As Skyharbour Resources Ltd. (SYH:TSX.V; SYHBF:OTCQX; SC1P:FSE) and its partner mining companies advance their uranium projects toward becoming possible takeout targets, the in-progress and near-term exploration campaigns planned for them should catalyze Skyharbour's stock, purported Sid Rajeev, Fundamental Research Corp. analyst, in a Dec. 8 research note.
Also of note, Fundamental Research increased its fair value estimate on the Canadian uranium explorer, Rajeev indicated.
He explained, "Applying sector multiples to Skyharbour's flagship assets, we arrived at a revised fair value estimate of $1.16 per share versus our previous estimate of $0.97 per share."
Potential gain compelling
Given the uranium company's current share price is CA$0.53 per share, the potential return implied for investors is significant, at 119%.
Skyharbour remains Buy rated.
High likelihood of M&A
Rajeev expects an upcoming flurry of uranium project takeouts, he wrote, which could benefit Skyharbour, given its assets.
"We believe the uranium sector is primed for consolidation," the analyst added. "We believe majors will likely pursue mergers and acquisitions to secure long-term supply."
The impetus for such activity, noted Rajeev, primarily is a vulnerable supply chain, given Russia produces about 35% of the world's enriched uranium. Other contributors include increases in the uranium price and demand for the metal. The uranium price, now about US$81 per pound, has risen 20% since Hamas attacked Israel on Oct. 7 and has gone up 68% since this time last year.
Rajeev noted the Sprott Physical Uranium Trust, the world's largest physical uranium investment fund, expanded its holdings 1% in the past two months and 6% year over year. Looking ahead, the analyst added, uranium demand for nuclear reactors is forecasted to increase 28% by 2030 and nearly double by 2040, according to the World Nuclear Association.
Upcoming work by Skyharbour
Rajeev provided a list of the various slated programs that could move up Vancouver, British Columbia-based Skyharbour's stock price, starting with the company's 100%-owned projects, all in Saskatchewan's Athabasca basin.
At Russell Lake, the uranium explorer plans to conduct a 4,000−5,000 meter (4,000−5,000m) drill program in Q1/24. This will follow up on positive results of 19 maiden holes drilled in the Grayling zone earlier this year. In that program, most holes returned mineralization. One highlight hole showed 5.9m of 0.15% of uranium (U3O8) starting at 338m downhole, including 1m of 0.37% U3O8. Rajeev noted grades overall were low but at Grayling, the strike length of mineralization extended beyond 1 kilometer.
As for its flagship Moore Lake project, Skyharbour intends to conduct a follow-up drill program there, too, in advance of an initial resource estimate.
Also in the works, Skyharbour is seeking joint venture partners to advance the three early-stage prospects it staked in August: CBX, Karin and 914W. Together, these projects cover 13,945 hectares (13,945 ha).
"Currently, Skyharbour's land package spans 518,000 ha across 24 properties, representing one of the largest portfolios among uranium juniors in the Athabasca basin," wrote Rajeev.
Imminent drilling by partners
Two of Skyharbour's partner companies have exploration programs calendared as well at projects also in the Athabasca in Saskatchewan, Rajeev reported.
One is Tisdale Clean Energy Corp. (TCEC:CSE). It intends to carry out 2,000m of step-out/in-fill drilling at the South Falcon East uranium project before updating the project's mineral resource estimate.
The other partner is Azincourt Energy Corp. It has a drill program scheduled for this winter at the East Preston project, during which it will further test the K and H zones.
In the upcoming months, Rajeev pointed out, Skyharbour should receive about CA$2 million in cash/shares from its bevy of partners.
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