Uranium Royalty Corp. holds a strategic investment in 9.9% of the initial public offering of Yellow Cake plc ("Yellow Cake"), representing approximately 8.6% of Yellow Cake's reported issued and outstanding ordinary shares as at September 30, 2019. This is a key strategic asset for the Company, as it also provides exposure to Yellow Cake’s physical uranium , provides the Company with the option to acquire physical uranium and provides for future cooperation and collaboration in relation to acquisitions of physical uranium, royalties, streams and similar interests. Yellow Cake is a specialist company operating in the uranium sector, created to purchase and hold U308 with the stated objectives of offering its shareholders exposure to the price of U308 through the purchase and storage of physical uranium and exploiting a range of expected opportunities connected with owning U308, and uranium-based financing initiatives, such as commodity streaming and royalties.

The Company’s investment in Yellow Cake provides for a long-term strategic relationship between the Company and Yellow Cake, including, among other things:

  • Option to Purchase U308: Yellow Cake granted the Company an option to acquire between US$2.5 million and US$10 million of U308 per year between January 1, 2019 and January 1, 2028, up to a maximum aggregate amount of US$31.25 million worth of U308.
  • Future Royalty and Streaming Opportunities: Yellow Cake has agreed to inform the Company of any opportunities for royalties, streams or similar interests identified by Yellow Cake with respect to uranium and the Company has an irrevocable option to elect to acquire up to 50% of any such opportunity alongside Yellow Cake, in which case the parties shall work together in good faith to pursue any such opportunities jointly.
  • Physical Uranium Opportunities: The Company has agreed to inform Yellow Cake of potential opportunities that it identifies in relation to the purchase and taking delivery of physical U308 by the Company. If such opportunities are identified, the parties will work together in good faith to negotiate, finalize and agree upon the terms of a strategic framework that is mutually agreeable from a commercial standpoint for both parties (including as to form and consideration) and a potential participation by Yellow Cake with the Company in such opportunities.

The Company and Yellow Cake have also agreed to, so far as it is commercially reasonable to do so, cooperate to identify potential opportunities to work together on other uranium related joint participation endeavors.