Categories: Energy
Topics: General Energy

Skyharbour Resources (TSX-V: SYH) CEO Jordan Trimble Continues to Make Deals, Options East Preston Lake Property to Azincourt Uranium for Cash and Shares

March 29, 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, thank you for joining me once again.

Jordan Trimble: Thanks for having me again.

Gerardo Del Real: Well, we needed to have you back on because you had some exciting news this morning. You have a new partner, you continue to execute on the project generator model. Can you share the details of this morning’s news release?

Jordan Trimble: Yeah. So we announced this morning another deal over at our Preston Project. This is our big land package over by Fission and NexGen on the west side of the basin. Some really exciting new discoveries that have been made over there and significant high grade deposits being delineated. We have a big property package over 120,000 hectares or almost 300,000 acres of land. And as we've been partitioning it off over the last several weeks, most notably, a couple of weeks ago with AREVA coming in to earn-in up to 70% of a portion of the property of that project. And $8 million in project consideration over $7.3 million in exploration and $700,000 in cash payments.

But today, we announced another partner coming in. Azincourt Uranium, run by a real strong management group with many years of experience in the Athabasca Basin. They have another property over on the west side of the basin so they're familiar with this area. But the deal that we've cut with them, they can earn-in 70% on the eastern part of this Preston property by spending $2.5 million in exploration and $1 million in cash over three years and by issuing a total of $4.5 million common shares of the company. Currently it is trading at about CAD $0.23, 0.24.

So the common shares and the cash payments will be split. We're 50/50 partners with another company, Clean Commodities, so that is split between us two partners. And then the exploration, the CAD $2.5 million in exploration will be carried out over the coming years.

So this gets back to this prospect generator model that we employ. It complements the drilling and the exploration that we're doing over at our flagship, the Moore uranium project, on the east side of the basin. It is a great way for us really to both monetize but continue advancing these secondary projects in our portfolio that we've accumulated over the last three and half, four years.

And it makes sure that companies, strategic partners like Azincourt, like AREVA are coming in, spending the money to advance these properties, exploring them, drilling them, taking them to that next stage. It is important to note that we would maintain a minority interest in these properties going forward, assuming that these companies do complete their earn-ins.

So any discoveries that are made, any success that they have in the field, obviously benefits us and our shareholders with that minority interest. The interesting thing with this specific deal with Azincourt is that large shareholding that we will have in the company going forward. So we'll also benefit from that as well. So you have the minority interests of your team but you also have your exposure through your shareholding that we'll have in the company.

So exciting deal. Yet another good example of us executing on this prospect generator model. We're looking to forge additional strategic partnerships, bring in more partners on some of the properties. We do have 100% of Falcon Point, Yurchison, and Mann Lake. These are all over on the east side of the Athabasca Basin, large property package between the three of them. So more deals will be forthcoming later this year and next year as we continue to execute on that model.

Gerardo Del Real: Yeah I know, it is exciting stuff, Jordan, and you've executed brilliantly. I mean, just to provide a bit of context, the agreement now with the partnership with AREVA and the partnership now with Azincourt. It is nearly $10 million in total exploration expenditures spread out over six years as well as the $1.7 million in total cash payments and then 4.5 million shares of Azincourt, which, of course, is split between Skyharbour and Clean Commodities. And you retain the 30% minority interest, so that's impressive. I'm obviously looking forward to results from the flagship. How are things coming along there?

Jordan Trimble: Yeah things are going on very well over at the Moore Uranium project. We announced just last week that we were bumping up the drill program by another 1,000 meters to 5,500 meters total, so that is underway right now. Obviously, a few weeks back, we had our first five holes. The results of those holes announced and some very, very high grade mineralization at 21% U308 over a meter and a half at relatively shallow depths of about 260, 265 meters. Those are the first five holes of what will likely be 15 or 16 drill holes on that first phase of drilling currently underway.

We're already in the midst of planning a summer program. So this initial winter phase one program will segue into a summer program and then we will also look into continue drilling there next winter, a year from now, as we get back to the project when it is frozen again.

So it has gone very well. Visually, we're very, very happy with what we're seeing. This drill program certainly exceeded our expectations and we really do believe that there is still a lot of upside exploration potential at this project yet to be unlocked and discovered through the drill bit.

We're keen to expedite the program that we had planned out over the next four or five years with asserting into the project. We'll likely have that complete in the next year to two years. So excellent early results from the program and from a few weeks ago. We're continuing to see encouraging visuals with the drilling. Obviously waiting for the final results, the geochem to come back but we will have news flow on those results in the coming weeks as well and start planning for our summer program.

So it is a project that we really feel is a company maker. We did the deal with Denison last August. It is a project, as I mentioned before, that we've had our sights on for a while and finally got a deal done to bring it into our portfolio. The history there being with my head geologist, Radioactive Rick, as we call him, having explored that project back in the early 2000's. And we've gone back in with a little more of a systematic approach to the drilling. We did a full re-analysis of the previous drilling in the core that was pulled up in the early, mid 2000's. And the models changed a little bit too, right. We're drilling along strike from that mean Maverick high-grade zone. We've hit in a few step out holes. We're continuing to expand the known high-grade zone at the main Maverick zone or lens as we call it.

But also we're looking a bit deeper into the basement rock and I've talked about this point before. A lot of the historical drilling was focused in and around the unconformity about 250, 260 meters vertical depth. But looking even a little bit deeper you're getting into the basement rock, a lot of the recent high-grade discoveries that have been made in the Athabasca Basin and the NexGen's of the world and the Griffin Zone over at the Wheeler project for Denison. These are all basement hosted. So, there is a lot of upside potential left on this project and we're looking to tap into it with the drilling going forward.

Gerardo Del Real: That's exciting Jordan. I want to touch on one more point, pivoting back to Preston. Because you're still retaining, outside of the agreement, that you have with AREVA and with Azincourt, you are retaining about 46,000 hectares of mineral tenure is that correct?

Jordan Trimble: Yeah so that is a great point to bring up. But as you mentioned, combined now between the AREVA and Azincourt deals, as you pointed out, up to $10 million in exploration planned over the next six years between those two option agreements. $1.7 million in cash payments and 4.5 million shares of Azincourt to be issued, again split between Skyharbour and Clean Commodities. But that is a significant exploration program over the coming years with two strategic partners. AREVA being an industry leader, one of the largest producers of uranium in the world, and Azincourt led by a management team that knows the basin quite, quite well.

So it is exciting. It brings a new look to the property as well. We did some work back there in 2013, 2014, and early 2015 with partner companies. But this really brings some new blood, if you will, to that project to go in there with a new look. Like I said, if they go in and they find anything, it is great news for us and for our shareholders. And, as you just pointed out, this deal with Azincourt, so Azincourt can earn up to 70% of East Preston, that's the eastern block of the entire Preston Project, it is just over 25,000 hectares. Whereas the AREVA deal, AREVA can earn up to 70% on about a 50,000 hectare portion, that's the central portion of the broader Preston Project. Well the whole project, as I said, is over 120,000 hectares so we still retain just over 45,000 hectares of the property to the south and to the west end.

It is important to note too, that any discoveries, any success that AREVA and Azincourt have should value add those claims as well. So it is not just about the minority interest, the shareholding that we in Azincourt, it is also the surrounding claims with any success at those specific blocks where AREVA and Azincourt are earning in, the surrounding claims will see their value increase as well.

So it is a great deal. As I said, with Skyharbour, there is the two pronged approach. You have a discovery driven exploration company that is focused on making the next big high-grade discovery in the basin, and delineating a resource. We feel we have the best opportunity to do that at our flagship, Moore Lake. But also we have the secondary strategy of the prospect generator. This is what we're doing over here at the Preston Project and we'll look to bring in additional strategic partners on some of the other properties later this year and next year.

So between the drilling and the exploration at Moore, and the strategic partnerships, the prospect generator model coming to fruition as we've seen with these two recent deals and additional deals being announced going forward, there's lots of news flow. You also will see news flow from the programs that Azincourt and AREVA will be carrying out later this year and next year as well.

So you have multiple irons in the fire. Lots of company specific news to come out. And the uranium market that we've seen poke its head up but I think there is still a lot of upside to be had with the macro picture with uranium over the coming years.

Gerardo Del Real: Excellent. And can you remind everybody the market cap of Skyharbour because it is tiny relative to the potential catalyst and the news flow that we're going to see this year.

Jordan Trimble: Yeah absolutely. So we're trading right now at about an $18, 19 million U.S. market cap, about CAD $25, 26 million. So it is still relatively small cap. Like I said earlier, we still see a lot of upside from here and we're hoping to unlock that value again through the drilling at Moore and through the strategic partnerships of some of our other projects.

Gerardo Del Real: Excellent. Jordan, I want to thank you for your time and hopefully we have you back on soon as you start getting assays back right?

Jordan Trimble: Yeah absolutely. We should have more news flow over the coming weeks.

Gerardo Del Real: Fantastic. Thanks again for your time. Jordan Trimble, for Skyharbour Resources.

Jordan Trimble: Thanks a lot. 

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