MD&A ending 30.09.2018
Consolidated Financial Statements
Condensed Interim Consolidated Financial
Jordan Trimble, B.Sc., CFA
President, Chief Executive Officer, Director
Jordan Trimble is the President and Chief Executive Officer of Skyharbour Resources. Mr. Trimble holds a Bachelor of Science Degree with a Minor in Commerce from UBC and he is a CFA® charterholder and serves as a director of the CFA Society Vancouver. He has worked in the resource industry in various roles with numerous TSX Venture listed companies specializing in corporate finance and strategy, shareholder communications, marketing, deal structuring and capital raising. Previous to Skyharbour, he managed the Corporate Development for Bayfield Ventures, a gold company with projects in Ontario which was acquired by New Gold (TSX: NGD). Mr. Trimble has an extensive network of institutional and retail investors as well as resource industry professionals bringing valuable relationships to the Company. He has appeared on BNN several times and has given presentations at numerous resource conferences across North America. Mr. Trimble has completed the Canadian Securities Course and Technical Analysis Course offered through CSI as well as several geology, exploration and mining courses.
James G. Pettit
Director, Chairman of the Board
Jim Pettit is the Chairman of the Board of Skyharbour Resources Ltd. Mr. Pettit is currently serving as a Director on the Boards of several public resource companies and offers over 30 years experience within the industry specializing in finance, corporate governance, management, and compliance. He specializes in the early stage development of private, as well as public companies. His background over the past 30 years has been focused primarily within the resource sector and he was previously Chairman and CEO of Bayfield Ventures Corp. which was sold to New Gold in 2014.
Richard Kusmirski, P.Geo, M.Sc.
Director, Head Technical Advisor, and Qualified Person
Rick Kusmirski, P.Geo, M.Sc., Head of Advisory Board, has over 40 years of exploration experience in North America and overseas, and has actively participated in the discovery of a number of uranium, gold and base metal deposits. For several years, in his capacity as Exploration Manager, he directed Cameco Corporation’s (TSX: CCO) uranium exploration projects in the Athabasca Basin. In 1999, Rick joined JNR Resources becoming Vice President of Exploration in 2000. Subsequently, he directed the exploration program that led to the discovery of the Maverick Zone on the Moore Lake uranium joint venture in the Athabasca Basin in Saskatchewan with partner Kennecott Canada. Rick became JNR’s President and CEO in January of 2001. In February of 2013, Denison Mines Corp. (TSX: DML) successfully acquired all of the outstanding shares of JNR by way of a friendly all-share take-over bid.
David Cates, CPA, MAcc
David Cates, CPA, MAcc, is a Director of Skyharbour. He is the President and CEO of Denison Mines (TSX: DML) and Uranium Participation Corp (TSX: U). Prior to being appointed the President and CEO position Mr. Cates served as Denison’s Vice President Finance, Tax and Chief Financial Officer. As Chief Financial Officer, Mr. Cates played a key role in the Company’s mergers and acquisitions activities – leading the acquisition of Rockgate Capital Corp. and International Enexco Ltd. Mr. Cates joined Denison in 2008 and held the position of Director, Taxation prior to his appointment as Chief Financial Officer. Prior to joining the Company, Mr. Cates held positions at Kinross Gold Corp. and PwC LLP with a focus on the resource industry.
Paul Matysek, M.Sc., P.Geo
Paul Matysek is a Strategic Advisor for Skyharbour and is a mining entrepreneur, professional geochemist and geologist with over 35 years of experience in the mining industry. He was the Founder, President and CEO of Energy Metals Corporation („EMC“), a premier uranium company that traded on the New York and Toronto Stock Exchanges. Mr. Matysek led EMC as one of the fastest growing Canadian companies in recent years, increasing its market capitalization from $10 million in 2004 to approximately $1.8 billion when it was acquired by a larger uranium producer, Uranium One Inc., in 2007. In December of 2017, Mr. Matysek was involved of the sale of Lithium X Energy corp. for $265M to NextView New Enenergy. Mr. Matysek was the President and CEO of Goldrock Mines Corp. which on June 7th, 2016 announced it had entered into a definitive agreement to be acquired by Fortuna Silver Mines (NYSE:FSM) (TSX:FVI) for $129 million on a fully-diluted in-the-money basis. Previously, Mr. Matysek was the President and CEO of Lithium One Inc., which developed a high quality lithium project in northern Argentina. In July 2012, Lithium One and Galaxy Resources merged with a $112 million plan to create a fully integrated lithium company. Prior to Lithium One, Mr. Matysek was the President and CEO of Potash One Inc. where he was the architect of the $434 million friendly takeover of Potash One by K+S Ag, which closed in early 2011.
Dave Billard, P.Geo.
Dave Billard is a geologist with over 35 years of exploration and development experience, searching for uranium, gold and base metals in western Canada and the western US.. He is a graduate of the University of Saskatchewan (1984) and Professional Geoscientist registered in Saskatchewan. He was Chief Operating Officer, Vice President Exploration and Director for JNR Resources Inc, prior to their acquisition by Denison Mines in 2013. Dave was instrumental in the discovery of JNR’s Maverick and Fraser Lakes B zones and, earlier in his career, participated in the discovery and development of several significant gold deposits in northern Saskatchewan. Before joining JNR Dave was a geological consultant specializing in uranium exploration in the Athabasca Basin of Saskatchewan and prior to that, was employed by Cameco Corporation for over 12 years. Mr. Billard is currently a geological consultant based in Saskatoon and is a Director of Troymet Exploration Corp.
Christine McKechnie, M.Sc.
Christine McKechnie is a geologist specializing in uranium deposits, in particular basement-hosted unconformity-related deposits in the Athabasca Basin and surrounding area. Since starting her career, she has worked for several companies (Claude Resources Inc., JNR Resources Inc., CanAlaska Uranium Ltd., and Cameco Corp.) carrying out gold and uranium exploration and working underground at the Eagle Point Mine; in addition to a summer mapping with the Saskatchewan Geological Survey. She completed her B.Sc. (High Honors) in 2008 from the University of Saskatchewan (U of S), and in early 2013, she completed a M.Sc. thesis at the U of S on the geology and origin of the Fraser Lakes Zone B pegmatite-/leucogranite-hosted U-Th-REE deposit in northern Saskatchewan. As part of her thesis, she co-authored four peer-reviewed journal papers on the Fraser Lakes Zone B deposit and other basement-hosted uranium prospects in northern Saskatchewan. Her paper (co-authored with Dr. Irvine Annesley and Dr. Kevin Ansdell) entitled “Geological Setting, Petrology, and Geochemistry of Granitic Pegmatites and Leucogranites Hosting U-Th-REE Mineralization at Fraser Lakes Zone B, Wollaston Domain, Northern Saskatchewan, Canada” received the 2015 CIM Barlow Medal for Best Geological Paper.
Investor Relations Manager
Nick Findler has worked in various investor relations and corporate development roles with over four years of capital markets experience. He holds a Bachelor of Commerce from the Gustavson School of Business at the University of Victoria as well as his Canadian Securities Course designation. Nick has been the Investor Relations Manager at Skyharbour since 2016, and previously worked at Kin Communications, an IR firm based in Vancouver, where he worked with mining, technology and transportation companies.
Donald C. Huston
Don Huston is a independent Director of Skyharbour Resources Ltd. He has been associated with the mineral exploration industry for over 30 years and has extensive experience as a financier and in-field manager of numerous mineral exploration projects in North America. He was born and raised in Red Lake, Ontario and spent 15 years as a geophysical contractor with C.D. Huston & Sons Ltd. as mineral exploration consultants in northern Ontario, Manitoba, and Saskatchewan. Mr. Huston serves as a Director of 5 Canadian public resource companies.
Amanda Chow, CPA, CMA
Amanda Chow serves as an independent Director of Skyharbour Resources Ltd. Ms. Chow is a Chartered Professional Accountant (CPA, CMA) and a graduate of Simon Fraser University where she earned her Bachelor of Business Administration degree. She began working with public companies in 1999.
Thomas S. Drolet, BEng, MSc, DIC
Mr. Drolet is a uranium and nuclear industry specialist and principal of energy consultancy Drolet & Associates Energy Services Inc. Mr. Drolet has had a plus-40-year career in the energy sector, where he spent 26 years with Ontario Hydro in various engineering, research and operations functions. He formed and headed Canada’s research and development program into fusion (CFFTP) in 1982 and then moved into international commercial work with Ontario Hydro International, where he was named president and CEO in 1993. Mr. Drolet was then appointed managing director of American Electric Power Canada, and president of Canadian Energy Opportunities Inc. where he was involved in mergers, acquisitions and other consulting activities in the Canadian and U.S. power sectors. Mr. Drolet earned a bachelor’s degree in chemical engineering from Royal Military College of Canada, a master of science degree in nuclear technology/chemical engineering, and a DIC from Imperial College, University of London, England. He is a frequent guest and keynote speaker on nuclear energy at global conferences.
Tamas Bakacs, MBA
Mr. Bakacs is an experienced and successful global resource fund manager who started his career in mergers and acquisitions at Arthur Andersen LLP. Following the completion of his MBA studies in 2004, Mr. Bakacs joined Baillie Gifford & Co. in Edinburgh, United Kingdom, where he became the global equities analyst for the firm’s flagship Long-Term Global Growth portfolio (Funds Under Management, “FUM”, of $14 billion) covering mid- to large-cap equities in various markets and indexes. Subsequently, he was chosen to be the head of the firm’s specialist Oil and Gas Energy sector group (FUM of $15 billion). Recently, Mr. Bakacs was an investment manager and senior analyst at Compass Asset Management JSC in Almaty, Kazakhstan (FUM of $250 million), a frontier emerging-markets-based hedge fund focusing on commodity-linked equity investments. Mr. Bakacs is currently a portfolio manager at ACCESS Fund Management Ltd., where he manages a junior-mining-focused commodity equity fund in Budapest, Hungary. Mr. Bakacs is a graduate of St. Francis College (BS, Accounting, 1999, Summa Cum Laude) and the University of California, Los Angeles (MBA, 2004).
Mr. Andreas Norlin
Mr. Norlin is the founder and Managing Director of the International Thorium Energy Organization, an international and multi-stakeholder advocacy platform with the goal of facilitating the pathway to power the world with thorium fueled nuclear energy. Through the organization, Mr. Norlin has aided development in the area of nuclear energy since 2009 with a continuously growing community of nuclear proponents. He has a vision to power the world with clean, safe and affordable energy. Mr. Norlin has a background in Physics and Technology Development from Lund University and has been published in Nature. He also holds a patent for a laser plasma wakefield accelerator technology he developed in laboratories at Ecole Polytechnique in Paris. Through his unique network and experience in the fields of energy, nuclear and thorium he can advise on related matters.
Simon Dyakowski, CFA, MBA
Simon Dyakowski has over ten years of corporate finance, corporate development, and capital markets advisory experience. He holds an MBA – Finance from the University of British Columbia, is a CFA charterholder, and holds an undergraduate Finance degree from the University of Western Ontario. His recent focus is advising venture stage and growth-oriented public market issuers on deal structuring, capital markets, and corporate development strategies. He previously held relationship coverage roles at the Bank of Tokyo-Mitsubishi UFJ and Royal Bank of Canada dealing with investment grade and mid-market Canadian corporate clients in the Energy, Power & Utilities, Forest Products, and Diversified Industries sectors. His professional experience is rooted in equity research and equity sales coverage roles he held at Salman Partners and Leede Financial. His coverage universe included publicly held companies in the Mining, Energy, Forest Products, Heavy Industrial, and special situations sectors.
Skyharbour Resources (TSX-V: SYH) (OTCQB: SYHBF) is a preeminent uranium and thorium exploration Company with projects located in the prolific Athabasca Basin of Saskatchewan, Canada which was ranked as the best mining jurisdiction to work in globally by the Fraser Institute in 2017. The Company has been acquiring top tier exploration projects at attractive valuations culminating in five uranium properties totalling approx. 200,000 hectares throughout the Basin. In July 2016, Skyharbour secured an option from Denison Mines (TSX: DML) to acquire a 100% interest in the Moore Uranium Project, now the flagship project, which hosts the high grade Maverick Zone. The Company is run by a strong management and geological team who are major shareholders with extensive capital markets experience as well as focused uranium exploration expertise in the Basin.
Skyharbour owns 100% of the 35,705 hectare Moore Uranium Project located 42 kilometres northeast of the Key Lake mill, approx. 15 kilometres east of Denison’s Wheeler River project, and 39 kilometres south of Cameco’s McArthur River mine. Unconformity-hosted uranium mineralization was discovered on the property at the Maverick Zone in the early 2000’s at relatively shallow depths. Skyharbour has carried out several drill programs with multiple holes intersecting high grade uranium mineralization over the 4km long Maverick corridor. Drill results include 20.8% U3O8 over 1.5m at 264m depth in hole ML-199, 9.12% U3O8 over 1.4m at 278m in hole ML-202 and 5.29% over 2.5m U3O8 at 279m depth in hole ML-200. Hole ML-202 represents a new high-grade discovery and illustrates the strong discovery potential of additional high grade lenses along strike. The Company is planning additional drill programs to expand the known high grade Maverick Zone and to test basement-hosted targets as well as regional targets.
Skyharbour also owns a 50% interest in one of the largest land packages (75,965 hectares) strategically located near Fission Uranium’s (TSX: FCU) Patterson Lake South (“PLS”) high-grade Triple R uranium deposit as well as NexGen Energy’s (TSX-V: NXE) high grade Arrow deposit. Skyharbour’s land position comprising the Preston Uranium Project was acquired for its interpreted favourable geology for the occurrence of PLS style uranium mineralization and a total of over $4.7 million in exploration has been carried out to date by Skyharbour and partner companies. In March 2017, Skyharbour announced an option agreement with Orano Resources Canada whereby Orano can earn up to 70% of a 49,635 hectare portion of Skyharbour’s 75,965 hectare Preston Uranium Project for $8 million in project consideration consisting of exploration expenditures and cash payments. Later that month, a second option agreement was announced with Azincourt Uranium whereby Azincourt can earn up to 70% of the East Preston property totaling 25,329 hectares of the total 75,965 hectare Preston Project through the issuance of 4.5 million shares of Azincourt and project consideration totaling $3.5 million in exploration and cash payments.
Skyharbour owns 100% interests in the Falcon Point (previously Way Lake) and Yurchison Uranium Projects totaling 84,710 hectares on the east side of the Basin. The Falcon Point property hosts an NI 43-101 mineral resource of 7.0 million pounds U3O8 inferred at an average grade of 0.03% U3O8 and 5.3 million pounds ThO2 inferred at an average grade of 0.023% ThO2 within 10.4 million tonnes using a cutoff grade of 0.01% U3O8. In addition to the deposit on the south end of the project, at the north end of the project high grade mineralization has been discovered with up to 68% U3O8 in recent grab samples from a massive pitchblende vein at the Hook Lake target. The source of this high grade uranium mineralization has yet to be discovered.
Finally, the Company has a 100% interest in the Mann Lake Uranium Project located on the east side of the Basin 25 km SW of Cameco´s McArthur River Mine. The project boasts highly prospective geology and geochemistry, and a robust discovery potential as identified by the historic work consisting of over $5 million in exploration including drilling. The property is also adjacent to the Mann Lake Joint Venture operated by Cameco (52.5%) with partners Denison Mines (30%) and Orano (17.5%) where high-grade, basement-hosted uranium mineralization was discovered in 2014.
Skyharbour’s goal is to maximize shareholder value through new mineral discoveries, committed long-term partnerships, and the advancement of exploration projects in geopolitically favourable jurisdictions.
Moore Uranium Property Highlights:
- Skyharbour has acquired a 100% interest in the 35,705 hectare (88,191 acre) Moore Uranium Project from Denison Mines, a mature uranium exploration property in the eastern Athabasca Basin near existing infrastructure with known high grade uranium mineralization and significant discovery potential
- Denison Mines (TSX: DML) (NYSE MKT: DNN) is a large, strategic shareholder of Skyharbour and David Cates, President and CEO on Denison, is on Skyharbour’s Board of Directors
- Moore hosts high grade uranium mineralization at the Main Maverick Zone, which was discovered by JNR Resources in the early 2000’s; historical drill results include 4.03% eU3O8 over 10m, including 20% eU3O8 over 1.4m at a depth of 265m in hole ML-61
- Skyharbour has carried out several drill programs in the last few years with multiple drill holes intersecting high grade uranium mineralization at the 4 kilometre long Maverick structural corridor
- Drill intercepts of high grade, shallow uranium including 20.8% U3O8 over 1.5m at 264m, 9.12% U3O8 over 1.4m at 278m and 5.29% over 2.5m U3O8 at 279m
- Skyharbour’s hole ML-199 tested the Main Maverick Zone lens and intersected high grade uranium mineralization containing 6.0% U3O8 over 5.9m at 265 metres depth including 20.8% U3O8 over 1.5m
- Hole ML-202 from the Maverick East Zone intersected high grade uranium of 1.79% U3O8 over 11.5m at 270m including 4.17% U3O8 over 4.5m and 9.12% U3O8 over 1.4m
- This is a newly discovered high grade mineralized lens on the Maverick corridor 100 metres from the Main Maverick Zone, and illustrates the strong discovery potential of additional high grade lenses along strike
- Only 2 kilometres of the total 4 kilometre long Maverick corridor has been systematically drill tested leaving robust discovery potential along strike as well as at depth in the underlying basement rocks which have seen limited drill testing historically
- In addition to the Maverick Zone, diamond drilling in several other target areas has intersected multiple conductors associated with significant structural disruption, strong alteration and anomalous uranium and pathfinder element concentrations
- Skyharbour has multiple diamond drill programs planned for Moore providing near term catalysts for the Company
- The property has been the subject of extensive exploration with over $40 million in expenditures and over 140,000 metres of diamond drilling in more than 380 drill holes
Moore Uranium Project History and Overview:
The Moore Uranium Project consists of 12 contiguous claims totaling 35,705 hectares located 42 kilometres northeast of the Key Lake mill, approx. 15 kilometres east of Denison’s Wheeler River project, and 39 kilometres south of Cameco’s McArthur River mine. Unconformity-hosted uranium mineralization was discovered on the property at the Maverick Zone in the early 2000’s and several high grade intercepts have been drilled since. Drill hole ML-61 contained the best historical result drilled on the property to date, which returned 4.03% eU3O8 over 10 metres, including 20% eU3O8 over 1.4 metres, starting at a depth of 265 metres. Drill holes ML-55 and ML-47 also encountered high-grade mineralization, returning 5.14% U3O8 over 6.2 metres, and 4.01% U3O8 over 4.7 metres, respectively. The depth to the unconformity on the property is relatively shallow, with the thickness of the sandstone cover varying from less than 125 metres on the property’s eastern side to over 325 metres on the property’s northwestern side. Basement rocks are predominantly paragneisses belonging to the Wollaston Domain. A large mafic sill known as the “Moore Lake complex” partially overlies a portion of the eastern side of the property. The property has been the subject of extensive historical exploration with over $40 million in expenditures, and over 140,000 metres of diamond drilling completed in over 380 drill holes. The project is accessible via ice roads from the McArthur River mine haul road and float or ski equipped aircraft.
In addition to the Maverick Zone, diamond drilling in several other geophysical target areas, has intersected multiple conductors associated with significant structural disruption, strong alteration and anomalous uranium and pathfinder element concentrations. This bodes well for the possibility of discovering additional high grade uranium zones in these areas.
Under the Option Agreement, Skyharbour will be the operator of the Moore project and is planning to complete additional infill and exploratory drilling on the Maverick Zone as well as on other high priority target areas on the property. The initial drill program is currently underway with input from both the Skyharbour and Denison technical teams and summer 2017 and winter 2018 drill programs are planned as well.
Skyharbour’s 2018 Winter Drill Program:
The recently completed winter/spring diamond drilling program totaled 3,399 metres in 9 holes which were drilled to a depth of between 330 and 525 metres. Five of the nine holes were drilled on regional grids testing geophysical targets and as a follow up to previous drilling, while the remaining four holes were drilled on the high grade Maverick structural corridor.
Skyharbour is planning for a minimum 3,000 metre 2018 summer diamond drilling program slated to commence in August. The majority of this drilling will test the high grade Maverick corridor both above the unconformity and below it in the basement rocks. Skyharbour’s technical team has recently reinterpreted historical drill results and has identified new high-priority drill targets in the basement rock at the Maverick corridor below the known high grade mineralization. The underlying basement feeder zones for the unconformity-hosted high grade uranium at the Maverick corridor have yet to be discovered and have seen limited drill testing.
- At the Yurchison Lake Project, prospecting near old trenches returned significant uranium (0.09% to 0.30% U3O8) and molybdenum (2,500 ppm to 6,400 ppm) mineralization in both outcrop and float samples
- Two holes drilled beneath the historic trenches returned highly anomalous molybdenum values up to 3,750 ppm and anomalous uranium values up to 240 ppm
- The property boasts strong discovery potential for both basement hosted uranium mineralization as well as copper, zinc and molybdenum mineralization
The 12,660 hectare Yurchison Lake property is located 70 kilometres southeast of the McArthur River uranium mine and 35 kilometres east of the Moore Lake joint venture property. Skyharbour Resources holds a 100% interest in the project.
Statement from the President:
Jordan Trimble, President and CEO of Skyharbour, stated: “The acquisition of 100% interests in the sizeable Falcon Point and Yurchison Lake Projects is a milestone for the Company as it significantly enhances Skyharbour’s portfolio of Athabasca uranium projects. The current uranium market has presented excellent opportunities for Skyharbour to increase its ownership, at attractive valuations, in high-quality uranium projects in the Basin with the objective of optimizing discovery potential and capitalizing on a future uranium market turnaround. The more advanced-stage Falcon Point Uranium Project boasts a near surface, inferred resource of 7 million pounds U3O8 open along strike and at depth. Elsewhere on the property, the Hook Lake target area hosts high grade uranium mineralization with historic grab samples returning up to 48% U3O8 in a massive pitchblende vein, the origin of which has yet to be discovered. Skyharbour’s management believes this is a highly accretive deal for the Company’s shareholders as we add a resource to the asset portfolio, bolster our exposure to the east side of the Basin, and add projects with robust exploration upside potential to complement our Syndicate and Mann Lake projects.”
Acquisition and Property Highlights:
- Skyharbour owns 100% of Falcon Point totaling 74,309 hectares (177,964 acres) on the east side of the Athabasca Basin
- Previous drilling to date on Falcon Point Project totals over 22,000 metres in more than 110 holes with over $15 million having been invested in previous exploration across six, near-surface target areas on the extensive property
- Falcon Point property hosts shallow, NI 43-101 inferred mineral resource totaling 7.0 million pounds at an average grade of 0.03% U3O8 and 5.3 million pounds at an average grade of 0.023% ThO2 at JNR Fraser Lakes Zone B area at south end of property, which is open along strike and at depth
- Geological and geochemical features show distinct similarities to high grade, basement-hosted deposits in the Athabasca Basin such as Eagle Point, Millennium, P-Patch and Roughrider
- Exploration potential of the 6 by 7 kilometre Fraser Lakes target area is considered exceptional, including resource expansion potential along strike and at depth at the Zone B uranium deposit
- Falcon Point property also recently yielded high grade uranium grab samples of up to 68% U3O8 in a massive pitchblende vein exposed at surface at the Hook Lake target area at north end of property
- To date, operators have been unable to definitively explain and locate the source of the high grade uranium mineralization at Hook Lake target
- Previous exploration at Falcon Point has consisted of airborne and ground geophysics, multi-phased diamond drill campaigns, detailed geochemical sampling and surveys, and ground-based prospecting culminating in an extensive geological database for the project area
Falcon Point Uranium Project Introduction:
The Falcon Point Uranium Project is comprised of 18 contiguous claims totaling 72,050 hectares located 55 kilometres east of the Key Lake mine in northern Saskatchewan. Uranium and thorium mineralization discovered to date at Falcon Point is shallow and is hosted in two geological settings with the northern half of the property characterized by structurally controlled uranium mineralization (Hook Lake, West Way and Nob Hill zones), whereas the southern half hosts classic Athabasca-style basement mineralization associated with well-developed EM conductors (EWA, Walker and Fraser Lakes zones). Drilling to date on the Falcon Point Project totals over 22,000 metres in more than 110 holes. Over $15 million has been invested in exploration consisting of airborne and ground geophysics, multi-phased diamond drill campaigns, detailed geochemical sampling and surveys, and ground-based prospecting culminating in an extensive geological database for the project area.
Statement from the President:
Jordan Trimble, President and CEO of Skyharbour, stated: “The acquisition of 100% interests in the sizeable Falcon Point and Yurchison Lake Projects is a milestone for the Company as it significantly enhances Skyharbour’s portfolio of Athabasca uranium projects. The current uranium market has presented excellent opportunities for Skyharbour to increase its ownership, at attractive valuations, in high-quality uranium projects in the Basin with the objective of optimizing discovery potential and capitalizing on a future uranium market turnaround. The more advanced-stage Falcon Point Uranium Project boasts a near surface, inferred resource of 7 million pounds U3O8 open along strike and at depth. Elsewhere on the property, the Hook Lake target area hosts high grade uranium mineralization with historic grab samples returning up to 68% U3O8 in a massive pitchblende vein, the origin of which has yet to be discovered. The project brings an NI 43-101 compliant resource to the asset portfolio, bolsters our exposure to the east side of the Basin, and adds a project with robust exploration upside potential to complement our other exploration projects.”
Preston Uranium Project Highlights:
- Large 74,965 hectare (185,164 acre) land position strategically located to the south of and adjacent to NexGen Energy’s (TSX: NXE) Rook 1 project host to the high grade Arrow deposit, as well as proximal to Fission Uranium’s (TSX: FCU) Patterson Lake South (“PLS”) project host to the high grade Triple R deposit
- Skyharbour advancing the project using “Prospect Generator” model with strategic partners funding exploration and making cash and share payments to Skyharbour; cost-efficient and operationally-effective structure to conduct large exploration programs without substantial equity dilution
- March 2017, Skyharbour signs option agreement with industry-leader and strategic partner Orano (formerly AREVA) Resources Canada to option up to 70% of a portion of Preston Project to Orano (formerly AREVA)
- Orano (formerly AREVA) may earn up to a 70% interest in central portion of Preston totaling 49,635 hectares of the total 74,965 hectare project through $8,000,000 of total project consideration over six years, including up to $7,300,000 of exploration and $700,000 of cash payments (all in Canadian dollars)
- If carried to completion, a tripartite joint venture would be formed being 70% as to Orano (formerly AREVA) and 30% as equally divided between Skyharbour and Clean Commodities
- March 2017, Skyharbour signs option agreement with Azincourt Uranium (TSX-V: AAZ) to option 70% of a portion of Preston Project to Azincourt
- Azincourt may earn a 70% interest in East Preston totaling 25,329 hectares of 74,965 hectare project through upfront issuance of 4,500,000 shares as well as $3,500,000 of total project consideration over three years, including up to $2,500,000 of exploration and $1,000,000 of cash payments to Skyharbour and Clean Commodities
- If carried to completion, a tripartite joint venture would be formed being 70% as to Azincourt and 30% as equally divided between Skyharbour and Clean Commodities
- A combined total of up to $11,500,000 in project consideration ($9,800,000 in exploration and $1,700,000 in cash payments) and 4.5 million Azincourt shares between Orano (formerly AREVA) and Azincourt option agreements for up to 70% of 74,964 hectare Preston Project
- Approx. $5 million in previous exploration expenditures on the Preston Project over the past three years of which Skyharbour has only had to fund $1 million
- Fifteen high-priority drill target areas associated with eight prospective exploration corridors have been successfully delineated through this extensive geophysics and ground evaluation
- The extensive field work data was used for final targeting of the first two exploratory drill program
- Initial drill programs consisted of approx. 3,300 metres in 14 holes and several of the holes returned elevated radioactivity intersecting multiple graphitic units within sheared and altered basement lithologies
- The alteration seen in these drill holes commonly consists of pervasive chlorite, hematite and clay development; features which are common to uranium mineralization in the Athabasca Basin
- Given the size of the property, exploration to date has only focused on approx. 50% the land package leaving significant exploration upside potential in untested areas
Skyharbour’s President and CEO, Jordan Trimble commented: “Skyharbour continues to execute on its business model by adding value to its project base in the Athabasca Basin through focused mineral exploration at its flagship Moore Uranium Project as well as utilizing the prospect generator model to advance its other projects with strategic partners. The signing of the Option Agreement with industry-leader Orano (formerly AREVA) was a significant milestone for Skyharbour. We are thrilled to have the opportunity to work with a new strategic partner to further advance the central portion of the Preston Uranium Project with up to $7.3 million in exploration funded by Orano (formerly AREVA) in addition to the cash payments. Orano (formerly AREVA) has a very knowledgeable geological team with a long and productive history in the Athabasca Basin so we are keen to see the commencement of exploration programs at Preston this year. We are also excited to have the opportunity to work with a new partner in Azincourt led by a dynamic management and technical team. Together the two option agreements combine for $9,800,000 in total exploration expenditures over six years, as well as $1,700,000 in total cash payments and the issuance of 4,500,000 shares of Azincourt split between Skyharbour and Clean Commodities in return for 70% interests in the respective property areas. The Preston Uranium Project is a strategic, district-scale property with robust exploration upside potential throughout and is located near recent high-grade discoveries in the Patterson Lake area including NexGen Energy’s Arrow deposit, Fission Uranium’s Triple R deposit, and the Spitfire discovery.”
2012-2017 Southwest Athabasca Basin Uranium Discoveries:
- The Arrow discovery made by NexGen Energy (TSX-V: NXE); now the high grade Arrow deposit
- Patterson Lake South discovery made by Fission Uranium (TSX: FCU); now the high grade Triple R deposit
- Cameco / Orano (formerly AREVA) / Purepoint Uranium’s Hook Lake Spitfire Zone high grade discovery
- Three separate major discoveries in a short period of time in this emerging uranium district illustrate high grade nature of mineralization and potential for additional discoveries
Skyharbour owns a 100% interest in the 3,473 hectare (8,582 acre) Mann Lake Uranium Project located in the eastern Athabasca Basin in northern Saskatchewan. It is strategically located 25 km southwest of the McArthur River Mine, the largest high-grade uranium deposit in the world, and 15 km to the northeast along strike of Cameco’s Millennium uranium deposit.
The Mann Lake property is also adjacent to the Mann Lake Joint Venture operated by Cameco (52.5%) with partners Denison Mines (30%) and Orano (formerly AREVA) (17.5%). Recently, Denison Mines acquired International Enexco and its 30% interest on the project after the 2014 winter drill program discovered high-grade, basement-hosted uranium mineralization. The drill program intersected 2.31% eU3O8 Over 5.1 metres including 10.92% eU3O8 Over 0.4 metres (see International Enexco News Release dated March 10th 2014).
Skyharbour carried out a ground-based EM survey in 2014 focused on a zone where a favourable, 2 km long aeromagnetic low coincides with possible basement conductor trends indicated by prior EM surveys. The survey was successful in confirming the presence of a broad, NE-SW trending corridor of conductive basement rocks which are probably graphitic metapelites.
Skyharbour Resources holds a 100% interest in the approximately 1,780 acres of land around the past-producing Selco South Bay copper-zinc-silver mine. The South Bay property is located in the Dent, Mitchell, and Agnew Townships, 80 kilometres east-northeast of Red Lake in northwestern Ontario.
The former South Bay Mine produced approximately 1.6 million tons of 2.3% copper, 14.5% zinc, and 3.5 oz/ton silver to a vertical depth of 410 metres, and explored to a vertical depth of 600 metres, between 1970 and 1982. The South Bay deposit is a classic Archean Volcanic associated Massive Sulfide (VMS) deposit that is hosted in an area known as the Confederation Belt.
Skyharbour Resources believes that with current geophysical survey methods allowing exploration to depths in excess of 1,000 metres, there is significant potential to identify new, highly prospective precious and base metal settings on the South Bay property.
Skyharbour completed a Quantec „Titan-24“ geophysical survey over the its South Bay property in Feb. 2007. A total of 22 line kilometres were surveyed. The primary objective of the „Titan-24“ survey was to identify Direct Current, Induced Polarization (DCIP) and Magnetotelluric (MT) anomalies, which may represent copper-zinc Volcanic Massive Sulfide (VMS) mineralization similar to the South Bay copper-zinc-silver deposit. The „Titan-24“ survey responses over the South Bay Mine deposit were used as a „Calibration Model“ for prioritizing anomalies in the area.