Yellowcake Plc (‘Yellowcake’ or ‘the Company’) was incorporated in the United Kingdom in February 2005 as an Investment Vehicle and floated on the Ofex market on 29 July 2005. The Company was formed primarily to invest in uranium projects, initially in Canada, the US, South Africa and in various states of the former Soviet Union. It is intended that Yellowcake’s interest in any of these selected projects may range from a minority holding to a fully owned stake.
The Company’s investments may be made in quoted or unquoted companies and could also be in uranium holding funds, partnerships or by way of joint ventures. The investment criteria will include projects that are exploring for, developing or producing uranium.
The Company’s investing activities commenced at the end of September 2005 when the spot price for uranium was US$32. The values of uranium stocks have improved impressively since. Yellowcake’s Directors believe that this reflects not only a shortage of supply over demand but political pressure to find energy sources which limit the production of greenhouse gases and increasing levels of acceptance of nuclear power as a long term solution for power generation. Additionally, global production of uranium is not able to meet increased demand due to difficulties in finding new supplies, permitting delays in bringing discovered deposits into production and mining problems being encountered by existing uranium-producing mines.
The Company believes that there is a strong outlook for the price of uranium and hence in the share price of companies seeking to exploit its potential. At the same time, although many new companies have been formed to seek uranium opportunities, the Directors believes there is a dearth of available companies with genuine prospects for uranium production through which to participate in this exciting market.
In accordance with its strategy, Yellowcake has also taken steps to participate directly in the discovery of new sources of the mineral. The first such participation is the Grease River project, detailed here.