Maurice Jackson: Joining us for conversation is Jordan Trimble, the CEO of Skyharbour Resources Ltd. (SYH:TSX.V; SA:NYSE.MKT), which is a preeminent uranium explorer.
Mr. Trimble, pleasure to speak with you today as we will review the company's successes last year, along with providing readers some key milestones for 2021. Mr. Trimble, before we begin, for someone new to the story, please introduce Skyharbour Resources and the opportunity the company presents to the market.
Jordan Trimble: Skyharbour Resources is a high-grade uranium exploration and early-stage development company. We have a vast project portfolio, all of the properties are located in northern Saskatchewan within the Athabasca Basin, which hosts the highest grade depositories of uranium in the world. We built the portfolio up over the last eight years and two of our projects have deposits. Our flagship project is Moore Lake Project, which we have been actively drilling and exploring, and delineating high-grade uranium zones over the last several years. That's been the key value driver for the company and will remain so.
We have a second business strategy, which is called prospect generation. Because our project portfolio is so expansive, covering over half a million acres, we carry out a little bit of exploration on our secondary projects, but ultimately, what we're looking to do is to package them up and auction them out, or sell them to strategic partner companies. Since 2017, Skyharbour has completed three deals with three different partners. One of which is industry leader Orano, in which they have an option to earn-in up to 70% at our Preston Project, which is over on the west side of the Athabasca Basin.
We have another, now joint venture partnership with a company called Azincourt Energy, which just completed their 70% earn-in on our East Preston Project, having spent several million dollars in exploration, issuing shares of the company and some cash payments to us. Azincourt is actively exploring and currently drilling on the East Preston project, which we now hold a minority interest in. And then last but not least, and more recently, we just completed a deal with a new Australian company, ASX-listed Valor Resources. On the North Falcon Point Project, they have an earn-in option where they can acquire up to 80% of the project. To complete earn-in Valor Resources will have to spend about $3.5 million in exploration, and pay Skyharbour Resources just under half a million dollars in cash. And we were recently issued or just over 233 million shares of the company, which at the current price is valued at about $1.6, $1.7 million. So, collectively these are option deals or joint venture partnerships that allow us to focus our time, capital and efforts at our flagship Moore Lake Project, while partner companies fund the exploration and generate news flow at our other properties.
Maurice Jackson: 2020 was an exceptional year for shareholders, which saw the share price move from 8 cents up to 33 cents and recent new highs this year up to 36 cents. All of which was accomplished during a global pandemic, I might add. Sir, please share some of the key milestones for Skyharbour Resources this past year.
Jordan Trimble: Our flagship project, Moore Lake, had two drill programs that were conducted in 2020, the first in the early part of the year and the second in which we just released results from over the last several months. We had a very successful year at the project, and that was certainly a contributor to the share price and valuation increase that rewarded our shareholders. Our recent news releases announced the results from the late summer and fall drill programs, which included some of the longest continuous widths of uranium mineralization ever discovered at Moore.
Readers may recall, we have the main target area, which is called the Maverick Corridor. It's about a 4.5-kilometer-long corridor that's highly prospective for high-grade uranium. Skyharbour recently has been drilling into a new geological setting called the basement rock. Thus, in the last several years, we have identified deeper targets below the unconformity, which is about 260 to 270 meters, and using some new geophysical techniques and some new geological modeling to more effectively target the basement hosted high-grade zones.
Our most recent drill program, as I mentioned, intercepted some very long widths, including 17.5 meters of 0.72% U308; there's a 10 meters zone of 1% in some higher-grade zones within that as well. So very exciting. We feel like we've just scratched the surface for these underlying basement rocks at the Maverick and Maverick East Zone. Skyharbour does have plans for the upcoming drill programs. We do have a program planned to start in the next month or two. We will carry out a second program later in the year as well to follow up on these results that we announced over the last several months.
We think that there is a much larger, higher-grade zone or multiple zones of uranium mineralization at depth, but also we have several other targets at the project that we're going to be testing, including continuing to drill along strike to the northeast on this four and a half kilometer-long corridor. We've only systematically drill tested about half of it or just under three kilometers of it. And so there's a lot of room to move along strike and at depth. And there are some other high-priority targets on the project as well. And again, this project is located on the east side of the Athabasca Basin, proximal to infrastructure. It's about 15 kilometers east of Denison's Wheeler project; Denison is our largest strategic shareholder. The president and CEO, Dave Cates, is on our board, a sort of very close working relationship with them.
Given the location of the project, proximal to infrastructure, there are other parts of the basin where you don't have the kind of infrastructure that you have on the east side of the Athabasca Basin where you have the current operating mines and mills power and roads. Readers should expect news flow on Moore Lake, as we continue to explore and drill the project, and news flow from our partner companies that will be carrying out exploration on the property bank.
Maurice Jackson: Leaving the Moore Lake project, a big feather in your cap is the East Preston project, which has received a lot of coverage recently with your partner Azincourt. This has been a big win for Skyharbour. What can you share with us?
Jordan Trimble: It's been a great partnership. Azincourt has just recently completed their 70% earn-in at the Preston Project demonstrating further confidence and commitment as a joint venture partner on the East Preston. We've also just commenced a 2,000- to 2,500-meter drill program that's currently underway. Any exploration success or new discoveries that Azincourt makes at the project will benefit Skyharbour shareholders, in addition, we have a minority interest position in the project. Skyharbour is keen for Azincourt to get to work and complete this drill program. Our relationship with Azincourt is a testament to the prospect generator business model that we employ, where we have other companies come in, raise the capital, and then deploy that capital into the ground into our projects so that we can focus at our higher priority projects in our flagship Moore Lake.
Earlier this month, we proudly announced that Valor Resources Ltd., an Australia listed company, as our newest partner on the Hook Lake Project, formerly the North Falcon Point Project. Valor will be initiating their phase one program at that project, which will include an initial geophysical program followed by a phase two field program, getting into the field, doing some geochemical sampling, some additional ground geophysics. And that will all lead to a phase three program later in the year, which will include an initial drill program. These are truly excited times. Skyharbour to be working with our partner companies, and we are looking forward to the results that will be generated from these programs,
Maurice Jackson: Leaving the project site, looking at the macro picture for uranium. What has your attention?
Jordan Trimble: Since we last spoke in November we've seen a move higher across the board with uranium companies, and there's a lot to talk about and unpack there. We have seen more generalist and institutional money, especially with an ESG mandate, come into the space. You and I have spoken at length about the underlying fundamentals and just to reiterate that, and some of those main points, which have been in place now for several years, you have a major supply-side response that's playing out. Initially, it was a low uranium price environment. We saw several mines go offline to include project deferrals and production curtailment almost five years.
That was exacerbated last year with the pandemic. In April, at one point almost 50% of primary mine supply are offline as a result. This just shows the risks to the supply side into supply shocks, which in the past, and in previous cycles, we've seen that have a major impact and be a major catalyst for a higher uranium price. The bottom line is you have annual demand of about 180 to 185 million pounds of uranium used as fuel in nuclear reactors. And in 2020, we only had about 120 million pounds of primary mine supply. A major supply deficit we expect this year, assuming there aren't as many supply disruptions as we saw in 2020, that number will move back to about 135 to 140 million pounds of demand. But again, that's about a 40 to 50 million pound shortfall.
Therefore, we can expect to continue to see a big supply-side deficit, as this has grown over the last several years, and that means we're having to continuously eat away at inventories and secondary supply. We've seen the spot market and the mobile secondary supply shrink. We've seen a tightening of the market. And that's what we saw in 2020 was this, especially in April and May, when the spot price jumped up relatively quickly, that's what we saw happen. There was a tightening of the market. We saw producers that had to shut down production buy in the spot market. Both Cameco and Kazatomprom have been buyers in the spot market to make up for their lost production. And the bottom line is we just don't have a large amount of new supply that can come onto the market.
There are several pretty significant development projects, but it's going to take some time for these new mines to be built. And so if you look out over the next several years, there's going to be a pretty major supply crunch. I see, regardless of what's happening with the pandemic, even with things getting back to normal, the bottom line is we simply do not have enough new supply that can come on to meet the growing demand for this commodity, for this metal. And just more recently talking a little more specifically about the market. As I mentioned, we've seen new money come into the space with generalist and institutional investors. The sentiment for nuclear energy improved significantly over the last several months, as it pertains to nuclear being the only real solution to climate change and countries going carbon neutral.
We've seen some major announcements out of China, out of the U.S. and other countries worldwide that they're planning to decarbonize their electrical grids by 2050 to 2060. And to do that, nuclear energy needs to play an important role. It is the only source of baseload, clean electricity that's reliable. I believe over the next several decades we will see a continued build-out of nuclear reactors globally. We've seen also the advent of these SMRs (Small Modular Reactors). I think that will add a significant amount of demand over the coming decades, especially in the Western world.
And then we see places like China and India, and then other parts of the developing world, that continue to roll out these larger reactor models that consume a lot of uranium. So as we see the push for clean energy, as we see the push for decarbonization, we will continue to see a rise in nuclear energy. And obviously, that's positive for uranium mining companies. And then we talked a little bit about, I believe in the last interview, some notable business leaders and specific institutional investors that have been talking about nuclear energy, including Bill Gates, Peter Thiel, more recently, we've seen Larry MacDonald and Michael Berry, who have advocated for nuclear energy.
I think the mainstream we will see that positive sentiment continue to improve and increase in uranium as we continue to see politicians and business leaders talk about nuclear energy. And that will obviously all be positive as for uranium and uranium mining companies as well.
In addition, within the last week here we are starting to see capital flows into the space, we're seeing companies like Yellow Cake Plc and other physical holding companies raise more and more money. Yellow Cake just announced $140 million financing, which they will use then to buy over 4.5 million pounds that will be taken directly from the market, which will tighten the market further and help drive a higher uranium price.
And as a result of that, now you will likely see a higher uranium price. So there's a lot to look forward to. There's a lot of moving parts on the underlying fundamentals, which I believe are the most compelling of any metal out there. People are finally paying attention to uranium. And we have seen in the last several months, new money come into this space as the world looks to go into these ESG friendly sectors and as countries globally look to decarbonize their electrical grids,
Maurice Jackson: Jordan, what I'm hearing are catalysts, catalysts and even more catalysts.
Jordan Trimble: One other thing good to point out, too, is for people looking at the sector asking have I missed the boat? We've seen a move higher from October, November of last year, but as you and I were talking about offline, I think we're still in the early days. It's like you've got to remember, this was a sector that was beaten up for many years. There were very few companies that were active in the space. Certainly, there's very few active exploration and earlier stage development companies. So it's not a crowded sector. The total combined market capitalization of all publicly traded uranium companies is still sub $20 billion. So I do believe that we are in the very early innings of this next bull market in uranium. And I think there's still a lot of return potential return available to investors entering the space now.
Maurice Jackson: Switching gears, Mr. Trimble, provide us with an update on the capital structure for Skyharbour Resources.
Jordan Trimble: Skyharbour Resources, we have a good share structure with about 100 million shares issued and outstanding. We have a great shareholder base. Typically, it's hard to generate much interest with institutional investors, but we're seeing more institutional interest, especially when we're raising money over the last 12 months. And I think we'll see that continue.
Now, just to point on that we have had warrants exercised, that is expiring over the next several months. So we are continuously raising capital through that. Currently, we have over $4.5 million in cash and stock. As I pointed out earlier with the recent transaction with Valor, we received about $1.6, $1.7 million in stock. Skyharbour Resources is well capitalized to complete all of the exploration and drill programs we have planned on our flagship project, and we also have partner companies funding the other programs at our other projects. And, we also do have ongoing cash payments and share issuance from partner companies as well.
Maurice Jackson: I have to give it to you, great business acumen and equally good stewards of capital. Any final words for shareholders?
Jordan Trimble: Skyharbour will have a lot going on this year, much like 2020, where we saw results and news flow help spark a rally in the market. In addition to an improving macro thesis and more interest coming into the space, 2021 is likely going to be our busiest year. We are currently talking with several other companies on other joint venture and option partnerships. So keep an eye out for that as well as the existing partners carrying up their exploration programs and last, but certainly not least, our key value driver, the main value driver for the company, will be our upcoming drill programs at our flagship Moore Lake.
Maurice Jackson: Jordan, if investors want to get more information about Skyharbour Resources, please share the contact information.
Jordan Trimble: Yeah. So the easiest way to get in touch with us is through the website. All of our contact information is on there. We're very accessible to answer any questions that investors may have. The website is www.skyharbourltd.com.
Maurice Jackson: Mr. Trimble, thank you for joining us today, wishing you and Skyharbour Resources, the absolute best, sir.
Before you make your next precious metals purchase (Platinum) make sure you contact me. I'm a licensed representative to buy and sell physical precious metals through Miles Franklin Precious Metals Investments where we have several options to expand your precious metals portfolio from physical delivery of gold, silver, platinum, palladium, and rhodium directly to your home or office, to offshore depositories and precious metal IRAs. Call me directly at 855.505.1900 or email: [email protected]. Finally, please subscribe to Proven and Probable, where we provide Mining Insights and Bullion Sales. Subscription is free.
Maurice Jackson is the founder of Proven and Probable, a site that aims to enrich its subscribers through education in precious metals and junior mining companies that will enrich the world.
[NLINSERT]Disclosure:
1) Maurice Jackson: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Skyharbour Resources. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: Skyharbour Resources is a sponsor of Proven and Probable. Proven and Probable disclosures are listed below.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Skyharbour Resources. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Azincourt Energy. Please click here for more information.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Skyharbour Resources and Azincourt Energy, companies mentioned in this article.
Disclosures for Proven and Probable: Proven and Probable LLC receives financial compensation from its sponsors. The compensation is used is to fund both sponsor-specific activities and general report activities, website, and general and administrative costs. Sponsor-specific activities may include aggregating content and publishing that content on the Proven and Probable website, creating and maintaining company landing pages, interviewing key management, posting a banner/billboard, and/or issuing press releases. The fees also cover the costs for Proven and Probable to publish sector-specific information on our site, and also to create content by interviewing experts in the sector. Monthly sponsorship fees range from $1,000 to $4,000 per month. Proven and Probable LLC does accept stock for payment of sponsorship fees. Sponsor pages may be considered advertising for the purposes of 18 U.S.C. 1734.
The Information presented in Proven and Probable is provided for educational and informational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose. The Information contained in or provided from or through this forum is not intended to be and does not constitute financial advice, investment advice, trading advice or any other advice. The Information on this forum and provided from or through this forum is general in nature and is not specific to you the User or anyone else. You should not make any decision, financial, investments, trading or otherwise, based on any of the information presented on this forum without undertaking independent due diligence and consultation with a professional broker or competent financial advisor. You understand that you are using any and all Information available on or through this forum at your own risk.
Images provided by the author.
