Uranium Explorers JV Partner Launches Extensive Drilling Program in Athabasca Basin

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Skyharbour Resources Ltd. (SYH:TSX.V; SYHBF:OTCQX; SC1P:FSE) announced that its joint venture (JV) partner in the nearly 50,000-hectare Preston Uranium Project in the western Athabasca Basin, Orano Canada Inc., is starting a large-scale drilling program at the site.

Orano is planning a helicopter-supporter diamond drilling campaign totaling 6,000 to 7,000 meters with up to 28 holes to test high-priority targets at 200 to 350 meters. Work is expected to start sometime mid-summer.

"Primary drill target areas include the previously untested Johnson Lake, the Canoe Lake, and FSAN target," Skyharbour said in a release on Thursday. "Target areas are spread throughout the project to ensure assessment credits are met across all claims, while testing perspective trends."

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

In addition to its own exploration projects, like its co-flagship Russell Lake and Moore uranium projects, Skyharbour also utilizes 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 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.

"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," noted Rajeev, who had a fair value estimate of CA$1.21 per share on the stock.

Three Primary Target Areas

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."

Orano has fulfilled an earn-in option on the project by funding exploration expenditures and making required cash payments. Upon completion of a total of CAD $4.8 million in exploration spending, a JV was established between Orano, Skyharbour, and Dixie Gold to advance and develop the project. Orano currently holds a 53.3% interest in the joint venture, with Skyharbour and Dixie Gold holding 25.6% and 21.1% interests, respectively.

Orano's drilling in the Johnson Lake area will target a broad structural corridor initially identified in an airborne VTEM survey and subsequently refined by a ground-based ML-TEM survey in 2018 and a DC resistivity survey in 2020, Skyharbour said.

Six to 12 holes are planned at the Canoe Lake area, which comprises nine conductive trends that remain largely untested, the company noted.

"Six zones of interest have been identified based on the review of available airborne and ground geophysical data, characterized by gravity lows near interpreted structural breaks and crosscutting magnetic features," it said in the release.

According to Skyharbour, the FSAN Zone will be the most extensively tested area in the 2025 program, with both reconnaissance and direct targeting strategies to be employed. "These holes will test gravity low anomalies, areas of magnetic disruption, and sites of high geochemical response, including SGH uranium anomalies and historical surface grab samples with anomalous uranium and pathfinder element concentrations," the company said.

The West and Far West grids have been designated as contingency targets for the drill program, the company said.

The Catalyst: Market 'Ripe' to Take Off

In an updated research note on the uranium sector on May 7, Red Cloud Head of Equity Research David Talbot wrote that the firm believes "the fundamentals are ripe for long-term strength in the uranium market."

"In our view, investors can’t go wrong anywhere in the sector right now as long as they are still targeting good names," he wrote, naming Skyharbour as one of his favorite stocks with a Buy recommendation and a CA$0.55 per share target price.

"While most producers and developers have started to do well, most explorers still have not joined the party," said Talbot, noting uranium is again approaching US$70 per pound again, up more than 7% over the last month. "We suggest investors should look to get in, looking downstream towards explorers for added pop, especially as we see positive catalysts in the summer from these companies."

Talbot said he also believed that while "supply seems strained" and "permitting delays continue to cause supply uncertainties," U.S. President Donald Trump's push for critical elements, mining, and nuclear energy "may be working."

"Permitting and licensing may speed up," he wrote.

According to an October report on CarbonCredits.com, BMO Capital Markets projects a strong outlook for uranium demand, predicting it to grow at an annual rate of 2.9% through 2035, largely driven by China's aggressive push to build new nuclear reactors and the potential for reactor restarts in North America.

BMO Analyst Alexander Pearce emphasized the long-term demand outlook, noting that they foresee a potentially higher uranium demand over the medium to long term, CarbonCredits.com reported.

Ownership and Share Structure

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

According to Reuters, President and CEO Jordan Trimble owns 1.5%, 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 9.6%, Alps Advisors Inc. owns 9.1%, Mirae Asset Global Investments (U.S.A) L.L.C. owns 5.68%, and Incrementum AG owns 1.05%, Reuters reported.

There are 204.46 million shares outstanding with 199.65 million free float traded shares, while the company has a market cap of CA$64.62 million and trades in a 52-week range of CA$0.28 and CA$0.51.