Categories: Energy
Topics: General Energy

Skyharbour Resources (TSX-V: SYH)(OTC: SYHBF) CEO Jordan Trimble on Multi-Project Uranium Drilling in Saskatchewan’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. Jordan, you've been on the road. How are you today, sir?

Jordan Trimble: I'm doing well. Yes, it has been a busy few months with a lot of travel and conferences. And it’s been an interesting market, as we discussed offline. A lot going on. Right now, it's been volatile but it looks like we've rebounded from recent lows in the uranium market, and I'm expecting a very exciting and positive few months ahead as we work our way through the rest of the year.

Gerardo Del Real: I'm expecting a very positive next few years, if I'm being perfectly honest, but we can definitely start with the next few months. I don't think it's a coincidence that Skyharbour is up some 16% - 17% here in the last week. And honestly, that comes on the heels of the uranium spot price not really taking off, just putting in what looks to me to be a pretty definitive bottom at current levels. 

You've been on the road. You've been marketing. You've been speaking with people behind the scenes that have their finger on the pulse. What was the sentiment like for you during your travels?

Jordan Trimble: We have a pretty good sense, talking with other industry experts and investors and pundits in the industry, that if you look at the price action over the last several months, there was, as I mentioned, volatility, and it was a very, very hot January. 

We saw, obviously, the uranium spot price gap up to just under US$110 a pound. And then we subsequently, in February, saw it pull back and hit a recent low of about US$83 or US$84 per pound in mid-March. And it has since bounced back into the high US$80s.

And when a commodity moves over 50% in less than a year — as this metal did in late 2023 — you can expect a pullback. Nothing goes straight up, as we've discussed previously. And so I think it was a healthy pullback. 

We saw the equities take a bigger hit and pull back more substantially. And what we were hearing was that it was a few institutional investors and funds that were lightening their position in some profit-taking. And that's, again, to be expected in these kinds of markets.

But clearly, I think we've seen the near-term bottom put in, and, as you pointed out, we're now seeing a move higher. Again, I just emphasize that the underlying fundamentals are as strong as they've ever been for this commodity, and I feel like I do say this most of the time when I've been on with you.

Gerardo Del Real: It's been accurate, though, right?

Jordan Trimble: Yeah, I am as bullish as I've ever been… and that keeps growing. Even though we’ve seen the uranium price move substantially higher, I think it's good to have some perspective. And as we've talked about in previous interviews, we're still a far cry away from all-time highs, especially when you look at it in inflation-adjusted terms; we'd have to be trading north of US$200/lb. 

When we look at it relative to previous cycles like what we had in the mid-2000s — the '06, '07 uranium bull market — that run was somewhat short-lived due to the blow-off top that we saw in early 2007. But nonetheless, through the mid-2000s, we saw a very strong market.

I think this current market is much more comparable to what we saw in the late 1960s and 1970s where you had an expanding nuclear fleet. You had real growth in demand. You had a lot of supply then. There was a lot of primary and secondary supply, whereas — as we've talked about at length in previous interviews — the current supply side is much, much more stressed than it has been, really, at any point in time.

We currently have primary mine supply of about 150 to 160 million pounds and growing demand at about 200 million pounds. And that's one of the features of this market that I'm really excited about… is the demand side really coming into its own. It's accelerating. 

We're seeing not only new reactors coming online. Everyone knows that narrative. But we're also seeing a lot of nuclear reactor and plant extensions. And that's a key thing in the West where we weren't seeing that even five, six, or seven years ago. So it's not just new reactors coming online; it's existing reactors getting life extensions.

You then layer on, in the next 5 to 10 years, the advent of small modular reactors (SMRs). And one of the big talking points in the industry and at these various conferences has been the growth in electricity demand as a result of the AI industry. This massive emerging new industry requires these electricity-intensive, power-intensive data centers. 

And really, if you look at it, the only real way to power these data centers with clean, baseload electricity is nuclear energy. We saw Amazon recently sign a contract with Constellation Energy, which just shows the potential for these data centers to be powered by clean, baseload electricity generation from nuclear power. 

I think we'll continue to see that trend, especially as small modular reactors come onto the scene. And you can co-locate these SMRs with these energy-intensive data centers that power AI.

There are also a lot of other industries that are contributing to rising electricity demand; AI being a big one… of course, electric vehicles (EVs)... we've talked about cryptocurrency… and the list goes on. The world is electrifying, and we need more clean electricity.

We saw this last December at the COP28 conference in Dubai where more than 20 nations signed a pledge to triple nuclear capacity by 2050. And we saw, just recently, the first nuclear summit held by the International Atomic Energy Agency (IAEA) in Brussels. Over 30 countries attended, again, working to build out the nuclear industry globally. And so this demand side is really coming into its own. 

On the other side of the equation, on the supply side — and as we've talked about at length — we simply do not have enough primary mine supply. Geopolitical challenges globally and conflicts are exacerbating the issue, including the global flow and trade of uranium and nuclear fuel. As a result, we're seeing this consistent upward pressure on the uranium price.

Getting back to what we were talking about market-wise, we simply need to take a step back and look at what’s happening here. Yes, there's day-to-day and week-to-week noise. And we get those fits and starts. Yet, I think the fundamentals are as sound as they've ever been. 

And that set up will help drive a much higher uranium price as we go forward to the benefit of the uranium equities and investors in the space.

Gerardo Del Real: No, listen, when we're not having conversations and when I'm not trying to bring quality guests and information and companies to people on Resource Stock Digest, I also write a paid newsletter under the publishing company that my business partner and I co-own — that being Digest Publishing. 

And I was writing about that just yesterday, how this commodity supercycle is different because a lot of the deficits that we're experiencing and will continue to experience are structural in nature. It's very different from past deficits that were able to be made up quickly when demand waned. That’s simply not the case this time.

And I think that point is lost on a lot of speculators. And I also think that's why a lot of speculators are going to miss out, unfortunately, on the first 200%, 300%, 400% gains in the broader commodities space — much like what we saw during the most recent leg up in the uranium space. 

Companies went from 10 or 15 cents to 70 cents in a hurry. And I think that same thing is going to happen in the copper space and, as well, in the lithium space. We have gold at all-time highs. Silver is up 4% today and only a few dollars away from new all-time highs. So I think it's going to be an interesting couple of years.

Jordan, you and the team did a brilliant job positioning Skyharbour during the uranium bear market when things were tough. What wasn't tough was finding good projects. What was tough was financing and finding the dollars to go get those good projects. 

You’ve expanded the portfolio and you’ve joint-ventured multiple projects. And now, you have co-flagships moving forward in a uranium bull market, which is starting to pay dividends here as the month of March has been absolutely busy-busy for what was already a busy start to 2024.

Can you speak to the multiple joint ventures that are now seeing partner-funded exploration? And then, can we talk about the co-flagships and what comes next there?

Jordan Trimble: Sure, and a lot to cover there. We've had quite a bit of news flow over the course of the last month. And we'll continue to have a lot of news flow and catalysts over the coming months as we work our way through these winter exploration programs.

So just a quick update on the various partners and their programs. 

We have seven partnerships currently, three of which are joint ventures with the other four actively earning in. We just announced today that one of our JV partners, a strategic partner in Orano, has commenced a field program at the Preston project. 

This is the first field program being carried out at the project in four years. We are very excited for them to initiate and commence this program that’ll run right through the year via a budget of just under C$900,000. We are participating as a minority interest-holder in the project and in the JV. 

They're carrying out some geophysics and some ground EM gravity surveys to start and will be carrying out a fairly large soil-sampling program this summer. So we are thrilled to see what they find. 

It's a big project. It’s located on the western side of the Athabasca Basin just to the south of Fission and NexGen. It's road-accessible. It's a great asset. And even though it was quiet for the last few years, I think it says a lot that they're coming back and that they've allocated a budget to the Preston project for this year. 

Right beside them is the East Preston project, which is being advanced by our JV partner Azincourt Energy. Azincourt just announced a 1,500-meter winter drill program, which is underway and which they're mobilizing for. They've done some great work there and they're making good headway at the project.

As I've said before, I think they're on the verge of a new discovery at East Preston. They're seeing all of the right indicator minerals elevated and anomalous uranium mineralization in some of the drill holes. This is relatively shallow drilling as well. Again, we'll be participating as a minority partner in the JV at that program, which will generate a fair bit of news flow over the coming months.

Then, moving over to the eastern side of the basin where most of our project portfolio is concentrated, we have two relatively new earn-in option partners that are drilling, or have just completed inaugural drill programs, at our South Falcon East and Falcon projects. 

Tisdale Clean Energy has optioned our South Falcon East project, which hosts the Fraser Lakes Zone B deposit. They just had some news on the first phase of drilling where they’ve confirmed mineralization at Fraser Lakes and where they're currently gearing up for a second phase. 

South Falcon East is a very important and exciting project in our prospect generator business. It's a more advanced-stage project that we did some work on before optioning out to Tisdale. There's a small resource there along with a lot of exploration upside potential. 

The project really hasn't been drilled deep so there's a lot of potential below the resource. And that's something Tisdale is going to be continuing to test. Only a small amount of drilling in the first phase completed with lots more drilling to come in the second phase and throughout the remainder of the year and going into next year.

Then, right beside them at the Falcon project, our option partner North Shore Uranium completed a small inaugural drill program, which intersected elevated radioactivity. They’re seeing some really nice alteration and indicator minerals in the core there. 

Both of those programs have assays pending so we'll have news out, and our partners will have news out, on results of those programs. But a very good first pass for both, and, again, more drilling slated at the South Falcon East project with Tisdale. We're expecting, again, that both companies will be continuing to work throughout the year as they earn-in at their respective projects. So plenty of upcoming news flow from those two.

Additionally, we recently signed the official JV with our partner Valor Resources at the Hook Lake project, which is just north of Falcon and South Falcon East. We’re expecting some fieldwork from them at the project later this year. Hook Lake is host to a high-grade showing where previous samples returned upwards of 68% U308 at surface. So that's an exciting exploration property, as well, being advanced by a partner company.

And then, we have several other option partners that we're expecting some work from later in the year. We don't have final budgets yet but we’ll likely be seeing work done at Yurchison and Mann Lake later in the year. We’re also in advanced negotiations on new option partners and potential JVs at some of our other projects. 

We recently staked some additional ground to add to the portfolio, bringing us to well over 1.4 million acres across 29 projects. It's a massive, massive land position. In fact, it’s the third-largest mineral tenure holding by acreage in northern Saskatchewan in the Athabasca Basin. 

We have 29 projects in all, 7 of which are currently under JV or option. Two of them are our co-flagship Russell and Moore Lake projects and then another 20 that we have 100% of, some of which we're actively seeking partners and negotiating potential new option deals on. So keep an eye out for some new partnerships to be announced and new companies to come in and advance some of those other secondary projects in the portfolio.

Now, going over to our two main projects, Moore and Russell Lake, we commenced a 8,000-meter winter drill program earlier this year. We're making great progress there, and we’re very, very happy with what we're seeing. Results are obviously still pending. We'll have some news flow on that over the coming weeks and months as we continue to drill at both projects. 

Of the 8,000 meters, 5,000 meters have been earmarked for Russell Lake where we're currently drilling. As I've mentioned in previous interviews, we're drilling three target areas at Russell; the Fork Target, the East Grayling Target, and the M-Zone Extension, which, so far, like I said, we are very, very excited with what we're seeing. 

Russell Lake is an advanced-stage exploration project on the eastern side of the basin that’s ripe for discovery. And I think we're going to deliver just that here this year. We’ll be wrapping up this winter drill program in the coming weeks. Once results are in and announced at Russell, we'll get back to drilling there in the summertime via a fully-funded, fully-permitted program.

Adjacent to Russell Lake is our co-flagship Moore Lake project, which is the most advanced-stage project in our portfolio. The project hosts the high-grade Maverick Zone. In fact, there are several high-grade zones present. We've had drill results previously at the project of 21% U308 over a meter-and-a-half. That was within six meters of 6% U308. 

We've since gone back in, and we're now drilling 3,000 meters in this winter phase. We're working our way through that currently. Again, very, very happy with what we're seeing. Results are pending. We're going back into a few main high-grade zones on the Maverick corridor. 

We're currently doing some infill and expansion drilling. And we’re planning to continue drilling through the summer and into the fall in a second phase later this year, which will likely consist of another 8,000 to 10,000 meters combined between Russell and Moore Lake.  

So 8,000 meters in total for this winter program at Russell and Moore and then another 8,000 to 10,000 meters this summer and into the fall. So a minimum, call it, 15,000 meters given that our drill costs are quite low. The Russell Lake project is road-accessible, with most targets located right off of the road, making it drillable year round. There's also an exploration camp there.

Our drill costs are substantially lower than most other projects and exploration companies operating in the basin. I mentioned the 15,000 meters… but we’ll likely get upwards of 18,000 to 20,000 meters combined across the two co-flagship projects.

This is the largest single-year drill campaign we've ever carried out, and that's not including any of the meters drilled from the various partner companies I referred to earlier. So a big year ahead, and I think the timing is great with the market. 

We talked a little bit about where we see the uranium market going this year. We're very bullish. I think it's still early on in what will be a much longer, more sustained bull market… and we're very well-positioned to take advantage of that.

Gerardo Del Real: Listen, well said. I couldn't have said it better. Thanks, Jordan. Uranium is going higher, and we're going to keep making discoveries to try and help provide some of that supply and also aid some of that deficit that's going to be here for years. 

This isn't a flash-in-the-pan uranium bull market. I hope everyone is able to profit from it. Jordan, anything else you'd like to add?

Jordan Trimble: I think that covers it all. Lots of news flow coming up… so stay tuned… and looking forward to catching up in the coming weeks and months.

Gerardo Del Real: We were definitely overdue for a catch-up. This one was a thorough one. Thank you so much for your time, Jordan. Appreciate it!

Jordan Trimble: Thank you, Gerardo.

Gerardo Del Real: Cheers.

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