Uranium Co. Begins Drilling at High-Grade Eastern Athabasca Basin Project

Source: Streetwise Reports 09/04/2024

Skyharbour Resources Ltd. SYHBF announced it has started a 2,500-meter summer drill program at its 100%-owned high-grade Moore uranium project.

The nearly 36,000-hectare project is about 15 kilometers east of Denison Mines Corp.'s DNN Wheeler River project and "proximal to regional infrastructure for Cameco Corp.'s CCJ Key Lake and McArthur River operations in the Athabasca Basin, Saskatchewan."

The seven to nine holes to be drilled have been designed to expand and further characterize the high-grade Main Maverick and Maverick East zones. Skyharbour said it is fully funded and permitted for the drill program, as well as for future drilling, including 4,000–5,000 meters to be drilled later this fall at the adjacent Russell Lake project.

"We are excited to commence drilling again with plans to carry out an initial program at Moore followed by a larger program at Russell totaling 7,000-8,000 meters combined across both projects" said President and Chief Executive Officer Jordan Trimble. "With the recent discovery of high-grade uranium mineralization at Russell in the newly identified Fork Zone, this has been a very successful year of drilling thus far for Skyharbour with much more news to come at both Moore and Russell as well as at the various partner-funded projects."

The use of local infrastructure including the McArthur River Mine haul road, powerlines, and the McGowan Lake Camp at Russell will help to materially lower all-in drill costs, Skyharbour said.

The drilling at Moore will be focused on the Main Maverick and Maverick East Zones to further expand, characterize and define the extents of the mineralized zones. The high-grade zones of uranium mineralization targeted in the Main Maverick and Maverick East zones are relatively shallow, between 250-280 meters from the surface, the company said.

"There remains expansion potential at both of the high-grade Main Maverick and Maverick East Zones" Skyharbour said in a statement. "Furthermore, substantial portions of the 4.7-kilometer-long Maverick corridor remain to be systematically drill-tested leaving robust discovery potential along strike as well as at depth in the basement rocks."

A Prospect Generator Strategy

Skyharbour has an extensive portfolio of uranium exploration projects in Canada's Athabasca Basin, with 29 projects, 10 of which are drill-ready, covering over 580,000 hectares of mineral claims. In addition to being a high-grade uranium exploration company, Skyharbour utilizes a prospect generator strategy by bringing in partner companies to advance its secondary assets.

In an updated research note on July 24, Analyst Sid Rajeev of Fundamental Research Corp. wrote that Skyharbour "owns one of the largest portfolios among uranium juniors in the Athabasca Basin."

"Given the highly vulnerable uranium supply chain, we anticipate continued consolidation within the sector" wrote Rajeev, who reiterated the firm's Buy rating and adjusted its fair value estimate from CA$1.16 to CA$1.21 per share. "Additionally, the rapidly growing demand for energy from the AI industry is likely to accelerate the adoption of nuclear power, which should, in turn, spotlight uranium juniors in the coming months."

Skyharbour also recently announced that partner company Azincourt Energy Corp. has received the sample analysis from this year's exploration program at its East Preston uranium project in the Athabascan Basin of Saskatchewan.

The program consisted of 1,086 meters of drilling in four diamond drill holes completed earlier this year. Drilling was focused on the K and H Zones.

A total of 53 samples, including 20 samples from the 2021-2023 drilling programs, featured relative proportions of phyllosilicate and clay minerals including illite, chlorite, dickite, kaolinite, and dravite.

"Illite and kaolinite are both indicators of hydrothermal alteration typically found within alteration halos of unconformity-associated uranium deposits" Skyharbour noted in a release. "Dravite is a boron-rich clay which is typically found within a larger clay package in close proximity to uranium mineralization in the system. Both illite and dravite have been identified as being significant vectors for recent discoveries to the northwest of the East Preston project."

Partners Advancing Other Projects

Other Skyharbour partner companies include Orano Canada, Thunderbird Resources Ltd. VOYRF (Previously Valor Resources Ltd.), Basin Uranium Corp. BURCF, and Medaro Mining Corp. MEDAD. More recently, two earn-in option agreements were signed with Tisdale Clean Energy Corp. TCEFF to option the South Falcon East project, as well as North Shore Uranium Ltd. to option the Falcon project.

The company has an additional 20 100%-owned projects that it is actively seeking to option out to potential new partners in the future to add to its growing prospect generator business.

"Option partners are actively advancing their projects through exploration and drill campaigns" Rajeev wrote for Fundamental Research. "SYH anticipates receiving (CA)$1-$2M in cash/share payments from its partners in the upcoming months."

"The demand for nuclear power is expected to grow faster than previously anticipated as data centers for AI applications experience exponential growth in energy needs" Rajeev continued.

The Catalyst: Green Economy Needs More Nuclear

Earlier this year, U.S. President Joe Biden signed into law a ban on uranium imports from Russia. According to Investing.com, the commodity's price has been under pressure recently, "trading within a narrow range and slightly lower due to limited trading volume and liquidity."

But a recent research note published by Citi Research predicted the weakness in prices would subside as the demand for nuclear energy continues to rise, Investing. com wrote.

"Analysts at Citi remain tactically bullish on uranium in the near to mid-term, with projections indicating a potential price rebound to (US)$98/lb later this year" the site said. "Citi has adjusted its uranium price forecasts in response to the recent market softness. The analysts now expect uranium prices to average (US)$94/lb in 2024, with potential upside momentum during the third and fourth quarters.

Looking further ahead, the website said Citi forecasts uranium prices to average (US)$110 per pound in 2025, reflecting continued bullish sentiment driven by the increasing demand for nuclear energy.

Demand for uranium in nuclear reactors is expected to climb 28% by 2030 and nearly double by 2040 as governments ramp up nuclear power capacity to meet zero-carbon targets, the World Nuclear Association said in a report, according to Reuters.

Ownership and Share Structure

Management, insiders, and close business associates own approximately 5% of Skyharbour.

According to Reuters, President and CEO Jordan Trimble owns 1.6%, and Director David Cates owns 0.70%.

Institutional, corporate, and strategic investors own approximately 55% of the company. Denison Mines owns 6.3%, Rio Tinto owns 2.0%, Extract Advisors LLC owns 9%, Alps Advisors Inc. owns 9.91%, Mirae Asset Global Investments (U.S.A) L.L.C. owns 6.29%, Sprott Asset Management L.P. owns 1.5%, and Incrementum AG owns 1.18%, Reuters reported.

There are 182.53 million shares outstanding with 177.73 million free float traded shares, while the company has a market cap of CA$62.06 million and trades in a 52-week range of CA$0.32 and CA$0.64.

Important Disclosures:

1. Skyharbour Resources Ltd. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000. In addition, Tisdale Clean Energy Corp. and North Shore Uranium Corp. have a consulting relationship with Street Smart an affiliate of Streetwise Reports. Street Smart Clients pay a monthly consulting fee between US$8,000 and US$20,000.
2. 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 Ltd., Cameco Corp., Tisdale Clean Energy Corp., North Shore Uranium.
3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
4. This article does not constitute investment advice and is not a solicitation for any 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. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.