Skyharbour Resources (TSX-V: SYH)(OTC: SYHBF) CEO Jordan Trimble on Highest Grade Drill Intercepts To-Date at Maverick East; Plus a Look at Today’s Booming Uranium 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, how are you this morning?
Jordan Trimble: I'm doing good. Great being back on. It's been a little while and we certainly have a lot to catch up on.
Gerardo Del Real: Look, let's get right into it. I joked with you off air that you'll be referred to as ‘Mr. Trimble’ now because we have a uranium bull market. And we joked a bit about that. But look, in the past month, the stock is up nearly 100%. I think it's like a 75% to 80% move.
And on the back of that, you just released some results from the Maverick East Zone that are really, really, really impressive. I want to get to the news. I want to go over why it's significant. I know we talked about swinging for doubles and triples and home runs and so a lot to get to there.
But I've got to get your take on two things: the move in the spot price and, secondly, of course, the move in the uranium juniors, which are responding beautifully, right?
Jordan Trimble: Yeah, they really are. And look, this last three or four weeks — as we talked about offline — has been quite the few weeks. And we had a bit of a roller coaster ride this year. I mean, a year ago, things were completely different… at least the market was. But we've now seen a breakout in not just the equities but now in the metal price itself.
So the spot market — as you and I have discussed — it's a relatively illiquid market. And so with the advent of the Sprott Physical Uranium Trust coming in and basically cleaning out the market, we're now seeing prices in the low- to mid-$40s.
The initial $300 million that Sprott raised at the market offering, they've now deployed almost all of that, if not, all of that. By today, they’ve bought, I believe, 6.5 to 7 million pounds over the last several weeks. And I think what's surprised everyone is how quickly that's moved the price here in the last few weeks.
So we've seen a spot price move from $30 a pound to, looking today, about $44 a pound. And that's very telling. That just shows how tight the market has become. There's very little resistance that's been met thus far. And we obviously had the big news on Friday with them expanding that at the market facility and offering from $300 million to $1.3 billion. So an additional billion dollars coming into it, which, needless to say, will have a major positive impact going forward.
Look, there will be resistance at some point. When and where, that's the million dollar question. But as you and I talked about offline, I think it's key to get back to the fundamentals and highlight and emphasize to people that — even though we've seen a very rapid move higher in the market, in particular, in the spot price, $43, $44, $45 a pound — it’s still a relatively low price for a pound of uranium. Pre-Fukushima, we were at $70 a pound. In '05, '06, '07, we saw the price run up to $140 a pound.
So when we're looking at it here in the low- to mid-$40s, I still think we're in the early days of a bull market. I think there's a lot of room to move. We're still well below the price needed to incentivize any real new meaningful production to come online.
Yes, there is the potential for the restart at MacArthur and for Kazatomprom to ramp back up. But again, as you and I spoke about offline, even with the restarts, even with the ramp up, you're still looking at a pretty significant primary mine supply deficit. And I think that that's a key point in this cycle here.
You don't have a new Kazakhstan ramping up to 50 to 60 million pounds a year, right? You don't have a new 15 to 20 million pound producing mine coming on in the next couple of years, right? So you don't have that production, that new primary mine supply, coming on in the next, call it, three or four years that can cap it.
So I think we're at a real interesting inflection point here. As I pointed out, I think there's still a lot of room to move. It very well could overshoot the fair value or the fair price for a pound of uranium. We tend to see that in these bull markets. It's obviously an exciting time. And look, there will be ups and downs. There will be corrections. But needless to say, the trend is in the right direction right now.
And just talking a little bit about the equities, I mean, look, we started to see the equities move about 9 or 10 months ago and we've seen a pretty good move higher and re-rating in the valuations. But when you look at the combined and total market capitalization — valuations of all publicly traded uranium mining companies — you're still around $35 to $40 billion. In the previous bull market, that was up at $150 billion, right? So there's still room to move. I think they're still, on a historic basis, relatively inexpensive. And it's not crowded, right? There aren't that many ways to get investment exposure to uranium.
It's great as a smaller or mid cap company because you see, in particular, institutional money and family office money flow down the value chain much quicker than you would in other markets. And, obviously, as a smaller to mid cap company now, I mean, Skyharbour, we're benefiting from that as are our peers.
And again, as we continue to see the metal price move higher, which I think we will see, driven by not just Sprott but the underlying fundamentals as well, we will see the equities continue to move higher as well.
Gerardo Del Real: Let's talk about some underlying fundamentals. You just drilled fantastic intercepts at the Maverick East Zone. I believe it's the highest grade that you've drilled down where you were looking for it, right? Can you speak to that a bit? And congrats, obviously. Great timing, by the way!
Jordan Trimble: Yeah. No, it is. We're, needless to say, very happy with this first batch of drill results. As you can see in the news release, we've completed just under 5,000 meters in 13 holes. About half of the program, the drill holes were targeting the Maverick East Zone and, in particular, the basement targets that we've more recently refined with some new geophysics and some new geological modeling.
The one hole in particular, it's our best hole to-date in the Maverick East Zone in the basement rocks. We see grades as high as 6.8% U3O8 over two meters within a wider zone of 6meters at 2.54% U3O8. You're seeing some copper and some nickel as well. But obviously very, very happy with the uranium grades and zones of mineralization we're seeing. We're basically following this zone down-plunge into the basement rocks. And we have some additional assays pending; very happy with what we've seen.
As you saw also in the news release, we announced an expanded program by 1,500 to 2,000 meters — so that's just starting back up. We're going to continue chasing that zone down-plunge into the basement rocks as well as continue testing some of these basement targets at the Main Maverick and the West Mavericks Zones.
We are working towards a resource estimate early in the new year. Obviously, with these kinds of grades, we'll be adding to the global resource there.
And then, just further in the news release, a quick note on some of the other targets that we drilled into. The Esker Target, which is just northeast of the Maverick Main and Maverick East Zones — and then a new target, Grid 19, which is about 10 to 11 kilometers northeast, a regional target from that Main Maverick corridor — we drilled several holes in each of those targets.
Assays are pending. Happy with what we've seen. We're basically seeing all the right geology; all of the right indicator and pathfinder minerals. And so we're confident that, with continued exploration and drilling at the project, we'll yield another discovery somewhere on the project. It's a big property with over 35,000 hectares. So yeah, making great progress there.
Lots more news to come. So we'll end up drilling around 7,000 meters or so in the 2021 season. And that'll provide news flow right into the new year. And then, we couple that with partner-funded programs; both Azincourt and Valor have been actively exploring at our East Preston and Hook Lake projects.
Gerardo Del Real: It's a lot to like. How's the treasury looking, Jordan?
Jordan Trimble: It's good. As we've mentioned in several news releases, we've had warrants come in. So we're at about C$10 million in cash and in equity holdings of some of our partner companies. So we're fully funded for the remainder of the drilling we have planned at our flagship Moore Lake Project.
We're fully funded for the upcoming winter 2022 program that we have planned at Moore Lake. We are right now planning a fairly aggressive, probably what will be our largest drill program to-date at Moore Lake in the coming year. We'll have news out on that and details out on that in the coming months. But fully funded for all of that.
And as I mentioned, we do maintain equity holdings in partner companies. And just talking a little bit about that as we've seen a rising tide with the share prices with uranium companies are obviously benefiting through those equity holdings.
And just a quick note, as I mentioned, we have our partner companies actively exploring our other projects. So we've got Orano; we'll have some guidance from them on their plans in the new year at the Preston Project over on the west side of the basin.
Azincourt put out some news just a few weeks ago, announcing a very large 7,000 meter drill program planned for later in the year/early in the new year at the East Preston Project. What's interesting there is they just completed some low altitude radiometric surveys at the project, very similar to what Fission did in the early days and Alpha did in the early days that led to the Triple R discovery. So excited for them to go in and test those new and refined drill targets.
And then, we have our other partner, Valor Resources, at Hook Lake. They announced, again, just several weeks ago now, some very high-grade samples at the Hook Lake showing at the project, upwards of 59% U3O8 at surface. So they're going to be drilling, planning to drill, there later in the year.
So multiple irons in the fire… lots going on. I will just note, too, we are in fairly advanced negotiations on some of our other 100%-owned projects. I think with this recent market move that we've seen, there's going to be a lot of interest from potentially new entrants and issuers coming into the sector. And we'll be there as one of the largest and most dominant land packages to monetize some of these assets and, again, grow our prospect generator business.
Gerardo Del Real: We've said it, I think, a hundred times over the past several years:
Nothing happens in the uranium space… and then, all of a sudden… it's ALL happening!
Mr. Trimble, it was a pleasure. I look forward to chatting soon. Lots of news flow coming up, obviously. I appreciate the update today.
Jordan Trimble: Yeah, thanks a lot. It was great catching up and we'll be in touch.
Gerardo Del Real: Sounds good. Chat soon.
Jordan Trimble: Take care.Click here to see more from Skyharbour Resources Ltd.