First Uranium Corporation (TSE:FIU) (PINK:FURAF) and Denison Mines Corp. (TSE:DML) (AMEX:DNN) are two examples of the abundant panic selling surrounding the uranium producers.FIU (down 15.6% on Monday) lost another 12% as the market opened today. DML, which tanked more than 22.2% yesterday, continued to collapse with another 9% lost upon opening today. The drop rates among non-Canadian producers were on the same scale. Trading was rather quiet on Monday with no intraday declines, thus it was mostly the overnight selling that got the prices upset.
Monday’s and Tuesday’s announcements of more explosions in the reactors of the Fukushima Daiichi power plant in Japan triggered further selling of uranium mining stocks.
The inside situation at these companies hasn’t changed, thus it can provide a favorable entry point once the situation settles down. However, speculations are ongoing about the possible changes on nuclear power plant safety regulations and might trigger further panic waves.
Possible damage from radiation leaks is one of the main drawbacks of the nuclear power plants in case of emergency. However, prevention mechanisms in place failed on one of the largest earthquakes in modern history, and that doesn’t come so often. It won’t cause international power plant shutdown, but may cause a call for more reliable failsafe installations and possibly temporary reductions on power output.
The recent news on radioactive dangers at Fukushima were somewhat calming. Radiation levels have already dropped to 0.6 millisieverts (mSv) per hour, from the initially observed 400. For comparison, a person’s natural exposure to radiation reaches around 2.4 mSv per year.
