Uranium specialist Yellow Cake announces first day of trading on AIM
Source - SMW
Uranium specialist Yellow Cake announced its first day of trading on the AIM market of the London Stock Exchange. It would have 76.2 million ordinary shares in issue.
In conjunction with the admission, the company raised gross proceeds of approximately £151 million through an oversubscribed placing and subscription of the 76.2 million ordinary shares with the placing taking place at a price of 200 pence per share.
The company would use the proceeds of the IPO to purchase approximately 8.1 million pounds of uranium for US$21.01 per pound under its contract with uranium producer Kazatomprom.
The uranium spot price was approximately US$22.55 per pound, approximately 7.5% higher than the contract purchase price, on 25 June 2018.
"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," said Yellow Cake CEO Andre Liebenberg.
"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," he added.
Yellow Cake was set up by Bacchus Capital Advisers with a view to hold long-term physical uranium and to offer shareholders exposure to the uranium price without the risks associated with companies that explore for uranium.