Perpetua Resources Corp. (PPTA:TSX; PPTA:NASDAQ), whose Idaho-based gold-antimony project continues getting federal, state and local support, had its share price increased to $15 by ROTH Capital Partners, Managing Director Mike Niehuser reported in an Oct. 22 research note.
"[The company's unique potential to produce antimony for clean energy and national defense applications has the support of both parties in the U.S. Senate," Niehuser wrote. "The Department of Energy and the Department of Defense support domestic production of critical metals including antimony."
45% return implied
ROTH's $15 per share target price is based on 0.35x net asset value discounted at 5% in the 2020 feasibility study at $2,350 per ounce gold, noted Niehuser. In comparison, Perpetua is trading now at about $10.38 per share.
The difference between these prices suggests a potential return for investors of 45%.
Perpetua remains a Buy.
Positive final decision likely
Support for restarting operations at Stibnite is "near unanimous," asserted Niehuser. Certainly, Perpetua's plan includes restoring the environment and fish spawning areas damaged by historical mining at the property, and this represents a "once-in-a-generation opportunity to resolve environmental issues," he wrote.
Given the bipartisan federal support for Stibnite, the upcoming presidential election should not hinder Perpetua from receiving the final record of decision on it, expected by year-end, Niehuser wrote. Changes in U.S. Forest Service personnel are not going to happen, so it will not be an influencing factor either. There likely is support from allied nations, too, given that China, Russia and Tajikistan produce about 90% of the world's antimony supply.
Potential for lawsuits
Despite Perpetua's well-conceived plan for Stibnite and the likelihood it will receive the final greenlight to proceed, the potential exists for lawsuits, hopefully spurious, after permitting is done, Niehuser pointed out.
He warned that Perpetua's share price could experience additional volatility in anticipation or in the event of litigation.
Construction expected regardless
If lawsuits are filed, it is likely Perpetua will be allowed to proceed with construction while the cases are resolved, if they are not dismissed early, Niehuser noted. He cited the U.S. Supreme Court decision in Chevron U.S.A. Inc. v. Natural Resources Defense Council as the already set precedent for this very type of scenario.
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