Disclosure: Skyharbour Resources Ltd. has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions.
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SYH’s Portfolio
24 properties, covering 518k hectares, in the Athabasca basin
The Athabasca basin hosts some of the world’s richest uranium projects
JV/Option Agreements
Source: Company
Nine projects with JV/ option agreements
Partners have committed $38M for exploration, and $48M in cash/share payments to SYH
SYH has completed a maiden drill program totaling 9,595 m/19 holes, including 15 holes at the Grayling zone, and four holes at the Fox Lake Trail target.
Location Map
Source: Company
Russell Lake is strategically located between SYH’s Moore uranium project, and Denison’s (TSX: DML) Wheeler River project, and close to Cameco’s (TSX: CCO) Key Lake mill, and MacArthur River mines
35+ km of untested targets
Mineralization was encountered in most of the drill holes at the Grayling zone, with notable results such as 5.9m of 0.15% U3O8 starting at 338 m, including 1.0m of 0.37%. Despite the program yielding low grades, it is noteworthy that mineralization has been confirmed over a strike length exceeding 1 km at Grayling.
2023 Drill Map (Grayling Zone)
Source: Company
Management is planning a follow-up drill program (4,000 to 5,000 m) in Q1-2024.
Drilling has confirmed mineralization over a strike length exceeding 1 km at Grayling
In August 2023, SYH staked three early-stage uranium prospects (CBX, Karin, and 914W) in northern Saskatchewan. Management is seeking JV partners to advance these projects.
New Claims Map
Source: Company
Three prospects covering 13,945 hectares
CBX is located 25 km northeast of the Eagle Point uranium mine owned by Cameco
914W is 48 km southwest of Cameco’s Key Lake operations
Partner Tisdale Clean Energy Corp. (TSXV: TCEC/MCAP: $3M) is initiating a 2,000 m step-out/in-fill drill program at the South Falcon East uranium project, prior to completing an updated resource estimate. In 2015, a maiden resource study had returned 7 Mlbs at 0.03% U3O8 of inferred resources.
2023 Proposed Drill Holes
Source: TCEC / Company
Azincourt (TSXV: AAZ/MCAP: $7M) is planning a winter drill program at the East Preston project, focusing on further testing the K- and H-zones indicated in the map below. A drill program conducted this year (3,066 m/13 holes) identified clay content, typically associated with uranium deposits, but did not yield any notable intercepts.
East Preston Targets
Source: Azincourt Energy / Company
Strong balance sheet
In-the-money warrants, and options, can bring in $5M
Uranium juniors in North America are trading at $6.9/lb (previously $5.3/lb), and 3.7x book value (previously 3.1x)
Source: FRC/S&P Capital IQ/Various
Applying sector multiples to SYH’s flagship assets, we arrived at a revised fair value estimate of $1.16/share vs our previous estimate of $0.97/share
We are reiterating our BUY rating, and adjusting our fair value estimate from $0.97 to $1.16/share. We believe the uranium sector is primed for consolidation, given the highly vulnerable supply chain. We anticipate that the ongoing and planned exploration programs by SYH, and its partners, should act as catalysts for the stock.
We believe the company is exposed to the following key risks (not exhaustive):
