- Intention to conduct an enlarged share buyback programme to purchase up to US$10 million of the Company’s shares
- Buyback financed by the disposal of 300,000 lb U3 O 8 raising net proceeds of US$9.9 million
Yellow Cake, a specialist company operating in the uranium sector with a view to holding physical uranium for the long term, announces that it has concluded an agreement to sell 300,000 lb U3O8 at an aggregate price of US$33.20/ lb. Following this sale, Yellow Cake will retain a significant 9.32 million lbs U3O8 in storage, acquired at an average cost of US$21.68/ lb.
The transaction will generate net proceeds of US$9.9 million (after costs and commission). Proceeds are expected to be received on or about 7 July 2020. These funds will enable the Company to conduct an enlarged share buyback programme to purchase up to US$10 million of the Company’s outstanding Ordinary Shares, pursuant to the authority the Company has in place to make market acquisitions in accordance with the Jersey Companies Law (the “Existing Authority”). The Existing Authority permits the purchase of a maximum of 8,821,572 Ordinary Shares at a maximum price (excluding expenses) of 105 per cent of the average market value of an Ordinary Share as derived from the AIM Appendix to the London Stock Exchange Daily Official List for the
five business days immediately preceding the date of purchase. This enlarged buyback programme is expected to be initiated following the announcement of the Company’s full year results on 8 July 2020.
Yellow Cake initiated a share buyback programme on 22 January 2020 to acquire up to US$2 million of the Company’s ordinary shares. To date, the company has acquired 611,806 shares for a total consideration of GBP1.2 million (US$1.5 million) at a volume weighted average price of GBP1.96/ share and volume weighted average discount to Net Asset Value of 20%. The Existing Authority therefore permits up to a further 8,209,766 shares to be purchased as at today’s date. The existing share buyback programme is expected to be terminated upon the initiation of the new, enlarged, share buyback programme.
“Yellow Cake has noted the recent persistent discount to NAV in the Yellow Cake share price. We believe now is the right time to take more aggressive action and significantly enlarge our buyback programme. This effectively enables us to acquire exposure to uranium at a discount to the spot price, creating value for all shareholders. The Board believes that by taking this decisive action now, the Company will be better placed to capitalise on its purchase agreement with Kazatomprom at the appropriate time. We continue to see uranium as a structurally favoured commodity and anticipate significant medium and longer term pricing upside.”Andre Liebenberg, Chief Executive
Yellow Cake plc
Andre Liebenberg, CEO
Tel: +44 (0) 153 488 5200
Carole Whittall, CFO
Nominated Adviser and Joint Broker: Numis Securities Limited
Tel: +44 (0) 207 260 1000
Joint Broker: Berenberg
Tel: +44 (0) 203 207 7800
Financial Adviser: Bacchus Capital Advisers
Tel: +44 (0) 203 848 1640
Investor Relations: Powerscourt
Tel: +44 (0) 7793 858 211
ABOUT YELLOW CAKE
Yellow Cake is a London-listed company founded and established by Bacchus Capital and
headquartered in Jersey, which offers exposure to the uranium spot price. This is achieved through its strategy of buying and holding physical triuranium octoxide (“U3O8”). It may also seek to add value through the acquisition of uranium royalties and streams or other uranium related activities. Yellow Cake seeks to generate returns for shareholders through the appreciation of the value of its holding of U3O8 and its other uranium related activities in a rising uranium price environment. The business is differentiated from its peers by its ten-year Framework Agreement for the supply of U3O8 with Kazatomprom, the world’s largest uranium producer. Yellow Cake currently holds 9.62 million lb of U3O8, all of which is held in storage in Canada and France.
FORWARD LOOKING STATEMENTS
Certain statements contained herein are forward looking statements and are based on current
expectations, estimates and projections about the potential returns of the Company and the industry and markets in which the Company will operate, the Directors’ beliefs and assumptions made by the Directors. Words such as “expects”, “anticipates”, “should”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “projects”, “pipeline”, “aims”, “may”, “targets”, “would”, “could” and variations of such words and similar expressions are intended to identify such forward looking statements and expectations. These statements are not guarantees of future performance or the ability to identify and consummate investments and involve certain risks, uncertainties and assumptions that are difficult to predict, qualify or quantify. Therefore, actual outcomes and results may differ materially from what is expressed in such forward looking statements or expectations. Among the factors that could cause actual results to differ materially are: uranium price volatility, difficulty in sourcing opportunities to buy or sell U 3O 8, foreign exchange rates, changes in political and economic conditions, competition from other energy sources, nuclear accident, loss of key personnel or termination of the services agreement with 308 Services Limited, changes in the legal or regulatory environment, insolvency of counterparties to the Company’s material contracts or breach of such material contracts by such counterparties. These forward-looking statements speak only as at the date of this announcement. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based unless required to do so by applicable law or the AIM Rules.