Geiger Counter Regulatory News (GCL)

06 July 2021

GEIGER COUNTER LIMITED(THE "COMPANY")

RELEASE OF INTERIM REPORT AND FINANCIAL STATEMENTS

The Directors announce the release of the Interim Report and Financial Statements for the Six Months to 31 March 2021.

http://www.rns-pdf.londonstockexchange.com/rns/3538E_1-2021-7-6.pdf

Chairman Statement

The strong recovery in the Company's net asset value and share price that we saw in the six-month period to 30th September 2020 has continued into 2021 and as at 31 March 2021 the net asset value has increased by a further 107.9% and the share price has gone up by 99.5%. We believe there have been two major factors behind this; firstly, climate related government policies that recognise the significant benefits of nuclear power have at long last been announced around the world in order to meet carbon emission goals and secondly, uranium purchasing has increased with recent indications that utilities are beginning to sign longer-term contracts which will help sustain the improving trend in U3O8 pricing and the positive momentum in related equity prices.

Your Board was pleased to see that the ordinary shares traded at a premium to their underlying net asset value for significant periods up until the date of writing. The Company has utilised the share issuance powers granted by shareholders and has issued 6,841,116 new shares from 1 October 2020 to the date of this report which has raised £2.66m of new capital. We were pleased to see new capital inflows and have worked with our advisers to develop plans to grow the assets of the Company further as we believe that a greater size of assets will attract more investors into the Company. This has resulted in the publication of an Annual Subscription Right document whose terms were approved by shareholders at an EGM held on 26 April 2021. The first Annual Subscription Right will take place on 30 April 2022 and Shareholders will be entitled to subscribe for 1 new share for every 5 they hold at a price of 37.84p per new share. Shareholders will be sent details of how to subscribe a few weeks before that date.

Your Board and the Investment Managers remain confident over the long-term outlook for uranium. Power output from nuclear generation continues to rise and governments around the world are looking to nuclear power to provide both a base load for energy to supplement renewal sources and to reduce more polluting energy generation such as coal. The Investment Managers have a portfolio of leading companies involved in the mining and supply of uranium and firmly believe that prices will improve.

At the time of writing the Company's net asset value stands at 42.52p and the ordinary share price is 44.90p with the ordinary shares trading at a premium of 5.30%.

The Board and I would like to thank all the Company's service providers for working so diligently as we work to overcome the difficulties caused by the Covid-19 pandemic. We would also thank shareholders for their continued support for the Company and we look forward to a continued period of growth.

George Baird

Chairman

June 2021

Investment Adviser's Report

Since the end of September 2020 there has been a sea change in sentiment towards the sector. Reflecting this groundswell, the Fund NAV increased by 108% over the interim 6 months to end-March and has increased a further 24% since. The half-year performance compares favourably to sterling returns of 78% and 59% from the Solactive Uranium Pure Play Index and Solactive Nuclear and Components Index respectively. The U3O8 price has been more muted, with the benchmark spot price rising around 3% to US$31/lb as the market absorbs returning supply from major mines whose operations were temporarily suspended during Covid-related lockdowns.

A number of events over the period have contributed to lift sentiment towards the sector. One significant driving force has been a wave of climate related government policies that have been announced around the world in order to meet carbon emission goals. In addition, uranium purchasing has increased with recent indications that utilities are beginning to sign longer-term contracts which will help sustain the improving trend in U3O8 pricing and the positive momentum in related equity prices. Notwithstanding strong uranium demand growth out of Asia, led by China, the sector remains well placed to benefit from a sustained focus on implementing such policies in the West ahead of the 26th UN Climate Change Conference which takes place later this year. Given the positive shift taking place and improving supply-demand balance, the Fund remains well placed to benefit from further appreciation in U3O8 commodity price and we look forward to continued growth in Fund assets.

Nuclear power core to climate targets

China's recently announced blueprint for development of its power industry confirmed its intent to construct 6-8 reactors a year through to the end of 2025. This will increase generating capacity from almost 50GW at the end of 2021, equivalent to just 2% of its overall installed generating capacity, to 70GW by 2025. With 17 reactors already under construction the nation is well on its way to achieving this interim goal and construction starts over the next five years will lay the foundation for regional capacity to reach 120GW by 2030, exceeding the US in scale.

In the United States President Biden has flagged intentions to cut US emissions by 50-52% from 2005 levels, double the cut previously targeted by Obama. Seen as a way of achieving ambitious climate goals such as a carbon-free electricity grid by 2035, Biden has included nuclear power in his US$2trn post-COVID, revitalisation plans in which infrastructure and clean energy investment is a core theme. The US has also designated its nuclear power sector as a strategic industry and ratified the establishment of a strategic uranium reserve as it attempts to reduce its dependence on dominant overseas suppliers, notably Russia and Kazakhstan. This move, which has the backing of Democrat and Republican administrations, comes in addition to the wider state roll out of supportive policies such as Zero Emission Credits and has reinforced investor opinion in the region's commitment to the nuclear power sector and contributed to the improvement in investor sentiment. Disruption to Texas power supplies during the February cold snap, which cause around half the state's wind turbines to freeze, exposed vulnerabilities from an over reliance on one form of generation and provided significant impetus to retail investor appetite in the sector.

Other nations have also updated climate targets which helped sustained the positive momentum towards sector equities. In Europe, wider backing for the inclusion of nuclear power in the EU's spending plans, which is also focused on delivering low emission power, was provided as a number of European based NGO groups flagged that the EU's strategy to reduce carbon emissions is inadequate without the inclusion of nuclear. This follows lobbying by a number of EU member states notably including France, Europe's largest nuclear power market, to incorporate nuclear energy in the post-Covid stimulus.

Rising fossil fuel costs, which typically represent two thirds of electricity generation costs, are also helpful for the nuclear sector, providing a more favourable economic tilt for nuclear's inclusion in the energy mix. As an example, seaborne thermal coal prices have increased nearly 70% since Sept 2020 while Asian LNG prices are up over 80% over the same period. Perhaps more relevantly each are up 27% and 62% respectively compared to their average prices over 2019, pre-covid.

Nuclear power output and demand for feedstock on the rise

Led by a 19% rise in output in China power nuclear output, latest data showed nuclear power output globally matched the previous 2006 peak of ~2,660TWh in 2019, prior to the disruptive effects of the pandemic.

Substantial incremental demand for uranium has also arisen with several companies (Yellow Cake, Uranium Participation, Denison, UEC, and Boss Resources) raising money to buy physical uranium. This mirrors more general tightening across the supply chain. Conversion prices remain at healthy levels more appropriate for the restart of the Metropolis facility in the US, scheduled for 2023. Similarly, enrichment is seeing a positive shift in the use of available capacity, which is reducing secondary supply while global mine output remains pressured, evidenced by news from France's state-owned uranium miner, Orano, confirming it had exhausted ore and closed its Cominak mine in Niger. Though well flagged, this mine closure nevertheless highlights the need to incentivise new production.

Focussed Portfolio Positioning

Despite its strong 140% rise since end September 2020, Nexgen remains a core position for the Fund. Its Rook One project, located in Canada's Athabasca Basin, remains pre-eminent in terms of its scale and market leading production costs which provide an ability to influence the global market to which considerable strategic value can be ascribed.

There have been some changes in the portfolio, however. The Texas cold snap sparked a tsunami of retail demand as blog websites such as Reddit and Robinhood promoted the nuclear sector. Of particular note, share performances were led specifically by significant demand for US-listed equity lines of companies such as Denison whose share price spiked nearly threefold in February. While Denison's core projects at Wheeler River remain attractive such, an outsized move represented a short-term opportunity to reduce the Fund's holding.

With the exception of Paladin, the Fund has held back from participating in some recent equity placings. It has however reinvested proceeds from the sale of Denison equity together with proceeds of Fund equity issuance into names such as Nexgen whose share price briefly dipped below its recent placing price. The Fund also acquired equity in Uranium Participation which has subsequently extended its valuation premium compared to the value of its physical holdings and raised money to acquire more physical uranium.

Elsewhere, HPX is taking solid steps towards a listing of its core iron ore asset later this year, having seen delays in the prior IPO timetable due to covid disruption. Fortunately, the outlook for this project has improved markedly given strength in the iron ore prices which have risen to over US$200/t, up over 80% since September last year. Other investments owned by HPX have also benefitted from improving metal prices.

Robert Crayfourd and Keith Watson

New City Investment Managers

June 2021