TSX-V: SYH | OTC: SYHBF
Advancing Multiple High-Grade Uranium Exploration Projects in the 2023-24 Uranium Bull Market
The new uranium bull market is now underway with U3O8 prices surging to decade-plus highs above US$65 per pound…
…and best of all, it’s still early innings, which means you haven’t missed out on the potentially largest-percentage gains.
The small-cap uranium company featured in this report — Skyharbour Resources Ltd. — has acquired an extensive portfolio of uranium exploration projects in Canada’s prolific Athabasca Basin and is well-positioned to benefit from improving uranium market fundamentals with 24 projects, ten of which are drill-ready, covering over 518,000 hectares (over 1.2 million acres) of land.
The flagship projects are the 100%-owned Moore Lake Uranium Project located 15 km east of Denison’s Wheeler River uranium project and 39 km south of Cameco’s McArthur River uranium mine as well as the adjacent Russell Lake Project recently optioned from Rio Tinto. Additionally, SYH has a total of 8 partner-funded uranium projects in the Athabasca Basin region as part of their prospect generator strategy.
Uranium Bull Market Underway in ‘23
There’s a major positive shift happening in the global nuclear energy market.
The world is quickly realizing that lofty climate goals will be impossible to meet without clean-burning, carbon-emission-free nuclear energy being an integral part of the clean-energy mix.
That fact is adding escalating pressure on an already constrained global uranium supply.
With uranium, what we arrive at is a market that’s consuming close to 200 million pounds of yellowcake annually — yet producing only around 140 million pounds.
That equates to a 60-million-pound structural deficit this year… which, when compounded over the next six years to the end of the current decade, balloons to a jaw-dropping ~360 million pounds.
That’s a staggeringly large deficit… and it underpins the escalating need for new domestic uranium sources reaching the supply chain.
And it’s really only the start.
On the demand side, we have Japan looking to restart a further 16 of its reactors. The island nation is also seeking ways to safely extend the plant-life of its existing reactor fleet from 40 to 60 years.
China just approved the construction of six new nuclear reactors across three provinces with plans to build 150 new reactors over the next 15 years as part of their newly-enhanced decarbonization mandate.
South Korea and India have also joined the fray and are now fully onboard with a cleaner energy future that will require vast amounts of uranium, or U3O8.
In Europe, France’s economy minister has doubled down on the need for a top-to-bottom overhaul of the electricity market saying, “there is no energetic transition without nuclear energy.” The nation has announced plans to construct a new generation of nuclear reactors for the first time in decades.
Even Finland’s Green Party — following decades of staunch opposition — voted overwhelmingly last year to categorize nuclear power as a form of sustainable energy. At present, one-third of Finland’s electricity is derived from nuclear power. And earlier this year, the country’s OL3 reactor, Europe’s largest, finally went online.
Other European nations are quickly falling in line with Finland’s pro-nuclear stance. Britain and Sweden are each planning new nuclear reactor projects with Belgium and Spain also cementing their support for the clean energy source.
Here in the United States, TerraPower is currently constructing a US$4B nuclear power plant in Wyoming that’ll use an all-new blend of enriched uranium.
Once completed, it is expected to generate efficient, low-cost, clean energy while utilizing enhanced safety standards that greatly reduce the risk of accident — even on par with wind power plants.
NuScale recently became the first company to be granted approval by the US government on small modular reactor (SMR) designs with the US Nuclear Regulatory Commission giving it the green light. Privately-owned Standard Power followed up that news with an announced partnership with NuScale on the construction of two SMRs to power its data center company customers.
Put plainly, increased uranium demand is coming from all angles. And that includes a new contracting cycle that’s just now getting underway with major utilities entering the market to secure their next long-term U3O8 contracts.
The combination of supply cuts from the highest-margin producers and utilities coming back into the market will create what many experts agree will be the greatest uranium bull market anyone has ever seen.
The Inflation Reduction Act of 2022 also provides funding for US nuclear power projects, including a tax credit for electricity produced at qualified nuclear power facilities.
Next, you have to look at the precariousness of the global uranium supply to really get the full picture.
Kazakhstan — a former soviet republic and the world’s largest uranium producer — produces roughly 40% of global supply. Last year, as you may recall, the country erupted into what’s now known as ‘Bloody January’ wherein over 225 people were killed in a government crackdown on nationwide protests.
Cameco, which owns 40% of the giant Inkai uranium mine in Kazakhstan, had this to say:
“As 40% of the world's uranium supply, any disruption in Kazakhstan could of course be a significant catalyst in the uranium market. If nothing else, it's a reminder for utilities that an over-reliance on any one source of supply is risky. It also reinforces the shift in risk from suppliers to utilities that has occurred in this market.”
Cameco, which accounts for roughly 17% of global uranium production, is experiencing production issues of its own — to the tune of about a 2.7 million pound shortfall expected for 2023 — citing ongoing difficulties at its Cigar Lake and McArthur River mines as well as at its Key Lake Mill in Canada.
Uranium supply is being further hampered by a recent military coup in Niger (the world's seventh-largest producer representing over 4% of supply).
It’s that type of geopolitical chaos that’s leading to increased energy insecurity around the world as supply comes under increasing pressure, particularly in the global uranium market.
Uranium supply is also under siege as companies look to capitalize on the opportunity to purchase large amounts of drummed uranium in the open spot market with the Sprott Physical Uranium Trust (SPUT) acquiring some 50M lbs over the last couple of years — and with others like Yellowcake PLC and Uranium Energy Corporation following suit.
As a result, uranium inventories are continuing to shrink, most notably from 3.5 years to around 2 years of supply right here in the United States, well below the historical average.
We also talked about restarts and lifespan extensions on reactors… and it’s not just Japan that’s going down that road.
In California, steps are underway to potentially extend the life of the Diablo Canyon reactor for an additional 5 years from 2025 to 2030. The same exact thing is happening in countries such as Belgium, Finland, and Slovakia.
All of that is to say that any further disruptions to the global uranium supply chain could lead to a run on uranium spot prices — possibly like what we saw back in 2006-07 when uranium soared to US$140 per pound upon the flooding of Cameco’s Cigar Lake Mine.
That upsurge caused the share prices of most uranium mining companies to breakout… resulting in substantial gains for well-timed investors.
We’re currently right around US$65 per pound U3O8. A couple of years ago, uranium prices were languishing at the US$30/lb level. So the uptrend is undoubtedly underway as you can tell by the uranium price chart below.
With geopolitical upheaval at an all-time high in key uranium producing countries, including Russia (which, at any time, could have its uranium exports sanctioned by the United States), the writing’s clearly on the wall for higher uranium prices going forward.
It also underpins the need for increased uranium production from safe jurisdictions such as the Athabasca Basin, located in Northern Saskatchewan, Canada, where Skyharbour is operating.
It’s still early innings in the current uranium uptrend, which means now is an opportune time for resource investors to consider positioning for what could be a material move higher.
Enter Skyharbour Resources Ltd. (TSX-V: SYH)(OTC: SYHBF).
Skyharbour Resources: A Brilliant Growth Model
Skyharbour Resources Ltd. (TSX-V: SYH | OTC: SYHBF) is a high-grade uranium exploration and early stage development company with 24 projects, ten of which are drill-ready, covering over 518,000 hectares (over 1.2 million acres) of land in the prolific Athabasca Basin of Saskatchewan, Canada.
These projects range from more advanced-stage exploration assets that either host small uranium resources and/or have high-grade U3O8 mineralization in previous drilling, to earlier-stage exploration properties ideal for optioning out to partner companies who then fund the exploration.
The Athabasca Basin is truly where the big boys come to play!
Industry leaders like Cameco have their largest uranium mines in the Athabasca. These are some of the biggest and richest uranium mines in the world… including behemoths like McArthur River and Cigar Lake.
Saskatchewan is consistently ranked as one of the best mining jurisdictions in the world, per the Fraser Institute — a benefit that simply cannot be overstated in today’s world where the nationalization or over-taxation of mining assets from foreign operators is commonplace.
With its own core projects plus several additional prospective properties being advanced by partners in the Athabasca Basin region, Skyharbour Resources Ltd. — currently trading around C$0.50 per share — represents an intriguing speculation in the North American uranium exploration space.
Flagship Property: Moore Uranium Project
Skyharbour owns 100% of the 137 sq mi Moore Uranium Project located 9 miles east of Denison’s Wheeler River uranium project and 24 miles south of Cameco’s McArthur River uranium mine — all situated in Canada’s famed Athabasca Basin.
The Athabasca Basin hosts the world's richest uranium deposits and mines, producing approx. 15-20% of world’s primary uranium supply.
In 2016, Skyharbour acquired the Moore property from Denison Mines, a large strategic shareholder of the company.
The project is an advanced-stage uranium exploration property with high-grade uranium mineralization at the Maverick Zone that has returned drill results of up to 6.0% U3O8 over 5.9 meters, including 20.8% U3O8 over 1.5 meters at a vertical depth of 265 meters.
In addition to the Maverick Zone, the project hosts other mineralized targets with strong discovery potential, which the Skyharbour team plans to test with future drill programs.
Skyharbour CEO, Jordan Trimble — whom you’ll be hearing from momentarily in our exclusive interview — commented via press release:
“We continue to discover and delineate new zones of uranium mineralization at our high-grade Moore Project and have plans for future drilling and exploration at the property…”
Keep in mind also that the main Maverick corridor is approximately 4.7 km long with just over half having been systematically drill tested to date, which means there’s plenty of expansion potential along strike and at depth.
Option with Rio Tinto to bring in Second Flagship Project: Russell Lake Uranium Project
On May 19th, 2022, Skyharbour announced that it had successfully entered into an option agreement with Rio Tinto to acquire up to a 100% interest in the Russell Lake uranium property.
The property is strategically located between Skyharbour’s other flagship, 100%-owned Moore uranium project and Denison Mines’ Wheeler River uranium project, and gives SYH a dominant land position in the southeastern corner of the basin (see below).
The Russell Lake project — which can be considered a co-flagship for Skyharbour — is an advanced-stage exploration property comprising 26 claims and covering more than 73,000 hectares (283 sq mi).
The property is in close proximity to critical regional infrastructure including Cameco’s McArthur River Mine and Key Lake Mill as well as a road, powerline, and exploration camp situated on the property.
The deal — which has an initial earn-in of 51% and can ramp up to 100% — provides Skyharbour, as operator, with a nearly contiguous block of highly prospective uranium claims totaling over 100,000 hectares (420 sq mi) when combined with the company’s adjacent Moore project.
The Russell Lake property benefits from a significant amount of historical exploration and drilling — 95,000 meters across 230 drill holes — resulting in the identification of numerous prospective target areas along with several high-grade uranium showings and drill hole intercepts.
Skyharbour has just completed a three-phased, 10,000-meter drill program across 19 holes at Russell Lake.
Skyharbour Resources CEO Jordan Trimble commented by press release:
“The commencement of our first diamond drill program at the Russell Lake Uranium Project is a key milestone for Skyharbour and its shareholders. This fully funded 10,000 m drill campaign will provide ample news flow well into the year as we advance the project using systematic and proven exploration methodologies coupled with new geological models and targeting strategies. We are confident in the discovery potential and exploration upside at Russell Lake given the high-grade mineralization in historical drill holes along with the many highly prospective target areas hosting the geology necessary for high-grade uranium deposition.”
The initial first-phase of drilling consisted of approx. 3,000 meters with a primary focus on the Grayling Zone where historical drilling has intercepted high-grade uranium mineralization in multiple holes. Assays are currently pending with plans for a follow up program to commence this winter.
The program also followed up on notable historic exploration and findings, including the drill-testing of additional targets with the potential to generate new discoveries. Some of those targets included the M-Zone Extension target, the Little Man Lake target, the Christie Lake target, and the Fox Lake Trail target.
Importantly, more than 35 km of largely untested prospective conductors in areas of low magnetic intensity exist on the property. Of course, never a bad thing having an industry titan like Rio Tinto as a large shareholder and also as a potential future project partner at the co-flagship project.
Partner Funded Projects: Multiple Drill Programs Planned
In addition to the co-flagship Moore Uranium Project and the option agreement with Rio Tinto on the other co-flagship Russell Lake project, Skyharbour boasts a total of 8 additional partner projects in Saskatchewan’s Athabasca Basin region:
- Preston: JV with Orano Canada Inc.
- East Preston: JV with with TSX-V-listed Azincourt Energy
- Mann Lake: Option partnership with CSE-listed Basin Uranium Corp.
- Hook Lake: Option partnership with ASX-listed Valor Resources
- Yurchison: Option partnership with CSE-listed Medaro Mining Corp.
- South Falcon: Option partnership with Canada-based private entity North Shore Energy
- South Falcon East: Option partnership with TSX-V-listed Tisdale Clean Energy Corp.
- Usam Island and Wallee: Option partnership with Australian-based private entity Yellow Rocks Energy Ltd.
For speculators, having a suite of active partner projects means Skyharbour will be delivering news flow not just from its primary projects but also by way of its regional partner-funded projects as developments arise and as milestones are checked off.
Preston Uranium Project
Skyharbour is joint-ventured with industry-leader Orano Canada Inc. at the Preston Uranium Project whereby Orano — France's largest uranium mining and nuclear fuel cycle company — has earned a 51% interest by way of exploration expenditures and cash payments. Skyharbour currently holds a 24.5% interest in the project.
The Preston project spans 49,635 hectares and is strategically located proximal to NexGen’s (TSX-V: NXE) high-grade Arrow uranium deposit and Fission Uranium’s (TSX: FCU) Patterson Lake South project, host to the high-grade Triple R deposit.
East Preston Uranium Project
Skyharbour is joint-ventured with Azincourt Energy on the neighboring East Preston Uranium Project (see below) whereby Azincourt has earned a majority interest through exploration expenditures, cash payments, and share issuance. Skyharbour maintains a 9.5% interest in the project.
Azincourt completed a 3,000-meter, 13-hole drill program at East Preston in Q3 2023.
Azincourt VP of Exploration Trevor Perkins noted:
“The alteration we are seeing in the K and H-Zones is very encouraging. The associated elevated uranium present is also very promising and shows that we are vectoring towards something in this area. The identification of dravite and illite clays with the elevated uranium emphasizes that we are on the right track and getting close. This target area will be a top priority moving forward and based on results we may see the north-northwest trending structures taking on more significance for targeting on this trend and others on the property.”
Although not an official discovery as of yet, it’s important to note that numerous Athabasca-based uranium deposits — including Key Lake, Millennium, and McArthur River — have been discovered by mapping out zones of alteration by way of the drill-bit.
To date, Azincourt has identified three distinct corridors at East Preston totaling over 25 km of combined strike length, each with multiple EM conductor trends.
Based on data collection from previous exploration and drilling, and with permits now in hand, the company is putting together a winter 2024 drill program at East Preston focused primarily on the property’s H- and K-Zones. Other zones will also be tested, including conductive corridors within the A-Zone through to the G-Zone.
South Falcon Uranium Project
In Q2 2023, Skyharbour entered into an agreement wherein North Shore Energy Metals Ltd. can earn-in up to a 100% interest in the South Falcon Property in the Athabasca Basin. North Shore is planning exploration and drilling programs to commence in 2024.
The property contains 11 mineral claims, comprising approximately 42,908 hectares located approximately 50 km east of the Key Lake mine.
Back in 2022, Skyharbour completed a FALCON® airborne magnetic survey over nine of the eleven claims; the new geophysical data should go a long way in assisting North Shore in prioritizing areas along the EM conductor system for potential drilling.
South Falcon East Uranium Project
The South Falcon East project is located in the eastern perimeter of the Athabasca Basin and contains a NI 43-101 inferred resource totalling 7.0 million pounds of U3O8 at 0.03% and 5.3 million pounds of ThO2 at 0.023%.
The project is currently optioned to Tisdale Clean Energy Corp., whereby Tisdale can acquire an initial 51% interest and earn up to 75% by issuing 1.1 million Tisdale shares, spending C$10.5 million on exploration, and making cash payments totaling C$11,100,000 of which C$6,500,000 can be settled for Tisdale shares over the five-year earn-in period. Tisdale is planning exploration and drilling programs to commence in 2024.
Located just outside the Athabasca Basin approximately 50 km east of the Key Lake Mine, South Falcon East — which has seen plenty of historical exploration and has a small inferred resource — consists of a series of 16 mineral claims totaling 12,464 hectares.
Mann Lake Uranium Project
Basin Uranium Corp. has an option to acquire a 75% interest in the Mann Lake Uranium Project from Skyharbour.
The project has seen more than C$5 million in previous exploration expenditures and is situated just 25 km southwest of Cameco’s McArthur River mine — the largest high-grade uranium deposit in the world — and 15 km to the northeast of Cameco’s Millennium uranium deposit.
In Q1 2023, Basin Uranium received assays from a Phase-2, four-hole drill program across 2,776 meters at Mann Lake with multiple holes intersecting uranium mineralization in the targeted basement rocks.
Basin Uranium CEO Mike Blady commented via press release:
“The completion of our phase two drill program represents the culmination of a very active and successful 2022 exploration program that was comprised of nearly 6,300 meters of diamond drilling and multiple geophysical programs at our Mann Lake project. We were able to advance this project from a grassroots-stage, one that had not seen any modern exploration techniques or benefitted from the last two decades of exploration understanding in the basin, through to a multi-phased diamond drill program that defined the unconformity and intersected uranium mineralization.”
To complete the previously announced 75% earn-in, Basin Uranium Corp. must pay Skyharbour C$850,000 in cash plus C$1.75 million in shares and spend C$4 million on exploration over a three-year period. Basin Uranium is planning exploration programs for 2024.
Hook Lake Uranium Project
At Hook Lake, Valor Resources can earn-in 80% through C$3,500,000 in exploration expenditures, C$475,000 in cash payments over three years, plus an initial share issuance to Skyharbour.
Valor Resources completed its maiden drilling program at Hook Lake earlier in 2022.
The drill program comprised eight drill holes for 1,757 meters with six holes at the S-Zone prospect and two at the V-Grid prospect.
A total of 305 samples were collected from the program and submitted for assay with all results having now been received. The assays came in within the boundaries expected and highlight uranium mineralization at depth.
Those results, coupled with 11 new targets from a recently completed airborne survey, should allow for the delineation of new potential drill targets for next-phase drilling at Hook Lake.
Yurchison Uranium Project
At Yurchison, Medaro Mining Corp. can earn-in an initial 70% of the project through C$5,000,000 in exploration expenditures, C$800,000 in cash payments as well as share issuances over three years followed by the option to acquire the remaining 30% of the project from Skyharbour through a cash payment of C$7,500,000 plus C$7,500,000 in shares.
Medaro has completed an airborne geophysical survey at Yurchison with the aim of refining existing historical targets plus the identification of new high-priority drill targets. Exploration and drilling is being planned for 2024.
Usam Island and Wallee Uranium Projects
In Q4 2021, the Skyharbour further strengthened its already robust position in the Athabasca Basin region with the staking of 6 new prospective uranium exploration properties.
Highlights of the newly-acquired properties include:
- Usam Island Project: 42,186 hectares situated ~21 km northeast of Cameco’s Eagle Point Mine; contains numerous EM conductors alongside significant magnetic lows of the Wollaston Domain.
- Wallee Project: 20,765 hectares located ~35 km northwest of Cameco’s Eagle Point Mine; contains numerous untested EM conductors coinciding with significant magnetic and/or gravity lows in the Wollaston Domain.
- South Dufferin Project: 922 hectares along the trend of the Virgin River Shear, which hosts Cameco’s Centennial high-grade uranium deposit 32 km to the north.
- Riou River Project: 18,227 hectares along the Riou River within the Athabasca basin; contains over 40 km of discrete undrilled EM conductors along a magnetic low and anomalous boulder geochemistry.
- Pluto Bay Project: 28,840 hectares situated northeast of Black Lake hosting numerous uranium showings and several EM conductors east of the regional Black Lake fault.
- Foster River Project: 37,529 hectares located southwest and adjoining Skyharbour’s South Falcon Point project; contains numerous uranium showings including up to 1.25% U3O8 in grab samples.
At Usam Island and Wallee, private Australian firm Yellow Rocks Energy Ltd. can earn-in up to 80% in the projects by issuing Yellow Rocks shares with an aggregate value of AUD$2,025,000, making a cash payment of AUD$50,000, and spending AUD$4.5 million on exploration.
The Usam project consists of 8 claims totaling 42,186 hectares and is situated approximately 16 km northeast of Cameco’s Eagle Point Mine (Rabbit Lake Operation). The project has numerous EM conductors that are associated with significant magnetic lows of the Wollaston Domain.
Historical work at Usam includes diamond drilling (12 holes), lake sediment sampling, soil sampling, geological mapping, ground and airborne geophysics.
The Wallee project contains approximately 20,765 hectares in 4 claims located 35 km northeast of Cameco’s Eagle Point Mine. Several geophysical surveys have been completed on the project and surrounding areas along with some prospecting and geochemical sampling but with no historical drilling.
South Dufferin Uranium Project
In Q2 2023, Skyharbour acquired 100% of the South Dufferin Uranium Project in the Athabasca Basin region from Denison Mines (TSX: DML)(NYSE-Amer: DNN).
Skyharbour plans to seek a joint venture or option partner for the advancement of the project as part of its hybrid prospect generator business model.
The South Dufferin project is situated just south of the southern margin of the Athabasca Basin nearby to industry leader Cameco’s Centennial deposit.
Skyharbour Resources CEO Jordan Trimble commented via press release:
“We are very pleased to have reached an agreement with Denison to acquire a 100% interest in South Dufferin, adding to our recently staked properties and to our dominant uranium project portfolio in the Athabasca Basin. South Dufferin complements our more advanced-stage exploration assets including Russell Lake, Moore and South Falcon Point, and provides additional ground to option or joint-venture out to new partner companies as a part of our prospect generator business. Furthermore, Denison Mines has been a valuable strategic partner for a number of years and we welcome them as an even larger shareholder now.”
As part of the transaction, longtime strategic partner Denison Mines has effectively increased its investment in SYH. Additionally, Skyharbour owns a 922 hectare claim (Preston project; JV with Orano) adjacent to South Dufferin, bringing its cumulative total landholding in the immediate area to ~13,000 hectares (~130 sq km) over ten claims.
8 Newly Acquired Uranium Projects
In Q2 2023, Skyharbour acquired, through staking, eight new 100%-owned prospective uranium exploration properties within the Athabasca Basin.
As an active hybrid prospect generator, Skyharbour intends to seek joint venture partners for the advancement of the newly-acquired early-exploration-stage assets.
Skyharbour Resources CEO Jordan Trimble added:
“We continue to add to our dominant uranium project portfolio in the Athabasca Basin with this recent staking while advancing our core projects through ongoing drilling and exploration. These new mineral claims bolster existing properties and provide additional ground to option or joint-venture out to new partner companies as a part of our prospect generator business.”
These newly acquired assets bring the company’s total land package in the Athabasca Basin region to nearly 5,000 sq km across 24 properties.
Prospect Generator Business
Tallying up the numbers, Skyharbour now has signed option agreements in place that could see partner companies contributing upwards of ~C$80 million in combined exploration expenditures, cash payments, and share issuances assuming these partner companies complete their entire earn-ins at the respective projects.
These partner-funded projects will no doubt provide a steady stream of news flow throughout the remainder of 2023 and into 2024 while complementing Skyharbour’s current and forthcoming drill programs at the co-flagship Russell Lake and Moore Uranium Projects.
As noted, Skyharbour will also be actively seeking project partners for the eight early-stage uranium assets it just acquired, along with the other remaining 100% projects in and around the Athabasca Basin.
Exclusive Interview: Jordan Trimble, CEO, Skyharbour Resources Ltd.
We’ve done our due diligence on Skyharbour Resources… and we’re impressed with the company’s vast uranium property portfolio in the Athabasca, its partnerships with global uranium mining companies, and its highly-adept management team starting with CEO, Jordan Trimble.
Skyharbour boasts a highly impressive amalgamation of talent — one we firmly believe has what it takes to get the job done for early SYH / SYHBF shareholders.
It’s a team that includes none other than professional geologist and strategic advisor, Paul Matysek, who founded and led Energy Metals as CEO prior to its eventual buyout by Uranium One for US$1.5 billion in 2007. Also on the board is Denison Mines’ CEO David Cates.
These are the types of industry professionals you can have confidence in and that you want to bet on in this highly competitive industry.
Please enjoy our exclusive interview with Skyharbour president & CEO, Jordan Trimble.
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, always a pleasure. It’s been a bit. How are you today, sir?
Jordan Trimble: I'm doing well. Yes, it has been a little bit. Looking forward to catching up!
Gerardo Del Real: Let's get right into it. It’s looking more and more like the next leg of the uranium bull market is starting to kick off. What are you seeing and hearing on the macro side?
Jordan Trimble: Yes, we are starting to see the seasonality kick in as we have in previous years. And one thing that’s very topical right now — and we’ve talked about it in the past but it's becoming even more of an issue in the uranium market and in the nuclear fuel market globally — is geopolitics and security of supply.
We've talked about Kazakhstan, and we've talked about this market bifurcation — East versus West — that’s been ramping up as a result of Russia’s invasion of Ukraine. The uranium market is continuing to bifurcate in that East versus West fashion.
When you look at global uranium supply and demand, you've got about 190 to 195 million pounds of demand. And that's growing quite quickly. China is planning to build 150 new nuclear power plants over the next 15 years. That's more nuclear capacity coming online in China in the next 15 years than has come online globally in the last 35 years.
You also have the advent of small modular reactors (SMRs), and, hence, you have new demand coming to the market. Yet, on the uranium supply side, we're still only producing about 140 to 145 million pounds globally. And a large chunk of that is coming from Eastern sources: Kazakhstan, Russia, Uzbekistan, and Africa.
And so security of supply, especially for Western consumption and Western utilities — which is still the majority of global demand — is becoming an issue.
If you look at Kazakhstan, for example, they've really had to play both sides. They’re an ex-Soviet state. They have very close ties with Russia, and I don't think we're going to see that change. I think Russia will continue to be a major buyer from Kazakhstan.
We also have the Chinese continuing to show that they're also going to be a dominant buyer of Kazakh production. China has represented over 35% of Kazakh uranium sales revenues over the last five years. I believe we're going to see that number continue to rise.
When you look at China and Russia, I think it's safe to say that, going forward, most Kazakh production is going to wind up in one of those two countries, which doesn't leave a lot of supply to go out West.
We've also seen this military and political coup in Niger. Niger represents about 5% of global primary mine supply. But over the last decade or so, they've supplied over 20% of the demand in France. And so for Western utilities, particularly French utilities, this military coup could prove problematic.
It all highlights the issues we're seeing geopolitically with security of uranium and nuclear fuel supply globally. Needless to say, that bodes well for Western uranium companies that are going to need to fill those big shoes.
With all that being said, I think we're very much in the early innings of this uranium bull market as we continue to see this push — especially in Western nations — for nuclear as the only source of baseload, carbon-emission-free electricity generation that's affordable, scalable, and reliable.
We're seeing countries like Canada, the United States, France, and other European nations doubling down on their nuclear expansion plans. In the US, there are 15 bills working their way through Congress that would help boost the nuclear industry as well as the domestic fuel cycle. And we just saw the first new nuclear reactor go online in the US in over 30 years at the Vogtle plant in Georgia.
So what we have is improving sentiment against a backdrop of geopolitical risk and security of supply issues. I believe that is going to continue to tighten up the market and lead to higher uranium prices. And ultimately, that will benefit the uranium equities.
Gerardo Del Real: That’s an excellent overview of the uranium bull thesis. I appreciate that Jordan. Let's talk Skyharbour specific. Azincourt, one of your many partners, recently received results from its 2023 drill program at the East Preston project in the Athabasca Basin. Can you provide us with a brief update from the property portfolio?
Jordan Trimble: Yes, absolutely. Azincourt just completed and announced results from their drill program as they continue to advance the East Preston project. It was a ~3,000-meter program.
They encountered elevated uranium and radioactivity. And notably, they had some very important indicator minerals — dravite and illite — with dravite being a specific clay indicator mineral that you typically see associated with high-grade uranium in the Athabasca Basin. They're making great progress there. We'll continue on as a minority interest holder in that project as Azincourt is the majority interest holder and operator.
At Russell Lake, we’re wrapping up the third phase of our 10,000-meter drill program, which is going to provide for ample news flow and results over the coming months. We're already planning a follow-up 4,000 to 5,000-meter program, which the money from the recent warrant exercise should cover.
We also have a 43-101 Mineral Resource Estimate (MRE) that we've commenced at our adjacent Moore Lake project. So between the two co-flagships — Russell Lake and Moore Lake — we have a lot of upcoming catalysts and news flow from drilling and from the forthcoming MRE that'll carry us right through into the new year.
We’ve also announced two new option partners, both of which we're expecting drill programs from in the next 6 to 12 months. At our South Falcon East project, Tisdale is planning a program for this winter. And at South Falcon, adjacent to South Falcon East, North Shore Energy is planning an initial program this winter as well.
We’re also expecting programs from Medaro at our Yurchison project and Basin Uranium at our Mann Lake project. So there's going to be lots of news flow. In addition to the partners funding the vast majority of the exploration budgets at these various projects, we also benefit from the cash and stock that we receive on an annual basis from the partner companies.
Furthermore, our recent staking in the Athabasca brings the total acreage of our portfolio up to over 1.2 million acres across 24 projects, making us the third-largest mineral tenure holder in northern Saskatchewan in the Athabasca region.
As I mentioned, we're currently focused on our two main projects — Russell Lake and Moore. We have partners funding and advancing other projects. We have 13 additional projects that we own 100% of that we're actively looking to bring new partners in on to advance those secondary and tertiary projects. So a lot is going on.
Gerardo Del Real: As I said… lots of irons in the fire! Jordan, always insightful. Thank you so much for the market overview and project update. I'm looking forward to having you back on.
Jordan Trimble: Thank you, Gerardo.
The Skyharbour Resources Opportunity
The new uranium bull market has arrived… and it’s only just getting started.
“Uranium has likely reached a pivotal inflection point that could force the price higher by as much as three to four-fold over the next several years. For the first time in history, uranium has slipped into a persistent and widening deficit. We believe the results will be dramatic.”
That’s how Goehring & Rozencwajg Associates, LLC describes the state of the uranium market — and we couldn’t agree more!
After an extended consolidation in the space, the uranium spot price is now riding decade-plus highs above US$65/lb with plenty of runway ahead.
We suspect the climb from US$65 to US$75-plus per pound will be an expedited one compared to how long it took to go from US$30 to where we are today.
Why? Several reasons.
The ongoing coups in Africa, coupled with other geopolitical factors — including Russia's invasion of Ukraine — are underscoring the need for clean energy sources that can contribute to a coordinated push for increased energy efficiency and energy security worldwide as a means of meeting net zero climate initiatives.
Nuclear energy is THE answer… and uranium is THE fuel source.
Earlier, we talked about ongoing uranium supply constraints with Cameco adding further fuel to the proverbial fire by announcing a 2.7 million pound uranium shortfall for 2023 from its Cigar Lake and McArthur River mines.
It’s a sign of the times: As old, existing mines deteriorate, exhaust their resources, and ultimately shutter, the global uranium supply will become increasingly dependent on new discoveries, such those being sought and made in Canada’s prolific Athabasca Basin.
With a ~360 million pound shortfall expected by the end of the current decade, uranium has been outperforming all other metals thus far in 2023, gaining more than 20% YTD and topping US$65/lb for the first time in 12 years.
Select small-cap uranium stocks — including Skyharbour Resources — appear poised to follow suit.
Led by President & CEO Jordan Trimble, Skyharbour Resources has amassed an impressive portfolio of 24 projects covering over 1.2 million acres (4,856 sq km or 1,875 sq mi) in and around the prolific Athabasca Basin region — oftentimes referred to as The Saudi Arabia of Uranium.
The combination of 100%-owned and partner-funded projects makes Skyharbour one to watch in the newly-resurgent uranium bull market.
You heard directly from CEO Jordan Trimble. He says,
“I think we're very much in the early innings of this uranium bull market as we continue to see this push — especially in Western nations — for nuclear as the only source of baseload, carbon-emission-free electricity generation that's affordable, scalable, and reliable.”
As we discussed in detail, the next major leg up in the uranium price will be driven by utilities coming into the market to secure long-term U3O8 contracts. That’s happening now.
And it means we could be setting up for a much higher uranium price environment — potentially well above US$75 per pound — for years to come.
The Skyharbour team is currently focused on advancing its co-flagship Moore and Russell Lake uranium projects located in the southeastern portion of the Athabasca Basin in close proximity to Denison's Wheeler River uranium project and Cameco’s McArthur River uranium mine.
The option agreement with Rio Tinto at Russell Lake — which has an initial earn-in of 51% and can ramp up to 100% — provides Skyharbour, as operator, a key advanced-stage exploration project with strong backing from an equally powerful partner.
Additionally, Skyharbour has 8 partners funding some of its other projects in the Athabasca Basin region. Most of these partner companies are planning exploration activities and/or drill programs that they'll be funding the lion's share of over the next 12-18 months.
It’s a brilliant model of advancing certain 100%-owned projects on their own — such as the flagship Moore project — while joint venturing or optioning out other properties with the vast majority of exploration expenditures being on other companies’ dimes.
Skyharbour typically retains a minority interest in the property that’s being optioned out while also securing an equity holding in the partner company.
Collectively, Skyharbour inked earn-in option agreements with partners that total to over C$37 million in partner-funded exploration expenditures, over C$28 million worth of shares being issued, and over C$19 million in cash payments coming into Skyharbour, assuming these partner companies complete their entire earn-ins at the respective projects.
With a robust portfolio of twenty-four Athabasca-based uranium exploration projects, ten of which are drill-ready, being advanced in a bullish uranium market — Skyharbour’s sub-C$100 million market cap is considered small compared to some of its peers.
Plus, you really cannot overstate the significance of having three very well-established strategic partners in Denison Mines, Orano, and Rio Tinto, as discussed throughout.
Skyharbour is also well-funded with approximately C$4 million in cash and equity holdings with more money and stock coming in from partner companies earning-in at the company’s secondary projects.
Now is an excellent time to begin conducting your own due diligence on Skyharbour Resources Ltd. — symbol SYH on the Toronto Venture Exchange and symbol SYHBF on the US-OTCQX Exchange.
And be sure to follow our exclusive interviews with upper management and much more.
— Resource Stock Digest ResearchClick here to see more from Skyharbour Resources Ltd.