Uranium Exploration Co. Enters Into New Partnership in Athabasca Basin

Source: Streetwise Reports 11/05/2024

Skyharbour Resources Ltd. (SYH:TSX.V; SYHBF:OTCQX; SC1P:FSE) announced it has entered into an agreement with Hatchet Uranium Corp. to acquire interest in several of its projects. One analyst says the “spotlight” is on uranium juniors as the energy transition drives a heightened demand for power sources.

Skyharbour Resources Ltd. (SYH:TSX.V; SYHBF:OTCQX; SC1P:FSE) announced it has entered into an agreement with a private arm’s-length company to acquire interest in several of Skyharbour’s uranium projects in the Athabasca Basin of Saskatchewan.

Skyharbour said under the agreement, Hatchet Uranium Corp. may acquire an 80% interest in its Highway uranium property and a 100% interest in its Genie, Usam, and CBX/Shoe projects.

“We are excited to enter into this partnership with Hatchet Uranium Corp. as they advance and fund these exploration properties going forward,” Skyharbour President and Chief Executive Officer Jordan Trimble said. “We are confident in the capable team behind Hatchet as they have plenty of experience in the Athabasca basin and we look forward to them unlocking value at these projects. We continue to execute on our strategy by adding value to our uranium project base in the Athabasca basin through strategic partnerships and prospect generation, as well as focused exploration at our co-flagship Russell and Moore projects.”

Highway consists of four mineral claims comprising approximately 9,339 hectares, Skyharbour said. Hatchet may acquire an 80% interest in the optioned property by issuing CA$1.05 million in shares, making aggregate cash payments of CA$245,000, and incurring an aggregate of CA$2.05-million in exploration expenditures on the property over a three-year period.

The purchased property consists of 25 mineral claims comprising approximately 66,358 hectares across the Genie, Usam, and CBX/Show projects, Skyharbour said. Hatchet can acquire 100% interest in that property by paying Skyharbour CA$25,000 and issuing Skyharbour such number of shares of Hatchet equal to 9.9% of the issued and outstanding shares immediately following issuance.

Skyharbour stated that it holds a claw-back provision on the property, which becomes effective within 90 days following the third anniversary of the transaction’s closing date. This provision allows Skyharbour to repurchase a 25% interest by either applying exploration expenditures or using cash. Hatchet also must complete a financing for a minimum of CA$1.5 million and list its shares on the TSX Venture Exchange or the Canadian Securities Exchange.

Skyharbour said it also will retain a 2% net smelter returns royalty from minerals mined and removed from the purchased property, of which Hatchet may purchase one-half at any time for CA$2 million.

More on the projects

The Highway project is about 41 kilometers south of the Rabbit Lake mine and 11 kilometers southwest of Uranium Energy Corp.’s (UEC:NYSE AMERICAN) West Bear uranium and cobalt-nickel deposits. Highway 905 runs through the property, providing excellent access for exploration and the project is in close proximity to regional infrastructure.

“There has been limited modern exploration carried out on the project but there is the potential for high-grade basement-hosted and unconformity-related uranium mineralization,” Skyharbour said in a release. “The Highway project is located approximately seven km east of the present-day margin of the Athabasca basin but is believed to have been covered by Athabasca sandstone in the past.”

The Genie property consists of five claims totaling 16,930 hectares, Skyharbour said. It is located about 48 kilometers northeast of Cameco Corp.’s (CCO:TSX; CCJ:NYSE) Eagle Point uranium mine (Rabbit Lake operation) and 40 kilometers north of Wollaston Lake Post.

Usam consists of 12 claims totaling 40,041 hectares and about 16 kilometers northeast of Cameco’s Eagle Point mine (Rabbit Lake operation). The project has numerous electromagnetic conductors that are associated with significant magnetic lows of the Wollaston domain.

The CBX property was recently expanded through staking to include five additional claims adjoining the previously staked CBX and Shoe properties, the company said. Both CBX and Shoe now consist of eight non-contiguous claims totaling 9,386 hectares.

The claims are about 6.5 kilometers to 25 kilometers northeast of the Eagle Point uranium mine and cover the northern shore of Wollaston Lake including parts of Cunning Bay, Skyarbour noted.

“Outcrop exposure on the property is poor, but historical mapping and drilling shows that the newly expanded CBX project is underlain by a mixture of Wollaston supergroup metasedimentary gneisses, Hudsonian intrusives, and Archean felsic gneisses of the Western Wollaston domain,” the company said.

Continued Consolidation in the Sector?

Skyharbour has an extensive portfolio of uranium exploration projects in Canada’s Athabasca Basin, with 29 projects, 10 of which are drill-ready, covering over 1.4 million acres 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.

In an updated research note in July, Analyst Sid Rajeev of Fundamental Research Corp. wrote 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,” wrote Rajeev, who rated the stock a Buy with a fair value estimate of CA$1.21 per share. “Additionally, 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.”

The Catalyst: New Economy Thirsty for Power

The growth of artificial intelligence, the eventual adoption of electric vehicles (EVs), and the need for more net-zero power means to power it all means a renaissance in nuclear power is underway.

Microsoft Corp. (MSFT:NASDAQ) recently announced a deal with Constellation Energy Group (CEG:NYSE) to restart and buy all of the power from one of the shut-down reactors at its infamous Three Mile Island plant in Pennsylvania. The Biden administration also has announced a plan to restart the Palisades plant in Michigan.

“Biden has called for a tripling of U.S. nuclear power capacity to fuel energy demand that is accelerating in part due to expansion of power-hungry technologies like artificial intelligence and cloud computing,” Valerie Volcovici wrote for Reuters on Oct. 8.

The administration also wants to develop small nuclear reactors (SMRs) for certain applications.[OWNERSHIP_CHART-6026]

Prices for the element have risen this year to levels not seen since 2007. On October 31, spot uranium traded at US$80.50 per pound, Cameco reported.

Uranium prices are expected to move higher by the end of this quarter, when Trading Economics’ global macro models and analyses forecast uranium to trade at US$84.15 per pound, Nuclear Newswire reported on Oct. 3. In another year, the site estimates that the metal will trade at US$91.80 per pound.

Ownership and Share Structure

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

According to Reuters, President and CEO Trimble owns 1.6%, and Director David Cates owns 0.70%.

Institutional, corporate, and strategic investors own approximately 55% of the company. Denison Mines owns 6.3%, Rio Tinto owns 2.0%, Extract Advisors LLC owns 9%, Alps Advisors Inc. owns 9.91%, Mirae Asset Global Investments (U.S.A) L.L.C. owns 6.29%, Sprott Asset Management L.P. owns 1.5%, and Incrementum AG owns 1.18%, Reuters reported.

There are 182.53 million shares outstanding with 178 million free float traded shares, while the company has a market cap of CA$73.66 million and trades in a 52-week range of CA$0.31 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. 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., Cameco Corp., and Uranium Energy Corp.
3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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( Companies Mentioned: SYH:TSX.V; SYHBF:OTCQX; SC1P:FSE, )

Source: https://www.streetwisereports.com/article/2024/11/05/uranium-exploration-co-enters-into-new-partnership-in-athabasca-basin.html