Yellow Cake Share News (YCA)

(Sharecast News) - Specialist uranium company Yellow Cake updated the market on its performance for the quarter ended 31 December on Monday, reporting that its estimated net asset value at period end stood at £2.11 per share, or $245.3m.
The AIM-traded firm said that comprised 9.62 million pounds of physical uranium, valued at a spot price of $25 per pound, as well as other net assets.

It said the value of the uranium it held decreased over the quarter from $246.7m to $240.4m, with its total holdings standing at 9.62 million pounds having been acquired at an average cost of $21.69 per pound.

The board still noted that the total increase in the value of uranium held by the company was 15.3% to $240.4m, relative to the aggregate acquisition cost of $208.6m.

Yellow Cake said that, following the conclusion of the section 232 investigation into uranium imports into the United States in July, and the US president's decision not to implement new trade restrictions on imports, a Nuclear Fuels Working Group (NFWG) was established to review the nuclear fuel supply chain.

The working group's recommendations were expected in mid-November, but were yet to be publicly announced.

Following the quarter end, the firm's shares continued to trade at a discount to its underlying net asset value.

On 22 January, the company began a share buyback programme to purchase up to $2m of its ordinary shares over three months.

The Yellow Cake board said it had taken the decision to implement the share buyback programme as a means of effectively acquiring exposure to uranium at a discount to the commodity spot price.

It said the buyback programme formed part of its broader strategy to deliver value to its shareholders.

"Uranium spot market volumes recovered to near 2018 levels in the last quarter, despite the continued uncertainty as to the findings and recommendations of the US Nuclear Fuels Working Group, though volumes were down over the year," said chief executive officer Andre Liebenberg.

"With this uncertainty remaining, the spot price has stayed locked in a narrow range."

Liebenberg said the long term case for uranium remained "sound", in particular as the world "increasingly recognises" the need for the "clean baseload energy" provided by nuclear.

"We expect demand to rise as the new nuclear fleet currently under construction comes on stream over the next two years and we see a sustainable return to buying from the major utilities."

He also noted that Yellow Cake's shares had continued to trade at a discount to net asset value.

"We therefore began the share buyback programme we had flagged in late 2019, as a means to acquire additional exposure to uranium at a discount to the commodity spot price.

"The programme is in line with our strategy to deliver shareholder value, but also indicative of the continued confidence we have in the longer term outlook for uranium."

At 1409 GMT, shares in Yellow Cake were up 0.43% at 187.8p.