Perpetua Resources Corp. (PPTA) reported strong progress on its Stibnite Gold Project during the second quarter of 2024, reflecting the growing significance of critical minerals in the global energy transition. The company’s primary focus remains on advancing the project through the permitting process and preparing for construction. The Stibnite Gold Project is uniquely positioned to provide the United States with a domestic source of antimony, a critical mineral essential for clean energy technologies and national security, alongside its substantial gold reserves.
Perpetua’s commitment to safety and sustainability was evident during the quarter, with no lost time incidents or environmental spills reported. The company also received an additional US$34.4 million in funding through a modified Technology Investment Agreement under Title III of the Defense Production Act, further solidifying its financial standing. This investment highlights the strategic importance of the Stibnite Gold Project to the United States government. Perpetua also published its 2023 Sustainability Report, reaffirming its dedication to environmental and social governance.
In April 2024, Perpetua received a letter of interest for up to US$1.8 billion in financing from the Export-Import Bank of the United States, indicating strong financial support for the project. “Stibnite is a world-class gold project with a strategic and valuable by-product in antimony, and we look forward to building on our momentum,” said Jon Cherry, President and CEO of Perpetua Resources, in a company news release.
The critical minerals sector has experienced unprecedented growth in recent years, driven by the global transition to clean energy technologies. According to the International Energy Agency (IEA), investment in critical mineral development surged 30% last year, highlighting the sector’s expanding significance. Perpetua Resources, through its Stibnite Gold Project, aims to contribute to this growing market, particularly with its focus on antimony production.
Antimony, also known as stibnite, has seen rising industrial demand, with its market size projected to grow from US$1.08 billion in 2024 to US$1.78 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 6.5% according to Fortune Business Insights. The report attributed this growth to the increasing demand for flame retardants, driven by stringent regulations mandated by the Occupational Safety and Health Administration (OSHA) to practice flame-retardant clothing.
The ongoing investments in the critical minerals sector are crucial for the affordability and speed of clean energy transitions. The IEA expressed cautious optimism that the recent boom in investments in critical minerals will help meet increasing demand to achieve net-zero transition targets. As Perpetua Resources advances its Stibnite Gold Project, it aligns with the broader industry trend of bolstering critical mineral supplies to support both national security and the global push toward decarbonization.
Perpetua Resources has made significant progress in advancing the Stibnite Gold Project, both in terms of permitting and construction readiness. The United States Forest Service (USFS) updated the project schedule in January 2024, with the Final Environmental Impact Statement (FEIS) and a Draft Record of Decision expected in the third quarter of 2024, followed by a Final Record of Decision in the fourth quarter. The USFS has confirmed that cooperating agency reviews of the FEIS are complete, with final consultations underway.
In addition to the NEPA process, Perpetua is moving forward with several ancillary permits, including its 404 permit application with the U.S. Army Corps of Engineers and the formal Endangered Species Act Section 7 consultation, which began in April 2024. The Idaho Department of Environmental Quality issued its final 401 Water Quality Certification for the project in May 2024.
The company is also actively preparing for construction, having appointed Jonathan Cherry as the new President and CEO and a Vice President of Projects to lead the Stibnite Gold Project. Perpetua has engaged Ames Construction as the construction manager general contractor, advancing detailed engineering for the proposed Burntlog Route and power line construction with Idaho Power and Kiewit. Ausenco has been awarded the Basic and Value Engineering Scope for the project, and key subject matter experts have been hired to guide engineering and construction readiness efforts.
Analysts have expressed strong support for Perpetua Resources and its Stibnite Gold-Antimony Project. Mike Niehuser of Roth MKM highlighted the project’s importance to national defense, particularly in light of antimony’s inelastic demand and the risks associated with its supply. He emphasized that the Department of Defense (DOD) had previously funded the Stibnite project due to its strategic value, noting that “advancement of the Stibnite gold project may be paramount” from the DOD’s perspective. Niehuser maintained a Buy rating on Perpetua Resources, with a target price of US$10 per share, implying a 56% potential return for investors.
Niehuser also pointed out that the U.S. needs the Stibnite project to come online to secure a domestic supply of antimony, which is critical for various military applications. With China, Russia, and Tajikistan controlling 90% of the global supply of antimony, Niehuser commented that this reliance “places the U.S.’ manufacturing base and national security at risk should relations between the U.S. and China deteriorate.” Further, Niehuser noted that the price of antimony had surged to over US$10 per pound, significantly higher than the US$3.50 per pound used in the project’s 2020 feasibility study. This price increase, along with higher prices for gold and silver, suggested a much stronger economic outlook for the project, with a potential net present value of US$2.943 billion and an internal rate of return of 36.9% under optimistic price scenarios.
Niehuser also highlighted the potential for additional financing support through the Export-Import Bank of the United States (EXIM), which had indicated the possibility of financing US$1.8 billion of debt for the project. This potential financing could significantly reduce the project’s financial risk, especially considering the Stibnite project’s estimated capex requirement of US$1.658 billion. The DOD had already provided approximately US$75 million to Perpetua Resources for various purposes, including antimony testing and permitting activities.
In a separate analysis, Technical Analyst Clive Maund described Perpetua Resources as a momentum play in May, noting the recent strong gains in the company’s stock price following the announcement of potential financing from EXIM. He suggested that the stock could see further significant gains, with a near-term target of US$9 per share, representing a potential 50% increase. Maund rated Perpetua Resources as a Buy for all timeframes, appealing to both short-term speculators and long-term investors.
Technical Analyst Jason Sen on Investing.com provided insights into the gold market, noting that gold is currently in a 4-month sideways consolidation pattern. However, Sen identified several positive indicators suggesting a potential for a significant breakout, emphasizing that “the long-term bull trend for gold is expected to continue higher eventually.” This positive outlook for gold further reinforces the positive outlook for the Stibnite Gold Project, which is expected to benefit from both gold and antimony price appreciation.
According to Reuters, management and insiders own approximately 0.55% of Perpetua and institutions own about 33.09%. Top institutional shareholders include Kopernik Global Investors LLC, Sun Valley Gold LLC, Krilogy Financial LLC, BlackRock Institutional Trust Co., Herr Investment Group LLC, and State Street Global Advisors (US). A strategic investor, Paulson & Co. Inc., owns 38.38% of the company. 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$2.64 and US$7.13.
