Skyharbour Resources (TSX-V: SYH)(OTC: SYHBF) CEO Jordan Trimble Gives a Primer on the Coming Uranium Bull Market


Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president and CEO of Skyharbour Resources, Mr. Jordan Trimble. Jordan, always a pleasure. It's been a bit, how are you today, sir?

Jordan Trimble: I'm doing well. Yeah, it has been a little bit looking forward to catching up and a lot to cover off.

Gerardo Del Real: Let's get right into it. I'm back to calling you Mr. Jordan Trimble because I think the next leg of the uranium bull market is kicking off. The spot price has quietly crept closer to 60 than it has fallen back to 50. So I think with where we're at, we talked a bit off-air, even with the summer doldrums, even with everybody rightfully outside, the juniors are perking up and some of them are really outperforming the rest of the resource space. I think that's a trend that continues. What are you seeing and hearing on the macro side? And then let's talk about the $1.65 million injection into Skyharbour via warrant exercises and some of the many catalysts that you have for the remainder of Q3 and Q4.

Jordan Trimble: Sure. So yeah, look, we're starting to see this seasonality kick in as we have in previous years. Usually mid to late August, right through October, November are stronger months for the uranium market. We see a lot of deals get done. There's the big WNA conference in London, right after Labor Day we'll be at that and I'm expecting that there'll be a flurry of new contracts and deals that are announced at this upcoming symposium and conference. And so yeah, we're in a good time of the year for these companies. We've talked about this in previous interviews, but we've seen a softer, more anemic market through the summer months. I think that's more a function of the broader equity market softness that we have seen really over the course of the last year to year and a half, and the junior uranium companies have suffered over the last year as a result of that.

The smaller mid-cap names lagging in particular, lagging the larger cap names like Cameco, which has outperformed significantly has been hitting 10 to 12 year highs consistently over the last few months. But that's a really, I think, important point is that we are seeing this capital in particular institutional and sophisticated money coming into the space. It's buying the Camecos. And we're also obviously, as you pointed out, seeing the uranium price move higher. So that money coming in I think will and is starting to, as you just pointed out, trickle down to the smaller and mid-cap names. And I'm excited for the prospects over the next few months going into the new year, there's been a lot to talk about over the summer months, which typically can be slower months. But one thing that's really kind of come to the surface here and is very topical right now, and we have talked about it in the past, but it's becoming evermore an issue in the uranium market, in the nuclear fuel market globally, is geopolitics and security of supply.

And we've talked about Kazakhstan, we've talked about this market bifurcation, east versus west that was really ramping up as Russia invaded Ukraine. And as we've seen sanctions against Russia, but this market is continuing to bifurcate in an east versus west fashion. When you look at the global supply and demand for uranium, you've got about 190 to 195 million pounds of global demand. And that's growing quite quickly. You look at places like China planning to build 150 new nuclear power plants over the next 15 years. That's more nuclear capacity coming on in China in the next 15 years and has come on globally in the last 35 years. You have the advent of small modular reactors, you have new demand coming to the market, but on the supply side, we're still only producing about 140 to 145 million pounds. And the vast majority of that, a good chunk of that is coming from Eastern supplies, Kazakhstan, Russia, Uzbekistan, parts of Africa.

And so security of supply, especially for western consumption and western utilities, which is still most of the global annual demand. This is becoming an issue. And so if you look at Kazakhstan for example, they've really kind of had to play both sides a little bit here. It's an ex-Soviet state. They have very close ties with Russia, needless to say, and I don't think we're going to see that change at all. I think we'll continue to see Russia be a main buyer, a big buyer of nuclear fueling of uranium from Kazakhstan. Rosatom has a number of joint ventures with Kazatomprom and actually just recently bought a stake in some Kazakh production. But the big thing in the last few months is the Chinese continuing to show that they're going to be a major buyer, a dominant buyer of Kazakh production. We saw recently the announcement of the large contract that CNMC signed with Kazatomprom.

China has represented over 35% of the Kazakh revenues, sales revenues over the last five years. And I think that we're going to see that number continue to increase. So when you look at China and Russia, I think it's safe to say that going forward, most Kazakh production is going to wind up in one of those two countries. And so that doesn't leave a lot for supply to go out west. And that actually just recently there were some issues with material that was still being transported through the Port of St. Petersburg. So that's how most of the uranium and material is shipped out west. It goes on train. And through the Port of St. Petersburg, that supply route is becoming less and less of a certainty for western utilities. And just recently there were some issues with insurance that led to the delay of material being shipped out through the Port of St. Petersburg.

Tim Gitzel went on record saying that any major delays in this supply coming out west through the Port of St. Petersburg could be akin to a supply disruption like what we saw at Cigar Lake back in 06, 07. It's a pretty significant statement coming from the CEO of Cameco. So again, there's a security of supply issue. We've also seen just recently this military and political coup in Niger. Niger represents, it's not a huge amount, but 5% of global primary mine supply. But over the last decade or so, they've supplied over 20% of the demand in France. And so western utilities, in particular French utilities, this military coup that we've seen now in the Western African nation of Niger could be problematic. So again, it all highlights the issues that we're seeing geopolitically globally and with security of supply of uranium and nuclear fuel globally.

And needless to say, it bodes well for western uranium companies that are really going to need to fill these big shoes, are going to need to step up to the plate and be that source of secure supply for western utilities, nuclear utilities going forward. And just one last note too, to shift over to sentiment and you talked about the rising uranium price. We're seeing it continue to tick higher. Big part of that I believe is just this overwhelming improving positive sentiment. I still think we're very much in early, early innings of this bull market, but we're continuing to see a push, especially in Western nations for decarbonization nuclear being the only source of emissions-free electricity generation that's affordable, scalable, reliable. And we're seeing countries like Canada, like the US, like France, like other parts of Europe doubling down on their nuclear expansion plans.

In the US right now, there's 15 bills that are working their way through Congress that would help boost the nuclear industry in the country as well as the domestic fuel cycle. And we just saw just in the last couple months here as well, the first new nuclear reactor come online at the Vogel plant in Georgia. First nuclear reactor coming online connected to the grid in the US in over 30 years. So yeah, there's improving sentiment in the backdrop of geopolitical risk and security of supply issues. And again, I think that this is going to continue to tighten up the market and lead to higher uranium prices and ultimately that will benefit the uranium equities.

Gerardo Del Real: No, listen, that's an excellent, excellent overview of the uranium bull thesis. I appreciate that Jordan. Let's talk Skyharbour specific. I mentioned you receiving the 1.65 million from warrant exercises, Azincourt one of your many partners just received results from its 2023 drill program at the East Preston Project in the Athabasca Basin. And I know like you know obviously that you have a lot of irons in the fire here moving forward. So if you could just briefly touch on a few of those so we can set the table for what I think is going to be a very, very exciting September, October, November, December here to end the year in the uranium space.

Jordan Trimble: Yeah, absolutely. So we just announced in the last couple of days that we'd received just over 1.6 million from warrant exercise over the last week or so here. It was one strategic institutional shareholder in a financing we did three years ago. It was actually the last hard dollar financing we did. It was at 15 cents with a 22 cent warrant. So these are the last of the in the money 22 cents warrants that were out there that have been exercised that brings in hard dollars, which is great. It keeps us well-funded for all of our ongoing exploration at Russell Lake. So we still have this 10,000 meter multi-phase to drill program. We're just wrapping up the third phase, and that's going to provide for ample news flow and results over the coming months. We're already planning a follow-up four to 5,000 meter drill program, which this money from the warrant exercise should cover.

But we've also got a mineral resource estimate, an NI 43-101 resource estimate that we've commenced at our adjacent Moore Lake Project. So the two co-flagship Russell and Moore Lake Projects we've got a lot of upcoming catalysts and news flow from drilling and from a resource estimate, and that'll carry us right through into the new year. Touching on the partner companies you mentioned Azincourt. So they just completed and announced results from a drill program earlier this year, and they're continuing to advance the East Preston Project. It was a just over 3,000 meter program. They had elevated uranium and radioactivity, but notably they had some very important indicator minerals, dravite and illite and dravite being a specific clay indicator mineral that you typically see associated with high grade uranium in the Basin. So they're making great progress there. We'll continue on as a minority interest holder in that project, as Azincourt's the majority interest holder and operator there.

We've also got several other partner companies that we're expecting either drill programs from or larger exploration and field programs from. So we've announced just this year two new option partners, both of which we're expecting drill programs from in the next six to 12 months, one of which is Tisdale at our South Falcon East Project. They're planning a program for later this year and more recently North Shore Energy at our South Falcon Project adjacent to South Falcon East. We're just going through the final planning on an upcoming initial program at that project. But we also expect programs from Medaro at our Yurchison Project and Basin Uranium at our Mann Lake Project. So there's going to be lots of news flow. In addition to the partners funding the vast majority of the exploration, the budgets at these various projects, we also benefit from the cash in stock that we receive on an annual basis from these companies.

And assuming that all of these option partners complete their respective earnings over the next 24 months, we would receive upwards of over 10 million in cash and in stock, which is more than enough to fund all of our exploration, G&A, additional acquisitions. And that is one other thing that we did announce just a few weeks ago, we had staked an additional just under 14,000 hectares of mineral claims that most of which were adding on to existing projects. But this brings the total acreage of the portfolio up to over 1.2 million acres across 24 projects. So that puts us as the third-largest mineral tenure holder in Northern Saskatchewan in the Athabasca region. We're focused on our two main projects, Russell and Moore. We have partners funding and advancing another nine of those projects. And then we've also got 13 additional projects that we own 100% of that we're actively looking to bring new partners in on to advance those secondary and tertiary projects. So a lot going on.

Gerardo Del Real: I said a lot of irons in the fire. There's a lot of irons in the fire. Jordan, always, always insightful. Thank you so much for the overview on this space. Thanks for the update there on Skyharbour. I know you have a few conferences coming up. I know you've been on the road quite a bit here the last several months. I'm looking forward to having you back here in the next couple of weeks after your trip back to hear how things are over in London. Thank you again.

Jordan Trimble: Thanks a lot, Gerardo. We'll catch up soon.

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