Why uranium stocks Basin Energy (ASX:BSN) and Alligator Energy (ASX:AGE) crashed 20% today
Nick Sundich, September 20, 2023
Although uranium has been the best performing commodity in 2023, this has not stopped Basin Energy (ASX:BSN) and Alligator Energy (ASX:AGE) experiencing share price declines on Wednesday.
With uranium getting to levels not seen since the GFC, plenty of companies with mothballed projects are bringing them back online and others are exploring at prospects that appear promising. But exploration does not always pay off and it costs money either way – as shareholders of these companies found out.
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Basin Energy reports drilling results
Basin Energy owns 60% of the Geikie Uranium project in Canada’s Athabasca Basin. It is conducting its maiden drilling program and reported some results to shareholders. The headline intersection was 0.5m at 0.27% uranium – something that obviously did not impress shareholders. Obviously there’s uranium there, but not that much – at least not where the company has been drilling.
Basin Energy told shareholders it would conduct a follow up drill program in the winter season. But the shares initially fell by more than 25% on Wednesday.
Alligator Energy falls too
Alligator’s news was not that bad – in fact, it may show the interest in the sector. The company raised $25.5m in capital to fund development at its Samphire Project in South Australia. The trouble is, it was conducted at a hefty discount to Friday’s closing price … – 23.5%. As a results, the shares took a hit when they started trading again on Wednesday.
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