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(Sharecast News) - Specialist uranium investor Yellow Cake said in an update on Wednesday that its estimated net asset value per share increased 2% over the first quarter, to £4.23 per share as at 31 March from £4.15 per share on 31 December.
The AIM-traded firm said its estimated pro forma net asset value on 25 April was £4.46 per share, assuming 20.16 million pounds of triuranium octoxide valued at a spot price of $53.50 per pound, and cash and other current assets and liabilities.
During the first quarter, it completed an oversubscribed placing of 15 million shares on 7 February, raising £61.8m ($74.3m).
Yellow Cake said it used the funds to purchase 1,350,000 pounds of triuranium octoxide from JSC National Atomic Company Kazatomprom under its 2022 uranium purchase option, for a total of $66m.
The delivery of the purchased uranium was expected to take place in the second half, increasing Yellow Cake's holdings to 20.16 million pounds.
Yellow Cake said it also retained its option to purchase up to an additional $100m of triuranium octoxide in 2023 under the framework agreement with Kazatomprom.
The company's uranium holdings increased in value to $952.5m as at 31 March from $902.7m on 31 December, due to an increase in the spot price of 5.5% over the quarter, to $50.65 per pound from $48.00.
Yellow Cake said its operations, financial condition, and ability to purchase and take delivery of triuranium octoxide remained unaffected by the geopolitical events in Ukraine.
All uranium to which it had title and had paid for was held at the Cameco storage facility in Canada, and the Orano storage facility in France.
"We continue to deliver on our strategy - in the first quarter we completed another oversubscribed share placing, raising over £60m, which we immediately used to secure a further 1.35 million pounds of uranium from Kazatomprom as part of our framework agreement," said chief executive officer Andre Liebenberg.
"Once we take delivery later this year, our total uranium holdings will exceed 20 million pounds, giving our shareholders a substantial opportunity to participate in the continued strong pricing environment.
"Our confidence in the outlook for uranium is unchanged."
Liebenberg noted that in the first quarter, the price of uranium had continued to rise in contrast to other commodities, which he said highlighted the "low correlation" of the uranium price to other asset classes.
"More significantly, there is a considerable positive shift in global sentiment towards nuclear, with governments worldwide recognising the need for clean base-load capacity.
"We continue to see rising demand, driven in part by higher contracting activity, which coupled with constrained supply, leads us to believe that this marks a generational opportunity for investors in uranium."
At 0841 BST, shares in Yellow Cake were up 4.53% at 374p.
Reporting by Josh White for Sharecast.com.
