Perpetua Resources Corp. (PPTA:TSX; PPTA:NASDAQ) had its Stibnite gold-antimony mine plan just approved by the U.S. Forest Service and on the news, ROTH Capital Partners increased its target price on the explorer by 27%, Analyst Mike Niehuser reported in a Jan. 6 research note.
"This is the major milestone in the reopening of the mine and central to our investment thesis," wrote Niehuser. "The Final Record of Decision (FROD) is the keystone authorization to commence construction."
72% Return Potential
ROTH's new target price on Perpetua is $19 per share, up from $15. It implies a 72% return for investors given the company is trading now at about $11.08 per share.
Perpetua remains a Buy.
Pre-construction Work To Do
Before advancing to a construction decision on Stibnite, Perpetua still needs to receive some permits, and it is likely they will come in short order, this quarter, Niehuser wrote, given the importance of the project to Idaho and the U.S. However, he is cognizant of the potential for "spurious lawsuits following the FROD," he added.
The federal Clean Water Act Section 404 permit, in process with the U.S. Army Corps of Engineers, is outstanding. For the U.S., Stibnite represents a potential domestic source of military-grade antimony, desperately needed since China banned exports of the metal to the States.
Perpetua also needs a cyanidation permit and a water discharge permit, both from the state. Idaho stands to benefit from Stibnite economically and environmentally. Regarding the latter, for instance, Perpetua has agreed to fund restoration of 20 miles of fish habitat that has been blocked for 80-plus years.
"[The company] plans to accelerate preconstruction activities, including final engineering, updating project economics and considering financing options, to make a positive construction decision in 2025," wrote Niehuser.
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