Yellow Cake NAV slips as uranium values decline

The AIM-traded company said it increased its holdings of triuranium octoxide from 20.16 million pounds to 21.68 million pounds during the six months ended 30 September, bolstered by the receipt of 1.53 million pounds of uranium in June.

Despite that, the value of its uranium holdings edged up by only 1.1% to $1.77bn, as the triuranium octoxide spot price fell 6% from $87.00 per pound to $81.75 per pound.

Yellow Cake reported a net asset value (NAV) decline to $1.8bn as of the end of September, compared to $1.88bn at the end of March.

That equated to a net asset value per share drop from £6.88 ($8.69) to £6.17 ($8.28).

The company posted a loss after tax of $87.6m for the half-year, swinging from a profit of $458.8m in the prior-year period.

During the period, Yellow Cake fulfilled its 2023 purchase agreement with Kazatomprom, acquiring 1.53 million pounds of triuranium octoxide at $65.50 per pound for a total of $100m.

The purchase was funded by an oversubscribed share placing in October last year, raising about £103m, with the acquired uranium stored at facilities in Canada and France.

As of 6 December, Yellow Cake’s net asset value stood at $1.7bn, reflecting a further decline in the triuranium octoxide spot price to $77.20 per pound.

“We are seeing a standoff between producers seeking higher prices due to rising costs and supply side strains, and buyers hesitant to commit, resulting in a largely stable uranium price recently,” said chief executive officer Andre Liebenberg.

“Despite this, demand for uranium is set to grow significantly, with the rapid growth in AI a particular driver.

“Nuclear energy is increasingly recognised as a low-carbon, reliable energy source, with global sentiment shifting in its favour.”

Liebenberg said that was evident in recent developments including China approving 11 new reactors, as well as global ambitions to triple global nuclear capacity by 2050.

“Small modular reactors are also advancing, offering shorter construction times and lower costs, with robust government and investor backing.

“Meanwhile, uranium supply faces challenges - Kazatomprom, for example, has cut its 2025 production forecasts due to material shortages and development challenges, highlighting broader supply constraints.

“These supply limitations and geopolitical tensions, such as Russian export restrictions, suggest price volatility but also present investment opportunities in physical uranium.”

At 1043 GMT, shares in Yellow Cake were down 3% at 531.05p.

Reporting by Josh White for Sharecast.com.