Categories: Energy / Mining Stocks
Topics: General Energy / Uranium Stocks

Skyharbour Resources (TSX-V: SYH)(OTC: SYHBF) CEO Jordan Trimble on Hitting High-Grade Uranium at Both Co-Flagship Projects in Canada’s Famed Athabasca Basin

 

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. 

Jordan, it's been a long time coming. You’ve been on the heels of a high-grade uranium discovery for quite some time, and you've put in a ton of work behind the scenes. You just drilled a brand-new discovery at your co-flagship Russell project. You hit high-grade uranium mineralization, up to 3%, at the newly identified Fork Zone. 

Congrats. As I mentioned, I'd love to get the context on what led to the discovery, where you're at with it now, and, of course, the million-dollar question; what comes next?

Jordan Trimble: Absolutely. It’s great to catch up with you. It has been a little while, and, yes, a very exciting development for us in the company and our shareholders at Russell. 

It’s been a while in coming, certainly, as the project, as we've discussed previously, has had a fair amount of historical exploration by Rio and by Hathor before them. It's a big project, well over 73,000 hectares, of prime real estate in the eastern Athabasca Basin to the south of the McArthur River Mine and northeast of the Key Lake Mill. 

Our Russell project is road-accessible with a haulage road running right through it, power lines as well, and an exploration camp that we've inherited at the project, which brings our drilling costs down well below, all-in, C$350 per meter. You've got a lot of bang for your buck at the project working there.

A lot of the historical exploration was reconnaissance work and widely-spaced drill fences or drill holes. There really wasn't a ton of systematic exploration that, on a lot of projects, you need to do to hone in on these discoveries. 

This new target, the Fork Zone, as discussed in the news release, was a bit of an enigma, quite frankly. It's related to one of the main target areas, the Grayling Zone, which is a multi-km-long conductive corridor. We did most of our drilling there in 2023.

That was, as you’ll recall, the first-pass drilling that we carried out after optioning the project from Rio Tinto in 2022. We did a lot of work at the Grayling target area last year. We had some decent results. Then, late last year, our geological team did a fantastic job going through all of the historical data, working with some geological consultants, and refining drill targets in and around that broader Grayling target area. 

This Fork Zone, which is the, call it, western extension of this big, long conductive corridor, was one of those targets that we did a lot of work on. One of the reasons why it was so challenging, historically, to get proper and more refined drill targets is that it sits right under the power lines, which is a bit of a blessing and a curse at the same time. 

You're right there where the infrastructure is located — the power lines and the road — but the power lines, historically, did interfere with some of the previous geophysical data and interpretation. That made it very challenging, historically, to properly drill the conductors and the various structures that are the main targets. And so we did a lot of work.

Our team did a fantastic job going through and refining these drill targets. The second hole that we drilled — it was actually the first hole drilled into the specific conductor that is mineralized — we intersected what is now a new discovery; multi-percent, up to 3% U308 over a half a meter. And that was within 2.5 meters of 0.72% U308.

It’s still very early days in this discovery but this is something that we have not seen at the project. No previous operator had seen this kind of mineralization — higher grade in the sandstone — which is very interesting, just above the unconformity and relatively shallow at about 340 meters. We believe there's a lot more room to grow this, and it’s open in most directions along strike.

We're working diligently right now to get as good a handle on the geology and on the geological model as we can for additional drilling. What we're looking for are cross-cutting structures along that main conductor that can open it up for more deposition of mineralization. It's an amazing start to what I believe will become a significant new discovery at the project. And we're very keen to get back to work there.

Just to recap, the drilling that we finished this winter, which includes these drill results that we announced just a few days ago, we drilled just over 5,000 meters at Russell with just over half of that drilling in and around this Fork Target area. There are actually several conductors, and, like I said, the one conductor that we hit on here in that second hole is going to be the focus for us going forward.

We also drilled a few holes up at the M-Zone Extension, which is about 5 km to the northeast. There are assays pending from the last few holes of that program, which were up in that target area. So we’ll have some more news flow from that recently wrapped 5,000-meter winter drill program at Russell.

We’re gearing up and are fully funded for another 4,000 to 5,000 meters this summer. We’ll be commencing that within the next couple of months. Again, the focus there is going to be going right back into that Fork Zone, continuing to hopefully expand that high-grade zone and find other lenses or pods that we can then start building a high-grade resource with. 

We are also planning a couple of other drill holes at a few other regional targets at the project. We’ve definitely honed in on something… it’s a very exciting new development at the project and for the company. 

We're ready to go, fully funded, and fully permitted for another 4,000 to 5,000 meters that'll commence this summer at Russell.

Gerardo Del Real: Far from a one-trick pony, I said co-flagship earlier, and you also have the high-grade Moore project. You just hit 7.3% U308 over 3 meters within 5 meters of 4.61% U3O8. Can we talk about that? It's been a heck of a week for you and the team, obviously.

Jordan Trimble: Yes, another good release, needless to say. I think Moore Lake, in the last few years, has gotten buried, if you will, within the news flow as most of the work that we've done has been at the newly-optioned Russell project. 

We decided late last year that it made sense to go back and continue advancing and drilling Moore Lake. It's important to note too that these are the two co-flagship projects: advanced-stage exploration assets in Skyharbour collectively accounting for over 250,000 acres of mineral tenure right in the heart of the southeastern part of the Athabasca Basin.

Another great thing is that the infrastructure at Russell benefits our drilling costs at Moore Lake as well. Our drilling costs at Moore Lake have decreased quite a bit as we've been able to utilize and stage out of the camp at Russell, which makes good sense in the ongoing advancement of the two neighboring co-flagship projects.

We carried out, along with the 5,000 meters at Russell, just under 3,000 meters at Moore Lake in this recently-completed winter phase of drilling. As you highlighted, we had some notable high-grade results, including 3.0 meters of 7.3% U3O8. Within that, there was 0.5 meters of 14.9% U308. And another hole had a nice long intercept of 11.5 meters of just over 1.1% U308. So, very strong results.

Those were all from the Main Maverick Zone. As you may recall, there’s a fertile uraniferous conductive corridor called the Maverick Quarter at just under 5 km long. There are several lenses or pods of mineralization, the main one being the Main Maverick Zone. 

Then, just to the east of that, there’s a discovery we made back in 2017 called the East Maverick Zone, which is host to some high-grade mineralization. In fact, the last major drill intercept we announced at Moore Lake was carried out in 2021 and 2022 and included a high-grade basement intercept at the East Maverick Zone of 6.8% U3O8 over 2 meters.

The Maverick Quarter in particular — those multiple high-grade lenses or pods within that corridor where we just completed some drilling — are open for expansion and are open along strike and at-depth in the underlying basement rocks. 

Most of the high-grade mineralization, including the high-grade that we announced in this recent news release, is hosted right at the unconformity in the sandstone. It's relatively shallow between, call it, 260 and 280 meters depth, which, in and of itself, is interesting through the lens of some of these new mining methods in the Athabasca Basin.

Most of that mineralization, again, shallow sandstone, hosted right above the unconformity; not a lot of historical drilling or previous drilling that we've carried out in testing the underlying basement rocks. Hence, we think there's room for expansion in those underlying basement rocks. So, some great numbers from Moore. 

I think it's nice to blow the dust off of that project and remind people that we do have this advanced-stage exploration asset, which lays host to some very high-grade uranium mineralization that's also shallow.

We’re planning another 2,500 to 3,000-meter drill program at Moore Lake for later this summer. Again, we're going to co-drill and co-advance these projects through this summer and into the fall. We’re planning to go back to Moore where we’ll continue expanding that high-grade zone of mineralization while simultaneously testing some regional targets. 

Much like Russell, Moore has a lot of blue sky potential, regionally, including a dozen other target areas that have had limited drilling but do have mineralization. So there’s potential to make new discoveries elsewhere at the project.

All in all, a very busy week with a couple of news releases that are now out. We do have more news pending. As mentioned, collectively, we have another 7,000 to 8,000 meters of fully-funded drilling across both of those projects planned for this summer. That'll take us right through into the fall with lots of news flow to come from that.

Gerardo Del Real: A lot to like and a lot to watch for. The uranium space seems to have finally found its footing, and I think it's upward and onwards here for the second half of the year. Any thoughts on the overall market before I let you go, Jordan?

Jordan Trimble: Yes, typically, as we have seen in the last three or four years in particular, you enter into these summer doldrums, if you will. We've certainly seen that with the uranium market where there has been a bit of softness in the equities with trading volume also being lower. 

Earlier this year, we saw the uranium spot price tick briefly above the US$100 per pound mark. It has since pulled back to the mid-US$80/lb range where it has found some very strong support.

To me, it cannot be over-emphasized how important it is to see this new base being built where the utilities are starting to have to digest this new pricing, this new norm, if you will, in the market. That's going to be key.

Just a couple more recent talking points and developments. Just recently, we saw an announcement out of Kazakhstan where they're raising the mining tax. It's a sliding scale. It increases with production volume and with the uranium price. The current 6% tax on uranium mining in the country could move up to as high as 18% to 20%. 

Now, that probably won't have a huge impact on Kazatomprom as it's primarily owned by the sovereign wealth fund in Kazakhstan but it will have an impact on some of their JV partners like Orano and Cameco. It could also deter a significant and quick ramp-up of production in the country. That was, I think, one of the catalysts and one of the main reasons why we saw the market pick up a bit this last week.

We also witnessed some great progress being made by Congress with one of the bills being passed. That included the ADVANCE Act, which will help bolster the nuclear industry in the United States and help get rid of some of the red tape with new nuclear reactors, in particular advanced nuclear reactors and SMRs coming online. 

That could really help spark the rollout of a new generation of nuclear reactors in the United States. So that’s a big news item there.

Then, we have the Russian uranium ban. And although that has been announced, the 90 days comes up here in mid-August. This will be interesting as the utilities that are applying for waivers have to apply for those waivers by mid-August. 

The Russian suppliers have essentially said, ‘Look, if you don't have the waiver by then, there's a force majeure clause, and we're going to enact that.’ And that will put any utility that is buying from the Russians in a bit of a strenuous position. What I'm hearing is that, especially for short-term imports of Russian nuclear fuel, it probably won't be that difficult to get the waiver.

These waivers go out a few years for nuclear fuel being bought from Russia in 2026-27. Hence, it will become more and more difficult to get them. And then, by 2028, it's all done. These US utilities will have to source nuclear fuel and material outside of Russia from other countries and other producing regions.

I think the waiver process has caused a bit of stagnation in the uranium market wherein we haven’t seen very much utility contracting so far this year. I think that changes. And I think it becomes a major catalyst for the second half of the year where we’ll begin to see contracting volumes really ramping up. One of the reasons why we've seen that stagnation is because, in particular, US utilities have been waiting to see what this waiver process was going to look like.

Going forward for the remainder of the year, there's a lot to look forward to. We've talked at length about the underlying supply/demand fundamentals. Those are still as strong as they've ever been with a major structural primary mine supply deficit to the tune of 40 to 50 million pounds a year.

What's exciting right now — and again, we’ve talked about this at length in previous conversations — is that the demand side is really starting to ramp up. We know that the supply side is strained right now. But the demand side is really becoming an exciting part of the uranium story. 

We're seeing not just new nuclear reactors coming online in places like China and India and other parts of the developing world but also restarts in the West. And now, there are talks of recommissioning previously decommissioned reactors.

Part of this has to do with the need for more electricity and more energy, in particular, for data centers. The AI revolution that we're seeing right now is requiring a lot of electricity, new energy, and electricity demand. At present, there are just over 7,000 data centers operating or under construction globally that will consume over 500 terawatt hours of electricity annually. That's more consumption than all of Italy.

Now, that number is expected to triple in the next 10 years to over 1,500 terawatt hours. Well, that's more electricity demand than all of India. As you can imagine, that’s going to require a lot of new electricity generation. 

As we're seeing, big tech is looking towards nuclear as one of the main sources of that baseload, carbon-emission-free electricity. Really, it’s the only source of baseload, carbon-emission-free electricity generation. So if you’re talking about co-locating, say, an SMR with a big data center, well, you can see how the demand side is really going to come into its own. 

On the supply side, again, we're just simply not producing enough uranium. Then, when you look at what's happening geopolitically across the globe, it’s clear that Western utilities, in particular, are going to have to start being more reliant on Western producers. 

We've seen the troubles in Niger. It's safe to say that a lot of the production in Niger, ultimately, will not be coming out West. The same can be said for the Kazakhs, the Mongolians, the Uzbeks; a lot of that forthcoming production over the next 10 to 20 years, I think, is going to be earmarked for China and for Russia and for Eastern consumption, if you will. 

And that means Western utilities are going to have to start relying more heavily on Western uranium production. We’re already starting to see some of that. And that's why we need to see more capital being invested into the sector. We need increased funding for development projects. We need to see that new production coming online to meet that growing demand.

Gerardo Del Real: I couldn't agree more, Jordan. I think we're going to see it across many sectors — not just the uranium sector. I think a premium for a safe and friendly supply is going to get noticed here, globally, soon. I think it's going to happen in the lithium space as well. 

Interesting times. A lot of money to be made. Congrats on the discovery, and I'm looking forward to having you back on with everything you have planned for the second half of the year. 

Jordan Trimble: Absolutely, and looking forward to talking again soon. Keep an eye out for additional news releases. It’s going to be a very exciting six months ahead going into the new year.

Gerardo Del Real: Good stuff. Thanks again, Jordan.

Jordan Trimble: Thanks, Gerardo.

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