Skyharbour Resources (TSX-V: SYH)(OTC: SYHBF) CEO Jordan Trimble on Long-Term Uranium Bull & New Partner-Funded Project in Canada’s Prolific 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. Mr. Trimble, how are you doing this morning?
Jordan Trimble: It's always ‘Jordan’ to you, Gerardo! But I appreciate it! I'm doing well, thanks. Yeah, lots to talk about.
Gerardo Del Real: It's a bull market in uranium, Jordan. I told you… I'm going to call you ‘Mr. Trimble’ until the bull market is over! Jokes aside, you positioned Skyharbour and shareholders very, very well during very challenging conditions. That's really starting to pay off. And I mean that in the literal sense.
You had some news this morning that I wanted you to provide a bit of context on; more accretive news, more accretive deal-making while still focusing on the flagship. You're doing both simultaneously, beautifully, frankly, so congrats on that front.
But do you want to go ahead and share some insight on the news from this morning?
Jordan Trimble: Sure… and I think that's a key point there that you made… that I don't want to take focus away from the exploration and the drilling that we're carrying out at our flagship Moore Lake Project as we spoke about in our last interview.
We completed a 7,000 meter drill program; very happy with what we've seen in that program having announced the first batch of results just over a month ago. Some of the highest grade mineralization that we've discovered to-date in the underlying basement rocks; 6.8% U308 over two meters in one of the drill holes. And we've got another 12 or 13 holes to report… so keep an eye out for news flow between now and year-end on that.
But yeah, look, the other part of our business, as we talked about at length, is prospect generation. And as we spoke just a couple of weeks ago when we announced the transaction — the option agreement with what is now Basin Uranium Corp. (was previously Black Shield) — we optioned our Mann Lake Project to them, which we went over, again, a few weeks ago.
And just today, we brought in a new partner company for what is now our fifth partner company at our other projects — a company called Medaro Mining. And as you'll see with the news release in the terms of this option agreement, it's very accretive for Skyharbour. It's a great deal for both companies.
So the total amount for an initial 70% interest in the Yurchison Project, which we own 100% of currently…
It's over on the east side, just actually outside of the basin. It's road accessible and it has some good historical exploration results. And it's actually prospective for both uranium and for base metals. But there's some very interesting historical uranium numbers there in trenches and in previous drill holes.
…but just getting back to the terms of the option agreement. So a three-year deal, earn-in option for an initial 70%; in order for Medaro to earn that initial 70%, they have to pay us C$800,000 cash. That's all Canadian. They have to carry out C$5 million in exploration expenditures, and they have to issue us C$3 million in shares of the company.
And what's a little bit different about this earn-in option agreement is that we've provided them an option to acquire up to 100%. Now, there's a big balloon payment that would need to be made within 30 days of earning the initial 70%. So if they earn the 70% through the exploration expenditures, cash, and share payments — then they have the option to acquire the additional 30% by paying us C$7.5 million in cash and issuing us C$7.5 million worth of stock.
So a big payment; it's a big dollar value, which is great to see. Obviously, we would retain an interest in the project and in the company through our shareholding and in NSR. Now, if they complete just the 70% earn-in, we would retain that minority interest, much like we have structured in our other option agreements. So a big deal for Skyharbour… yet, again, a good way for us to monetize some of our other secondary projects.
And this is now our fifth partner company; our third active option agreement. So again, these partner companies are funding the vast majority of the exploration and the development work that's being carried out on these projects. And really, again, I emphasize this, it provides us with additional active programs and projects whereby Skyharbour and its shareholders have exposure to potential new discoveries in the basin.
So come January and February, if we go through our various partnerships, there's a strong likelihood you'll see, at minimum, three to four active drill programs at our various projects. Obviously, our flagship Moore Lake Project, we have plans to get back to work there in the new year once all of the assays are reported from this recently completed drill program.
But we also have partner companies: Azincourt planning a 7,000 meter drill program at East Preston; Valor planning a 2,500 meter drill program at Hook Lake. And likely, we'll see one of these two new option partners — either Medaro or Basin Uranium Corp. — drilling in the new year as well; potentially both of them drilling in the new year. So lots going on.
Gerardo Del Real: A lot going on. Can't let you go without getting your take on the uranium space. I know you were at a couple of conferences recently. I have to believe that the sentiment this year was a tad bit different than the last time you were out and about conferencing as it relates to uranium. How did that go for you?
Jordan Trimble: Yeah, it's been good. We've attended several virtual conferences and road shows. There's a lot of interest in the space right now.
And taking a step back, there's two mega-macro-trends that continue to gain momentum, and one of which is electrification globally. The world needs more electricity. And the second is decarbonization; clean energy. And, really, nuclear is at the nexus of both of these megatrends.
And I think we'll just continue to see support grow for the industry. You've got the COP26 happening right now in Britain. You've got a continued push towards decarbonization and economies being carbon-neutral by mid-century. And nuclear will have to play a pivotal and integral role in achieving those climate goals.
So the demand side… I think we continue to see growth in demand globally. We've talked at length about the supply/demand fundamentals. But they're as compelling as they've ever been. And certainly, with the advent of SMRs and some of these advanced nuclear technologies — and just the build-out of nuclear reactors in places like China and India and other parts of the developing world — I think we're in for a good 10 to 20 years ahead of us in terms of growth in demand.
We've talked at length about the supply side; there's been a major supply side response that's played out over the last five or six years. Simply, at even the current price having moved up — we saw it jump up from $30 to $50… it’s kind of settled back in in the low to mid-$40s — but at that price per pound of uranium, we're still at quite low levels. We need to see a higher price to incentivize new meaningful production to come back online.
And as I said before, I still think it's very much the early, early innings of this bull market. We've talked about recent financial entities that have come into the market like the Sprott Physical Uranium Trust more recently.
The Kazakhs announced a physical fund that they're going to be setting up, and they've announced they're planning to raise half a billion dollars for that. Sprott has announced over $1.3 billion. So that's a lot of money that's come in, and it will be cleaning up the market. And so we're seeing that market continue to tighten.
We saw, last week, with Cameco's earnings call… I thought it was one of the more bullish earnings calls from them in a long time. They hit on a number of key points, one of which was the restart at McArthur likely not taking place or happening until, at least, for a few years.
And in their discussions with the utility companies, we are seeing some new utility interest, and, again, I emphasize this, that's historically been the main driver for a higher uranium price in uranium bull markets is utilities coming in and contracting. And we have yet to see that happen.
This recent move and the catalyst for a higher uranium price has been driven by just a couple of financial entities in the market and a bit of speculation. So when we see the real main driver and catalyst come into the market over the next several years — I think it's going to be a very lucrative space to be in!
Gerardo Del Real: Agreed! Well said. I'm looking forward to the consistent news flow to end what was a spectacular 2021. And I think as great as 2021 was for the uranium space, I think 2022 is going to be an absolute barnburner! Thanks a lot, Jordan. I appreciate the time.
Jordan Trimble: Absolutely. Thanks for having me.
Gerardo Del Real: Alright, we'll chat soon.
Jordan Trimble: Take care.Click here to see more from Skyharbour Resources Ltd.