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Skyharbour Resources (TSX-V: SYH) CEO Jordan Trimble on Successful Closing of $2.1 Million Private Placement

April 18, 2017

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, how are you?

Jordan Trimble: I'm doing well. Thanks for having me again.

Gerardo Del Real: Well, thanks for coming on. The last time we spoke, you were in the midst of a drill program that has so far been very successful. Just this morning you announced that you closed the non-broker private placement of over $2.1 million dollars with some pretty significant new shareholders. So I wanted to talk a little bit about that. I'm hoping you can fill in the details for me.

Jordan Trimble: Yeah. Absolutely. So we've just closed at $2.1 million Canadian, as you pointed out. It was pretty much, most of it was institutional. Some new funds coming in in the US, Canada, and overseas. So that's exciting. Starting to see a bit more institutional interest in some of these smaller cap names, which is great. That tops up the treasury for us. As in the news release, we now have over $3.7 million, which covers us for an upcoming summer drill program that we're just starting to plan now as well as a winter program early next year, early in 2018 very similar to what we're just finishing currently. This first phase of drilling, as you pointed out, we're just wrapping it up right now, about 15 drill holes. We've reported on the initial five. That was back in late February, early March.

We have another 10 holes that we drilled that we're waiting for final geochemical assays on. Those will be coming in. We'll have news flow on that coming out over the next few weeks. That's at our flagship, the Moore Uranium Project in the Athabasca Basin. So great to see those initial results. We're expecting some more nice results, good results, given the visual indications that we've seen, elevated radioactivity, all the stuff that you want to see when you're drilling for high-grade uranium in the Athabasca Basin. So we'll just wait to get the final geochem back. Lots of news flow forthcoming on that project, both with the last 10 holes, but as well as I mentioned the summer program. Which given the early results and success that we've had with the drilling at Moore, we're keen to get back and continue drilling later this year and planning that program already.

Gerardo Del Real: Well, that's exciting, Jordan, because I know that in addition to that program, you're also going to get plenty news flow from the upcoming exploration programs with your strategic partners, AREVA and Azincourt, at the Preston Uranium Project. Is that correct?

Jordan Trimble: Yeah. That's correct. So the Moore Uranium Project, that's our flagship that we're earning in 100% on, a deal we did with Denison, as you know late last year. So Denison is our largest strategic shareholder. The President and CEO of Denison Mines, Dave Cates, is on our board. They actually participated in this current financing at 50 cents, a $200,000 investment to top up their position to 400,000 units. Very important partnership with Denison and, again, all of the drilling and the money that we're deploying, the capital we're deploying going into the Moore Uranium Project with the high-grade uranium mineralization we've been finding at the Maverick Zone, but we are also going to be testing some of the regional targets as well.

We have the Preston Project, which over the last few months we've announced two separate option agreements on, one with AREVA Resources Canada, a very strategic partner, large company based in France, one of the largest producers of uranium in the world and really an industry leader. They're coming in for part of that Preston Project earning in 70% on a portion of it through $7.3 million dollars in exploration over a number of years, as well as $700,000 in cash payments split between us and our 50/50 partner, Clean Commodities. So they can earn in up to 70% with those expenditures. Again, very important partnership for us at that project.

This is over on the west side of the basin, right? So the Moore Uranium projects over on the east side of the Athabasca Basin where the two operating mines are, McArthur and Cigar. The west side where you have the exciting exploration and discovery stories of NexGen and Fission and some of these other recent discoveries. We have that big property package there. So AREVA coming in with an option to earn up to 70% there, but also Azincourt, we just announced a deal with Azincourt Uranium. On another portion of this Preston property, it's a big property, about 120,000 hectors of ground, so we're partitioning it up with these strategic partners coming in.

Azincourt can earn in 70% as well. $2.5 million dollars in exploration over three years, a million dollars in cash payments and 4.5 million shares, which have been issued to us in Clean Commodities. So exciting times for us. A lot of news flow coming from not just our drill program, but also these other exploration programs that AREVA and Azincourt will be commencing. So we'll benefit from the news flow from those programs happening at the Preston Project. But we also do retain the surrounding claims at the Preston property. We haven't optioned all of it. So we are employing this prospect generator model to bring in strategic partners to fund exploration, get some cash and stock payments to Skyharbour, but we also do maintain ownership on some of the surrounding claims where Azincourt and AREVA will be working over the coming year. So lots of news flow. The company's fully funded for its planned programs over the next 12 to 18 months.

Gerardo Del Real: Well, you're well positioned for the next leg up, Jordan. Can you remind everybody just how tiny the market cap still is? You have $3.7 million in the treasury. You have multiple drill programs being planned here for the summertime, and your market cap stands at?

Jordan Trimble: Yeah. No, it's still about a $20 million dollar market cap, right? I think that in itself is the real opportunity. We've seen how these cycles play out, especially in the uranium space. You look at 2004 to 2007 and, again, 2009 to 2011. When you do get some interest coming back into the sector a little bit of capital goes a long way. Skyharbour, one of the few exploration and early stage development companies that have survived this downturn in the uranium market. We've seen some new life, though, breathe back into it, right? We saw the news out of Kazakhstan earlier this year, 10% production cuts. We've seen some better news out of Japan, right, just recently. A high court there has removed an injunction against the Takahama Reactors.

So we believe we'll see some of those reactors restarting over the next year or two. That's obviously quite positive. So it's exciting. I think we have seen that turnaround, that reversal, in what was one of the worst bear markets I think anyone in the sector in the space has seen. We're looking at a commodity right now, as I've highlighted in the past, that's trading well below its average global all in cost of production. $23 a pound uranium today on the spot market is well below that global average cost of production and well below that incentive price needed to see new mines come online, right? You need a much higher price.

It's exciting given that I think we're at the early days of a bull market. With this commodity there's a lot of upside potential here, and with Skyharbour in particular at a $20 million dollar valuation with the drills turning over the coming years and with the strategic partnerships we formed with industry leaders like AREVA and Denison. There's going to be lots of news flow and I think lots of excitement both from company-specific news but also good macro news flow for uranium and the uranium market over the coming years as well.

Gerardo Del Real: Absolutely. No, I couldn't agree more, Jordan. I think 2017's going to be an exciting year in general. When these markets turn they turn quick. So I encourage everybody to go the website, take a look at Skyharbour Resources. Jordan, I want to thank you for your time.

Jordan Trimble: Thank you very much, Gerardo.

Gerardo Del Real: Talk to you soon.

Jordan Trimble: Take care.

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