Yellowcake plc

November 13, 2008 04:00 ET

Update on Investment Portfolio and Loans to Uranium Prospects Plc

                                            YELLOWCAKE PLC
                                    ("Yellowcake" or "the Company")
                   Update on Investment Portfolio and Loans to Uranium Prospects Plc

In 2005 when Yellowcake floated on Plus Markets, the Company's stated aim was to invest, directly or
indirectly, in uranium mining projects. In early 2007, the CEO of the Company identified a project in
which Yellowcake could participate.  Through major Canadian operators CanAlaska Uranium Limited
("CanAlaska") (traded on TSX.V- CVV and the OTCBB-CVVUF) the Company entered into an option agreement
whereby it could earn a 60% stake in The Grease River Project covering the exploration of 170,000
acres of land in the northern rim of Canada's important Athabasca Basin. Under the option agreement,
Yellowcake was obliged to provide Cdn $5,000,000 of exploration funding to the operators at staged
periods over a five year period. CanAlaska retained a 40% stake in the project.

In August 2007 Yellowcake transferred rights over 51% of The Grease River Project to a newly formed
company, Uranium Prospects Plc ("Uranium Prospects"), in which the Company was a founding shareholder,
whilst retaining a 9% interest on a 'carried' basis in The Grease River Project. Mark Watson-Mitchell,
a 4.43% shareholder and Director of Yellowcake, is also a 4.13% shareholder and Director of Uranium
Prospects. By transferring these rights, Yellowcake also transferred the exploration funding
commitment from itself to Uranium Prospects. Uranium Prospects, which is an associated company of
Yellowcake, met its requirements for funding the 2007 exploration programme, amounting to
Cdn$1,017,600 in full.

Later in 2007 Yellowcake assumed a role of identifying further projects for Uranium Prospects, on a
fee basis. The introduction of very early stage interests in Sweden to Uranium Prospects earned the
Company a fee of £20,000.

In October 2007, to assist Uranium Prospects in funding The Grease River Project development costs for
2008, Yellowcake advanced Uranium Prospects the sum of £65,000, adding a further £10,000 in late
November 2007. In early December 2007 Uranium Prospects repaid £45,000 to the Company. At the end of
2007 the Uranium Prospects debt to Yellowcake stood at £50,731 including £731 of interest due and the
fee of £20,000 mentioned previously.

In March 2008, Yellowcake and Uranium Projects received highly encouraging assay results from
CanAlaska for the 2007 programme at The Grease River Project, showing identification of surface
samples ranging from 0.10% to 3.53% uranium oxide, with some interesting shows of rare earths.
Subsequently the exploration areas had been increased to cover some 250,000 acres of land. On
receiving this report, Uranium Prospects started to seek investor funding to finance its commitment
for the 2008 exploration programme at The Grease River Project.

In May 2008, Yellowcake advanced a further £19,000 to Uranium Prospects enabling them to meet its Cdn
$75,000 yearly (the annual fee payable under the option agreement) contribution to CanAlaska (which
was not part of the exploration funding). However, by late July 2008 it was becoming evident that
equity markets generally were weakening, as too was potential investor appetite.

In August 2008, Yellowcake and Uranium Prospects arranged with CanAlaska that due commitments under
the options covering The Grease River Project would be stretched.  CanAlaska was prepared to accept
lower immediate contributions against the outstanding commitment, thereby enabling Uranium Prospects
and Yellowcake to retain their 51% and 9% option positions. In the meantime, Uranium Prospects
continued to search for investment support with various funding alternatives under active discussion,
including interest from other operators in Canada.

At that stage, all the Directors of Yellowcake considered that the Company's interest in The Grease
River Project was potentially the most exciting long term participation for the Company, especially as
equity markets worldwide were falling.

In late August 2008, principally because the uranium spot price was falling globally, Yellowcake
decided to realise the bulk of its uranium equity portfolio constituents, representing 58% of its
market value at that time. The disposals realised a total of £199,952 for the Company. In early
September 2008, Yellowcake advanced a further £160,000 on a short term loan basis to Uranium
Prospects. This enabled Uranium Prospects to meet the reduced commitment requirement to CanAlaska,
whilst it was still engaged upon its search for investor funding.

At the end of October 2008, the overall figure advanced by Yellowcake to Uranium Prospects totalled
£231,500 (including the outstanding sum of £20,000 on the Swedish introduction) together with interest

The Directors' ongoing commitment to Uranium Prospects reflects their belief in The Grease River
Project. Moreover, by assisting Uranium Prospects, the Directors of Yellowcake unanimously considered
that the Company was helping to protect its own 12.52% equity shareholding in Uranium Prospects, as
well the important 9% stake in The Grease River Project. Following the disposals referred to above,
the balance of the Yellowcake portfolio is now reduced to just 4 stocks, including the Uranium
Prospects stake. As at 11th November 2008, the value of that reduced portfolio was £71,485. In
addition the Company has cash at bank of £25,116.

On 31st October 2008, Yellowcake formalised the total £231,500 owed to it by Uranium Prospects by way
of a documented loan agreement. The loan carries a 9% coupon and provides that the sum is to be repaid
to Yellowcake if Uranium Prospects is in adequate funds covering six months of operational and
exploration financial commitments, not earlier than 31st December 2008 and no later than 31st December

Furthermore on 31st October 2008, Addworth Plc which is the major shareholder in Yellowcake, holding
17,319,225 shares representing 29.48% of its equity, also consolidated loans to Uranium Prospects
totalling £59,300 by way of a loan on identical terms as above. Mark Watson- Mitchell is a Director of
Addworth Plc and owns 19.5% of that company's equity.

The Directors of Yellowcake, having been advised by Uranium Prospects that investor discussions are
ongoing, remain totally committed to the Company's participation in The Grease River Project and
Yellowcake will keep shareholders fully informed of any further developments.

The Directors of the Issuer accept responsibility for this announcement and for the delay in the
release in this information.

For more information please contact:

Yellowcake Plc
Mark Watson-Mitchell, Chairman             Tel: 020 7638 8750

St Helen's Capital Plc
Duncan Vasey/Barry Hocken                  Tel:  020 7628 5582

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