Testing Partnership Aims to Boost U.S. Antimony Supply Chain

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Perpetua Resources Corp. (PPTA:TSX; PPTA:NASDAQ) has entered into an agreement through its subsidiary, Perpetua Resources Idaho, Inc., to conduct metallurgical testing of antimony concentrate samples from its Stibnite Gold Project in Idaho. The testing will be carried out in collaboration with the United States Antimony Corporation (USAC) at its Montana-based antimony processing facility. This partnership aims to strengthen the U.S. supply chain for antimony, a critical mineral used in national defense, clean energy technologies, and flame retardants.

Jon Cherry, President and CEO of Perpetua Resources, emphasized the significance of this collaboration in the news release, "The antimony produced by the Stibnite Gold Project can serve America's needs, and we're dedicated to investigating all options to develop a fully domestic antimony supply chain. The antimony produced by the Stibnite Gold Project can serve America's needs, and we're dedicated to investigating all options to develop a fully domestic antimony supply chain."

The Stibnite Gold Project holds an estimated 148 million pounds of antimony reserves, making it one of the largest non-Chinese-controlled reserves globally and the only U.S. domestic reserve. According to the 2023 USGS Antimony Commodity Summary, the Project could fulfill about 35% of total U.S. antimony demand during its first six years of operation. This partnership represents a critical step toward reducing reliance on foreign sources, particularly given that over 70% of the global antimony supply originates from China and Russia.

What is Happening With Antimony?

As Yahoo! Finance reported on November 25, the price of antimony surged over 200% this year. This jump has been driven by China's export restrictions and the metal's critical role in national defense. The report noted that antimony has long been essential in military production, including applications in bullets, artillery shells, night vision goggles, and anti-tank missiles. Prices reached US$25,000 per ton by mid-November, reflecting a 212% increase year-to-date.

On December 3, Reuters reported that China banned exports of gallium, germanium, and antimony to the United States, citing national security concerns. The Chinese Commerce Ministry stated, "In principle, the export of gallium, germanium, antimony, and superhard materials to the United States shall not be permitted."

The report highlighted that China's decision significantly tightened the supply chain for critical minerals. Jack Bedder, co-founder of consultancy Project Blue, remarked, "The move is a considerable escalation of tensions in supply chains where access to raw material units is already tight in the West." Additionally, antimony prices in Rotterdam had surged by 228% since the start of the year, reflecting the growing strain on global supply.

The Driving Forces Behind Perpetua Resources

Perpetua Resources' October 2024 investor presentation outlines key milestones for the Stibnite Gold Project, including its potential to become a significant contributor to the U.S. antimony supply chain. The partnership with USAC aligns with Perpetua's strategic goals of leveraging its high-grade antimony reserves for domestic production while addressing environmental restoration at the historical mining site.

Upcoming catalysts for the project include the anticipated issuance of a Final Record of Decision (ROD) in Q4 2024, which is the key federal permit the project needs prior to construction. The project's environmental and economic benefits are highlighted in the Feasibility Study, which forecasts a 15-year mine life with low-cost gold production. Additionally, the U.S. Department of Defense has previously recognized the Stibnite Gold Project as a potential domestic source for antimony trisulfide, critical for military applications. 

The successful completion of the metallurgical testing phase and the subsequent establishment of a processing pathway could position Perpetua and USAC as leaders in rebuilding America's antimony supply chain, fostering greater economic and national security resilience.

Research on Pepetua Resources

On October 25, in a research report for Roth MKM, Managing Director Mike Niehuser highlighted Perpetua's robust positioning within the critical minerals sector. He emphasized bipartisan support for the company, stating, "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 also noted that Perpetua's Stibnite Gold Project is backed by both the Department of Energy and the Department of Defense, reinforcing the company's strategic importance.

Niehuser provided a target price of US$15 per share for Perpetua, representing a 45% potential return from its October trading price of US$10.38. This valuation was based on a 0.35x net asset value discounted at 5% in the 2020 feasibility study, with gold priced at US$2,350 per ounce. Furthermore, Niehuser described the Stibnite project as a "once-in-a-generation opportunity to resolve environmental issues," citing widespread federal, state, and local support for its restart.

On December 9, Mike Parkin of National Bank Financial reiterated an "Outperform" rating for Perpetua Resources with a target price of US$22.00.

In the December 6 edition of What Is Chen Buying? What Is Chen Selling? Chen Lin expressed optimism about Perpetua Resources Corp., noting its recent price surge following China's ban on antimony exports. He stated, "I started to buy PPTA in letter 2836, very lucky! I am selling my shares for a 30% jump on the news!" This increase reflects the market's recognition of Perpetua's strategic importance in securing domestic supplies of critical minerals.

On December 9, Mike Parkin of National Bank Financial reiterated an "Outperform" rating for Perpetua Resources with a target price of US$22.00. The analysis emphasized the potential for a re-rating of the company due to its exposure to critical minerals and strong government backing. Parkin highlighted that the Stibnite Gold Project could supply up to 35% of U.S. antimony demand in its first six years of operation, a figure that could increase to 40% with additional processing from Sunshine Silver Mining. He noted that a domestic antimony processing facility in Idaho would significantly reduce transportation costs, adding further value to the project. Parkin identified the upcoming Final Record of Decision (ROD), expected by the end of the year, as a key catalyst for the company.

Mike Kozak of Cantor Fitzgerald, in a December 9 report, maintained a "Buy" rating for Perpetua Resources and raised the target price to US$15.00. Kozak described the company's agreements with Sunshine Silver Mining and the United States Antimony Corporation as vital steps toward establishing a fully integrated domestic antimony production supply chain. He underscored the importance of the Stibnite Gold Project, which is positioned to become one of the largest antimony mines in the United States, serving national defense and clean energy markets. Kozak further highlighted the significance of the expected Final ROD, which would complete the federal permitting process and enable the project's advancement to construction.

Ownership and Share Structure

According to Refinitiv, management and insiders own approximately 0.50% of Perpetua and institutions own about 63.52%.

Top institutional shareholders include Paulson & Co at 35.30%, Sun Valley Gold LLC with 4.23%, Sprott Asset Management LP with 3.98%, Kopernik Global Investors LLC with 3.60%,  and Sprott Asset Management USA Inc at 3.16% reported by Refinitiv.

Of insiders, Chief Financial Officer Jessica Marie Largent owns 0.14%, former President and CEO Laurel Sayer owns 0.13%, and Director Chris Robinson owns 0.09%.

Refinitiv reports that there are 64.54 million shares outstanding and 64.19 million free float traded shares. The company has a market cap of US$339.65 million and trades in a 52-week range between US$2.69–US$13.18.