Yellow Cake asset value rises with uranium prices

Yellow Cake asset value rises with uranium prices

After making its debut on the AIM mid-way through 2018, uranium buyer Yellow Cake Plc (KIN:YCA) said that its net asset value rose in December, in line with increasing uranium prices.

Continued success for Yellow Cake

The company said that for the three months through December 2018, its net asset value had risen 5.9% to £2.53 per share, which represented a 27% jump since its initial public offering in July. Within the same time frame of July to December, uranium oxide prices had jumped 25% to $28.50 per pound.

Yellow Cake Chief Executive, Andre Liebenberg, said, “We look to the future with optimism as countries around the world implement new uranium programmes and extend the lifecycle of existing projects,”

“Our investment thesis remains sound and we are confident in the long-term outlook for the uranium price.”

A positive outlook following their IPO

Following July’s successful IPO, the company’s Chief Executive said that,

“Due to an exceptional set of circumstances, uranium is one of the few commodities yet to recover from the recent commodities bear market and we believe that uranium is currently fundamentally and structurally mispriced,”

He added, “Yellow Cake’s long-term supply contract with Kazatomprom has allowed us to secure a highly significant and strategic position in physical uranium, at a competitive price, and to offer that exposure to a potential resurgence in the uranium price to investors, while avoiding direct exposure to exploration, development, mining and processing risk.”

Peter Bacchus, Chairman and Chief Executive of Bacchus Capital said, “The highly successful initial public offering of Yellow Cake demonstrates the depth and breadth of interest emerging in uranium as a commodity, and reflects the U.K. market’s continued strong support for the natural resources sector where an opportunity presented is on-theme, clearly articulated and compelling in nature.”

The outlook for 2019

Yellow Cake look set to expand and start 2019 on a positive footing. The company’s shares are currently trading at 226.5p 16/01/19 14:39 GMT, up 5.7p or 2.58% since trading began this morning. As of December, Berenberg analysts reiterated their ‘Buy’ stance on Yellow Cake stock.