Sign up UNITED KINGDOM
Proactive Investors - Run By Investors For Investors

Uranium trader Yellow Cake to list on AIM next month

Uranium is structurally mis-priced, says Yellow Cake
Uranium
Yellow Cake will store its uranium at Cameco's Port Hope and Blind River facilities in Canada

A uranium trader focused on Kazakhstan is set to make its debut on AIM next month.

Yellow Cake Plc is backed by Bacchus Capital, the corporate finance boutique set up in 2016 by a group of senior bankers led by Peter Bacchus.

Uranium (U3O8) is structurally mis-priced, it says and Yellow Cake will make its money from stockpiling the radioactive metal, commodity streaming and royalties.

Kazakhstan is one of the world’s lowest cost uranium producers and has increased production substantially in recent years.

Added to the curtailing of nuclear programmes following the Fukushima disaster in Japan, this has kept uranium prices under pressure.

The group has a long-term supply contract with Kazakh group Kazatomprom, one of the world's lowest cost producers of uranium, that will see it acquire US$170mln of U3O8 following the IPO.

Yellow Cake is paying US$21.01 per pound, a discount of about 8% to the current spot price.

In addition, the Kazatomprom contract allows it buy up to an additional US$100mln of U3O8 each year for the next nine years.

A uranium pile of US$170mln is equal to one quarter of Kazatomprom's annual production and approximately 5% of 2016 global marketed production.

Yellow Cake is expected to join AIM in early July.

View full YEL profile View Profile

Related Articles

Picture of pilot plant
April 05 2018
An impressive pre-feasibility study features a pre-tax valuation of $227 million for start-up capital expenditure of $65 million.
Zinc in periodic table
April 17 2018
The report was prepared by CSA Global under contract to SLR Consulting Ireland ...
1527253264_Kavango.jpg
May 29 2018
Kavango Resources is going big game hunting in Southern Botswana

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use