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Skyharbour Resources (TSX-V: SYH)(OTC: SYHBF) CEO Jordan Trimble on Drilling at Co-Flagships & Positioning for a 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 (TSX-V: SYH)(OTC: SYHBF), Mr. Jordan Trimble. Jordan, always great to have you on. A bit overdue. How are you today?
Jordan Trimble: Yeah, no, good to be back. I'm doing well. I was just on the road, so back in the office now and lots to catch up on.
Gerardo Del Real: Well, listen, you are one of the best-informed and the hardest-working voices in the uranium space. I can sniff a bottom out when subscribers and friends and family are writing or texting or calling asking me if they should liquidate their uranium holdings, right? That's usually a telltale sign that the bottom is in, or we're damn close to it. You just got back from PDAC. I'd love to get your take on the current state of the uranium market and specifically the difference here between the spot price, the contracting price, and the current sentiment, if that's not too much for you?
Jordan Trimble: Yeah, well, it's a lot to cover off there. I mean, look, we all feel the negative sentiment. Obviously the market's been very challenging the last few months. I mean, I think most of the equities are trading at or near 52-week low, similar to where they were last summer, right before the big rally in the fall. There are reasons for this, the discrepancy in the spot price and the long-term price. Certainly the weakness in the spot price in recent months I think has been a contributor to obviously the equity weakness that we've seen.
Now, the weakness in the spot price, I think it's important to note that this is a relatively illiquid market. It has been over the last few months. So any aggressively sold pounds, and there was one fund in particular that had to sell two and a half million pounds over the last few months. That has a large impact on the price as it has in the last several months. So this isn't fundamental selling of an oversupplied market. This is one-off stuff, and again, into not a lot of liquidity where buyers in particular utilities have in the last year or so, been on a bit of a buyer's strike. That's another reason why I think we've seen some softness.
You and I have talked about this previously where, as most recall a year, a year and a half ago, we had a fairly quick rapid move higher in the uranium price. I think that that set the stage here for an impasse on some contracts and negotiations that were happening and led to a bit of a stagnant market. And again, utilities and fuel buyers stepping away from the market. You couple that with the uncertainty that you had over the last year, whether it's geopolitical uncertainty, the elections in not just the United States, but several countries globally. And trade restrictions last year, obviously the news that was coming out with Russia and the U.S. on nuclear fuel trade between the two nations. More recently, obviously the tariffs in North America.
So a lot of this has created uncertainty, and that's led these fuel buyers to basically just take a wait-and-see approach. Now that being said, as we all know, you can delay contracting, you can defer contracting, but you can't avoid contracting. Ultimately, they have to come back to the market. Now the number, if you look at the uncovered requirements between now and 2040, over the next 15 years, over two billion pounds of uranium needs to be contracted between now and then. So this procurement cycle that we're going to be coming into, contracting cycle, is going to be I think the largest ever. We saw in 2023, 160 million pounds or so contracted just below the replacement rate. Last year it was only about 105 to 110 million pounds. I think this year we will see that replacement rate contracting volumes hit. I mean, in January there was 16, 17 million pounds contracted.
So I think this is the year where we see the next leg up. This consolidation period that we're seeing, it's not unusual. We have seen these periods in the past few years, usually after the price has a big move higher where you get some consolidation, you get a pullback. I think ultimately we'll look back on it and it'll be a healthy pullback. I think now the bottom is nearly in, if it isn't already. Look, the sentiment as we've seen in the equities clearly has, I think followed more the spot price action more so than the long-term price given the long-term price has held in.
The fundamentals again, are very much fully intact and stronger than they've ever been. You've got a major supply deficit to the tune of 30 to 40 million pounds a year. You simply do not have new meaningful supply coming on in the next few years to meet that growing deficit. The demand side is quite robust. I believe we're going to see a lot of new demand from big tech, from SMRs. And just if you look around the world, you've had countries like China continue to ramp up their nuclear capacity.
I think one of the potentially headline positive upside catalysts could come from the United States with deregulation and incentive to expand nuclear capacity in the United States in particular, potentially through the small modular reactors, right? I've seen some talk of that in the media. So I do think that this is going to be something we look back on as an incredible buying opportunity. I've been purchasing more shares in Skyharbour and other uranium companies over the last several months. I do think we're near the bottom, if not already there.
Gerardo Del Real: Well, let's get to why you've been purchasing more shares. You just commenced your 2025 drilling campaign with your winter drilling program at your Russell Lake Project. I know that there are a lot, or there is a lot of partner funded action happening. But I do want to focus the bulk of the rest of this conversation on the very aggressive 16 to 18,000 meters of drilling that you'll have at your co-flagships, Russell Lake and Moore here in 2025.
Jordan Trimble: Yeah, well, look, it's our largest ever annual drill campaign, 18,000 meters, fully funded for that, with the option to actually expand on it. We budgeted currently for that amount to drilling about $6 million, and so we did raise a bit more, and we're fully funded for even a little bit more if we really like what we're seeing. So that's right through this year. So that's multiphased winter, summer, spring, summer, and fall drilling right into the new year.
We still do have some assays pending from late last year, which I think will excite the market when we get those final geochem numbers back. But the drilling this year is really what people need to be focused on and what we're most excited about. Given what we saw last year, we highlighted in previous interviews the multi-percent high-grade mineralization that we discovered at Russell at a new zone called the Fork Zone. As well as some very high-grade mineralization, some of the better drill results from our Moore Lake Project, including 7.3% U3O8, over three meters at the Maverick zone. And so this multi-percent high-grade mineralization from the drilling last year.
That's really what led us to go out there and be even more aggressive with the plans and the budget for this year, knowing that we are onto something that is potentially market moving. This is the year we think we can deliver those drill results that will be game changers for us. And so the first phase of drilling at Russell just started, 5,000 meters in a winter phase of drilling. It's going to be testing, going back into that high-grade zone at the Fork Zone. We're also going to be testing a number of the conductors, the uraniferous high-grade conductors that host the high-grade mineralization at the adjacent Wheeler River Project where Denison's building a mine. A lot of those same geological trends trend right onto our Russell Lake Project. So we've got a lot of good targets there.
It's relatively inexpensive. There's road access, there's power lines, there's a camp. So our drilling costs at both Russell and Moore Lake as they're adjacent projects, is all in Canadian $350 a meter. Most other exploration companies, it's double that in the Athabasca Basin. So we get a lot of bang for our buck. The 18,000 meters likely consist of 40 to 45 drill holes across those two projects.
So we'll start with this first phase. We'll move the rig over to Moore Lake in the spring. We'll drill a few thousand meters there, and then a summer and fall, a couple of phases of drilling as well. So a lot going on with the drilling this year. Again, fully funded for this. And this will provide the catalyst throughout the year. Now, we do have also various partner companies that we've announced programs at their projects in the recent weeks and months, and most notably is Orano with a 6,000 to 7,000 meter drill program that they're the operator at, at the Preston Project.
We are going to participate and fund a minority part of that program to keep our minority interest. But that's the biggest drill campaign and program at that project ever. And there's various other partner companies that have just commenced or are soon to be commencing drill programs at a number of our other projects. So the combined drilling from all of our partner companies this year, we're expecting it to come in between 15,000 to 16,000 meters of drilling. When you add that to our 18,000 meters, you're looking at 30,000 to 35,000 meters of combined drilling across numerous projects, A good chunk of that funded by the partner companies.
Gerardo Del Real: That's a lot to like. It's a lot of catalysts. It sounds like you're hyper focused on delivering those high-grade discoveries that the market has been craving. You have excellent partners, you have multiple shots on goal, you're fully funded. It should be a fun rest of the year. I can't stress enough to people that want to play the uranium space in a contrarian way what a compelling speculation Skyharbour is at current levels. Anything to add to that, Jordan?
Jordan Trimble: No, I think that that covers everything. Again, it's a very catalyst rich year ahead for us. I think the timing with the recent pullback provides a very attractive entry point for those looking at the sector. And like I said, you can never time it perfectly, but again, given this pullback, I think when we start coming out with the results from the drilling this year, I think we'll be in an upward trend again in the sector.
Gerardo Del Real: Looking forward to all of it. Thanks again. We were overdue for the catch-up. Let's do it again here soon. Thank you.
Jordan Trimble: Thank you, Gerardo.
Gerardo Del Real: All right, chat soon. Cheers.
Jordan Trimble: Okay.
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