Perpetua Resources Corp. (PPTA:TSX; PPTA:NASDAQ) is successfully completing the requirements necessary to conclude the environmental impact statement process for Stibnite, its gold-antimony project in Idaho, "to be construction ready in the next 12 months," reported ROTH Capital Partners analyst Mike Niehuser in an Aug. 22 research note.
"We believe that Perpetua has a clear pathway to be awarded a record of decision for the proposed development," Niehuser wrote. "This may soon transform the company's perception by investors for the Stibnite gold project to be a bankable project."
As far as timing, the U.S. Forest Service outlines a final environmental impact statement and draft record of decision by year-end 2023, followed by a final record of decision in early 2024.
129% implied return
Accordingly, ROTH maintained its $7.25 per share target price on the mining company, currently trading at about $3.05 per share, noted Niehuser.
The projected potential return for investors is material, at 129%.
Perpetua remains a Buy.
Critical steps taken
Niehuser presented the actions, Perpetua has taken to move Stibnite toward a record of decision, including forming partnerships.
"Most of the stakeholders are aligning in a common cause to advance the project through permitting, construction and production," added Niehuser.
One, the Idaho-headquartered explorer signed a Clean Water Act Settlement Agreement with the Nez Perce Tribe, establishing the "parameters of activities" it deems essential. Relatedly, Perpetua is currently mobilizing people and equipment to carry out the agreed-upon cleanup of waste and measures to improve and maintain water quality.
Second, Perpetua signed a Definitized Agreement for Critical Minerals with the U.S. Department of Defense (DOD) for an award of $24.8 million ($24.8M) under the Defense Production Act. These monies are "intended to support construction readiness and environmental studies to continue through the permitting process," explained Niehuser.
Third, with an eye toward production at Stibnite, Perpetua hired an experienced and accomplished mining project development professional, Michael Wright, to serve as vice president of projects, a positive move according to ROTH.
"This is significant for its organization to transition from a permitting focus to define the Stibnite gold project to be financeable," Niehuser commented.
Funding for antimony efforts
Antimony is deemed strategically important to the U.S.' national defense, but no domestic sources of it exist. China, Russia and Tajikistan provide 90% of the world's supply.
As such, the DOD's Defense Logistics Agency awarded Perpetua two grants of $100,000 in September 2022. These are to support the company's evaluation of whether antimony from Stibnite can meet military specifications for use in munitions. This will require bench-scale testing of the element.
Further, earlier this month, the DOD's Ordnance Technology Consortium awarded Perpetua a Technology Investment Agreement of $15.5M to develop a wholly domestic antimony trisulfide supply chain of military-grade Stibnite ore.
"Perpetua plans on obtaining additional material for a pilot plant study to produce military-grade antimony and a full-scale processing circuit that may be useful to assess further projects," wrote Niehuser.
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