16th Jan 2019 11:11
LONDON (Alliance News) - Yellow Cake PLC on Wednesday reported a rise in net asset value on the back of an increase in value of uranium and uranium reserves.
The company focused on investing in uranium said it was "encouraging" to see the spot price of uranium increase in the period.
The company's NAV per share at December 31 stood at GBP2.53, up 27% from GBP2.00, the company's NAV per share at its initial public offering in July 2018. The spot price of uranium increased 25% to USD22.85 per pound from USD28.50 when Yellow Cake listed.
The company said: "The global spot uranium market continued to strengthen during the fourth quarter of 2018, which was a record-setting year despite the price increase trend moderating as demand weakened heading into the traditional holiday period."
Yellow Cake's uranium holding at the end of 2018 was 8.44 million pounds, which is valued at USD240.6 million compared to the acquisition cost of USD178.2 million, a 35% increase.
"It has been encouraging to see the uranium spot price continue to rise since our IPO, with the spot price hitting a three-year high in late November. Yellow Cake's performance has been solid, with NAV up 5.9% over the quarter," said Chief Executive Office Andre Liebenberg.
Yellow Cake believes the spot price will increase further in the first quarter of 2019. Yellow Cake said: "There is a general industry expectation that ongoing spot market purchases by nuclear utilities, uranium producers, trading companies and financial entities will result in further price strengthening. However, periods of market price volatility may arise depending upon the demand and supply balance at any point in time."
Liebenberg added: "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."
Shares in Yellow Cake were up 2.8% Wednesday at 226.95 pence each.
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