Skyharbour, Denison strike $61.5M pact

Skyharbour Resources (TSXV: SYH) has formed four joint ventures with Denison Mines (TSX: DML; NYSE-A: DNN) at its Russell Lake uranium project in Saskatchewan’s Athabasca Basin.

Denison plans to invest up to $61.5 million (US$44 million) in cash and exploration spending for stakes ranging from 20% to 70%, according to a release on Monday. 

The JVs cover the core Russell Lake claims along with Wheeler North, Getty East and the Wheeler River inliers. Skyharbour keeps significant interests and will operate on key ground, it said. Denison has committed at least $4 million of exploration in the first two years at Wheeler North and Getty East, it added. 

“The real prize is increased exploration at Russell Lake, which should lift the odds of additional high-grade uranium discoveries,” Red Cloud Research Managing Director David Talbot said Monday in a note.

Busy Athabasca

The partnership consolidates a busy corner of the eastern Athabasca, next to Denison’s Wheeler River project, which is in final permitting. It brings Denison’s technical bench and balance sheet to ground Skyharbour recently unified after buying Rio Tinto Exploration Canada’s minority interest.

Denison’s spending is staged over seven years as it earns into the blocks. Skyharbour also strengthens its treasury through cash and share payments and expects fee income from Denison’s use of the McGowan Lake exploration camp at Russell Lake, according to Talbot.

“We are excited to build on our long-standing relationship with Skyharbour and accelerate the evaluation of this highly prospective ground,” Denison President and CEO David Cates said in the release.

While earn-ins don’t guarantee discoveries and the Athabasca remains highly competitive for drill capital, the structure concentrates funding on priority targets while leaving Skyharbour with meaningful ownership if drill work delivers.

Skyharbour shares closed at 36.5¢ on Monday, up about 4.3%, while Denison shares closed at $3.38, down 3.2%.