Uranium Co. Reaches for the Sky Amid Russian Withdrawal

Skyharbour Resources Ltd (TSX.V:SYH; OTCQX:SYHBF) has expanded its property portfolio with nine additional properties. The company now holds one of the most extensive portfolios within the region and expects to make a significant progress advancing their secondary assets through partnerships on those properties.

Skyharbour Resources is a Canadian based uranium exploration company. The CEO and president is Jordan Trimble, and the Senior Vice President and Head of Corporate Development is Dr. Andrew J. Ramcharan.

New Property Acquisitions

Skyharbour Resources Ltd. recently acquired eight new uranium exploration properties within Northern Saskatchewan through strategic property staking. The company has expanded its total land package to 504,356 hectares across what is now twenty-four properties and has one of the largest land holdings in the region. Skyharbour reports that these newly staked additions have no underlying royalties or encumbrances attached to them.

According to Jordan Trimble, the CEO and President of Skyharbour, "They complement our more advanced-stage exploration assets . . . and provide additional ground to option or joint venture out to new partner companies as a part of our prospect generator business. Executing on this part of the business, Skyharbour has signed option agreements with seven different partners that total over $70 million in partner-funded exploration expenditures, cash payments, and share issuances."

The new properties added include the Highway project with 1,184 hectares, the CBX project with 1,761 hectares, the Shoe project with 609 hectares, the Snow project with 212 hectares, the Elevator project with 9,294 hectares, the 914 projects with 2,129 hectares, the 914N project with 450 hectares, and the Karin project with 18,383 hectares.

Skyharbour has also recently acquired 100% of the South Dufferin uranium project, a 12,282-hectare property covering nine claims located in the Athabasca basin of Saskatchewan. The property was previously owned by Denison Mines Corp. (DML:TSX; DNN:NYSE.MKT).

The CEO of Denison Mines, David Cates, said of the acquisition, "With this transaction, Denison increases its ownership in Skyharbour in exchange for a prospective exploration property that became non-core in the Denison portfolio given our development and exploration focus in areas proximal to our flagship Wheeler River and McClean Lake properties. We are pleased to increase our shareholdings in Skyharbour and look forward to the continued collaboration between our companies."

The Purchase Agreement stipulates that Skyharbour may acquire a 100% interest in the project in consideration for the issuance of 6 million shares, 1 million non-transferable share purchase warrants, and a cash payment of CA$125,000. One warrant entitles Denison to one common share for two years at CA$0.60 per share.

The South Dufferin project covers the southern extension of the Virgin River Shear Zone, an area that is highly competitive. Airborne EM, magnetic and radiometric surveys, lake water and sediment sampling, prospecting, and ground truthing of airborne anomalies, geological mapping, and diamond drilling are all listed in the historical exploration of the property.

Historical drill holes have intersected elevated uranium, with past exploration advancing the property to a discovery-ready state. The property's claims have no underlying royalties on the property except for a 2% NSR on one of the claims, and, in addition to a 922-hectare claim nearby, Skyharbour holds 13,204 hectares over ten claims.

Dwindling Supply and Russian Withdrawal

In February of this year, Stockhead predicted that a Uranium boom would set values high for a long time. The analysis cited supply issues caused by inflation, the growing need for green energy, and Russia's withdrawal from international markets as factors creating the perfect storm for a sustained rise in value. According to Grant Isaac of Cameco, "a fuel buyer who thought their reactor was being shut down didn't procure any material, so there's near-term demand to deal with, and we're seeing medium-term demand in the form of reactor life extensions . . . while I say the demand outlook is the best ever, I'd say the supply outlook is more uncertain than it's ever been."

According to Grant Isaac, this is good news for investors: "We've never been at this stage of a cycle at a US$50 uranium price already."

In another piece from Stockhead, the need for green energy and nuclear power is making an impact on the market in the midst of a uranium shortage. Cameco has restarted the world's largest uranium mine, McArthur River. However, even McArthur's level of production cannot fill the gap in supply for all of the reactors in service.

According to Grant Isaac, this is good news for investors: "We've never been at this stage of a cycle at a US$50 uranium price already."

According to Richard Mills of Ahead of the Herd, the G-7 nations have agreed to jointly cut Russia out of nuclear supply chains.

In a statement on the decision, UK Energy Secretary Grant Shapps said, "This agreement will be used as the basis for pushing Putin out of the nuclear fuel market entirely and doing so as quickly as possible." Russia was previously the largest supplier of uranium for nuclear power and provided 8% of global mined uranium. The end result of these sanctions is to create a bullish market for uranium as supply contracts.

The Future at Skyharbour

Skyharbour has a number of catalysts working in its favor right now. For one, Skyharbour is set to benefit from the bifurcation of the uranium and nuclear fuel market since western nuclear utilities are looking to shore up their supplies as Russian uranium becomes unavailable. Skyharbour was predicted to do well even before the outbreak of the war in Ukraine.

According to Clive Maund in February of 2022, "Skyharbour has a lot of uranium exploration projects in Canada, many of which are drill ready, so with commodities generally and uranium in particular expected to continue in an accelerating bull market against the background of increasing inflation, Skyharbour stock looks set to do well."

According to Clive Maund, "Skyharbour has a lot of uranium exploration projects in Canada, many of which are drill ready, so with commodities generally and uranium in particular expected to continue in an accelerating bull market against the background of increasing inflation, Skyharbour stock looks set to do well."

The main catalyst currently is Skyharbour's ongoing 10,000m of drilling at the Russell Lake Project. In total, Skyharbour is expecting a combined 20,000 to 25,000 meters of drilling to occur across its two core projects of Russell and Moore projects as well as at several partner-funded projects.

Skyharbour has interest in 24 projects covering over 1.2 million acres, and they are advancing their primary projects at Russell and Moore Lake.

In addition to the exploration of their co-flagship projects, the company is using a prospect generator model to vend out secondary properties to partner companies while focusing on their primary projects.

The model provides shareholders with news flow and upside exposure to uranium discoveries across a diversified project base in the Athabasca Basin, with numerous operators with partner companies funding the bulk of the exploration. Skyharbour has now signed option agreements with seven separate partner companies that total over $70M in project consideration (>$34M in partner-funded exploration, >$14.5M in cash payments, and >$22M in share issuances from these partners assuming they all complete their earn-ins).

Skyharbour's partner companies have been actively advancing their respective projects, with Basin Uranium completing a total of 6,279 meters of diamond drilling on the Mann Lake property during the 2022 season, with additional exploration planned later in 2023. JV partner Azincourt recently completed a 3,000m program at the East Preston projects with assays pending. Medaro Mining is planning a drill program at Yurchison later in 2023. Furthermore, at the South Falcon East project, Tisdale is planning to drill later this year.

Ownership and Share Structure

Skyharbour has a market cap of CA$58.3 million. There are 153.5 million shares, 20.8 million warrants, and 10.8 million options. They trade in the 52-week period between CA$0.29 and CA$0.59.

Management and insiders own 5% of the company. Jordan P. Trimble, the CEO, and President, owns 1.62% with 2.48 million shares.

In terms of institutions, Alps Advisors, Inc., owns 5.81% with 8.92 million shares, Mirae Asset Global Investments owns 4.18% with 6.42 million shares, Exchange Traded Concepts, LLC owns 2.76% with 4.24 million shares. MMCAP Asset Management owns 2.38% with 3.66 shares. Incrementum AG owns 1.51% with 2.32 million shares. Sprott Asset Management LP owns 0.86% with 1.32 million shares, DWS Investment GmbH owns 0.39% with 0.60 million shares, and Vident Investment Advisory, LLC owns 0.35% with 0.53 million shares.

David Cates, the current president and CEO of Denison Mines and a Director of Skyharbour, owns 0.81% with 1.25 shares. Denison Mines Corp., Rio Tinto, and Paul Matysek, the previous founder and president and CEO of Energy Metals Corp, all represent strategic investors. Denison owns 11.4M shares and Rio Tinto owns 3.6M shares.

Approx. 40% of the company shares are in retail.

Skyharbour reports that it has over CA$5.5 million in the bank, with another CA$3.5 million expected as a result of the option partner payments scheduled in the next 12 months. The company has a monthly burn rate of CA$125k.

There are warrants priced at CA$0.22 that expire May 1, but most have been exercised over the last several weeks.

The company has coverage by several analysts, including Siddarth Rajeeve of Fundamental Research Corp. and David Talbot of Red Cloud Securities Inc.

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