On March 20, Skyharbour Resources Ltd. (SYH:TSX.V; SYHBF:OTCQX; SC1P:FSE) announced that its partner, North Shore Uranium Ltd. (NSU:TSX), had completed a maiden drill program at its 55,699-hectare Falcon Property. This property is in the eastern part of the Athabasca basin in Northern Saskatchewan. The Fraser Institute consistently ranks the Athabasca Basin as a top-5 mining district, and its location in Canada ensures more geopolitical stability than many uranium-bearing regions.
The company reported that through this drill program, three targets were drilled, along a strong, dominantly northeast-trending electromagnetic (EM) conductor system: P03, P08, and P12. At P03 and P08, the targeted subvertical EM conductors were intersected.
Hole P12 had the following highlights:
- Radioactivity: Elevated total count gamma probe readings were obtained at targets P03 and P08 with a maximum value of 2.695 counts per second (cps) at P03.
- Conductor modeling: Three-dimensional plate models of the EM conductor systems were modeled using Maxwell EMIT software. At P03 and P08, the targeted conductors were intersected very close to the depths predicted by the models.
- Favorable structures: A brittle graphitic fault zone with angular rubble and clay gouge underlain by gneiss with strong silica alteration and patchy chlorite alteration was encountered coincident with the EM conductor at P03. A brittle fault zone with bleached clay, hematite staining, and altered pegmatite explained the EM conductor at P08.
- Next steps: Fault zones and alterations similar to those encountered at P03 and P08 can be associated with basement-hosted uranium mineralization. The forthcoming analytical results integrated with the drill hole data will guide future work related to these two targets. Target P12 remains untested and should be drilled again to reach the targeted EM conductor depth. It lies within a prominent interpreted structural zone near several other priority targets in the South Walker area. In addition, multiple high-priority untested targets on the property have the potential for basement-hosted uranium mineralization. Using its proven exploration methods, the company will continue to prioritize these targets for future field evaluation and drilling.
The release stated that the company is expecting core sample results in four to six weeks.
"The initial results from our maiden drill program are encouraging," President and CEO Brooke Clements said of this news.
Why Uranium?
Uranium is a key element in the ongoing clean energy revolution, and with this, prices have been steadily rising. In January, the price of uranium hit a high of US$107.
Around that time, Yahoo Finance! put out an article titled "Uranium's "Third Bull Market" Set to Shine in 2024." In the article, they pointed out some key catalysts for the yellow element, including rising electricity prices, increased volume in investment funds, and lower inventory."
In the article, they noted that "Berenberg analysts said the requirement for some uranium users to diversify away from Russian supply could be a major price driver. They said prices will likely normalize around US$70 per pound for the long term."
Currently, the price of uranium is at US$85, still higher than the Berenberg analyst's long-term price.
However, some believe that uranium can go higher this year. A recent article from The Motley Fool stated, "In 2007, uranium prices topped out at around US$140 per pound, an 80% premium to today's prices. If the global demand and supply gap widens further, it's not difficult to see prices exceeding those previous highs."
While the price lowered from its US$107 high, some analysts are still optimistic, as reported in this Bloomberg article, and forecasting increased demand.
2024 Plans
Speaking with Proactive's Angela Harmantas at the PDAC conference, Skyharbour's Investment Relationship Manager Nick Coltura spoke of two of the company's proactive drill projects: 5000 meters of drilling at Russell Lake and 3000 meters at Moore Lake.
The 73,294-hectare Russell Lake Uranium property is situated in the central core of the eastern Athabasca Basin of northern Saskatchewan. The Fraser Institute consistently ranks the Athabasca Basin as a top-5 mining district, and its location in Canada ensures more geopolitical stability than many uranium-bearing regions.
Coltura stated he is quite excited about the new drill program.
"We believe there can be some high grades in between those holes, and we are very excited to do more systematic drilling," he explained. "We are fine-tuning the targets."
Regarding the company's overarching goals, he explained that Skyharbour is "trying to be a one-stop show for uranium discovery, drilling, and exploration."
He's particularly bullish about where the company's projects are located. He explained, "We are in the best place in the world to be developing uranium assets."
A Buy-Rated Stock
Many analysts and newsletter writers have shown optimism for Skyharbour over the last couple of months. On January 7, Technical Analyst Clive Maund posted on his site, stating, "This looks like an excellent point to buy or add to positions ahead of renewed advance.
Around the same time, in a January 16 article, Michael Ballanger of GGM Advisory Inc. commented on Skyharbour, saying, "Any kind of exploration success in the Athabasca Basin will be met with voluminous demand, so the upside leverage is potentially explosive."
Gwen Preston of The Maven Letter also has a positive view of the stock. In a February 7 newsletter, she wrote, "My rationale for buying Skyharbour Resources Ltd. is both for its particular appeal (near-term discovery potential, close working relationship with Denison) and its position as a larger but still small uranium company. I think this segment will be the next to go."
In a March 4 research note, David Talbot with Red Cloud Securities commented on the catalysts above, reiterating his Buy rating of the company and CA$0.65 target price.
Ownership and Share Structure
According to Skyharbour, management and insiders own approximately 2.5% of the company. According to Reuters, President and CEO Jordan P. Trimble owns 1.54% of the company with 2.79 million shares, Director David Daniel Cates owns 0.70% of the company with 1.27 million shares, and Chairman of the Board James Gaydon Pettit owns 0.23% of the company with 0.42 million shares.
Skyharbour said institutional, corporate, and strategic investors own approximately 55% of the company, as Alps Advisors, Inc., owns 8.28% of the company with 14.99 million shares, Mirae Asset Global Investments (U.S.A) L.L.C. owns 4.83% of the company with 8.76 million shares, Sprott Asset Management L.P. owns 2.74% of the company with 4.96 million shares, M.M.C.A.P. Asset Management owns 2.02% of the company with 3.66 million shares, Incrementum AG owns 1.30% of the company with 2.36 million shares, Vident Investment Advisory, L.L.C. owns 0.34% of the company with 0.61 million shares, and DWS Investment GmbH owns 0.33% of the company with 0.60 million shares.
According to Reuters, there are 181.16 million shares outstanding with 176.36 million free float traded shares, while the company has a market cap of CA$83.88 million and trades in the 52-week period between CA$0.32 and CA$0.64.
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