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RPT-UPDATE 1-Cameco closes at six-month low on Japan crisis
March 17, 2011 / 10:09 PM / 7 years ago

RPT-UPDATE 1-Cameco closes at six-month low on Japan crisis

(Repeats to widen distribution)

* Uranium miner closes down 5.78 pct at C$27.73

* Shares down more than 23 percent since Friday

* Uranium One shares close down at C$3.46

By Julie Gordon

TORONTO, March 17 (Reuters) - Shares of uranium producer Cameco (CCO.TO) closed at a six-month low on Thursday due to rising concerns over an earthquake-shattered nuclear power plant in northeastern Japan, and as governments from Australia to the United States advised citizens to leave the region.

Cameco’s stock has plunged by more than 23 percent since last Friday, falling almost 6 percent on Thursday, as concern mounted over the long-term outlook for nuclear reactors and the uranium that fuels them.

“No one wants to own that kind of stock today,” said Baskin Financial Services portfolio manager Barry Schwartz. He added: “We think two years from now, a year from now, it will be a great buy.”

Schwartz’s firm has owned Cameco shares for years and he said they have no intention of selling.

But other investors were less convinced. Shares of Cameco, the world’s No. 2 uranium producer, closed down 5.78 percent at C$27.73 on the Toronto Stock Exchange.

Uranium One UUU.TO, which has fallen more than 43 percent since Friday, closed down 1.7 percent at C$3.46, while Paladin Energy (PDN.AX)PDN.TO ended up 1.54 percent at C$3.29.

In Sydney, shares of Rio Tinto-owned Energy Resources of Australia (ERA.AX) closed down at A$7.80.

The uranium sector has come under increased pressure as Japan fought to contain the crisis at the crippled Fukushima nuclear power plant and as several countries advised their citizens to leave the region.

Australia urged citizens with nonessential roles in Japan to consider leaving Tokyo and the eight prefectures most damaged by the earthquake.

Meanwhile, the United States chartered aircraft to help Americans leave Japan and approved the voluntary departure of about 600 family members of diplomatic staff.

NUCLEAR QUESTIONED

Cameco has plans to double its uranium output by 2018 to meet the growing demand for the nuclear fuel from countries including China, India and Korea.

But China called into question its ambitious nuclear plans on Wednesday, with the government freezing approvals on all new reactors. The Asian nation has some 27 reactors under construction and 50 in the planning stage, according to the World Nuclear Association.

Japanese engineers were scrambling on Thursday to restore a power cable to the crippled Fukushima plant in the hope of restarting pumps desperately needed to pour cold water on overheating fuel rods.

However, despite fears of a nuclear catastrophe, analysts were quick to point out that once the immediate crisis is over, the uranium markets will recover.

“With the confusion and uncertainty in the market relating to uranium equities, we recommend investors focus on well-financed producers with high quality assets and the ability to weather depressed uranium prices,” RBC Capital Markets mining analyst Adam Schatzker said in a note.

He named Cameco, Uranium One and Paladin as good bets for longer-term recovery.

$1=$0.99 Canadian Additional reporting by Claire Sibonney; editing by Rob Wilson

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