Japanese nuclear reports fuel Silex

Reports that Japan is about to rekindle its love affair with nuclear power has set Silex Systems aglow, with the stock enjoying its best one-day gain in over a month.

Reports that Japan is about to rekindle its love affair with nuclear power as the three year anniversary of the Fukushima disaster draws near has set Silex Systems (SLX) aglow, with the stock enjoying its best one-day gain in over a month.

Silex, which is developing a more efficient way of enriching uranium using its laser technology, jumped 6.3% to $2.11 ahead of the market close.

The Japanese government is about to release its draft of its Basic Energy Plan and will outline its long-term commitment to nuclear energy, according to news reports.

The Fukushima disaster in March 2011 had triggered a nuclear winter for uranium-related stocks as it triggered a global backlash against the use of the energy source.

This is the primary reason why Silex shares have slumped by 59% over the period as investors began to question if the first commercial uranium plant in the United States using the Silex laser will ever be built.

The start of construction of the plant will be a significant catalyst for the stock as Silex will earn between 7% and 12% in royalty fees in perpetuity from its partner, GLE. GLE is a joint venture between GE, Hitachi and Cameco.

While Silex has other products it is developing, the commercialisation of the enrichment facility is the single most important milestone in the eyes of investors (see Smalls in a sweet spot for more details).

This is why the release of its interim results this morning was an incidental affair. Silex reported a 15.6% decline in operating revenue to $3.9 million as net loss narrowed 8.8% to $7.7 million for the six months to end December.

I doubt anyone was really paying attention though.