Final OK Granted for US Gold-Antimony Project
Research Report

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Disclosures for National Bank of Canada, Perpetua Resources Corp., January 5, 2025

RISKS: Commodity Price Risk. Once producing, Perpetua would have the majority of its revenues tied to the sale of gold. Any decline in the price of gold may materially affect the company’s development and mining activities in the future. Other commodity price risks include antimony, although at a much lower significance vs. gold. Regulation Risk. The mining, processing, development and mineral exploration activities of Perpetua are subject to various laws governing prospecting, development, production, taxes, labour standards and occupational health, mine safety, toxic substances, land use, water use, land claim of local people and other matters. Permitting/Environmental Risk. The Stibnite project is subject to environmental regulation in the state of Idaho as well as regulations at a U.S. Federal level. These regulations require the project to operate within certain levels to maintain permits and advance the project. These regulations mandate the maintenance of air and water quality standards and land reclamation. The site requires a substantial cleanup of prior mining activities and an extensive 25-year reclamation plan. As the project is yet to achieve a fully permitted status, delays could occur in the granting of the final permits and or outright refusal to grant one or more of the final permits without more work carried out by the company to meet additional requirements and/or address new concerns raised by the permitting issuing government departments. Financial Risk. We assume that financing required to fund the development of Stibnite should come in the form of mostly debt, with the bulk of it assumed to be granted by EXIM at competitive interest rates, which is not guaranteed to be achieved on both the scale granted and the interest rate. Assuming this level of debt is granted, a portion of Perpetua’s future cash flows will be required to service this debt. ADDITIONAL COMPANY RELATED DISCLOSURES Perpetua Resources Corp. 323 LEGEND FOR COMPANY RELATED DISCLOSURES: 2 National Bank Financial Inc. has acted as an underwriter with respect to this issuer within the past 12 months. 3 National Bank Financial Inc. has provided investment banking services for this issuer within the past 12 months. 4 National Bank Financial Inc. or an affiliate has managed or co-managed a public offering of securities with respect to this issuer within the past 12 months. 5 National Bank Financial Inc. or an affiliate has received compensation for investment banking services from this issuer within the past 12 months. 6 National Bank Financial Inc. or an affiliate has a non-investment banking services related relationship during the past 12 months. 7 The issuer is a client, or was a client, of National Bank Financial Inc. or an affiliate within the past 12 months. 8 National Bank Financial Inc. or its affiliates expects to receive or intends to seek compensation for investment banking services from this issuer in the next 3 months. 9 As of the end of the month immediately preceding the date of publication of this research report (or the end of the second most recent month if the publication date is less than 10 calendar days after the end of the most recent month), National Bank Financial Inc. or an affiliate beneficially own 1% or more of any class of common equity securities of this issuer. 10 National Bank Financial Inc. makes a market in the securities of this issuer, at the time of this report publication. 11 A partner, director, officer or research analyst involved in the preparation of this report has, during the preceding 12 months provided services to this issuer for remuneration other than normal course investment advisory or trade execution services. 12 A research analyst, associate or any other person (or a member of their household) directly involved in preparing this report has a financial interest in the securities of this issuer. 13 A partner, director, officer, employee or agent of National Bank Financial Inc., is an officer, director, employee of, or serves in any advisory capacity to the issuer. 14 A member of the Board of Directors of National Bank Financial Inc. is also a member of the Board of Directors or is an officer of this issuer.15 A redacted draft version of this report has been shown to the issuer for fact checking purposes and changes may have been made to the report before publication. 323 An NBF Analyst attended a tour of Perpetua's Stibnite Gold Project in central Idaho on Sept. 20, 2024. A portion of the expenses were paid by the issuer.

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Perpetua Resources Corp. (PPTA:TSX; PPTA:NASDAQ) secured a signed Final Record of Decision (FROD) on its Stibnite gold-antimony project in Idaho from the U.S. Forest Service, reported National Bank of Canada Analyst Michael Parkin in a Jan. 5 research note.

"We expect Perpetua's share price to outperform peers on the news," Parkin wrote. "The signing further advances the project to a construction decision, which we believe could come in Q2/25."

Rerating of Shares Likely

The National Bank of Canada has a CA$22 per share target price on Perpetua, trading at the time of the report at about CA$15.96 per share, noted Parkin. The difference between these prices implies a potential return for investors of 38%.

The exploration company is rated Outperform. The National Bank believes a rerating of Perpetua shares is likely given the positive factors linked to Stibnite, Parkin explained. They include strong governmental support, an Export-Import Bank of the U.S. Letter of Interest in funding most the project's capex and exposure to the critical metal antimony.

Possible First Domestic Source

Because China recently banned exports of antimony to the States, it is becoming harder to obtain it in the U.S. Stibnite, which would produce antimony as a byproduct of gold, could become the first domestic source of antimony for the U.S. The project could supply about one-third of its antimony requirement.

As such, "Stibnite is proving to be of high interest to several U.S. government agencies/departments," Parkin wrote.

Final Tasks Before Construction

Parkin pointed out what Perpetua still must accomplish before advancing Stibnite to construction. It must secure some remaining federal and state permits, and the National Bank of Canada expects it will have all of them in place this quarter.

Another priority is securing financing for Stibnite. Perpetua management indicated the capex for Stibnite will be higher than the US$1.3 billion (US$1.3B) estimated in the 2020 technical study, to account for inflation that occurred in the interim. The National Bank of Canada is modeling a Stibnite development cost of US$1.95B.

"We could see the capital budget updated this quarter," noted Parkin.