Categories: Energy
Topics: General Energy

Skyharbour Resources (TSX-V: SYH)(OTC: SYHBF) CEO Jordan Trimble on Drills Turning at Flagship High-Grade Moore Uranium Project as Uranium Bull Gathers Steam

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. It's Mr. Trimble, again, uranium bull market in full effect! How are you today?

Jordan Trimble: I'm doing well. I'm dreading the day when you call me Jordan again though!

Gerardo Del Real: Well, these markets, these times are interesting to say the least. A lot going on, on the macro scale, both in a very consequential way as far as it relates to people in Ukraine and, obviously, thoughts are there every day. 

But pivoting a bit away from that and just looking at the markets — we talked a bit off air — and you look at gold, you look at palladium, you look at copper, you look at uranium breaching $50 today… there is a lot to be excited about in the markets despite the kind of somber tone going on with the invasion in Ukraine. 

I want to talk markets with you. I have to get your macro take right off the bat as it relates to uranium. You're one of the brighter voices in the space and can't waste having you on here and not get your take on everything going on. And then, let's talk about the commencement of the winter 2022 drilling program at the flagship, high-grade Moore Uranium Project. But first, uranium, Jordan. Thoughts?

Jordan Trimble: Yeah, well, I appreciate the kind words there. And we talked about this offline; certainly, a bit of a bittersweet feeling right now. Obviously, there's a lot of geopolitical conflict and uncertainty out there, and it is very much a tragedy what's happening in Ukraine right now. 

It's bullish for, specifically, certain commodities. Obviously, the uranium price, as you mentioned, has caught a pretty significant bid here moving back up through $50 a pound. 

And I think the key overarching themes, with everything that's going on, one is energy independence. And you and I talked about this offline, the news out of Germany on the weekend that they may be reversing what, really, was a failed energy policy. It's unfortunate it took what it took to get them to reconsider this when they really should have never phased out nuclear in the first place. 

But nonetheless, I could see that being the next shoe to drop where Germany, having had 17 reactors operating at one point and now down to three, now looking at expanding the life on the existing operating reactors but also potentially restarting some of the reactors that have gone offline. 

And who knows… maybe, like France has announced, recently, doubling down on their nuclear programs and looking to expand their nuclear fleets. And it's speculation at this point. But again, given that they're heavily dependent on Russia for natural gas imports and fossil fuel imports, and their energy and electricity generation, domestically, is on shaky ground right now — they may not have an option.

So that's a pretty notable development if that comes to fruition here because I don't think anyone, a week or a week and a half ago, even was predicting that Germany could be a new source of demand going forward. So we'll see what happens. But energy independence is a big thing. 

And it's not just Germany. It's a lot of other countries in the West. A lot of countries do rely on Russian imports of natural gas and oil. And nuclear energy, and uranium as a fuel, can be a good hedge to that going forward if we continue to see the conflict escalate in further sanctions. You've got to remember, Russia, Kazakhstan, and Uzbekistan account for over 50% of global primary uranium mine supply. And there are a lot of Western nuclear utilities that rely on those countries for their material that they use as fuel for their reactors.

And so, just when you look at that, if there are any problems with sanctions going forward on Russia — and if there's any impact on the existing contracts with some of these Western utilities — they're going to have to look elsewhere. And that's where companies and companies with projects in North America, Canada, the US, and in Australia and other Western countries — that's where they, obviously, will be the benefactor. 

We've spoken about this in the past… but Canada, in the Athabasca Basin specifically, has been the breadbasket for uranium for North American needs for the better part of the last century. And there's still a lot of uranium there. It's high-grade. It's profitable. Saskatchewan is consistently ranked in the top-five mining jurisdictions by the Fraser Institute globally.

So it's not like there isn't the source or the material for reactors and for demand in the West in a place that's reliable, safe, and economic. And so, you'll see, I think, these premiums that are starting to build on projects in Canada and in the US and Australia and other, again, parts of the West, I think you'll see these premiums continue to grow. The market is going to start paying up more for them. And obviously, that'll benefit companies like Skyharbour and others.

And just getting back to, broadly, what we're seeing out there, obviously, the last few weeks, the news headlines have been dominated with the conflict in Ukraine. And that's having an impact on the uranium market. But just getting back to the underlying fundamentals, again, we preach this it seems like every time we talk… but these are some of the strongest underlying fundamentals of any commodity. 

And I think you said it best offline… we're starting to see the prices of these metals like uranium move but that's in the backdrop of already very strong underlying fundamentals. So these are the catalysts that are finally starting to allow for this price action and these moves to materialize.

But again, I always like to take a step back and emphasize that you have a major supply deficit that's formed over the course of the last five or six years. We talked about the supply side response that's happened over the last half a decade as a result of low uranium prices and then supply shocks or disruptions like COVID and other things.

But one of the things that I think the market is also starting to wake up to — and I do want to emphasize this — is the growing demand. And this has always been, in particular, in the last, call it, five or six years, it's always kind of been more of a supply side story. At least that's what's been talked about. 

But the demand side, we've talked about, obviously, that the move as we transition from carbon-intensive sources of electricity to carbon-free ones, is we decarbonize economies globally. As we continue to move in that direction, obviously, nuclear is going to play an important role. But the demand for uranium, I think, is going to really surprise people to the upside going forward. And that's something I don't think the market is yet pricing in as much as it should.

Gerardo Del Real: You know what's interesting — that was excellent by the way — what's interesting to me about your commentary regarding Germany and the about face and how no one really priced in them playing a part in the demand part of the equation, I actually think the exact same thing is going to play out with the Fed where they're talking about rate hikes right now. 

And maybe they get one off, possibly they get a second one off. And then, I think the market will force it to do an about face. And I don't think very many people are positioning to actually have the Fed cutting rates and not tightening but loosening again via QE. 

So I think Q3 and Q4 of this year is going to be absolutely critical, critical in the clean energy metals, the battery metals, commodities across the board. It's going to be extremely volatile. But I think it’s going to be fascinating to watch if you're positioned well for it, right? And that's kind of the key. As Nick Hodge always says, you're either reaping inflation profits or you're losing purchasing power by the day. And so positioning is going to be key.

Have to talk the commencement of the winter 2022 drilling program at the high-grade Moore Uranium Project, the flagship, of course, for Skyharbour. Have to be excited to get that going again.

Jordan Trimble: Yeah, we are. And a bit of a flood of news this morning; we obviously were preparing for the announcement of the commencement of drilling. And we put that out; a minimum 2,500-meter winter drill program. We can look to expand that. I will note, it'll be the first of probably several phases of drilling this year at the project. 

Again, similar to last year, we've got what we feel are our best picked targets given everything we know at the project in following up on high-grade mineralization that we're finding in the underlying basement rocks, in particular, the East Maverick Zone on that main, almost 5-km-long Maverick corridor. So we'll continue chasing that at-depth, obviously, having reported what turned out to be some of our highest grade results ever found in the underlying basement rock: 6.8% U3O8 over two meters.

And there's still a lot of room to move. As we talked about before, historically, most of the drilling at this project has been focused on sandstone and unconformity-hosted deposits in zones of mineralization. So a lot of room to move at-depth in the underlying basement rocks in the feeder zones for the high-grade zones that we know are there.

But what we're really also excited about is the potential along strike. We've got a target area called the Viper area, which is about a kilometer and a half northeast on that same fertile conductive corridor, the Maverick Corridor. We're going to be going back and drill testing a few targets there with, really, a new geological model that we put together for that target area. 

There have been historical results that have returned very good numbers, and so not a lot of follow up work on that. So we're going to drill a few holes there. And then, for people that have been reading in between the lines a little bit, we've got this new regional target called the Grid 19 target area that we drilled a few holes into in last year's program; had anomalous mineralization. 

But it's a really interesting target because it's a newly-identified regional target. It's about nine and a half kilometers, 10 kilometers to the northeast of the Maverick Zone. So it is a truly different part of the project and would be a new bona fide greenfield discovery at that area if we're able to tap into some high-grade mineralization. 

But basically, we're seeing everything we want to be seeing in the early days of drill testing this target. So we do have a couple of holes planned there but, bottom line, going to have ample news flow from this program. It'll be the first of likely several phases of work over the coming year. 

And much like we had in 2021, we're confident that we'll be able to deliver some solid high-grade results and continue to expand the known zones of high-grade mineralization there and hopefully discover some new ones as well.

Gerardo Del Real: I've complimented you in the past because of the work that you did during the bear market in the uranium space. And specifically, I've complimented you on vending in and bringing in projects that are highly prospective and then getting them drill-ready and partnering them out but retaining significant enough upside to where if there is a discovery of substance, Skyharbour shareholders reap benefits from it. 

And I know we don't have assays yet but it appears that your partner company, Azincourt, may be onto something that gets the market excited in a hurry. Can you speak to that?

Jordan Trimble: Yeah, so this was the surprise news release for us and kind of came in last minute, but needless to say, very much welcomed. So Azincourt — Skyharbour’s partner company in the East Preston project — announced this morning… being about halfway through the 6,000-meter drill program… some very exciting visual indications of mineralization. 

And to just kind of go verbatim from the news release here… so Hole EP-030 shows the best alteration on the G-Zone with an extensive interval of hydrothermal hematite alteration and significant evidence of a steep east-west fault cross-cutting the main northeast trending structure and graphitic lithologies.

So a little bit of a technical overview there but, basically, they're seeing all the right indicator minerals, alteration, and then, as it points out in the news release, elevated radioactivity. Now, I will caution everyone that you've got to get the final geochem assays in before you know definitively. But this is what I would consider a bit of a breakthrough hole for this program and this project. 

As you know, it was a project that has had a fair bit of work carried out on it, pre-drilling reconnaissance work. And then, Azincourt has done a great job carrying out some exploratory drill programs, and I think they've been kind of moving further and further down the road to a discovery and advancing the project. And again, we don't want to get too ahead of ourselves but that's a very encouraging release and announcement from their camp here this morning. 

And so, needless to say, very excited to see what the results have in store and with the continued drilling. Again, like I said, they're only about halfway through it. They're going to get a lot of drilling carried out this winter and, again, provide lots of news flow.

And as you point out, the great thing here is that we understand the risks inherent in exploration and, in particular, uranium discoveries and exploration in the Athabasca basin. And so one of the main reasons that we're so active now as a secondary part to the business as a prospect generator is we want to have as many shots on goal as we possibly can. 

And Azincourt here is clearly making some really good headway at East Preston. And a lot more, I'm sure, will be coming out here in the next several months as they continue to advance the project and for later on in the year as well. 

Clearly they're onto something. And so, I think it's safe to say that there's going to be a lot more to look forward to out of this project over the remainder of the year. And it complements what we're doing at Moore Lake in terms of news flow and adding value for shareholders, and it also complements the other partner companies that are active. Azincourt is obviously carrying out a significant drill program at East Preston and, again, making very good progress there. 

But we've got Valor, as well, drilling at Hook Lake; 2,500 meters. Again, that's looking for the source of this very high-grade, massive pitch blend outcrop that we see at-surface. So they're looking for the source of that outcropping high-grade mineralization with this drill program. I'm sure you'll see some updates and some news flow from them here over the coming weeks and months. 

In addition to the substantial drill program that Azincourt is carrying out at East Preston, we have our other newer partner companies that are actively exploring at the other projects. Valor just commenced a 2,500-meter drill program at our Hook Lake project. And as we've talked about in the past, this is a very interesting program given that there's a high-grade, massive pitch blend uranium outcrop right at-surface on that project that they're going to be testing. 

They're going to go and try and find the source for that high-grade mineralization at-surface. If they can find that, that'll be a significant new discovery. So they're well on their way with that program. And I expect to see some news flow and updates from them over the coming weeks and months.

And then, the more recent partner companies — Basin Uranium Corp. at Mann Lake and at our Yurchison project with Medaro — both of these companies will soon be commencing the first phases of exploration at those projects, which will consist of geophysics and some groundwork. But both companies raised quite a bit of money last year, including flow through dollars that they'll be spending this year. So I expect drill programs from both of those companies in addition to the drilling currently being carried out by Valor and Azincourt. 

So bottom line is you've got, over the course of this next, call it, 8 to 10 months, you've got five active projects; Moore Lake, our focus, the flagship project… but you've also got four partner companies funding the bulk of exploration at these other properties. So again, like I said, multiple irons in the fire; multiple shots on goal. It just provides us and our shareholders with a higher probability and better chances of making a discovery and adding value at at least one of these projects going forward.

Gerardo Del Real: A lot to like given the market cap and where we are in the uranium cycle. Still early days but I would encourage anyone looking to speculate in the sector to not wait too much longer. Anything to add to that, Jordan?

Jordan Trimble: No, I think that covers it. Again, like I said, we’ll be continuing to look for new option and joint venture partners that can come in and advance some of our secondary projects. 

And again, just kind of wrapping it up and bringing it back to what we talked about at the beginning of the conversation, again, I think the key themes of energy independence and security of supply… they've become very topical in the last couple weeks here. And I think that's going to continue to boost the premiums of the valuations that are ascribed to North American assets.

Gerardo Del Real: Jordan, well said as always. Great catching up! Thank you for that thorough update. We'll chat again soon.

Jordan Trimble: Thanks, Gerardo. Take care.

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