NOTICE OF EGM
18 July 2007
The following letter and Notice of EGM have been sent to the shareholders of Yellowcake Plc:
Dear Shareholder
NOTICE OF AN EGM
We enclose a notice of an Extraordinary General Meeting ("EGM") to be held on 2 August 2007 at 10.30am at the offices of Marriott Harrison at 12 Great James Street, London WC1N 3DR (the "Notice").
Introduction
With the long-term prospects for uranium mining undiminished, Yellowcake Plc (the "Company") continues to see its portfolio advancing in value and, as a result, the Company's directors have taken the view that its business model should remain focused on the development of its unique investment portfolio of quoted and unquoted global uranium equities.
Alongside the Company's primary focus, and capitalising on the Company's widespread contacts throughout the world's uranium mining industry, the directors also intend to carry out the identification, acquisition and potential disposal of direct uranium projects. This brings the Company the opportunity to earn fees alongside and build up a number of `carried interests' in promising uranium projects where the Company can enjoy significant upside potential, whilst seeking to minimise the financial risks of directly operating such projects.
The proposal summarised below reflects this revised business model as far as direct projects are concerned.
Proposed Transaction
On 16 April 2007 the Company announced that it had acquired an option to acquire a 60% interest in the Grease River Project pursuant to an agreement dated 10 April 2007 with CanAlaska Uranium Limited ("CanAlaska") (the "Option"). The Company has agreed terms in principle with Uranium Prospects plc ("UP") under which UP will acquire an option to acquire a 51% interest in the Grease River Project and the Company will retain a 9% free carried interest (the proposed "Transaction").
Under the proposed Transaction the terms of the Option will, subject to shareholders' approval, be amended, the principal amendments being as follows:
- UP will assume liability to pay option fees, previously due to be paid by the Company, of Cdn $75,000 per annum for a further three years to CanAlaska and will repay to the Company Cdn $75,000 in respect of the first-year option fee already paid.
- UP will assume liability to pay the balance of Cdn $5,000,000 of exploration expenditures on the Grease River Project, previously due to be paid by the Company, and will repay to the Company exploration expenditures already paid totalling Cdn $399,000 (which was GBP184,066.26 in sterling).
- UP will pay to the Company the sum of GBP25,000 as a contribution towards the cost of management time and expenses which the Company has incurred over the last year in negotiating the Option with CanAlaska.
- In addition to the 500,000 shares in the Company already issued to CanAlaska, the Company will, as a condition of the Option, remain obliged to issue further tranches of shares to CanAlaska over the period to 31 March 2010 - being 500,000 before 31 August 2007, 500,000 before 31 March 2008, 500,000 before 31 March 2009 and 500,000 before 31 March 2010.
Company's interest in Uranium Prospects Plc
The Company is a founding shareholder in, and holds 16.15% of the equity of UP. UP has applied to PLUS Markets Group Plc for its shares to be introduced to PLUS which it is expected will take place later this week.
Addworth Plc has a 29.9% shareholding in the Company and a 16.15% shareholding in UP. Directors of Addworth and their families also between them hold a further 9.16% shareholding in UP.
Although not required under the PLUS Rules or the Companies Act 1985 (as amended), the directors of the Company thought it appropriate to seek shareholders approval to the proposed Transaction. Accordingly, the Notice is attached.
Action to be taken
Shareholders will find enclosed with this document a Form of Proxy for use at the EGM. WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE EGM, THE FORM OF PROXY SHOULD BE COMPLETED AND SIGNED IN ACCORDANCE WITH THE INSTRUCTIONS ON IT AND RETURNED TO THE COMPANY'S REGISTRARS, SHARE REGISTRARS LIMITED OF CRAVEN HOUSE, WEST STREET, FARNHAM, SURREY GU9 7EN, AS SOON AS POSSIBLE, BUT IN ANY EVENT SO AS TO BE RECEIVED NOT LATER THAN 10.30 A.M. ON 31 JULY 2007. The completion and return of the Form of Proxy will not preclude you from attending the EGM and voting in person should you so wish.
Recommendation
The Company's directors believe the terms of the proposed Transaction are fair and reasonable and accordingly unanimously recommend shareholders to vote in favour of the resolution approving the proposed Transaction to be proposed at the EGM. All of the Company's directors will be voting their shareholdings in favour of the resolution.
Yours sincerely
MARK WATSON-MITCHELL
Executive Chairman
YELLOWCAKE PLC
(COMPANY REGISTERED NO. 5370820)
NOTICE OF EXTRAORDINARY GENERAL MEETING
NOTICE is hereby given that an Extraordinary General Meeting of Yellowcake Plc (the "Company") will be held at the offices of Marriott Harrison at 12 Great James Street, London WC1N 3DR at 10.30 am on 2 August 2007 for the purpose of considering and, if thought fit, passing the following resolution as an Ordinary Resolution.
RESOLUTION
THAT, the proposed agreement between the Company, Uranium Prospects Plc and CanAlaska Uranium Limited relating to the Grease River Project (the "Agreement") in the form presented to the meeting and as described in the letter to shareholders of the Company dated 17 July 2007 be and it is hereby approved and that the Directors be and they are hereby authorised to do all acts and things which they consider necessary or desirable to give effect to and to complete the Agreement and that the Directors are hereby empowered to make minor amendments to the Agreement as they think fit.
By Order of the Board
Albert Collins
Secretary
Registered Office:
1 Carthusian Street
London EC1M 6DZ
Dated 17 July 2007
The Directors of the Issuer accept responsibility for this announcement.
Enquiries:
Yellowcake Plc
Robert Wallace, Chief Executive
Email: robert@yellowcakeplc.co.uk
Tel: 020 7638 8750
St Helen's Capital Plc
Barry Hocken, Director
Email: barry.hocken@sthelenscapital.com
Tel: 020 7628 5582