors should result in continued strong demand for uranium and support a continued increase in uranium prices. Yellow Cake is well positioned to make the most of opportunities to realise value for investors both through increasing its holding of U(3) O(8) and through share buybacks when the share is trading materially below net asset value."

Surely they must announce a share buy back at this price unless they are all talk!

[jonwig] 22/7/2022 16:26

Exactly! Spare cash should be used to buy cake or own shares.The original prospectus said no dividends - clear enough?

[dartboard1] 22/7/2022 16:00

Dividends from what income? This is a holding vehicle for uranium, the only income is from revaluing the uranium to spot price.

[7kiwi] 22/7/2022 15:57

Germany's Chancellor Scholz to look again at keeping Germany's nuclear plants open.

[csalvage] 22/7/2022 12:39

I thought dividends might help bring this share to the attention of income people ,I'm happy hustbto have the shares go up.