Yellow Cake To Use IPO Funds To Buy 8.1 Million Pounds Of Uranium (ALLISS)

LONDON (Alliance News) - Uranium investor Yellow Cake said Thursday it will use the proceeds ...

Alliance News 5 July, 2018 | 12:02PM
Email Form

LONDON (Alliance News) - Uranium investor Yellow Cake said Thursday it will use the proceeds from its initial public offering to buy 8.1 million pounds of long term physical uranium (U3O8).

Shares in the company were admitted to trading on Thursday after raising GBP151 million in a float on London's AIM market, placing 76.2 million shares at 200 pence each.

Shares in Yellow Cake were trading at 198.00 pence on Thursday, down 1.0% from its IPO price.

The company said it will use the funds raised in the IPO to purchase 8.1 million pounds of U3O8 at a price of USD21.01 per pound under a contract with uranium producer Kazatomprom.

The company said that the spot price of uranium is around USD22.55 per pound, 7.5% higher than what it will pay under its contract.

Yellow Cake said that the quantity of uranium to be purchased represents 5% of 2016 global market production and a quarter of Kazatomprom's annual production, based on 2016 data.

"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," Chief Executive Officer Andre Liebenberg said.

By Elena Cherubini; elenacherubini@alliancenews.com.

Copyright 2018 Alliance News Limited. All Rights Reserved.

Email Form
Securities Mentioned in Article
Security Name Price Change (%) Morningstar Rating
Yellow Cake PLC Ordinary Shares 207.00 GBX 2.48 -
About Author Alliance News

Alliance News provides Morningstar with continuously updating coverage of news affecting listed companies.