Perpetua Resources Corp. (PPTA), the owner of the largest antimony reserve in the United States, is poised for a resurgence as China, the world’s leading producer of antimony, implements export controls on the strategic metal starting September 15, 2024. This move, which will restrict the availability of antimony globally, has been highlighted as a positive catalyst for Perpetua by Cantor Fitzgerald analyst Mike Kozak.
Kozak, in an August 22 research note, emphasized the urgency for the US to reshore its antimony supply chain. With China controlling approximately half of global antimony production, the shift in policy presents a significant opportunity for domestic producers like Perpetua.
Antimony, a vital component in a range of military applications, including ammunition, infrared missiles, night vision goggles, and flame retardants, has gained renewed strategic importance. Perpetua’s Stibnite mine in Idaho, which historically played a crucial role in supporting the US ammunition industry during World War II and the Korean War, is positioned for a return to production.
The news of China’s export controls comes at a propitious time for Perpetua, as the company is in the final stages of permitting for its Stibnite mine. The US Forest Service, the regulatory body overseeing the project, is expected to finalize its environmental impact statement and record of decision in the coming months, potentially paving the way for a restart of mining operations.
Cantor Fitzgerald has reiterated its Speculative Buy rating on Perpetua, citing the favorable market dynamics and the anticipated restart of Stibnite. The firm’s one-year target price of CA$18.25 per share represents a potential upside of 57% from the company’s current share price.
The timing of China’s announcement and the wording used in the Ministry of Commerce’s statement, which emphasizes concerns over national security and development interests, suggest a deliberate effort to curb the use of antimony for military purposes. This further strengthens Perpetua’s position as a key supplier of domestically sourced antimony, particularly as the US prioritizes bolstering its defense capabilities.
The combination of China’s export controls, the imminent permitting of Stibnite, and the strategic importance of antimony has created a favorable landscape for Perpetua. The company is well-positioned to benefit from the growing demand for domestically sourced antimony and the strengthening of the US defense industry.
