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, now trading 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.
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