Skyharbour Resources (TSX-V: SYH)(OTC: SYHBF) CEO Jordan Trimble Gives Masterclass on Current Uranium Bull Market & Maps Out 2024 Drilling at Co-Flagship and Partner-Funded Projects in Canada’s Athabasca Basin


Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president & CEO of Skyharbour Resources — one of my favorite uranium players in the space — Mr. Jordan Trimble. Jordan, how are you today?

Jordan Trimble: I'm doing well. It's good to be back on, and happy New Year to everyone.

Gerardo Del Real: Happy New Year to everyone is right. Happy New Year to us uranium bugs that have been waiting for this market to develop. The last time you and I spoke publicly, we were talking about a US$70/lb uranium spot price. We mentioned in that interview that it seemed like it would take a lot less time to go from US$70 to US$100 than it did to go from US$50 to US$70. That has played out beautifully. 

I want to talk Skyharbour and how you positioned the company to take advantage of what I think is going to be a uranium bull market for the books. But before that, I have to get your take on the uranium space, the price action in the spot price, and how you see things developing because the supply/demand fundamentals make me giddy. I think it's going to be a profitable, profitable couple of years for us, Jordan.

Jordan Trimble: I agree. And I think when we last spoke about this, you're right, we were climbing through US$70, US$75 a pound. The market has now eclipsed US$90 a pound and is approaching US$100. We're not there quite yet but I do think we'll be there in short order.

There's a confluence of factors that are driving a higher uranium price. We've gone over the very, very compelling underlying supply/demand fundamentals. And just to recap that, because I think it's always important to remember that part of this commodity, as you've had a major supply side response play out over the last six to seven years, culminating in what is now a pretty significant supply crunch. 

We simply do not have the secondary supplies, in particular, the mobile secondary supplies that we once had to fill the structural supply deficit. We've got about 190 to 200 million pounds of annual demand… and it's worth noting that the growth of that demand has increased quite a bit over the last several years. It's been revised up from about 2.5% a year to over 4% a year. And I think that will continue to grow. 

But the backdrop for that growing demand is a supply side that is about 140 to 145 million pounds a year of primary mine supply. So there is a major structural supply deficit. Again, secondary supplies from various sources have been able to plug that supply deficit. That's coming to an end as we're seeing the age of having a lot of secondary supply coming to an end here. And this is one of the main reasons we're seeing upward pressure on the uranium price.

When we look at the contract markets for uranium — and just to remind listeners that you've got a couple of prices that uranium is quoted in the spot price, which a lot of market participants look at and which is what we're talking about — that has just moved through US$90 into the mid-US$90s. But most uranium is traded through these long-term contracts. 

And when we look back at the long-term contracting market in 2023, we almost hit the replacement rate of 180 million pounds. It was reported that the volume for the year was just over 160 million pounds. So I expect we will see that replacement rate hit this year and in the coming years.

It's important to note that when you look at previous years where replacement rate volumes were exceeded, those were years where you saw significant moves in the uranium price. We saw that in the mid-2000s. We saw that again in the early 2010s. So we're working our way to, I think, another one of those years where we'll see continued significant volumes in the long-term contract market.

I think Tim Gitzel, the CEO of Cameco, said it best when he said, "We've never been this early in the cycle with prices as high as they are today." And when we look at previous cycles like 2006-07 or 2010-11, where, again, you had high contracting volumes, you had upward pressure on the price. We haven't started at this US$80, US$90, US$95 uranium price. So it's very, very bullish, I think, going into the new year.

A couple of other important developments that are worth talking about, or keeping an eye on, is the fact that certain parts of the world like Kazakhstan and parts of Africa contribute to meaningful amounts of the primary global mine supply. And the West is going to have to be less reliant on these jurisdictions for its primary mine supply going forward. 

As we see geopolitical tensions and issues take hold as they have, we're going to have to be more reliant. The West in particular, Western utilities are going to have to be more reliant on Western suppliers. And we just simply do not have new supply that can come online in the West in the next few years to meet that growing demand and, quite frankly, meet the current demand.

So it's a very exciting time for the commodity. I think we're going to see much higher uranium prices. One other thing to talk about here is the fact that there is some catching up to do with the uranium equities, in particular the smaller and mid-cap names. This isn't unusual to see a bit of a lag as, typically, the smaller and mid-cap mining equities and stocks usually outperform later in the cycle. I think that's yet to come. 

And so investors have a lot to look forward to over the coming months and over the coming years with this sector in particular and with the uranium price.

Gerardo Del Real: Let's talk about how you've positioned Skyharbour and shareholders to take advantage of that bull market that we are in. You have a ton of catalysts in 2024, not just at the co-flagships, which will see drilling, but also with your partner-funded activity, which is going to be substantial in 2024 and kind of positions shareholders for discovery potential across the board. You want to chat about some of those catalysts real quick?

Jordan Trimble: Yeah, absolutely. We announced this morning an 8,000-meter combined drill campaign across our two co-flagship projects. This will be the first time in our history as a company that we’ll be simultaneously advancing two of our core projects, Russell Lake and Moore. 

Russell Lake is a project that we auctioned from Rio Tinto. Rio Tinto has been a shareholder and strategic partner of ours now for well over a year. We completed in 2023 an inaugural 9,600-meter drill program and intersected significant zones of mineralization at what's called the Grayling target area at the project. We are planning to go right back into that target area. But this go around, we're going to be testing what's called the Grayling East target area and the Fork Zone.

The Grayling East target, as the name implies, is the eastern extension of the main Grayling conductive corridor. It's been sporadically drill-tested over many, many years. There's very strong discovery upside potential. We're seeing all of the right geological indicators. There's a big long conductive corridor, a mag low, and a number of the indicator minerals that you need to see for uranium deposition. So that's going to be a primary target that we're drill-testing early in this 5,000-meter drill program.

To the west of the main Grayling corridor is the Fork Zone, and this is actually an extension of a uraniferous conductive corridor from Denison's adjacent Wheeler River Project. Again, Denison Mines is a very large strategic shareholder of ours, and their main project, Wheeler River, is adjacent to Russell to the west. So this Fork Zone and Fork target area is really the extension of a number of conductors that trend from Denison's Wheeler River Project. We're going to be drilling a few holes, testing that target area.

And then, we're going to go a little bit further to the north and test what's called the M-Zone extension. Again, this is also a continuation of uraniferous conductive corridors that host mineralization on Denison's Wheeler River Project that trend onto our Russell Lake Project. 

Notably, all of these target areas are road accessible. There's a exploration camp that we've inherited from Rio Tinto as a part of the property transaction. We're going to be staging out of that, so that'll bring our drill costs down quite significantly. In fact, last year, when we drilled this project in the inaugural drill program, our all-in costs were quite a bit lower than what they would be if we were drilling a more remote project and certainly much more competitive than some of our peers.

Again, a lot of bang for our buck drilling at Russell Lake. The 5,000 meters will start here this month in January and probably take us right through into March. And at that point, we will look to move the rig over from Russell to our adjacent Moore Lake Project, which I think most of your listeners are familiar with as it's been a flagship in the company as an advanced-stage exploration project in Skyharbour since 2016. 

We've done a fair bit of drilling there over the years. We've had some notable high-grade intersections highlighted with 21% U308 over a meter and a half. That was within a 6-meter zone that hosted 6% U308. So very, very high-grade uranium mineralization.

We've been drilling a little bit deeper there in recent years into the underlying basement rocks below the high-grade; several Maverick Zones: Maverick Main and Maverick East Zones. And we've had success drilling into these basement rocks. Just a couple of years ago, we announced our highest-grade intercept of 7% U308 over two meters in these underlying basement rocks. So we're going to go back in, and we're going to do some infill and definition drilling in those high-grade zones at the Maverick corridor.

So that should produce some results and some numbers that I think will get the market's attention. And then, we're going to continue exploring at regional targets, drilling regional targets at Moore Lake, including the Grid Nineteen target area, which we drilled a few holes into over these last several years. 

So a very exciting few months coming up: 5,000 meters at Russell Lake followed by 3,000 meters at Moore Lake. We're fully funded; we've got just under C$10M in the treasury. We're expecting the budget for this drilling to come in around C$3M to C$3.5M, so we'll have plenty left over to carry out additional drill programs and exploration programs going right through 2024.

Gerardo Del Real: I would be very surprised, Jordan, if we don't end 2024 with Skyharbour trading in dollars, not cents. I know that you're close to a 52-week high despite the recent consolidation. Catalyst after catalyst, we really didn't touch on all of the partner-funded drilling that's going to happen. Can you speak to that before I let you go?

Jordan Trimble: Yeah, absolutely. We, as most people know, operate as a hybrid model and strategy with focused high-grade uranium exploration discovery potential at our main projects of Russell and Moore. But coupled with that, we act as a prospect generator. We look to bring in partner companies to advance our secondary and tertiary projects. 

We've signed option agreements with a handful of partner companies across a number of our other projects in the Athabasca Basin, two of which are now joint ventures, one of which is Orano at our Preston Project. Again, Orano is a strategic partner of ours. They are France's largest uranium mining and nuclear fuel company. They are planning an exploration program for 2024. We are planning to participate in that program so there will be some news out on that as they advance the Preston Project.

Adjacent to the Preston Project, another joint venture that we have is with Azincourt. Azincourt is the majority holder of the project, and we still retain a minority interest and they do have plans this year for additional drilling and exploration at the project. So we'll expect some news flow out on that. 

And then, of the option partners that we have, we are expecting a handful of them to be carrying out either field or exploration programs and/or drill programs over the course of this year in particular.

As we announced late last year, we're expecting drill programs from Tisdale Clean Energy at our South Falcon East Project. This is host to the Fraser Lakes Zone B deposit. It's a very, very exciting advanced stage exploration project that we really can't wait for them to get to work there. It's a project that we've spent money on over the course of the last six years. It's drill-ready, and I think there is going to be a lot of exploration upside realized on that project when Tisdale gets the drill rig there this year.

Adjacent to South Falcon East is the Falcon Project, which we've auctioned more recently to North Shore, and they are planning a small inaugural drill program there as well in the first quarter of this year. Actually, both companies are planning to stage out of our camp, and there are some cost savings associated with co-mingling resources and contractors. So it's going to be an exciting couple of months for both of those companies as they advance the Falcon and South Falcon East Projects.

And then, when we look outside of that project area, we are expecting programs and some exploration expenditures from Medaro Mining at our Yurchison Project as well as at the Mann Lake Project, which is currently under auction to Basin Uranium.

So there's a lot going on. I just covered a handful of the option and JV partners. There's a long, long list. There's going to be a lot of news flow as a result of this. And again, one of the great things with this model is that you get exposure not just to the exploration and potential upside and discovery upside that we offer at Russell and Moore but you also get exposure to potential new discoveries and exploration success that the partner companies offer.

Gerardo Del Real: Listen, I think for any uranium company that just wants to sit idly by and hope that a rising spot price gains you traction, Mr. Trimble, I think, just gave a class on how to be active and proactive in a bull market. 

And again, kudos to you and the team, Jordan, because you were doing this during the bear market when the spot price was in the US$20 range. It's why you're so well positioned. Congrats on that front. Looking forward to a year full of discoveries and looking forward to more updates here. Anything to add to that?

Jordan Trimble: No. Look, I think that covers it. Again, maybe just touching back on some of the important upcoming macro developments. We talked about the supply/demand fundamentals. We talked about the market bifurcation. We're seeing this sentiment around nuclear energy improve almost on a daily basis. 

We had the COP28 conference in Dubai where 22 nations, including some of the largest economies in the world, signed off on a declaration to triple nuclear capacity by 2050. The big question mark there is where are they going to get the fuel for that? 

We continue to see positive news on small modular reactors (SMRs) and other advanced nuclear technologies. We're seeing this Russian uranium import ban work its way through Congress. I expect we'll see that fully passed here shortly. That's just, again, exacerbating this strain on the supply side and domestic supply side in the United States. 

And as I talked about earlier, these Western utilities are going to have to rely more on Western suppliers. And one other thing that's interesting and worth keeping an eye on is nuclear's role in the advance of artificial intelligence. I mean, this is a massive, massive amount of new electricity demand that's going to be coming on. 

We've already seen companies like Constellation Energy in the United States sign an agreement with Microsoft to provide them with emissions-free nuclear electricity for some of their data centers. And it'll be interesting to see how, as more electricity and power is needed to power AI, nuclear energy — again, as the only source of emissions-free, baseload, reliable, scalable, and affordable electricity generation — could play an integral role in that.

So there's a lot to be excited about. You are seeing, obviously, the price move higher. I think there's going to be some catching up for the equities, and, in particular, the smaller and mid-cap equities. 

As we've seen in previous cycles, these companies outperform later in the cycle, and I do believe that we're going to see higher uranium prices throughout the year as the market has very much tightened up. We just simply do not have the supply side answer to this growing demand side.

Gerardo Del Real: Couldn't have said it better. Literally, could not have said it better. Jordan, thank you again.

Jordan Trimble: Thanks, Gerardo.

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