Categories: Energy
Topics: General Energy

Skyharbour Resources (TSX-V: SYH) CEO Jordan Trimble on Launch of 2,500 Meter Drill Program at the Moore Uranium Project & Increasing Generalist Fund Interest in the Uranium Space

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the President and CEO of Skyharbour Resources (TSX-V: SYH)(OTC: SYHBF), Mr. Jordan Trimble. Jordan, how are you?

Jordan Trimble: I'm doing good. It's good to be back.

Gerardo Del Real: It's game time again. You just announced that the 2,500 meter summer diamond drilling program at the flagship, the high-grade Moore Uranium Project, has commenced. Exciting times. Let's talk a bit about the approach. I know in the past we've used a baseball analogy. You're hoping for singles and doubles on a consistent basis, but man, a home run would not be unwelcome. How are you approaching this program?

Jordan Trimble: Just to recap, the 2,500 meter program just started. 7 to 9 drill holes. There's a couple of targets that we're going to be drill testing here. As you know, when we talk about the baseball analogy, we believe there is a much larger zone of mineralization and deposit at depth in the basement rocks. Those are where the feeder zones are. We've intersected mineralization at our flagship Moore Project at the Maverick Zone as high as 21% U308 over 1.5 meters. We know there's the right geological setting for very high-grade uranium mineralization. We think we're right on the cusp of finding more. There will be a continued focus on the basement rocks and drilling below the unconformity.

Just to go over the few target areas that we're going to be drill testing, we will drill a few holes into the Main and East Maverick Zones. That's really been the focus for us. We want to continue drilling and testing basement-hosted targets. Some recent geophysics and new geological modeling have refined these targets for us. You'll see a few holes drill there. 

And then, about 1.5 kilometers up to the northeast, more exploratory drilling at what's called the Viper Zone, which is interesting because there you have historical drill results that have intersected uranium mineralization. You have all the right pathfinder elements, alteration and structural disruption, but just not a lot of drilling. We're going to go back in there and drill a few holes.

This is relatively new, we really haven't done much work in this target area since acquiring the project a few years back. But west of the Main Maverick Zone, we call it the Maverick West Zone, we're going to be drilling a few drill holes there. What's interesting about the West Maverick Zone is we recently reinterpreted the historical drilling and results and revealed that the intersection of the Athabascan conformity with two rock groups, the Archean and Wollaston groups. There's a contact there that hasn't been adequately tested west of the Main Maverick Zone. This contact is the locus for mineralization along that Main Maverick structural corridor, especially where it coincides with electromagnetic conductors. We went back to the drawing board, and we have a couple drill holes plan for the West Maverick Zone. Given that contact between these two main rock groups, we feel that it's a high-priority target that could yield a new discovery.

An exciting time to get started back up, healthy drill program, get fully funded and permitted. We did just announce a $1 million dollar raise. So we're cashed up with over $2.7 million. I'll note it was one single institutional investor, a generalist fund, which is interesting in itself. So we are seeing, again, institutional money coming into this space. They're taking shots on smaller cap companies, which is good to see. That capital's flowing down into the juniors. I also think it does show there's an interest out there right now, going into the fall, which is seasonally a busier, more active time for the uranium market.

Gerardo Del Real: I assume that generalist fund prefers to not be identified.

Jordan Trimble: Yeah. It's a generalist fund out east. I will just say, as I mentioned, I think that that's noteworthy. They've been building positions in uranium companies over the last little while and obviously believe, as you and I believe, there is a bull market brewing for this commodity. I think we're in the early, early days of it.

Gerardo Del Real: Well, we've seen it in the gold space. We know it'll be a lot more pronounced to the upside in the uranium space because of the lack of names. There's only so many vehicles that you can speculate on that are quality vehicles that can provide you that exposure that is sustainable. 

I have to ask you, you mentioned the generalist fund. It's a single strategic investor that's been building positions in quality names. That has to speak to the macro take that some of the speculative capital is now taking, as it relates to uranium. What are your thoughts, Jordan? You're always really insightful about letting us know what you're seeing, what you're hearing, what it feels like. I described uranium earlier this week on Twitter as a coiled spring. It's a rusty coiled spring, but it's still coiled and it's still a spring. What's your take on the space?

Jordan Trimble: Yeah, that's a great analogy. I'd say the rust is starting to come off though. I think we're now seeing, as I said, truly the early days of this recovery and I think soon to be a major bull market. We've talked at length about the supply and demand. 

There's no secret out there, there's been a major supply disruption over the last several years. It's been accelerated with COVID. The risks of the supply side far outweighs the risk to the demand side from the pandemic. I think that that's an important note going forward. And just even recently, with Kazatomprom announcement, and I'll talk a little bit more about that, but they highlighted that. They said, "Look, production cuts could continue as a result of the pandemic." So it's just something to keep an eye on going forward.

But just getting into the weeds a little bit more on that recent announcement from Kazatomprom, they announced a continued production cut of 20% through 2022. That's over 14 million pounds in 2022 alone. If you factor in the production cuts from this year through 2022, it's going to be over 50 million pounds of uranium that's taken from the market, just from Kazatomprom. So that's significant. The prices are low right now for the commodity, for the metal. They are moving in the right direction. But as we continue to see the price below the average global cost of production, we'll see what happens with the pandemic.

Again, I think there are further risks to the supply side. In this commodity, as we know with Cameco and even more recently Kazatomprom, producers are obligated to deliver material to purchasing managers, to utilities for fuel, for nuclear reactors. They cannot risk not delivering uranium to their clients. As a result of that, any production cuts that we've seen, they have to find that material somewhere. Whether it's from inventory, whether it's from secondary supply sources, or more recently, having to buy in the spot market. 

Again, the supply disruptions lead directly to additional demand in the spot market. We know that there's some major contract deliveries towards the end of the year. We know that there's likely going to be increased activity and buying from these producers going into the end of the year. I think that – much like we saw in April where there was a very active, high volume month for the spot market – I think you could see one a month coming up here where we see, again, similarly high volumes and a significant move up in the price of the commodity.

Gerardo Del Real: Going back to Skyharbour, you also have partner-funded exploration programs at your other projects. Can you speak about that a bit?

Jordan Trimble: Yeah, absolutely. Azincourt at our East Preston Project has a summer/fall program planned that they'll be commencing here shortly. You'll see news flow on that as they earn up to 70% of that project. To complete that earn-in, they have to spend a bit more money in the field, which they'll do this in the next several months and then make a $200,000 cash payment. 

Orano, France's largest nuclear uranium mining and nuclear fuel cycle company, is exploring at our Preston Project. They completed a field program earlier this year. We're just waiting to get the final report back on that, with some guidance on future programs at the Preston Project. 

As we talked about previously, there are negotiations underway on bringing in additional partner companies at some of our other 100%-owned projects in the Athabasca Basin.

Gerardo Del Real: Good spot to be in. Market cap, what's it look like right now, Jordan?

Jordan Trimble: It's trading around $15 million market cap, Canadian dollars. So still relatively low. Again, with all the news flow and catalysts coming up and the impending uranium bull market and the seasonality, I think the value proposition is quite strong. I've continued to buy in the market as you can see with my insiders and will continue to do so.

Gerardo Del Real: Well put as always. Anything else to add, Jordan?

Jordan Trimble: No, I think that covers it all.

Gerardo Del Real: Appreciate your time. Thank you so much for the update.

Jordan Trimble: Thanks, Gerardo.

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