Perpetua Resources Corp. (PPTA:TSX; PPTA:NASDAQ) received more funding, in the amount of $34.6 million ($34.6M), from the U.S. Department of Defense to continue advancing its Stibnite gold-antimony project in Idaho, reported ROTH Capital Partners analyst Mike Niehuser in a Feb. 13 research note.
"Funding mitigates the preconstruction and environmental activities," Niehuser wrote. "Also, this reduces financial risk, as Perpetua anticipates a Decision of Record (DOR) [on Stibnite] at year-end."
142% gain implied
Given the news, ROTH reiterated its $7.25 per share price target on the U.S.-based mining firm, wrote Niehuser, noting an increase in the target is probable after an upcoming event.
"Following the Record of Decision, Perpetua will update project economics and capital costs, which should result in an adjustment to our price target," the analyst purported.
The Idaho-based company is currently trading at about $2.99 per share. From here, the return to target represents a return for investors of 142%.
Perpetua is still a Buy.
Domestic antimony supply wanted
Niehuser pointed out that this latest nondilutive capital installment takes the total amount the DOD has awarded to Perpetua to date to about $75M.
"This demonstrates the importance of the project to the military and its willingness to advance the project," Niehuser commented.
Once up and running, Stibnite would be the only U.S.-based supplier of antimony, produced as a byproduct, given most of the metal comes from China, Russia and Kazakhstan, noted the analyst. During its mine life, Stibnite could meet about 35% of domestic antimony demand on average.
Antimony is used in a wide range of products used by the Armed Forces, including weapons, munitions, equipment and materials, from grenades to night vision goggles. Some of the many other applications of antimony are large storage batteries, flame retardants, wind turbines, solar panels, cell phones, semiconductors, plastics and cable sheathing. The metal is also in demand because it makes alloys corrosion resistant.
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