Exercise of Repurchase Option and Buyback Option

RNS Number : 0425T

Yellow Cake PLC

22 November 2021

 

22 November 2021

Yellow Cake plc ("Yellow Cake" or the "Company")

Exercise of Kazatomprom Uranium Repurchase Option and Buyback Option

Yellow Cake, a specialist company operating in the uranium sector with a view to holding physical uranium for the long term, confirms the exercise of the previously announced uranium repurchase option by JSC National Atomic Company ("Kazatomprom") and the subsequent, related exercise of the previously announced uranium buyback option by the Company.

Under an existing arrangement (as previously disclosed in the Company's admission document, annual reports and recent press releases), Kazatomprom has an option to repurchase at the uranium spot price (less an aggregate discount of US$6.55 million) up to 25% of the initial purchase volume (of 8,091,385 lb of U₃O₈) which the Company purchased from Kazatomprom in July 2018 under its ten-year framework agreement with Kazatomprom (the "Framework Agreement") (the "Repurchase Option"). The Company has a corresponding buyback option to purchase from Kazatomprom, at the prevailing spot price, all or a portion of the volume repurchased by Kazatomprom under the Repurchase Option (the "Buyback Option"). Kazatomprom's right to exercise the Repurchase Option arises only once during the term of the Framework Agreement, for a period of 60 days, when certain conditions are met.

Following the conditions being met for Kazatomprom to exercise the Repurchase Option, the parties have agreed that:

o  Kazatomprom will exercise the Repurchase Option to repurchase from the Company 2,022,846 lb of U₃O₈ at a price of US$43.25/lb, less a total aggregate discount of US$6.55 million. Kazatomprom will take delivery of the 2,022,846 lb of U₃O₈ from Yellow Cake on 22 November 2021; and

o  Yellow Cake will exercise the Buyback Option to purchase from Kazatomprom the same quantity of U₃O₈ at a price of US$43.25/lb. Yellow Cake will take delivery of the 2,022,846 lb of U₃O₈ from Kazatomprom between March 2022 and April 2022.

The net impact of these transactions is expected to be a pay-out by the Company to Kazatomprom of US$6.55 million.

 

ENQUIRIES: 

Yellow Cake plc
Andre Liebenberg, CEO	Carole Whittall, CFO
Tel: [phone]
Nominated Adviser and Joint Broker: Canaccord Genuity Limited
Henry Fitzgerald-O'Connor	James Asensio
Georgina McCooke Tel: [phone]
Joint Broker: Berenberg
Matthew Armitt	Jennifer Wyllie
Varun Talwar	Detlir Elezi
Tel: [phone]
Financial Adviser: Bacchus Capital Advisers
Peter Bacchus	Richard Allan
Tel: [phone]
Investor Relations: Powerscourt
Peter Ogden	Linda Gu
Tel: [phone]

 

ABOUT YELLOW CAKE

Yellow Cake is a London-quoted company on AIM, 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 14.86 million pounds 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 U₃O₈, 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.

 

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