Company Spotlights / Market Commentary

Exploring Uranium with Skyharbour Resources

  • Declan O’Flaherty

    Declan holds a Bachelor of Commerce from the University of Alberta and has over 4 years of experience investing in financial markets. As a fundamental investor, Declan embraces the investment principles of Warren Buffett and his disciples. This puts a focus on finding businesses with healthy financials, competent and accountable leader, enduring competitive advantages, and those that are selling at discount to what they are worth.

“There have always been enough fossil fuels to power human civilization for hundreds and perhaps thousands of years, and nuclear energy is effectively infinite.” – Michael Shellenberger

In a world deprived of reliable and sustainable energy sources, nuclear energy is one solution that could effectively put all others to rest.

Today, nuclear power plants make up roughly 10% of the world’s total energy supply (2653 TWh of electricity).

But if we are to achieve the ambitious goal of reaching “Net Zero Emissions by 2050” set by the Paris Agreement, then nuclear energy must play an integral role in the international energy market.

That is because nuclear power produces a minimal carbon footprint that is 9x smaller than gas-powered generators and 21x smaller than coal.

What’s more, nuclear energy is unmatched as a generator of electricity, producing the same amount of energy as one ton of coal or 149 gallons of oil per single uranium fuel pellet.

But getting there will require an abundant supply of uranium—the primary fuel used in nuclear energy generation.

Interestingly, one Canadian company happens to hold multiple uranium projects located in one of the best mining jurisdictions in the world and hosts the highest-grade uranium deposits globally.

If there is anyone suitable for finding the fuel for this energy transition, you will want to see what Skyharbour Resources (Canada: SYH)(USA: SYHBF) has to offer.

What is Skyharbour Resources?

The World's Richest Uranium Play | World Nuclear Association
The World’s Richest Uranium Play | World Nuclear Association

Skyharbour Resources is a high-grade uranium exploration and early-stage development company, holding an extensive portfolio of uranium exploration projects in Canada’s Athabasca Basin.

With 18 projects, ten of which are drill-ready, covering over 460,000 hectares of land, the Company possesses one of the largest land packages in the region.

Coupled with the fact that the Athabasca Basin is home to the world’s highest-grade uranium deposits, boasting grades (aka purity levels) 10 to 100 times greater than the global average, Skyharbour is in a position to benefit greatly as the demand for reliable uranium supplies is projected to increase in the coming years.

To get to this point, the Company began acquiring assets in 2013, during a depressed uranium market and is now one of the largest mineral claim landholders in the Athabasca Basin.

By utilizing a dual-pronged strategy of high-grade discovery and resource expansion at its core projects, coupled with leveraging partnerships to advance its secondary and tertiary projects, it has built a uranium portfolio that maximizes its opportunities for shareholders.

This, in addition to a highly proven management team, is what makes Skyharbour so special.

But to truly understand what it has to offer, we must dig deeper…

Skyharbour’s Uranium Project Portfolio

Skyharbour Resources' Properties | Skyharbour Investor Presentation
Skyharbour Resources’ Properties | Skyharbour Investor Presentation

Skyharbour holds an extensive portfolio of uranium exploration projects in Canada’s Athabasca Basin.

Let’s explore a few of its most advanced projects while highlighting its secondary projects as well.

Moore Lake

The Moore Lake project is a 100%-owned, advanced-stage uranium exploration property, covering 35,705 hectares in the Eastern Athabasca Basin, and is one of Skyharbour’s flagship projects.

The project was acquired from Denison Mines (USA: DNN) in 2016, with Denison now a large, strategic shareholder of Skyharbour, and President and CEO, David Cates, a member of Skyharbour’s Board of Directors.

Moore has been subject to extensive exploration with over $45 million in expenditures and over 150,000 meters of diamond drilling in more than 390 drill holes.

The property possesses high-grade uranium mineralization at its Main Maverick Zone, while also demonstrating strong potential for additional high-grade zones in the surrounding area.

Throughout the exploration process, Skyharbour discovered multiple areas of high-grade uranium mineralization, with highlight drill results including 21% U3O8 (uranium) over 1.5m within 6% U3O8 over 6m.

As one of its most advanced projects, the Company plans to continue its uranium exploration and drilling on the property alongside the drilling recently commenced at the newly optioned Russell Lake Project.

Russell Lake

Recently, Skyharbour commenced its largest-ever drill campaign at its co-flagship project, Russell Lake, strategically located in the Eastern Athabasca Basin.

The fully-funded 10,000-meter drill program, consisting of 18 to 20 drill holes, is intended to follow up on notable historic exploration and findings, as well as to test additional targets with the potential to generate new discoveries within the 73,294-hectare plot of land.

Russell Lake has been subject to significant exploration efforts in the past, including over 95,000 meters of drilling in over 220 drill holes.

This provides Skyharbour with an excellent dataset to direct subsequent exploration in high-priority areas.

From this data, they’ve identified numerous highly prospective target areas, with some holes hosting high-grade uranium mineralization.

In terms of ownership, the project was recently optioned from Rio Tinto (USA: RIO), giving Skyharbour an initial 51% stake in the project through funding and exploration investments—Rio Tinto, one of the largest mining companies globally, is now a large strategic shareholder of Skyharbour.

The Company also has an opportunity to earn the additional 49% interest once certain exploration and investment requirements are met.

Overall, the Company expects the drilling program to be completed by June 2023.

South Falcon

Skyharbour’s 100% owned, 44,470-hectare South Falcon Point Project is host to the Fraser Lakes Zone B deposit which consists of an NI 43-101 inferred resource of 7M lbs of U3O8 (uranium) near the surface at 0.03% U3O8.

Drilling to date at the project totals over 21,000m in 110 holes with over $13 million in previous exploration across six, near-surface target areas.

A portion of this project has recently been optioned to Tisdale Clean Energy whereby Tisdale can earn up to 75% of the project by making cash and share payments to Skyharbour and funding the exploration over the next 5 years.

Tisdale has plans to commence exploration/drilling campaigns in 2023.

Preston & East Preston

In addition to its co-flagship projects, Skyharbour has an interest in both the Preston (24.5% interest) and East Preston Uranium Projects (15% interest).

At the 49,635-hectare Preston Project, the Company entered into a joint venture with industry leader Orano Canada, whereby Orano earned a 51% interest in the project through exploration expenditures and cash payments—Orano invested a total of $4.8 million so far.

As of right now, multiple high-priority drill target areas were determined which have culminated in an extensive, proprietary geological database for the project area.

And with only 50% of the land package explored thus far, there is still significant exploration upside potential in untested areas.

Similarly, Skyharbour also entered a joint venture with Azincourt Energy at the 20,647-hectare East Preston Project, whereby Azincourt earned a 70% interest in the project.

Recently, Azincourt announced the completion of its 2023 Drill Program at the property, which included 13 drill holes covering a total of 3,066 meters, with assays pending.

From the drill program results, Skyharbour and Azincourt concluded that there were extensive hydrothermal alterations, which is a significant step forward in identifying the key areas along the conductor trends where more attention is required.

Remaining Skyharbour Projects

Skyharbour also owns positions in another thirteen uranium exploration projects.

To learn more about all of Skyharbour’s uranium projects, click the here.

The Prospect Generator Model

Skyharbour Resources' Partners | Skyharbour Resources
Skyharbour Resources’ Partners | Skyharbour Resources

Beyond being a high-grade uranium exploration and early-stage development company, Skyharbour uses a prospect generator strategy that involves partnering with other companies to invest in exploration at some of its secondary projects.

This allows Skyharbour to focus more of its efforts on primary projects like Moore Lake and Russell Lake while allowing its partner companies to advance and fund the other projects.

Furthermore, the prospect generator model allows Skyharbour to mitigate equity dilution by bringing in cash and stock from the partners and retaining exposure to potential mineral discoveries via minority interests and royalties at these projects.

This in turn provides shareholders with ample news flow and potential upside exposure to multiple projects, all the while conserving capital and ensuring that its partners cover most of the exploration costs.

Skyharbour now has seven partners with option agreements that total over CAD $34 million in exploration expenditures, over $23 million in stock being issued and $15 million in cash payments coming into the Company, assuming the partners complete their full earn-ins at their respective projects.

All-in-all, Skyharbour is trying to be the one-stop shop for high-grade uranium exploration and discovery potential in the Athabasca Basin across a diversified asset base, with numerous operators and the bulk of the funding primarily coming from these partner companies.

The Skyharbour Team

To maximize the potential of its assets, Skyharbour has built a proven management and geological team that is well-positioned to succeed in this market.

With CEO, President, and Director, Jordan Trimble, coming from an entrepreneurial background with 12 years of experience in the resource industry, the company has a leader capable of discovering, funding, and advancing valuable ventures.

Coupled with a seasoned geological team, led by Dave Billard and Christine McKechnie, Skyharbour is strategically built for exploration and discovery success in the basin.

What’s more, the Company has a world-class board and advisory team including the likes of David Cates, Director of Skyharbour and President and CEO of Denison Mines, Paul Matysek, Strategic Advisor, and Jim Pettit, Chairman, and Director.

With the combination of capital markets experience and focused exploration expertise in the Basin, Skyharbour is in a unique position to benefit in this quickly expanding market.

Check out our in-depth interview with CEO Jordan Trimble here.

Why Uranium?

The Uranium Supply/Demand Squeeze | World Nuclear Association/Deep Yellow
The Uranium Supply/Demand Squeeze | World Nuclear Association/Deep Yellow

You may be aware that the uranium market has potential but are unsure how much value it actually offers.

Well, to help you understand this industry a little better, here are a few interesting facts about the uranium and nuclear market.

For one, the global demand for electricity is expected to grow 50% by 2040.

Given that nuclear energy is the only source of low-cost, reliable, baseload, and clean power, uranium is a well-positioned commodity that is likely to benefit from this surge in energy demand.

This is further demonstrated by the massive supply gap of uranium in the current market.

According to BNN Bloomberg, uranium demand reached 195 million lbs in 2022

But, with current mine supplies at roughly 140 million lbs, there is a large shortage relative to the demand–this gap is expected to grow even larger, with the supply shortage forecasted to reach 300 million lbs by 2030.

If the current and expected demand isn’t met, it is likely that the price of uranium will continue to rise for the foreseeable future.

As for the nuclear reactors themselves, there are currently 438 operable reactors, 58 reactors under construction, and over 400 ordered/planned/proposed, across the globe.

Right now, China, India, and Russia are making the biggest investments in nuclear energy with all three countries building and planning to build new reactors for many years to come.

In addition, many other countries and companies have been financing the development of new nuclear technologies including small modular reactors (SMRs) which are less expensive and easier to permit.

These new technologies are starting to gain traction which will generate a new wave of demand, especially in Western countries.

This trend is expected to continue elsewhere as well, given that the Paris Agreement set out a highly ambitious goal to reach net-zero emissions by 2050.

As such, there is ample opportunity to profit from the uranium market in the meantime, and Skyharbour is more than capable of being a key player in this industry.

Why You Should Consider Skyharbour

With one of the largest uranium project portfolios in the Athabasca Basin, coupled with a proven management and geological team, as well as the Prospect Generator Model, Skyharbour Resources (Canada: SYH)(USA: SYHBF) is positioned to benefit from the rising demand for nuclear energy.

Not to mention that the Company just embarked on its largest drill program at a newly acquired project, Russell Lake, which will provide ample news flow and catalysts in the near term.

Lastly, as climate change pressures mount, forcing national governments to act decisively, the need for reliable and sustainable energy sources becomes increasingly important.

Since there is no other energy supply as efficient as nuclear energy, it is possible that it becomes the foundation of our energy market, fueling our ambitions for many years to come.

And with Skyharbour investing extensively in uranium projects now, the Company is in an excellent position to make the most of this quickly expanding market—high-grade uranium discoveries in the Athabasca Basin can generate significant returns for investors as illustrated by NexGen Energy, Fission Uranium, and Hathor.

All-in-all, it will be fascinating to see how the Company progresses over the coming years as it seeks to unlock the proven potential of uranium as the fuel for nuclear energy.

To learn more about Skyharbour Resources (Canada: SYH)(USA: SYHBF), check out its Investor Presentation here.

Disclosure/Disclaimer:

We are not brokers, investment, or financial advisers; you should not rely on the information herein as investment advice. If you are seeking personalized investment advice, please contact a qualified and registered broker, investment adviser, or financial adviser. You should not make any investment decisions based on our communications. Our stock profiles are intended to highlight certain companies for YOUR further investigation; they are NOT recommendations. The securities issued by the companies we profile should be considered high risk and, if you do invest, you may lose your entire investment. Edge Investments and its owners currently hold shares in Skyharbour Resources and are compensated for content creation, amounting to twelve thousand dollars. Edge Investments and its owners reserve the right to buy and sell shares in Skyharbour Resources without further notice, which may impact the share price. Please do your own research before investing, including reading the companies’ public filings, press releases, and risk disclosures. The company provided information in this profile, extracted from public filings, company websites, and other publicly available sources. We believe the sources and information are accurate and reliable but we cannot guarantee it. The commentary and opinions in this article are our own, so please do your own research.

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  • Declan O’Flaherty

    Declan holds a Bachelor of Commerce from the University of Alberta and has over 4 years of experience investing in financial markets. As a fundamental investor, Declan embraces the investment principles of Warren Buffett and his disciples. This puts a focus on finding businesses with healthy financials, competent and accountable leader, enduring competitive advantages, and those that are selling at discount to what they are worth.

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