Categories: Energy
Topics: General Energy

Skyharbour Resources (TSX-V: SYH)(OTC: SYHBF) CEO Jordan Trimble on Capitalizing off a Catalyst Rich Uranium Bull Market

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO, the very busy CEO of Skyharbour Resources, Mr. Jordan Trimble. Jordan, how are you?

Jordan Trimble: I'm doing well. It's great to connect again. Looking forward to catching up. And yeah, it's been very busy for us and a lot to look forward to over the next 12 months.

Gerardo Del Real: Let's dive right into it. We have to start with the high grade Moore Lake Project. You just intersected some additional uranium mineralization. There was a lot in this recent bit of news that I want to get to, but let's start there, because that of course is a project that is the cornerstone of Skyharbour.

Jordan Trimble: Absolutely. So we completed a just under 2,500 meter drill program earlier in the year, as you know. And good chunk of this program we were testing some exploratory targets, regional targets at the project, including the Grid 19 target, which as you know is a relatively new target that we found and then further refined over the course of 2020 and into 2021. Did some initial drilling there last year. And we're very excited with what we're finding there. Early on in the discovery process, we're seeing all of the right indicator minerals, anomalous uranium mineralization, and we definitely would like to get back and drill a few more holes there in the new year. We did some drilling at the Viper Zone, which is about just northeast on trend from the main Maverick Zone. It's on that main Maverick corridor, so it's a part of that same system, whereas Grid 19 is an entirely different target area, about nine and a half kilometers from the main Maverick Zone.

So the Viper Target, we drilled a couple holes in. And again, we intersected some uranium mineralization. We're seeing, again, all the right indicator minerals, alteration structure. And we drilled one hole at the East Maverick Zone to test the western extent. And again, we're continuing to find pretty healthy zones of uranium mineralization, in particular in the basement rocks. It's still wide open, down dip and down plunge, especially as you work your way over to the east side of that East Maverick Zone. So we're excited to continue exploring and drilling there. And we do have plans in the new year to continue advancing the project. There's still a lot of upside potential there. It's a big property, as you know, and we've really just scratched the surface at a number of these targets, including that main Maverick corridor, which again is five kilometers long. It's really only been systematically drill tested for about three kilometers. And a lot of blue sky potential in those underlying basement rocks.

But the difference going into next year versus the previous few years where we've been actively advancing Moore Lake is with the new Russell Lake acquisition and option, it brings a whole bunch of infrastructure, including the road, the power lines and the 40 person exploration camp that is located at Russell Lake. It allows us to utilize that infrastructure, which will bring our drilling costs at both Russell Lake and Moore Lake down quite significantly. So this will afford us the opportunity to continue advancing Moore Lake in conjunction with the work and the drilling that we're planning to do at Russell, which I'll talk a little bit more about afterwards. It'll allow us to continue to advance Moore Lake at a lower cost of drilling and discovery. And so again, a part of that acquisition, a part of the strategy there was just that as the projects are adjacent to each other. And as we've talked about, we'll be co advancing these projects going forward.

Gerardo Del Real: Well, you partially answered my next question, which was going to be about Russell. Clearly you're excited about what you describe as the first of several phases of drilling shortly at Russell. Let's talk about what the strategy as far as exploring that project is.

Jordan Trimble: Yeah. So as you know, this project, we spent a lot of time and effort to get the deal done with Rio Tinto. We've talked about that in previous interviews. Having now closed that transaction, we have an option to earn up to 100% of the project. Again, very strategic large land holding and advanced stage exploration asset in the heart of the eastern side of the Athabasca Basin. We're now at the point where we're coming up to that first phase of drilling in what will be as the news release highlights a multi-phase program over the next 12 months. We're likely going to be carrying out three phases of drilling, with the first phase to start before year end here. We've done a lot of work, a lot of great work geologically to pick the highest priority targets at the project.

As we've discussed, this project is host to high grade mineralization that was discovered in previous drill holes. But it's a big property, so there's no lack of targets. Strategically located, wedged in between the McArthur River Project to the north, the Key Lake mill to the south, our Moore Lake Project to the east and Denison's Wheeler project to the west. You got a lot of those same conductive corridors and systems that carry on over from Wheeler River, and a few as well from Moore Lake. So we have a real good handle on the geology. We're going through all, there's a lot of historical data from the project, which is a huge, huge benefit. And we think there are a number of targets that weren't fully drilled out, and I think there's still a lot of meat potentially left on the bone whereby we can go in and drill between two mineralized drill fences that were several hundred meters apart.

Just going back to 2017, that's actually how we discovered the Maverick East Zone at Moore Lake, whereby we intersected 9% U308 over just under a meter and a half. We drilled between two drill fences. Those two fences were only about 80 or 90 meters apart. Well, at Russell there's certain targets where you've got a couple hundred meter drill fences spacing, and so there's incredible opportunity to go in there and delivering new high grade discovery at the project. So we're very excited. We're right there. We're at the point where we're going to be commencing that first phase of drilling followed by phase two and phase three in 2023. We will, as I've talked about, include drilling, continue drilling at Moore Lake as a part of those several phases of drilling at Russell. It's easy to move the rig around.

We're going to have details on the exact meterage, and target selection and plans for these upcoming phases of drilling, but I can say it will be our most aggressive, our largest drilling campaign ever carried out by Skyharbour. We're fully funded for this over the next 12 months. And then if you couple that with the exploration and drilling plans that our various partner companies have, you're tacking on another several drill programs. We're looking at potentially between 25 to 30,000 meters of drilling combined between us and our partner companies over the next 12 months. So it's a very catalyst rich story. It's going to be the busiest drilling campaign over a 12 month period we've ever had as a company. And we have, again, multiple irons in the fire at various projects, most of which are being funded by these partner companies.

Gerardo Del Real: And again, when you say partner companies, I want to be absolutely clear to everyone, we're not talking one or two. I count five the last that I recall, right?

Jordan Trimble: Yeah. We've announced just in the last couple weeks here, another company called Yellow Rocks Energy, an Australian company that will be listing on the ASX. We've agreed to option terms at two projects we acquired a year ago, Usam and Wallee. So it's actually our sixth partner company. So we've got our two joint venture partners in Orano, again, France's largest uranium mining and nuclear fuel cycle company, JV with them at the Preston Project. Azincourt at our East Preston Project. They've earned in 70%. And they are soon to commence a 5,000 to 6,000 meter drill program at that project. And then we have now four active earn in option partners. The three that we announced in 2020 and 2021 include Valor Resources at Hook Lake. They've announced recently some drill results from their inaugural drill program at Hook Lake, plans to drill there in 2023.

We'll get some news out on that forthcoming. And then at our Mann Lake Project, Basin Uranium Corp announced results from their first program. Some interesting results there. And they've just commenced a follow up drill program, 4,000 meters that's underway at Mann Lake. And then at our Yurchison Project, Medaro did quite a bit of fieldwork, some geophysics in the summer and are planning a drill program in 2023. And then this most recent partner coming in at the Usam and Wallee Projects. No definitive plans on exploration yet. We're just working through that right now, but you'll likely see some news out on that shortly. And we are in active negotiations on a few of the other projects. So yes, there's a lot of companies, a lot of partner companies. Again, it just allows us to focus in on our core assets as we're doing in particular now with Russell Lake in the project portfolio. I think we're in the best shape we've ever been to deliver a new high grade discovery.

And just to recap now with the addition of Yellow Rocks Energy, the total exploration expenditure, cash payments and share issuances from these partner companies, so in these various agreements that we've signed, these partner companies will be spending upwards of just under 24 million in exploration expenditures, making cash payments of just over 10 million and issuing shares that, depending on market conditions, total between 15 to $20 million in stock, assuming that they all earn in. So significant amount of money being spent and funded by partner companies. Cash and stock coming into Skyharbour. That's an important part of our story is getting that, fortifying our treasury, keeping the dilution in check. We're going to be receiving cash and share payments from the various partner companies over the next three to four months here. And again, it's all about making new discoveries. And delineating resources and having several projects that are being actively advanced by us and by partner companies, I think is going to be paramount to getting that done.

Gerardo Del Real: You talked about it being a catalyst rich year for Skyharbour. It's a catalyst rich year for the uranium sector. Can you just speak to that briefly, Jordan, before I let you go? I got to get your take on it.

Jordan Trimble: Yeah. I mean, look, we can spend hours talking about this. And in the last interview I highlighted some of the key takeaways from the WNA conference. And I'll just say even in the last few weeks since the conference has been hearing, there's a lot more potential contracting and new contract negotiations underway, new RFPs that have come to market. So again, I want to highlight that this new contracting cycle, we've seen the early innings of it, but I think it will be really picking up here over the course of the next 12 to 24 months. We're seeing the continued bifurcation east versus west. We saw the news out of Cameco here in the last 24 hours with Westinghouse. It's a very significant transaction and we'll see what comes of that over the coming years. But obviously Cameco looking to vertically integrate. And again, I think it's a part of their broader strategy going forward where you do have some supply concerns in energy security. Supply security being a big, big topic right now globally with geopolitical tensions and the war in Russia and Ukraine.

And bottom line is even though we are seeing some volatility in the broader market, we are seeing a sector that, again, suffered through a long drawn out bear market come out of that. We're seeing the sentiment for nuclear energy continue to improve globally as countries look to decarbonize, as we're trying to meet these decarbonization objectives, and as we're trying to transition from dirty energy, fossil fuels and other sources of less clean energy to clean energy that nuclear is going to continue to play an integral role in that transition. And we're seeing these supply demand fundamentals that we've talked about for a while now finally start to work their way into the market. We're seeing in particular the spot market tighten up. And we're seeing the impact of these financial entities, like Sprott Physical Uranium Trust and other financial entities that have come to market further tighten that market, and this is all leading to higher uranium prices.

So look, any time where we see some volatility, we see a pullback. I truly believe it's a good opportunity to add to positions. I've been doing so in the market. I really do believe right now, given what we have in Skyharbour, what we have planned for the next 12 months, there is incredible value proposition going forward. And so I will continue to add to my position over the course of the next several months.

Gerardo Del Real: Well said. I've described the trading action in the uranium equities and the spot price as being a process that's two steps forward and then one step back. I think we are completing the one step back part of that process and likely to see the two steps forward next leg up very, very soon. Jordan, insightful as always. Thank you so much for that thorough update. I think we'll likely be chatting soon.

Jordan Trimble: Absolutely. I appreciate it and we'll talk soon.

Gerardo Del Real: Thanks, Jordan.

Jordan Trimble: Thanks.

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