Notice of General Meeting

RNS Number : 6480Z

Yellow Cake PLC

25 May 2021

 

25 May 2021

Yellow Cake plc

("Yellow Cake" or "the Company")

Notice of General Meeting

Yellow Cake, a specialist company operating in the uranium sector with a view to holding physical uranium ("U₃O₈") for the long term, will hold a General Meeting ("GM") at 10:00am on 10 June 2021 at 3rd Floor, Liberation House, Castle Street, St Helier, Jersey, JE1 2LH. Copies of the GM Notice ("Notice") and Proxy form will be posted to registered shareholders and the Notice is available on the Company's website www.yellowcakeplc.com .

Please note that in light of the COVID-19 pandemic and the associated restrictions on travel and gatherings, the Company is unable to permit shareholders to attend the GM in person. To ensure that their votes count, shareholders are requested to instead submit their votes by appointing the Chair of the GM as their proxy.

A hard copy version of the Notice and the Form of Proxy will be sent to those shareholders who have elected to continue to receive paper communications. Shareholders who have not elected to continue to receive paper communications will be sent a notification of the availability of the Notice on the Company's website by post or, where they have elected, by email.

Summary Reasons for General Meeting

· Yellow Cake's strategy is to buy and hold physical uranium for the long term and to date the Company has financed its uranium purchases through the issuance of equity. In line with its stated strategy, each year Yellow Cake seeks authority from its shareholders at its Annual General Meeting ("AGM") to allot and issue new shares on a non-preemptive basis, for uranium purchases, including the exercise of the Company's US$100 million uranium purchase option under the Framework Agreement with NAC Kazatomprom JSC ("Kazatomprom") (the "Framework Agreement") as well as its working capital needs. Under the Company's Framework Agreement, Yellow Cake has the option to purchase up to US$100 million of U₃O₈ per year from Kazatomprom at an undisturbed spot price, through to 2027.

· On 2 March 2021, Yellow Cake successfully completed an upsized US$140 million share placing due to very strong investor demand. The Company utilised the proceeds of the placing to fully exercise its 2021 option to purchase US$100 million worth of U₃O₈ from Kazatomprom pursuant to the Framework Agreement and to purchase a net additional $15 million worth of U₃O₈ in the spot market.

· Following the share placing, Yellow Cake has almost fully utilised the authorities to allot and issue new shares obtained at its AGM in 2020. The Company is now restricted in its ability to issue further new shares on an opportunistic basis prior to the renewal of the annual authorities at its 2021 AGM, expected to be held in September.

· Yellow Cake believes that the uranium market fundamentals are such that purchasing additional physical uranium could be done on a value accretive basis. The increased need for producer purchasing, ongoing impacts of COVID-19 on supply, and corporate actions, may limit spot market purchases in the very near term. To the extent that opportunities arise to source additional uranium that are value accretive ahead of expected further spot market tightening, the Directors believe it would be in the best interests of the Company to continue with further uranium market purchases.

· As a result, the Board is seeking shareholder approval at a GM in order to renew its authorities to allot up to 25 million new ordinary shares prior to its AGM in September 2021 to ensure it is in a position to act opportunistically should it be able to identify new uranium purchase opportunities.

· The Board of Yellow Cake continues to firmly believe in the longer term investment case for uranium, and that there is a growing recognition of the attractive supply/demand fundamentals that give uranium its positive price dynamic. The Company has traded at a consistent and strong premium to net asset value ("NAV") since the March 2021 equity raise (currently a premium to NAV of 11%(1)).

· Yellow Cake would only seek to utilise its authorities if it was able to identify access to physical uranium purchases that are value accretive. If not utilised, the authorities being sought will lapse at the AGM in September 2021, and the Company will seek new authorities to issue and allot shares to fund uranium purchases at the AGM as usual.

Ends

 

Enquiries:

Yellow Cake plc
Andre Liebenberg, CEO	Carole Whittall, CFO
[phone]
Nominated Adviser and Joint Broker: Canaccord Genuity Limited
Henry Fitzgerald-O'Connor	James Asensio
Georgina McCooke
+ 44 (0) 207 523 8000
Joint Broker: Berenberg
Matthew Armitt	Jennifer Wyllie
Varun Talwar	Detlir Elezi
Tel: [phone]
Financial Adviser: Bacchus Capital Advisers
Peter Bacchus	Richard Allan
Tel: [phone]
Media/Investor Relations: Powerscourt
Peter Ogden
[phone]

 

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 9.85 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 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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(1)  Yellow Cake's estimated proforma NAV on 20 May 2021 was US$432.5 million, consisting of 13,305,601 lbs of U₃O₈ valued at the Broker Average Price of US$31.05/ lb published by UxC LLC on 20 May 2021, a derivative liability of US$3.4 million and other net current assets as at 31 March 2021, less net consideration payable for committed purchases after that date. As at 31 March 2021, Yellow Cake held 9,856,385 lb U₃O₈. Pro-forma adjustments for committed purchases after 31 March 2021 include the addition of 3,454,231 lb U₃O₈ that Yellow Cake has committed to purchase from Kazatomprom for a cash consideration of US$100.0 million (for delivery between May and August 2021), the addition of 343,053 lb U₃O₈ which Yellow Cake purchased in the market for a cash consideration of US$10.0 million (completed in May 2021) and the deduction of 348,068 lb U₃O₈ which Yellow Cake sold to Uranium Royalty Corp. for a cash consideration of US$10.0 million (completed in April 2021). Yellow Cake's estimated NAV per share as at 20 May 2021 was £2.38 per share, calculated assuming 132,740,730 ordinary shares in issue less 4,156,385 shares held in treasury on that date and the Bank of England USD / GBP exchange rate of 1.4155. At market close on 20 May 2021, the Company's share price was £2.63 per share, which represents an 11% premium to the above estimated NAV of £2.38 per share. The premium to NAV figure referred to, the numbers from which it has been derived and the calculations made to derive it have not been audited or reviewed by the Company's auditors.

 

END

 

 

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