Federal permitting of Perpetua Resources Corp.'s (PPTA:TSX; PPTA:NASDAQ) Stibnite gold-silver-antimony project in Idaho is now delayed by three to nine months, reported Cantor Fitzgerald analyst Mike Kozak in a Jan. 2, 2024 research note.
"This is a minor permitting setback and likely already priced into Perpetua's shares," Kozak wrote. "When in production, Stibnite will be one of the Top 5 largest gold mines and the single largest antimony mine in the United States."
Nearly 300% return projected
Following the news, Cantor maintained its target price on the U.S. mining company of CA$16.50 per share, Kozak noted. Now, in comparison, it is trading at about CA$4.19 per share.
The difference between these two share prices implies a significant return for investors, of 294%.
Perpetua remains a Speculative Buy.
New timeline, need for cash
The reason for the delay, Kozak reported, is a change in the U.S. Forest Service's (USFS) timeline for publishing three key documents.
Originally, the USFS indicated the final environmental impact statement (FEIS) and a draft record of decision would be ready in December 2023 but now guides to Q2/24 for both. The difference is three to six months. Perpetua indicated review of the FEIS by a cooperating agency is nearly done.
Also, the USFS pushed back release of the subsequent final record of decision to Q4/24, six to nine months later than its initial time of March 2024.
Kozak pointed out Perpetua will likely need additional funds to complete the permitting process given the delay. As of Sept. 30, 2023, the company had US$7.1 million in cash.
New board member
In other news, Kozak reported, Perpetua appointed a mining professional with extensive experience to its board of directors: Andrew Cole.
His 35 years in the industry include the role of general manager of two of Barrick Gold Corp.'s mines, Goldstrike in Nevada and Donlin Creek in Alaska.
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