Categories: Energy
Topics: General Energy

Skyharbour Resources (TSX-V: SYH) CEO on Stellar Drill Results and New High Grade Uranium Lens Discovery at Moore Lake

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 doing today?

Jordan Trimble: Doing excellent. Thanks for calling.

Gerardo Del Real: Absolutely. Well, I'm glad that you're joining me. You had some spectacular news. The drilling program is off to a great start, and let me just read the headline. The headline reads, "Skyharbour Intersects 20.8% Uranium over 1.5 Meters in First Drill Hole at Maverick Zone and Discovers New High Grade Uranium Lens on Moore Lake Uranium Project." You also increased the planned drill program from 3,500 meters to 4,500 meters. There's a lot of really important details in the release that I'd love for you to go over. If you could, share some of those details, Jordan.

Jordan Trimble: Sure. The first hole, with the 20.8% over a meter and a half, I mean, that's pretty stellar, right? We drilled the first few holes back at that high grade Maverick Zone, the known zone there. It's relatively shallow, about 240, 250 meters at depth to the unconformity.

It's a zone that was discovered historically by my head geologist, Rick Kusmirski, and his team at JNR, so we've gone back in there and we're obviously having some early success. Those numbers, again, are very, very good, and have certainly exceeded our expectations going back into that zone.

It's a long title, there's a lot to it, obviously, in the news release. It really is just the first five holes, though. We bumped up the program as a result of these early results that we've gotten, from 3,500 meters to 4,500 meters.

The first hole within that, or the high grade, the meter and a half of very high grade there, was within a broader zone of about 6% over 5.9 meters. The second hole, which was also drilled in the Maverick Zone, you had 1.7% eU3O8, so that's radiometric grade equivalent over 7.2 meters. And then a higher grade zone of 3.3% over 4.6 meters, so again, very strong, robust mineralization at the Maverick. We're looking to expand the known high grade zone there. Still a lot of upside potential, both along strike at the unconformity, but also in the basement rock a bit deeper down.

One of the particular notes in this news release, where we say, "discovers new high grade uranium lens," this is our fourth hole, Hole ML-202. This was actually drilled as a 75 meter step-out from the eastern boundary of the known high grade Maverick Zone, so it's a little ways away, in a zone that JNR and Denison hadn't done much drilling on previously. So we plugged a hole down there, having gone back and looked at some of the historical drilling along strike, and sure enough, it looks like we've discovered a new lens. The drill result in that hole being 5.6% over 1.8 meters, and then over a broader mineralized zone of about 10.7 meters, grading about 1.4% eU308, so that's quite significant.

As we see at this project, and quite frankly, at a lot of other projects and deposits in the basin, you get these long conductive conductors, and you can think of it as kind of like pearls or beads on a string, and you got these high grade pods of mineralization, and we're starting to see that here at Maverick.

The exciting part as well is that you can eventually continue drilling and proving up these lenses, or these pods, but in a lot of other cases in the basin, you'll see at some point a larger deposit, higher grade deposit, discovered along that conductive corridor. So needless to say, that's what we're trying to go after here. But great start, obviously, bumped up the drilling, so like what we see.

The drilling, too, I was just up there last week with our geological team, with the team at Denison. We did a joint site visit, also with Marin Katusa, one of our largest shareholders. We're putting together a video showcasing the project, as well as Denison's Wheeler project and the McClean Lake Mill, which is AREVA and Denison. It's the richest, well, it's the only mill that can actually process high grade uranium ore in the basin. So it was a great site visit.

We spent a day at our property. The drilling, and the drillers have done an excellent job, we're actually coming in under budget. This is significant, you look at the total costs of drilling up there all-in, we're coming in between $220 and $230 a meter. Now to put that in perspective, we had budgeted for about $340, $350 all-in a meter, so coming well in under budget.

I talked about this in the video, but this is significant that the costs have come down. This is due in part from new technologies, new drill rigs, that you can go in there, they're obviously much more cost effective, they're much more accurate. So it makes a big difference, again, when we talk about return on investment, return on drilling rod. Hy-Tech Drilling, they're the company, the outfit, we're using and they've done an excellent job. So bumped up the program, from 3,500 to 4,500 meters.

Gerardo Del Real: Excellent. That's exciting news, Jordan. Now, I'm assuming that you're fully funded for this drilling program, even with the extra thousand meters?

Jordan Trimble: Yeah, absolutely. Fully funded, I got about $2.7 million in the treasury. We had a million dollar budget on this drill program, so we'll bump that up slightly, but we'll get even more meterage, because again, it's been coming in under budget.

Just getting back, actually, to that drilling costs, when JNR was drilling this project, back in the early 2000s, when they made the initial discovery at Maverick, their all-in costs in 2001 were about $300 a meter drilled, right? So if you factor in inflation, it just shows you how far these drill rigs and the technology has come, which really helps, obviously, on again, that return on drilling, return on investment, for the discovery process in the basin.

Gerardo Del Real: Excellent. Now you mentioned Marin, and you mentioned Denison Mines (TSX: DML)(NYSE: DNN). I imagine they're happy shareholders. I understand that they're committed long-term, strategic shareholders as well. What can we expect as far as news flow here for the coming quarter or two, Jordan?

Jordan Trimble: Absolutely, Denison, as you are well aware, is our largest strategic shareholder, and that their president, CEO Dave Cates, who was up with us last week in northern Saskatchewan, is on our board, so working very closely with their team. You know, they did quite a bit of work on this project in the previous years, and we have a number of other regional targets on the project that we are planning to go drill test as well over the next year or two.

As far as news flow goes, obviously, there'll be more news flow from this drill program. We've completed five holes, high grade mineralization in three of them, what appears to be a new discovery, a new high grade lens. But we're planning now on doing between 15 to 16 holes total, depending on the depth of the holes. Most of that drilling in and around Maverick and along strike, but also testing some regional targets as well. So obviously, more news flow coming out of that drill program over the coming months.

We are just finalizing the definitive agreement for a deal that we actually announced back in December, as you may recall, on our Preston project. We signed a binding term sheet with a strategic partner for an $8 million earn-in. They'll be spending $8 million over a six year period, the bulk of that in exploration, and likely drilling at the Preston project, that's our property over by Fission and NexGen on the west side of the basin. That's really us employing this prospect generator model on some of the other projects that we have, to make sure that they're advanced in terms of the exploration and drilling on them, but it also brings in some cash and stock for us.

These deals that we're looking to consummate on a few of these other projects as well, which can help subsidize the drilling that we're planning on doing at Moore Lake. Really, Moore Lake is the focus, that's where you're going to see the most news flow, and real catalyst for the company over the coming months.

In all likelihood now, given the early results that we've seen in this drill program, we'll be doing a summer drill program as well, so we'll be planning that. But we'll wait until we complete this winter drill program, get all the final results back over the coming months, and then we'll likely commence a summer program in the summer months. So lots of news flow from Moore Lake on the drilling, news flow on the other projects looking to bring in strategic partners, and option or joint venture them off.

And then the uranium price and market. I mean, we've seen a bit of a pull-back here, but we're now back in that kind of $22, $23 range, where we're getting back into that kind of no man's land, where you really don't have any mine, at that price, making money. So I think there's been a little bit of a pull-back, probably a healthy correction given that it moved up very quickly, but I really do think we did see the trend reverse after hitting $18 a pound late last year. I just see this upward trend continuing in the long run.

Gerardo Del Real: Well, you're definitely providing shareholders multiple shots on goal there, Jordan. Can you remind everybody the market cap, because it's still tiny, I mean, especially in the context of the multiple opportunities to increase the value of several projects that you're working on. Obviously, the flagship is Moore Lake, but you have several other irons in the fire, as you mentioned. Can you provide a market cap update for everybody?

Jordan Trimble: Right now, even with the recent move up, we're still trading around a $30 million Canadian market cap, so you're looking at the low $20 million US market cap, so it's still relatively small. I mean, even, you look at some of the peer companies, and you look at, really, the potential value creation from these high grade discoveries and proving up high grade uranium deposits in the basin.

I mean, you take the NexGens and the Fissions of the world, Hathor, these are all companies that have made high grade discoveries and have proven up deposits. In Hathor's case, they were acquired by Rio Tinto, for just under $700 million a few years back. And you look at NexGen trading at over a $1 Canadian market cap.

These are significant discovery stories, and it just goes to show that even in a declining commodity price environment, which we've been in, really, for uranium for the better part of the last five or six years, you can still create a lot of value for investors and your shareholders, and that's what we're seeking to do with Skyharbour, both through the drill bit and new discoveries potentially being made at Moore Lake, but also through the strategic partnerships and the prospect generator model we're looking to employ to advance the other projects in the portfolio as well.

Gerardo Del Real: Excellent. Well Jordan, you're off to a great start. It's obviously exciting to see all the hard work that you've put in over the years begin to pay off this year, and I'm definitely looking forward to having you back on as 2017 progresses. It sounds like there's a lot on the horizon.

Jordan Trimble: Yeah, absolutely. Thanks for having me.

Gerardo Del Real: Thank you so much, Jordan.

Jordan Trimble: Thanks.

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