The company hopes these assets will increasingly generate value for its shareholders as the market heats up. Skyharbour has successfully deployed a prospect generator model under which it has farmed out three assets to earn-in partners, while focusing its own exploration efforts on its flagship Maverick target on the 100%-owned Moore Lake property.
"We started acquiring projects during the early years of the rout following Fukushima. The sentiment at the time was at all-time lows and we set out to build a project portfolio for pennies on the dollar," president and CEO Jordan Trimble told Mining Journal.
Its portfolio cost just over C$5 million to assemble, with most of that being in share payments rather than cash, before doing a landmark deal with uranium developer Denison Mines to bring in Moore Lake. This transaction had elements of completing a circle, given the previous history with the asset by head geologist Richard (Rick) Kusmirski.
Kusmirski was an Exploration Manager at producer Cameco for many years and subsequently ran an exploration junior called JNR Resources.
JNR discovered the high-grade Maverick Zone at Moore Lake, advanced the project through drilling and went on to sell it to Denison Mines.
Denison's focus on the development of its flagship Wheeler River project gave Kusmirski and the team that made the initial discovery the opportunity to reconnect with the asset and bring it into Skyharbour to continue advancing it.
The Moore Lake Project is on the east side of the basin, near roads and power infrastructure, and is just 15km east of Denison's Wheeler River project. As a result of the transaction, Denison became Skyharbour's largest shareholder and it now owns a 7-8% interest in the company.
Denison's president and CEO, David Cates, is also a director of Skyharbour and so the larger company is keeping an eye on how the project develops.
"We believe there is the geological potential at Moore to host larger uranium deposits, and we are using new exploration techniques and methodologies to find these deposits, as well as looking in the relatively untested basement rocks," said Trimble.
‘Ultimately our end game is to build the company up and sell it while the uranium price continues to increase'- JORDAN TRIMBLE
CEO
"Ultimately our end game is to build the company up and sell it while the uranium price continues to increase, as there has been underinvestment in the sector for an extended period of time and mining companies will need to replenish their resources and resources."
The Maverick corridor at the Moore Lake project extends over 4.7km, of which just over half has been systematically drilled. At Maverick, Skyharbour recently started a 3,500m drilling programme, which was just expanded to 5,000 metres after encountering encouraging mineralization so far.
The programme is focused on testing basement hosted targets and looking for new zones to expand the known high-grade zone at Maverick and Maverick East Zone, possibly leading to a maiden resource estimate in early 2022.
The company drilled 2,560m in seven holes in 2020, with highlights including 17.5m grading 0.72% U3O8.
"Our focus is on expanding known zones of mineralisation as well as making new discoveries around these existing zones, and as well as at new targets elsewhere on the project," said Trimble.
The focus for this drill programme is on basement-hosted targets. Typically, the highest grade uranium mineralisation is hosted in these underlying feeder zones, and more recent major discoveries like those made by Nexgen and Fission are basement-hosted deposits.
Although they do not have big alteration halos such as sandstone-hosted deposits tend to have, Skyharbour has been using more modern techniques and geophysical surveys to target them, thereby increasing the chances of discovery success.
Furthermore, two new mining methods are being proposed to bring existing Athabasca Basin deposits into production: ISR (In Situ Recovery) and SABRE (Surface Access Borehole Resource Extraction).
Skyharbour's Moore Lake project core shack
Both of these mining methods have the potential to bring mining costs down, decrease timelines to production, and offer more envi-ronmentally favourable extraction methods without having to build conventional mines.
In addition to offering high-grade discovery potential at its Moore Lake project, Skyharbour employs the prospect generator model, meaning the company does not have all its eggs in one basket.
Skyharbour has exposure to the exploration success of others through ownership stakes it retains in the projects it has farmed out, in addition to the equity holdings it has acquired through its deal making.
Skyharbour has struck deals with three other companies so far. Industry-leader and France's largest uranium mining company, Orano, has earned a 51% interest in the Preston Project in the western part of the Athabasca Basin, having spent $4.8 million on the project. Skyharbour also owns 15% of the adjacent East Preston project, where Azincourt Energy has contributed $3.5 million in cash and exploration expenditures to earn a 70% interest.
The third deal could soon bear fruit as new partner Valor Resources undertakes geophysics and field work to define drilling targets for later in the year at Skyharbour's Hook Lake Project, where a previous surface grab sample returned 68% U3O8.
"If they can find the source for this high-grade mineralisation, it will likely be a major discovery," said Trimble.
Valor can earn an 80% interest by contributing just under $4 million in exploration and cash over a three-year period and having issued over 233 million shares to Skyharbour.
"The farm-out process allows us to hand the reins over and bring in new sets of eyeballs to the projects, with partner companies funding the exploration at them. We maintain exposure to potential new discoveries and value creation events without having to continuously dilute our shareholders to raise money for these exploration programmes. Our minority project interests can be worth a lot of money as the targets are typically high-grade and high-value deposits," said Trimble.
Finally, worth noting is that in the previous uranium bull market of 2006/07, the market capitalisation of JNR Resources, a company that held some of the same assets Skyharbour has now, reached over $300 million, so a new discovery at these projects in a rising uranium market could have a profoundly positive impact on the company's valuation.
