Co. Sells Royalty on Future Production of Au, Ag, Sb

Source: Mike Kozak 03/26/2024

The explorer has sufficient funds to see it through federal permitting for its Idaho project, noted a Cantor Fitzgerald report.

Perpetua Resources Corp. (PPTA:TSX; PPTA:NASDAQ) sold a royalty on all future silver production from its Stibnite gold-antimony-silver open-pit project in Idaho to Franco-Nevada, which paid Perpetua US$8.5 million (US$8.5M) up front, reported Cantor Fitzgerald analyst Mike Kozak in a March 22 research note.

This is “a much welcome cash injection as Perpetua nears the conclusion of the federal permitting process,” Kozak wrote.

219% Return Possible

The analyst reiterated Cantor’s CA$16.50 target price on Perpetua, currently priced at about CA$5.65 per share, noted Kozak. The difference between these prices implies a potential return for investors of 219%.

Valuation of the Royalty

According to Kozak, the after-tax net present value, discounted at 5%, of the royalty is US$11.5M, using a long-term silver price of US$24 per ounce.

“Perpetua selling forward all future silver production from the mine is immaterial to the project economics as the metal represents less than 0.3% of Stibnite’s total future revenues as per the 2020 feasibility study,” the analyst explained.

All Cashed Up

Kozak pointed out that Perpetua has sufficient funds to get through federal permitting. In addition to the US$8.5M from Franco-Nevada and the US$7.1M that the company had at the end of Q3/23, it has further funding, up to US$34.6M from the U.S. Department of Defense.

What To Watch For

Upcoming catalysts for Perpetua include completion of the Final Environmental Impact Statement and a Draft Record of Decision from the U.S. Forest Service, expected in Q2/24. After, that the Final Record of Decision will be issued, likely in Q4/24.

“When in production, Stibnite will be one of the Top 5 largest gold mines and the single largest antimony mine in the United States,” Kozak wrote.

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1. Perpetua Resources Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
3. This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.

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Disclosures for Cantor Fitzgerald, Perpetua Resources Corp., March 22, 2024

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Disclosures as of March 22, 2024 Cantor has provided investment banking services or received investment banking related compensation from Perpetua Resources Corp. within the past 12 months. The analysts responsible for this research report do not have, either directly or indirectly, a long or short position in the shares or options of Perpetua Resources Corp. The analyst responsible for this report has not visited the material operations of Perpetua Resources Corp. No payment or reimbursement was received for related travel costs.

Analyst certification The research analyst whose name appears on this report hereby certifies that the opinions and recommendations expressed herein accurately reflect his personal views about the securities, issuers or industries discussed herein

( Companies Mentioned: PPTA:TSX; PPTA:NASDAQ, )