Skyharbour Resources (TSX-V: SYH) CEO Jordan Trimble on Latest Drill Results from the Global Epicenter of Uranium Mining
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president & CEO of Skyharbour Resources — Mr. Jordan Trimble. Jordan, good morning to you. Happy new year! It's been a long year!
Jordan Trimble: It has been and Happy New Year to you as well! And looking forward to the year coming up here.
Gerardo Del Real: You know, it's an interesting time. Obviously, a lot going on in the world. But let's stick to uranium right now.
You had a news release today that was very, very well received by the market. And you know, before I let you go, I have to get your thoughts on the uranium market. We chatted last year and we joked about potentially being right, finally, about the market that we all knew was coming… and I think it's here in the uranium space.
But let's talk about the expansion of the Maverick East zone. We had some additional high-grade hits. We've joked in the past also about swinging for home runs… but singles and doubles and triples add up. And it seems like you're starting to put the singles together, right?
Jordan Trimble: Yeah. And I think the way to look at it is – and we've talked about this extensively – is we've only really recently been targeting these basement hosted targets at the Maverick corridor. And keep in mind, this is a 4.5-km-long corridor main target on the project. It's only been systematically drilled about half of it.
And most of that drilling, historically, has been relatively shallow drilling testing sandstone and unconformity targets. So we've really just started to scratch the surface for the basement potential and potential along strike.
And just even within these first few holes that we're now drilling into the basement rock, we're seeing, notably, very long width mineralization. In fact, these two holes that we have reported here now… there's 17 to 18 meters of continuous uranium mineralization. There's higher grade mineralization that we're finding deeper in the basement rocks.
And no different than many other discoveries – notable discoveries in the Athabasca Basin, in particular basement hosted discoveries – you typically see a progression of results getting better and better.
And, ultimately, as we talked about… you see that home run hit, and I think we're well on our way to doing that. We do have a drill program lined up starting in February; fully funded for that. We're doing a little bit of geophysics here in the next few weeks to further refine these targets. But it's very exciting.
Again, I emphasize the length; these are two of the longest drill intersections that have been found on the project to-date. And so we reported, back in December, 10 meters of 1% that was within a 17.5 meter zone of 0.72%. And then today, about just under 18 meters of 0.28% U3O8. And, again, higher grade mineralization within that zone.
So very exciting. This is all at our Maverick East zone. And so, again, this is on this longer conductive corridor. So we're going to follow up on those results. Like I said, I think there's more to come. There's a number of other targets on that conductive corridor – both sandstone and basement hosted targets – that we're going to be drill-testing.
And worth noting, again — it's a big project. There are a dozen other high priority target areas on this project, all of which historical drilling have discovered zones of uranium mineralization.
And one last note I will make here is some of this deeper drilling that we have been doing, we've been discovering at-depth, even deeper down in the basement rocks — indicator minerals. We announced today some higher grade copper and other indicator minerals at-depth about a hundred meters below the unconformity. So we believe there's a lot more to be found there, and we believe with the upcoming drilling, we will find more high-grade mineralization — both at-depth and along strike.
Gerardo Del Real: How is the continuity holding up within that central portion of the eastern extension of the Maverick East zone? Because I know that's important, right?
Jordan Trimble: Yeah. Look, it's holding up quite well. I mean, we've continued to expand the zones, in particular, to the northeast, right? And the bulk of the conductive corridor is further up to the northeast. Now, what you typically do see are these lenses or pods, right? And so we've discovered several of them along about a kilometer and a half, thus far, at that Maverick corridor.
But, again, we haven't done a lot of drilling into the underlying basement rocks, and that's what's exciting… is looking for larger zones, higher grade zones at-depth in these feeder zones in the basement rock.
So we will continue to drill a little bit deeper looking for that… looking for the source of the high-grade mineralization that's been previously discovered in these lenses at the Maverick corridor. And then, there's lots of room to move up to the northeast as well.
Gerardo Del Real: Excellent! Can we speak a bit about the other projects within the Skyharbour portfolio — the partner funded projects?
Jordan Trimble: Yeah. So we now have three partner companies. We spoke about this in December when we finalized the deal with a new partner company, an ASX-listed company, called Bauer Resources.
They're earning-in up to 80% of our North Falcon Point project, which is actually just southeast of our flagship Moore Lake project. And in order to earn that 80% – it's a three-year earn-in – they have to spend about $3.5 in exploration expenditures over that period of time. There's just under half a million in cash payments that have to be made. And we're being issued over 230 million shares of the company — quite a lot. It works out to about a million to a million and a half dollars worth of stock.
So again, once they start work, which we expect them to commence work in February and March, that'll generate news flow for us. And it adds to the news flow coming in from other partners over on the west side, Azincourt Energy; they've been quite active. Recently, they had a geophysical program that they carried out just before the holidays. They are planning a drill program. They're raising some money right now. That's at our East Preston project.
And then, strategic partner in Orano is working at our Preston project, and they have the option to earn up to 70% there by spending $8 million over a 6-year period.
So if you look at the combined expenditures and project considerations for these three projects, you're just shy of $20 million in combined exploration expenditures, cash payments, and share issuance from these companies. So this is a great, again, great compliment to what we're doing at our flagship project. It's our prospect generator business. And we do have a few other 100%-owned projects that we are looking to joint venture or option out to other companies.
And as you see this uranium market continue to build momentum, you will likely see additional partners coming in. You'll see more money flowing into the sector. And that's very positive for us as a prospect generator with these other secondary projects we have. It's a great way for us to finance the company going forward, as well, without having to go back to the market and raise money for the exploration at our flagship Moore Lake project.
Gerardo Del Real: We've talked in the past that, with uranium bull cycles — it's better to be early than to miss out on that first initial leg up, right? And I think the past several weeks has been just a Master Class on why that is so. Can you speak to the uranium market right now, Jordan, and what you see and what you think and where you think it's headed?
Jordan Trimble: Yeah. I mean, look, it's been a long time coming. We kind of had a chuckle about it before this interview. But look, I believe it is finally here. You're seeing, as we talked about, look, you're seeing a lot of money moving around different asset classes and sectors, and you're finally starting to see some of that come into the uranium sector.
And one key note is that these companies are still relatively cheap, right? Even with the recent move higher, look, you have a limited number of active companies; that will start changing, right? You will start to see new companies coming into the sector… but we were one of the few companies that did stick it out. We'll stand to benefit from that as we see the market continue to strengthen.
But you're seeing more interest in the space. And we talked about this in December. And there's a confluence of factors. I think one of the big catalysts, obviously, is in the States with the election… this push towards this Green New Deal. We talked about that with the SMRs [Small Modular Reactors] being included in that $1.8 trillion climate change budget that Biden is proposing. So nuclear is starting to get more attention. It's starting to get the interest of ESG [Environmental, Social, and Corporate Governance] investors. That's a huge amount of money that can flow into the space.
And as we know, and as I'm sure your audience knows, nuclear is the only source of carbon-free, base load electricity. It's reliable, it's safe, it's cost-effective. Places like China, for example; that's been the real growth story over the last decade. They're talking about going carbon neutral by 2060. They have no other option but to build more nuclear power plants.
The US… talking about going carbon neutral by 2050… that's why they're talking about the rollout of these SMRs. You just saw in the UK late last year; they plan to build sixteen SMRs… an agreement that the government has with Rolls Royce.
So you're starting to see now the demand picture get better and better. But this is all in the backdrop of a very constrained and restricted supply side. And I can't emphasize this enough… this has been a four-year supply side response now that started with a number of major mine shutdowns or production curtailments due to low uranium prices. Even at $30 spot price, that's still well below the average global all-in cost of production. So I do think the next shoe to drop is going to be a very rapidly rising uranium price.
But again, this supply side… it's been exacerbated by the pandemic. We just saw, late last year, Cigar Lake shutting down yet again because of COVID cases. And keep in mind, this is a mine that produces over 10% of global primary mine supply. So when Cigar Lake or a MacArthur (one of these larger operations) shuts down, that has an immediate impact on the market.
And we're having to see producers continue to buy in the spot market to make up for this lost production; this curtailment in production. And again, as I've said before, the risks to the supply side far exceed the risk to the demand side.
And so that's one of the, I think, key points that the market is finally waking up to. And we'll see what happens in the next year with the pandemic but I wouldn't be surprised to see continued supply disruptions. And the bottom line is we just simply don't have new large-scale production and supply coming online in the next several years to meet this growing demand… especially in the backdrop of a world that's trying to decarbonize.
Gerardo Del Real: It's important for everybody listening that feels like they missed out on that first leg up… I think it's so important to emphasize that we are in the early, early stages of what's going to be a multi-year bull market. Would you agree with that, Jordan?
Jordan Trimble: Yeah, and I think the number to look at there is… what is the combined market cap or valuation of publicly traded uranium mining companies globally. And it's still less than 20 billion, right? So it's still very small. There aren't a lot of companies out there. And so a little bit of capital starting to flow into the sector – especially if the ESG crowd continues to get more and more interested; sentiment continues to improve – that 20 billion can move quite quickly, right?
We're seeing the valuations with other mining companies in certain metals just move parabolically higher right now. And as we've seen with uranium, this is one of these sectors, one of these markets, that when it moves — it moves very quickly! And that, as you said… that's why it's very important to be early to it because you can miss it.
Gerardo Del Real: Good stuff! Jordan. Anything else to add?
Jordan Trimble: No, I think that covers it all. I'll note that we do have plans for a drill program, as I mentioned, in February at our flagship project and partner funded programs, as well, coming up. So it will be a busy four to six months for us; fully funded for all of these activities.
We do have cash coming in from our option partners as well. So it's an exciting time. Again, we're seeing the macro backdrop with this metal in this commodity finally provide a tailwind — not a headwind. And it's exciting being in a space that isn't crowded like uranium.
Gerardo Del Real: Good stuff! Thanks again, Jordan.
Jordan Trimble: Thanks a lot!