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

Skyharbour Resources (TSX-V: SYH)(OTC: SYHBF) CEO Jordan Trimble on the Start of the Next Leg Up in Uranium

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today for an overdue chat is the president and CEO of Skyharbour Resources, Mr. Jordan Trimble. Jordan, it's been a bit. It's great to have you back on. How are you today, sir?

Jordan Trimble: I'm doing well. It's great to be back on and looking forward to catching up. Got a busy year ahead.

Gerardo Del Real: Man, listen, we talked a bit off-air. I think both you and I are excited about 2025. I think with inflation ramped up, despite what the powers that be would like to tell us, we can see and we can feel that inflation is definitely not subsiding and so I think the commodity space is sniffing that out. And we talked a little bit about uranium and why we think 2025 is going to be a pivotal year for uranium, and you're one of the smartest people in the business. You keep your finger on the pulse. You have a lot of behind the scenes conversations with a lot of big movers and players in the uranium sector, and so I'd love to get your thoughts on what you're hearing and what you think. Because I think 2025 is going to be, as I mentioned, a pivotal, pivotal year for uranium. That bodes well for Skyharbour, it bodes well for the equities, but first, let's get your macro take. What do you think about uranium right now?

Jordan Trimble: Sure. Yeah. Well, this is going to shock you, but I'm very bullish. But as we talked about offline, no, look, as I told you though, I said I've been buying, adding to my positions. You can see with my insider filings of Skyharbour, both in the open market and in the financing, the $10 million financing that we just closed. I've been building up my already overweight position in the sector, more so in the last few months than I have really at almost any other point in the last couple of years. I think this year is going to be a transformational year for the sector. I truly believe that. After a 10-month consolidation and choppy market that we saw for the big run-up in late 2023, early 2024, the uranium price ended up being down for the year in 2024, and obviously, we saw that in the equity prices and valuations as well, especially towards the end of the year.

But I think it's a healthy consolidation. Nothing goes straight up, and the stage is set for I think what... It'll be a year similar to what we saw in the mid 2000s where you just have this next big leg up. There's too many positive forces and factors at play right now. The fundamentals continue to improve when you have a supply deficit of 30 to 45 million pounds, and importantly, now you just have this age of abundant secondary supply that's come to an end. That's a big, big hole to fill, and we're going to see continued upward pressure on the uranium price.

I think this is the year as well where we finally see that replacement rate contracting, the volumes of contracted material exceed the replacement rate, which we almost got to in 2023 at about 160 to 165 million pounds. We need about 180 to 185 million pounds for the replacement rate to be hit. Last year, we saw that pull back to about 105 to 110 million pounds. There's a number of reasons for that which we discussed in previous interviews last year, a lot of uncertainty globally, and in particular in the US and the Russia-US nuclear fuel embargoes and trading bans that we've seen. But a lot of those uncertainties that I think sidelined a lot of US and Western utilities last year, those are at least coming to a head now, and again, you can't forgo and avoid contracting as a utility. You can delay it, they've done a great job of that, flexing up contracts and using other levers that they have at their disposal, but those are short-term fixes, right? Eventually, you have to go back to the market and contract.

And so I think this will be the year where we see replacement rate contracting, which historically, again, that's one of the key drivers for this commodity. When you see large contracting volumes, you typically see a spike in the price. And last year there was, despite the uranium price, the spot price pulling back. Keep in mind, the long-term price continued to move higher throughout the year. Despite the price pullback in the spot market, we had some very positive news throughout the year, in particular with the big tech companies, hyperscalers announcing agreements with nuclear and advanced nuclear tech and SMR developers. So these are the biggest companies in the world, movers and shakers globally that are coming into this sector and will be, I think, having a huge impact on the demand going forward as these agreements and contracts materialize and as they work their way into the uranium market.

So you have a very strong, robust, growing demand side, and yet the supply side, as we've talked at length, again, in previous interviews, is tenuous at best, right? We are not producing enough uranium. There isn't enough new substantial amounts of uranium supply that can come on in the near term, especially in the West with the market bifurcating East versus West. You've had geopolitical issues that have further stressed the market. You just look at the recent news out of Kazakhstan, the suspension of production at Inkai. Now that looks like it'll be a temporary suspension, but there's things happening behind the scenes that I think the market isn't yet quite pricing in that'll be positive.

And again, any further supply disruptions or lower guidance, which we saw a lot of that in the last few years and the market respond positively to it, I think that's a trend that continues. And so there's just a slew of positive catalysts that I think are going to happen this year in a relatively short period of time that are really going to light a spark under the sector and hopefully lead to much, much higher uranium prices.

Gerardo Del Real: How is that going to benefit Skyharbour Resources? I'll start by answering a little bit of it. You've just announced that you're going to carry out a multi-phased 2025 drilling campaign totaling 16,000 to 18,000 meters at Russell Lake and the Moore uranium projects. That's an aggressive program. You raised some money. What are we swinging for in 2025?

Jordan Trimble: Well, it's going to be our largest annual drill campaign, our most ambitious drill program we've ever carried out as a company. As you mentioned, 16 to 18,000 meters over a multi-phased program throughout the year. So basically, we're going to start back up drilling at Russell Lake, an initial 5,000 meter winter drill program starting up within the next few weeks, and then we're going to move the rig back and forth between Russell and Moore. We'll end up drilling likely 10 to 11,000 meters at Russell throughout the year and an additional five to 7,000 meters at Moore, so our largest drill campaign by meters.

We're also benefiting from relatively low cost drilling. There's infrastructure, road, power lines. There's the exploration camp that we've inherited from Rio Tinto as we've completed the earn in at Russell, so these bring our drilling costs down at both Russell and Moore well below, all in Canadian $350 per meter, which if you look at a lot of other exploration companies in the Athabasca Basin at more remote projects, a lot of times, it can be well north of $500 Canadian all in. That's all the expenses, assay, geologist, camp, you name it. So our drilling cost is quite low. We get a lot of drilling for less money, and it's relatively shallow drilling as well.

Our targets at both Russell and Moore range from 250 meters to at most 450 to 500 meters. And so most of the drilling is in that three to 400 meter range, which means that we get a lot more holes for every thousand meters that we drill. So with the 16 to 18,000 meters of drilling, we're expecting somewhere in the ballpark of 35 to 45 drill holes, which is a lot of drilling and a lot of shots on goal, if you will, to hit a big high grade zone and deliver a market-moving intersection of high grade uranium mineralization.

Now, that's just the two projects, Russell and Moore, which again, we've spoken about at length previously. They're both advanced stage exploration assets, prime real estate in the Athabasca Basin, collectively over a quarter million acres of ground between the two projects as they're adjoining projects situated between the MacArthur River Mine and the Key Lake Mill. And our largest corporate shareholder, Denison, just adjacent to our Russell Lake project to the west, where they're building the Phoenix mine. That's just a few kilometers away from several of the higher priority drill targets at Russell.

And a lot of your audience will recall that last year, we announced what ended up being the best drill hole at the Russell Lake Project historically where we discovered up to 3% U308 over a half a meter in a brand new zone called the Fork Zone, so that's going to continue to be a priority target as we believe we're onto something much larger there. But there's a number of other targets at the project that we're planning to drill and test this year. A lot of them are simply the continuation or the extension of high grade uriniferous conductive quarters from Denison's Wheeler River Project onto Russell, so very, very excited to start the drilling back up at Russell.

We still have assays pending as well from the last bit of drilling that we carried out late last year at Russell and Moore, and we're very, very pleased with what we've seen there. Still waiting on the final geochem assays from both of those projects from late last year, but that'll generate some near term news flow and catalysts over the next month, two months, as we start this big 16 to 18,000 meter drill program, which will take us right through this year into the new year. Fully funded for all of this too. We just closed a $10 million financing. It was well-placed with a handful of funds and corporates, and that basically funds us right through this year into next year.

Gerardo Del Real: A lot to be excited about in 2025 if half of what we think is going to materialize in the uranium sector, and that coincides with high grade hits and discoveries at your co-flagships. I think it's going to be a blockbuster of a year. The consolidation hasn't been fun. It's been 10 months or so. I know my lithium audience is probably saying, "10 months. What's that?" They've been going through it for a year and a half or two now, but I think in both sectors, things are about to turn, and I think you've positioned Skyharbour really, really well. Anything to add to that, Jordan?

Jordan Trimble: Yeah, just a quick note on our prospect generator business. Needless to say, we've got lots to talk about with the two co-flagship Russell and Moore Lake projects this year, especially coming off of the high grade drill results that we announced last year and going into, again, the largest single year drill campaign we've ever carried out as a company at those two projects. But we also have a number of partner companies that are going to be very busy and active this year, and we will have news forthcoming as we get the final plans in from the various partner companies that are going to be drilling this year. But we are expecting somewhere in the ballpark of call it 15 to 16,000 additional meters across a handful of those partner funded projects throughout the Athabasca Basin.

So when you look at all the drilling that is anticipated this year at our Russell and Moore Lake projects, as well as at our partner funded projects, we're looking at potentially 30 to 35,000 meters of drilling, which is likely when you look all throughout the Athabasca Basin at various exploration companies operating there, it's probably one if not the largest combined drill campaign of any exploration company in the Basin.

So again, this is a one-stop shop for investors to get high-grade exploration and uranium discovery upside potential across a number of projects, numerous operators, a lot of that drilling as well being funded by partner companies. We still receive cash and shares as well annually from these partners as they earn in at these projects, and allows us to focus in on our two core assets of Russell and Moore.

Gerardo Del Real: A lot to like, a lot to be excited for. I keep using that word, but I think 2025 is going to be a blockbuster of a year if we have a similar run to the last time that the utility stepped off the sidelines and got in there pretty aggressively. Doing that from a 70 to $80 base makes for some pretty exciting price prognostications. I'm looking forward to it. Jordan, thank you for your time as always.

Jordan Trimble: Thank you.

Gerardo Del Real: All right, chat soon.

Click here to see more from Skyharbour Resources Ltd.