Skyharbour Resources (TSX-V: SYH) (OTCQB: SYHBF) is a publicly traded uranium and thorium exploration company with five projects in Saskatchewan’s Athabasca Basin. In 2017, The Fraser Institute ranked Saskatchewan as the best mining jurisdiction globally within which to work.
According to Skyharbour’s President and CEO Jordan Trimble, “Our goal is to maximize shareholder value through new mineral discoveries, long-term strategic partnerships, and the advancement of exploration projects in geopolitically favourable jurisdictions.”
“Skyharbour wants to emulate the success of other Basin discovery stories, including Nexgen at their Rook Project, Fission at their PLS Project, Hathor at their Roughrider Project and International Enexco at their Mann Lake Project. All of these discoveries generated significant returns for shareholders,” he adds.
Since inception in 2013, Skyharbour has acquired a number of top tier exploration projects at what Jordan describes as “attractive valuations.” Currently, the company has five active uranium properties, including its flagship property, the 35,705 hectare Moore Uranium Project, recently acquired from Denison Mines (Denison Mines is also Skyharbour’s largest strategic shareholder).
“With a strong management and technical team, increasing global demand for nuclear power, an existing portfolio of top-tier Athabasca Basin uranium projects, and our innovative discovery process, Skyharbour is in an excellent position to create significant shareholder value going forward.”
Strong management/geological team.
The Skyharbour Resources team is led by President and CEO Jordan Trimble. Prior to joining Skyharbour, Jordan worked at several TSX Venture-listed resource companies specializing in corporate finance and strategy, shareholder communications, marketing, deal structuring and capital raising. Earlier, he was the Corporate Development Manager at Bayfield Ventures Corp., a gold company with projects in Ontario, which was successful in making a high-grade gold discovery before being acquired by New Gold, a larger gold mining company. This is the same business model Jordan is looking to execute on for Skyharbour.
Chairman of the Board James G. Pettit has been active in the resource sector for more than thirty years. Prior to joining Skyharbour, Jim was Chairman and CEO of Bayfield Ventures where he and Jordan worked together. Jim also serves on a number of other public resource company Boards.
Director and Head Geologist Richard Kusmirski has over forty years of North American exploration experience including focused uranium exploration expertise in the Athabasca Basin. Rick directed Cameco Corporation's uranium exploration projects in the eastern Basin for a number of years before running his own company JNR Resources. Rick and the JNR team are credited with discovering the high-grade uranium on the Moore Uranium Project in the early 2000’s. Eventually JNR was acquired by Denison Mines.
Director David Cates is a Director of Skyharbour and the President and CEO of Denison Mines and Uranium Participation Corp. Prior to assuming his current position, Dave served as Denison's VP Finance, Tax and Chief Financial Officer, and played a significant leadership role in the company's mergers and acquisitions activities. He also led the team responsible for the acquisition of Rockgate Capital Corp. and International Enexco Ltd. Before joining Denison Mines, David held positions at Kinross Gold Corp. and PwC LLP.
Strategic Advisor Paul Matysek is a mining entrepreneur, professional geochemist and geologist with over thirty-five years of mining experience. Paul founded Energy Metals Corporation, a uranium company that traded on the NYSE and TSX. Under his leadership, EMC was recognized as one of the fastest growing Canadian companies. His accomplishments included increasing EMC’s market capitalization from $10 million in 2004 to approximately $1.8 billion when it was acquired by Uranium One Inc. in 2007.
Noteworthy shareholder base and significant insider ownership:
Insiders, management and other key shareholders hold over 40% of Skyharbour’s shares and include Denison Mines Corp., Marin Katusa and the KCR Fund, Paul Matysek, ACCESS Fund Management Ltd. and OTP Fund Management Ltd., Jeff Phillips (Global Market Development) and Doug Casey. Several other institutional investors also own large positions in the company.
An impending turnaround in the uranium market.
Uranium is currently trading near all-time lows which presents what Jordan calls an excellent contrarian opportunity. “It is anticipated that global demand for electricity will grow by 76% by 2030,” Jordan Tremble says.
“Nuclear is a reliable source of low cost and clean base load power. It is the perfect complement to renewable energy sources as it provides electricity 24/7 without emissions - in the last 45 years, nuclear generation has avoided the equivalent of nearly 80 billion tonnes of carbon dioxide. Furthermore, many countries around the world have committed to the Paris Climate Agreement, which aims to hold the global temperature increase below 2°C. Nuclear will play an important role in achieving this target. The International Energy Agency estimates that global nuclear generation is likely to increase by almost two and a half times by 2040.” Jordan explains.
“Globally, there are currently 448 operable reactors. Sixty are currently under construction; over five hundred others are either ordered, planned or proposed. China, India, Russia and other developing countries are all planning to build many new reactors in the future. As well, 80% of the long-term, higher-priced uranium contracts will expire by 2025. This means utilities and fuel buyers will be coming back to the market in a meaningful way over the coming years,” he adds.
“Where it gets interesting from an investment perspective, in addition to the current contrarian and deep value opportunity, is the lack of new mine supply coming on in the next five years, given the low spot price. Kazakhstan, the lowest cost producer accounting for 40% of the global primary mine supply of uranium, recently announced a 10% production cut due to low prices. Uranium is the only metal right now where not one producing mine is profitable at the current spot price of $21 per pound of U3O8 when looking at the all-in cost of production. The global average cost of production is almost double the current spot price of uranium. To incentivize new mine builds and to bring new supply online to meet the growing demand, analysts are forecasting a necessary price of $60 per pound, triple the current spot price.
There’s a saying in our industry: either the price starts going up, or the lights will start going out. Skyharbour and its shareholders will benefit immensely from rising uranium prices,” Jordan adds.
Top tier Athabasca Basin uranium and thorium projects.
Skyharbour has been opportunistically acquiring high quality uranium assets at attractive valuations. “We currently have five uranium projects totalling 200,000 hectares, at various stages of exploration and early stage development. All projects are strategically located in the Basin which hosts the highest-grade uranium deposits in the world averaging 2% U3O8 (2% U3O8 is equivalent to approx. 40 g/t gold). The Basin is a geological anomaly and some deposits even average over 15% U3O8,” Jordan says.
Moore Uranium Project (flagship project)
Jordan describes the 35,705 hectare Moore Uranium project as an “Advanced uranium exploration property located on the eastern portion of the Basin. There has been over $35 million in historical exploration at Moore. Our recently completed drill program was very successful. Drill results include 21% U3O8 over 1.5 metres at 265 metres depth. This project offers strong upside potential going forward and we intend to unlock value through new discoveries and resource delineation in upcoming drill programs.”
Preston Uranium Project.
The 74,965 hectare Preston Project is located near NexGen’s large, high grade Arrow uranium deposit and Fission’s PLS Triple R deposit. Jordan says, “Skyharbour recently completed a deal with industry-leader AREVA, a large multinational headquartered in France, that gave AREVA the right to acquire up to a 70% interest in a portion of the project in exchange for investing $7,300,000 in exploration and making $700,000 in cash payments over the next six years. Skyharbour is employing what’s known as the “prospect generator model” to advance its secondary projects by partnering up with strategic partners who can fund the exploration at these projects as well as pay Skyharbour cash to earn an ownership interest in the projects.
Falcon Point Uranium / Thorium Project.
The 72,050-hectare Falcon Point property hosts a shallow NI 43-101 inferred mineral resource of 7.0 million pounds U3O8 at an average grade of 0.03% U3O8 and 5.3 million pounds ThO2 inferred at an average grade of 0.023% ThO2. Jordan says, “Skyharbour is one of the only sub- $50 million market cap companies in the Basin with an NI 43-101 compliant uranium deposit. We have also discovered high grade uranium mineralization at surface at the north end of the project.”
Mann Lake / Yurchison Uranium Projects.
Skyharbour owns two other projects in the eastern part of the Basin: the 3,473 hectare Mann Lake Uranium Project and the 12,660 hectare Yurchison Project. Mining projects are often criticized for their negative effect on the environment. “But,” Jordan says, “Mining companies in Canada were some of the first in the world to develop externally-verified performance systems for sustainable mining practices as well as standards for rigorous environmental and regulatory oversight. The industry has come a long way in the last thirty years and new technologies and innovations continue to mitigate the environmental impact of modern mines.”
“It’s also critical to look at the economic benefits the mining sector provides Canada, especially in more remote northern communities,” Jordan says. According to The Mining Association of Canada (http://mining.ca/resources/mining-facts) mining contributed $56 billion to Canada’s Gross Domestic Product in 2015. Moreover, the industry directly employs more than 373,000 and indirectly employs an additional 190,000.
Canada has one of the largest mining supply sectors globally - more than 3,700 companies supply engineering, geotechnical, environmental, financial and other services to mining operations. Mining is also the largest private sector employer of Aboriginal peoples.
“Skyharbour has plans for a number of upcoming exploration programs, including drill programs at its flagship Moore Uranium Project. The exploration phase of mining is risky and is not suitable for every investor. However, the tradeoff for higher risk is the possibility of much higher returns,” Jordan explains. “At Skyharbour we are looking to make the next high-grade, Basin uranium discovery at our flagship Moore project. We are also using the prospect generator model and forging strategic partnerships like that with AREVA to advance our other projects,” he adds.
Jordan Trimble has a Bachelor of Science Degree with a Minor in Commerce from UBC. He is a CFA® charter holder and also serves as a Director of the CFA Society Vancouver.
Suzen Fromstein is the author of Suits and Ladders, Ten Proven Ways to Keep Your Job Safe - with a few jokes thrown in. Suits and Ladders was an Amazon Best Selling Book in the Career Guides Category
Jordan Trimble, B.Sc., CFA
President and CEO
Skyharbour Resources Ltd. (TSX.V: SYH)
1610 – 777 Dunsmuir St.
Vancouver, BC, V7Y 1K4
Toll Free: 1-800-567-8181