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Field Campaign Underway at Uranium Exploration Co.'s JV Project

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Skyharbour Resources Ltd. announced that its joint venture (JV) partner, Orano, has started its comprehensive 2024 field campaign at the Preston uranium project in the western Athabascan basin. See why one analyst is bullish on this sector important to the clean energy transition.

Skyharbour Resources Ltd. (SYH:TSX.V; SYHBF:OTCQX; SC1P:FSE) announced its joint venture (JV) partner in the Preston uranium project in the western Athabascan basin has started its comprehensive 2024 field campaign at the site.

After fulfilling its earn-in requirements, Orano Canada Inc. holds a 51% interest in the 49,635-hectare JV project, with the remaining interest split evenly between Skyharbour and Dixie Gold Inc. (DG:TSX.V; YWRLF:OTCMKTS) at 24.5% each.

This year's field campaign will be Orano's first exploration program at the site since 2020 and will include a ground electromagnetic survey, a ground gravity survey, and a spatiotemporal geochemical hydrocarbons (SGH) soil sampling program, Skyharbour said.

"This is the first fieldwork being carried out at the project in several years, and we have elected to participate in the program as a minority partner in the JV, as we strongly believe in Preston's discovery upside potential," said Skyharbour President and Chief Executive Officer Jordan Trimble.

On January 30, the spot price for the element important to nuclear energy spiked to US$100.25 from US$81.25 on November 30. It has since cooled, but Red Cloud Securities analyst David Talbot noted in a price sector update in February that "we are starting to see the much-needed uranium price incentive, leading to exploration and mining projects being taken off the shelf, new exploration companies are emerging, and equity investment into uranium stocks continues at a torrid pace."

Talbot predicted long-term spot price assumptions of US$120 per pound for 2024, US$135 per pound in 2025, US$150 per pound in 2026, and US$175 per pound in 2027.

"We'd argue that current uranium prices are still just half of previous highs when considering inflation," he wrote.

In a March 4 research note, Talbot maintained his Buy rating of Skyharbour and a CA$0.65 per share target price.

The Catalyst: A Good Neighborhood

Skyharbour signed the option agreement with Orano in 2017, giving it the earn-in option for the majority working interest in the Preston project.

The project's potential is highlighted by past discoveries in the area, such as NexGen Energy Ltd.'s (NXE:TSX; NXE:NYSE.MKT) Arrow deposit, Fission Uranium Corp.'s (FCU:TSX; FCUUF:OTCQX; 2FU:FSE) Triple R deposit, and F3 Uranium Corp.'s (FUU:TSX) PLN discovery.

Ground gravity, airborne and ground electromagnetics, radon, soil, silt, biogeochemical, lake sediment, and geological mapping surveys have been done at the site, as well as exploratory drill programs.

"Over a dozen high-priority drill target areas associated with multiple prospective exploration corridors have been successfully delineated through these methodical, multi-phased exploration initiatives, which have culminated in an extensive, proprietary geological database for the project area," Skyharbour said in the release.

Orano fulfilled its earn-in option in early 2021 by funding a total of CA$4.8 million in exploration expenditures and making cash payments. Orano, Skyharbour, and Dixie Gold have now formed the JV for the "future advancement and development of the project."

'One-Stop Shop' for Uranium

Skyharbour has an extensive portfolio of uranium exploration projects in Canada's Athabasca Basin, with 29 projects, ten of which are drill-ready, covering over 587,000 hectares of mineral claims. In addition to being a high-grade uranium exploration company, Skyharbour utilizes a prospect generator strategy by bringing in partner companies to advance its secondary assets.

Skyharbour partner companies include Orano Canada, Azincourt Energy Corp. (AAZ:TSX.V; AZURF:OTC), Valor Resources Ltd.. (VAL:ASX), Basin Uranium Corp. (NCLR:CSE; BURCF:OTC; 6NP0:FRA), and Medaro Mining Corp. (MEDA:CNX), advancing the Preston, East Preston, Hook Lake, Mann Lake and Yurchison Projects, respectively. More recently, two earn-in option agreements have been signed with Tisdale Clean Energy Corp. (TCEC:CSE; TCEFF:OTCQB; T1KC:SE) to option the South Falcon East project, as well as North Shore Uranium Ltd. (NSU:TSX) to option the Falcon project, bringing the total partner companies to seven. The company has an additional twenty 100%-owned projects that it is actively seeking to option out to potential new partners in the future to add to its growing prospect generator business.

Skyharbour Investor Relations Manager Nick Coltura told Proactive's Angela Harmantas at this year's Prospectors and Developers Association of Canada (PDAC) conference in Toronto that the company is "trying to be a one-stop shop for uranium discovery, drilling, and exploration."

"We are in the best place in the world to be looking for and developing uranium assets," he said.

Many analysts and newsletter writers also have optimism for Skyharbour's future.

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."

In her February 7 newsletter, Gwen Preston of The Maven Letter 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."

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."

New Uranium Bull Market Coming?

Uranium is a key element in the ongoing clean energy revolution. Yahoo Finance! predicted that "Uranium's Third Bull Market Set to Shine in 2024," pointing out some key catalysts for the yellow element, including rising electricity prices, increased volume in investment funds, and lower inventory.

"Berenberg analysts said the requirement for some uranium users to diversify away from Russian supply could be a major price driver," the article noted. "They said prices will likely normalize around US$70 per pound for the long term." 

Currently, the price of uranium is at US$87.75, 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."

streetwise book logoStreetwise Ownership Overview*

Skyharbour Resources Ltd. (SYH:TSX.V; SYHBF:OTCQX; SC1P:FSE)

*Share Structure as of 4/4/2024

Ownership and Share Structure

Management, insiders, and close business associates own approximately 5% of the company. According to Reuters, President and CEO Jordan Trimble owns 1.54% of the company with 2.79 million shares, Director David 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.

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$96.03 million and trades in a 52-week range of CA$0.32 and CA$0.64.

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Important Disclosures:

  1. Skyharbour Resources Ltd. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000. 
  2. In addition, North Shore Uranium Ltd. has a consulting relationship with an affiliate of Streetwise Reports, and pays a monthly consulting fee between US$8,000 and US$20,000.
  3. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Skyharbour Resources Ltd., Azincourt Energy Corp., and North Shore Uranium Ltd. 
  4. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
  5.  This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 

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