YELLOW CAKE ANNUAL REPORT 2024 A
YELLOW CAKE AT A GLANCE
STRATEGIC REPORT
GOVERNANCE
FOR THE YEAR ENDED 31 MARCH
Annual
Report
2024
CONTENTS
STRATEGIC REPORT
02
AT A GLANCE
01
FINANCIAL STATEMENTS
04
GOVERNANCE
03
2
Yellow Cake at a glance
3
Investment case
35
Corporate governance report
36
Board of directors
47
Report of the Audit Committee
50
Directors’ remuneration report
58
Directors’ report
61
Independent auditor’s report
66
Financial statements
85
Corporate information
4
Highlights
5
Our business model
6
Chairman’s statement
8
Our strategy
19
Chief Executive Officer’s review
22
Chief Financial Officer’s report
24
Environmental, social and governance
27
Risk management
34
Viability
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 1
YELLOW CAKE AT A GLANCE
n Nuclear power is forecast to grow strongly to 2050 to meet the world’s growing energy needs and net zero carbon
emission commitments, particularly in developing markets. Russia’s invasion of Ukraine highlighted the concentrated nature
of nuclear fuel supply, increased the focus on national energy security and accelerated the shift away from fossil fuels. Many
countries have reassessed nuclear energy as a safe, secure and reliable source of electricity.
n As at 31 March 2024, Yellow Cake held 20.2 million lb of U3O8, equivalent to 14.2% of 2023 global uranium
production1. Yellow Cake issues its shares at or above net asset value to acquire U3O8 under its Framework Agreement with
Kazatomprom and in the spot market.
n Yellow Cake currently holds 21.68 million lb of U3O8 following the completion of the purchase of 1.53 million lb of U3O8
from Kazatomprom in June 2024.
1
MineSpans Q124.
Yellow Cake holdings and U3O8 price
Average acquisition cost USD34.64/lb
0
5
10
15
20
25
30
Feb-23
Nov-22
Aug-22
May-22
Feb-22
Nov-21
Aug-21
May-21
Feb-21
Nov-20
Aug-20
May-20
Feb-20
Nov-19
Aug-19
May-19
Feb-19
Nov-18
Aug-18
May-18
U3O8 price
Yellow Cake U3O8 holdings
0
10
20
30
40
50
60
70
USD/lb
U3O8 (mlb)
Yellow Cake plc (the “Group”)
is quoted on the London AIM market
and provides investors with the
opportunity to gain exposure to the
uranium market through our physical
holdings of uranium oxide concentrate
(“U3O8”) and commercial opportunities
related to these holdings. The short-
and medium-term supply and demand
asymmetry suggests an increase in the
uranium price in the near term.
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 2
INVESTMENT CASE
Direct exposure to uranium
n Provides liquid exposure to the uranium spot price, with no exploration, development or operating risk.
n Opportunities to realise value from ownership of U3O8.
Strong board and management
n The Board is committed to good governance and high ethical standards, and plays an
active oversight role.
Storage in safe jurisdictions
n Uranium holdings are stored in Canada and France.
Buy and hold strategy
n Yellow Cake purchases uranium and holds it for the long-term in a market with a
significant supply/demand disjuncture.
Value accretive growth
n Yellow Cake issues its shares at or above net asset value to acquire U3O8 at the spot
price, under its Framework Agreement with Kazatomprom, and in the spot market.
Low-cost exposure
n Yellow Cake’s structure and outsourced operating model minimise operating costs
(<1% of net asset value).
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 3
Holdings of
21.68 million lb of U3O8
as at 18 July 2024 acquired at an average cost of
USD34.64/lb3 which represent approximately 15%
of 2023 global uranium production4.
HIGHLIGHTS
Spot U3O8 price rose to a
16-year high
of USD107/lb in February 2024 and closed at
USD87.00/lb on 31 March 2024, a 72% increase
compared to its close of USD50.65/lb as at
31 March 20231.
Net asset value of
USD1,883.6 million
(GBP6.88 per share)2
as at 31 March 2024 (2023: USD1,035.3 million
(GBP4.23 per share)).
Increase of
84%
in the value of the Group’s Holdings of U3O8
during the financial year to USD1,753.5 million as at
31 March 2024, as a result of a net increase in the
volume of uranium held from 18.81 million lb of U3O8
to 20.16 million lb of U3O8, combined with the
appreciation in the uranium price.
Holdings of
20.16 million lb of U3O8
as at 31 March 2024.
ACQUIRED A FURTHER
1.53 MILLION LBS
OF U3O8
after year-end, using the raise proceeds to exercise
the 2023 Kazatomprom option. This additional uranium
was received in June 2024.
Raised gross proceeds of approximately
USD125 million
(approximately GBP103 million) during the financial
year through a share placing in October 2023 to
acquire additional U3O8.
1
Based on the daily spot price of USD50.65/lb published by UxC LLC on 31 March 2023 and the daily spot price of USD87.00/lb published by UxC LLC on
29 March 2024.
2
Net asset value per share as at 31 March 2024 is calculated assuming 221,440,730 ordinary shares in issue less 4,584,283 shares held in treasury, the Bank of
England’s daily USD/GBP exchange rate of 1.2632 as at 28 March 2024 and the daily spot price published by UxC LLC on 29 March 2024.
3
Average cost calculated based on a first-in, first-out methodology.
4
MineSpans Q124.
Profit after tax of
USD727.0 million
for the year ended 31 March 2024 (2023: loss after tax of
USD102.9 million) due primarily to a 72% gain in the spot
price leading to a USD735.0 million increase in the fair
value of the Group’s uranium holdings
(2023: USD96.9 million decrease).
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 4
OUR BUSINESS MODEL
Yellow Cake’s low-cost outsourced business model aims to maximise
investor exposure to the uranium price and enable them to benefit from
commercial opportunities arising from uranium ownership, while ensuring
high standards of corporate governance and minimising costs.
Our outsourced business model is built on key strategic and
contractual relationships with industry players to provide
cost-effective access to uranium supply, intellectual capital,
expertise and storage facilities.
Holds U3O8
(20.16 million lb as at 31 March 2024)
We explore and enter into transactions where beneficial
commercial opportunities arise from uranium ownership.
These include uranium-based financial initiatives such as
commodity location swaps, streaming and royalties.
Yellow Cake’s long-term framework agreement with
Kazatomprom, the world’s largest uranium producer, gives
the Group the right to purchase up to USD100 million of U3O8
each year to 2027. Purchases are made at a price agreed prior
to announcing the purchase to the market so that the price is
not disturbed by market anticipation of a significant uranium
purchase.
PRODUCERS
SPOT MARKET
Most of Yellow Cake’s uranium holdings are stored at licenced
conversion facilities at Cameco’s Port Hope/Blind River facility
in Ontario, Canada, with the balance stored at Orano Cycle’s
Malvési/Tricastin storage facility in France.
308 SERVICES LIMITED
308 Services Limited, a uranium specialist
company focused on the uranium
commodity markets, provides significant
expertise and market knowledge, and
supports the Group in procurement and
other uranium transactions.
Direct exposure to the uranium commodity
Opportunities to realise value from uranium ownership
Strong corporate governance and experienced management
Low-cost outsourced business model
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 5
“The Board is proud of Yellow Cake passing the significant milestone of a USD2 billion asset value during the year. The Group’s
holdings of uranium on receipt of the latest acquisition will represent approximately 15% of annual global production.”
YELLOW CAKE ANNUAL REPORT 2023 6
CHAIRMAN’S STATEMENT
Yellow Cake is committed to its stated strategy and has
delivered considerable value to our shareholders through the
buying and holding of physical uranium, while continuing to
explore further opportunities to realise additional value from
these holdings.
The Board of Directors (the “Board”) is proud of the significant
milestone achieved by Yellow Cake during the year, with the
Group’s market value passing USD2 billion, a noteworthy
increase from the USD200 million value at listing in 2018.
At the time, uranium had traded for an extended period at
around USD20/lb, a price significantly below that implied by
the disconnect between future requirements and producers’
ability to easily meet this demand.
The recognition of nuclear energy’s important role in
meeting future low-carbon energy requirements and
increasing global focus on energy security continued to
strengthen during the year under review. This was evident
in positive policy shifts towards nuclear in many countries,
announcements of new builds, operating life extensions for
existing facilities and ongoing restarts in Japan.
At the same time, the vulnerability of the uranium supply chain
came more sharply into focus, with key producers announcing
difficulties in ramping up projects and delays in bringing new
resources into production. Western nations are formalising
ways to work together to reduce dependence on Russian
sourced nuclear fuel and support non-Russian capacity, with
related legislation approved by the US during the year. These
developments saw U3O8 trade at over USD100/lb for the
first time in 16 years, peaking at USD107/lb in February. In
May 2024, President Biden signed into law regulations to limit
the import of Russian nuclear fuel into the US1.
SUPPORTING POSITIVE RETURNS FOR
INVESTORS
Yellow Cake provides investors with an opportunity to realise
value from long-term exposure to the uranium spot price
and related uranium opportunities in a low-risk, low-cost and
publicly-quoted vehicle. The Group actively pursues strategies
to support positive returns for investors.
In October 2023, Yellow Cake took advantage of a market
opportunity, placing 18.7 million new ordinary shares in an
oversubscribed placing with existing and new institutional
investors. We were delighted with the strong response, which
highlighted the growing interest in, and understanding of, the
uranium investment case.
The proceeds were used to acquire a further 1.53 million lbs
of U3O8, which was received in June 2024. Following receipt,
Yellow Cake’s total holdings of 21.68 million lbs represent
approximately 15% of 2023 global annual uranium production.
The Board constantly reviews the Group’s strategy to grow
the business, improve shareholder value and address any
discount to net asset value.
1.
Prohibiting Russian Uranium Imports Act (H.R. 1042).
The Lord St John of Bletso
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 6
Following the commencement of trading of Yellow Cake’s shares
on the OTCQX Best Market last year, we were very pleased at the
Group’s inclusion in the 2024 OTCQX® Best 50, a ranking of top
performing companies traded on the market last year.
Yellow Cake’s Board reserves the right to declare a dividend, as and
when deemed appropriate, however, the Group does not currently
expect to declare dividends on a regular or fixed basis. The Board is
not declaring a dividend for this financial year.
ENSURING RESPONSIBLE
BUSINESS PRACTICES
The Board is committed to good governance and high ethical
standards, and recognises that responsible management of
the Group’s environmental, social and governance impacts
and performance are integral to long-term value creation.
Yellow Cake has zero-tolerance for bribery, corruption and
unethical practices. Policies and measures are in place to
prevent bribery, modern slavery, inducements and money
laundering, and to ensure compliance with economic
sanctions. These include a whistleblowing policy.
The Code of Conduct promotes the Group’s key values of
dignity, diversity, business integrity and accountability. It
also sets operational and performance requirements for
employees, directors, business partners, contractors and
advisers.
EFFECTIVE GOVERNANCE AND OVERSIGHT
Yellow Cake applies the principles and provisions of the
UK Corporate Governance Code 2018 (the “Code”) to the
degree appropriate to the size and nature of Yellow Cake’s
business. The Group’s small scale and simplicity supports
effective governance and oversight, and facilitates good
communication. Compliance policies are regularly reviewed
and updated to ensure continued alignment with the latest
developments in corporate governance requirements
and guidelines.
The Board plays an active role in overseeing the Group’s
activities and met seven times during the year to
31 March 2024. The Audit and Remuneration Committees
also met during the period to discharge their duties as set out
in their terms of reference.
The direct social and environmental impacts of the Group’s
activities are minimal. We conduct appropriate due diligence
on suppliers and business partners to ensure that we are
comfortable that they share our commitment to responsible
business practices. This is supplemented by an annual external
and independent assessment of our ESG practices and those
of our primary suppliers. An overview of this assessment and
its conclusions is available on pages 24 to 26.
STAKEHOLDER ENGAGEMENT
The Group values its relationships with key stakeholders
and proactively facilitates opportunities for dialogue.
Feedback from these engagements is regularly communicated
to the Board.
The Chairman is available to the Group’s major shareholders
to discuss governance, strategy and performance. Day-to-day
stakeholder queries are addressed by the Executive Directors.
When required, the chairs of the Board Committees seek
engagement with shareholders on significant matters related
to their areas of responsibility. During the year, Yellow Cake
engaged with shareholders and consulted the Group’s
remuneration advisors regarding concerns about the Group’s
long-term incentive programme. The Group’s response is
discussed in the Directors’ Remuneration Report on pages
50 and 54. More information on other engagements with
stakeholders is available in the Corporate Governance Report
on pages 42 to 44.
APPRECIATION
I would like to thank my fellow Directors for their contribution
and diligence during the year. On behalf of the Board, I thank
our shareholders and investors for their continued strong
support for the Group.
We believe the compelling supply-demand fundamentals
underpinning Yellow Cake’s investment case are as relevant
today as they were in 2018, with rising production costs and
utilities re-stocking representing additional drivers.
The Lord St John of Bletso
Chairman
Chairman’s statement continued
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 7
OUR STRATEGY
Yellow Cake provides investors with exposure to the uranium price by buying and holding physical U3O8 and realising value
from commercial opportunities related to these holdings. We finance our uranium purchases with equity when our share
price is trading at or above net asset value.
Most of the world’s uranium production is used to produce electricity in nuclear power plants. Global supply is concentrated and the time required to bring on new supply means that supply responds
slowly to changes in demand. In addition, an extended period of low uranium prices disincentivised production and the development of new resources, with producers responding by shutting down
or suspending uneconomic operations.
Yellow Cake listed in July 2018 at a time when the uranium market price did not reflect the supply-demand fundamentals, having traded at levels that did not incentivise new supply for an extended
period of time. Sentiment towards nuclear energy has improved significantly since our listing, reflecting nuclear’s important role in achieving net zero carbon commitments as electricity demand
increases and as the focus on energy security tightens with rising geopolitical tensions. The U3O8 price has started to respond positively, reflecting that growing supply/demand imbalance. Yellow Cake
issues its shares at or above net asset value to acquire U3O8 at the spot price, under its Framework Agreement with Kazatomprom and in the spot market. We continuously assesses opportunities to
realise value from its holdings of U3O8, including potential opportunities related to the optimisation of logistics associated with the trading of U3O8, generating revenue from the lending of U3O8 and
uranium-based financing initiatives such as commodity streaming and royalties.
DEMAND SIDE DRIVERS
+ Long-term growth in global electricity demand
+ Strong growth forecast for nuclear in the large developing economies in Asia
+ Low carbon emission energy source supporting 2050/2060 country emission targets
+ Increased focus on energy security in light of geopolitical developments is driving a rethink
in energy policies in countries that previously moved away from nuclear
+ Nuclear’s ability to provide reliable and predictable electricity to complement renewable
sources
+ Progress in developing small modular reactors (“SMRs”) with reduced capital costs and
footprint
+ Increased activity in the spot market from financial intermediaries
+ Contracting by nuclear power utilities for future uranium purchases has started to
increase from historically low levels
+ Overhang of secondary supply has largely eroded
+ The growth of data centres and artificial intelligence, which requires greater amounts of
reliable electricity
- Resistance regarding perceived potential environmental and safety impact is reducing
SUPPLY SIDE-CONSTRAINTS
- Concentrated resources (three countries produce 68% of the world’s annual uranium
production) increase the risk of supply disruptions due to geopolitical events or
other factors
- Significant historical resources reached end of life in 2021 (Ranger and Akouta)
- Exploration and development of new resources has been uneconomic during an
extended period of depressed uranium prices
- Cost inflation, supply chain disruptions for essential inputs and industry skills shortages
are affecting producers’ ability to increase production, restart idled capacity and
develop new resources
- Producers continue to show discipline at current prices
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 8
Uranium consumption1
Uranium production (2023)2
South Africa
China
Armenia
Iran
India
Pakistan
United Arab
Emirates
Japan
South Korea
Taiwan
United States
Mexico
Brazil
Argentina
Namibia
Rest of the world
Australia
Uzbekistan
Kazakhstan
Russia
Canada
12%
9%
9%
6%
39%
5%
20%
Uranium producers and consumers
Spain
Switzerland
France
Belgium
Netherlands
Slovakia
Slovenia
Hungary
Czechia
Romania
Bulgaria
Finland
Belarus
Ukraine
Sweden
United
Kingdom
Uranium demand2
8%
12%
6%
27%
27%
20%
China
USA
Rest of world
South Korea
Russia
France
1.
World Nuclear Association/World Nuclear Power Reactors
& Uranium Requirements (May 2024).
2.
MineSpans Q124.
Our strategy continued
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 9
THE NUCLEAR FUEL VALUE CHAIN
The front end of the nuclear fuel cycle is a complex process in which uranium can take up to 18 months to travel from mine to reactor1. While there are nuclear reactors in 32 countries around the
world1, the majority of uranium production, conversion, enrichment and fabrication take place in relatively few places.
Mining
Conversion
Enrichment
Fuel fabrication
Power generation
Uranium is mined using in-situ
leaching, open pit or underground
mining.
Uranium ore is processed
to produce uranium oxide
concentrate (U3O8).
Conversion plants convert
physical U3O8 from powder form
into natural uranium hexafluoride
gas (UF6).
Gaseous uranium (UF6) is
enriched, raising the uranium-235
isotope from the natural level
of 0.7% to the range of 3.5% to
5% required for use in nuclear
reactors.
Enriched UF6 is converted to
uranium dioxide powder which
is pressed into pellets that are
fabricated into fuel rods and then
fuel rod bundles. Fuel bundles
are placed into nuclear reactors
owned by utility companies.
Heat from nuclear fission
produces steam that drives
turbines to generate electricity.
Uranium enrichment is a sensitive technology from a nuclear non-proliferation standpoint and is tightly controlled. The world’s conversion and enrichment capacity is concentrated in China, France,
Canada, Russia, the United Kingdom and the United States2.
Nuclear power utilities typically refuel around every 18 months on average. Utilities hold uranium inventories as working inventory (being enriched, or fabricated into fuel) or strategic inventory
(forward requirements held in the event of supply disruption). Typically around 80% to 85% of utilities’ uranium requirements are secured directly with producers, converters and enrichers through
long-term contracts (two to three years in advance and for at least five years of deliveries). The balance of their uranium requirements is purchased in the spot market (defined as delivery within a year)
which generally trades at a discount to the term contract prices.
Short-term supply shocks tend to take time to fully reflect in the spot price due to the time it takes for uranium to reach a reactor, the extended refuelling cycle and stockpiles held at utilities.
Our strategy continued
1.
OECD-NEA, The Economics of the Nuclear Fuel Cycle (1994).
2.
World Nuclear Association/ Nuclear Fuel Cycle Overview.
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 10
THE URANIUM MARKET
Our strategy continued
PRODUCERS
SPOT MARKET
TERM MARKET
NUCLEAR UTILITIES
Miners produced 142.3 mlb
of uranium oxide (U3O8) in
20231
56.3 mlb of U3O8 traded on
the spot market (2023)2
Global utilities bought
13.5 mlb (24% of total spot
market volume)2 in 2023
Total US/EU uranium
deliveries (spot/term) of
71.0 mlb4, 5 (2022)
Global utilities 2023 reactor
requirements 170.7 mlb of
U3O8
6
US and EU utilities received
uranium under long-term/
multi-year purchase
agreements (2022) 64.5 mlb
(83% of total deliveries)4,5
Producers bought 3.8 mlb
(7% of total spot market
volume)2 from the spot
market in 2023
Delivery within one year
160.8 mlb of U3O8 traded on
the term market (2023)3
Delivery two to three years
in advance and for at least
five years
Secondary
supplies
Traders and
financial buyers
1.
MineSpans Q124.
2.
UxC Weekly; “2023 Uranium Spot Market Review”; 29 January 2024.
3.
UxC Weekly; “2023 Uranium Term Contracting Review”; 5 February 2024.
4.
Euratom Supply Agency Annual Report 2022 (2023).
5.
US Energy Information Administration Uranium Marketing Annual Report 2022 (June 2023).
6.
World Nuclear Association/World Nuclear Power Reactors & Uranium Requirements (May 2024).
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 11
NUCLEAR ENERGY REMAINS A KEY AND
GROWING ELEMENT OF GLOBAL ENERGY
SUPPLY ON THE PATH TO NET ZERO
The world’s energy use is projected to grow by 34% from 2022
to 2050, with most of the increase driven by a combination
of economic and population growth in developing markets,
primarily India, China and other Asia-Pacific countries1. Within
this growth, electricity consumption is projected to increase by
50% as access to electricity improves in developing markets and
electrification increases globally.
The energy sector accounts for around three-quarters of
current greenhouse gas emissions2 and growth in energy
production to meet the anticipated increased demand will need
to be primarily driven by low-carbon energy sources to achieve
net-zero emissions by 20503 .
Although energy prices have pulled back from their record highs
following Russia’s invasion of Ukraine in February 2022, the
global energy system has changed significantly, with the shift
away from fossil fuels accelerating and energy security playing a
major role in energy strategies4.
Nuclear power has an important role to play as an efficient,
secure, very low-carbon and reliable source of energy that
complements renewable energy by supporting grid stability.
Nuclear is currently the second largest source of low emissions
power after hydropower and, while wind and solar PV are
expected to lead the push to replace fossil fuels, growth in
nuclear can help ensure secure, diverse, stable low emissions
electricity systems.
The International Energy Agency scenarios see growth in nuclear energy as one of the key milestones for the electricity sector
in its Net Zero Emissions Scenario, with nuclear power generation forecast to more than double to 916 GWe by 2050 as the policy
landscape becomes more supportive1. This will require an average of 26 GW of new nuclear capacity to be added each year from
2023 to 2050, compared to the 8 GW brought online in 20225 and the 56 GW over the last decade6.
0
200
400
600
800
1 000
2021
2022
2030
2040
2050
Net Zero Emissions 2023
Announced Pledges Scenario
Stated Policies Scenario
Global nuclear energy demand scenarios (GW)
Our strategy continued
1.
US Energy Information Administration International Energy Outlook 2024
Reference Case.
2.
Net Zero by 2050, IEA (October 2021).
3.
Net Zero Roadmap: A Global Pathway to Keep the 1.5C Goal in reach, IEA
(September 2023).
4.
IEA, www.iea.org/topics/russias-war-on-ukraine.
5.
IEA, www.iea.org/energy-system/electricity/nuclear-power#tracking.
6.
International Energy Agency Nuclear Power and Secure Energy Transitions.
Source: Our world in data, Safest sources of energy, 2020
Source: IEA World Outlook 2023
0
200
400
600
800
1 000
Coal
Oil
Natural gas
Biomass*
Solar
Hydro-power
Wind
Nuclear
3
4
34
53
230
490
720
820
78
CO2 equivalent emissions per GWh
*Range of emissions for biomass depends on material being combusted
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 12
The US has 25% of the world’s operable reactor capacity,
France 16% and China 14%. Together, these three countries
account for 59% of global uranium demand1. In total, there are
440 reactors operable in 32 countries with a total capacity
of 396 GWe that generate approximately 10% of total global
electricity requirements and around 25% of low carbon
electricity. Short-term growth in nuclear energy is being
supported by uprating the capacity of existing nuclear reactors
and extending operating licences beyond the initially planned
lives.
A further 152 reactors (157 GWe) are already under
construction or planned. 59% of the nuclear capacity currently
under construction is in China, India and Russia, and 69% of
planned capacity additions are in those countries. Nuclear
energy already meets 20% of Russia’s electricity needs, but
this percentage is far lower in India (3%) and China (5%). India’s
Minister of State recently announced that the country’s nuclear
generating capacity is expected to reach about 9% of generating
capacity by 20472 while the China Nuclear Energy Association
indicated that nuclear power is expected to supply 10% of the
nation’s electricity by 2035 and 18% by 20603.
Reactors are also being built or planned in many emerging
markets including Bangladesh, Brazil, Bulgaria, Egypt,
Iran and Türkiye.
Small modular reactors (“SMRs”) and other advanced reactor
designs show great promise for speeding up the rollout
of nuclear energy. Government support for these new
technologies has increased significantly, with the United States
making substantial grants to promote development, and support
in Canada, the United Kingdom and France increasing their
attractiveness for private investors4. SMRs are less technically
challenging to construct, more affordable, easier and faster
to build than conventional large reactors, shortening project
timelines and potentially reducing construction risk and
financing costs.
Their relatively small size means that SMRs could be sited on
existing approved nuclear power or decommissioned fossil fuel
facilities. They also provide improved flexibility in operation and
offer the potential to provide outputs in addition to electricity,
such as hydrogen and heat.
Nearly 80 designs are currently under development.
Commercially viable SMR projects look likely towards the end
of the current decade, with the US, Russia, China and Canada
closest to launch.
Our strategy continued
Source: World Nuclear Association
1.
World Nuclear Association/World Nuclear Power Reactors & Uranium Requirements (May 2024).
2.
World Nuclear News; “Indian minister eyes 9% nuclear share by 2047”; 12 April 2023.
3.
China Daily; “China’s nuclear power to generate 10% of total electricity by 2035”: 26 September 2023.
4.
IEA, www.iea.org/energy-system/electricity/nuclear-power#tracking.
5.
World Nuclear Association; “COP28 agreement recognises accelerating nuclear as”; 13 December 2023.
NATIONAL ENERGY POLICY CONTINUES TO
SHIFT IN FAVOUR OF NUCLEAR
The low-carbon emissions profile of nuclear energy and its
energy security benefits are being recognised in many countries
with lifespan extensions, capacity expansions, positive policy
shifts and plans to expand nuclear power generation.
At the 28th Congress of the People (COP28) in December 2023,
nuclear was for the first time specified alongside other low-
emissions technologies as one of the solutions to climate change
in a COP agreement. The Ministerial Declaration to Triple
Nuclear Energy (by 2050) was launched at the congress and
has been signed by more than 20 countries. This agreement was
echoed by 120 companies active in over 140 nations signing the
Net Zero Nuclear Industry Pledge5.
0
30 000
60 000
90 000
120 000
150 000
Planned
Under construction
Current operable
Other
UK
India
Ukraine
Canada
South Korea
Russia
Japan
China
France
USA
Current and future reactors (MWe)
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 13
In March 2024, high-level representatives of 32 countries
attended the inaugural Nuclear Energy Summit in Brussels, the
first ever conference to focus exclusively on nuclear energy and
its future potential to contribute to addressing climate change.
Principal themes were the importance of nuclear energy in
achieving energy security, climate goals, and driving sustainable
development1.
UNITED STATES
The US has instituted a number of regulations and programmes
to support growth in nuclear power and development of
advanced nuclear technologies. These include support and
subsidies through the Inflation Reduction Act of 20222 and
the Civil Nuclear Credit Program3 as well as funds to research
and develop advanced nuclear technologies through the DoE’s
Advanced Reactor Demonstration Program4.
The roadmap for the commercialisation of clean energy
technologies in the DoE’s “Pathways to Commercial Liftoff”
reports indicate that advanced nuclear technologies could help
US nuclear capacity scale from around 100 GW in 2023 to
approximately 300 GW by 20505.
In July 2023, commercial operation commenced at Vogtle-3,
the first newly constructed power reactor in the United
States in more than 30 years, with Vogtle-4 entering
commercial operation in April 20246. In the same month, a
joint development agreement was executed between US
utility Energy Northwest and X-Energy Reactor Company for
the deployment of up to 12 Xe-100 small modular reactors
in central Washington state that would start to come online
by 20307.
Several US states indicated local support for nuclear during
the year, including Ohio, Virginia, Kentucky, Tennessee
and Michigan.
FRANCE
The French Senate approved draft legislation removing the
objective to reduce nuclear energy to 50% of electricity
production and relaunching the country’s reactor construction
programme. Government’s nuclear investment plan was
formally approved in March 2023 and includes construction of
six new reactors at three sites8.
Early in 2024, France’s energy minister announced that
legislation will be introduced for the construction of a further
eight new nuclear reactors9.
CHINA
China announced that its commercial nuclear power programme
now has 24 reactors under construction10 and the construction
of six more nuclear reactors was approved11. In September
2023, the China Nuclear Energy Association announced that
China’s installed nuclear capacity is planned to reach
400 GWe by 2060. Twenty-one reactors have been approved
for construction since the beginning of the 14th Five-Year Plan
period (2021-2025)12.
Our strategy continued
1.
IAEA Press Announcement; “A Turning Point: First Ever Nuclear Energy Summit
Concludes in Brussels”; 25 March 2024.
2.
H.R. 5376 – Inflation Reduction Act of 2022, 117th Congress (2021–2022).
3.
US Department of Energy Civil Nuclear Credit Program, www.energy.gov/gdo/civil-
nuclear-credit-program.
4.
World Nuclear Association, Small nuclear power reactors.
5.
US DoE: Pathways to Commercial Liftoff: Advanced Nuclear.
6.
Georgia Power: “Vogtle unit enters commercial operation”; 29 April 2024”.
7.
World Nuclear News; “Multiple Xe-100 SMRs planned for Washington State”;
19 July 2023.
JAPAN
Operations at Takahama-1 and Takahama-2 reactors
recommenced during the year, bringing to 12 the number of
reactors to restart since the Fukushima accident in 2011. Two
more reactors – Onagawa 2 and Shimane 2 – are scheduled to
resume generation in the second half of 202413.
In December, the Nuclear Regulation Authority authorised
fuel loading in Units 6 & 7 at Kashiwazaki-Kariwa, the world’s
biggest nuclear power plant14 at 8,212 Mwe. In April 2024,
the plant announced that fuel loading was starting at Unit 7 to
commence testing ahead of a potential restart15.
Japan has also been sustaining growth in nuclear power by
granting licence extensions of up to 20 years beyond initial
licencing (40 years) and in May the country’s parliament passed
a law allowing offline periods to not be counted towards the 60-
year operating lifetime limit13.
SOUTH KOREA
In April 2024, Unit 2 at Shin Hanul nuclear power plant started
commercial operation, becoming the 28th operating nuclear
unit in the country, with plans for a further two reactors at
the site16. South Korea is evaluating the country’s need for
additional nuclear power reactors in response to increasing
electricity demand resulting from the expansion of data centres,
investment in high technology industries (semi-conductors and
batteries) and escalating utilisation of electric vehicles17.
8.
World Nuclear Association, www.world-nuclear.org/information-library/country-
profiles/countries-a-f/france.
9.
AFP-Agence France Presse; “France To Build Beyond Planned Six New Nuclear
Plants”; 7 January 2024.
10. China Nuclear Energy Association: “China takes world’s crown in nuclear power
units under contraction”; 26 April 2023.
11. World Nuclear News; “Six reactors approved for construction in China”;
1 August 2023.
12. China Daily; “China’s nuclear power to generate 10% of total electricity by 2035”:
26 September 2023.
13. World Nuclear Association, world-nuclear.org/information-library/country-
profiles/countries-g-n/japan-nuclear-power.
14. https://www.japantimes.co.jp/news/2024/04/15/japan/kashiwazaki-kariwa-
reactor-fueling-approved/.
15. World Nuclear News; “Fuel loading to start at Kashiwazaki-Kariwa unit”;
15 April 2024.
16. World Nuclear News; “Fourth Korean APR 1400 begins commercial operation”;
8 April 2024.
17. World Nuclear News; “South Korea considering new nuclear plants”; 12 July 2023.
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 14
The United Kingdom has in recent years committed significant
funds to support nuclear projects, develop the domestic
nuclear fuel sector and promote research and development of
advanced nuclear technologies. In January 2024, government
launched the Civil Nuclear Roadmap which outlines plans to
invest in developing new advanced nuclear fuel, establish new
regulations and explore SMRs as well as a new large scale
nuclear reactor5. The roadmap represents the biggest expansion
of nuclear power in the UK for 70 years and aims to increase
nuclear generating capacity to 24 GW by 2050 (currently 6GW)
to supply 25% of electricity demand.
COUNTRY-SPECIFIC DEVELOPMENTS
Various other countries also announced new initiatives
around nuclear over the past year, including:
n Norway, Italy, Slovenia and Ghana formally announced that
they were evaluating nuclear power.
n Sweden, Bulgaria, Sri Lanka, the Philippines, South Korea,
Türkiye, India, Serbia and the UK announced long-term
energy strategies to increase nuclear power.
n Bulgaria, Poland, Türkiye, Kenya and Uganda initiated
construction approvals for new facilities.
n Japan, Finland and Belgium initiated or concluded the process
to grant lifespan extensions to existing nuclear facilities.
n Nuclear facilities entered into commercial operation
or recommenced in Japan, the US, South Korea and the UAE.
EUROPE AND THE UK
In 2022, nuclear power was included as a green investment in
the EU’s Taxonomy Complementary Climate Delegated Act,
making specific nuclear energy projects eligible to access low-
cost financing1. In November 2023, the European Parliament
adopted its official position on the proposed Net-Zero Industry
Act (“NZIA”) as part of the EU’s Green Deal Industrial Plan.
The NZIA aims to support Europe’s manufacturing output in
technologies needed for decarbonisation and includes nuclear
fission and fusion in the list of 17 technologies addressed by
the legislation. The NZIA sets a target for Europe to produce
40% of its annual deployment needs in net zero technologies
by 2030 and to capture 25% of the global market value for
these technologies2.
The European Nuclear Alliance, which launched in
February 2023, brings together 16 countries to push for
recognition of nuclear energy in the EU’s energy strategy and
relevant policies. The initiative commits members to cooperate
across the nuclear fuel supply chain, and to promote new
nuclear generation projects and technologies, including the
advancement of SMRs3.
In February 2024, the European Commission launched an
SMR Industrial Alliance to facilitate stronger cooperation and
joint action between all interested partners to accelerate the
deployment of SMRs by the early 2030s and ensure a strong
EU supply chain, including a skilled workforce4.
Our strategy continued
1.
International Trade Administration; “EU sustainable finance taxonomy delegated
act nuclear energy and natural gas”; 22 December 2022.
2.
World Nuclear News; “MEPs fully include nuclear in Net-Zero Industry Act”;
22 November 2023.
3.
World Nuclear News; “Alliance calls for greater European support for nu”;
17 May 2023.
POWER UTILITY LONG-TERM CONTRACTS
NEED TO BE REPLACED
Nuclear utilities typically secure around 80% to 85% of their
uranium requirements under long-term contracts. Over the
last decade, annual term contracting volumes have averaged
around 50% of the average annual uranium requirements of
around 170 million lb. At the end of 2022, only around 73%6 of
European and 45%7 of US utilities’ 2028 uranium requirements
were contracted.
Long-term contracting increased significantly in CY2023,
reaching 160.8 million lb, the highest rate of contracting in more
than 10 years. The increase was driven mainly by European
utilities, particularly those who had previously purchased
from Russia moving to Western fuel sources. However, term
contracting by US utilities decreased by 73% from 20228. More
information on developments in the term market is available in
the CEO review on page 20.
In the longer-term, UxC estimates that cumulative uncovered
requirements to 2040 are about 2.3 billion lb and utilities
will have to cover the shortfall in the context of constrained
uranium production, declining secondary supplies and a
tighter spot market.
4.
World Nuclear News; “European SMR Industrial Alliance launched”;
7 February 2024.
5.
World Nuclear News; “UK releases roadmap to quadruple nuclear energy capacity”;
11 January 2024.
6.
Euratom Supply Agency Annual Report 2022 (2023).
7.
US Energy Information Administration Uranium Marketing Annual Report 2022
(June 2023).
8.
UxC Weekly; “2023 Uranium Term Contracting Review”; 5 February 2024.
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 15
SUPPLY-SIDE CONSTRAINTS
The ability of global supply to respond to the forecast
increased uranium demand over the next three decades
is constrained by the complexity of the nuclear fuel value
chain, concentrated supply and an extended period of
underinvestment in developing resources.
Just over half of the world’s recoverable uranium resources
are located in Australia, Kazakhstan and Canada1 and together
these countries produced 68% of global uranium mined
production in 20232.
The low uranium prices over the past decade reduced the
incentive for exploration and mining, and producers responded
by shutting down or suspending uneconomic operations. This
removed an estimated 43.7 million lb of U3O8 from the market
from 2016 to 2020 with COVID-19 removing an additional
22.5 million lbs in 20202. With primary production falling below
market demand for an extended period, the shortfall was
made up from secondary supplies, primarily underfeeding at
enrichment facilities and utility/producer inventory draw-down.
Our strategy continued
0
40
80
120
160
2023
2024
2025
2026
2028
2029
2030
2031
2027
US Utilities Coverage
EU Utilities Coverage
Future contracted coverage rate of US and European Utilities
95%
96%
95%
90%
60%
55%
64%
73%
73%
89%
121%
124%
136%
81%
62%
39%
40%
13%
Source: US Energy Information Administration Uranium Marketing Annual Report
2023 (June 2024); Euratom Supply Agency Annual Report 2022 (2023)
Source: MineSpans (March 2024)
Source: MineSpans (March 2024)
Production increased by 10% to 142 million lb of U3O8 in 2023
(2022: 129 million lb)2 due primarily to Cameco recording a full
year of production at its restarted mines.
Developments in 2023 again emphasised the downside risks
to supply. The military coup in Niger affects around 4% of
global uranium production and there are concerns around the
effects of sanctions and restrictions on Russian supply (5% of
global production) as well as potential impacts on supply from
Kazakhstan (39%) that transits Russia. The conflict in the Middle
East has increased the time taken for material shipped from
Australia (9% of global production) to Europe.
The ability of producers to easily increase production is also
constrained by various industry issues and supply chain
challenges. In September, Cameco, which accounts for around
16% of global production, reduced production guidance for
2023 by 2.7 million lbs. Production was affected by developing
and commissioning of a new mining area and unplanned
equipment maintenance at its Cigar Lake mine as well as
challenges at its Key Lake operation. These included the length
of time the mill was on care and maintenance, operational
changes, aging infrastructure, skills shortages and the impact
of supply chain challenges on the availability of materials and
reagents3. Full year production ultimately came in 1.7 million lb
below the revised guidance4.
In January 2024, Kazatomprom, the world’s largest producer
of uranium, reduced guidance for 2024 production by 8 to
10 million lbs, citing reduced availability of sulphuric acid
and delays in construction work at new deposits/sites5.
Uranium production by country
20%
39%
12%
9%
6%
5%
Kazakhstan
Canada
Namibia
Uzbekistan
Russia
Australia
Rest of World
9%
1.
NEA/IAEA (2023), Uranium 2022: Resources, Production and Demand.
2.
MineSpans Q124.
3.
Cameco production and market update, 3 September 2023.
4.
Cameco 2023 Management’s discussion and analysis, 8 February 2024.
5.
Kazatomprom; Kazatomprom expects adjustments to its 2024 Production Plans;
12 January 2024.
Global uranium market balance, 2015 to 2035 mlb U3O8
2015
0
50
100
150
200
250
300
350
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
2035
Secondary
Operation
Restart
Base case projects
High case projects
Demand - High
Demand - Base
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 16
The announcement also indicated that 2025 production could
be affected due to considerable supply chain risks. An increasing
proportion of Kazatomprom’s future production is being
allocated to China and Russia, reducing the amount available for
western utilities.
Production shortfalls in the context of utilities flexing up their
contracts could also result in producers increasing purchases
from the spot market to meet contract commitments.
While a number of uranium assets are scheduled to restart
production in 2024, and Cameco is forecasting a return to full
production at its operations, the supply deficit is expected
to remain significant. Despite the relative ease and lower
cost of restarting production (compared to developing and
commissioning new resources), several of these projects
experienced delays in the year and remain vulnerable to
supply chain disruptions and other industry challenges.
Sustained high uranium prices will be required to incentivise
development of more complex and capital intensive
greenfield projects that could expand global uranium
production capacity.
SECONDARY SUPPLY SOURCES ARE ERODING
For many years, utilities have relied on sources of secondary
uranium supply, but these have now largely been eroded1, with
utilities in the US, Europe and Japan having drawn down their
stockpiled material. Strategic stockpiling by China and India
has removed a significant quantity of U3O8 from the market,
and parties will need to find newly produced material to repay
uranium borrowed from Japanese utilities. Additional material
has been removed from the spot market by carry-trades
(sales by uranium traders principally for deliveries to utilities
in the mid-term market), with some of this material committed
into the post-2025 timeframe. In addition, material has been
sequestered by financial entities, including Yellow Cake and
Sprott Physical Uranium Trust, which together have acquired
67 million lbs from the market since Yellow Cake’s listing in
July 20182.
RUSSIA AND THE NUCLEAR FUEL CYCLE
Russia’s invasion of Ukraine in February 2022 highlighted the
dependency of major Western nuclear utilities on Russian-
sourced nuclear fuel. Their initial focus was on securing
supplies of uranium conversion/enrichment, which led to
significant increases in the prices for these products in both
2022 and 2023.
Russia produces around 5% of global uranium annually, but
plays a dominant role in the later stages of the nuclear fuel cycle,
accounting for 20% of global conversion capacity utilised and
nearly half of all enrichment capacity.
Source: MineSpans (March 2024)
Utility data reports that US nuclear utilities sourced on average
14% of their uranium and 25% of uranium enrichment services
from Russian origin/sources from 2019 to 20233, while their EU
counterparts purchased on average 18% of uranium and 30% of
enrichment services from Russia from 2018 to 20224.
Many major uranium users, and particularly the US, are heavily
reliant on non-domestic sources. While it may be possible for
Western utilities to avoid Russian-sourced uranium, there is
currently insufficient alternative capacity for conversion and
enrichment to avoid Russian supplies.
Russia’s position in the uranium fuel cycle (%)
0
10
20
30
40
50
Uranium
resources
Uranium
production
Conversion
Enrichment
5%
9%
20%
46%
Our strategy continued
Source: MineSpans (March 2024)
1.
UxC Weekly; “The Era of Inventory Overhang is Over”; 5 September 2022.
2.
Sprott Physical Uranium Trust, “Daily and Cumulative Pounds of Uranium (U3O8)
Acquired by Trust”, March 2024.
3.
US Energy Information Administration Uranium Marketing Annual Report 2023
(June 2024).
4.
Euratom Supply Agency Annual Reports 2018–2022.
Secondary uranium supplies (mlb U3O8)
0
10
20
30
40
50
60
Reprocessed Uranium
Reprocessed Uranium
and Mixed Oxide fuel
Tails Re-enrichment/underfeeding
% of Total Demand
2013
2017
2021
2025
2029
2033
33%
19%
14%
11%
7%
7%
Highly Enriched Uranium
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 17
Source: MineSpans (March 2024)
Governments are taking steps to incentivise new capacity in
the nuclear fuel value chain, however most of these will take
at least three to five years to reach scale. In April 2023, five
of the G7 countries (the US, Canada, France, Japan and the
UK) announced a strategic collaboration to increase the depth
and resilience of their nuclear fuel supply chains and reduce
reliance on Russia1. This follows the launch in May 2022 of the
European Commission’s REPowerEU Plan, which aims to reduce/
eliminate the EU dependency on fuel imports from Russia. The
plan encourages EU members to secure alternative sources of
uranium and promote conversion, enrichment and fuel fabrication
in Europe or in the EU’s partners2.
The US is currently at its lowest annual uranium production
level in more than 70 years, with domestic suppliers generally
Reactor requirements and origin of uranium 2023 (mlb)
0
10
20
30
40
50
Domestic
Non-domestic
USA
China
France
South
Korea
Russia
India
Ukraine
47
31
24
12
10
5
5
Our strategy continued
1.
US Department of Energy; “Statement on Civil Nuclear Fuel Cooperation
between the United States, Canada, France, Japan and the United Kingdom”;
17 April 2023.
2.
REPowerEU Plan, 18/05/22..
3.
H.R. 5376 – Inflation Reduction Act of 2022, 117th Congress (2021–2022).
idled and commercial inventory decreasing. As a step to
address this exposure, the US government established a
strategic reserve of domestically produced uranium which
purchased 1.1 million lb of U3O8 in 2022.
Initiatives to promote US conversion/enrichment capacity
include USD700 million allocated under the Inflation Reduction
Act for the development/production of High-Assay Low-
Enriched Uranium (“HALEU”) necessary for advanced reactors
which is currently solely available from Russian sources3. The
Nuclear Fuel Security Act of 2023, currently before the Senate,
requires the Department of Energy to create a Nuclear Fuel
Security Program and strengthen the US nuclear fuel supply
chain, including new low-enriched uranium (“LEU”) and HALEU
capacity.
In February 2024, the US Senate approved a bill allocating
$2.7 billion to expand production of LEU and HALEU at facilities
in the US4.
The US also introduced the International Nuclear Energy Act
in March 2023 to develop a civil nuclear export strategy and
offset China’s and Russia’s influence on international nuclear
energy development5.
Sanctions imposed by Western countries on Russia until
recently were limited to restrictions and bans on entities
and individuals, trade in certain goods and services, freezing
of foreign assets, and the anchorage and movement of
Russian-affiliated vessels. In the absence of restrictions on
the use of Russian nuclear fuel, a growing number of nuclear
utilities had already started self-sanctioning by diversifying their
suppliers to reduce future dependence and support Western
fuel supply sources.
In May 2024, President Biden signed into law the Prohibiting
Russian Uranium Imports Act (H.R. 1042), which bans Russian
uranium imports into the US from August 2024 to December
2040. While the Act allows temporary waivers to the end of
2027 where no alternative viable sources are available or in the
national interest, it is likely to increase demand for non-Russian
source nuclear fuel. It also raises the risk of retaliation by Russia,
which could include a complete cut-off of supply.
The concentrated supply of uranium and physical distance
between producers, convertors/enrichers and utilities add
further risk in disruptions to logistics and trade from sanctions
and restrictions on countries, entities, individuals and ships.
Uranium exports to Western customers from Kazakhstan
(42% of global production) historically traversed Russian
territory to the Port of St. Petersburg, introducing risks
associated with this transit, shipping insurance and the delivery
of cargo by sea vessels. Kazatomprom reported that 64% of
uranium shipments to the West in 2023 were successfully
concluded using the alternative Trans-Caspian International
Transport Route6, which avoids Russian territory. Kazatomprom
has indicated that it can also supply uranium through swaps with
partners and customers, or from its global inventories.
Yellow Cake’s operations, financial condition and ability
to purchase and take delivery of U3O8 from Kazatomprom, or
any other party, to date remain unaffected by the geopolitical
events in Ukraine. All U3O8 to which the Group has title and has
paid for, is held at the Cameco storage facility in Canada and the
Orano storage facility in France.
4.
Utility Dive; “Domestic uranium enrichment gets $2.7B boost from US Senate”;
16 February 2024.
5.
www.energy.senate.gov/2023/3/manchin-risch-reintroduce-bipartisan-
international-nuclear-energy-act-of-2023.
6.
Kazatomprom; “Operating and Financial Review for 2023”; 15 March 2024.
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 18
Andre Liebenberg
“The themes driving the uranium market became more deeply entrenched in the 2024 financial year. We expect these trends to
continue and remain confident in the outlook for uranium and Yellow Cake’s ability to deliver on our stated strategy”.
CHIEF EXECUTIVE OFFICER’S REVIEW
The uranium market is currently characterised by five key
themes – four supporting demand and a fifth relating to the
constraints on supply. These themes were forming when Yellow
Cake listed and have continued to strengthen since then.
NUCLEAR’S KEY ROLE IN THE LOW-CARBON
ENERGY TRANSITION
Nuclear power is now widely accepted as having an essential
role to play in meeting growing global energy demand while
supporting decarbonisation goals. Its low carbon lifecycle
emissions, small operational footprint and reliable baseload
profile make it an excellent complement to renewable energy
sources. The International Energy Agency Net Zero Emissions
Scenario forecasts nuclear power generation to more than double
by 2050, requiring an average of 26 GW of new nuclear capacity
to be added each year compared to the 56 GW which was
brought online in the last decade. In December 2023, more than
20 countries signed a pledge at COP28 to triple nuclear energy
by 20501 and in March 2024 representatives from 32 nations
met at the inaugural Nuclear Energy Summit to discuss the role of
nuclear energy in addressing climate change2.
FORECAST GROWTH IN NUCLEAR
GENERATION CAPACITY
Theme two is the resulting steps many countries are taking to
rapidly increase available nuclear capacity following positive
policy shifts towards nuclear. These efforts include halting
plans to decommission existing facilities, extending operating
lifespans, restarting idled reactors and accelerating nuclear
build programmes. There are 60 reactors currently under
construction worldwide and more than 90 planned, with 53 of
these in China and India alone3.
Advanced reactors and SMRs are receiving strong support
from governments and investors, and making encouraging
progress towards commercialisation. These technologies promise
reduced upfront costs, operational footprints and construction
times. While smaller than existing reactors, their upfront fuel
requirements to support longer refuelling cycles suggest
increased uranium demand in the medium term.
A NEW EMPHASIS ON ENERGY SECURITY AND
ENERGY INDEPENDENCE
The third theme is the global reassessment of the importance
of energy security and accelerating shift away from fossil fuels
following Russia’s invasion of Ukraine. While this has raised
nuclear’s profile as a source of secure and affordable energy, it
also added risk to the global uranium fuel cycle and has driven a
de-globalisation of demand between Russian and non-Russian
sources.
Russia supplies approximately 5% of global uranium
concentrates, 20% of conversion and 46% of enrichment4,
highlighting the security of supply risk in the context of the
growing primary supply gap and shrinking secondary supplies.
Western nations are working together to reduce dependence on
Russian sourced nuclear fuel and support non-Russian capacity,
with the US in particular committing significant funding to
securing supply of HALEU for SMRs and advanced reactors. In
May 2024, the US banned imports of Russian nuclear fuel from
August 2024, although with certain waivers until 20275. Since
the start of the war, utilities in the US, Europe and elsewhere
have sought to source from non-Russian suppliers.
This has seen prices in the back end of the nuclear fuel cycle
rise dramatically, with the price of enrichment and conversion
1.
World Nuclear Association; “COP28 agreement recognises accelerating nuclear as”;
13 December 2023.
2.
IAEA Press Announcement; “A Turning Point: First Ever Nuclear Energy Summit
Concludes in Brussels”; 25 March 2024.
3.
World Nuclear Association/World Nuclear Power Reactors & Uranium
Requirements (May 2024).
4.
MineSpans Q124.
5.
Prohibiting Russian Uranium Imports Act (H.R. 1042).
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 19
tripling, compared to the doubling in the uranium spot market. Given its strong position in
conversion and enrichment, there is also a risk that Russia could disrupt the market by unilaterally
cutting supplies in response to the new US Act, other policy developments or sanctions.
There remain concerns about disruptions
to uranium deliveries from Kazakhstan that
transit Russian territory and delays to maritime
deliveries from Australia that may be affected
by attacks on ships in the Red Sea.
LONG-TERM CONTRACTING BY
UTILITIES
For many years, global uranium consumption
has run well ahead of production, with the
shortfall being made up from stockpiles and
secondary supplies. With these alternative
sources now largely depleted, demand for
mid and long-term contracts to cover future
uranium requirements is pushing term
uranium prices higher. Contracted volumes in
2023 more than doubled from 2021 and the
negotiated terms in term offers reportedly
reflect the shift from a buyer’s market to a
seller’s market.
URANIUM SUPPLY REMAINS
CHALLENGED
In the face of the trends driving demand,
the ability of producers to easily increase
production and bring new resources online
remains constrained. The extended period
of low uranium prices saw major producers
idling uneconomic operations or curtailing
production, and disincentivised investment in
new resources. In the past few years, several
significant operations closed permanently
and the coup in Niger last year has disrupted
around 4% of global production. Ongoing
supply chain challenges following COVID-19
Chief Executive Officer’s review continued
1.
UxC Weekly; “2023 Uranium Spot Market Review”; 29 January 2024.
2.
UxC Weekly; “2023 Uranium Term Contracting Review”; 5 February 2024.
$0
$20
$40
$60
$80
$100
$120
Jan-24
Jul-23
Jan-23
Jul-22
Jan-22
Jul-21
Jan-21
Jul-20
Jan-20
Jul-19
Jan-19
Spot
Term
U308 prices (USD/lb)
$0
$20
$40
$60
$80
Jan-24
Jul-23
Jan-23
Jul-22
Jan-22
Jul-21
Jan-21
Jul-20
Jan-20
Jul-19
Jan-19
Spot
Term
Ux conversion prices (USD/kgU as UF6)
have exacerbated delays and limited access to
key equipment and materials.
While several producers have announced
restarts of idled production, these will take
time to reach full capacity and are insufficient
to meet the shortfall. Over the past year,
Kazatomprom and Cameco, the two largest
global uranium producers, both announced
delays in planned ramp ups due to shortages
of key inputs and other industry complexities.
This may require both companies to buy from
an already thin spot market to meet contractual
commitments.
Sustained higher uranium prices will be required
to incentivise more capital-intensive greenfield
developments to support a meaningful rise in
long-term global production. These new mines
are also likely to experience similar challenges
in reaching sustainable production and would
only start to contribute towards the end of the
current decade.
SPOT AND TERM MARKET
VOLUMES CONTINUE TO
DIVERGE
Spot market volumes decreased by 8% in the
2023 calendar year to 56.3 million lb (CY2022:
60.8 million lb), well below the record volumes
in CY2021 (102.4 million lb), but still above
historical averages1. Only US utilities and hedge
funds increased purchases during the year,
with decreased activity by investment funds,
producers, junior miners and non-US utilities
resulting in the net decrease in volumes year
on year.
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
Spot
Term
Jan-24
Jul-23
Jan-23
Jul-22
Jan-22
Jul-21
Jan-21
Jul-20
Jan-20
Jul-19
Jan-19
Enrichment prices (USD/SWU)
Source: UxC LLC
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 20
Chief Executive Officer’s review continued
The uranium spot market price started 2023 at USD48.00/lb and
ended the year 90% up at USD91.00/lb. Early in February 2024,
the price peaked at USD107/lb, before retreating to USD87.00/lb
on 31 March 2024, 72% higher than the close on 31 March 2023
of USD50.65/lb.
Term uranium volume contracted rose by 29% to 160.8 million lb
(CY2022: 114 million lb), more than double the annual average of
around 77 million lb over the past decade2. This was mainly driven
by European utilities that previously sourced uranium from Russian
suppliers shifting to Western sources, which offset decreased
contracting by US utilities. Three and five-year forward prices
increased by 70% and 77% respectively over the year to 31 March
2024.
Conversion and enrichment prices increased by 44% and 27%
respectively over the year to 31 March 2024, reflecting concerns
about the possibility of bans on US imports of Russian fuel and
ongoing capacity constraints as utilities move away from Russian
sources. Additional conversion and enrichment capacity will take
several years to come to market if higher prices are sustained,
although a short-term switch from underfeeding to overfeeding
could help to meet demand, but will require additional UF6
and U3O8.
INCREASED HOLDINGS OF U3O8
In September, Yellow Cake took delivery of a further
1.35 million lb of uranium contracted in the 2023 financial year.
In October, we took the opportunity to raise approximately
USD125 million (before costs), which was applied to fully utilise
the 2023 Kazatomprom option and contract for a further
1.53 million lb, which was delivered in June 2024. This brings our
total holdings after receipt to 21.68 million lb.
Despite the continued improvement in the uranium market
fundamentals, Yellow Cake traded at a discount to net asset value
for a significant part of the year. We believe this was much more
due to macroeconomic factors impacting the risk appetite in the
broader equity market rather than specifically the uranium spot
market. During the course of the last calendar year equity markets
were impacted by the Silicon Bank failure in the United States, the
second wave of COVID-19 in China and flattening of interest rate
expectations as investors priced in a “higher for longer” federal
funds rate.
OUTLOOK
We expect the existing trends in the uranium market to remain
in place in the year ahead, with continued spot price volatility
on an upward price trend in the near- to medium-term with a
strong bias towards the upside as the lack of mobile inventory
takes hold, constraining near-term uranium supply availability.
Term contracting volumes are anticipated to increase as utilities
secure future supplies. Increased activity in the uranium market
could also unlock opportunities to realise further value from
commercial opportunities related to our U3O8 holdings. The
market will be watching progress in producer ramp-up plans and
new uranium projects closely as indicators of producers’ ability
to meet the growing primary supply gap.
We remain confident in the outlook for uranium and Yellow
Cake’s ability to deliver on our stated strategy of realising
opportunities to create value for investors by increasing
our U3O8 holdings when the share price is trading above net
asset value and adding value from commercial opportunities.
Andre Liebenberg
Chief Executive Officer
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 21
“During the financial year, the value of Yellow Cake’s uranium holdings increased 84% as a result of a 1.35 million lb increase in its holdings and a 72%
increase in the uranium price. In October, the Group successfully completed a USD125 million share placing and applied the proceeds to the purchase of
an additional 1.53 million lb of U3O8 which was received in June 2024.”
CHIEF FINANCIAL OFFICER’S REPORT
I am pleased to present the following audited financial
statements for the year to 31 March 2024 and report a number
of highlights:
n Uranium holdings of 20.16 million lb of U3O8 valued at
USD1,753.5 million as at 31 March 2024 (18.81 million lb of
U3O8 valued at USD952.5 million at 31 March 2023).
n Gross proceeds of USD124.7 million from a share placing in
October 2023, applied to the purchase 1.53 million lb of U3O8
at a price of USD65.50/lb and an aggregate consideration of
USD100 million, delivered in June 2024.
n Profit after tax of USD727.0 million (2023: Loss of
USD102.9 million), driven by a fair value gain of
USD735.0 million on the Group’s uranium holdings.
URANIUM TRANSACTIONS
Yellow Cake started the financial year with holdings of
18.81 million lb of U3O8. On 30 September 2023, Yellow Cake
took delivery of 1.35 million lb of U3O8 that it had agreed to
purchase in February 2023 as part of its 2022 Kazatomprom
uranium purchase option. This was received by the Group at
the Cameco storage facility in Canada in accordance with the
agreed delivery schedule.
In October 2023, Yellow Cake took the opportunity to raise
USD124.7 million through a share placement. The proceeds
were applied to fully utilise the Group’s 2023 Kazatomprom
option by purchasing 1.53 million lb of U3O8 at an average price
of USD65.50/lb and an aggregate consideration of
USD100.0 million. This uranium purchase transaction
completed in June 2024.
As at 31 March 2024, the Group’s uranium holdings comprised
20.16 million lb of U3O8, a net increase of 1.35 million lb of
U3O8 during the financial year. Following completion of the
agreed purchase of 1.53 million lb of U3O8 the Group’s uranium
holdings comprises 21.68 million lb of U3O8.
Yellow Cake continues to explore beneficial commercial
opportunities related to its uranium holdings on an ongoing
basis. Although no such transactions were concluded in the year
under review, we have set up a new subsidiary to allow us to
more easily conclude commercial agreements.
URANIUM-RELATED GAINS AND LOSSES
Yellow Cake made a total uranium-related profit of
USD735.0 million in the year to 31 March 2024 as a result of an
increase in the fair value of the Group’s uranium holdings, which
was attributable to the increase in the spot price.
Profit after tax of
USD727.0 million
2023: loss of USD102.9 million
Gross proceeds from share placing of
USD124.7 million
2023: USD74.3 million
Increase in value of uranium holdings of
USD735.0 million
2023: USD35.8 million
Carole Whittall
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 22
ESTABLISHMENT OF SUBSIDIARY
During the year, Yellow Cake established a wholly-owned
subsidiary, YCA Commercial Ltd, which holds 1.95 million lb
of U308. It is intended that YCA Commercial Ltd will be the
vehicle through which the Group engages in uranium-related
commercial transactions, such as location swaps, to realise
value from Yellow Cake’s uranium holdings.
OPERATING PERFORMANCE
Yellow Cake delivered a profit after tax for the year of
USD727.0 million (2023: loss of USD102.9 million). Expenses
for the year were USD12.3 million (2023: USD7.0 million).
Yellow Cake’s Management Expense Ratio for the year (total
operating expenses, excluding commissions and equity offering
expenses, expressed as an annualised percentage of average
daily estimated net asset value during the period) was 0.74%
(31 March 2023: 0.68%).
The Group does not propose to declare a dividend for the year.
SHARE PLACING
On 2 October 2023, the Group issued 18.7 million new
ordinary shares to existing and new institutional investors at
a price of GBP5.50 per share. The Group raised net proceeds
of GBP102.7 million (USD equivalent: USD121.1 million net of
costs of USD3.6 million).
Chief Financial Officer’s report continued
1.
Net asset value per share as at 31 March 2024 is calculated assuming
221,440,730 ordinary shares in issue less 4,584,283 shares held in treasury, the
Bank of England’s daily USD/GBP exchange rate of 1.2632 as at 28 March 2024
and the daily spot price published by UxC LLC on 29 March 2024.
0
1
2
3
4
5
6
7
8
200.0
0
500
1 000
1 500
2 000
March 2024
March 2023
March 2022
March 2021
March 2020
March 2019
Listing
Net asset value ("NAV") and NAV per share
2.25
222.9
2.45
267.1
421.5
1 069.0
2.38
4.42
1 053.3
4.23
1 883.6
6.88
(USDm)
GBP/share
Net asset value (USDm)
Net asset value per share (GBP)
2.00
2.
Estimated net asset value per share as at 11 July 2024 is calculated assuming
221,440,730 ordinary shares in issue, less 4,584,283 shares held in treasury, the
Bank of England’s USD/GBP exchange rate of 1.2924 as at 11 July 2024 and the
daily spot price published by UxC LLC on 11 July 2024.
BALANCE SHEET AND CASH FLOW
The value of Yellow Cake’s uranium holdings increased
by 84% to USD1,753.5 million at year-end compared to
USD952.5 million at the end of the 2023 financial year, as a
result of a net increase in the volume of uranium held and the
increase in the uranium price. As at 31 March 2024, Yellow Cake
had cash of USD133.2 million (2023: USD84.4 million).
Yellow Cake’s net asset value at 31 March 2024 was GBP6.881
per share or USD1,753.5 million, consisting of 20.16 million lb
of U3O8 valued at a spot price of USD87.00/lb, cash and cash
equivalents of USD133.2 million and other net current liabilities
of USD3.1 million.
Yellow Cake’s estimated net asset value on 11 July 2024
was USD1,894.8 million or GBP6.76 per share2, assuming
21.68 million lb of U3O8 valued at the daily price of USD86.00 lb
published by UxC LLC on 11 July 2024, cash and cash
equivalents of USD133.2 million and net current liabilities of
USD3.1 million as at 31 March 2024, less cash consideration of
USD100 million which was paid to Kazatomprom following the
delivery of 1.53 million lb of U3O8 in June 2024.
Carole Whittall
Chief Financial Officer
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 23
Uranium is important to the
transition to a low carbon economy
Strong female representation at the
management and Board level
The highest levels of safety in
the storage of uranium
A skilled, committed and
independent Board
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
The Board recognises the importance of Yellow Cake’s
environmental, social and governance (“ESG”) considerations
and performance to ensure the Group’s success, sustainability
and reputation.
Yellow Cake has minimal direct societal and environmental
impact as the Group’s activities do not include exploration,
development, mining, or processing. The Group’s main sources of
ESG risk arise from the activities of its key suppliers that supply
uranium, provide storage facilities and provide procurement
advice (see pages 31 and 32 for a description of our principal
ESG risks and how the Group manages these). Yellow Cake
is committed to ensuring that it is comfortable that its key
suppliers’ activities align with its values and strives to reduce
ESG risks throughout its supply chain. Suppliers are selected in
accordance with Yellow Cake’s Supplier Standards Policy.
The Group has a zero-tolerance approach to bribery and
corruption. Yellow Cake’s Supplier Standards Policy sets out the
Group’s standards in the areas of health and safety, business
integrity and legal compliance, labour and human rights,
environmental stewardship, treatment of host communities,
and reporting. We conduct annual risk-based due diligence on
suppliers and business partners to identify potential risks in
their governance, environmental, social and ethical practices.
In addition, risk-based due diligence is conducted for all material
transactions with existing or new counterparties. Counterparty
due diligence is undertaken ahead of entering into relationships
with material suppliers and ahead of any material payments
being made to existing suppliers. Additional ad hoc counterparty
due diligence is undertaken subject to particular circumstances
giving rise to increased risk.
PRODUCT RESPONSIBILITY
Uranium mining has similar social and environmental impacts to the mining of other
metals and minerals, and is regulated in terms of local legislation on health, safety and
environmental protection.
Uranium ore and U3O8 are mildly radioactive, although prolonged exposure can
cause damage. Uranium is toxic chemically and is handled and contained to prevent
inhalation or ingestion. Radioactivity and toxicity increase during concentration and
enrichment, which happen later in the nuclear fuel value chain.
The 20.16 million lb of U3O8 owned by Yellow Cake at 31 March 2024 is stored in
metal drums in storage accounts at licenced storage facilities at Cameco’s Port Hope/
Blind River operation in Canada and Orano’s Malvési/Tricastin site in France.
Kazatomprom uses the in-situ-recovery (“ISR”) method of uranium mining, which
causes minimal radioactivity. Radiation monitoring and safe working practices are in
place at Kazatomprom. The management systems at Kazatomprom’s operations and
at the storage facilities at Cameco and Orano
adhere to national regulations and align with
OHSAS 18001 or ISO 45001 (occupational
health and safety management systems) and
ISO 14001 (environmental management
systems).
Yellow Cake enters into location swap
agreements and other uranium-based financial
initiatives. These transactions take the form
of book transfers and therefore do not involve
the physical transportation of uranium.
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 24
ESG REPORTING BOUNDARIES AND
IDENTIFICATION OF MATERIAL ISSUES
Yellow Cake determines topic boundaries for reporting ESG
with reference to the United Nations Guiding Principles of
Business and Human Rights and the OECD Guidelines for
Multinational Enterprises. Accordingly, the Group takes into
account both direct impacts and indirect impacts arising
from our business relationships with suppliers, and defines
materiality to include topics that affect Yellow Cake’s economic,
environmental, and social impacts on stakeholders and society.
EXTERNAL ESG ASSESSMENT
In line with Yellow Cake’s commitment to ESG principles, the
Group commissions an annual external and independent ESG
risk assessment of its primary supplier and storage partners.
The assessment was conducted by PRISM Political Risk
Management, a strategic risk intelligence firm with extensive
experience in the mining and energy industries in emerging
markets.
PRISM reviewed ESG risks related to Yellow Cake’s primary
supplier Kazatomprom, as well as its storage partners Cameco
and Orano over their respective 2023 financial years. The
review comprised enquiries with industry sources, public
domain research to assess ESG performance and direct
engagements with the ESG team and high-level managers
from Kazatomprom.
KEY FINDINGS FROM THE PRISM REPORT
According to PRISM’s report, Yellow Cake’s key suppliers are
continuing to make progress towards their long-term ESG
goals. Yellow Cake’s key suppliers have successfully begun
implementing their internal decarbonisation strategies, having
expanded their international reporting and met international
audit and climate standards.
Kazatomprom’s Integrated Annual Report is guided by the
17 UNSDGs and publishes assured information adhering to
GRI standards. In 2023, Kazatomprom continued to be a
regional leader in observing global standards.
Cameco and Orano have improved their application of
international industrial benchmarks and continue to actively
monitor and address ESG impacts. PRISM did not identify any
material ESG risks at Cameco or Orano. For instance, Cameco
began reporting in line with TCFD recommendations and
Orano deployed a radiation protection maturity assessment
in 2023.
APPROACH TO ESG REPORTING
Yellow Cake’s ESG reporting is informed by the following
leading guidelines and standard setters for ESG disclosures:
the United Nations Sustainable Development Goals
(“UNSDGs”), the Global Reporting Initiative (“GRI”), the
Sustainability Accounting Standards Board (“SASB”), and the
Task Force on Climate-Related Disclosures (“TCFD”).
Based on these frameworks, key assessment areas for the
review of Yellow Cake’s potential material ESG risk exposures
were identified as relevant to Yellow Cake:
n Environment: Emissions, Water Use, Nuclear Assets
n Social Responsibility: Human Rights and Community
Relations
n Employees: Health and Safety, Education, Diversity
n Business Model: Resilience, Innovation, Procurement, Ethics
n Risk Management: Regulatory and Political Environment
Environmental, social and governance continued
IMAGE
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 25
n Kazatomprom introduced a Water Management
Water Resources Management Strategy and adopted a
comprehensive Radioactive Waste Management Programme
for 2023–2030 to improve the company’s management of
water and disposal of waste.
n Yellow Cake will continue to assess Kazatomprom’s progress
to monitor its implementation of specific measures to achieve
these aims, including reducing coal as an energy source and
increasing the use of renewable energy.
n Orano reduced its Scope 1 emissions, but total emissions
rose.
n Cameco released its own Decarbonisation Strategy with the
aim of achieving carbon neutrality in Scope 1 and 2 emissions
by 2050, set out by Canada’s national net zero target.
SOCIAL
n Yellow Cake continues to implement its policies on employee
and stakeholder well-being, including health and safety, equal
opportunities, and whistleblowing protection.
n Yellow Cake partners Kazatomprom, Cameco, and Orano
have well-developed standards for the health, safety, and
well-being of their employees, which are regularly assessed by
both regulators and external monitors.
n The Group considers the interests of stakeholders
(see page 42).
n Yellow Cake is committed to female representation. Women
make up 43% of the Board and 50% of management.
n PRISM’s report noted that Kazatomprom could improve
representation of women in the company’s senior
management and improve reporting on the health and safety
of contractors.
n All Group partners improved their performance on human
rights and social indicators in 2023. Kazatomprom, Cameco,
and Orano hold internationally accepted health and safety
certifications and their systems are regularly monitored by
independent bodies for compliance.
GOVERNANCE
n Yellow Cake has a zero-tolerance approach to corruption,
bribery, unethical practices and anti-competitive behaviour.
The Group works with partners to eliminate such behaviour
from its supply chain and commissions independent reviews
of its activities and those of its suppliers.
n The Board meets frequently and meetings have high
attendance. The Board monitors the Group’s ESG
performance at these meetings having regard to governance
best practice and the ESG performance of its key suppliers.
n 71% of Yellow Cake’s Board of Directors are independent.
n Kazakhstan is subject to political risks, which Yellow
Cake monitors closely. PRISM identified diversity and
independence of board members, as areas for possible
improvement in Kazatomprom’s corporate governance.
Environmental, social and governance continued
Within the SASB framework, the following sustainability issues
were identified as relevant to Yellow Cake:
n Social Capital: Human Rights and Community Relations
n Human Capital: Employee Engagement, Diversity, and
Inclusion; Employee Health and Safety
n Leadership and Governance: Business Ethics; Competitive
Behaviour; Management of the Legal and Regulatory
Environment
Yellow Cake is monitoring the development and adoption of
the new sustainability- and climate-related disclosures issued
by the International Financial Reporting Standards (IFRS S1
and S2) and is considering how to address these in future
reports.
ENVIRONMENT
n While Yellow Cake does not engage in mining activities or
directly handle inventory, it is committed to the reduction of
environmental risk at its primary supplier and main business
partners.
n Nuclear energy is viewed globally as an important alternative
to energy from fossil fuel and key to fulfilling global
decarbonisation goals. Yellow Cake has a role to play in
facilitating the energy transition.
n Primary supplier Kazatomprom uses in-situ recovery for
uranium extraction, a method producing fewer emissions than
other methods.
n Kazatomprom obtained its first international climate rating
from the Carbon Disclosure Project (“CDP”) for its 2023
financial year. Although Kazatomprom’s Scope 1 emissions
increased, the company’s total emissions fell year-on-year due
to a reduction in Scope 2 and 3 emissions.
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 26
RISK MANAGEMENT
HOW WE MANAGE RISK IN OUR BUSINESS
The Board sets the Group’s business strategy and has
overall responsibility for risk assessment. Yellow Cake’s
risk management framework aims to mitigate risk to an
acceptable level to execute the strategy and create value for
all stakeholders. The Audit Committee is mandated to keep the
Group’s internal control and risk management systems under
review and to report to the Board. The committee reviews the
system of internal controls, regularly assesses its effectiveness
and receives input from the external auditor regarding issues
identified during its engagement, particularly feedback
relating to any control weaknesses and the responses from
management.
The Executive Directors periodically perform risk assessments
to identify and quantify the risks that face the Group’s
operations and functions, and to evaluate the adequacy
of the prevention, monitoring and mitigation practices in
place for those risks. The Audit Committee reviews the risk
assessment and risk management processes for completeness
and accuracy, carefully considers the Group’s risk register and
receives regular updates from management.
PRINCIPAL RISKS AND UNCERTAINTIES
The Audit Committee has carried out a robust assessment
of the principal risks facing the Group, including those that
would threaten its business model, future performance,
solvency or liquidity.
Operational
Risks
Geopolitical
Risks
Corporate
Risks
Industry
Risks
Environmental,
Social and
Governance
Risks
Financial
Risks
1. Counterparty
risk
4. Geopolitical
developments
5. Key personnel
7. Regulatory
regime
9. Environmental
risk
12. Uranium
price risk
2. Cash flow risk
6. Key service
providers
8. Industry
10. Social risk
13. Foreign
exchange risk
3. Pandemic risk
11. Governance
14. Taxation risk
CHANGES TO THE 2024 RISK REGISTER
The risk review during the 2024 financial year resulted in the following changes to the risk register:
n New operational risks were added (1(d) and 1(f)), to reflect the concentrated nature of storage facilities and risks related to the
Group’s uranium-related commercial activities.
n A new financial risk was added relating to taxation (14(b)) regarding the Group’s tax residence status requirements.
n The consequence rating of risks 1(a), 4(a) and 4(b) were reduced from Catastrophic to Major.
n The probability ratings for risk 1(a) increased from Unlikely to Possible and for risk 4(a) from Possible to Likely.
The table below shows the principal risks currently facing the Group, including those that could threaten its business model,
future performance, solvency or liquidity. Risk levels are determined based on an evaluation of the probability and consequence of
individual risks.
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 27
Nature and impact of risk
How we manage the risk
Risk level
Operational risks
1. Counterparty risk
The counterparties to the Group’s key contracts may become
insolvent or otherwise unable to fulfil their contractual
obligations.
(a) The Group engages in the purchase of U3O8 from third
parties, in an increasingly supply constrained market that is
susceptible to geopolitical impacts.
In particular, the Group has the option to purchase U3O8
from Kazatomprom under the Kazatomprom Framework
Agreement, and its ability to continue to do so may be
subject to geopolitical risks or enhanced risks associated
with emerging market countries. This arrangement expires
at the end of 2027.
Under the Kazatomprom Framework Agreement, the Group is required to pay for any purchases of physical uranium
ten days after taking delivery of the uranium. This ensures the Group is better able to manage any potential credit
exposure.
If Kazatomprom defaulted on the Framework Agreement and was unable to perform its contractual obligations,
this would prevent Yellow Cake from being able to procure uranium at the undisturbed market price under that
agreement. If that occurred and Yellow Cake wished to purchase uranium, it would need to enter into new supply
contracts for uranium with producers and/or to purchase uranium in the spot market. Yellow Cake recognises that any
new contracts or spot market purchases may not provide equivalent access to undisturbed uranium prices or volumes
as provided by the Kazatomprom contract.
As the remaining term of the Kazatomprom Framework Agreement reduces, the impact of Kazatomprom defaulting
under its obligations recedes, which is why the consequence rating was reduced from catastrophic to major. In addition to
procuring uranium through the Kazatomprom Framework Agreement, the Group has previously purchased significant
quantities of uranium from other suppliers, including Curzon/CGN Global Uranium Limited. The relative materiality of
the Kazatomprom Framework Agreement is also reducing in view of the Group’s significant asset growth.
High
(b) The Group has contracts in place for the storage of its U3O8
with Cameco for storage at Cameco’s Port Hope/Blind
River facility and with Orano for storage at Orano’s Malvési/
Tricastin storage facility in France. There is a risk that
Cameco or Orano could become insolvent.
The Group retains ownership of the U3O8 while in storage and would therefore retain ownership through any potential
insolvency event in relation to Cameco or Orano (although it cannot be guaranteed that, in the event of a Cameco or
Orano insolvency event, a third party would not seek to challenge the Group title to its U3O8). Yellow Cake maintains a
watching brief on the credit rating and financial health of Cameco and Orano.
Medium
(c) There is a risk that the storage facilities could be destroyed.
Cameco and Orano have contractual undertakings to either provide replacement U3O8 or pay Yellow Cake the
replacement volume of such U3O8 in the event of a loss of Yellow Cake’s holdings. As such, Yellow Cake does not have
third party insurance arrangements in place to insure this risk. Cameco and Orano are not liable for consequential losses.
High
(d) There are currently only three regulated storage facilities
globally in OECD countries where the Group may hold
its uranium. The concentrated nature of these services
means that the Group is susceptible to significant storage
cost increases.
The Group holds its uranium in more than one storage facility in order diversify its exposure to the extent possible.
Medium
(e) The Group maintains cash balances in its current accounts in
amounts that are material to the Group. The risk exists that
the bank may not be able to repay the Group’s cash or a fraud
event occurs.
Cash balances are held with Citibank, a major global financial institution. Current accounts are operated by Langham
Hall Fund Management (Jersey) Limited. The risk of fraud and embezzlement of funds is mitigated by multiple signatory
and authorisation protocols in place with Langham Hall Fund Management (Jersey) Limited.
Medium
Risk management continued
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 28
Nature and impact of risk
How we manage the risk
Risk level
Operational risks continued
(f) In undertaking uranium-related commercial activities such as
location swaps, uranium lending and royalty agreements, the
Group is exposed to the specific performance risk and credit
risk of third parties.
Yellow Cake maintains a watching brief on the credit rating and financial health of its counterparties and structures its
transactions based on legal and expert advice, so as to have appropriate security and recourse in the event of default.
Medium
2. Cash flow risk
Yellow Cake may, in the future, have insufficient funds to pay
operating expenses.
The Group continues to review and evaluate opportunities related to the ownership of uranium and other
uranium-related activities, and may, from time to time, enter into transactions or arrangements which generate
cash to support the Group’s business.
The Group is unlevered and seeks to maintain sufficient working capital to fund its ongoing operations. The Group
has the ability to sell, trade, lend or otherwise commercialise some of its holdings of uranium in a manner which
would provide cash to support its operations.
Medium
3. Pandemic risk
The COVID-19 pandemic disrupted uranium mining in 2020
and 2021, and had an extended impact on global supply
chains. Future pandemics that result in an extended shutdown
could affect the Group’s business model, ability to access
capital and continue in business.
The Group’s day-to-day operations were not affected by COVID-19, given that Yellow Cake has no physical
operations and the executive team is already home-based. As at 31 March 2024, Yellow Cake had sufficient
cash balances to meet approximately two years of working capital requirements, after taking into account
commitments to purchase USD100.0 million worth of U3O8 after the year end, before it would need to raise
additional funds for working capital. The Group has no debt or hedges on the balance sheet.
Low
Geopolitical risks
4. Geopolitical developments
(a) The stringent economic sanctions imposed by the European
Union and United States on Russian companies and the ban
by the United States on the importation of Russian uranium
products is expected to directly impact the global nuclear
fuel trade and exacerbate supply constraints across the
nuclear fuel supply chain. The risk exists that secondary
sanctions could be imposed on the Group’s suppliers,
precluding future purchases from these sources.
Kazatomprom has business relationships with Rosatom, Russia’s state nuclear corporation, including certain
joint ventures with Rosatom’s Uranium One and a uranium processing agreement with the Uranium Enrichment
Centre, located in Russia. However, it is understood that Kazatomprom has mitigation plans with regards to these
business interests. The risk of secondary sanctions applying to Kazatomprom is therefore considered low.
High
(b) Some of Kazatomprom’s products are transported
through the Russian Federation. At present the Group
is unaware of any restrictions related to the supply of
products to end customers. However, such restrictions
may apply in future.
Kazatomprom has indicated that, while some of its production is shipped through the Russian Federation, it is
successfully using an alternative trans-Caspian transport route that completely excludes Russian territory for
most of its exports to the West. It has advised that it has capacity to negotiate swaps with partners and customers,
access its uranium holdings at a number of global locations and is working on diversifying routes to market, including
through the territory of the People’s Republic of China. Nevertheless, logistics constraints may impact future
deliveries.
High
Risk management continued
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 29
Nature and impact of risk
How we manage the risk
Risk level
Corporate risks
5. Key personnel
The Group is reliant on its Executive Directors and other
key personnel. Any change to the Group’s management and
service providers may have a negative impact on its business.
The Group believes that its executive team, as well as the Board of Directors are dedicated to the long‑term
growth of the Group. However, in the event that any of these persons elects to leave the Group or discontinue
provision of services, the Group is confident in its ability to find suitable replacements.
Low
6. Key service providers
The Services Agreement with 308 Services Limited may be
terminated by either party on one year’s notice.
The Group believes that its advisers in 308 Services Limited are dedicated to the long-term growth of the Group.
The Group does not expect that 308 Services Limited will elect to terminate its contract; however, in the event
that such an event were to occur, the Group is confident in the ability of its executive management to find a
suitable replacement.
The Group has the benefit of, and is the direct counterparty, to its supply and storage contracts. 308 Services is
not a party to these agreements.
Low
Industry risks
7. Regulatory regime
Changes in laws around the ownership of uranium, or
increased regulation or change in government policy around
uranium and nuclear power generation, could adversely
affect the Group’s business.
The Group believes it is unlikely in the near- to medium-term that a significant change to the laws or regulations
around the ownership or transfer of ownership of uranium or generation of nuclear power will occur. Additionally,
as the Group’s exposure is focused in Western Europe (where the Group is based and where some of the Group’s
U3O8 holdings are held) and North America (where most of the Group’s U3O8 holdings are held), any changes,
however unlikely, would be expected to be transparent and conducted in a legal manner which would have limited
impact on the Group’s value.
The Group keeps a watching brief, with the advice of counsel and 308 Services Limited, on changes of legislation
that may impact its business.
High
8. Industry
The Group’s operations are focused around uranium and
uranium-related activities. Nuclear accidents could impact
the future prospects for nuclear power, the key source of
demand for U3O8.
The nuclear industry operates with one of the highest margins of safety in the world, with a number of safeguards
and redundancies built into processes in order to reduce public health and safety risks.
There are limited steps that the Group can undertake to impact the activities of other companies.
High
Risk management continued
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 30
Nature and impact of risk
How we manage the risk
Risk level
Environmental, social and governance risks
9. Environmental
The Group operates in the resources sector, which is under
increasing scrutiny from investors and other stakeholders
with regards to how it manages its environmental
responsibilities. Negative environmental trends in the
resources sector could cause a significant withdrawal of
capital and affect the share prices of listed companies in the
sector and their ability to access equity capital markets.
Yellow Cake does not carry out exploration, development or mining operations, but is exposed to environmental
risk via its suppliers, particularly through its contract with Kazatomprom. The Group has limited influence over
the activities of its suppliers but is committed to more responsible mining practices that mitigate the risk of
climate change and damage to the environment. To ensure this, Yellow Cake regularly monitors its partners’
environmental performance. Specifically, it appraises Kazatomprom’s record with regard to greenhouse gas
emissions, water management, waste and hazardous materials, radiation and safety, decommissioning of mining
sites and land management. Cameco and Orano, as storage providers to Yellow Cake, are also monitored for
environmental compliance and efficient use of resources. The Environmental, social and governance section on
pages 24 to 26 provides an overview of relevant ESG aspects.
Yellow Cake’s Supplier Standards Policy sets out the Group’s position and expectation of its suppliers regarding
their environmental, social and governance practices. Kazatomprom is listed on the London Stock Exchange
(“LSE”) and Cameco is listed on the Toronto Stock Exchange (“TSX”). Listing on these exchanges requires a
commitment to good corporate governance and responsible environmental and social practices. Cameco’s
storage facilities are subject to strict licencing requirements by the Canadian Nuclear Safety Commission
regarding the health and safety of the public and the environment. Orano is majority owned by the French
Government and applies a comprehensive Safety-Environment policy based on Operational Excellence.
High
10. Social
Yellow Cake is exposed indirectly to social risk via its
suppliers. Negative social trends in the resources sector
could cause a significant withdrawal of capital and affect the
share prices of listed companies in the sector and their ability
to access equity capital markets.
Yellow Cake regularly monitors its partners’ exposure to social risk by analysing incidents involving injury or
fatality as well as storage facilities management. Kazatomprom is a significant employer and tax contributor in
Kazakhstan and Yellow Cake monitors its programmes of education and training as well as employee diversity and
inclusion. Yellow Cake assesses Kazatomprom’s human rights compliance and community relations particularly
with regard to its mine closures.
Yellow Cake’s Supplier Standards Policy sets out the Group’s position and expectation of its suppliers regarding
their environmental, social and governance practices. Kazatomprom is listed on the LSE and Cameco is listed
on the TSX. Listing on these exchanges requires a commitment to good corporate governance and responsible
environmental and social practices. Cameco’s storage facilities are subject to strict licencing requirements by the
Canadian Nuclear Safety Commission regarding the health and safety of the public and the environment. Orano is
majority owned by the French Government. The company’s Health, Safety and Radiation Protection policy aims to
continuously improve the group’s results and strengthen preventative actions.
High
Risk management continued
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 31
STRATEGIC REPORT
Nature and impact of risk
How we manage the risk
Risk level
11. Governance
(a) Yellow Cake is exposed indirectly to governance risk via
Kazatomprom being based in Kazakhstan, a country which
could be affected by political instability. As Kazatomprom
is a State-Owned Enterprise, a change in the political
leadership could negatively impact its corporate
governance record should Kazatomprom’s management
and Board become less independent. There is a risk
that political instability could also initiate a challenge to
contracts held between the Group and Kazatomprom.
Kazatomprom is listed on the FCA’s standard list in the UK. It is not required to comply with the UK Corporate
Governance Code, although it is required to comply with relevant provisions of the FCA’s Listing Rules and the
Disclosure and Transparency Rules.
Yellow Cake complies with the UK Corporate Governance Code insofar as appropriate given the Group’s size, business,
stage of development and resources, explains areas of non-compliance in its Annual Report. Yellow Cake has limited
influence over its suppliers, but regularly assesses its chief supplier, Kazatomprom’s, corporate governance practices.
The Group does not have assets in Kazakhstan and any deterioration in governance of Kazatomprom is only likely
to impact on the future of its uranium supply contract. Yellow Cake closely monitors the extent of political risk and
its effect on Kazatomprom’s corporate governance performance.
Yellow Cake’s Supplier Standards Policy sets out the Group’s position and expectation of its suppliers regarding
their environmental, social and governance practices.
Medium
(b) Bribery and corruption in the geographical regions in
which the Group conducts business could materially
adversely affect its business, results of operations and
financial condition.
Relations with suppliers are overseen by Yellow Cake’s management and Board, who are informed by regular due
diligence. The Group has a zero tolerance towards bribery and corruption and regularly reviews its bribery and
corruption policy for suppliers. In terms of the Economic Sanctions Policy, counterparties, connected parties and the
ultimate source of uranium in a transaction are subject to risk-based due diligence to identify money laundering and
economic sanctions risks
Medium
Financial Risks
12. Uranium price
The uranium price is volatile and affected by factors beyond
the Group’s control.
A protracted period of weak uranium prices may limit the
Group’s ability to raise capital or fund itself.
The Group believes that uranium is currently structurally underpriced, and while the price may be volatile in the
short term, over a longer time frame the Group believes the price of uranium will increase.
The Group retains sufficient working capital to support its operations through short-term fluctuations.
If necessary, the Group could realise some of its uranium holdings to fund working capital.
Medium
13. Foreign exchange
The Group raises funds in Sterling while its functional
currency is the US Dollar.
The Group maintains the majority of its cash resources in US Dollars and converts funds raised in Sterling to US
Dollars as soon as practicable. However, prior to funds from a capital raise being settled, the Group is exposed to
fluctuations in the GBP/USD exchange rate, but only for short durations.
Low
14. Taxation
(a) Changes in the tax position of the Group could adversely
affect the Group. There is a risk that a country in which
the Group operates changes its tax legislation, rules or
policies to the detriment of the Group.
The Group manages this risk through complying with all tax regulations and ensuring that its local accounting
policies are in line with regional requirements.
The Group receives regular tax advice and opinions from its advisors and accountants to ensure it is aware of, and
can mitigate the effects on its tax position of, any changes in regulation.
High
(b) A risk exists that the Group may fail to comply with its
current tax residence status requirements.
The Group receives regular tax advice and opinions from its advisors and accountants to ensure it is aware of, and
can seek to maintain, its status. The Group continuously monitors its actions against the advice received.
High
Risk management continued
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 32
HIGH RISK
1 a
Counterparty risk
1 c
Counterparty risk
4 a
Geopolitical risk
4 b
Geopolitical risk
7
Regulatory regime
8
Industry
9
Environmental
10
Social
14 a
Taxation
14 b
Taxation
MEDIUM RISK
1 b
Counterparty risk
1 d
Counterparty risk
1 e
Counterparty risk
1 f
Counterparty risk
2
Cash flow risk
11 a
Governance
11 b
Governance
12
Uranium price
LOW RISK
3
Pandemic risk
5
Key personnel
6
Key service providers
13
Foreign exchange
Risk management continued
RISK LEVEL MATRIX
Very Likely
(5)
Extreme
Likely
(4)
High
Possible
(3)
Medium
Unlikely
(2)
Rare
(1)
Low
Very Minor
(1)
Minor
(2)
Moderate
(3)
Major
(4)
Catastrophic
(5)
1 d
11 a
2
5
6
13
3
11 b 12
7
1 c
8
9
10
1 a
4 b
4
a
a
14
CONSEQUENCES
PROBABILITY
1 b
1 e
1 f
b
14
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 33
VIABILITY
The ultimate success of Yellow Cake depends on its ability
to accretively grow its uranium holdings, realise value from
commercial opportunities arising from these holdings and
generate profits. The Group’s operations are not significantly
income generative. The Group relies on the proceeds of
its regular capital raises to acquire uranium and will usually
set aside sufficient cash to meet approximately three years’
working capital requirements as at the date of the capital
raise.
The Directors’ assessment of the Group’s viability covered a
three-year period to March 2027, which the Directors believe
is an appropriate timescale for existing and potential risks and
opportunities to crystalise. The choice of a three-year viability
period also aligns to the aforementioned working capital policy
following each equity raise and the three-year cost forecasts.
The viability statement focusses on the existing business of the
Group and its ability to meet current contractual commitments
and operating costs from current cash balances and, in “severe
but plausible” scenarios, by realising or borrowing against a
portion of its uranium holdings.
The viability assessment takes account of the Group’s current
financial position, operations and contractual commitments.
The financial position includes the Group’s cash balances,
unleveraged balance sheet and realisable uranium holdings.
Potential financial and operational impacts of the principal
risks and uncertainties set out on pages 27 to 33 in severe but
plausible scenarios were assessed. These included the impact of
movements in the uranium price, foreign exchange fluctuations
and operating risks, including Russia’s invasion of Ukraine. Risk
can never be fully eliminated, but can be mitigated to a level
which the Directors are prepared to accept as necessary to
execute the Group strategy.
The Group prepares detailed annual budgets against which
performance is assessed and regularly reviews its medium-
term working capital projections. Sufficient cash balances are
usually retained to cover at least three years’ working capital
requirements following a placing of shares or other capital raise.
As at 31 March 2024, Yellow Cake had sufficient cash
balances to meet approximately two years of working capital
requirements, after taking into account commitments to
purchase USD100 million worth of U3O8 after the year end
in June 2024, before it would need to raise additional funds
for working capital. The Group has no debt or hedges on the
balance sheet. The Group’s operating expenses are in part
linked to the underlying price of uranium. The sensitivity
analysis shows that a 30% increase in the U3O8 price for
two years would reduce the Group’s current estimated working
capital surplus by approximately three months of working
capital requirements.
The Directors consider that within a three-year time horizon,
the Group can reasonably expect to secure additional working
capital as required through further equity issuances, debt or the
realisation of a portion of its uranium holdings.
Based on this assessment, the Directors have a reasonable
expectation that the Group will be able to continue in operation
and meet all liabilities as they fall due up to March 2027.
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 34
CORPORATE GOVERNANCE REPORT
The Group seeks to ensure that its governance processes
and procedures evolve appropriately as the business evolves
to continue to protect the interests of the Group and its
shareholders.
Jersey law imposes certain obligations and responsibilities
on the directors of a Jersey company, which arise principally
under Jersey customary law, under the Companies (Jersey)
Law 1991 and under the Group’s articles of association
(the “Articles”).
GOVERNANCE STRUCTURE
The Group’s Board of Directors (the “Board”) sets
Yellow Cake’s purpose, strategy and values, and is
collectively responsible for promoting and safeguarding
the long-term sustainable success of the Group. It assesses
the basis on which the Group generates and preserves
value over the long term. The Board is supported by, and
delegates certain matters to the Audit, Remuneration and
Nomination Committees.
Yellow Cake plc elects to comply
with the principles and provisions
of the UK Corporate Governance
Code 2018 (the “Code”) insofar as
appropriate given the Group’s size,
business and resources.
SHAREHOLDERS
THE BOARD
AUDIT COMMITTEE
REMUNERATION
COMMITTEE
NOMINATION
COMMITTEE
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 35
BOARD OF DIRECTORS
Non-Executive Directors at 31 March 2024
The Lord St John of Bletso (67)
Independent Non-Executive Director
and Chairman
Anthony St John has been a long-standing
Crossbench Independent Member of the House
of Lords. He has served on many Parliamentary
Select Committees and is Vice Chairman
of both the All-Party Parliamentary Africa
Group and the All-Party South Africa Group.
He qualified as a Solicitor in South Africa and
worked for over 20 years in the City of London.
He serves as a director and adviser to several
UK listed and unlisted companies, including IDH
plc, Smithson Investment Trust and Gulf Marine
Services plc.
Amongst his business interests, his expertise
has focused on corporate governance, financial
restructuring and disruptive technologies. In
addition to Yellow Cake plc, he is also Chairman
of Strand Hanson.
Lord St John holds a Master of Law (LLM)
in Chinese and Maritime Law from London
University as well as degrees in BA, B.SocSc
and B.Proc in South Africa.
Sofia Bianchi (67)
Independent Non-Executive Director
Sofia Bianchi is the Founding Partner of Atlante
Capital Partners, an advisory and turnaround
specialist in emerging markets. She was
previously Head of Special Situations, as well
as a member of the Investment Committee for
Debt and Infrastructure, at the CDC Group plc,
a development finance institution. Prior to this,
she was Head of Special Situations at BlueCrest
Capital Management.
Ms Bianchi served as a Deputy Managing
Director of the Emerging Africa Infrastructure
Fund with Standard Bank London and held
senior positions with the European Bank
for Reconstruction and Development. She
has extensive experience in banking, fund
management and mergers and acquisitions.
Sofia Bianchi is a non-executive director of
Ma’aden. She has also served as an independent
non-executive director of Endeavour Mining plc
and Kenmare Resources plc.
Ms Bianchi holds a Bachelor of Arts in
Economics from George Washington University
and a Master’s in Business Administration
(MBA) from the Wharton School.
The Hon Alexander Downer (72)
Independent Non-Executive Director
The Hon Alexander Downer AC served
as Australian High Commissioner to the
United Kingdom from 2014 to 2018. He
has had a long and distinguished political
career in Australia, serving as Australia’s
Minister for Foreign Affairs, from 1996 to
2007, making him Australia’s longest-serving
Foreign Minister. Mr Downer also served
as Opposition Leader and leader of the
Australian Liberal Party from 1994 to 1995,
and he was a Member of the Australian
Parliament for Mayo for over 20 years. He
was appointed a Companion of the Order
of Australia in 2013 and was awarded the
Centenary Medal in 2001. He is Executive
Chair of the International School for
Government at King’s College London.
Alexander Downer holds a Bachelor of Arts
(BA) (Hons) in Politics and Economics from
Newcastle University.
Alan Rule (62)
Independent Non-Executive Director
Alan Rule has more than 25 years’ experience
as a Chief Financial Officer and Company
Secretary in the operating mining industry
in Australia, Africa and South America. He
has considerable experience in international
debt and equity financing of mining projects,
financial risk management, implementation of
accounting controls and systems, governance
and regulatory requirements, and mergers
and acquisitions.
Mr Rule was the CFO at Galaxy Resources
Limited, an ASX listed lithium company, for four
years until it merged with Orocobre Limited in
August 2021. His previous positions have also
included CFO of uranium producer Paladin
Energy Limited, Sundance Resources Limited,
Mount Gibson Limited, Western Metals Limited
and St Barbara Mines Limited. He is currently a
non-executive director of Leo Lithium Limited
and Ora Banda Limited both of which are listed
on the ASX.
Alan Rule holds a Bachelor of Commerce
(B.Com) and a Bachelor of Accountancy (B.Acc)
from the University of the Witwatersrand
and is a Fellow of the Institute of Chartered
Accountants (FCA) in Australia.
Claire Brazenall (39)
Independent Non-Executive Director
Claire Brazenall acts as in-house legal counsel
and Client Director of Langham Hall Fund
Management (Jersey) Limited, which provides
administrative services to the Group.
Claire Brazenall (Legal name, Claire Le Quesne)
has over 12 years of experience of the Jersey
funds industry. Prior to joining Langham Hall
Jersey in 2020, Ms Brazenall spent 10 years in
private practice with Carey Olsen Jersey LLP
where she gained a wealth of experience of
different fund structures and asset classes and
was heavily involved in providing regulatory
and structuring advice to a range of clients.
During her time at Carey Olsen Jersey LLP, she
was involved in the closings of over US$100bn
of investor commitments into various fund
structures.
Ms Brazenall has extensive experience in
liaising with the Jersey Financial Services
Commission (“JFSC”) and The International
Stock Exchange and has in-depth knowledge
of the relevant Codes of Practice and Jersey
financial services regulations. She is approved
as a principal person by the JFSC and currently
acts as a director on a number of regulated and
unregulated funds and Special Purpose Vehicles
(“SPV”) boards of client companies.
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 36
Executive Directors
5
Board Composition
Executive Directors
Non-Executive Directors
2
Board Diversity
Male
Female
3
4
6
1
Board Tenure
1-2 years
3-6 years
BOARD OF DIRECTORS CONTINUED
Andre Liebenberg (62)
Executive Director and Chief Executive
Officer
Andre Liebenberg is an experienced mining
industry professional and has extensive
investor marketing, finance, business
development and leadership experience. He
has over 25 years’ experience in the resources
industry including private equity, investment
banking, senior roles within BHP Billiton
and, prior to joining Yellow Cake, at QKR
Corporation, where he was Chief Financial
Officer. Andre’s previous roles within BHP
Billiton included Acting President for BHP
Billiton’s Energy Coal division, Chief Financial
Officer for the Energy Coal division, the
Head of Group Investor Relations and Chief
Financial Officer for the Diamonds and
Specialty Products division. These roles were
based in London, Melbourne and Sydney. Prior
to joining BHP Billiton, Andre worked for UBS
in London and the Standard Bank Group in
Johannesburg.
Andre Liebenberg is a non-executive director
of Zeta Resources Limited.
He holds a Bachelor of Science (B.Sc) Elec.
Eng. from the University of Cape Town and
a Master in Business Administration (MBA)
from the University of Cape Town.
Carole Whittall (52)
Executive Director and Chief Financial
Officer
Carole Whittall is a director and co-founder
of Mining Strategies Limited, which provides
M&A and transaction advisory services to
the metals and mining sector. She has 25
years’ management, corporate finance and
mergers and acquisitions experience in the
metals and mining sector. Most recently,
she was Vice President, Head of M&A at
ArcelorMittal Mining and a member of its
Mining Executive Team, responsible for global
M&A, government relations and corporate
and social responsibility, and served as a board
member of subsidiary companies and joint
ventures. Previously, she was with Rio Tinto
where she held various senior commercial and
business development roles. Her prior career
was with JP Morgan and Standard Corporate
and Merchant Bank in corporate finance.
Carole Whittall holds a Bachelor of Science
(B.Sc) (Hons) Geology from the University
of Cape Town and a Master in Business
Administration (MBA) from the London
Business School.
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 37
Corporate governance report
COMPLIANCE WITH THE CODE
The Group considers that it was compliant with the majority of the provisions of the Code during the year to 31 March 2024. The table that follows provides references to where the Group applies
the Code’s principles and explains areas of non-compliance. These mainly reflect the Group’s current size and the scale and simplicity of its activities. The Board keeps any instances of non-compliance
under review.
Part 1: Board leadership and company purpose
References
Areas of non-compliance
The members, structure and activities of the Board are
discussed on pages 35 to 37.
Provision 5 – Yellow Cake’s two Executive Directors are the Group’s only employees and it is therefore not considered necessary
to establish formal mechanisms for engagement with the Group’s workforce. The Remuneration Committee monitors the size
and nature of the Group’s workforce to determine, among other things, the appropriate level of engagement required by the
Group with its workforce. It also considers whether the committee’s role and responsibilities should be expanded to include
consideration of additional workforce-related matters. If Yellow Cake’s workforce increased significantly in the future, the Group
would favour mandating one of its Non-Executive Directors with responsibility for representing the interests of the workforce
(alongside their other duties).
Part 2: Division of responsibilities
References
Areas of non-compliance
The division of responsibilities among the Board is discussed
on page 44.
Provision 12 – The Board does not consider it necessary or desirable to appoint a Senior Independent Director at this stage,
given the simplicity and scale of the Group’s activities. Those actions set out in the Code to be taken by a Senior Independent
Director will be taken by the Board as a whole. The Board meets from time to time without the Chair present.
Provision 13 – The Chairman may hold meetings with the Non-Executive Directors without the Executive Directors present as
and when appropriate and required, however it is not currently anticipated that such meetings will take place on a regular basis
due to the simplicity and scale of the Group’s current activities.
Provision 15 – Individual Directors are not required to seek prior approval of the Board before undertaking additional
external appointments. This is due to the nature and extent of the Group’s activities and the benefit to the Group of directors’
complementary roles in the sector. Such appointments are required to be disclosed to the Board. As the Group’s business
develops, the Board will periodically assess whether such policy continues to be appropriate.
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 38
Part 3: Composition, succession and evaluation
References
Areas of non-compliance
The Board’s composition, succession and evaluation are
discussed on pages 36, 37 and 41.
Provision 21 and 22 – Annual self-assessments are completed by the Directors to appraise the performance of the Board as
a whole and feedback from the result is implemented, where relevant. Given the Group’s simplicity and scale of its activities,
the Group does not consider it necessary at this point to conduct an externally facilitated board evaluation. The Board may also
undergo periodic informal assessment processes. Each of the Audit, Remuneration and Nomination Committees reviews its
effectiveness annually, in accordance with their terms of reference.
Part 4: Audit, risk and internal control
References
Areas of non-compliance
The role of the Board in this area is primarily shown in the
Report of the Audit Committee on page 47. More information
on the Group’s strategic objectives and key risks to the
business are set out in the Strategic Report on pages 2 to 34.
Provision 25 – The Audit Committee considers annually whether there is a need for an internal audit function, taking into
account the growth of the Group, the scale, diversity and simplicity of the Group’s activities and the number of employees, as
well as cost and benefit considerations. The Group does not currently have an internal audit function due to the simplicity and
scale of its activities. The decision as to whether or not to establish an internal audit function shall be made by the Board upon the
recommendation of the Audit Committee.
Part 5: Remuneration
References
Areas of non-compliance
The Group’s remuneration policy and the Report of the
Remuneration Committee are available on page 50 to 57.
Provision 33 – Yellow Cake’s workforce currently comprises its two Executive Directors and the Remuneration Committee
consequently does not conduct a separate review of workforce remuneration and related policies and the alignment of incentives
and rewards with culture. The committee is mandated to monitor the size and nature of the Group’s workforce in order to
determine, among other things, whether its role and responsibilities should be expanded to include consideration of additional
workforce-related matters.
Corporate governance report continued
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 39
ROLES AND RESPONSIBILITIES
The Board comprises two Executive Directors (the CEO and
the CFO) and five Independent Non-Executive Directors. The
Board delegates certain authorities to the Board Committees
and to the Executive Directors, who are responsible for the day-
to-day management of the business.
The Board reserves certain decisions to ensure it retains proper
direction and control of the Group, and monitors delivery
against the Group’s strategy. These include:
n approval of financial statements, dividends and significant
changes in accounting practices;
n board membership and powers, including the appointment
and removal of Board members, determining the terms of
reference of the Board and establishing the overall control
framework;
n senior management appointments and remuneration;
n key commercial matters, including location swaps, uranium
lending transactions and royalty transactions;
n risk assessment;
n financial matters including the approval of the budget and
financial plans, changes to the Group’s capital structure, the
Group’s assets strategy, acquisitions and disposals of assets
and capital expenditure; and
n other matters including health and safety policy, insurance
and legal compliance.
DIRECTORS
In the year to 31 March 2024, at least half of the Board, excluding the Chairman, comprised Independent Non-Executive Directors.
More information on the Board members and their skills and experience can be found on pages 36 and 37.
The Board meets formally at least four times a year and is supported by the Audit, Remuneration and Nomination Committees. In
the year to 31 March 2024, the Board met seven times.
Meeting attendance
Date of
appointment
Board
Audit
Committee
Remune-
ration
Committee
Nomination
Committee
Attendance
percentage
Number of meetings
7
2
2
0
The Lord St John of Bletso†
(Chairman)
01-Jun-18
7
N/A
2
0
100%
Sofia Bianchi†
01-Jun-18
6
2
2
0
91%
Claire Brazenall†
09-Nov-22
7
N/A
N/A
N/A
100%
The Hon Alexander Downer†
01-Jun-18
7
2
2
0
100%
Alan Rule†
01-Jun-18
7
2
2
0
100%
Andre Liebenberg‡ (CEO)
01-Jun-18
7
N/A
N/A
N/A
100%
Carole Whittall‡ (CFO)
01-Jun-18
7
N/A
N/A
N/A
100%
Attendance percentage
98%
100%
100%
† Independent Non-Executive Director.
‡ Executive Director.
N/A Not applicable as not a member of the committee.
Any Director who has concerns which cannot be resolved about the running of the Group, or a proposed action, will ensure that
their concerns are recorded in the Board minutes at these meetings.
Corporate governance report continued
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 40
BOARD FOCUS AREAS IN THE 2024 FINANCIAL
YEAR
The primary focus of Board deliberations during the 2024
financial year included:
n review of the Group’s strategy in the context of significant
changes in the uranium and nuclear fuel markets, geopolitical
impacts on the uranium sector and general equity market
conditions;
n review and approval of the decision to place additional shares
in October 2023 and to apply the proceeds to purchase
additional uranium; and
n review and approval of the 2023 financial statements and the
decision to not declare a dividend for the year.
BOARD APPOINTMENTS AND SUCCESSION
PLANNING
Appointments to the Board are overseen by the Nomination
Committee as well as succession planning for the Board and
senior management. Appointments are based on merit and
objective criteria, including an assessment of the balance of
skills, knowledge, experience and diversity of the Board.
The provisions in the Articles state that all Directors are
required to retire at the first Annual General Meeting after
appointment and, thereafter, every three years. However, in
accordance with the Code, all Directors voluntarily submit
themselves for re-election on an annual basis.
It is intended that the Chairman should not remain in his
post for a period of more than nine years from the date of his
appointment to the Board.
Service agreements for the Non-Executive Directors are
terminable on 90 days’ notice (by either party) and are
available for inspection at the Group’s registered office.
DIRECTORS’ DEVELOPMENT
The Board has adopted a comprehensive set of policies and
manuals on regulatory and compliance matters. The Group’s
policies are regularly reviewed, updated where necessary
and approved by the Board. The Directors received training
on regulatory and compliance matters ahead of the Group’s
admission to AIM in 2018 and time is set aside at least once
annually at regular Board meetings for supplementary training
and updates. A formal induction process is in place for new
appointments to the Board. Directors have access to the
Company Secretary and are entitled to seek professional advice
at the Group’s expense in connection with the affairs of the
Group or the discharge of their Directors’ duties.
Annual evaluations are conducted by the Directors to appraise
the performance of the Board. These evaluations assess
areas including the Board’s role and responsibilities, the
appointment process, Board effectiveness, Board meetings,
the Board Chairman and the Group’s ethics. The Board will
monitor whether an externally facilitated appraisal should be
implemented as the Group’s business develops. In addition, the
Board may undergo periodic informal assessment processes.
In accordance with their terms of reference, each of the
Audit, Remuneration and Nomination Committees reviews its
effectiveness annually.
ETHICS AND INTEGRITY
The Board sets out the Group’s values, which form the basis
for the Code of Conduct (www.yellowcakeplc.com/about/
code-of-conduct/). The Directors seek to uphold those values
in their dealings with each other and when dealing with third
parties on the Group’s behalf. The Board is mindful of the
need to ensure that Yellow Cake’s values and culture are
maintained as its business evolves and will continue to assess
and monitor the Group’s culture, taking or seeking assurances
as to corrective action where necessary.
The whistleblowing policy sets out the Group’s commitment to
conducting its business openly and honestly. It encourages all
officers, contractors and other workers to report any conduct
that falls short of Yellow Cake’s standards and emphasises
the Group’s commitment to treating all such disclosures in
a confidential and sensitive manner. The policy outlines the
protection and support available for whistleblowers, and invites
them to raise their concerns with a Director. Any concerns
reported will be reviewed by the Board, investigated and
appropriate follow-up action will be taken where necessary.
Yellow Cake’s workforce comprises two Executive Directors
(the CEO and CFO) who can raise any concerns directly with
the Audit Committee and Board.
CONFLICTS OF INTEREST
The Articles contain provisions governing conflicts of interest
and restrict Directors from voting on certain contracts and
arrangements in which they have an interest. The Directors’
service agreements require the Directors to devote sufficient
time to fulfil their duties to the Group. The Directors
hold external directorships and/or are partners in various
partnerships, and the Board is comfortable that these external
positions do not negatively affect the time they devote to the
Group.
REGULATORY MATTERS
The Group’s share-dealing code for Directors and employees
aligns with the provisions of the Market Abuse Regulation
relating to dealings in the Group’s securities. The Code sets
out clearance procedures and additional provisions for persons
discharging managerial responsibilities. The Group’s dealing
policy defines the obligations of Directors and employees in
relation to conduct regarding the use of inside information, and
provides a summary of applicable laws and possible sanctions
in terms of the market abuse regime. The Group will take all
reasonable steps to ensure compliance with the Code and policy.
Corporate governance report continued
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 41
Yellow Cake’s disclosure policy sets out the Group’s key
internal procedures, systems and controls that aim to ensure
that the Group complies with its obligations relating to inside
information under the Market Abuse Regulation, the guidance
set out in the Disclosure Guidance and Transparency Rules of
the Financial Conduct Authority and the Group’s obligations
relating to price-sensitive information under the AIM Rules for
Companies.
ANTI-MONEY LAUNDERING, ANTI-BRIBERY
AND CORRUPTION POLICY
Yellow Cake is committed to acting professionally, fairly and
with integrity in all business dealings and relationships, and has
a zero-tolerance for bribery and corrupt activities. The Group
recognises the importance of preventing money laundering and
terrorism financing and is committed to the highest standards
of anti-money laundering and combating terrorist financing.
The anti-money laundering, anti-bribery and corruption policy
is aimed to prevent any company or individual from using Yellow
Cake for money laundering or terrorist or proliferation financing
activities and to prevent any employees, directors, business
partners, contractors, consultants or advisers of Yellow Cake
from committing bribery or corruption. Processes underpinning
the policy include appropriate risk-based counterparty due
diligence.
ECONOMIC SANCTIONS AND MONEY
LAUNDERING
Yellow Cake’s policy is to comply with all applicable
requirements of economic sanctions, trade control laws and
regulations. All counterparties and connected parties are
screened through risk-based due diligence on an ongoing basis
and before the Group enters into a counterparty relationship or
engages in a transaction. The screening aims to identify money
laundering or economic sanctions risk by identifying persons
who are blocked or subject to economic sanctions restrictions
maintained by the United Kingdom, European Union, United
States or the United Nations Security Council. The Group may
also screen the ultimate source of uranium in a transaction and
other persons with whom the Group has dealings. Yellow Cake’s
economic sanctions policy is available on our website at www.
yellowcakeplc.com/wp-content/uploads/2023/09/Economic-
Sanctions-Policy.pdf.
DIVERSITY AND INCLUSION
The Group values diversity and inclusion, and is committed
to promoting equal opportunities in employment. It complies
with all relevant anti-discrimination laws. Employees and job
applicants are treated equally regardless of age, disability,
gender reassignment, marital or civil partner status, pregnancy
or maternity, race, colour, nationality, ethnic or national origin,
religion or belief, sex or sexual orientation. Recruitment and
promotion will be conducted on the basis of merit, against
objective criteria that avoid unfair discrimination.
Yellow Cake’s equal opportunities policy is applied to all aspects
of its operations, including recruitment, pay and conditions,
training, appraisals, promotion, conduct at work, disciplinary and
grievance procedures, and termination of employment. 43% of
Yellow Cake Directors are women, including the Chief Financial
Officer, and the Group therefore exceeds the gender diversity
requirements proposed by the UK Financial Conduct Authority.
Currently the Board does not include a Director from a minority
ethnic background and the Nomination Committee will consider
this requirement in future appointments to the Board.
RISK MANAGEMENT
The Board has overall responsibility for risk management and
determines the nature and extent of the principal risks the
Group is willing to accept to achieve its long-term strategic
objectives. Prudent and effective controls are in place to
assess and manage risks effectively, supported by appropriate
measures for whistleblowing and to manage conflicts of interest.
The Audit Committee is mandated to keep under review the
Group’s internal control and risk management systems and to
report to the Board.
Regular assessments are conducted by the Executive
Directors to identify and quantify the risks that face the
Group’s operations and functions, and to assess the adequacy
of the prevention, monitoring and mitigation practices in
place for those risks. The Audit Committee reviews the risk
assessment and risk management processes carried out by
the Executive Directors for completeness and accuracy, and
receives regular updates from management.
More information on the Group’s risk management processes as
well as the primary risks and opportunities facing the Group is
available on pages 27 to 33. The Group’s internal control system
is discussed on pages 58 and 59.
SHAREHOLDERS AND OTHER STAKEHOLDERS
The Board values its dialogue with stakeholders. As a Jersey-
registered company, Yellow Cake is not required to prepare a
s172 statement in accordance with UK legislation. However, it
remains the policy of the Group to comply with high standards
of corporate governance and we have voluntarily chosen to
report how we take our stakeholders into consideration in
running the business. Yellow Cake’s stakeholders include its
shareholders, investors, analysts, employees (the Group’s two
Executive Directors), regulators, suppliers and customers.
In performing their duties, the Directors consider and aim to
act in a way they consider, in good faith, would be most likely to
promote the success of the Group for the benefit of its members
as a whole (having regard to the stakeholders and matters set
out in s172(1)(a-f) of the UK Companies Act, 2006 and Article
74(1) of the Companies (Jersey) Law 1991).
Corporate governance report continued
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 42
In particular, the Board considers the following:
(a) The likely long-term consequences of any decision.
The Board sets Yellow Cake’s purpose, strategy and values, and is collectively responsible for promoting and safeguarding the
Group’s long-term sustainable success. Performance is assessed against detailed annual budgets and the Board regularly reviews
its medium-term working capital projections. The Group usually aims to retain cash balances sufficient to cover approximately
three years’ working capital requirements following a placing of shares or other capital raise. More information is available in the
Viability Statement on page 34.
(b) The interests of the Group’s employees.
Our talented, experienced and motivated Executive Directors (being the only employees of the Group) are key to the success of
our Group. Yellow Cake is committed to employing a diverse and balanced team to ensure an effective and talented workforce
at all levels of the organisation, including the Board. The value we place on equal opportunities and diversity of ideas, skills,
knowledge, experience, culture, ethnicity and gender is evident in our daily operations and formalised in our policies and
procedures. Our recruitment policy is to appoint individuals based on their skills, experience and suitability to the role, as well as
their contribution to promoting diversity in the workforce.
(c) The need to foster the Group’s business relationships with
suppliers, customers and others.
Our focus on long-term strategic thinking, and ability to foster close working relationships with our key strategic suppliers and
advisers, enable Yellow Cake to build deep and valuable relationships that help us to fulfil our strategy. Refer to page 5 for more
information on Yellow Cake’s key business relationships.
(d) The impact of the Group’s activities on society, the
environment and Yellow Cake’s reputation.
The Group’s activities create minimal direct social and environmental impacts. The Board nevertheless conducts due diligence on
the Group’s suppliers and business partners to ensure that they take a responsible approach to governance and environmental,
social and ethical practices. Further information can be found on pages 24 to 26.
(e) The importance of maintaining the Group’s reputation for
high standards of business conduct.
Yellow Cake is a Jersey-incorporated, Jersey tax domiciled Group which is quoted on AIM. Notwithstanding the reduced
requirements of an AIM listing, we are committed to complying with the applicable regulatory requirements in both Jersey and the
UK, and operating to high standards of corporate governance. This corporate governance report illustrates how the Board and its
Committees support business activities while maintaining a strong governance culture.
(f) The need to act fairly between members of the Group.
The Board of Directors is committed to behaving in a responsible manner towards our shareholders and treating them fairly and
equally, so they too may benefit from the successful delivery of our strategy. The Chairman and Directors meet regularly as part
of the Board’s responsibility to ensure all shareholders are treated equally.
The Group proactively facilitates opportunities for engagement with its stakeholders, particularly with shareholders, investors and analysts. These include participating in investor roadshows and
conferences, conference calls, investor briefings with industry experts, media briefings, interviews, presentations and at the Annual General Meeting. The CEO or the CFO address day-to-day queries
raised by stakeholders. The Chairman is also available to the Group’s major shareholders to discuss governance, strategy and performance, and ensures that the views of shareholders are clearly
communicated to the Board.
The chairs of the Board Committees will seek engagement with shareholders on significant matters related to their areas of responsibility when relevant. The outcomes of meetings between members
of the Board and shareholders are regularly communicated to the Board (including the Non-Executive Directors), including at Board meetings. Should 20% or more of shareholder votes be cast against
Corporate governance report continued
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 43
the Board’s recommendation for a resolution, the Group will
follow the consultation and other requirements set out in
the Code.
At the Annual General Meeting of the Group held on
6 September 2023 all resolutions passed with the necessary
majority, however resolution 1 (to receive the Group’s
Annual Report and Accounts for the financial year ended
31 March 2023) received less than 80% of votes in favour.
At the time of the AGM announcement, the Group noted
that Investor Shareholder Services (“ISS”), a proxy advisory
firm, raised concerns regarding the conditions of vesting of
the Group’s long-term incentive options. As an AIM listed
company, Yellow Cake is not required to and does not offer a
separate vote in respect of its Directors’ Remuneration Report
and ISS therefore recommended a vote against the approval
of the Group’s Annual Report and Accounts which included
the Directors’ Remuneration Report. The Group’s response is
discussed on pages 50 and 54.
The Board considers that its Long Term Incentive Plan (“LTIP”),
which was developed on the advice of external independent
remuneration consultants and is discussed on pages 50 and
54, is appropriate for Yellow Cake. Nevertheless the Board is
currently undertaking a review of the long-term incentive plan
structure. The Group aspires to the highest level of shareholder
and stakeholder engagement and continues to engage with
the relevant shareholders to better understand their specific
concerns.
ANNUAL GENERAL MEETING
Yellow Cake’s 2024 Annual General Meeting will be held at 10:30 a.m. (UK time) on 3 September 2024 at 3rd Floor,
Gaspé House, 66-72 The Esplanade, St Helier, Jersey, JE1 2LH. The notice of the Annual General Meeting will be available on
our website and includes the full text of the separate resolutions proposed in respect of each substantive issue, together with
accompanying explanatory notes and important information.
DIVISION OF RESPONSIBILITIES
The roles of Chairman and CEO of Yellow Cake are separate and clearly delineated. A written statement of the division of
responsibilities between the Chairman and the CEO is in place and was approved by the Board. The Chairman (currently and as at
the date of appointment) meets the independence criteria set out in the Code.
Role and responsibilities of
the Chairman
Role and responsibilities of the CEO
Role and responsibilities of the CFO
n Leads the Board and is responsible
for its effectiveness, including by
facilitating active participation by all
members of the Board.
n Ensures effective communication
between the Directors more
generally to promote a culture of
openness and debate.
n Ensures that the Board has the
necessary information to fulfil its
duties and that Board meetings are
effectively run.
n Promotes and oversees the highest
standards of corporate governance.
n Provides support and counsel to the
CEO and CFO if requested.
n Sets corporate strategy and
the direction of the Group, in
conjunction with the Board.
n Organises the day-to-day operations
of the Group.
n Oversees risk management.
n Manages corporate actions.
n Ensures that the Group maintains
compliance with all relevant
regulatory bodies.
n Has a key role in stakeholder
engagement in the Group, including
managing investor relations and
engagement with investors, and
engaging with suppliers, prospective
suppliers, regulators and
prospective providers of capital.
n Has overall responsibility for
financial reporting, including
budgets, monthly reports and
annual accounts.
n Sets the Group’s tax policy.
n Maintains adequate control
procedures.
n Supports the CEO regarding risk
management, compliance and
corporate actions.
n Also plays a key role in stakeholder
engagement initiatives.
Corporate governance report continued
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 44
The Board does not currently consider it necessary or desirable
to appoint a senior independent director, given the simplicity
and scale of the Group’s activities. The responsibilities of the
senior independent director are shared between the Non-
Executive Directors.
More information regarding the role and responsibilities of the
Chairman, Board, CEO and CFO is available on our website at
https://www.yellowcakeplc.com/wp-content/uploads/2019/07/
Role-of-Board-Chairman-CEO-and-CFO-. pdf.
COMPANY SECRETARY
LHJ Secretaries Limited provides company secretarial services
to the Group and advises the Board on all governance matters.
Directors have unfettered access to the Group Secretary and
removal of the Group Secretary is a matter for the Board as a
whole.
BOARD COMMITTEES
The terms of reference of the three Board committees are
available for inspection at the Group’s registered office and on
our website at www.yellowcakeplc.com/investors/the-board/
board-committees. In accordance with their terms of reference,
each of the committees reviews its effectiveness annually.
AUDIT COMMITTEE
Audit Committee members
Alan Rule (Chairman)
Independent
Non-Executive Director
Sofia Bianchi
Independent
Non-Executive Director
The Hon Alexander Downer Independent
Non-Executive Director
The Audit Committee assists the Board in fulfilling its
responsibilities by, inter alia, reviewing and monitoring the integrity
of the financial statements of the Group, ensuring that these
comply with the requirements of the Code and overseeing the
Group’s relationship with its external auditor. The committee is also
mandated to keep under review the Group’s internal control and
risk management systems and to report to the Board. In line with
the recommendations of the Code, the Board Chairman is not a
member of the Audit Committee.
The Audit Committee comprises three Independent Non-
Executive Directors and has unrestricted access to the Group’s
auditor. The Chief Financial Officer and external auditor are
invited to meetings of the Audit Committee on a regular basis
and other non-members may be invited to attend all or part of
any meeting as and when appropriate.
The Audit Committee meets at least twice each financial year
and met twice during the year under review. Attendance is
shown on page 40.
More information on the roles and responsibilities of the Audit
Committee and its activities during the year to 31 March 2024 is
available in the Report of the Audit Committee on pages 47 to 49.
REMUNERATION COMMITTEE
Remuneration Committee members
The Hon Alexander Downer
(Chairman)
Independent
Non-Executive Director
The Lord St John of Bletso
Independent
Non-Executive Director
Sofia Bianchi
Independent
Non-Executive Director
Alan Rule
Independent
Non-Executive Director
The Remuneration Committee sets the remuneration policy
for Executive Directors and determines the total individual
remuneration package of the Chairman and the Executive
Directors, among other duties. In determining remuneration
policy, the committee takes account of the need to align
executive remuneration to the Group’s purpose and values and
to clearly link this to the successful delivery of the Group’s long-
term strategy.
The Remuneration Committee comprises four Independent
Non-Executive Directors. It is intended that any person who is
appointed as the Chair of the Remuneration Committee in the
future should have at least 12 months’ experience serving on a
Remuneration Committee prior to appointment.
The committee met twice in the year to 31 March 2024.
More information on the roles and responsibilities of the
Remuneration Committee and its activities during the year is
available in the Director’s Remuneration Report on pages 50
and 51.
Corporate governance report continued
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 45
NOMINATION COMMITTEE
Nomination Committee members
The Lord St John of Bletso
(Chairman)
Independent
Non-Executive Director
The Hon Alexander Downer Independent
Non-Executive Director
Sofia Bianchi
Independent
Non-Executive Director
Alan Rule
Independent
Non-Executive Director
The Nomination Committee assists the Board in fulfilling its
responsibilities by, inter alia, reviewing the structure, size and
composition of the Board, as well as the Board Committees.
When evaluating the composition of the Board, the committee
considers the length of service of the Board as a whole and any
requirements as to tenure set out in the Code.
The committee oversees appointments to the Board and is
responsible for overseeing a diverse pipeline for succession to
both the Board and senior management. Appointments and
succession plans are based on merit and objective criteria,
and new appointments to the Board are subject to a rigorous
approval process. Within this context, the committee aims to
promote diversity of gender, social and ethnic backgrounds,
cognitive and personal strengths.
The Nomination Committee comprises four Independent
Non‑Executive Directors and usually meets at least twice each
year. The committee met after financial year end.
The committee’s terms of reference stipulate that the Chairman
of the Nomination Committee will not chair the committee
when dealing with the appointment of his successor.
It is intended that an external search consultant will generally be
used for the appointment of the Chairman or a Non-Executive
Director, although the Nomination Committee may deviate
from this where appropriate to ensure, for example, that an
incoming appointee has at least the equivalent skill set of an
outgoing appointee.
The duties of the Nomination Committee include:
n regularly reviewing the structure, size and composition
(including the skills, knowledge, experience and diversity) of
the Board and making recommendations to the Board with
regard to any changes;
n succession planning for Executive and Non-Executive
Directors and in particular for the key roles of Chairman and
Chief Executive;
n identifying and nominating candidates to fill Board vacancies
for the approval of the Board when these arise;
n reviewing the leadership needs of the Group, both Executive
and Non-Executive; and
n making recommendations to the Board regarding:
membership of Board Committees in consultation with the
chairpersons of those committees;
the reappointment of any Non-Executive Director at the
conclusion of their specified term;
the re-election by shareholders of any Director under the
re-election provisions of the Code or the “retirement by
rotation” provisions in the Articles; and
matters relating to the continuation in office of any
Director including the suspension or termination of
service of an Executive Director as an employee of the
Group subject to the provisions of the law and their
service contract.
The Nomination Committee recommended to the Board
that each of the Directors be submitted for re-election at the
Annual General Meeting on 3 September 2024.
Corporate governance report continued
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 46
REPORT OF THE AUDIT COMMITTEE
The Audit Committee gives due consideration to applicable laws
and regulations, the provisions of the Code, the requirements
of the Companies (Jersey) Law 1991 and the requirements
of the London Stock Exchange’s rules for AIM companies, as
appropriate.
The three Independent Non-Executive Directors who comprise
the committee all have relevant financial experience through
the various leadership roles they have held. The Chairman of the
committee is a Fellow of the Institute of Chartered Accountants
of Australia and New Zealand. Details of the Directors’
qualifications and experience are provided on pages 36 and
37. The Audit Committee has access to sufficient resources to
carry out its duties, including access to the Group Secretary for
assistance as required.
After each meeting, the Chairman of the committee reports
formally to the Board on its proceedings on all matters within
its duties and responsibilities, and how it has discharged its
responsibilities. The Chairman of the committee attends the
Annual General Meeting to answer questions concerning the
committee’s work.
The committee conducts an annual review of its effectiveness
as well as its constitution and terms of reference to ensure it is
operating effectively. Changes arising from these reviews are
recommended to the Board for approval.
Key duties of the Audit Committee include:
n monitoring the integrity of the Group’s financial reporting;
n reviewing the consistency of, and any changes to, accounting
policies both on a year-on-year basis and across the Group,
and reviewing whether the Group has followed appropriate
accounting standards and made appropriate estimates and
judgements, taking into account the views of the external
auditor;
n reviewing the Group’s internal financial controls and internal
control and risk management systems;
n reviewing the adequacy and security of the Group’s
whistleblowing facilities for employees and contractors,
and ensuring that these facilities allow for investigation and
appropriate follow up action in respect of any reports made;
n reviewing the Group’s systems, procedures and controls
for detecting fraud, the Group’s anti-money laundering
and bribery systems and controls, and the adequacy and
effectiveness of its compliance function, including with regard
to economic sanctions regulations;
n considering annually whether there is a need for an internal
audit function, taking into account the growth of the Group,
the scale, diversity and complexity of the Group’s activities
and the number of employees, as well as cost and benefit
considerations;
n making recommendations to the Board (to be put to
shareholders for approval at the Annual General Meeting)
in relation to the appointment of the external auditor;
n managing and overseeing the relationship with the
external auditor, including their terms of engagement and
remuneration; and
n meeting regularly with the external auditor and reviewing
their findings.
The committee’s full terms of reference are available on our
website at www.yellowcakeplc.com/investors/the-board/
board-committees.
FINANCIAL REPORTING
The Audit Committee reviewed and assessed the Group’s
financial reporting in the 2024 financial year, including its half-
year report, results announcements and this Annual Report.
This review included, where appropriate:
n an assessment of the consistency of, and changes to,
accounting policies, estimates and judgements;
n the methods used to account for significant or
unusual transactions;
n the appropriateness of the accounting standards used;
n obtaining independent tax advice;
n the clarity and completeness of disclosures and the context in
which statements are made; and
n a review of material disclosures regarding audit and risk
management in the financial statements, including in the
strategic report and this corporate governance statement.
In reviewing the Group’s financial statements, the Audit
Committee considered the Group’s accounting policies,
particularly in relation to the uranium holdings, and the
accounting estimates and judgements as described on page 73.
In addition to the publicly released reports, the committee’s
review covered management reports as well as reports from
and discussions with the external auditor.
The Audit Committee reviewed this Annual Report and
provided comment and feedback on before finalisation and
approval. The review concluded that, taken as a whole, this
Annual Report is fair, balanced and understandable and
provides the information necessary for shareholders to
assess the Group’s position, performance, business model and
strategy.
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 47
INTERNAL AUDIT
The Audit Committee annually considers the need for an
internal audit function in the context of the growth of the
Group, the scale, diversity and complexity of the Group’s
activities and the number of employees, as well as cost and
benefit considerations. The Audit Committee has concluded
that it is currently not necessary for the Group to have an
internal audit function given its current size, the simplicity of
its activities and control environment, and the high degree of
senior oversight by the CEO and CFO. For the same reasons,
the committee does not believe the absence of an internal audit
function adversely affects the work of the external auditor.
EXTERNAL AUDITOR
ENSURING THE INDEPENDENCE AND OBJECTIVITY
OF THE EXTERNAL AUDITOR
The Audit Committee oversees the Group’s relationship with
the external auditor, RSM UK Audit LLP, who have been the
Group’s external auditor since its listing in 2018. To safeguard
the independence and objectivity of the external audit process,
the committee’s policy is to review and approve all fees related
to non-audit services. A formal policy governs non-audit
services provided by the external auditor. In the current year,
there were no non-audit services performed by RSM UK Audit
LLP (2023: none).
Other safeguards include:
n the external auditor is required to adhere to a rotation policy
based on best practice and professional standards in the UK.
The maximum period for rotation of the audit engagement
partner is five years. During the current financial year, the
lead audit partner rotated off the Yellow Cake engagement;
n the external auditor is required to assess periodically whether,
in their professional judgement, they are independent of the
Group; and
n the committee ensures that the scope of the auditor’s work
is sufficient and that the auditor is fairly remunerated. The
committee reviewed and discussed the 2024 fee proposal,
concluding that the proposed fees were appropriate for the
scope of work required. Details of the external auditor’s
remuneration are disclosed in note 12.
The Audit Committee has satisfied itself that the external
auditor’s independence was not impaired.
CONSIDERATION GIVEN TO THE APPOINTMENT
OF THE EXTERNAL AUDITOR
Following the committee’s assessment of the external
auditor’s performance and independence, the committee
has recommended to the Board that shareholders be asked
to approve the reappointment of RSM UK Audit LLP as
auditor until the conclusion of the AGM in 2025. Resolutions
to authorise the Board to re-appoint and determine the
remuneration of RSM UK Audit LLP will be proposed at the
AGM on 3 September 2024.
DISCHARGE OF DUTIES IN RESPECT OF THE
EXTERNAL AUDITOR
The Audit Committee discharged its duties regarding the
Group’s interactions with its external auditor in accordance
with its terms of reference during the year to 31 March 2024,
including:
n approving the engagement of the external auditor;
n reviewing and approving the annual audit plan;
n meeting regularly with the external auditor. The committee
also met with the external auditor without management being
present, to discuss their remit and any issues arising from the
audit;
n reviewing the findings of the audit of the financial statements
for the year ended 31 March 2024 with the external auditor;
n reviewing the management representation letter requested
by the external auditor before it was signed by management
and management’s response to the auditor’s findings and
recommendations; and
n reviewing the effectiveness of the audit process.
Given the size and nature of the Group’s business, the Audit
Committee is able to work directly with the auditor to assess its
effectiveness, and also received feedback from the CFO.
WHISTLEBLOWING
Yellow Cake’s workforce comprises two Executive Directors
(the CEO and CFO) who can raise any concerns directly with the
Audit Committee and Board. A formal whistleblowing policy is
in place (see page 41), and any concerns raised will be reviewed
by the Board, investigated and appropriate follow-up action
will be taken where necessary. No whistleblowing reports were
received by the Audit Committee during the year.
Report of the Audit Committee continued
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 48
RISK MANAGEMENT AND INTERNAL
CONTROL
The Board has mandated the Audit Committee to keep the
Group’s internal control and risk management systems under
review. These systems support the integrity of the financial
reporting process and the preparation of accounts. They include
policies and procedures to ensure that adequate accounting
records are maintained and transactions are recorded accurately
and fairly to permit the preparation of financial statements
in accordance with UK-adopted International Accounting
Standards. The key elements of the Group’s system of internal
controls are discussed on pages 58 and 59 of this report.
The committee reviews the system of internal controls and
regularly assesses its effectiveness. Feedback from the external
auditor arising from issues identified during its engagement
informs the committee’s assessment, particularly feedback
relating to any control weaknesses and the responses from
management to these issues. During the year the committee
reviewed the Group’s risk management and material controls,
including financial, operational and compliance controls, and
concluded that these were effective and appropriate given the
size and nature of the Group.
AUDIT COMMITTEE FOCUS AREAS FOR THE
2025 FINANCIAL YEAR
The primary focus areas for the Audit Committee in the year
ahead will be:
n financial reporting;
n risk management; and
n internal controls.
Alan Rule
Audit Committee Chair
18 July 2024
Report of the Audit Committee continued
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 49
DIRECTORS’ REMUNERATION REPORT
DEAR SHAREHOLDER,
It is with great pleasure that I present the Group’s Directors’
Remuneration Report for the year ended 31 March 2024.
Yellow Cake’s remuneration policy is designed to attract, retain
and motivate the quality of Directors and employees required
to develop and implement the Group’s business strategy and
run a successful and sustainable business for the benefit of all
stakeholders. The policy is described on pages 51 to 57.
The policy is consistent with the Group’s values, culture,
remuneration philosophy and business strategy. Above all, it
has been designed to be simple. The remuneration policy which
was applied in the year under review was developed in the 2022
financial year with the assistance of independent remuneration
consultants, Deloitte LLP. Deloitte LLP provides no other
services to, and has no other connection with, the Group.
APPROACH TO REMUNERATION
Yellow Cake plc’s workforce comprises two employees, its CEO
and CFO. Management culture is to focus on successful outcomes
and the Group’s business strategy is to achieve this by investing in
long- term holdings of U3O8 and realising value from commercial
opportunities related to these holdings. This is the second year in
which the current remuneration policy has been applied.
The remuneration policy comprises three components:
n A base salary.
n An annual bonus of up to 50% of base salary for the CEO and
CFO, typically paid in cash, based on the achievement of key
strategic objectives.
n A long-term incentive in the form of share options with a face value
of up to 75% of base salary for the CEO and 45% of base salary for
the CFO. The exercise price for awards is based on the estimated
net asset value of the Group at grant date or the share price at
grant date, whichever is higher.
The short- and long-term incentives are designed to reward
growth and take account of risks through equity participation,
and to align executive rewards with shareholder returns.
REVIEW OF THE LONG-TERM INCENTIVE
PLAN
The committee was disappointed to receive only c.73% support
for Yellow Cake’s Financial Statements and Statutory Reports
at the September 2023 AGM. We understand that a number of
shareholders voted against this resolution in order to express
their concerns about our approach to executive remuneration
following ISS’s recommendation ‘Against’. The committee
Chairman consulted with shareholders to clarify the Group’s
approach, particularly in respect of our long-term incentive plan.
As a reminder, our current long-term incentive plan consists
of market-value options, with the number of options granted
annually equal to 75% and 45% of salary for the CEO and CFO
respectively, divided by the share price at grant. Market-value
options are a simple, easy-to-understand tool which rewards
management in line with the shareholder experience. Yellow
Cake is a unique investment vehicle offering investors pure
exposure to the uranium commodity. As such, our current
long-term incentive scheme is designed to align management
with investors seeking to participate in an expected increase
in the uranium price. Value is therefore only realised under the
market-value options if management grow the net asset value
per share over the vesting period – if the share price does not
increase above the issuing net asset value per share or share
price (whichever is greater), management receive nothing.
The committee is currently undertaking a review of the
remuneration policy in order to ensure that it appropriately
reflects the size and nature of the company, and the scope
and responsibilities of the roles undertaken by our Executive
Directors. If any changes are proposed as a result of this review,
the committee will consult with shareholders as appropriate.
The committee is dedicated to an active and ongoing dialogue
with shareholders on executive remuneration and welcomes
any feedback on our approach to executive remuneration and
reward. In this context, the Company will introduce a separate
vote on the Directors’ Remuneration Report at AGMs going
forward.
REMUNERATION OUTCOMES FOR THE YEAR
UNDER REVIEW
The Board evaluated the performance of the Executive
Management of the Group against the corporate objectives
agreed by the Board at the beginning of the financial year.
The annual bonuses for the year were based on executive
performance measured against a scorecard of performance
targets, which was summarised in the 2023 annual report.
Based on this assessment, the Remuneration Committee
determined to award a cash bonus equal to 50% of base salary.
Further detail is provided on page 53.
In light of the AGM result and the feedback received from ISS,
the committee reviewed, refined and strengthened the factors
that underpin the vesting of the 2024 long-term options. The
underpins are based on satisfactory business and individual
performance and aim to serve as an additional safeguard
to ensure alignment with the shareholder experience. The
underpins are discussed in more detail on page 54.
As outlined in last year’s report, the Remuneration Committee
resolved to award long-term incentive options with a face value
of 75% of base salary to the CEO and 45% of base salary to the
CFO in respect of the 2024 financial year. The grant of these
options was delayed pending engagement with the Group’s
shareholders. It is intended that the long-term incentive options
for the 2024 financial year will be granted on 26 July 2024.
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 50
Directors’ remuneration report continued
REMUNERATION APPROACH FOR THE 2025
FINANCIAL YEAR
The Remuneration Committee reviewed the base salaries of the
Executive Directors and proposed to increase these with effect
from 1 April 2024 from USD264,000 to USD277,200
(5% increase) for the Chief Executive Officer and from
USD187,000 to USD196,350 (5% increase) for the Chief
Financial Officer.
The committee is currently undertaking a review of the
remuneration policy in order to ensure that it appropriately
reflects the size and nature of the company, and the scope
and responsibilities of the roles undertaken by our Executive
Directors. If any changes are proposed as a result of this review,
the committee will consult with shareholders as appropriate.
Further details will be provided in the Directors’ Remuneration
Report for the year ended 31 March 2025.
On behalf of the Remuneration Committee, I look forward to
receiving your support for this Directors’ Remuneration Report
at our 2024 AGM.
Alexander Downer
Remuneration Committee Chair
18 July 2024
RESPONSIBILITIES OF THE REMUNERATION
COMMITTEE
The Remuneration Committee comprises four Independent
Non-Executive Directors. It is responsible for, among other
things, determining the total individual remuneration package of
the Chairman and the Executive Directors in accordance with
the terms of the Group’s remuneration policy, determined in
conjunction with the Board.
The committee meets at least twice a year and met twice during
the year under review. Details of the committee members and
their record of attendance at meetings during the year are
available on pages 40 and 45.
Key duties of the Remuneration Committee include:
n determining and agreeing with the Board the policy for the
remuneration of the Chairman of the Board and the Executive
Directors, including pension rights and compensation
payments;
n recommending and monitoring the level and structure of
remuneration for senior management;
n within the terms of the agreed policy and in consultation with
the Chairman and/or CEO as appropriate, determining the
total individual remuneration package of the Chairman and
the Executive Directors;
n ensuring there is an appropriate level of engagement with
the CEO and CFO (currently the Group’s only employees)
to monitor the continued effectiveness of the Group’s
remuneration policy and practice; and
n reviewing the operation of share option schemes and the
granting of such options.
The full terms of the reference for the committee are available
on our website at www.yellowcakeplc.com/ investors/the-
board/board-committees.
The remuneration of Non-Executive Directors is a matter for the
Board or the Shareholders, within the limits set in the Articles. No
Director is involved in any decisions as to their own remuneration.
ACTIVITIES DURING THE 2024 FINANCIAL YEAR
During the year to 31 March 2024, the Remuneration Committee
discharged its duties by:
n reviewing and approving the Executive Directors’ annual bonus
performance scorecard for the 2024 financial year;
n reviewing the short-term and long-term incentive schemes to
ensure continued alignment with the Group’s strategy;
n engaging with shareholders regarding the remuneration policy
following the voting result at the 2023 AGM;
n reviewing, refining and strengthening the performance
underpins for vesting of share options under the long-term
incentive plan for the 2024 option awards;
n reviewing of remuneration levels and structures for Executive
Directors, the Chairman and Non-Executive Directors; and
n reviewing relevant provisions of the Code.
FOCUS AREAS FOR THE 2025 FINANCIAL YEAR
The main objectives for the Remuneration Committee in the
financial year ending 31 March 2025 will be to:
n review and approve the Executive Director annual bonus
performance against the scorecard for the 2025 financial year;
n review the short-term and long-term incentive scheme to ensure
continued alignment with the Group’s strategy;
n review remuneration levels and structures for Executive
Directors, the Chairman and Non-Executive Directors; and
n review the long-term incentive plan.
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 51
ANNUAL REPORT ON DIRECTORS’ REMUNERATION
This report describes the Group’s remuneration policy and remuneration outcomes for Executive Directors for the year ended 31 March 2024.
The table below describes the components of the Group’s remuneration policy for Executive Directors which provide the framework for their future remuneration.
Remuneration element
Purpose, link to strategy and operations
Opportunity and performance metrics
Remuneration Committee discretion
Salary
A base annual salary is essential to attract and
retain key executives. It is reviewed annually
based on:
n role, experience and individual performance;
n external market practices; and
n the general economic environment.
Salaries are benchmarked to the relevant market
median, taking account of the individual’s time
commitments to the Group.
Salaries may be reviewed annually by the
committee.
Benefits and pension
Directors are not entitled to any non-cash benefits
or company pension contributions.
Annual bonus
The annual bonus rewards achievement of annual
key performance indicators (“KPIs”). Bonus awards
are determined after the relevant year-end based
on the committee’s assessment of achievement
against the KPI targets.
The committee sets annual targets and weightings,
and performance is measured over a single financial
year.
The annual bonus will normally be paid in cash
(unless circumstances at year-end are such that
payment in cash is not appropriate, in which case
the award will be in shares) and will be capped at a
maximum of 50% of salary.
The committee may make upwards and downwards
adjustments to bonus awards to ensure they are
consistent with the underlying performance of
the business or to give effect to malus or clawback
provisions.
Performance targets may be amended if there is
a significant event which causes the committee
to believe that the original targets are no longer
achievable or appropriate.
Long-term incentive
The long-term incentive aims to align the interests
of management and shareholders, and encourages
retention. Long-term incentives may be granted
annually and currently take the form of market-
priced share options.
The long-term incentive options are exercisable
if the share price at the exercise date is greater
than the net asset value per share as at the date of
grant and subject to continued employment by the
Group.
The exercise price of the options multiplied by the
number of options granted is capped at 75% of salary
for the CEO and 45% of salary for the CFO.
Vesting is subject to an underpin based on satisfactory
business and individual performance and the share
price exceeding the prevailing net asset value at the
date of grant. The exercise price per share is set at the
higher of the average market price in the week prior to
the grant date and the estimated net asset value per
share on the grant date.
The committee retains the discretion to give effect
to malus and clawback provisions, and to impose
additional conditions on the vesting of incentive
awards, should it wish to do so.
Directors’ remuneration report continued
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 52
EXECUTIVE DIRECTORS’ RECRUITMENT POLICY
Remuneration packages for new Executive Directors will be
determined by the Remuneration Committee and designed
in accordance with the remuneration policy. However, the
committee, in consultation with the Nomination Committee,
may exercise its discretion to depart from the policy described
above if necessary to secure the recruitment of a new Executive
Director.
TERMS OF THE EXECUTIVE DIRECTORS’
SERVICE CONTRACTS
Executive Directors are engaged on rolling service contracts,
which provide for three months’ written notice of termination
from either the individual or the Group.
TERMINATION POLICY
Any compensation payment made to an Executive Director for
termination of employment will be determined with reference
to the terms of the individual’s service agreement, the rules of
any incentive plan in which the individual is a participant and the
individual’s obligation to mitigate loss.
NON-EXECUTIVE DIRECTORS’ APPOINTMENT
AND REMUNERATION
The remuneration of Non-Executive Directors is determined by
the Board in accordance with the Group’s articles of association
and does not include performance-related incentives. Non-
Executive Directors are engaged by letters of appointment
terminable on three months’ written notice from either the
individual or the Group.
IMPLEMENTATION OF THE REMUNERATION
POLICY IN THE 2024 FINANCIAL YEAR
SALARY IN RESPECT OF THE 2024 FINANCIAL YEAR
The table below shows the salaries applicable at the end of the
2024 financial years and proposed base salary for the financial
year ending 31 March 2025:
Base salary
2024
USD’000
2025
USD’000
%
Increase
Chief Executive
Officer
264.0
277.2
5.0
Chief Financial
Officer
187.0
196.4
5.0
In respect of the 2025 financial year, the committee deemed
that a 5% salary increase, in line with inflation, was appropriate.
ANNUAL BONUS
The annual bonus is based on commercial targets and was
capped at 50% of base salary for the 2024 financial year, subject
to performance, as determined by the Board. The bonus awards
normally take the form of cash, unless circumstances at year-
end are such that payment in cash is not appropriate, in which
case the award will be in shares. In respect of the 2024 financial
year, annual bonuses were paid in cash and no share-based
annual bonus awards were made.
ANNUAL BONUS AWARDS IN RESPECT OF THE
2024 FINANCIAL YEAR
The annual bonus calculation for the 2024 financial
year assessed:
n Corporate performance, comprising:
n management of the discount to net asset value related to
actions such as share buybacks, strategic transactions and
net asset value accretive uranium purchases;
n cost effective growth in the Group’s uranium holdings,
effective capital raising to fund the uranium purchases
and effective evaluation and execution of uranium-related
commercial transactions;
n financial control and risk management; and
n reporting and budgeting.
n Reputation, stakeholder engagement and investor relations,
comprising:
n execution of an effective investor relations programme;
n engagement with equity and debt providers;
n ongoing management of the ESG framework, policies and
reporting; and
n engagement with suppliers, prospective suppliers
and regulators and other stakeholders and potential
stakeholders as appropriate.
During the year ended 31 March 2024, the Executive Directors
led a successful equity placement, raising USD121.1 million
and implemented transactions (completed or committed) that
increased the Group’s U3O8 holdings by approximately 8%. They
also undertook significant shareholder engagement with a view
to maintaining investor interest in the context of fundamental
changes in the uranium market.
The Remuneration Committee considers that these actions
have created significant shareholder value, notably through
the equity raise and the subsequent use of these proceeds to
purchase 1.53 million lb of U3O8 during the financial year (which
was delivered in June 2024), which increased the Group’s
holdings to 21.68 million lb of U3O8 acquired at an average cost
of USD34.64/lb. Operating costs were also effectively managed
to budget. As such, the Remuneration Committee considers
that the Executive Directors have delivered effectively against
the KPIs outlined in the performance scorecard for the 2024
financial year.
Directors’ remuneration report continued
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 53
Based on the performance scorecard for the 2023 financial year,
the Remuneration Committee has resolved at its discretion to
award bonuses, equivalent to 50% of base salary, as set out below
(2023: 50% of base salary). The bonuses will be paid in cash.
USD’000
Chief Executive Officer
132.0
Chief Financial Officer
93.5
ANNUAL BONUS AWARDS IN RESPECT OF THE
2025 FINANCIAL YEAR
The Remuneration Committee reviewed the annual bonus
performance scorecard for the 2025 financial year.
The maximum annual bonus opportunity for the 2025 financial
year is set at 50% of base salary, based on satisfactory business
and individual performance, as determined by the Board, in the
following areas:
n Corporate performance, comprising:
n management of the discount to net asset value related to
actions such as share buybacks, strategic transactions and
net asset value accretive uranium purchases;
n cost effective growth in the Group’s uranium holdings,
effective evaluation and execution of uranium-related
commercial transactions and effective capital raising to
fund the uranium purchases;
n financial control and risk management; and
n reporting and budgeting.
n Reputation, stakeholder engagement and investor relations,
comprising:
n execution of an effective investor relations programme;
n engagement with equity and debt providers;
n ongoing management of the ESG framework, policies and
reporting; and
n engagement with suppliers, prospective suppliers
and regulators and other stakeholders and potential
stakeholders as appropriate.
LONG-TERM INCENTIVE
The current long-term incentive takes the form of a market-
value share option scheme that grants options to acquire shares
in the Group exercisable not earlier than three years after grant,
with a total holding period of at least five years, save in certain
circumstances including a change of control of the Group. Each
option gives the right to acquire one share in the Group. The
exercise price per share is set at the higher of the average share
price in the week prior to the grant date and the estimated net
asset value per share on the grant date.
Vesting is subject to an underpin based on satisfactory business
and individual performance, and the share price exceeding the
prevailing net asset value at the time of grant, and is generally
subject to continued employment by the Group. The Remuneration
Committee retains the discretion to impose additional performance
conditions on the vesting of incentive awards, should it wish to do so.
Market-value options are a simple, easy-to-understand tool
which rewards management in line with the shareholder
experience. Yellow Cake is a unique investment vehicle offering
investors direct exposure to the uranium market through
physical holding of the uranium commodity and uranium-related
commercial activities. As such, our long-term incentive scheme
is designed to align management with investors seeking to
participate in an expected increase in the uranium price. Value
is therefore only realised under the market-value options
if management grow the net asset value per share over the
vesting period – if the share price does not increase above the
issuing net asset value per share or share price (whichever is
greater), management receive nothing.
As noted in the Chair’s letter, in light of the AGM result and the
feedback received from ISS, the committee reviewed, refined
and strengthened the underpin approach for the 2024 awards
to ensure that it acts as an additional safeguard to ensure
alignment with the shareholder experience. Each year, when
considering if the underpin has been met, the committee will
take into account a range of factors including:
n Value-enhancing growth in the Group’s uranium holdings,
effective capital-raising to fund the growth in uranium
and effective evaluation and execution of uranium-related
commercial transactions;
n Effective management of the balance sheet and tax risk
associated with uranium transactional activities;
n Promoting Yellow Cake as the investment community’s vehicle
of choice for gaining exposure to the uranium commodity and
related commercial activities, and promoting nuclear power as a
key contributor to a low carbon future; and
n Management of the ESG Program, including the ESG
framework, policies, risks, and reporting.
The options expire ten years after the date of grant and are
subject to a post-vesting holding period of not less than two
years (although permission may be granted to sell shares in
order to meet tax liabilities). For any annual grant of long-term
incentive options, the exercise price of the options multiplied by
the number of options granted is capped at 75% of salary for the
CEO and 45% of salary for the CFO. The long-term incentive
award for a financial year is usually granted at the beginning of
that financial year.
The committee believes that the design of the current long-term
incentive plan appropriately rewards management, aligns their
interests with those of our shareholders, and ensures that there
is no reward for poor performance.
As noted in the Chair’s Letter, the committee is currently
undertaking a review of the remuneration policy (including
the long-term incentive design) in order to ensure that it
appropriately reflects the size and nature of the company, and
the scope and responsibilities of the roles undertaken by our
Executive Directors. Details of any changes as a result of this
review will be provided in the Directors’ Remuneration Report
for the year ended 31 March 2025.
Directors’ remuneration report continued
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 54
LONG-TERM INCENTIVE AWARDS IN RESPECT OF THE 2024 FINANCIAL YEAR
In the 2023 financial year, the Remuneration Committee resolved to award long-term incentive
options with a face value of 75% of base salary to the CEO and 45% of base salary to the CFO in
respect of the 2024 financial year. The grant of these options was delayed pending engagement
with the Group’s shareholders in relation to the long-term incentive plan. It is intended that the
long-term incentive options for the 2024 financial year will be granted on 26 July 2024 following
the publication of the Group’s annual results.
Details of the long-term incentive options held by the Executive Directors at year-end are
as follows:
Share
options
awarded
Date of
Award
Exercise
price
Value at
award date
USD’000
Vesting
date
Chief Executive Officer
FY2020
84,480 24/02/2020
GBP2.13
34 24/02/2023
FY2021
78,262
8/07/2020
GBP2.88
25
8/7/2023
FY2022
–
–
–
–
–
FY2023
33,162
3/11/2022
GBP4.75
43
3/11/2025
Total
195,904
102
Chief Financial Officer
FY2023
14,094
3/11/2022
GBP4.75
18
3/11/2025
Total
14,094
18
Directors’ remuneration report continued
The long-term incentive options shown in the table above are exercisable three years after the
date of grant and must be held for a further two years.
LONG-TERM INCENTIVE AWARDS VESTING IN THE YEAR UNDER REVIEW
On 19 July 2023, the Chief Financial Officer acquired 20,362 ordinary shares in the Group
following the exercise and net settlement of her options over 62,609 shares on that date
granted under the rules of the Yellow Cake plc share option plan 2019. The option exercise
was satisfied by way of a transfer of shares held by the Group as treasury shares. The share
options were granted on 8 July 2020 as long-term incentive options with a vesting date of
8 July 2023. Further detail on the share options granted can be seen in the Group’s 2021 and
2022 Annual Reports.
Share options exercised
Options exercised
Grant date
Shares acquired
following exercise
and net settlement
Chief Financial Officer
62,609
8 July 2020
20,362
While these options were not formally subject to an underpin, the Remuneration Committee
used the underpin framework described on the previous page and was satisfied that these
options should vest as outlined above.
LONG-TERM INCENTIVE AWARDS IN RESPECT OF THE 2025 FINANCIAL YEAR
As noted in the Chair’s Letter, the committee is currently undertaking a review of the
remuneration policy (including the long-term incentive design) in order to ensure that it
appropriately reflects the size and nature of the company, and the scope and responsibilities
of the roles undertaken by our Executive Directors. Long-term incentive awards in respect of
the 2025 financial year will be made following this review. Details of any changes as a result
of this review will be provided in the Directors’ Remuneration Report for the year ended
31 March 2025.
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 55
DIRECTORS’ TOTAL COMBINED REMUNERATION FOR THE YEAR ENDED
31 MARCH 2024
During the financial year, the Chairman received a fee of GBP89,250, while the other
independent Non-Executive Directors each received fees of GBP47,250. In addition, Alexander
Downer and Alan Rule each received an additional GBP11,000 as chairs of the Remuneration
and Audit Committee respectively.
Director
Salaries
and Fees
USD ’000
(A)
Annual
Bonus
USD ’000
(B)
LTIP
USD ’000
(A)+(B)
Total
Variable Pay
USD ’000
Total
USD ’000
Executive Directors
Andre Liebenberg
264
132
–
132
396
Carole Whittall
187
94
–
94
281
Non-Executive
Directors
The Lord St John of
Bletso
111
–
–
–
111
Sofia Bianchi
59
–
–
–
59
Claire Brazenall
Note 1
Note 1
Alexander Downer
72
–
–
–
72
Alan Rule
72
–
–
–
72
Total
765
226
–
226
991
The annual bonus indicated above in respect of the year to 31 March 2024 was paid after the year-end.
The amounts indicated for the LTIP above correspond to the fair value as at the grant date, detailed in note 9 of the financial statements.
Note 1: Ms Brazenall’s services were supplied pursuant to an administration agreement between the Group and Langham Hall
Fund Management (Jersey) Limited dated 18 December 2017 and amended on 7 January 2019. The annual administration fee
payable by the Group under such agreement in the year ended 31 March 2024 is USD181,892 (31 March 2023: USD160,607).
Directors’ remuneration report continued
DIRECTORS’ TOTAL COMBINED REMUNERATION FOR THE YEAR ENDED
31 MARCH 2023
Director
Salaries
and Fees
USD ’000
(A)
Annual
Bonus
USD ’000
(B)
LTIP
USD ’000
(A)+(B)
Total
Variable Pay
USD ’000
Total
USD ’000
Executive Directors
Andre Liebenberg
240
120
43
163
403
Carole Whittall
170
85
18
103
273
Non-Executive
Directors
The Lord St John of
Bletso
103
–
–
–
103
Sofia Bianchi
56
–
–
–
56
Claire Brazenall
Note 1
Note 1
Alexander Downer
66
–
–
–
66
Alan Rule
66
–
–
–
66
Emily Manning
Note 1
Note 1
Total
701
205
61
266
967
The annual bonus indicated above in respect of the year to 31 March 2023 was paid after the year-end.
As a result of the Remuneration Committee’s planned review of the long-term incentive plan, no grant of long-term incentive options
were made in respect of the 2022 financial year.
Note 1: Ms Brazenall and Ms Manning’s services were supplied pursuant to an administration agreement between the Group and
Langham Hall Fund Management (Jersey) Limited dated 18 December 2017 and amended on 7 January 2019.
The annual administration fee payable by the Group under such agreement in the year ended 31 March 2023 was USD160,607
(31 March 2022: USD186,056).
No Director received any non-cash benefits or pension provision. There were no payments to
past Directors and no payments of compensation for loss of office in the year under review.
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 56
Total shareholder return (“TSR”) performance
The performance of the Group’s ordinary shares compared with the FTSE AIM All Share
Index (the “Index”) for the financial year to 31 March 2024 is shown in the graph below:
FTSE AIM all share
Yellow Cake
-0.4
-0.2
0.0
0.2
0.4
0.6
0.8
March
2024
February
2024
January
2024
December
2023
November
2023
October
2023
September
2023
August
2023
July
2023
June
2023
May
2023
April
2023
Statement of directors’ share interests
The number of shares held by each Director in the Group as at 31 March 2024 is shown in the
table in Note 14 of the Annual Financial Statements. There is no shareholding requirement
for Directors. While the Non-Executive Directors hold shares in the Group, the holdings are
considered sufficiently small so as not to impinge on their independence.
Alexander Downer
Remuneration Committee Chair
18 July 2024
Directors’ remuneration report continued
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 57
The Directors of Yellow Cake plc (the “Group”) present their
report and the audited financial statements for the Group for
the year ended 31 March 2024. The financial statements of the
Group have been prepared in accordance with UK-adopted
International Accounting Standards.
PRINCIPAL ACTIVITIES
Yellow Cake plc was incorporated in Jersey, Channel Islands
on 18 January 2018. The Group operates in the uranium
sector and was created to purchase and hold U3O8 and to
exploit other uranium-related opportunities. The strategy of
the Group is to acquire and hold U3O8 over the long term and
not to actively speculate with regards to short-term changes
in the price of U3O8.
The Group was admitted to list on the London Stock Exchange
AIM market (“AIM”) on 5 July 2018.
On 22 June 2022, the Group’s shares were admitted to trading
on the OTCQX Best Market, the highest tier of the US over-the-
counter market.
RESULTS FOR THE PERIOD
The results of the Group for the year are set out on pages 66
to 84.
BUSINESS REVIEW AND FUTURE
DEVELOPMENTS
The Strategic Report on pages 2 to 34 provides a review of the
year’s activities, operations, future developments and key risks.
DIRECTORS
The Directors who held office during the period and
subsequently were as follows:
n The Lord St John of Bletso (Chairman)
n Sofia Bianchi
n Claire Brazenall
n The Hon Alexander Downer
n Alan Rule
n Andre Liebenberg
n Carole Whittall
DIRECTORS’ INTERESTS
The Audit and Remuneration Committee reports are available
on pages 47 and 50 respectively.
Details of the Directors’ interests in the Group’s shares can
be found in the notes to the Annual Financial Statements on
page 83.
There are no outstanding loans granted by any member of
the Group to the Directors or any guarantees provided by the
Group for the benefit of the Directors.
No Director has or has had any interest in any transaction which
is or was unusual in its nature or conditions or which is or was
significant in respect of the business of the Group and which
was effected by the Group during the current or immediately
preceding financial year, or which was effected during an
earlier financial year and remains in any respect outstanding or
unperformed.
DIRECTORS’ INDEMNITIES
The Group maintains appropriate insurance cover in respect of
legal action against its Directors.
DIVIDENDS
The Directors do not recommend an ordinary dividend for
the year.
EVENTS AFTER THE REPORTING DATE
On 3 June 2024, the Group took title to 1,526,717 lb of U3O8,
acquired as part of its 2023 uranium purchase option under
its Framework Agreement with Kazatomprom, at a price of
USD65.50/lb for a total consideration of USD100.0 million.
Payment occurred following delivery of the U3O8at Orano’s
storage facility in France.
FINANCIAL RISK MANAGEMENT
Details of financial risk management are provided in note 3 to
the financial statements.
POLITICAL AND CHARITABLE CONTRIBUTIONS
The Group made no charitable or political contributions during
the year.
INTERNAL CONTROL
The Board is responsible for the Group’s risk management and
internal control systems, and has mandated the Audit Committee
to keep these systems under review and to report to the Board.
The controls in place are appropriate to the size and nature of
the business, and to the risks relevant to it. They include controls
over financial, operational and compliance risks. The Audit
Committee reviews the system of internal controls together with
reports from the external auditor regarding issues identified
during its engagement, particularly those relating to any control
weaknesses, and the responses from management.
The Group’s system of internal control is designed to provide the
Directors with reasonable, but not absolute, assurance that the
Group will not be hindered in achieving its business objectives,
or in the orderly and legitimate conduct of its business, by
DIRECTORS’ REPORT
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 58
circumstances that may reasonably be foreseen. However, no
system of internal control can eliminate the possibility of poor
judgement in decision-making, human error, fraud or other
unlawful behaviour, management overriding controls, or the
occurrence of unforeseeable circumstances and the resulting
potential for material misstatement or loss.
The key elements of the control system in operation are
as follows:
n The Board meets regularly with a formal schedule of matters
reserved to it for decision.
n The Group has an organisational structure and has put in place
operating protocols and procedures ensuring clear lines of
responsibility and appropriate delegation of authority.
n The Board monitors the Group’s financial performance
against budgets and forecasts.
n The Executive Directors undertake a regular assessment
process, to identify and quantify the risks that face the
Group’s operations and functions, and to assess the adequacy
of the prevention, monitoring and mitigation practices in place
for those risks.
n The Board is responsible for reviewing the risk assessment
and risk management processes for completeness and
accuracy.
n The Board receives regular updates from management in
addition to carefully considering the Group’s risk register at
regular intervals.
n There are no significant issues disclosed in the report and
financial statements for the year ended 31 March 2024
and up to the date of approval of the report and financial
statements that have required the Board to deal with any
related material internal control issues.
The Directors confirm that the Board has reviewed the
effectiveness of the system of internal control during the year
and concluded that the controls and procedures are adequate.
The Board will continue to review the adequacy of the Group’s
internal controls and will test the controls and procedures again
during the 2025 financial year.
CORPORATE GOVERNANCE
The corporate governance report on pages 35 to 46 forms part
of this Directors’ report.
GOING CONCERN
Yellow Cake’s operations, financial position and ability to source
additional U3O8 have to date been unaffected by the war in
Ukraine, while the Group’s ability to continue in operational
existence is not contingent on its ability to increase the volume
of its uranium holdings.
As at 31 March 2024, Yellow Cake had sufficient cash
balances to meet approximately two years of working capital
requirements, after taking into account commitments to
purchase USD100 million worth of U3O8 after the year end,
before it would need to raise additional funds.
The Directors, having considered the Group’s objectives
and available resources along with its projected income and
expenditure for at least 12 months from the date of approval
of the financial statements, are satisfied that the Group has
adequate resources to continue in operational existence for the
foreseeable future. Accordingly, the Directors have adopted the
going concern basis in preparing these financial statements.
NUMBER OF SECURITIES IN ISSUE
As at 20 June 2024, Yellow Cake had 221,440,730 in issue of
which 4,584,283 shares were held in treasury.
The Group was aware of the following holdings of 3% or more in
the Group’s issued share capital:
Shareholder
Number
of shares
Share
holding
MM Asset Management
21,813,167
10.06
Global X Management
Company
16,240,476
7.49
Interactive Brokers (EO)
10,857,004
5.01
Kopernik Global Investors
10,510,215
4.85
Hargreaves Lansdown,
stockbrokers (EO)
8,877,878
4.09
Brandes Investment
Partners
8,817,427
4.07
ALPS Advisors
8,528,618
3.93
STATEMENT OF DISCLOSURE TO THE
AUDITOR
The Directors have taken the necessary steps to make
themselves aware of the information needed by the external
auditor for the purposes of its audit and to establish that the
auditor is aware of that information. The Directors are not
aware of any relevant audit information of which the auditor
is unaware.
AUDITOR APPOINTMENT
RSM UK Audit LLP was the auditor during the year under
review and have expressed their willingness to continue as
auditor of the Group. A resolution for their reappointment will
be proposed at the forthcoming Annual General Meeting.
Directors’ report continued
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 59
DIRECTORS’ RESPONSIBILITY STATEMENT
The Directors are responsible for preparing the Annual Report
and the Financial Statements in accordance with applicable laws
and regulations. The Companies (Jersey) Law 1991 requires
directors to prepare Financial Statements for each financial year
in accordance with any generally accepted accounting principles.
The Directors have elected to use UK-adopted International
Accounting Standards. The Group’s financial statements are
required by law to give a true and fair view of the state of affairs
of the Group at the year-end and of the profit or loss for the
year then ended.
In preparing these financial statements, the Directors are
required to:
n select suitable accounting policies and then apply them
consistently;
n make judgements and estimates that are reasonable and
prudent;
n state whether the financial statements have been prepared
in accordance with UK-adopted International Accounting
Standards;
n present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information; and
n make an assessment of the Group’s ability to continue as a
going concern.
The Directors are responsible for keeping accounting
records which are sufficient to show and explain the Group’s
transactions and are such as to disclose with reasonable
accuracy at any time the financial position of the Group and
enable them to ensure that the financial statements prepared
by the Group comply with the requirements of the Companies
(Jersey) Law 1991. They are also responsible for safeguarding
the assets of the Group and, accordingly, for taking reasonable
steps to further the prevention and detection of fraud and other
irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Group’s website. Information published on the website is
accessible in many countries, and legislation in Jersey and the
relevant provisions of the AIM Rules for Companies governing
the preparation and dissemination of financial statements may
differ from legislation and the rules in other jurisdictions. The
Directors’ responsibility also extends to the continued integrity
of the financial statements contained therein.
The Directors have reviewed this Annual Report and have
concluded that, taken as a whole, it is fair, balanced and
understandable and provides the information necessary for
shareholders to assess the Group’s position, performance,
business model and strategy.
By order of the Board
Andre Liebenberg
Chief Executive Officer
18 July 2024
Directors’ report continued
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 60
OPINION
We have audited the financial statements of Yellow Cake plc and
its subsidiaries (the ‘group’) for the year ended 31 March 2024
which comprise consolidated statement of financial position,
consolidated statement of comprehensive income, consolidated
statement of changes in equity, consolidated statement of cash
flows, and notes to the financial statements, including significant
accounting policies. The financial reporting framework that
has been applied in their preparation is applicable law and UK-
adopted International Accounting Standards.
In our opinion, the financial statements:
n give a true and fair view of the state of the group’s affairs as at
31 March 2024 and of the group’s profit for the year
then ended;
n have been properly prepared in accordance with UK-adopted
International Accounting Standards ; and
n have been properly prepared in accordance with the
requirements of the Companies (Jersey) Law 1991.
BASIS FOR OPINION
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described
in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of
the group in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the
UK, including the FRC’s Ethical Standard as applied to listed
entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe that the
audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
SUMMARY OF OUR AUDIT APPROACH
Key audit matters
n Investment in uranium
Materiality
n Overall materiality: $18,300,000 (2023: $12,000,000)
n Performance materiality: $13,700,000 (2023: $9,010,000), with specific performance materiality of $614,000
(2023: $519,000) applied to all items in the Statement of Comprehensive Income and Statement of Financial
Position other than the fair value movement in the investment in uranium, investment balance and tax.
Scope
Our audit procedures covered 100% of total assets and 100% of profit before tax.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the group financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect on the overall audit strategy, the allocation of resources in the
audit and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the group
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
INVESTMENT IN URANIUM
Key audit matter
description
The Group’s business model is based on holding investments in uranium. The Company’s accounting policy is
that uranium is held at fair value based on the most recent month-end spot rate price for U3O8 published by
UxC LLC. At 31 March 2024, the Company’s investment in uranium was valued at $1,753,537,000
(2022: $952,504,000).
The Company’s holding of uranium is held by third-parties and valuation of the investment in uranium is
considered to be a key audit matter because errors in measurement of quantity or use of an inaccurate
period-end price could result in a material misstatement of the value of the Company’s investment in uranium.
Details of the Company’s investment in uranium are disclosed in note 4 in the financial statements.
How the matter
was addressed in
the audit
Our response to the risk included:
n Obtaining direct third-party confirmation of the quantity of uranium held at 31 March 2024;
n Corroborating the purchases of uranium during the year and consideration of the accounting treatment
applied to these transactions;
n Corroboration of the price used to value the investment at 31 March 2024 to published market price
information and recalculation of the fair value; and
n Consideration of the appropriateness of the Company’s accounting policy and disclosures made in the
financial statements.
INDEPENDENT AUDITOR’S REPORT
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 61
OUR APPLICATION OF MATERIALITY
When establishing our overall audit strategy, we set certain thresholds which help us to determine
the nature, timing and extent of our audit procedures. When evaluating whether the effects of
misstatements, both individually and on the financial statements as a whole, could reasonably influence
the economic decisions of the users we take into account the qualitative nature and the size of the
misstatements. Based on our professional judgement, we determined materiality as follows:
Group
Overall materiality
$18,300,000 (2023: $12,000,000)
Basis for determining overall
materiality
0.97% (2023: 1.16%) of total assets
Rationale for benchmark
applied
The company’s business model is based on long-term holding
of investments in uranium, which represents the majority of
total assets. Total assets is therefore considered to be the most
appropriate benchmark for overall materiality.
Performance materiality
$13,700,000 (2023: $9,010,000), with specific performance
materiality of $614,000 (2023: $519,000) applied to all items
in the Statement of Comprehensive Income and Statement of
Financial Position other than the fair value movement in the
investment in uranium, the investment balance and Tax.
Basis for determining
performance materiality
75% of overall materiality, with specific materiality applied to all
items in other than the fair value movement in the investment
in uranium, investment in Uranium and Tax being determined
based on 10% of total expenses.
Reporting of misstatements to
the Audit Committee
Misstatements in excess of $183,000 ($120,000) and
misstatements below that threshold that, in our view, warranted
reporting on qualitative grounds.
Independent auditor’s report continued
AN OVERVIEW OF THE SCOPE OF OUR AUDIT
The group consists of 2 components, all of which are based in Jersey.
The coverage achieved by our audit procedures was:
Number of
components
Total
assets
Profit
before tax
Full scope audit
1
91%
96%
Specific audit procedures
1
9%
4%
Total
2
100%
100%
CONCLUSIONS RELATING TO GOING CONCERN
In auditing the financial statements, we have concluded that the directors’ use of the going
concern basis of accounting in the preparation of the financial statements is appropriate. Our
evaluation of the directors’ assessment of the group’s ability to continue to adopt the going
concern basis of accounting included audit of 3-year forecasts prepared by management by
assessing the arithmetic accuracy of the forecasts, challenging assumptions made by management
and corroboration of cash balances.
Based on the work we have performed, we have not identified any material uncertainties relating
to events or conditions that, individually or collectively, may cast significant doubt on the group’s
ability to continue as a going concern for a period of at least twelve months from when the
financial statements are authorised for issue.
In relation to the entity reporting on how they have applied the UK Corporate Governance Code,
we have nothing material to add or draw attention to in relation to the directors’ statement in the
financial statements about whether the directors considered it appropriate to adopt the going
concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are
described in the relevant sections of this report.
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 62
OTHER INFORMATION
The other information comprises the information included
in the annual report, other than the financial statements and
our auditor’s report thereon. The directors are responsible
for the other information contained within the annual report.
Our opinion on the financial statements does not cover the
other information and we do not express any form of assurance
conclusion thereon.
Our responsibility is to read the other information and, in
doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the course of the audit or otherwise appears to be
materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement
in the financial statements themselves. If, based on the work
we have performed, we conclude that there is a material
misstatement of this other information, we are required to
report that fact.
We have nothing to report in this regard.
MATTERS ON WHICH WE ARE REQUIRED TO
REPORT BY EXCEPTION
We have nothing to report in respect of the following matters
where the Companies (Jersey) Law 1991 requires us to report
to you if, in our opinion:
n proper accounting records have not been kept by the parent
company or proper returns adequate for our audit have not
been received from branches not visited by us; or
n the financial statements are not in agreement with the
accounting records and returns; or
n we have failed to obtain any information or explanation that,
to the best of our knowledge and belief, was necessary for our
audit.
CORPORATE GOVERNANCE STATEMENT
We have reviewed the directors’ statement in relation to
going concern, longer-term viability and that part of the
Corporate Governance Statement relating to the group’s
voluntary compliance with the provisions of the UK Corporate
Governance Code.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial
statements and our knowledge obtained during the audit:
n Directors’ statement with regards the appropriateness of
adopting the going concern basis of accounting and any
material uncertainties identified;
n Directors’ explanation as to their assessment of the group’s
prospects, the period this assessment covers and why the
period is appropriate;
n Director’s statement on whether it has a reasonable
expectation that the group will be able to continue in
operation and meets its liabilities;
n Directors’ statement on fair, balanced and understandable;
n Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks;
n Section of the annual report that describes the review
of effectiveness of risk management and internal control
systems; and
n Section describing the work of the audit committee.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the directors’ responsibilities
statement set out on page 60, the directors are responsible
for the preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such internal
control as the directors determine is necessary to enable the
preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the group’s ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless
the directors either intend to liquidate the group or to cease
operations, or have no realistic alternative but to do so.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT
OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always
detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on
the basis of these financial statements.
Independent auditor’s report continued
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 63
THE EXTENT TO WHICH THE AUDIT WAS
CONSIDERED CAPABLE OF DETECTING
IRREGULARITIES, INCLUDING FRAUD
Irregularities are instances of non-compliance with laws and
regulations. The objectives of our audit are to obtain sufficient
appropriate audit evidence regarding compliance with laws and
regulations that have a direct effect on the determination of
material amounts and disclosures in the financial statements,
to perform audit procedures to help identify instances of
non-compliance with other laws and regulations that may have
a material effect on the financial statements, and to respond
appropriately to identified or suspected non-compliance with
laws and regulations identified during the audit.
In relation to fraud, the objectives of our audit are to identify
and assess the risk of material misstatement of the financial
statements due to fraud, to obtain sufficient appropriate audit
evidence regarding the assessed risks of material misstatement
due to fraud through designing and implementing appropriate
responses and to respond appropriately to fraud or suspected
fraud identified during the audit.
However, it is the primary responsibility of management, with
the oversight of those charged with governance, to ensure that
the entity’s operations are conducted in accordance with the
provisions of laws and regulations and for the prevention and
detection of fraud.
In identifying and assessing risks of material misstatement
in respect of irregularities, including fraud, the group audit
engagement team:
n obtained an understanding of the nature of the industry and
sector, including the legal and regulatory framework, that the
group operates in and how the group is complying with the
legal and regulatory framework;
n inquired of management, and those charged with governance,
about their own identification and assessment of the risks
Independent auditor’s report continued
of irregularities, including any known actual, suspected or
alleged instances of fraud; and
n discussed matters about non-compliance with laws and
regulations and how fraud might occur including assessment
of how and where the financial statements may be susceptible
to fraud.
As a result of these procedures we consider the most significant
laws and regulations that have a direct impact on the financial
statements are:
Legislation/
Regulation
Additional audit procedures
performed by the audit engagement
team included:
UK-adopted
International
Accounting Standards
and Companies
(Jersey) Law 1991
Review of the financial statement
disclosures and testing to supporting
documentation.
Completion of disclosure checklists to
identify areas of non-compliance.
UK Corporate
Governance Code
Review of financial statement
disclosures against the requirements of
the UK Corporate Governance Code.
Tax compliance
regulations
Inspection of advice received from
external tax advisors and review of their
assessment of the tax implications of
activities in different jurisdictions.
The group audit engagement team identified the risk of
management override of controls as the area where the financial
statements were most susceptible to material misstatement due
to fraud. Audit procedures performed included but were not
limited to testing manual journal entries and other adjustments
and evaluating the business rationale in relation to significant,
unusual transactions and transactions entered into outside the
normal course of business.
A further description of our responsibilities for the audit of the
financial statements is included in appendix 1 of this auditor’s
report. This description, which is located at page 65, forms part
of our auditor’s report.
USE OF OUR REPORT
This report is made solely to the company’s members, as a body,
in accordance with Article 113A of the Companies (Jersey) Law
1991. Our audit work has been undertaken so that we might
state to the company’s members those matters we are required
to state to them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company and
the company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.
David Hough
For and on behalf of RSM UK AUDIT LLP, Auditor
Chartered Accountants
25 Farringdon Street
London
EC4A 4AB
18 July 2024
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 64
APPENDIX 1: AUDITOR’S RESPONSIBILITIES
FOR THE AUDIT OF THE FINANCIAL
STATEMENTS
As part of an audit in accordance with ISAs (UK), we exercise
professional judgment and maintain professional scepticism
throughout the audit. We also:
n Identify and assess the risks of material misstatement of the
financial statements, whether due to fraud or error, design
and perform audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher than
for one resulting from error as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the
override of internal control. We include an explanation in the
auditor’s report of the extent to which the audit was capable
of detecting irregularities, including fraud.
n Obtain an understanding of internal control relevant to the
audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the group’s internal control.
n Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and related
disclosures made by the directors.
n Conclude on the appropriateness of the directors’ use of the
going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant
doubt on the group’s ability to continue as a going concern.
If we conclude that the use of the going concern basis of
accounting is appropriate and no material uncertainties have
been identified, we report these conclusions in the auditor’s
report. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditor’s report
to the related disclosures in the financial statements or, if
such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or
conditions may cause the group to cease to continue as a
going concern.
n Evaluate the overall presentation, structure and content
of the financial statements, including the disclosures, and
whether the financial statements represent the underlying
transactions and events in a manner that achieves fair
presentation.
n Obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities
within the group to express an opinion on the consolidated
financial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain
solely responsible for our audit opinion.
We communicate with those charged with governance
regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during
our audit.
We also provide those charged with governance with a
statement that we have complied with relevant ethical
requirements regarding independence, including the FRC’s
Ethical Standard as applied to listed entities, and communicate
with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where
applicable, related safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements
of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law
or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because
the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such
communication.
Independent auditor’s report continued
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
YELLOW CAKE ANNUAL REPORT 2024 65
YELLOW CAKE ANNUAL REPORT 2024 66
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Notes
As at
31 March 2024
USD ’000
As at
31 March 2023
USD ’000
ASSETS:
Non-current assets
Uranium holdings
4
1,753,537
952,504
Total non-current assets
1,753,537
952,504
Current assets
Receivables
5
432
324
Cash and cash equivalents
6
133,189
84,428
Total current assets
133,621
84,752
Total assets
1,887,158
1,037,256
LIABILITIES:
Current liabilities
Trade and other payables
7
(3,544)
(1,930)
Total current liabilities
(3,544)
(1,930)
Total liabilities
(3,544)
(1,930)
NET ASSETS
1,883,614
1,035,326
EQUITY:
Attributable to the equity owners of the Group
Share capital
8
2,951
2,724
Share premium
8
781,233
660,203
Share-based payment reserve
9
107
166
Treasury shares
10
(14,061)
(14,216)
Retained earnings
1,113,384
386,449
TOTAL EQUITY
1,883,614
1,035,326
The consolidated financial statements of Yellow Cake plc and the related notes were approved by Directors on 18 July 2024 and were signed on its behalf by:
Andre Liebenberg
Chief Executive Officer
YELLOW CAKE ANNUAL REPORT 2024 67
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
Notes
1 April 2023
to 31 March 2024
USD ’000
1 April 2022
to 31 March 2023
USD ’000
Uranium holding gains/(losses)
Fair value movement of uranium holdings
4
735,018
(96,902)
Total uranium gains/(losses)
735,018
(96,902)
Expenses
Share-based payments
9
(25)
(44)
Equity offering expenses
8
(206)
(144)
Commission on uranium transactions
11
(660)
(226)
Procurement and market consultancy fees
11
(3,890)
(3,092)
Storage and other expenses
12
(7,517)
(3,466)
Total expenses
(12,298)
(6,972)
Bank interest income
4,785
576
Loss on foreign exchange
(499)
362
Profit/(loss) before tax attributable to the equity owners of the Group
727,006
(102,936)
Tax expense
13
–
–
Total comprehensive profit/(loss) for the year after tax attributable to the equity owners of the Group
727,006
(102,936)
Basic earnings/(loss) per share attributable to the equity owners of the Group (USD)
15
3.51
(0.56)
Diluted earnings/(loss) per share attributable to the equity owners of the Group (USD)
15
3.50
(0.56)
YELLOW CAKE ANNUAL REPORT 2024 68
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to the equity owners of the Group
Share
capital
Share
premium
Share- based
payment reserve
Treasury
Shares
Retained
earnings
Total
equity
Notes
USD ’000
USD ’000
USD ’000
USD ’000
USD ’000
USD ’000
As at 31 March 2022
2,544
588,181
122
(11,219)
489,385
1,069,013
Total comprehensive loss after tax for the year
–
–
–
–
(102,936)
(102,936)
Transactions with owners:
Shares issued
8
180
74,072
–
–
–
74,252
Share issue costs
8
–
(2,050)
–
–
–
(2,050)
Share-based payments
9
–
–
44
–
–
44
Purchase of own shares
10
–
–
–
(2,997)
–
(2,997)
As at 31 March 2023
2,724
660,203
166
(14,216)
386,449
1,035,326
Total comprehensive profit after tax for the year
–
–
–
–
727,006
727,006
Transactions with owners:
Shares issued
8
227
124,448
–
–
–
124,675
Share issue costs
8
–
(3,418)
–
–
–
(3,418)
Share-based payments
9
–
25
–
–
25
Exercise of incentive options
10
–
–
(84)
155
(71)
–
As at 31 March 2024
2,951
781,233
107
(14,061)
1,113,384
1,883,614
YELLOW CAKE ANNUAL REPORT 2024 69
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
CONSOLIDATED STATEMENT OF CASH FLOWS
1 April 2023
1 April 2022
to 31 March 2024
to 31 March 2023
Notes
USD ’000
USD ’000
Cash flows from operating activities
Profit/(loss) before tax
727,006
(102,936)
Adjustments for:
Change in fair value of uranium holdings
4
(735,018)
96,902
Share-based payments
9
25
44
Loss/(gain) on foreign exchange
499
(362)
Interest income
(4,785)
(576)
Operating cash outflows before changes in working capital
(12,273)
(6,928)
Changes in working capital:
Increase in trade and other receivables
(108)
(190)
Increase in trade and other payables
1,116
1,369
Cash used in operating activities including changes in working capital
(11,265)
(5,749)
Interest received
4,785
576
Cash used in operating activities
(6,480)
(5,173)
Cash flows from investing activities
Purchase of uranium
4
(66,015)
(132,689)
Net cash used in investing activities
(66,015)
(132,689)
Cash flows from financing activities
Proceeds from issue of shares
8
124,674
74,252
Issue costs paid
8
(3,418)
(2,050)
Share buyback programme
–
(2,997)
Net cash generated from financing activities
121,256
69,205
Net increase/(decrease) in cash and cash equivalents during the year
48,761
(68,657)
Cash and cash equivalents at the beginning of the year
84,428
153,136
Effect of exchange rate changes
–
(51)
Cash and cash equivalents at the end of the year
133,189
84,428
YELLOW CAKE ANNUAL REPORT 2024 70
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2024
1.
GENERAL INFORMATION
Yellow Cake plc (the “Company”) was incorporated in Jersey, Channel Islands on 18 January 2018. The Company is the holding company of YCA Commercial Ltd (“YCA Commercial”) (together
the “Group”) which was incorporated on 26 September 2023 in Jersey, Channel Islands. The Company purchased 2 ordinary shares of GBP 1 each of the subsidiary on 17 October 2023. The
subsidiary is fully owned by the Company. The address of the registered office of the Group is 3rd Floor, Gaspé House, 66-72 Esplanade, St. Helier, Jersey, JE1 2LH.
The Group operates in the uranium sector and was established to purchase and hold U3O8 and to add value through other uranium-related activities. The strategy of the Group is to acquire
long‑term holdings of U3O8 and not to actively speculate with regards to short-term changes in the price of U3O8. The Group engages in uranium related commercial activities such as locations
swaps and may enter into uranium lending transactions.
The Company was admitted to list on the London Stock Exchange AIM market (“AIM”) on 5 July 2018. On 22 June 2022, the Company’s shares were admitted to trading on the OTCQX,
the highest tier of the US over-the-counter market.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PREPARATION
These audited consolidated financial statements of the Group for the year 1 April 2023 to 31 March 2024 have been prepared in accordance with UK adopted International Financial Reporting
Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
NEW AND REVISED STANDARDS
At the date of authorisation of these financial statements there were standards and amendments which were in issue but not yet effective and which have not been applied. The principal ones
were:
Amendments to IFRS 16: Lease liability in a sale and leaseback (effective 1 January 2024);
Amendments to IAS 7 and IFRS 7: Supplier Finance Arrangements (effective 1 January 2024);
Amendments to IAS 21: Accounting where there is a lack of exchangeability (effective 1 January 2025);
Amendments to IAS 1: Non-current liabilities with covenants, and classification of liabilities as current or non-current (effective 1 January 2024); and
IFRS 18: Presentation and Disclosure in Financial Statements (effective 1 January 2027 - subject to endorsement by the UKEB).
The Directors do not expect the adoption of these standards and amendments to have a material impact on the financial statements.
The principal accounting policies adopted are set out below.
GOING CONCERN
The Directors, having considered the Group’s objectives and available resources along with its projected income and expenditure for at least twelve months from the date of approval of the
audited consolidated financial statements, are satisfied that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the Directors have
adopted the going concern basis in preparing these audited consolidated financial statements.
The Board continues to monitor the ongoing impact of the Ukraine/Russian Conflict and sanctions relating to this conflict which could impact on Yellow Cake’s activities, the uranium industry,
and the world economy.
YELLOW CAKE ANNUAL REPORT 2024 71
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
After taking into account the Group’s post year end commitments to purchase USD100.0 million of U3O8, the Group considered that as at 31 March 2024, it had sufficient working capital to
meet approximately two years of operating expenses before it would need to raise additional funds. Further details can be found in note 4 of these financial statements. The Group has no debt or
hedge liabilities on its balance sheet. In the absence of other sources of capital, the Group can reasonably be expected to sell a portion of its uranium holdings to raise working capital if required.
CONSOLIDATION
The period under review is the first year for which consolidated financial statements have been prepared. The consolidated financial statements are prepared by combining the financial
statements of the Company and its subsidiaries. Subsidiaries are all entities over which the parent company has control, as defined in IFRS 10 “Consolidated financial statements”. Subsidiaries are
fully consolidated from the date on which control is transferred to the parent company. They are de‑consolidated from the date that control ceases.
URANIUM HOLDINGS
Acquisitions of U3O8 are initially recorded at cost including transaction costs incurred and are recognised in the Group’s statement of financial position on the date the risks and rewards of
ownership pass to the Group, which is the date that the legal title to the uranium passes.
After initial recognition, U3O8 holdings are measured at fair value based on the most recent month-end spot price for U3O8 published by UxC LLC.
IFRS lacks specific guidance in respect of accounting for uranium holdings. As such the Directors of the Group have considered the requirements of International Accounting Standard 1
“Presentation of Financial Statements” and International Accounting Standard 8 “Accounting Policies, Changes in Accounting Estimates and Errors” to develop and apply an accounting policy.
The Directors of the Group consider that measuring the U3O8 holdings at fair value provides information that is most relevant to the economic decision-making of users. This is consistent with
International Accounting Standard 40 “Investment Property”, which allows for assets held for long-term capital appreciation to be presented at fair value.
FOREIGN CURRENCY TRANSLATION
Functional and presentation currency
The consolidated financial statements are presented in United States Dollars (“USD”) which is also the functional currency of the Group.
These consolidated financial statements are presented to the nearest round thousand, unless otherwise stated.
Foreign currency translation
Transactions denominated in foreign currencies are translated into USD at the rate of exchange ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated into USD at the rate of exchange ruling at the reporting date. Foreign exchange gains or
losses arising on translation are recognised through profit or loss in the statement of comprehensive income.
FINANCIAL INSTRUMENTS
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the instrument. The Group shall offset financial assets and financial
liabilities if the Group has a legally enforceable right to set off the recognised amounts and intends to settle on a net basis.
The carrying amount of the Group’s financial assets and financial liabilities are a reasonable approximation of their fair values due to the short-term nature of these instruments.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 March 2024
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
YELLOW CAKE ANNUAL REPORT 2024 72
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
FINANCIAL ASSETS
The Group’s financial assets comprise receivables. These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are initially
recognised at fair value and subsequently carried at amortised cost using the effective interest method, less any provision for impairment.
Cash and cash equivalents comprise cash in hand and short-term deposits in banks with an original maturity of three months or less.
FINANCIAL LIABILITIES
The Group’s financial liabilities comprise trade and other payables. They are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.
SHARE CAPITAL
The Group’s ordinary shares are classified as equity. Incremental costs directly attributable to the issue of shares are recognised in share premium as a deduction from proceeds of the share issue.
TREASURY SHARES
The Group’s treasury shares are classified as equity. Treasury shares are accounted for at cost and shown as a deduction from equity in a separate reserve. Transfers from treasury shares are
recognised at the weighted average of the cost of acquiring the treasury shares.
SHARE-BASED PAYMENTS
Where the Group issues equity instruments to external parties or employees as consideration for services received, the statement of comprehensive income is charged with the fair value of the goods
and services received, except where services are directly attributable to the issue of shares, in which case the fair value of such amounts is recognised in equity as a deduction from share premium.
Equity-settled transactions are awards of shares, or options over shares that are provided to employees in exchange for the rendering of services.
Equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using a Black-Scholes option pricing model that takes into account the exercise price,
the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the
term of the option, together with non-vesting conditions that do not determine whether the consolidated entity receives the services that entitle the employees to receive payment. No account
is taken of any other vesting conditions in determining fair value.
The cost of equity-settled transactions is recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative charge to profit or loss is calculated based on
the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for
the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods.
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market conditions are considered to vest irrespective of whether that market condition
has been met, provided all other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An additional expense is recognised, over the remaining vesting period,
for any modification that increases the total fair value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is treated as a cancellation. If the condition is not within the control of the Group or
employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 March 2024
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
YELLOW CAKE ANNUAL REPORT 2024 73
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
If an equity-settled award is cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is recognised immediately. If a new replacement award is substituted
for the cancelled award, the cancelled and new awards are treated as if they were a modification.
TAXATION
As the Group is managed and controlled in Jersey it is liable to be charged to tax at a rate of 0% under schedule D of the Income Tax (Jersey) Law 1961 as amended.
EXPENSES
Expenses are accounted for on an accrual basis.
SEGMENTAL REPORTING
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker is responsible for
allocating resources and assessing performance of the operating segments and has been identified as the Board of Directors of the Group.
The Group is organised into a single operating segment being the holding of U3O8 for long-term capital appreciation.
CRITICAL ACCOUNTING JUDGMENTS AND ESTIMATION UNCERTAINTY
The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of
assets, liabilities, income and expenses.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under
the circumstances. Revisions to accounting estimates are recognised in the year in which the estimate is revised and in any future years affected.
The resulting accounting estimates will, by definition, seldom equate to the related actual results.
JUDGEMENTS
Taxation
The Group receives regular tax advice and opinions from its advisors and accountants to ensure it is aware of, and can seek to mitigate the effects on its tax position of, changes in regulation.
While the Group stores its uranium in storage facilities in Canada and France, the Group does not carry on business in either of these jurisdictions. The Directors have considered the tax
implications of the Group’s operations and have reached judgement that no tax liability has arisen during the year (year ended 31 March 2023: USD nil).
Uranium Holdings
As set out under the accounting policy for uranium holdings above, the Group measures its holdings in U3O8 at fair value.
Kazatomprom Framework Agreement
As set out in note 4, under the terms of the Framework Agreement with Kazatomprom, the Group has an annual purchase option which entitles it to contract for up to USD100 million of U3O8
each calendar year at the U3O8 spot price prevailing at the date that the Group binds itself to make the purchase. The purchase is accounted for on delivery of the U3O8 at the storage facility,
which may be in a subsequent accounting period. The Group has determined that the terms of this arrangement do not fall within the scope of IFRS 9.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 March 2024
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
YELLOW CAKE ANNUAL REPORT 2024 74
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
3.
MANAGEMENT OF FINANCIAL RISKS
FINANCIAL RISK FACTORS
The Group’s financial assets and liabilities comprise of cash, receivables and payables that arise directly from its operations. The accounting policies in note 2 include criteria for the recognition
and the basis of measurement applied for financial assets and liabilities. Note 2 also includes the basis on which income and expenses arising from financial assets and liabilities are recognised
and measured.
The Group’s assets and liabilities have been primarily categorised as assets and liabilities at amortised cost, with the exception of the uranium holdings being held at fair value. The carrying
amounts of all such instruments are as stated in their respective notes.
INTEREST RATE RISK AND SENSITIVITY
Any cash balances are held on variable rate bank accounts or in money market funds. Assuming year-end cash balances were held throughout the year under review, and the interest rate
received was 1% higher over the year under review, profit after tax would have increased by USD1,331,887 (year ended 31 March 2023: USD844,285). Likewise, if the interest rate received
was 1% lower, profit after tax would have decreased by USD1,331,887 (year ended 31 March 2023: USD844,285). After the year-end, on 7 June 2024, the Company paid USD100,0 million to
Kazatomprom in consideration for 1.5 million lb of U3O8 delivered to the Company on 3 June 2024, thus reducing the interest income receivable in the future by the Company.
COMMODITY PRICE RISK AND SENSITIVITY
The fair value of the uranium holdings may fluctuate because of changes in market price. If the value of the uranium holdings fell by 5% at the year end, the profit after tax would decrease by
USD87,435,753 (year ended 31 March 2023: USD47,625,185). Likewise, if the value rose by 5% the profit after tax would have increased by USD87,435,753 (year ended 31 March 2023:
USD47,625,185).
ECONOMIC RISK
Geopolitical events that occurred in Russia-Ukraine during the Group’s financial year have not had a material impact to date on the Group’s operations, nor affected its financial position.
While the Group has purchased and intends to continue to purchase U3O8 from Kazatomprom, the Kazakh national atomic company, all U3O8 to which the Group has title and has paid for, is held
at the Cameco storage facility in Canada and the Orano storage facility in France.
In October 2023, the Group agreed to purchase 1,526,717 lb of U3O8 under its agreement with Kazatomprom (the “Framework Agreement”) and took delivery at the Orano storage facility in
France on 3 June 2024. Payment was made to Kazatomprom following delivery to the Group.
While part of Kazatomprom’s production is transported through Russia, the Group is unaware of any restrictions on Kazatomprom’s activities related to the supply of its products to end
customers and the Group does not anticipate any material delays to the delivery dates indicated above. There are nevertheless risks associated with both transit through the territory of Russia
and the delivery of cargo by sea vessels, which could adversely impact deliveries from Kazatomprom.
LIQUIDITY RISK
This is the risk that the Group will encounter in realising assets or otherwise raising funds to meet financial commitments. Prudent liquidity risk management involves maintaining sufficient
liquidity and short-term investment securities, being able to raise funds based on suitably adapted lines of credit and a capacity to unwind market positions.
At year end, the liquidity of the Group is composed of either bank account or bank deposits, for a total amount of USD133,188,699 (31 March 2023: USD84,428,484).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 March 2024
YELLOW CAKE ANNUAL REPORT 2024 75
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
The Group’s cash and cash equivalents are held with Citibank Europe PLC, which is rated A+ (2023: A+) according to ratings agency Fitch.
Carrying amount
<1 year
1 to 2 years
2 to 10 years
USD ’000
USD ’000
USD ’000
USD ’000
As at 31 March 2024
Cash and cash equivalents
133,189
133,189
–
–
As at 31 March 2023
Cash and cash equivalents
84,428
84,428
–
–
FAIR VALUE ESTIMATION
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether
that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or liability, the Group takes into account the characteristics of the asset
or liability at the measurement date. IFRS 13 requires the Group to classify fair value measurements using fair value hierarchy that reflects the significance of the inputs used in making the
measurements. The fair value hierarchy has the following levels:
i Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
ii Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2); and
iii Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).
The level to the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined based on the lowest level input that is significant of an input is assessed
against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement
is a level 3 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgement, considering factors specific to the asset or liability.
The following table analyses within the fair value hierarchy the Group’s financial assets and liabilities (by class) measured at fair value.
Level 1
Level 2
Level 3
Total
Assets and liabilities
USD ’000
USD ’000
USD ’000
USD ’000
As at 31 March 2024
Uranium holdings
1,753,537
–
–
1,753,537
As at 31 March 2023
Uranium holdings
952,504
–
–
952,504
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 March 2024
3.
MANAGEMENT OF FINANCIAL RISKS CONTINUED
YELLOW CAKE ANNUAL REPORT 2024 76
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
4.
URANIUM HOLDINGS
Fair Value
USD ’000
As at 31 March 2022
916,717
Acquisition of U3O8
132,689
Change in fair value
(96,902)
As at 31 March 2023
952,504
Acquisition of U3O8
66,015
Change in fair value
735,018
As at 31 March 2024
1,753,537
The value of the Group’s U3O8 holdings is based on the daily spot price for U3O8 of USD87.00/lb as published by UxC LLC on 31 March 2024 (2023: USD50.65/lb as published by UxC LLC on
31 March 2023).
As at 31 March 2024, the Group:
n had purchased a total of 22,826,515lb of U3O8 at an average cost of USD30.98/lb;
n had disposed of 2,670,914 lb of U3O8 at an average selling price of USD40.23/lb that had been acquired at an average price of USD21.01/lb, assuming a first in first out methodology; and
n held a total of 20,155,601lb of U3O8 at an average cost of USD32.30/lb for a net total cash consideration of USD651.1 million, assuming a first in first out methodology.
PURCHASE OF URANIUM
On 30 September 2023, the Group took title to 1,350,000 lb of U3O8, acquired as part of its 2022 uranium purchase option under its Framework Agreement with Kazatomprom, at a price of
USD48.90/lb for a total consideration of USD66.0 million. Payment occurred following delivery at Cameco’s storage facility in Canada.
POST YEAR-END PURCHASES OF URANIUM
On 3 June 2024, the Group took title to 1,526,717 lb of U3O8, acquired as part of its 2023 uranium purchase option under its Framework Agreement with Kazatomprom, at a price of
USD65.50/lb for a total consideration of USD100.0 million. Payment occurred following delivery of the U3O8 at Orano’s storage facility in France.
SALE OF URANIUM
During the period, there were no sales of uranium.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 March 2024
YELLOW CAKE ANNUAL REPORT 2024 77
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
URANIUM HOLDINGS
The following table provides an analysis of the Group’s U3O8 holdings at 31 March 2024:
Quantity
Fair Value
lb
USD ’000
As at 31 March 2024
Canada
19,855,601
1,727,437
France
300,000
26,100
Total
20,155,601
1,753,537
As at 31 March 2023
Canada
18,505,601
937,309
France
300,000
15,195
Total
18,805,601
952,504
5.
TRADE AND OTHER RECEIVABLES
As at
As at
31 March 2024
31 March 2023
USD ’000
USD ’000
Other receivables
432
324
432
324
6.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents as at 31 March 2024 were held with Citi Bank Europe plc in a variable interest account with full access. Balances at the end of the year were USD133,173,462 and
GBP12,062, a total of USD133,188,698 equivalent (31 March 2023: USD84,420,908 and GBP6,127, a total of USD84,428,484 equivalent).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 March 2024
4.
URANIUM HOLDINGS CONTINUED
YELLOW CAKE ANNUAL REPORT 2024 78
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
7.
TRADE AND OTHER PAYABLES
As at
As at
31 March 2024
31 March 2023
USD ’000
USD ’000
Trade and other payables
3,544
1,930
3,544
1,930
8.
SHARE CAPITAL
Authorised:
10 000 000 000 ordinary shares of GBP 0.01
Issued and fully paid:
Ordinary shares
Number
GBP ’000
USD ’000
Share capital as at 31 March 2022
187,740,730
1,877
2,544
Issued 7 February 2023
15,000,000
150
180
Share capital as at 31 March 2023
202,740,730
2,027
2,724
Issued 2 October 2023
18,700,000
187
227
Share capital as at 31 March 2024
221,440,730
2,214
2,951
The number of shares in issue as at 31 March 2024 includes the 4,584,283 treasury shares – refer to note 10.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 March 2024
YELLOW CAKE ANNUAL REPORT 2024 79
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
Share premium
GBP ’000
USD ’000
Share premium as at 31 March 2022
432,756
588,181
Proceeds of issue of shares
61,650
74,072
Share issue costs
(1,706)
(2,050)
Share premium as at 31 March 2023
492,700
660,203
Proceeds of issue of shares
102,663
124,448
Share issue costs
(2,812)
(3,418)
Share premium as at 31 March 2024
592,551
781,233
The Company has one class of shares which carry no right to fixed income.
On 2 October 2023, the Company issued a total of 18,700,000 new ordinary shares to existing and new institutional investors, at a price of GBP5.50 per share. The Company incurred listing
expenses, comprising of commissions and professional adviser fees totalling USD3,623,708 of which USD3,417,826 have been taken to the share premium account. Additional placing costs of
USD205,882 have been recognised in the statement of comprehensive income. Net proceeds from the placing were USD121,051,063 equivalent.
9.
SHARE-BASED PAYMENTS
The Group implemented an equity-settled share-based compensation plan in 2019 which provides for the award of long-term incentives and an annual bonus to management personnel.
During the period, USD24,585 was recognised in the statement of comprehensive income, in relation to share-based payments (31 March 2023: USD43,996).
ANNUAL BONUS
The annual bonus award in relation to a financial year is usually granted following publication of the Group’s audited annual results for that financial year. The annual bonus awards are either in
cash or in the form of nominal-cost options, which usually will vest and become exercisable no earlier than one year after grant.
In respect of the 2023 and 2024 financial years, annual bonuses were paid in cash and no share-based annual bonus awards were made. The annual bonus award in respect of the year ended
31 March 2024 was based on commercial targets and was 50% of base salary (31 March 2023: 50% of base salary).
LONG-TERM INCENTIVE
The long-term incentive is in the form of options granted to acquire shares in the Group that will become exercisable not earlier than three years after grant (save in certain circumstances
including a change of control of the Group) and will expire 10 years after the date of grant. The option exercise price has been set at the net asset value per share at the grant date of the shares
placed under option. The options are subject to a post-vesting holding period of not less than two years (although sufficient shares may be sold on exercise in order to meet tax liabilities arising
at vesting). The face value (exercise price of the options multiplied by the number of options granted) of shares subject to the grants may be up to 75% and 45%. of salary for the CEO and CFO
respectively. Each option gives the right to acquire one share in the Group.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 March 2024
8.
SHARE CAPITAL CONTINUED
YELLOW CAKE ANNUAL REPORT 2024 80
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
The long-term incentive award relating to a financial year is usually granted at the beginning of that financial year. The exercise of each of the long-term incentive options is conditional upon the
share price as at the exercise date being equal to or greater than the net asset value per share of the Group as at the date of grant.
The Remuneration Committee resolved to award long-term incentive options with a face value of 75% of base salary to the CEO and 45% of base salary to the CFO in respect of the 2024
financial year. The grant of these options was delayed pending engagement with the Company’s shareholders. It is intended that the long-term incentive options for the 2024 financial year will be
granted on 26 July 2025.
Set out below is the summary of the long-term incentive options awarded on 3 November 2022 in relation to the year ended 31 March 2023:
Director
Grant
date
Exercise
date
Exercise
price
Opening
balance
Exercised
Expired/
forfeited/other
Closing
balance
A Liebenberg
03/11/2022
03/11/2025
GBP4.75
33,162
–
–
33,162
C Whittall
03/11/2022
03/11/2025
GBP4.75
14,094
–
–
14,094
Total
47,256
47,256
Total fair value
as at the grant date*
USD62,320
* The USD equivalent is derived using the FX rate as at the date of reporting.
A Black-Scholes option pricing model was used to determine the fair value of the long-term incentive options. The valuation model inputs used to determine the fair value at the grant date are as
follows:
Grant date
Vesting
Share price
at grant date
Exercise
price
Expected
volatility
Risk-free
interest rate
Fair value at
grant date
GBP
Fair value
at grant date
USD*
03/11/2022
03/11/2025
GBP4.30
GBP4.75
40%
3.21%
49,335
USD62,320
* The USD equivalent is derived using the FX rate as at the date of reporting.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 March 2024
9.
SHARE-BASED PAYMENTS CONTINUED
YELLOW CAKE ANNUAL REPORT 2024 81
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
10. TREASURY SHARES
Number
GBP ’000
USD ’000
Treasury shares as 31 March 2022
4,069,498
8,681
11,219
Purchased in the year
566,833
2,352
2,997
Treasury shares as at 31 March 2023
4,636,331
11,033
14,216
Exercise of long-term incentive options
(52,048)
(123)
(155)
Treasury shares as at 31 March 2024
4,584,283
10,910
14,061
On 2 June 2023, following an exercise of share options on 24 May 2023 under the Yellow Cake plc Share Option Plan 2019, 31,686 ordinary shares held as treasury shares were transferred at
213p per share to satisfy the exercise.
On 25 July 2023, following an exercise of share options on 19 July 2023 under the Yellow Cake plc Share Option Plan 2019, 20,362 ordinary shares held as treasury shares were transferred at
288p per share to satisfy the exercise.
Following these transfers, the total number of treasury shares held by the Company reduced from 4,636,331 to 4,584,283. The reduction in the value of treasury shares resulting from the
exercise of share options has been calculated based on the weighted average acquisition cost of the treasury shares.
11. COMMISSION, PROCUREMENT AND CONSULTANCY FEES
308 Services Limited (“308 Services”) provides procurement services to the Group relating to the sourcing of U3O8 and other uranium transactions and in securing competitively priced
converter storage services.
In terms of the agreement entered into between the Group and 308 Services on 30 May 2018 and amended on 12 June 2018, 308 Services is entitled to receive:
(i) a Holding Fee comprised of a Fixed Fee of USD275,000 per calendar year plus a Variable Fee equal to 0.275% per annum of the amount by which the value of the Group’s holdings of U3O8
exceeds USD100 million; and
(ii) a Storage Incentive Fee equal to 33% of the difference between the amount obtained by multiplying the Target Storage Cost (initially set at USD 0.12 /lb per year) by the volume of U3O8
(in pounds) owned by the Group on 31 December of each respective year and the total converter storage fees paid by the Group in the preceding calendar year.
The Group considers Holding Fees and Storage Incentive Fees to be costs of an ongoing nature. During the period the Group paid Holding Fees and Storage Incentive Fees of USD3,890,270
(31 March 2023: USD3,092,083) to 308 Services. 308 Services has not earned the Storage Incentive Fee since 31 December 2022.
308 Services is also entitled to receive a commission equivalent to 0.5% of the transaction value in respect of certain uranium sale and purchase transactions approved by the Yellow Cake Board.
In addition, if the purchase price paid by the Group in respect of such a purchase transaction is in the lowest quartile of the range of reported uranium spot prices in the calendar year in which the
transaction completed, 308 Services is entitled to receive, at the beginning of the following calendar year, an additional commission of 0.5% of the value of the uranium transacted. If the purchase
price paid by the Group in respect of such a purchase transaction is in the second lowest quartile of the range of reported uranium spot prices in the calendar year in which the transaction
completed, 308 Services is entitled to receive, at the beginning of the following calendar year, an additional commission of 0.25% of the value of the uranium transacted. If the purchase price is in
the top half of the range for the calendar year in which the transaction completed, no additional commission will be payable to 308 Services.
During the period, commissions payable to 308 Services totalled USD660,150 (31 March 2023: USD226,005).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 March 2024
YELLOW CAKE ANNUAL REPORT 2024 82
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
12. STORAGE AND OTHER OPERATING EXPENSES
1 April 2023
1 April 2022
to 31 March 2024
to 3 1 March 2023
USD ’000
USD ’000
Professional fees
912
772
Management Salaries and Directors’ fees
952
965
Storage and other expenses
5,545
1,590
Auditor’s fees
108
139
7,517
3,466
Auditor’s fees include interim review fees of USD31,084 (31 March 2023: USD27,255).
13. TAXATION
1 April 2023
1 April 2022
to 31 March 2024
to 31 March 2023
USD ’000
USD ’000
Tax expense for the year
–
–
–
–
As the Group is managed and controlled in Jersey it is liable to be charged tax at a rate of 0% under schedule D of the Income Tax (Jersey) Law 1961 as amended.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 March 2024
YELLOW CAKE ANNUAL REPORT 2024 83
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
14. RELATED PARTY TRANSACTIONS
During the year, the Group incurred USD181,892 (31 March 2023: USD160,607) of administration fees payable to Langham Hall Fund Management (Jersey) Limited (“Langham Hall”).
Claire Brazenall is an employee of Langham Hall and has served as a Non-Executive Director of the Group since 9 November 2022, for which she has received no Directors’ fees. David England
is an employee of Langham Hall and has served as Non-Executive Director of the subsidiary since 14 February 2024, for which he has received no Director’s fees. As at 31 March 2024 there
were no amounts due to Langham Hall (31 March 2023: USD nil).
The key management personnel are the Directors and as there are no other employees, their remuneration is represented by ‘management salaries and director fees’ in the Statement of
Comprehensive Income.
The following Directors own ordinary shares in the Company as at 31 March 2024:
Name
Number of
ordinary shares
% of share capital
as at 31 March
2024
The Lord St John of Bletso*
26,302
0.01%
Sofia Bianchi
13,186
0.01%
The Hon Alexander Downer
29,925
0.02%
Claire Brazenall
–
–
Alan Rule
18,837
0.01%
Andre Liebenberg
121,478
0.06%
Carole Whittall
101,966
0.05%
Total
311,694
0.16%
* The Lord St John of Bletso’s shares are held through African Business Solutions Limited, in which he holds 100% of the Ordinary Shares.
While the Non-Executive Directors hold shares in the Company, the holdings are considered sufficiently small so as not to impinge on their independence.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 March 2024
YELLOW CAKE ANNUAL REPORT 2024 84
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
15. EARNINGS PER SHARE
1 April 2023
1 April 2022
to 31 March 2024
to 31 March 2023
USD ’000
USD ’000
Profit/(loss) for the year (USD ’000)
727,006
(102,936)
Weighted average number of shares during the year – Basic*
207,444,702
185,323,320
Weighted average number of shares during the year – Diluted*
207,665,352
185,635,546
Earnings per share attributable to the equity owners of the Group (USD)
Basic
3.51
(0.56)
Diluted
3.50
(0.56)
* The weighted average number of shares excludes treasury shares.
16. EVENTS AFTER THE REPORTING DATE
On 3 June 2024, the Group took title to 1,526,717 lb of U3O8, acquired as part of its 2023 uranium purchase option under its Framework Agreement with Kazatomprom, at a price of
USD65.50/lb for a total consideration of USD100.0 million. Payment occurred following delivery of the U3O8 at Orano’s storage facility in France.
Quantity
Purchase Price
Post year end uranium related transactions
lb
USD ’000
France
1,526,717
100,000
Total
1,526,717
100,000
In the opinion of the Directors, there are no other significant events subsequent to the period end that are deemed necessary to be disclosed in the consolidated financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 March 2024
YELLOW CAKE ANNUAL REPORT 2024 85
YELLOW CAKE AT A GLANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
Head Office
3rd Floor, Gaspé House
66-72 The Esplanade
Jersey, JE1 2LH
Registered Office
3rd Floor, Gaspé House
66-72 The Esplanade
Jersey, JE1 2LH
Company Secretary
3rd Floor, Gaspé House
66-72 The Esplanade
Jersey, JE1 2LH
Nominated Advisor and Joint Broker
Canaccord Genuity Limited
88 Wood Street
London, EC2V 7QR
Joint Broker
Joh. Berenberg, Gossler & Co. KG, London Branch
60 Threadneedle Street
London, EC2R 8HP
Financial Advisor
Bacchus Capital Advisers Limited
6 Adam Street
London, WC2N 6AD
Legal Advisors to the Company as to English and US Law
Linklaters LLP
One Silk Street
London, EC2Y 8HQ
CORPORATE INFORMATION
Jersey Solicitors to the Company
Mourant Ozannes
22 Grenville Street
St Helier
Jersey, JE4 8PX
Auditor to the Company
RSM UK Audit LLP
25 Farringdon Street
London, EC4A 4AB
Registrars
Link Market Services (Jersey) Limited
IFC 5
St Helier
Jersey, JE1 1ST
Principal Bankers
Citibank Europe
1 North Wall Quay
Dublin 1, Ireland
Media Advisors
Sodali & Co
1 Tudor Street
London EC4Y 0AH