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Interesting talking head interview https://www.youtube.com/watch?v=lkTnW2GRwOc. i think his point about how easy it woudl be for big investors to game the SPUT price. We have a positive underlying supply/demand story and then creation of a vehicle that actually is extremely dangerous because of the way it is structured.
Any idea what happened on the open > i was expecting YCA to be 3-4% higher and instead absolutely bombed??? Trading around 13% discount with SPUT closing at 3%. Very weird. All I can think is a bunch of very weak short term players piled in this month and got caught out.
Assume everyone seem this for what its worth
https://www.lse.co.uk/news/canaccord-genuity-raises-target-price-on-yellow-cake-yuuw8pt6mhd4zwe.html?utm_source=alerts&utm_medium=email&utm_campaign=2023-10-10&utm_term=news
Well your spreadsheet implies they paid $70.09 if they received no additional cash during the day. Presumably if units outstanding doenst change then there were no new investments? This is inline with 5/10 revaluation but shares were trading at a 4.2% discount. This implies they can buy physical at the valuation of the previous day no matter what the discount the shares are trading at?
We are clearly not understanding something here. The discussion was while they traded at a discount they couldn't buy as this would make the NAV worse i.e. increase the discount., but they seem to have. Hard to tell what price they paid but sure it was above $70 and NAV is based off $68.60.
I'm pretty confused what the rules of the game are with this ETF!!!
So while they trade at a discount they cant buy physical Uranium unless they hit 10% cash? Is that the correct interpretation. Can they buy their own shares then as that is accretive to NAV? Maybe ETFs aren't allowed to do that. Yellowcake shoudl be buying back at effectively $61 if they thought taking delivery at $65.50 was a good deal.
In theory raising money at the same price as they buy Uranium woudl make no difference to NAV if 1005 of the money raised buys uranium at that price. This time $25mio excess not reinvested woudl in theory have to buy at market price which woudl be a straight loss. so reduces NAV. Seems daft to raise more money at a discounted price unless you can buy the uranium at the same price!!!! i.e they should have only raise $100mio
Am I being dim but everything overnight seems to be positive and yet YCA down 2%
1. Sprott buy 160,000lb and still has 58mio of cash (=800,000lb)
2. Spot now 71.5 bid
3. YCA exercises option to buy at $65.50 so improving NAV at current Spot and increasing discount
4. GBPUSD lower
Discount now around 9%???
I sold some when it got to by $65 target a few weeks ago and just bough it all back
maybe i missed something?
Oops fat finger be quite entertaining if they built up enough cash to buy 25mio lb!!!!! Typically they havent allowed cash to go above this level so be interesting to see if they take the plunge or not. I know nothing about liquidly in spot market, but it may not be trivial to buy 2.5mio lb in current market.
Does anyone know the exact rules around when Sprott have to buy uranium. Cash holding up to $68mio which is highest since Jan23 when they bought 2.5mio lb. I assume by law there is a limit how much cash they hold, but its only 1.5% now.