US$3 million Share Buyback Programme
4 April 2022
Yellow Cake plc ("Yellow Cake" or the "Company")
Yellow Cake begins US$3 million Share Buyback Programme
Yellow Cake, a specialist company operating in the uranium sector holding physical uranium for the long term, is pleased to announce the initiation of a share buyback programme to purchase up to US$3 million of the Company's Ordinary Shares over 30 calendar days commencing on 4 April 2022 (the "Programme").
The Yellow Cake Board notes that the Company's shares have traded at a material discount to its underlying net asset value since mid-January this year. The Yellow Cake Board has therefore taken the decision to implement a share buyback programme as a means of effectively acquiring exposure to uranium at a discount to the commodity spot price. The Programme forms part of the Company's stated broader strategy to deliver value to its shareholders.
Yellow Cake confirms the geopolitical events in Kazakhstan and Russia/Ukraine have not had a material impact to date on the Company's operations, nor affected its financial position, while both demand and supply side fundamentals around the outlook for uranium remain compelling. The tragic war in Ukraine, as well as the conclusions of COP26 have resulted in a comprehensive review of the benefits of nuclear energy. By way of example, the UK government has brought forward plans to build more nuclear energy plants and the Belgian and South Korean governments are reviewing their planned phaseouts of nuclear power given concerns over future energy security. We are seeing an acceleration in the transition away from fossil fuels driven by fears over security of supply and significant fossil fuel price increases.
While the Company has purchased and intends to continue to purchase U3O8 from Kazatomprom, all U3O8 to which the Company has title and has paid for, is held at the Cameco storage facility in Canada and the Orano storage facility in France. Furthermore, Yellow Cake does not anticipate any material delay in completing the delivery of uranium it has agreed to purchase as part of agreements announced last year.
Yellow Cake currently holds 15,832,755 lb of U3O8 in Canada and France and has exercised its Buyback Option with Kazatomprom in terms of which it will acquire 2,022,846 lb of U3O8 from Kazatomprom to be delivered to the Company at the Cameco storage facility in Canada between April 2022 and May 2022. In addition, the Company has entered into an agreement to purchase 950,000 lb of U3O8 from Kazatomprom to be delivered to the Company at the Cameco storage facility in Canada by 30 June 2022. On completion of these transactions, Yellow Cake will hold 18,805,601 lb of U3O8. Additionally, the Company does not anticipate any restrictions on being able to make further purchases under its option agreement with Kazatomprom (the "Framework Agreement") should it wish to do so.
Yellow Cake provides an attractive means for investors to gain exposure to the uranium commodity sector and believes the price outlook for uranium is similarly compelling. We have seen a recent rapid rise in the spot uranium price and are now seeing strong demand from utilities concerned about their supply security and the diversity of their supply portfolios starting to impact the mid-term and longer-term uranium prices. The buyback presents a good opportunity to increase our exposure to the commodity.
Buyback Programme
Purchases pursuant to the Programme will be made under the authority the Company has in place to make market acquisitions in accordance with the Jersey Companies Law (the "Existing Authority"). Under the parameters of the Programme, the Company will seek to make market purchases at a price or prices and volume that the Company believes to be value-enhancing for the Company's shareholders. As such, it is the Company's intention that Ordinary Shares only be purchased should the closing mid-market share price of the Company in any given day represent a discount of 10% or more to the Company's proforma Net Asset Value at that time. The Programme will be implemented over 30 calendar days unless extended by the Company.
The Existing Authority permits the purchase of a maximum of 15,358,435 Ordinary Shares. The Programme will be conducted in compliance with the Market Abuse Regulation (EU) No. 596/2014 and Commission Delegated Regulation (EU) No. 2016/1052, as they form part of UK law. The Company intends to hold those Ordinary Shares purchased under the Programme in treasury.
Purchases will be carried out in compliance with the relevant conditions for trading, restrictions regarding time and volume, disclosure and reporting obligations, and price conditions. The Ordinary Shares will be repurchased at a price, excluding expenses, that does not exceed the higher of (i) the last independent trade or the highest current independent bid on the relevant trading platform; and (ii) 105 percent 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.
Yellow Cake has entered into an agreement with the Company's Broker, Canaccord Genuity Limited ("Canaccord"), to carry out on-market purchases of its Ordinary Shares.
Details of any purchases made under the Programme will be provided via RNS announcements and published on the Company's website.
Andre Liebenberg, CEO of Yellow Cake said:
" We believe this buyback provides us an attractive opportunity to increase our exposure to the uranium price in the current environment. We are currently unaffected by the tragic situation in Ukraine and do not foresee any material impact in the future, although we continue to monitor the situation. Further, these events have once again turned attention from Governments around the world to the importance of energy security. We note the decisions by various governments to delay their planned phaseouts or extend the life of their nuclear energy capacity, and continue to believe the supply demand fundamentals for uranium remain compelling ."
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Yellow Cake plc
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Andre Liebenberg, CEO |
Carole Whittall, CFO |
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Tel: +44 (0) 153 488 5200 |
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Nominated Adviser and Joint Broker: Canaccord Genuity Limited |
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Henry Fitzgerald-O'Connor |
James Asensio |
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Gordon Hamilton Tel: +44 (0) 207 523 8000
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Joint Broker: Berenberg |
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Matthew Armitt |
Jennifer Wyllie |
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Detlir Elezi |
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Tel: +44 (0) 203 207 7800 |
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Financial Adviser: Bacchus Capital Advisers
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Peter Bacchus Tel: +44 (0) 203 848 1640 |
Richard Allan |
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Investor Relations: Powerscourt |
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Peter Ogden |
Molly Melville |
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Tel: +44 (0) 7793 858 211 |
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