Skyharbour Resources (TSX-V: SYH)(OTC: SYHBF) CEO Jordan Trimble on Major Uranium Property Acquisition from Rio Tinto in Canada’s Athabasca Basin

Editor's Note: The recent pullback in the uranium spot price has led to a substantial correction in the uranium equities. The pullback presents another excellent opportunity to buy into quality teams and assets at attractive entry points. I spoke with Skyharbour Resources (TSX-V: SYH) (OTC: SYHBF) CEO Jordan Trimble about the latest milestone for Skyharbour, the recent pullback and his take on the uranium space. Enjoy.

Gerardo Del Real

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 today?

Jordan Trimble

Jordan Trimble: I'm doing great. Thanks for having me and looking forward to catching up. It's been a little while, and it's certainly been a busy week with the news and with the conference here in Vancouver.

Gerardo Del Real

Gerardo Del Real: Let's get right into it. Congratulations are in order. I've complimented you in the past for taking a bear market, which we had in the uranium space for years… and it felt like decades for those of us that were holding on and trying to work through it… but I've complimented you in the past on your ability to make deals that are accretive and that position your shareholders to benefit from those turns when uranium turned back up.

Obviously, Skyharbour has had a great 12-month run. We're in the midst of a bit of a pullback right now. But the deal that you were just able to secure, you just secured an option to acquire an initial 51% and up to 100% of the Russell Lake Uranium Project from Rio Tinto. I know those deals are tough to make. I know Rio Tinto doesn't even sit at the table with a lot of people.

Congratulations, Jordan. Do you want to tell us a bit about this project?

Jordan Trimble

Jordan Trimble: Yeah, absolutely. And as you know, we've been working on this for a while now. As you point out, Rio Tinto typically doesn't do a lot of these deals with smaller-cap companies. They're one of the largest mining companies in the world. So we are incredibly excited to announce this transaction. It's a major milestone and development, certainly, for Skyharbour and its shareholders.

Russell Lake is a premier advanced-stage exploration asset. It's a very large property; centrally and strategically located in the southeast portion of the Athabasca Basin. You can see on the map the size of it; over 72,000 hectares.

But importantly, it's wedged in between the McArthur River Mine and Cameco’s McArthur River Project to the north and the Key Lake Project and mill to the south. And then, on our western border, you have Denison’s flagship Wheeler River Project; Denison is a large strategic and corporate shareholder of Skyharbour. And then, of course, to the east of Russell Lake, you have our Moore Lake Uranium Project, which has been the focus of our exploration, as most of your audience would know here, over the last several years.

So really, what we've done is we've fortified our land position in this key and central part of the Athabasca Basin. It also happens to have the haulage road that accesses and services the McArthur River Mine that goes right up through the western extent of Russell Lake along with power lines. It has a fairly significant exploration camp that's just off of the road.

So the combination of the road, the power, the camp… it's pretty significant exploration and development infrastructure already in place. It's turnkey, so that'll provide for lower exploration costs going forward. There's a lot of operational synergies, needless to say, with the adjacent Moore Lake Project.

So as you saw with the announcement, a very, very manageable initial 51% earn-in over a three-year period. A fairly significant share position now that Rio will own. And we will plan now for an initial phase of exploration and drilling. And the project details on that are forthcoming.

But just to highlight some of the historical work and findings of this project; it's had almost 100,000 meters of drilling and over 230 drill holes. Worth noting is that most of this exploration was carried out well over 10-12 years ago. So much like with Moore Lake, we are planning to go in there with some new geological modeling, some new ideas, and look to discover additional high-grade mineralization.

There are some multi-percent U308 intercepts in historical drill holes at Russell Lake; there's several high-priority targets. There's over 35 kilometers of untested conductors with mag lows and all of the right indicators that you want to see for the deposition of high-grade uranium in the basin.

So we're very excited to ultimately get to work. We think there's a lot of value to unlock at the project, and you will see additional news flow coming out as we work our way towards the initial program at Russell Lake.

Gerardo Del Real

Gerardo Del Real: You mentioned the strategic location of the project. It's adjacent to the flagship. It's also nearby companies that, I believe — and during the next leg up with this uranium bull cycle — are positioning themselves well for a major consolidation nearby.

I know it's getting ahead a little bit and looking quite forward but as someone that obviously speculates in the markets on a daily basis — and I do it for a living — you have to feel good about the neighbors and the neighborhood that you're in.

Jordan Trimble

Jordan Trimble: Yeah, that's a key part of this property and this acquisition is that very strategic location; the neighbors. If you look on a map and see where this project is, you'll see who we're surrounded by as I just listed. And these are big land packages, right?

So yes, it’s very important to highlight that in addition to the historical findings and high-grade at the project. And really, our prospects and the exploration discovery prospects going forward at this project, again, I think there's a lot of value to unlock here. There's a very robust exploration upside discovery potential at the project. We're looking to go in there and hopefully find that next big deposit in addition to continuing to advance the adjacent Moore Lake Project.

And again, I want to highlight that this comes with a new and very strategic partner in Rio Tinto. They'll be a large shareholder — potentially a joint venture partner — on the project. As you pointed out, it's a staged earn-in so we do have a pathway to 100%. But you could wind up with a 51% or 70% majority interest in the project. We will be the operator of it as well.

All around, we're thrilled to have this announced. Again, we think the market is going to, over the next several weeks, really start to appreciate the significance of this. And this is really just the start, right? As I pointed out, we've got fairly significant exploration plans over the coming years at this property.

Gerardo Del Real

Gerardo Del Real: Before I let you go, Jordan, I have to get your take on the overall uranium market. I know, as I mentioned, we've had a bit of a pullback. I think it presents a pretty compelling opportunity. And then, of course, I want to give you the opportunity to talk about the other projects in the portfolio that, again, you were able to bring in on very shareholder-friendly terms during the last bear market before the most recent upturn.

Jordan Trimble

Jordan Trimble: Sure, so on the market, we've obviously seen some volatility recently. I've been purchasing more shares in the market now that we have this news release out there, and I will continue to do so. I think this is one of the strongest value propositions that we've seen with this company in many years given everything we have going on and the plans that we have coming up.

We have seen, obviously, the spot price pull back from the highs in the mid-US$60s to the high-US$40s here. Probably got a little ahead of itself when it ran up after the invasion in Ukraine. But I think we've seen a little bit of consolidation here now. I think it's a healthy pullback, and I do think that we will see a bounce back.

I mean, the key thing to remember is that the fundamentals for this commodity, specifically, are very, very unique. There are very unique market dynamics, and I do expect that we will see that US$65, US$70, US$80, US$90 price hit at some point sooner than later. I could see it going much higher over the next 6 to 12 months.

Needless to say, the uranium companies that are active — certainly the uranium companies that have built strong asset portfolios and assembled great teams over the course of not just the last couple years but the last 5 to 10 years — will benefit. You've got a major supply deficit looming; expecting 190 million pounds of annual demand here in 2022, and we simply aren't producing enough. It suffered from significant underinvestment over the last decade post-Fukushima so we're looking at primary mine supply of about 140 million pounds.

We've seen a new contracting cycle. We've talked about this in previous interviews. A new contracting cycle with utilities commenced. We saw that earlier in the year. I think that contract, that long-term price is going to continue to tick up here. The spot price, again, there's volatility there. We know that financial entities like Sprott, for example, have been a pretty key part to the last, call it, 6 to 12 months, and the move that we've seen. And look, they'll continue purchasing and sequestering pounds.

Then, one last note, too… given everything that's happened geopolitically and globally here, I do think the market is going to start pricing in a premium valuation for uranium assets in North America and Australia. I don't think that that's fully baked in yet given the supply disruptions and, really, the mess that we see globally.

Certainly Russia has a stranglehold, really, on this industry. Whether it's uranium mining, whether it's enrichment, whether it's conversion — we know the numbers. They account for a significant amount of global supply. And if that gets disrupted here with sanctions, we're going to see the market continue to tighten up, and we will likely see the uranium price move higher. And we will, as I pointed out, see premium valuations on assets in the West. So I think that's yet to come to fruition but will materialize over the next, call it, six to 12 months.

Then just a quick note before we sign off on the other projects; as we talked about, we've got a lot going on. We've got our partner companies actively exploring and drilling at four of our other properties. Collectively right now, we have about 15,000 meters of drilling either underway or assays pending. We’ve completed our 2,500-meter drill program at Moore Lake with assays pending; very happy with what we've been seeing there. We will continue to advance Moore going forward throughout this year.

Then, the other companies… Basin Uranium Corp., Medaro, Valor, and Azincourt are in the midst of completing exploration and drill programs or recently completed programs. So there's going to be quite a bit of news flow coming up. They're all funded for their programs this year. We're going to see them continue to work those projects. And we will see cash and share payments coming in over the course of the next several years as they earn into these properties.

Gerardo Del Real

Gerardo Del Real: Jordan, well said. You're off your 52-week highs by about 50%. I think it's a heck of an opportunity. Thank you for your time today. I appreciate it!

Jordan Trimble

Jordan Trimble: Thank you, Gerardo, and we'll chat soon!

Gerardo Del Real

Gerardo Del Real
Editor, Resource Stock Digest