Perpetua Resources Corp. (PPTA:TSX; PPTA:NASDAQ) agreed to receive US$255 million (US$255M) in the form of a strategic equity investment by Agnico Eagle Mines Ltd. (AEM:TSX; AEM:NYSE) and JP Morgan Chase & Co. (JPM:NYSE), reported Rabi Nizami, analyst in National Bank of Canada's Capital Markets division (NBCCM), in an Oct. 27 research note. The private placement is slated to close in the next day or so.
"The private placement and premium-priced warrants offer a vote of confidence and a better financing alternative than the previously anticipated, up to 3.9% net smelter return (NSR) royalty or stream structure," Nizami wrote.
53% Return Implied
NBCCM maintained its CA$50 per share target price on the Idaho-based mining developer, noted Nizami.
"We expect Perpetua to advance through a steady price:net asset value rerate over the near-term construction period, with the potential for a more significant valuation rerate towards the later years of the build, given the project's potential to generate over US$1 billion (US$1B) annual EBITDA," the analyst wrote.
Compared to the CA$50 per share target, Perpetua was trading at the time of Nizami's report at about CA$32.60 per share. From this price, the return to target is 53%.
Perpetua remains rated Outperform.
Terms of the Arrangement
Nizami provided the details of Perpetua's financing deal with Agnico Eagle and JPMorgan & Chase. The two companies' total investment comprised US$255M in a private placement and up to US$142M in warrants having one-, two- and three-year maturity at premiums of 35% (US$31.46/share), 50% (US$34.95/share) and 65% (US$38.45/share). In the private placement, Perpetua issued a total of 10.94 million (10.94M) shares at US$23.30 apiece, the company's price at last close. Both AEM and JPM entered into Investor Rights Agreements with Perpetua, meaning they may participate, on a pro rata basis, in future equity offerings to maintain their respective degree of ownership.
With respect to Agnico Eagle, it acquired 7.73M Perpetua shares at US$180M total for a 6.5% stake, to thereby become Perpetua's second-largest shareholder. Warrants for AEM amounted to 2.86M, and when fully exercised, Agnico's interest in Perpetua will rise to 8.6%.
As part of AEM's investment, the mining major and Perpetua agreed to form a joint technical and exploration advisory committee.
"Agnico's participation also highlights the Stibnite project's attractive scale and economics that we believe are of interest to all senior gold producers in a future mergers and acquisitions scenario," wrote Nizami.
As for JPMorgan & Chase's component of the private placement, the banking and financial services firm purchased 3.22M Perpetua shares for US$75M at terms equivalent to AEM's. This garnered JPM a 2.7% stake, which will increase to 3.6% when all warrants have been exercised.
JPM's investment was a vote of confidence in Perpetua, given it is the first tied to the bank and financial services firm's US$1.5 trillion Security and Resiliency Initiative. Under this program, JPM intends to facilitate, finance and invest in industries critical to national economic security and resiliency over the next 10 years. JPM's investment in Perpetua also showed "the urgency and relevance of the Stibnite project to the national strategic narrative," wrote Nizami.
Prior to the placement involving AEM and JPM, the analyst reported, Perpetua's Q3/25 share count totaled 107.57M. The private placement will add 10.94M shares, and the warrants, if exercised in full, will add another 4.05M shares. The overall effect will be a diluted 122.56M shares.
More Palatable Financing
The US$255M private placement is a better form of financing than Perpetua's previously planned, up to 3.9% NSR royalty or stream deal, according to Nizami. The latter would have encumbered life-of-mine revenues to the tune of US$654M, at a US$4,000 per ounce gold price, and exploration upside as well.
Additionally, there already are two NSR royalties on Stibnite, a gold one for 1.7% and a silver one for 100%. Any further royalties would have complicated the set-up.
Renewed Focus on Exploration
While working to get the various permits required for Stibnite, Perpetua invested little in exploration. Now that federal permitting is done and construction is underway, NBCCM expects the mining company to shift its focus to exploration at its flagship project over the coming months, Nizami wrote. The analyst also pointed out that the official, existing 4,200,000 million ounce gold reserve estimate for Stibnite is "under-represented" and outdated.
Continually Moving Forward
Nizami reported Perpetua's recent achievements, and they prove the company is advancing Stibnite relentlessly. Last week, Perpetua commenced early works construction and posted the required financial assurance bond. Also, it engaged ATCO Ltd. (ACO.X:TSX) to build a housing facility at Stibnite for $130M to accommodate 1,052 workers. ATCO will do preparation work throughout the rest of this year, kick off facility construction in 2026 and complete the project in Q1/27.
In spring of 2026, Perpetua should get a final determination from the Export-Import Bank of the United States on its application for up to US$2B in debt financing for construction of Stibnite.
"We would not be surprised to see PPTA receive further U.S. government-backed funding," wrote Nizami. "Given recent precedents in the critical minerals space, direct equity participation by the U.S. is a possibility and would represent a strong catalyst."
In the meantime, Perpetua will continue with early construction work.
Upcoming Catalysts
Nizami listed the many upcoming events that could catalyze Perpetua's stock. NBCCM expects the company to announce an offtake agreement sometime this quarter. The major catalyst, expected in spring 2026, is EXIM's final decision on debt financing for Stibnite. If positive, a full construction decision will follow, another possible stock-lifting event.
Other potential positive catalysts include news pertaining to the remaining state ancillary Idaho Pollutant Discharge Elimination System permit, such as a resolution or the start of a court proceeding; the start of exploration work with results to follow; and updates on Perpetua's collaboration with the U.S. Department of Defense on high-purity antimony test work.
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