Skyharbour Resources (TSX-V: SYH)(OTC: SYHBF) CEO Jordan Trimble on Multi-Property Uranium Acquisition & Drilling Update from 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. Jordan, how are you today?
Jordan Trimble: I'm doing well. Thanks for having me. Looking forward to catching up.
Gerardo Del Real: No, look, it's a timely catch up. Skyharbour has signed option agreements with seven different partners, right, that total over C$34 million, potentially, in partner-funded exploration expenditures, over C$22 million in stock being issued, and just under C$15 million in cash payments that'll come into the company, assuming, of course, that all of the partner companies complete the full earn-ins at their respective projects.
Now, despite that, Skyharbour shares, and the entire uranium sector, has pulled back; the equities, not so much the spot price. We talked about the disconnect and the opportunity off-air, and I thought it merited a brief discussion on air for those that maybe have been looking at tiptoeing into the uranium space and were waiting for a pullback for better entry points. I personally think that right now is going to be the bottom of this leg up.
I think it's similar to a year ago where we were at a bottom and waiting for that first leg up. And we've talked baseball parlance in the past and called it the first two innings of the game. I think this is the next step before the next leg up. Any thoughts on the disconnect there between the spot price and the equities pulling back and the opportunity there?
Jordan Trimble: Yeah, I'm in full agreement with you, and we have seen this in the past. We saw this in late 2020 before that first breakout that we saw in late 2020 and early 2021. We saw this in the summer of 2021, and we saw this yet again in the summer of last year.
And we're at this lower range in the trading. Most of these companies, right now, including Skyharbour, I've been actively adding to my position. So needless to say, I'm putting my money where my mouth is, and I think there is the strongest value proposition that we've ever offered.
We've talked about this extensively in the past. But coming into this year, we knew this was going to be a catalyst rich year with all of the drilling that we're carrying out at Russell and, ultimately, at Russell and Moore Lake. And then, obviously, all of the work, as you alluded to, that the partner companies are funding.
We've got seven partner companies, two joint ventures, five active earn-in option agreements; well over C$70 million in combined project consideration, as you pointed out. So that's exploration expenditures funded by the partner companies and cash and share payments. We're expecting to receive over C$2 million in cash in stock from these partners over the next 12 months. So it keeps the dilution in check and allows us to focus our time, money, and efforts at our two primary projects.
Russell Lake, where we have the ongoing 10,000-meter drill program — I won't say a lot on it as we have assays pending — but I will say we are very, very happy with what we're seeing and making great progress there. Still a lot of drilling to be done and a lot of news flow to come out from that.
And as I pointed out in previous interviews, this is a project that we strongly believe can deliver a new hybrid discovery and unlock a lot of value over the coming months and over the next couple of years. So very, very happy with what we're seeing there.
But getting back to the partners and this news that we announced today, there's a lot of news flow coming from these various partner companies. We're expecting several of them to be drilling and to be carrying out substantial exploration programs over the next year.
We have assays pending, as well, from East Preston where Azincourt just completed a multi-thousand-meter drill program. So a lot of news flow… and I do think this disconnect will be short-lived as the uranium price has held in there at about US$50 a pound, yet the equities are trading near their lower range.
Gerardo Del Real: You must like what you're seeing in the assays, as you stated, because you just announced a strategic property staking. You’ve added eight new properties. The portfolio, cash aside, potential cash, potential equity value — all of that aside and kudos to you and the team — you've done a brilliant job of positioning shareholders for that next leg up.
But you can't ignore over 490,000 hectares in the Athabasca Basin, right? That's like staking 490,000 hectares of potential oil-bearing sands in the Middle East. Can you speak to that a bit?
Jordan Trimble: Yeah, so the news this morning is we've added just over 34,000 hectares, or 85,000 acres, of new property through staking. So it's relatively inexpensive in terms of the acquisition cost.
As you pointed out, this is the highest-grade depository of uranium in the world; some of the most prospective mineral properties in the world. It brings our total land package to north of 492,000 hectares, or over 1.2 million acres.
So this is one of the largest property packages held by any company in the region, and we now have 23 properties. Some of the staking that we did here was to add on additional claims at existing properties. But we, basically, have every subregion of the basin covered. And as we point out in the news release, these new properties will become a part of our prospect generator business.
So we will incubate them and look to bring in strategic partners. And then, we will look to option or JV out some of these claims and have the partner companies fund the exploration and bring in some cash and stock to Skyharbour.
We're in advanced negotiations on a few of our existing 100%-owned properties that are part of our prospect generator model. The market has been very receptive to these deals as well. I think that that's worth noting. A potential catalyst coming up is us signing new option agreements with new partner companies at some of our other secondary projects.
And as we’ve talked about in the past, and just to be clear on this, we have our two main projects:
Russell Lake, which we've optioned from Rio Tinto; drilling there right now, as I just mentioned.
And our Moore Lake Project; 100%-owned. And we have plans to continue advancing that project later in the year.
And now, the other 21 projects are a part of our prospect generator business. Eight of them, we've signed option agreements and/or a joint venture agreement with these seven other companies. And now, several more that we've added to the portfolio that we will look to bring in partner companies on.
Gerardo Del Real: It's a lot of great work being done despite that you're trading near your 52-week lows. For those of you in the uranium space that want quality uranium exposure to partner-funded exploration, a non-dilutive model, a chance at multiple high-grade discoveries at 100%-owned projects… it doesn't get much better than Skyharbour near 52-week lows.
It's called buy low, sell high, people. You can't do one without the other. So do your own due diligence; not investment advice, obviously. But I like it when the CEO eats his or her own cooking, and in this case, Mr. Trimble is up and at it buying shares in the open market.
Always a good sign. Jordan, anything to add to that?
Jordan Trimble: Maybe just a quick note on the uranium market. I mean, we did talk about the price, and it's about US$50 a pound. There's obviously a big disconnect with the equities. We're trading near our 52-week lows, and a number of our peer group companies are as well like we've seen in the past.
So as I pointed out, this isn't the first time we've seen this, and we've seen fairly strong support and then, typically, a pretty strong bounce back. And if we look at the uranium market in particular and potential catalysts for a higher uranium price, I'm as bullish as I've ever been. This US$50 uranium price, currently, I don't think will last very long.
I think there's too many potential near-term catalysts on the horizon. You have a major, major structural supply deficit that's formed to the tune of 40 to 50 million pounds annually.
We're just simply not bringing on enough near-term supply to meet that. You look at the contracting market, right; the contracting market has picked up quite a bit over the last several years. But we're still well away from the replacement rate contracting levels that we saw in the mid-2000s, which corresponded with much higher uranium prices.
We saw about 120 million pounds of contracting last year. We need to see about 180 million pounds for that replacement rate to be met. And I think we will see that over these next few years. And again, that's typically been one of the largest drivers for higher uranium prices, these new utility procurement cycles.
We've also just seen more and more positive news come out, in particular, in the US and in other parts of the West. The Department of Energy recently issued a report that was really pushing for advanced nuclear technologies, and Austin Mars, and meeting their decarbonization objectives.
And there were talks in there of an additional 200 gigawatts of nuclear capacity. That's more aggressive than even what China is looking at. So even if a fraction of that comes to fruition, that's a lot of new demand that isn't being forecasted or isn't currently being estimated in most supply-demand estimates. That's a lot of new demand that comes on. And again… those reactors need fuel and they need uranium.
And getting back to the bifurcation that we're seeing in the market — East versus West and Russia being a major player and being carved out from the West — where would these new reactors get that long-term secure supply? It's going to have to come from Western suppliers; Canada, the US, Australia.
And we talked about a big global supply-demand imbalance. Well, the supply-demand imbalance in the West is even more extreme. So all the more reason to be looking at Western uranium companies right now given the low valuations.
And I do think if we do see this next leg up in the uranium price, the equities are going to have — and it'll be a bit of a double whammy, if you will — for the equities because they'll have to rerate to catch up to where they should have been. Plus, they'll rerate, or they’ll move higher, when the uranium price also moves higher from the current US$50 per pound price.
Gerardo Del Real: Couldn't agree more. I tried to get the last word… it never works with Jordan! Jordan, thank you for your time. Let's chat again soon.
Jordan Trimble: Thank you very much, Gerardo.
Gerardo Del Real: I'm looking forward to those assays.
Jordan Trimble: Absolutely. We'll chat soon.
Gerardo Del Real: Alright, thank you.Click here to see more from Skyharbour Resources Ltd.