Skyharbour Resources (TSX-V: SYH)(OTC: SYHBF) CEO Jordan Trimble on Uranium Market & Rollout of 2021 Exploration/Drilling Program at Flagship Moore Uranium Project in Canada’s Prolific Athabasca Basin
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, how are you?
Jordan: I'm doing great! Thanks for having me.
Gerardo Del Real: Thanks for coming back on. It seems like the sentiment in the uranium space has clearly changed even since the last time you and I spoke publicly. And that was just a little less than a month ago.
You and I spoke about near-term and mid-term catalyst in the uranium space, and there were several that you outlined. And the biggest that we've talked about in the past and highlighted, of course, was the utilities having to step back into the market; them being the largest buyers, right?
But we're seeing a new trend recently where companies are starting to take it upon themselves to take advantage of these cheap spot prices and start stacking an inventory of pounds of physical inventory. Can you speak to that a bit?
And then I want to talk about the exciting news, of course, with exploration commencing at the high-grade Moore Uranium Project and exploration at a few other partner-funded projects. A lot going on, obviously!
Jordan: Yeah, sure. I think we did speak briefly about this in the last interview. But we were hearing over the last few months with this new capital flowing into the sector that various groups out there were looking to deploy that capital directly and buy material in the spot market or from existing inventories.
And now, here we are a few weeks later, and we've had a couple of notable announcements. One from our largest strategic and corporate shareholder, Denison Mines; a $75 million financing to buy a few million pounds in the spot market. Shortly thereafter, UEC announcing just over a $30 million financing to buy 1.2 million pounds.
And this was all on the back of – just a few weeks back or about a month ago – when Yellow Cake announced a big $140 million financing to buy approximately 4 million pounds in the short-term and continue buying as per their contract with Kazatomprom.
So I don't think a lot of people were expecting this. But again, in the last few months here, with the influx of capital — I think it's a great thing for these companies to be doing. One, I think it's going to look really good on their balance sheets going forward as we see this rebalancing take place in the market and price discovery with the commodity price. We've seen, just in the last 24 hours here, a $2 move higher on the spot market — back up around $30 a pound. I think you'll see that trend continue.
But it also gives them flexibility with their negotiations on contracts. And so these near-term producers – like Denison, UEC – they're able now to go in with more leverage, with more firepower, on negotiating these longer-term contracts at the terms and prices that they want.
So it's, I think, a great thing for the space. I expect you will see more of it. I expect you will see not just the mining companies, as we've seen more recently, but the physical holding companies – like UEC, Yellow Cake and likely others that will pop up – continue to purchase material around these prices.
Again, this is $30 a pound… still well below the average all-in cost of production. So these companies know that they're getting a good deal on it. And again, this is just going to continue to put pressure onto these utility companies to move. Eventually, the market is going to tighten up so much that there isn't going to be available material. They're going to have to contract; they're going to have to be price takers.
And again, it's a very crafty move on behalf of the mining companies. And it will be positive for the sector. You'll see the price move as a result, and you'll see the equity valuations rise as well. So it's exciting news. And again, just yet another positive development in this space.
Gerardo Del Real: Perfect time for Skyharbour to mobilize the team for the upcoming drill program at your high-grade Moore Uranium Project. Can you speak to the targets and the goals there?
Jordan: Yeah, so we announced a 3,000 meter upcoming drill program at our flagship Moore project. We were also going to carry out some geophysical work in the coming weeks to refine regional targets in particular. One target is called Grid 19. It's about 8 or 9 kilometers to the northeast of the Maverick corridor.
What's interesting about it is it's on the outskirts of a big intrusive complex called the Moore Lake Complex. It's been very poorly tested previously; not a lot of drilling and exploratory work that's been carried out around this big intrusive body. But it's something very much of interest to us.
And there's a lot happening with the geology there; not yet well understood but likely will provide the environment for uranium deposition and could make discoveries of other metals as well. Typically, you'll see nickel and cobalt and even some copper in that. But again, something that hasn't been systematically explored for many years and a lot of work that can be done there. So we'll carry out a little bit of drilling at that target once the geophysics is done.
But the main focus, again, will be at the Maverick corridors. We've talked at length in the past; this 4.7-km-long uriniferous corridor that has various high-grade zones right at the unconformity and in the sandstone that we've continued to expand.
But more recently, we've been looking deeper into the basement rocks between 300 to 500 meters depth, looking for these feeder zones that can host higher grade, bigger deposits. The last program – where we announced our results in December and January – having intersected the longest continuous zones of uranium mineralization at almost 18 meters of 0.72 percent. Some higher grade hits within that; again, basement hosted, and, again — we think we've just scratched the surface there.
So the bulk of the 3,000 meters will be follow-up drilling on those zones from that last program, and we'll continue to test this corridor at-depth in a couple of other targets along strike as well. So again, offering that high-grade Athabasca Basin discovery potential and continuing to expand the known zones there.
And all of this will be working towards a maiden resource estimate towards the end of the year. We do have plans to carry out several drill programs this year starting with this one coming up.
Gerardo Del Real: A lot going on there. You're also seeing exploration at East Preston and the Hook Lake Project, which was previously called the North Falcon Point Project. Can you speak to that a bit, Jordan?
Jordan: Yeah, so Azincourt has been busy with a 2,000 meter program that's currently underway. Excited about this program; they've got some excellent targets that they're going to be testing. And I know they have plans to continue working there through the year. So early days in the program. I'm sure we'll have updates as the program progresses. And we'll look forward to future exploration at the project; joint venture project now with a partner.
And our other partner, Valor; they're getting to work at the Hook Lake project. We spoke a little bit about this in previous interviews. But a multi-phased program starting with some geophysics which will commence shortly, and then a summer field program. And, ultimately, they’ll be looking to drill it later this year.
And what's exciting about this project in particular is the Hook Lake target; the project being renamed specifically for that. And this is a very high priority target. There's a high-grade, up to 68%, U3O8 surface showing a massive pitch blend vein outcropping; a bit of an enigma; the source of that mineralization is yet to be discovered. That's why they’re going in with some modern geophysics; give us a better idea of what’s at-depth and deeper structures that could be the potential source for this mineralization.
So a lot of work that'll be done here at the project in the next few years in particular with the three upcoming programs that they have planned this year. And again, lots of news flow that will be generated from that.
Gerardo Del Real: The market has been kind to Skyharbour. There is a lot of runway. Anyone that has seen a uranium bull market knows we are in the early stages. And I encourage everybody to do their due diligence. And if you haven't already made a list of your favorite uranium names — I urge you to do so now.
Jordan, anything else to add to that?
Jordan: No, I mean just as a segue from that, I think that's a good point… there is still a lot of runway. These are still relatively undervalued companies. There's not a lot of them. It's a very small sector. It's contracted significantly over the last decade or so. You haven't seen dozens of new uranium companies pop up yet. That will come; we will see that at some point.
It's still early days. And we're still trading around a C$35-C$36 million market cap with one of the largest land packages in the basin; two deposits; active exploration at several projects.
The value proposition is still very strong. As I've talked about in the past, I continue to buy shares in the market. Again, I see a lot of runway from here. And the timing is great with the uranium market starting to move and the positive sentiment that we've seen build in the space. And again, I just think that's going to continue.
Typically, when we see these uranium bull markets, they can last for several years. And certainly in the latter part of the cycle, or in a bull market, you see these enormous gains and returns generated. And again, I think we're still early days.
Gerardo Del Real: Agreed. Jordan thanks for your time as always, and thanks for the overview that you always provide. It's appreciated!
Jordan: Absolutely, my pleasure, Gerardo!
Gerardo Del Real: Thanks again.
Jordan: Take care.