The youngest CEO in mining has his eye on uranium
Jordan Trimble, 27 is currently the youngest CEO of any publicly traded mining company. This young dynamo entered the business straight out of university and is now running Skyharbour Resources (SKY.V). Skyharbour is a uranium junior holding a very prospective land position(over 390,000 hectares) in the prolific Athabasca Basin.
Jordan made several property deals in the past couple years while at the same time studying for his CFA exam, which he just completed (and is now a CFA charter holder). He has also put together an experienced team led by head geologist Rick Kusmirksi who is the former VP exploration for Cameco.
Skyharbour has numerous exploration properties that offer shareholders a shot at making a uranium discovery. One of the properties acquired (Way Lake) already has a 43-101 inferred resource of 7 million pounds of uranium.
Recently Tommy Humphreys sat down with Jordan to talk about how and why he entered the mining business, what he has learned so far, and what investors can expect from Skyharbour in 2015.
Here is the full transcript:
Jordan Trimble, Skyharbour Resources CEO,
TH: So Jordy you came into the business in 08 or 09?
JT: It was actually the beginning of 2010. I was in the office for a summer when I was out of school which was actually 09. I kind of saw just the initial part of the recovery from the financial crisis but really didn’t get going full time till until early January 2010.
TH: It was great timing. I would like to review quickly the Bayfield experience with you. So your group has just sold one of its stable companies to New Gold.
JT: New Gold.
TH: Bayfield it is called and Jordan was there I think when they had that great Burns Block discovery in 2010 and everybody was making money. What has been the experience of going from boom times to bust and what have you learned through the process?
JT: You know I was fortunate to get in during a boom as we saw. It was an incredible boom. I mean it was one of the best bull markets when you talk with people who have been doing it again for many decades.This was one of the better ones; that recovery from the bottom up to 2010/2011. When I started really my initial deal I was working on was Bayfield with Jim. We would go out to Toronto and we’d market and raise capital. We were travelling a lot, we were on the road a lot for it.
The experience for me being young and impressionable, it really kind of lit a fire under my belly in a good way where I saw the core of it. I saw the good side of this industry. I saw what you can do when you raise capital and you go and explore and you put the right ingredients together.
You have the right team, you have the right management, a big thing obviously is the technical team. Bob Marvin was our geologist, great geologist. You have the right assets, right projects, right methodology, and you have the right structure so on and so forth. You hear about this all the time. In that case we did have a much better market. When you have the right ingredients it showed me how lucrative and how quickly you can create value and create wealth. There are very few other industries/sectors out there where you can have that kind of return in that short of time.
TH: Do you think investors have forgotten that?
JT: Yes, I think so. We have seen it over the last 3-4 years now investors are losing or have lost sight of that. As we are seeing the only people financing these early stage deals and projects are the ones that have seen the cycles and have the wisdom and the experience to know that it will turn around eventually.
TH: How do you be a great junior mining CEO?
JT: In this market in particular you really need to be prudent with each dollar. Whether that is going towards the exploration, whether that is going towards the G&A, marketing etc.
Right now there are a lot of companies out there that are just trying to survive.I think it is healthy what we are going through, there are too many issuers out there and you have heard this lots. This has been an underpinning theme over the last couple years. I agree, it is basic supply and demand you have too much supply out there right now and that’s fixing itself.
I think as a CEO as a manager of these companies, you are not going to be the jack of all trades.I don’t pretend to be a geologist. My focus, my expertise is more on the market and finance side of things. If you can find the best geologists, you can find the best technical guys, you can find the best team that you can surround yourself with. I think that is the probably one of the top top criteria points: be able to work with them and be able to have them work together in harmony and that is tough to do.
TH: But the biggest job of a CEO right now is to find the money now right?
JT: Right now absolutely it is. In our space (the junior side of things) that is the biggest part. We have been fortunate – again the group that I work with has been around for over 20 years and seen ‘the good the bad and the ugly’ in these markets and have always been able to raise capital. Always survived.
TH: Where is money going to come from for the sector?
JT: From my perspective right now it is coming from the high net worth individuals/ sophisticated investors that have historically been focused in the resource space. I see that continuing depending on what type of a company what type of a market cap you are looking at, for the smaller cap companies. I think that will be the source of financing for a little bit here.
TH: Pros. So you just passed the CFA level three so you’re a CFA charter holder now?
JT: I am.
JT: Thank you.
TH: So what was your hope in taking the CFA? Trying to better understand the buy side or?
JT: You know, I get asked that a lot. I think that for investors, a lot has changed in our industry in the last 20 or 30 years, like the way they do their due diligence. The way investors analyze and pick stocks is changing fundamentally.
I really see value in being able to understand how this sector and how these investments play into a broader portfolio. You know you’re not going to have 100% of your portfolio locked in on junior exploration companies.
However, as an alternative investment there is a place for this asset class. It is a high risk, high return asset class. If you want access to an asset class that fits in your portfolio that diversifies your portfolio, this asset class works. I want to be able to convey that to the retail investor and to the hedge fund manager.
The CFA was really a channel for me to understand how a portfolio manager thinks and I learned how to converse with them on a different level, not just do the elevator pitch if you will.
TH: So Jordy now that you passed… I guess they say the hardest financial exams are behind you now.. the CFA… Do you think you can get the stock up now?
JT: (laughter) I didn’t see much correlation there but you know I hope so.
TH: So what is going on with Skyharbour right now – you’re a small uranium explorer and where does it stand?
JT: Skyharbour needless to say is my main focus. I have dedicated my life to it and I am going to see it through to the end. I am a young guy and this is my first deal, and I am going to make sure it works out right. What really excited me initially about getting involved and putting the deal together was uranium. This was the sector that I wanted to get the company involved with.
Just some basic, basic things that stood out to me: you had a sub sector within the resource space that had been absolutely crippled by black swan events; you had the uranium bubble burst in 2007; you had the financial crisis which was of course global but nonetheless uranium companies were caught up in that; and then you had Fukushima. So this sub sector had been absolutely thrashed around and as a result, unlike other commodities, there are a lot less uranium companies out there now than there were seven years ago.
We have really had a bear market for a while. I mean you had a little move up from 2009-2011 until Fukushima. Ironically enough Fukushima marked the top of the resource space anyway in March 2011. The Uranium spot price chart has been in a decline for years, not three or four like you have seen in the other metals. We have seen oil pull off but uranium has really been getting beat up for a long period of time.
I looked at that and I looked at the average global cost of production out there. You are talking $50-$60 per pound all in cost. Yet you had a spot price that has been trading between call it $30-$40. You are trading at a significant discount to the average global cost of production.
At the time I was initially putting the deal together, uranium stood out as a true contrarian bet and really the entry point to me at the time made a lot of sense. I knew it wasn’t going to turn around overnight but there were opportunities to put a deal together. Bring in the team. First and foremost.. Rick Kurmirski, Tom Drolet… Jim Petit who is the chairman. Bring in the right experienced team and then go and acquire the projects that we could get at pennies on the dollar and continue to build the company.
TH: So Jordan, why should anyone follow Skyharbour now?
JT: We are trading at a $2.5-$3 million dollar market cap right now. We have assembled one of the largest and most prospective land packages in the basin to date. Historically, if you look at what projects like this are sold for when there are discoveries, (Hathor for example and you look at Patterson Lake South what Alpha ended up selling 50% of the project for. These aren’t 2X or 3X returns these are 20-30X returns. They are multi hundred million dollar deals. That’s a function of them being in the basin with high grade mineralization. You are hunting in elephant country. If you’re doing exploration make sure you are going after something big that is going to be worth something even in a down market like we are in right now.
TH: Any last words?
JT: All in with Skyharbour we are building a vehicle that investors can go to if:
1: They like the uranium space and they see upside there.
2: There are 3 main value drivers, 3 main projects in the company right now. Way Lake, Mann Lake, and the Syndicate project… so we cover different target types.. We have more traditional unconformity style as well as basement hosted targets outside of the basin so we have diversity in the portfolio.
3: They care about the team – we have Rick Kusmirski and Tom Droulet, who is a nuclear engineer and a keynote speaker at a lot of energy conferences – a very knowledgeable guy in the nuclear space and the utility space as well.
I think we have put together the right ingredients for success. There are really two main catalysts: obviously you have a rising tide market that turns around but we have no control over that.
The biggest thing for us is putting the right ingredients in the pot here, to give ourselves and our investors the best opportunity the best shot of getting exposure to a discovery, which creates a lot of value, which generates huge returns for investors.
To find out more about Skyharbour Resources Ltd. (TSX VENTURE:SYH) visit the Company’s website at www.skyharbourltd.com.
This blog post includes certain statements that may be deemed to be “forward-looking statements”. All statements in this release, other than statements of historical facts, that address events or developments that management of the Company expects, are forward-looking statements. Although management believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance, and actual results or developments may differ materially from those in the forward-looking statements. The Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause actual results to differ materially from those in forward-looking statements, include market prices, exploration and development successes, continued availability of capital and financing, and general economic, market or business conditions. Please see the public filings of the Company at www.sedar.com for further information.
Article written by James Fraser, Mining Analyst (ccd).