Automated transcript · Written by software from the replay's audio. It can mishear names and figures; the replay is the record.
0:38 Without further ado, I'll hand it to you, Jordan. Thanks for having me. Good afternoon, everyone. Welcome back. For those of you who saw the interview, I believe it was last October or early November. I'm looking forward to providing an update for everyone that's been following the story since then. A lot's happened, not just with the company, but also in the Uranium sector. I'll talk a little bit more about our plans for 2021. And I'll spend some more time on this one on this interview, talking a little bit about the Uranium market, the ESG component of it that we've seen come in and drive buying more recently, especially in the equities. I think it's an important part of the narrative right now around uranium and around nuclear energy. I'll talk about the supply-demand fundamentals as I did in the last interview or presentation and get in a little more in the weeds on that as well. And again, as always, feel free to ask any questions. We'll leave some time open for questions at the end. So Bear with me people that did see the last presentation. I am gonna go through some of the slides that I went through previously.
1:51 I wanna make sure that people who haven't seen the presentation are familiar with the basics of the company. So Just as a quick overview of Sky Harbor, we are a uranium exploration and early stage development company. All of our projects are located in the Athabasca Basin of Northern Saskatchewan. It's the highest grade depository of uranium in the world. I'll move on to the first few slides here. So this is just a disclaimer on forward-looking statements. As always, we will be making forward-looking statements, so I encourage the viewers to take a read through this when they can. Getting back into investment highlights in a high level of the company, we like to highlight 3 key pillars of the company.
2:40 That's the people. So that's both the management, the technical team, as well as our strategic partners and our larger and strategic shareholders. Timing has to do with the macro picture, the uranium market. What's unique about uranium is it's a relatively small sector. There aren't many publicly traded uranium mining companies. There's very few ways to get investment exposure to this sector. It's a bit old school in that sense, where typically an investor looking to get exposure does have to buy the mining companies, the uranium mining equities. And as I pointed out in the last presentation, I believe we are in the early, early days of Uranium market recovery and bull market.
3:25 And then last but not least, the projects, the asset base that make up the company. As I mentioned, all of our projects are in the Athabasca Basin in northern Saskatchewan. We have 6 projects that we've acquired over the last 6 and A07 years. We have 2 deposits. The projects are at various stages of exploration and early stage development. And we are in the process right now of advancing those projects and creating shareholder value through exploration, both at our flagship project, which is called the More Lake project, and at a partner funded project. So we do have now 3 partner companies that are funding exploration and work at various other projects we have in the Athabasca Basin. And that makes us a prospect generator. It's an important part of our day to day business where we basically package our projects up and look for strategic partners to come in and fund exploration. And it's a great way for us to raise additional capital so that we can fund our exploration and advancement of our flagship project, the Moore Lake project. So we'll continue on here to the first part of the presentation, just to familiarize everyone with the team, the management team and the technical team. So I'm the president and CEO. I started running the company about 7, just over 7 years ago. I come from a entrepreneurial and financial background. I'm a CFA charter holder. I was doing corporate development work for a gold company previously called Bayfield Ventures,
4:57 which we successfully sold to a larger gold mining company called New Gold back in 2013 and 2014. That's when I left to start Sky Harbor Resources. And just as a kind of a prelude, we are looking to do that same thing here with Sky Harbor. That's the end goal. Go out, have exploration success, make new discoveries, delineate deposits, uranium deposits in the base, and then ultimately we are looking to sell the assets or sell the company as a whole. I partnered up with my head geologist, Rick Kazmersky. For those of you watching from Saskatchewan, I'm sure you're familiar with Rick, a well-known geologist, a 40-year veteran. He's been looking for uranium in the basin for many years. He was the exploration manager at Cameco for a number of years, and then he went and started his own company called JNR.
5:48 He took it over and ultimately sold the company to Denison Mines. Jim Pettit, the chairman, you'll see here I've worked with Jim for over 10 years now. He's the chairman of the company, a 30-year veteran in the mining space. On to the next slide here, Dave Cates, a very important part of our board. Dave is the president and CEO of Denison Mines and Uranium Participation Corp. We have a strategic partnership with Denison Mines. They are one of our largest strategic shareholders. We did a deal with them back in 2016 to acquire our flagship project, Moor Lake, which obviously I'll talk a bit more about later on in the presentation. But a very close working relationship with Dave and his team at Denison. Paul Matizek is a strategic advisor, well-known in the mining industry. He's built and sold 5 mining companies over the last 15 years. And his biggest win was a uranium company, which he sold for 1.8 billion in 2007.
6:48 More recently, we added some more capital markets expertise to our board of directors with Joseph Gallucci. So Joe is an investment banker at Laurentian Bank. He's a managing director and the head of mining investment banking at Laurentian in Montreal. Joe joined us about this time last year, and again, is gonna be helping us on our capital marketing side of the business. We go to, sorry, here's next slide. So just to round out the team, you'll see a couple of other names here on the board, Dawn Houston, Amanda Chow, independent directors. And then we have Christine McKechnie and Dave Bayard who are our project geologists.
7:33 They work closely with Rick Kasmersky and Saskatoon. And one of the things I'd like to highlight is on the technical side, on the geological side, we have focused expertise in the Athabasca Basin. The team has been, again, looking for uranium there for many years. They've worked throughout the Athabasca basin. They've made many discoveries and that's a very important part. This is a very specialized type of exploration. The discovery process is quite unique in the Athabasca Basin and we have the right mixture of people on the team on the technical side to go out there and make that next big discovery in the basin. Just to quickly recap the capital structure, So you'll see about just over 99 million shares issued in outstanding.
8:19 We're trading around at 24, 25 million dollar market cap. It's moved up a little bit in the last few days here. We do trade in Frankfurt and on the US OTC QB. You'll see the listing there on the QB SYHBF. We do trade about 25 to 30% of our volume. So we've seen a pickup in US both retail and institutional interest in the last several years. Some notable and strategic shareholders You'll see at the bottom management and insiders. We own about 15% of the company. A lot of skin in the game. You can see with my insider reporting that I've been continuously buying in the open market over the last several years. Denison Mines, as I mentioned, is our largest strategic shareholder, corporate shareholder, Marin Katusa and the KCR Fund, OTP, Sachem Cove, L2, various institutional investors that have come in on more recent financings. And I think that That's a good signal as to where this market's moving. We're seeing more institutional interest even in smaller cap companies like Sky Harbor, there just aren't many companies that are actively exploring, developing and producing Uranium. And so we do see capital that's interested in getting exposure to Uranium to this market work its way down the value chain relatively quickly.
9:42 So I know we're going to spend a bit of time on this, and I'm assuming by last presentation's Q&A that we'll want to talk a little bit more about this, but I think it's a very topical point right now to discuss further. We have seen since the last time I was on here a pretty notable move higher in share prices and in valuations across the board with uranium companies. A part of that has had to do with the green or clean energy move and this push globally, both from the public and from politicians to decarbonize and go carbon neutral. Nuclear energy is the only source of base load emissions-free electricity. It's low cost energy, it provides grid and price stability, it anchors local communities with jobs and a tax base. It's really the perfect mix. It's a great complement to renewables. We've seen a major rollout of renewable energy, wind, solar, geothermal, hydro over the last 20 or 30 years. But nuclear still is that only 24 7 baseload source of emissions free electricity.
10:56 What doesn't get talked about a lot is something called capacity factor. And for nuclear energy, most nuclear, newer nuclear power plants can generate electricity in 90% capacity factor, whereas renewables range from 10 to 60%. So it is going to be that backbone for the clean energy movement going forward. And as I said, it doesn't have to be mutually exclusive. It doesn't have to cannibalize other renewable energy sources. It's really the perfect source of that 24-7 baseload energy. So if you look at just some of the numbers here, and I really do want to highlight these, some interesting numbers on pollution globally. You'll see here, by some estimates, nuclear has saved over 3 million lives that would have been lost prematurely to deadly air pollution from energy alternatives.
11:51 We see every year air pollution a significant contributor to deaths. You'll see there in 2012 a study that was done. Air pollution claimed 7 million lives, 1 million in China alone. China is one of the largest sources of new demand for uranium as the fuel in nuclear reactors. So I can't emphasize this point enough. And what's significant is we're finally seeing the investment community wake up to this. We're finally seeing it's just it's in the early days. We still there is still a bit of a stigma with with some investors out there around nuclear, but the ones that seem to be doing their due diligence, their homework on it are finally waking up to the simple fact that nuclear energy needs to play an important role going forward. There was a recent survey conducted by the UN.
12:40 They surveyed 1.2 million people, massive, massive survey that they conducted, and they found that nearly two thirds of those surveyed view the climate emergency as an existential threat. It's very topical right now and in places like Japan, Britain, Italy, Germany, France, Canada, over 0.667 or 0.75 of those that were surveyed believe we have a climate emergency right now. Just over the weekend or late last week, we saw the Japanese energy minister reinforce their commitment to nuclear energy. That has been a bit of a sticking point for the industry. We all know, remember Fukushima and the nuclear disaster that happened about 10 years ago.
13:28 And that basically shut down all of Japan's nuclear reactors. It was a big hit to the industry. And it really did create, for Sky Harbor, what was an opportunity to go out and acquire projects at pennies on the dollar at attractive valuations because the industry more or less was decimated for a few years thereafter. And as I've said, we're now coming out of that, we're seeing this notable recovery. So just getting back to, I wanna highlight, let me pull up my drawing tool here. This is something that we get asked about. So small modular reactors, these are new advanced nuclear technologies and reactor models that are standardized. They're much less permitting and lower cost to build. They range between 5 to 300 megawatts.
14:19 You can install them pretty much anywhere. And there's a handful of companies globally that are advancing and developing these SMRs and these new nuclear reactors. They're simple designs, as I said, lower capital and operating costs. By some estimates, we could see this market grow significantly over the next 15 years to 65 to 85 gigawatts. But what's interesting about it is in analyst forecasts and in demand forecasts for uranium, there's really no 1 paying attention to this potential new source of demand for uranium going forward. We continue to see forecasts based solely off of larger reactors, which I'll get to shortly here. But I just wanna draw people's attention to that because this is something that I believe in the Western world in particular will be a source of new demand going forward. And just to give a couple of other points to discuss there, we've seen more recently in the UK, Rolls-Royce announced that they're planning to build with the UK government 16 SMRs at a cost of about $1.8 billion. So again, much lower capital cost and investment than you would see in a larger reactor.
15:38 The Western US utilities are planning 12 new-scale power SMRs to be in commercial production by 2030. We've seen here in Canada, 3 provinces have signed an MOU in late 2019 for the development and rollout of SMRs in Canada. And again, they're versatile. They can be used for a number of different situations. Ultra safe nuclear is building a micro reactor, which applicable for mining companies could be used in lieu of diesel for mining operations in remote parts of the world. So that's just something that I wanted to draw people's attention to, happy to discuss more in the Q&A or offline. So just getting back to why nuclear, this is a good case study which shows the pros and cons of nuclear and getting rid of nuclear. We have 2 countries, Germany and France, and I've spent a fair bit of time in France. We have a partnership with Iran on one of our projects, and France has really been the poster child for good civilian nuclear use over the last several decades. They generate over 70 percent of their electricity from nuclear energy.
16:56 Germany, on the other hand, post Fukushima, decided that they would try to phase out nuclear. And they've invested now almost 200 billion euros into this green energy initiative where they would roll out renewable energy sources like wind, like solar. Unfortunately, and like a lot of other parts of the world, Germany is not the most conducive country to wind and solar. So as a result of that, we've seen escalating electricity prices in Germany. And if you look at the numbers now on a per kilowatt carbon emissions basis, France is about 10% that of Germany, while their electricity costs are about 50% that of Germany. So this is just a perfect case study, real world case study of what happens when you try to force a renewable initiative or program in a country, in a place that isn't conducive to it. Again, I get back to the simple fact that nuclear will have to play an integral role in the energy mix going forward if we are to decarbonize. And you look at places like the US and Japan planning to go carbon neutral by 2050. China has plans by 2060 to be carbon neutral.
18:11 Again, they have to resort to nuclear as that baseload emissions-free source of electricity. So now we can get into the supply-demand fundamentals. I think this is a very important slide. When we look at the demand picture, uranium, which is used as nuclear fuel in nuclear power plants, You'll see here global demand for electricity expected to grow by 76 percent in the next decade. That number could increase with the advent of electric vehicles. Bottom line is we're seeing a major amount of electrification globally. And I think as we, again, continue to decarbonize our electricity grids and we need to power our electric vehicles, that will just play an important role in adding new demand for this important metal.
19:06 As far as nuclear operable nuclear reactors go globally, there's 442 reactors currently operating, 53 reactors under construction and over 400 reactors that are ordered, planned and proposed. And I just get back to the SMRs, that is not including any new rollout of SMRs globally. This is just with the current reactors and the current reactor pipeline. So if we look at the numbers, this is quite compelling. So we have right now about 180 million pounds of annual demand of uranium for the nuclear fleets globally. That number, I will note, was relatively unaffected by the pandemic. That was a concern, a risk that we had back in March and April. We wanted to see how much of that would go offline.
19:57 As a result of the pandemic, it was relatively negligible. Nuclear is one of the last sources of electricity you turn off if you do have a lower demand for electricity. So that's an important, relatively sticky demand. And it is growing, as I mentioned, not just with the potential for SMRs, but as you can see there with 53 reactors under construction. And then when we look at the supply side, this is what's really driving the initial phase of this bull market and recovery. And this is what we've seen in previous cycles where a combination of low prices and more recently somewhat of a supply shock with the pandemic. We've seen the primary mine supply fall from £163M just a few years ago.
20:45 It was expected to be about £142M in 2020. With the pandemic and the mine closures and disruptions that we saw throughout the year, that number has decreased to about £120M. You're looking at a pretty major supply deficit to the tune of 50 to 60 million pounds of a primary mine supply deficit. And one of the key takeaways here is that the risks to the supply side far exceed the risks to the demand side. Again, relatively sticky demand and growing demand in the backdrop of a supply side where you have highly concentrated supply both geographically and geologically. We still have Cigar Lake, which is one of the largest mines in the world in the Athabasca Basin, that's still offline because of COVID.
21:34 And earlier in the year, we saw a number of the Kazakh ISR operations have to cut back production. Just to draw your attention here to this chart, This is also a very important point. So what this represents is the growing uncovered requirements. So typically nuclear utilities contract their uranium. So They'll enter into long-term contracts to purchase uranium for 5-10 years from the mining companies. And what this chart shows is over the next decade, we see a major increase in uncovered requirements. And what this means is that these utilities are going to have to come back to the market and start contracting again. We can see by 2025 there's approximately 45 to 50 percent of the requirements that are uncovered.
22:28 So that means there is going to be a rush of utility buying, I believe, in the next few years. And that's really, I believe, the last and major final catalyst for this market really to catch fire. I do think we will see that start in earnest this year. And I'll talk a little bit more about that or can address more questions that you have about that in the Q&A. So just looking at it, breaking it down globally here, I'll start with China and India. And these These are really the 2 at the forefront of new nuclear reactor builds in uranium demand. They are building a lot of nuclear power generation. You'll see China there with 47 reactors and a dozen under construction.
23:15 India just more recently announced plans for 21 new nuclear reactors by 2031. So these are the countries, 2 in particular. There's also countries in the Middle East that are expanding and growing their nuclear reactor base and fleets. We will see that continue. Russia is an interesting country and player in this space. So Russia currently has just under 40 operating reactors, 4 under construction and a few dozen more planned, ordered, and proposed. But what's interesting about Russia is Russia has a program where they basically outsource their nuclear industry, build, own, operate programs. So countries can hire Russia and Russian nuclear companies to build their reactors, operate these reactors, and therefore provide the fuel for these reactors.
24:09 One of the things that's not getting a whole lot of press right now is the fact that Russian uranium mining companies account for about 20 million pounds of annual supply. By some estimates, this build-own-operate program under the current pace will require 50 million pounds about 10 years from now. That's a pretty major shortfall that the Russians are going to have to make up for. And it'll be interesting to see how they do that. But if they continue with this aggressive build out and export of this industry, they will have to find material from somewhere. Moving on to Japan, as I talked about a little bit earlier, we just over the last week, the Japanese Energy Minister reinforced their commitment to nuclear energy. It's expected to account for over 20% of their power by 2030, by 2035, about 30 reactors. So that's been, again, a bit of a sore point for the industry.
25:10 It's taken longer than most expected to have Japanese reactors come back online. But I think now with the clean energy and decarbonisation narrative and push we're seeing globally, I could see that being expedited over the coming years. And then just to finish off here with what really has caught headlines more recently, certainly since my last presentation with the election, the US, the American role in this industry globally. So the US is still the largest consumer of uranium. They have 96 operating reactors. Nuclear accounts for 20 percent of their electricity generation. It accounts for 55% of their emissions free electricity generation. And we just saw yesterday a pretty positive report come out of Bank of America and what they were talking about. And this was a reason you saw some of the the uranium companies have a have a nice move yesterday.
26:12 They are given now with Biden in. They are talking about delaying plant closures in the US. There's a handful of nuclear reactors that are slated to go, to be shut down in the next decade. And there's now talks that that could be delayed. And In fact, there's talks that these reactors could be extended to 100 year lives, which would be very significant. By their estimate, that would boost global uranium demand by 26 million pounds over the next decade. And it would be it certainly be precedent setting the election with the Biden administration and the Democrats coming in. I think a lot in our industry were unsure of what that would really mean for nuclear. But given Biden's aggressive climate change platform and policies, and we're clearly seeing that play out with his the recent decisions and policies around pipelines in the fossil fuel industry, clearly they are going to have to be pro-nuclear.
27:17 It's the first time in almost 50 years that we've seen bipartisan support for nuclear energy in the United States. That's another key part here is that it does have bipartisan support, unlike most other issues down in the US. And just in the last several months, we've seen a couple of notable new legislative positive developments for the space in the US, including a strategic uranium reserve budget of 1.5 billion over the next 10 years. So they're going to they're going to start to build this domestic stockpile, starting with a 75 million budget in fiscal 2021. And then more recently, there was the extension and amendment to what's called the Russian suspension agreement, which is basically the US reducing imports of Russian uranium into the United States. And that's quite significant because that does have positive implications for Canadian and Australian companies, as well as obviously American uranium mining companies.
28:30 So we'll move on to uranium supply. And this is, I think, a key chart or image here where you can see the aggregate impact of restricted primary mine supply. This is going to be updated. You'll likely see where it, in 2022, you'll likely see these supply, the supply disruption that we saw in 2020 extend into 2021 and likely even further. But a couple of key takeaways here. Again, with the pandemic, we saw at one point in April, about 50% of primary global mine supply offline. As I pointed out in the slide previously, we've seen primary mine supply decrease consistently over the last few years.
29:20 Most of that had to do with the low price of uranium. The bottom line is uranium is trading at $30 a pound. Very few operating mines make money at $30 a pound. They've been able to get by through legacy contracts where they've been able to sell their product and their material at higher prices. The price needed to incentivize new production to come online is closer to $50 to $60 a pound. So an almost doubling of where it is right now. But bottom line is the low price environment drove a number of shutdowns, it drove a number of project deferrals and production curtailment, and that was exacerbated by the pandemic. And again, we saw again in April and May at one point almost 50 percent offline.
30:11 The Kazakhs just came out with their numbers yesterday where their production for 2020 was down almost 20% from 2019. And their well-field development, because all of their mines are in-situ recovery, ISR mines, their well-field development was hard hit too. So we could see that production curtailment and that supply disruption linger for some time to come. So again, a key takeaway here is the risks to the supply side, the chances, the probability or potential for there being future supply disruptions. Again, when you have just a few operating mines globally that account for a large percentage of global primary mine supply, if any one or a number of those mines goes offline, it has an immediate impact on the market.
31:01 And we now have a major supply deficit to the tune of 50 to 60 million pounds that's eating into inventories, that's eating into secondary supplies. And ultimately what that is going to force is utility companies that have not been contracting. They've been sitting on their hands. It's going to force them back to the market, likely in a herd mentality where you get a handful of them coming in all at once to contract and to purchase material in previous cycles. That's always been really the fuel on the fire, if you will. And I suspect we'll see that here in the coming years, given where the market's at right now. So again, happy to answer any more macro related uranium questions.
31:49 Happy to talk about the market, the dynamics, the fundamentals. Please feel free to ask any questions in the Q&A. We'll move on now. I wanted to save some time here for Q&A, so I'll try to get through the project section as quickly as possible as we covered it extensively in the last presentation. I'll start with this slide, why the Athabasca Basin? As I pointed out earlier, all of our projects are in the basin. The Athabasca basin is the highest grade depository of uranium in the world. You have a unique set of geological characteristics and factors that have led to the deposition of what are the highest value types of mineral deposits out there. If you look at MacArthur River, you look at Cigar Lake, you look at some of these other high-grade uranium deposits in the basin, the value per ton of rock is incredible.
32:43 And you'll see the great equivalents of Uranium here, 1% U308 is equivalent to about 14 grams per ton of gold, over 850 grams per ton of silver, 12% copper. And I'll just note at our flagship project, Moor Lake, we've had drill intercepts return grades as high as 21% U308. So again, it just shows you the potential to make major discoveries of high value per ton rock. And it's really the only place in the world that you have this. The average grade of these deposits in the basin is 10 to 20 times that of the average grade of uranium deposits globally. I'll skip ahead here to the couple of charts here at the bottom and talk a little bit about some recent discoveries and successes in the Athabasca Basin. As a Uranium exploration company, our main value driver and value creator is through the drill bit. We go out there, we are looking to find the next big uranium deposit in the Athabasca Basin. We feel like we're hot on the trail right now with our flagship project.
33:57 We've over the last several years carried out a number of drill programs. There is a small deposit there that we've expanded, but more recently we've been looking in a new geological setting called the basement rocks and we've been having success with the early days of drilling and testing these deeper targets. But just to recap some of the recent success stories that we're looking to emulate at Sky Harbor, at the bottom here you'll see a few charts and these are all charts of companies that were successful in making high-grade Uranium discoveries in the Athabasca Basin. You'll see NextGen Energy, their second largest publicly traded Uranium company now in Canada. They've gone from a small cap, micro cap to 1 billion and a half dollar company on the back of a major and high-grade discovery over on the west side of the Athabasca Basin. Fission Uranium, another great example of a major discovery that was made recently in the Athabasca Basin.
34:57 More recently, Iso Energy has gone from a $20-$30 million company to north of $200 million on the back of a high-grade basin discovery over on the east side of the Athabasca Basin where most of our project base is. And one of the reasons that you're seeing this in a relatively short period of time is there are new techniques and methodologies that we're employing that exploration companies are employing to make these discoveries at a lower cost. It used to be where you went out and you did some rudimentary geophysics, You get some basic targets and you go and you drill as many holes as you could or as you could fund until you found a high-grade uranium deposit. Well, these are relatively small tonnage deposits. They're not easy to find if you're just drilling a bunch of holes. It's really like finding a needle in a haystack. So more recently, new geophysical techniques, better understanding of the geology and the geochemistry, new ground surveys that we can now use to better identify and refine targets are now at our disposal and we can go out there and we can use these new techniques and methodologies to increase the chances of making a discovery, but also bring your discovery costs down. It's great if you find something but if it costs you hundreds of millions of dollars to go and find it, your return on investment is not that great. So that's something that
36:27 we focus on and we take pride at Sky Harbor is using these new techniques, drone, for example, drone flown geophysics, that give us a better image of what's happening in the basement rocks, something that we've employed more recently that we've had success with. I'll talk a little bit more about that as we work our way through here. So just to cover off the projects before I, the entire project base, before I get into the specifics of each project, you'll see here, here's a map of the Athabasca Basin. You'll see Sky Harbors projects scattered throughout. Again, 6 projects covering about 240,000 hectares of property. You'll see our flagship project here. I'll just draw a little arrow to it. This is Moore Lake.
37:15 So that's the crown jewel for the company. Again, a project that we acquired from our partner Denison back in 2016. That's where the focus for the exploration and the news flow has been more recently and will be for this upcoming year. Outside of that, we have other projects that we are looking to bring partner companies in or have already brought partner companies into. And you'll see here East Preston, Preston, and more recently what's called North Falcon Point. These are all projects that we have now consummated option agreements on with partner companies. At our Preston project, we have industry leader, Arano, France's largest uranium mining and nuclear fuel cycle company as a option and joint venture partner there.
38:06 They can earn up to 70% by spending $8 million, most of that in exploration expenditures. East Preston just beside it is operated by a partner company of ours called Azencourt. Again, they can earn up to 70% by spending about 5 million in exploration dollars, cash payments, and share issuance to Sky Harbor. And then just more recently, and Since my last presentation, we announced a definitive agreement with a new Australian company called Valor Resources at our North Falcon Point project. And at this project, Valor can earn up to 80% by spending in total about $5 million in project considerations, $3.5 million in exploration, and just under 500,000 in cash payments over a 3-year period. They'll be issuing us over 233M shares of the company which at the close In the last trading day in Australia was about 1.6 1.7 million dollars worth of stock Just before I move on I will note that this project base. We spent several years acquiring.
39:13 We were very meticulous with acquiring these projects The total expenditure to build this portfolio was just over $5 million Canadian. In the last bull market, in the last big Uranium bull market, 2006-2007, these 2 projects, Moor Lake and Falcon Point, were in a company that was valued at over $300 million. So it just shows you the kind of re-rating potential when we do see, I believe, the next big Uranium bull market. We're well positioned to see a pretty significant increase in the valuation based off of the the asset base that we've put together and you'll see here we have a handful of other projects to complement just those 2.
40:03 So I'll skip ahead here. Again, I don't wanna leave some time for Q&A. Talking a little bit about our flagship project, Moore Lake. So this is a project that we've been focused on for the last several years. It's a big property over on the east side of the Athabasca Basin. It's adjacent to infrastructure, to road, to mills, to power. What's interesting about this project was it was my geological team that made the initial discovery here back in the early 2000s. And you'll see some very high grade drill results over the 20 year period since the initial discovery was made. What's exciting about this project though is more recently we've been testing targets in a new geological setting, what's called the basement rocks. And so there's essentially 2 types of uranium deposits in the basin. There are sandstone or unconformity hosted deposits, and then there are basement hosted deposits. The underlying basement rocks is where the feeder zones for the mineralization, the structures that carry the fluids up, that's where they sit. And that's typically, as we've seen with more recent discoveries, that's typically where you can find very high grade zones of uranium mineralization and larger deposits.
41:16 So more recently, we've carried out a couple of exploratory drill programs. We have plans for drilling to commence here shortly as well. And through this year, we're fully funded for all of our programs that we have planned at Moor Lake this year. But these programs, again, are focused in the underlying basement rocks. And you'll see here, we just announced actually in early December and early January results from a drill program we carried out in the fall of last year. And You'll see some of the numbers here that we announced with a few of the drill holes. You'll see 0.72% over 17.5m, included in that is 1% over 10m. What's significant about this is the width of those intercepts.
42:03 These are the longest zones of continuous mineralization that have been discovered yet at the project. We'd like to see a bit higher grade but we feel like we've just nicked something much larger. We feel that with additional drill programs we will tap into something that's much larger and higher grade. But what's significant about this is the width of these zones in the basement rocks. We're seeing that opposed to the 567 meter zones we would see historically on the project. We're seeing much longer continuous zones of mineralization. So, as I said, fully funded for upcoming drilling. Keep an eye out for news flow on that. We typically carry out a couple of drill programs a year. This is a key catalyst and source of news flow for the company. And I believe given what we've discovered, what we've been finding in the most recent drill programs, we're poised to make a new major discovery here in the upcoming drill programs in the basement rocks.
43:01 Moving on, just to cover off some of the other projects and then we can get into the Q&A. So this is a part of our prospect generator business where we have partner companies come in and under an option agreement, earning in at the project, ultimately looking to form a joint venture partnership. The first 2 option partners that we did deals with back in 2017 were at our Preston and East Preston projects. You'll see the map here. This is over on the west side of the Athabasca Basin and it's proximal to Fission and to NextGen and a couple of other operators in that area. It's an exciting area for the basin. It's new, There's these new discoveries that have been made in the last 10 to 15 years. So it's ripe for discoveries.
43:51 It's it's an area that we initially acquired our first properties in and we carried out some work back in 2014, 2015. But ultimately, what we decided to do was find partner companies that we could pass the baton off to. And we've done that with Orano and Azencourt. You'll see here a combined project consideration of about 11.5 million between the 2 companies, The bulk of that in exploration expenditures, some cash payments and some share issuance as well from Azencourt. Just recently, Azencourt announced plans for a drill program, about 2,000 to 2,500m at our East Preston project. They will have completed their earn-in and they have to make a small cash payment to complete that. At that point, it will be a joint venture partnership.
44:45 But again, we benefit from cash payments, share issuance, and the project exploration and development work being funded by these partner companies. And if they do have success with the exploration, if they do make a major discovery, we retain a minority interest. So we will benefit with that retained minority interest and even a 15, 20, 30 percent minority interest in a major Athabasca Basin discovery, that's worth a lot. So if we move on to the next slide here, North Falcon Point. Again, this is more recent news that's come out of the company having just signed a definitive agreement with a new Australian company, Valor Resources. You'll see the numbers here at the bottom. Total project consideration of just under $4 million, the bulk of that in exploration expenditures. You'll likely see some news flow on their exploration plans over the next coming weeks. They do have plans to get right to work there in February and March, starting with some geophysics and then ultimately looking to carry out a small initial drill program in the summer months.
45:52 I'll also just direct your attention to the share issuance. And it's a lot of stock, as I pointed out earlier, it's at the close today, it's valued at about 1.7, 1.8 million. This is great for us. We're excited to participate in the upside. We think that the group that's running it, led by a gentleman out of Perth, a mining executive named George Bach, He's built several mining companies over his career. He has a lot of experience in the uranium sector, very capable mining executive and his partner, geological partner in Saskatoon, Gary Billingsley, I spoke with this morning. Again, been working in Saskatchewan for many decades. They're the right group to lead this company forward and we're excited to again participate in the upside as a major shareholder of the company.
46:44 Move on here. So I won't spend too much time on these other projects. I will note that there are a handful of projects that we own 100% and that we are looking to bring in new partner companies on. South Falcon point is the most advanced of those projects. It does host an NI 43 101 compliant resource, about 7 million pounds of uranium. It's at a lower grade 0.03%, but right at surface, and there's depth potential and the potential for higher grade mineralization below the current deposit area. There's also a small thorium credit and rare earth credit as well. So it's a great project in the portfolio, but again, we are entertaining joint venture and option partner deals right now. We would like to bring in a company that can advance this so that we can stay focused at our flagship More Lake project.
47:40 The same goes for Yurchasin here, which has both uranium and base metal potential. You'll see some historical drilling and trench work that was done. Great project. It's road accessible. It's a project that just to the actually the southwest of us, you can't really see it too well on this map, but right down here, Rio Tinto has a $30 million earn-in option on a project called Janus Lake, which is owned by a company called Form. They just announced a drill program that they've commenced. So a lot of regional work being done and we have all the ground along trend to the Northeast, as you can see here.
48:25 And then last but not least, Man Lake, it's right in the thick of things in the east side of the basin. It's just north of our northwest of our more lake project. And you'll see here there was a pretty significant discovery made just a few years back at the adjacent property. Denison ended up acquiring a minority stake in that project by acquiring a company that was called International Inexco back in 2014. And what we're looking for there is the extension of some of these cross-cutting structures that would host mineralization onto our project. But again, it's a secondary asset, a project we own 100% of, that we would like to find a partner company to come in on and explore as a part of our prospect generator part of the business.
49:15 So just to recap and finish off here, again, I'll get back to those 3 main talking points, people, timing, and projects. We have a great mix of management and capital markets expertise and a technical team that has focused experience in the Athabasca Basin that's made high-grade Uranium discoveries in the past. Timing with the Uranium market, I think again we're in the very early days of recovery here. Very few ways to play the sector And just in the last 3 or 4 months, we've seen, I think, what is the first inning of a notable move higher with the Uranium stocks. And as we see the ESG narrative continue to gain momentum, I think you'll see nuclear and uranium mining companies swept up in that as well. And then last but not least, the projects, high-grade discovery potential at our flagship Moore Lake project. We're going to be continuing to drill there in the coming months, in the coming years. We feel like we're on the verge of making a major discovery there.
50:20 And then projects funded by partner companies, now 3 partner companies in Orano, As in Court, and more recently Valor. Combined project consideration between those 3 deals is about $18 million in exploration, expenditures, cash payments, and share issuance. So I think without spending any more time, again, thank you everyone. I really appreciate you taking the time. I wanna leave a couple minutes here open for Q&A and I'm very accessible. Anyone that wants to connect offline, happy to do so. Thank you. Great. Thank you so much, Jordan. So let's just jump into Q&A now for the last 10 minutes. Max has a question. When are the options and warrants coming to life and at what price are they exercisable?
51:06 Also, what will the need for additional funding and the potential share dilution through private placement in 2021 be? Yeah, so the warrants and options, I can get the average warrant and option exercise price. Off the top of my head, the weighted average price would be around $0.30, $0.28 to $0.30. There's some warrants, I think the lowest warrants we have are at $0.22 and then there's other warrants at 45 50 and I believe some at 60 even still Most of the options are in the high 20s or low 30s as well. But that, we can pull that from the website. There's a list of the exercise prices and the time left on them. As far as the financing needs for the company go, you'll see just in December, we raised about 1 million and a half flow through dollars. It was 1 lead order.
52:11 It was actually there's a fund in Toronto that's been the lead order on our last few financings and they become a very large shareholder. We have over $2.5M in the Treasury. The budget for the upcoming drill program at Moore Lake is about $800,000, so we're well-funded for that and for future programs. But just to add to that point, as I mentioned, we do have option payments, both in cash and stock, coming in from partner companies. So we have a $200,000 payment coming from Asyncorp to complete their earning, a $50,000. These are cash payments coming in from Valor. And then we get the 233 million shares free trading in Valor. We'll be getting that shortly. And again, that's valued at just under 2 million as of today's close. So if you add that, that's about another 2.5, 3 million that you can add, or to call it 2 million that you could add to the treasury. So We're well positioned financially.
53:19 That's a great benefit of being a prospect generator is you have partner companies that fund the exploration and you get some cash in stock. And keep an eye out, that's gonna be a potential catalyst coming up along with drill results and exploration at our project base is getting additional deals done at our other projects that we own 100% of. Great. Next question we have is what are the mineral resources at Moor Lake and at what cutoff grade are they estimated? For example, what is the operating cost in the calculation of cut-off grade? Great question. I can't give you the answer on that. We are working towards a made-in-resource estimate at Moor Lake. So look out for that. Later in the year, We expect we'll have something out here probably in the second half of 2021.
54:09 And so at that point, I can talk a little bit more about the size of the deposit. And with those numbers in hand, I will note you can see from the previous drilling and even more recently the results that we've announced, you know, there are these high grade pods or lenses of mineralization. Most of it in the sandstone or at the unconformity, which is interesting in and itself because of some of these new mining methods that are being talked about in the basin or being proposed in the basin, including ISR and Sabre. But we believe our real exploration upside, discovery upside lies in the basement rocks. And we really just scratched the surface with just a few drill holes down into these basement to test these basement targets in the last few programs.
54:56 Great. Mark asks, any US equity coverage? No, we do not have US equity coverage right now. FRC does have coverage. We are going to be doing Red Cloud. We're going to be at their conference coming up. They've helped raise money. You could see something there. And I think as you see the company grow, I mean, you know, the simple answer there is we still are a smaller company, you know, at sub 30 million market cap. We're kind of right at that threshold. But I think as you see that move higher, I think you'll start to see new research and new coverage initiated. And yeah, look in the US, I've done a fair bit of marketing in the US. As I mentioned, we have a fairly large U.S.
55:48 Shareholder base and it does trade good volume on the OTCQB. It would be great to get coverage in the U.S. And I think we can achieve that here in the coming year. Great. All right. So in closing, what are the near-term catalysts for the price of uranium? Yeah, well, look, we talked at length about what's been driving it over the last few years, and in particular in the last few months with the clean energy and decarbonization push globally, that's I think been one of the reasons we've seen this initial move higher. What's going to be the major and main catalyst coming up is going to be new utility contracting.
56:35 That's really the historically, that's where you see most Uranium transacted and bought through these contracts. We know that utility companies globally have really just been sitting on their hands the last several years. We've seen a lot of a lot of volume in the spot market versus the contract and long term market. I think you see that change here. I think 2021 is going to be the year where utility companies, given that they've been drawing down inventory over the last several years, they're going to have to come back to the market. And that's usually, historically, that is usually the biggest driver for a move higher in the uranium price. Wonderful. Well, that's a great place to close up.
57:21 So that's all the time we have for today. I want to thank you so much, Jordan, for taking us through the presentation and the Q&A session. I also want to thank everyone who submitted questions. If you didn't get a chance to get your questions answered or if you think of 1 after, we will be emailing you out a survey where you have the opportunity to leave your contact details and the Sky Harbor team will be happy to follow up with you directly. And for more information, please visit Sky Harbor Resources website at www.skyharborltd.com. And as always, the recording of this presentation will be available on six.com. So now I'll hand it back to you, Jordan, for the final word. Great, Well, thank you and thanks everyone for taking the time. I hope that was informative.
58:06 I hope for those of you who saw the last presentation, you have an update. We have a lot going on coming up in 2021, both at our projects and in the Uranium market. I'm very excited for the year coming up. We're well-funded to advance the company and the project base. I look forward to some of the upcoming catalysts through our drill programs and our partner-funded drill programs, as well as new developments in the Uranium market globally.
