REG - Yellow Cake PLC - Exercise of Repurchase Option and Buyback Option

Yellow CakeAnnouncement

22/11/2021 07:05

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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 U(3)O(8)) 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 U(3)O(8) 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 U(3)O(8) from Yellow Cake on 22 November 2021; and

o  Yellow Cake will exercise the Buyback Option to purchase from Kazatomprom
the same quantity of U(3)O(8) at a price of US$43.25/lb. Yellow Cake will take
delivery of the 2,022,846 lb of U(3)O(8) 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: +44 (0) 153 488 5200

 Nominated Adviser and Joint Broker: Canaccord Genuity Limited
 Henry Fitzgerald-O'Connor        James Asensio
 Georgina McCooke

 Tel: +44 (0) 207 523 8000

 Joint Broker: Berenberg
 Matthew Armitt                   Jennifer Wyllie
 Varun Talwar                     Detlir Elezi
 Tel: +44 (0) 203 207 7800

 Financial Adviser: Bacchus Capital Advisers

 Peter Bacchus                    Richard Allan

 Tel: +44 (0) 203 848 1640

 Investor Relations: Powerscourt
 Peter Ogden                      Linda Gu
 Tel: +44 (0) 7793 858 211

 

 

 

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 ("U(3)O(8)"). 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 U(3)O(8) 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 U(3)O(8) with Kazatomprom, the world's
largest uranium producer. Yellow Cake currently holds 14.86 million pounds of
U(3)O(8), 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(3)O(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.

 

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