Construction Could Start This Year at Idaho Antimony Project
Research Report

Perpetua Resources Corp.'s (PPTA:TSX; PPTA:NASDAQ) Stibnite gold-antimony project in Idaho remains one of the critical minerals projects the U.S. needs to achieve resource independence, Mike Niehuser, managing director and senior research analyst at ROTH Capital Partners, reported in a May 14 research note. The country's military relies on antimony trisulfide for use in various munitions and weapons systems, and China's ban on antimony exports to the U.S. persists.

"This underpins our investment thesis that having received a favorable record of decision, Perpetua should receive consideration for Export-Import Bank of the United States (EXIM) financing, leading to a positive mine decision and a higher valuation," Niehuser wrote.

55% Uplift Possible

ROTH Capital Partners has a $19 per share target price on Perpetua, now trading at about $12.28 per share, noted Niehuser. The target implies a potential return of 55%.

Perpetua remains a Buy.

Focused on Financing

In the financing stage of Stibnite, Perpetua is expected to submit its formal loan application to EXIM soon, Niehuser wrote. Based on the economics of the project and the Trump Administration prioritizing it as one of critical importance to the nation, the likelihood is high that EXIM will agree to financing it. It also is likely such EXIM financing will be "preferable in tenor and amount to conventional debt financing," the analyst wrote.

Once financing for Stibnite is secured, Perpetua can make a construction decision, Niehuser wrote. His estimated timeline has construction there potentially starting this year.

Cos. in Supply Chain Amenable

Niehuser highlighted that the U.S. mining sector is on board with developing a domestic antimony supply chain, particularly involving Perpetua. For example, the private company, Sunshine Silver Mining & Refining, agreed, in a December 2024 memorandum of understanding with Perpetua, to assess whether and how it could refine the antimony produced at Stibnite.

Similarly, the United States Antimony Corp. (UAMY:NYSE.American) agreed back in 2021 to evaluate processing Stibnite's antimony concentrate, and earlier this year, announced it could produce 99.7% pure antimony trisulfide from it, at its facility in Marion, Ind.

"We believe both [companies] have the potential to process concentrate from the Stibnite gold project," Niehuser wrote.

From Ordinary to Extraordinary

Niehuser recapped how in a short period of time, Stibnite went from being a typical gold project to one of crucial importance to the U.S. because of its antimony byproduct. Initially, the analyst's investment thesis centered on Stibnite's high gold grades, the potential for low-cost open-pit operations at the project and Perpetua's years of formulating an environmental solution for reversing previous mining-caused environmental damage and restoring local fish habitat. It was because of these factors that Stibnite would be permitted, Niehuser believed.

A series of recent circumstances, however, changed that and put Perpetua and Stibnite in the national spotlight. The U.S. military increasingly became aware of antimony's importance to it and the defense industry, leading to about $75 million ($75M) in government grants being awarded to Perpetua to help it advance Stibnite. Then in September 2024, China halted antimony exports to the U.S., and the country elected Donald Trump for president. Since the latter, he and his administration have prioritized advancement of domestic critical minerals projects to re-establish a manufacturing base at home and boost national defense capabilities. Recently, the White House selected Stibnite as a transparency project.

"We believe the current conditions should persist through the end of the current administration," Niehuser wrote.

Stock Specifics

The analyst reported that Perpetua has 71.54 million shares outstanding. It has a market cap of $839.92M. Its share price in the past 52 weeks has been between $5.05 and 15.18 per share.