26 Apr 2023 13:07

Yellow Cake fund bought 1.35 mln pounds of uranium from Kazatomprom in Q1

MOSCOW. April 26 (Interfax) - Yellow Cake Plc. has informed Kazakhstan's national nuclear corporation Kazatomprom that it elected to purchase 1,350,000 lb of uranium U3O8 at a price of $48.90/lb, or $66 million in aggregate, the company said in its report for the first quarter of 2023.

Yellow Cake expects delivery to take place in the second half of 2023. On completion of the purchase, Yellow Cake will hold 20.16 million lb of U3O8.

To finance the purchase, Yellow Cake completed an oversubscribed share placing of 15 million shares on February 7, 2023, which raised gross proceeds of approximately $74.3 million, according to the report.

Yellow Cake retains its full option to purchase up to an additional $100 million of U3O8 in 2023 under the Framework Agreement.

"Our confidence in the outlook for uranium is unchanged. In the first quarter, the price of uranium has continued to rise, in contrast to other commodities, highlighting 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," CEO of Yellow Cake Andre Liebenberg is quoted as saying.

In January 2023, the daily uranium spot price increased by almost 6% to reach $50.75/lb U3O8 by month-end. The spot price then traded in a narrow range through February ($50.85/lb U3O8) and March ($50.65/lb U3O8), due to relatively limited market demand.

The annual spot market volume in 2022 totaled 60.8 million lb, as compared to the 2021 level of 102.4 million lb, according to the 2022 Uranium Spot Market Review published by UxC.

UxC expects utilities to focus on new term contracting in 2023. "However, additional contracting activity could also flow back into the spot market, which would add to demand that is expected to be heavily driven by the activity of financials," according to UxC.