Uranium Exploration Company's JV Partner Launches Major Uranium Exploration Program

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Skyharbour Resources Ltd. (SYH:TSX.V; SYHBF:OTCQX; SC1P:FSE) announced that joint-venture partner Orano Canada Inc. is planning a "substantial" exploration and drilling program this summer at the nearly 50,000-hectare Preston Uranium Project in western Canada's Athabasca Basin.

Orano is the majority owner and operator at the project with Skyharbour owning a minority interest of approximately 25.6%, the company noted.

"The proposed exploration program for the Preston project will consist of a planned 6,000- to 7,000-meter, helicopter-supported diamond drill program in approximately 26 holes at an average depth of 250 meters during the summer of 2025," Skyharbour said Tuesday in a release.

"Primary drill target areas include the previously untested Johnson Lake grid as well as the Canoe Lake grid," the release continued. "Target areas are separated throughout the claim to ensure assessment credits are met across all claims, while also testing perspective trends."

In addition to its own exploration projects, like its co-flagship Russell Lake and Moore uranium projects, Skyharbour also uses a prospect generator business using other companies to advance projects throughout the Athabasca Basin.

The company's total ownership interest is more than 614,000 hectares (ha) across 36 projects. It has nine partner companies advancing 13 projects in its portfolio, with project considerations totaling CA$70 million, assuming that these partner companies complete their full earn-ins at their respective projects.

Analyst Sid Rajeev of Fundamental Research Corp. wrote recently that Skyharbour owns "one of the largest portfolios among uranium juniors in the Athabasca Basin."

"Given the highly vulnerable uranium supply chain, we anticipate continued consolidation within the sector," he wrote, confirming the firm's Buy rating and adjusting its fair value estimate from CA$1.16 to CA$1.21 per share. "Additionally, the rapidly growing demand for energy from the AI (artificial intelligence) industry is likely to accelerate the adoption of nuclear power, which should, in turn, spotlight uranium juniors in the coming months."

Earlier this month, the company announced plans for 2025 drilling totaling 16,000 to 18,000 meters in 35 to 45 holes at Russell Lake and Moore, the "largest annual drill campaign ever carried out by the company."

More About Preston Target Areas

No drill testing has been carried out to date at the Johnson Lake Area, which has an ML-TEM grid (28.4 kilometers across 7 lines). A DC resistivity survey was also performed over four lines within the grid to better define and prioritize drill targets.

A drill program was planned for the grid in the winter of 2019, however, limited ice thickness prevented heavy equipment from entering the area. The 2025 program will be helicopter supported and will avoid that issue.

"Multiple conductors within the grid show moderate to strong conductive responses, concurring with the elevated conductivity seen on the airborne GEOTEM," Skyharbour said. "To thoroughly test these new conductive trends, seven to 12 drill holes with an average depth of 250 meters are planned totaling 1,750 to 3,000 meters, contingent on results."

According to the company, the Canoe Lake Area is highly prospective and is a planned target area for the 2025 diamond drilling program.

"About 10 to 12 holes totaling 2,500 to 3,000 meters have been set aside for both the FSAN and West Grid areas," Skyharbour said. "Drill holes will be allocated contingent on the final 2024 geophysical and geochemical results."

Skyharbour signed the original option agreement for Preston with Orano in 2017. It provided Orano an earn-in option to acquire a majority working interest in the project.

Orano fulfilled its earn-in option interest in the project in 2021 and formed a joint venture with Skyharbour and Dixie Gold to advance the project. Orano now holds an about 53% with the remaining interest split between Skyharbour and Dixie.

The Catalyst: Surging AI Demand Fuels Rising Nuclear Energy Requirements

Artificial intelligence (AI) and a surging number of data centers is drawing attention to the main fuel for nuclear reactors, helping to push the price for uranium, the main fuel for nuclear reactors, to new heights, according to a Yolowire release posted on Barchart.

Prices for enriched uranium rose to US$190 per separative work unit, the commodity's standard measure, which is up 239% from US$56 three years ago, according to the report.

"A resurgence of interest in nuclear power has come as governments and companies source carbon-free power to service major industrial facilities and communities," the release said.

In an indicator of nuclear power's resurgence, Microsoft Corp. (MSFT:NASDAQ) last year announced a deal with Constellation Energy Group (CEG:NYSE) to restart and buy all of the power from one of the shut-down reactors at its infamous Three Mile Island plant.

AI requires "bucket loads of power," wrote Dominic Frisby for his newsletter, The Flying Frisby, in October.

On Tuesday, Blair McBride wrote for Mining.com that the Chinese AI company DeepSeek, which has made a splash with its chatbot downloads surpassing that of ChatGPT, was pushing major tech stocks down, including sending the price of uranium down 5%. 

But in a research note on Tuesday, BMO Capital Markets analyst George Heppel wrote that additional demand interest is emerging in uranium, including from power utilities for prices under US$70 per pound.

"Despite a negative shift in AI sentiment yesterday, our reactor demand outlook remains unchanged out through 2030, underpinned by significant growth from ongoing reactor builds in China," Heppel said in the note. "Improving economics for the carry trade should provide upward support at this level."

Ownership and Share Structure

Management, insiders, and close business associates own approximately 5% of Skyharbour.

According to Reuters, President and CEO Jordan Trimble owns 1.48%, and Director David Cates owns 0.65%. Institutional, corporate, and strategic investors own approximately 55% of the company.

Denison Mines owns 6.3%, Rio Tinto owns 2%, Extract Advisors LLC owns 13.76%, Alps Advisors Inc. owns 9.65%, Mirae Asset Global Investments (U.S.A) L.L.C. owns 6.24%, and Incrementum AG owns 1.05%, Reuters reported.

There are 204.46 million shares outstanding with 199.71 million free float traded shares, while the company has a market cap of CA$73.62 million and trades in a 52-week range of CA$0.31 and CA$0.60.