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Skyharbour Resources (TSX-V: SYH) CEO Jordan Trimble on Optioning Preston and Upcoming Drilling at Moore Lake

December 16, 2016

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is president and CEO of Skyharbour Resources (TSX-V: SYH)(OTC: SYHBF), Mr. Jordan Trimble. Jordan, good to have you on this afternoon.

Jordan Trimble: Hi Gerardo, thanks for having me.

Gerardo Del Real: I reached out because you had some pretty important news today, so I'm going to read the headline. It reads, "Skyharbour announces binding term sheet to option up to 70% of a portion of the Preston Uranium project for up to eight million in project consideration." Can you share the details and the strategy behind this deal Jordan?

Jordan Trimble: Absolutely. This is a great deal for the company. It's something we've been working on now for several months. Finally come to fruition with this signing of the binding term sheet. Needless to say, there will be a further news release in the new year on the definitive agreement, so more more news to come. This is a big milestone for us and what it really does, Gerardo, is it shows us executing on the prospect generator model, finding strategic partners. The partner company that's going to be spending the $8 million to earn in a 70% stake, their name is not disclosed in this news release. That's forthcoming. I can say it's a strategic partner, a group that we're thrilled to be working with going forward.

Some other notable points in this release too, apart from the $8 million dollar financial commitment, $7.3 million of that in exploration on the project as well as $700,000 in cash payments, they'll earn, the partner company earning in, a 70% interest over a six year period. It's on a portion of the project, as mentioned in the title. This is a big property that we have a 50% stake in with our partner commodity, Clean Commodities. It's a project, actually that we've had in the portfolio for a number of years. It's strategically located near Fission Uranium (TSX: FCU)(OTC: FCUUF), near NexGen Energy (TSX: NXE)(OTC: NXGEF), all of those high grade discoveries being made on the western side of the basin. We are still very strong believers that there's lot more outside potential there. You're going to see continued success in the area. This is one of the largest land holdings in that area.

The option deal is for less than half of the total land package, just over 52,000 hectares of the total 121,000 hectares. They will earn in 70% on that portion. We will maintain our 50% interest on the surrounding claims to maintain exposure to this area. We will obviously retain, assuming they complete the earn in, retain a minority stake in the project going forward and continue to have exposure to any exploration success that they have on the project. This is just the start of a number of news releases that'll be coming out on this project. Obviously one in the new year and then once the work programs, the exploration commences, being funded by that partner company, there will be a pretty steady flow of news on this Preston project in the Patterson Lake area over the coming years. What that will really do for us is compliment our work, our exploration, our drilling on our flagship project on the east side Moore Lake.

It will provide lots of news flow. News flow that we don't have to raise money to go and explore to generate the news flow, being funded by the partner company. It's an exciting announcement for Skyharbour.

Gerardo Del Real: Excellent. I think the news release today is important because this truly is a large, strategic district scale property. You mentioned the real estate, obviously you have a NexGen discover nearby. You have the Fission discovery nearby. It's exciting to get this out. Tell me a little bit about Moore Lake and how things are progressing there because I know that we can expect a busy 2017 as far as drilling there goes, right?

Jordan Trimble: Yeah, absolutely. As you're well aware, the money we raised in the summer, just over C$2.0 million, C$1.0 million of that will be put towards the drill program here starting in January on the flagship project which is now over on the east side of the Athabasca Basin, a project that we are acquiring from Denison Mines who's our largest strategic shareholder. We have everything lined up now. We have the drill contract, a drill contractor lined up, the camp, permits, all of that. It's really just now waiting for the freeze up, right? The good thing with this project, Moore Lake on the east side of the basin, there's lots of infrastructure over there. It's winter road accessible, that cuts your cost significantly. For a C$1.0 million program, we can get a fair bit more drilling in. There will be more news detailing the drill program and the specific targets, but I can say there is the high grade Maverick Zone there which my head geologist Rick Kazmierski and his team at JNR discovered in the early 2000's, some nice high grade uranium mineralization.

We'll be going back in. We'll be testing that high grade mineralization at about 250, 260 meters depth. The exciting thing about this project for us going back in there though, is testing some of the basement rock potential, so we look at these recent discoveries in the Athabasca Basin, you look at NexGen, you look at Hathor you look at Gryphon Zone, at Denison's Wheeler project, these are basement-hosted, high-grade uranium deposits and discoveries. The Moore Lake project and the Maverick Zone in particular, most of the exploration, most of the drilling was focused in and around unconformity style targets. A lot of the high grade mineralization comes up from the feeder zones in the basement rocks, right?

Gerardo De lReal: Right.

Jordan Trimble: It's an exciting project that has had a lot of work, a lot of drilling on it, historically. There is high-grade mineralization on the project. There's numerous other targets that are mineralized as well outside of the Maverick zone, but it still has a lot of up side potential both in the basement rock, as I just talked about, but also a long strike from that high-grade, known high-grade Maverick zone, a long strike on the conductor. We're going to be starting that here January that will provide us news flow through the spring. Again, you'll have news coming out once the drill holes are complete reporting on radioactivity in the drill core and then that will be followed by the final news releases reporting on the geo chemical assays. Lots of news flow, lots of catalysts coming out for the company. This is what we've been waiting for, this big drill program coming up. Big, big pivotal six months coming up for the company here.

Gerardo Del Real: Absolutely, now Jordan, I had the pleasure recently of interviewing Mr. Jim Dines and he actually called a new Uranium bull market and sure enough, about a week later it seems like we've seen some capitulation and it seems like there's some positive news here in regards to the Uranium price and just the direction that that's going. What are your thoughts on that because I know you have your finger on the pulse there.

Jordan Trimble: Yeah, I mean it's, I think the last time that we did an interview it was right at the bottom when stock price clipped $18 a pound. This last month, month and a half, really since the election, as been highly encouraging. I think we've seen a bottom formed. We've certainly seen a trend reversal in the equities and now the spot price. The spot price has ticked nicely in the last few weeks. When I say it’s, it’s ticked up from $18 to $22. It's not like we've seen it move right back up to $40 or $45 a pound. I think there's still a lot of room to move. Yeah, look, we put out an article a couple weeks ago, and I know a few other companies have, talking, discussing the ramifications of Trump getting in. I think it will be quite positive for nuclear. He has a number of close advisors, energy advisors that are well known nuclear proponents. Needless to say, his proposed infrastructure spend would be positive for nuclear and for uranium companies both in Canada and the U.S. We're obviously seeing that in the market.

As I said all along, the uranium market is a market that has been under siege for many years now, really. Obviously Fukushima's exacerbated that, but the fundamentals, the mid- to long-term fundamentals are incredibly strong and bullish for this commodity. You're still trading well below the average global all-in cost of production. There's not a lot of new mines coming online, there just isn't the incentive price to build new mines. There's very few mines right now at this current spot price that can produce economically. Globally, there's really only two places in the world, Kazakhstan, needless to say, not a lot of public companies there and the Athabasca basin with the high grade mineralization and lower costs you have in the basin because of the high grade mineralization.

All of these factors are quite bullish. Like I said in previous interviews, when uranium starts moving, it moves quickly. The spot market is not an overly liquid market. You can see it obviously on the down side as we've see, but just recently to the upside. As we've seen in previous cycles, once the trend starts moving in the right direction, it moves very quick. Utilities companies are not price sensitive. When they come back, there will be this new contracting cycle over the coming years. They will have to go back to the market, start buying. You have the new growth in China, in India, in Russia, in some other developing countries. That's real, new demand coming online. They need supply. You've seen the Chinese invest a lot of money recently in the Athabasca basin in a couple of companies. Clearly they're looking for long term supply. I just think that trend will continue.

Gerardo Del Real: Absolutely. Well Jordan, it should be an exciting 2017 for Skyharbour. I look forward to having you back on as soon as we start getting some of those news releases out. Thank you so much for your time. Anything you'd like to add today?

Jordan Trimble: No, I think that covers it all. We will be in touch and keep an eye on the company.

Gerardo Del Real: Excellent, Jordan Trimble, President and CEO of Skyharbour Resources (TSX-V: SYH)(OTC: SYHBF).

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