Skyharbour Resources Ltd.'s (SYH:TSX.V; SYHBF:OTCQX; SC1P:FSE) 51%-owned Russell Lake project in Saskatchewan's Athabasca Basin showed high-grade uranium mineralization in the Fork zone upon drilling, reported Red Cloud Securities Head of Equity Research David Talbot in a July 9 research note.
"We view this discovery positively and believe that it represents a breakthrough for Russell Lake, as previous exploration in this area was limited by interference from nearby power lines," Talbot wrote.
76% return potential
Red Cloud maintained its target price of CA$0.65 per share on the Canadian uranium and thorium company, currently trading at about CA$0.37 per share. The difference between these prices implies a potential return for investors of 76%.
Skyharbour remains a Buy.
Best hole, ideal location
Talbot reported that the U3O8 mineralization in the Fork zone was encountered during the phase one drill program at Russell Lake consisting of six holes over 3,094 meters (3,094m). Hole RSL24-02 returned the best intercept, 0.721% U3O8 over 2.5m, including 2.99% U3O8 over 0.5m, at a depth of 338.1m.
"This hole encountered mineralization just above the unconformity in the sandstone and represents the first multipercent, high-grade intercept at Russell," the analyst wrote.
Geophysics only recently identified this target due to interference from power lines previously, he noted. Mineralization remains open in multiple directions, including along strike, and Skyharbour intends to explore the area further.
Talbot highlighted that the Fork zone is ideally located, about 4 kilometers (4 km) southeast of two high-grade projects, Denison Mines Corp.'s (DML:TSX; DNN:NYSE.MKT) Phoenix and IsoEnergy Ltd.'s (ISO:TSX.V) Hurricane. Also, Fork is about 1 km southwest of the Grayling target and 3 km southwest of the East Grayling target, both at Russell Lake.
At East Grayling, during this same program, the drill bit encountered "graphitic host rocks below the unconformity in the basement," reported Talbot.
What to watch for
Because Skyharbour is currently working at two of its projects, catalysts at each are on the horizon. They include results from a set of phase two drill programs, 2,058m at Russell Lake targeting the M zone extension and 2,864m at Moore, the company's flagship uranium project, also in the Athabasca.
Further, Skyharbour plans to carry out follow-up drilling this summer at both projects, 4,000−5,000m at Russell Lake and 2,500−3,000m at Moore.
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