Skyharbour Resources (TSX-V: SYH)(OTC: SYHBF) CEO Jordan Trimble on Multiple Athabasca-Based Drilling Projects in a Rising Uranium Market
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, great to have you back on again. How are you today, sir?
Jordan Trimble: I'm doing well. It's good to be back and looking forward to catching up.
Gerardo Del Real: Well, let's get into it. You've been traveling; you've been on the road. Uranium prices just touched US$75 a pound, a 15-year-high. The sector looks like it's primed to continue to break out and make new highs. Thoughts on the uranium space before we get into the recent news from Skyharbour and the uranium mineralization at the Russell Lake project?
Jordan Trimble: Yes, the commodity has been performing like we had hoped it would. And I think it's the top-performing commodity this year; up over 50% year to date. And a lot of the underlying fundamentals that we've talked a lot about previously are all lining up and we're seeing that materialize into higher uranium prices.
I've been at several conferences recently, and no question the sentiment around the sector is strong, and I think there's also a good case to be made that there's going to be even higher prices going forward.
You've had a lot of utility buying this year, so we're seeing that contract market really pick up. I think we've eclipsed, now, well over 140 million pounds of long-term material contracted. The volumes are approaching that replacement rate of 180 million pounds. Not sure if we'll get there this year but I think it sets up nicely for those numbers in the coming years.
And again, as we've spoken about previously, when we see that kind of contracting volume, we typically see continued price spikes in the commodity, in the metal price. We're seeing this market bifurcation continue to unfold where you've got a lot of primary mine supply coming from places like Kazakhstan, Russia, Uzbekistan, and parts of Africa, and I think a lot of that material going forward is going to be earmarked for countries like Russia and China, especially the Kazakh production.
In fact, just last year in 2022, over half of Kazatomprom sales were to the Chinese, and I think we're going to continue to see the Chinese and the Russians be the major buyers of material from Kazakhstan. So Western utilities and western demand for uranium, they're going to have to start buying material, buying uranium, from Western suppliers. And as we’ve talked about extensively, we just simply don't have the new production coming on in the West in the next few years to meet that growing demand.
We've seen, in the US in particular, utility inventories drop well below two years on hand. And yet, we've seen some, but we haven't seen a ton, of US utility contracting and buying in the long-term market this year. I think that that could very well be the next shoe to drop in the upcoming 12 months is US utility buying. And I think that that will help drive a much higher price in the next 12 to 24 months.
We've seen, also, inventories at producers like Cameco drop. Cameco has had to step into the market and buy 5 million pounds this year as just yet another source of demand that's helped drive higher prices. Obviously, the financial entities like the Sprott Physical Trust, and Yellow Cake plc, and a few others, new funds that have come to market, these are all additional marginal buyers and new sources of demand that will also continue to put upward pressure on the price.
But the bottom line is there's very little excess inventory in the market in all stages of the fuel cycle. And so we're seeing upward pressure on prices at all intermediate products including U308 yellowcake, and we're going to continue to see the contract market ramp up.
There's a billion and a half pounds of uncovered requirements through 2040. So I think we're just getting started with this robust contracting market that's really starting to come to life, and I think we'll see that carry through into the following few years.
So, a very exciting time for uranium mining company investors and for the companies in the space. And, like I said, even at US$70 to US$75 a pound — basically back to where we were pre-Fukushima — I think there's still a lot of runway ahead of us.
Gerardo Del Real: I couldn't agree more. Let's get into how Skyharbour has positioned shareholders to be able to outperform the spot price, right? You're trading at really, really good levels right now. You just had some news. How are things coming along on the company specific side?
Jordan Trimble: Yeah, we're well-positioned right now as a leading Athabasca Basin exploration early-stage development and prospect generation business. We’ve talked about the portfolio; one of the largest land positions in northern Saskatchewan in the highest grade depository of uranium in the world in one of the top mining districts with 24 projects spanning over 1.2 million acres.
We've had news out on our two co-flagship projects here recently, including drill results from our first pass drill program at the recently optioned Russell Lake project; 9,600 meters that we’ve completed. And we just announced results on a multi-phase program over the course of the year.
We are very pleased with what we've initially seen there at this project and, already, we have plans for a follow-up 4,000 to 5,000 meter winter program, which will commence in the next several months. I was just up at the project and it's a big, big property at over 73,000 hectares.
The main target area that was drilled, we intersected significant uranium mineralization over a very long conductive corridor called the Grayling target area. This is a primary target at the project. And there are several areas within the main target area that we're going to continue drill testing and following up on the results from this first program, including one hole that intersected just under 6 meters of 0.15% within that one meter of just under 0.4%.
So we're well on our way there, we believe, to making a new meaningful high-grade discovery at the project. And we're very, very confident in going right back in there this winter to continue following up on that mineralization that we discovered in this first inaugural drill program that we carried out at the project. So keep an eye out for additional news flow on Russell Lake.
At the adjacent Moore Lake project, we are planning drilling in the next year as well. In fact, it's quite easy for us to move the rig back and forth between Russell and Moore Lake as they're adjacent to each other. Russell Lake also benefits by having a road, power lines, and an exploration camp there, so we're going to continue to explore and advance both projects over the course of the next 12 months.
And as you and the listeners are well aware, Moore Lake, our most advanced stage project, is host to the high-grade Maverick Zone and Maverick East Zones. We're actually working on a resource estimate at that project currently, and we're looking to go in and continue to define some of the higher grade zones in these underlying basement rocks that we've had success with in recent years drilling. There's multi-percent U308 mineralization in the basement rocks and in the sandstone.
So planning what'll likely be between, collectively, those two projects in the next six months, I would say somewhere between 7,000 to 9,000 meters combined. And so there's going to be lots of news flow and catalysts coming from those two more advanced stage co-flagship projects in 2024.
Gerardo Del Real: A lot to like. Fully-funded winter drilling programs, stock near 52-week highs. Despite that, I believe you'll soon be trading in dollars and not cents. Most definitely have some momentum. Anything to add to that, Jordan?
Jordan Trimble: Yeah, we've also had some news out on some of our partner-funded projects as a part of our prospect generator business. We've recently announced programs from Tisdale at our South Falcon East project.
They're planning a 2000-meter inaugural winter drill program, which will commence early in the new year. Very, very excited for this program; highly anticipated given that the project does host a small resource at the Fraser Lakes Zone B deposit. They are looking to go in and continue expanding that near-surface uranium deposit and also looking to make additional discoveries elsewhere in the project area.
We've also just announced the closing of our option agreement with North Shore Uranium. Now, this is at the South Falcon project adjacent to South Falcon East, and this is an option agreement that will see North Shore Uranium earn-in a majority interest over the coming years. They too are planning exploration and drilling in 2024.
We're also expecting programs from our two JV partners, Orano and Azincourt; the first time in a number of years that both companies are planning exploration at the Preston and East Preston projects on the western side of the Athabasca Basin.
And we're anticipating that a couple of the other option earn-in partners will be exploring and drilling at their respective projects as well. So it'll be eight partner companies, six earn-in option partners, and two JV partners.
I suspect that we'll see at least five, maybe six of them, actively advancing their projects in the new year, which will complement the news flow that we'll generate from our two main projects at Russell and Moore.
Gerardo Del Real: A lot to like. Exciting times, Jordan. As always, it's been insightful. Appreciate the time, sir.
Jordan Trimble: Thank you very much, Gerardo.
Gerardo Del Real: Alright, chat soon. Cheers.
Jordan Trimble: Take care.Click here to see more from Skyharbour Resources Ltd.