Categories: Energy
Topics: General Energy

Skyharbour Resources (TSX-V: SYH) CEO Jordan Trimble on Summer Drill Program at Moore Uranium Project and Macro-level Insight into the Uranium Market

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.

Gerardo Del Real: I know you've been doing a lot of traveling behind the scenes. I know it appears to be a slow summer in the uranium space, but you've been busy.

Jordan Trimble: Yeah, we have. I've been on the road a little bit here over the last few weeks. I was out in Europe at a conference and visiting our partners in Paris at AREVA there. I'm going to be in New York and Toronto next week, and then off to Saskatchewan to finalize the upcoming drill program, this summer drill program, 2,500 meters that we have planned. So just going through the final drill target selection and then we'll get the drills turning in August.

Gerardo Del Real: Excellent. Now, simultaneous to that, you're also carrying out a pretty comprehensive data compilation program at Moore. Can we talk a bit about that and just the details behind that, Jordan?

Jordan Trimble: Yeah, sure. We thought it was important to mention this in the news release this morning. What we've done and what we are doing at Moore is going through all the historical work, all of the exploration, all the geological information that's been aggregated over a number of decades on the project. It's important to note that the project's had a fairly robust history of exploration dating back to the '80s and early '90s. There's been a lot of work done on the project. What we're doing is basically compiling all of that into a modern, user-friendly database that we can then go into and really kind of streamline the analysis, the target evaluation.

We did this in the first drill program when we took the project back on a year ago, having done the option agreement with Denison, who's our largest shareholder as you know. We went back in and we looked at some of the historical work in drilling, and in particular, the geochemical signatures in the previous drill holes. That's actually what lead to that new discovery zone, the East Maverick, where we drilled a meter-and-a-half of just over 9% U308 on strike from the main Maverick zone. As you recall, we've had some very high-grade results from that main area, 6% over 6 meters, and within that, 21% U308 over a meter-and-a-half.

But we're finding these additional high-grade lenses along strike. It's a big, long 4-kilometer corridor. Really, only a kilometer-and-a-half of it has been systematically drill tested so there's lots of additional exploration upside, discovery potential at this main corridor not just along strike, but also in the basement rock. We are now going and formalizing this process, if you will, putting everything together. There's a lot of data. There's a lot of information and we feel that employing some new, innovative techniques and analysis to this data and the historical exploration work that's been done, it'll help us find more or additional high-grade uranium, both on that main Maverick corridor but also elsewhere on the project.

There's a dozen other regional targets on this project that have mineralization that have had some previous drilling but not a lot of follow-up work. It's a very exciting program that we have coming up, the 2,500 meter program commencing in August, because not only are we going to continue to test and drill out this Maverick zone and that main Maverick corridor but we're also going to test some of these regional targets while we have the air support this summer. In the winter, that main Maverick corridor, most of it's road accessible, brings your costs way down. So getting into next winter's drill program, we'll likely focus almost all of the drilling at that main Maverick corridor but this summer, we feel that it's wise to go and test some of these other regional targets in addition to that main Maverick area.

Gerardo Del Real: Excellent. I'm assuming that you're fully permitted and funded for the program?

Jordan Trimble: We are, yeah. We have all the permits we need and we, as you know, raised money a couple months back at $0.60, it was a float-through financing, to fund this exploration. No warrant, mostly institutional money that came in. And that covers us for not just this summer drill program commencing in August but also for next winter, next winter's drill program commencing in December or January, so fully funded for the next two drill programs. We'll likely do as you see here, 2,500 meters in this summer program followed by a next winter program, probably to the tune of 5,000 to 5,500 meters. So fully funded, have all the permits, ready to go.

Gerardo Del Real: Excellent. Now, you are a project generator and you've done a fantastic job, frankly, of joint-venturing out projects to very, very deep pocketed partners that are looking to advance those projects. How is partner funded exploration coming along, Jordan?

Jordan Trimble: Yeah, so just to rehash the recent deals that we did, one with the industry leader AREVA and then right after that, we announced a deal with Azincourt, a combined expenditure of $9.8 million over the next 6 years, $1.7 million in cash payments and some shares of Azincourt. Now, this is over on the west side of the basin at our Preston Project near NexGen and Fission. Both of those companies will be starting their exploration programs in the next few months. We'll likely be carrying out some groundwork, geophysics, which will lead into drill programs later this year or early next year. So this is an important part of our story, right?

We do offer that high-grade discovery potential at our flagship project, the Moore Project on the east side of the basin, but we also, as a secondary strategy, employ this prospect generator model. These two strategic partners that have come in are perfect examples of that, over on the west side at our Preston Project. We are looking and talking with other companies right now on Falcon Point and Mann Lake, and we are looking to bring in partners on those projects as well to help advance those projects while we focus all of our time, effort, and money at Moore. This also helps bring in, as I mentioned, some cash payments and stock as well that we can then help use to basically subsidize the exploration, the drilling that we're carrying out at Moore without having to continuously raise capital and dilute the shareholders.

Gerardo Del Real: Excellent, excellent. Well, Jordan, I hope to have you on as you launch that drill program. I look forward to speaking with you again. Is there anything else that you'd like to add today?

Jordan Trimble: Yeah, just one other thing on more of a macro level. We've seen a bit of a slower summer here with the mining companies and the commodity space in general but some important news, in particular, out of the U.S. in the last month here. Secretary of Energy Rick Perry announcing that nuclear was going to be an important part of the energy mix going forward, really kind of reinvigorating the space, if you will, in the industry down there. I think that's important from an American standpoint. There's been cost overruns and quite frankly, too much regulatory burden on the industry and that could very well change under the Trump administration with Rick Perry, who does have a pro-nuclear agenda, over the coming years. That's quite exciting.

And then over in Asia, Kazakhstan, as we know, the world's largest producer, that was really the driver earlier this year for higher prices and higher equity valuations early on in the year with that initial 10% production cut. But we're still trading at $21, just under $21 a pound. Not one mine in the world that's profitable at that price, so we're still well below the average all in cost of production in the low $40s. Again, something has to give here and there's a lot of speculation right now, you might see additional production cuts out of Kazakhstan. Interestingly, KazAtomProm, which is the uranium and nuclear state-run enterprise in Kazakhstan, is planning an IPO in 2018. They're certainly not going to want to IPO at these current uranium prices, so you could see that incentive for them to announce additional production or supply cuts, which would be very beneficial for the spot price and for all of the publicly traded uranium companies out there.

Gerardo Del Real: Absolutely. Now, it's going to be an interesting second half of the year and definitely keeping an eye on all of that. The macro situation, as we know in the uranium space, can turn on a dime. So definitely looking forward to seeing what comes of that, looking forward to the drill program. Jordan, I want to thank you for time today. Thank you for coming on.

Jordan Trimble: Yeah, I really appreciate it. We'll talk soon.

Gerardo Del Real: You have a good one.

Jordan Trimble: Thanks.

Click here to see more from Skyharbour Resources Ltd.