REG - Yellow Cake PLC - US$3 million Share Buyback Programme

Yellow CakeAnnouncement

04/04/2022 07:00

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RNS Number : 0596H  Yellow Cake PLC  04 April 2022

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 U(3)O(8)
from Kazatomprom, all U(3)O(8) 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 U(3)O(8) in Canada and France and
has exercised its Buyback Option with Kazatomprom in terms of which it will
acquire 2,022,846 lb of U(3)O(8) 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 U(3)O(8) 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 U(3)O(8.) 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."

 

 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
 Gordon Hamilton

 Tel: +44 (0) 207 523 8000

 Joint Broker: Berenberg
 Matthew Armitt                   Jennifer Wyllie
 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                      Molly Melville
 Tel: +44 (0) 7793 858 211

 

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