Perpetua awarded up to US$24.8M under US Defense Production Act, stock jumps

Perpetua Resources (TSX: PPTA; NASDAQ: PPTA) announced on Monday that its Idaho-based subsidiary has received a technology investment of up to US$24.8 million under Title III of the Defense Production Act (DPA).

The objective of the funding, issued by the Air Force Research Laboratory, is to complete the environmental and engineering studies necessary for Perpetua to obtain the required permits to sustain the domestic production of antimony trisulphide, which is essential to national defence as a key component for munitions.

The U.S. currently has no mined supply of antimony trisulphide. Perpetua is planning to re-establish a domestic supply of the critical mineral antimony as a byproduct from its Stibnite gold project located in central Idaho.

According to the United States Geological Survey, the Stibnite project contains one of the largest economic reserves of antimony (estimated at 14.2 million tonnes grading 0.42% antimony) and could supply roughly 35% of U.S. demand in the first six years of production.

The DPA funding allows the company to advance the construction readiness of the Stibnite project while the company continues through the ongoing permitting process, including a final environmental impact statement and a final record of decision, led by the United States Forest Service (USFS).

Under the funding agreement, Perpetua may request reimbursement for certain costs incurred over 24 months related to environmental baseline data monitoring, environmental and technical studies, and other activities related to advancing the construction and permitting process for the Stibnite project.

The DPA funding does not interrupt the ongoing National Environmental Policy Act (NEPA) review process. The DPA award is separate from the previously announced Small Business Innovation Research Phase 1 funding awarded to Perpetua by the Defense Logistics Agency in September 2022.

In October, the USFS released the Supplemental Draft Environmental Impact Statement (SDEIS) for the project, which provided clarity for the remainder of the NEPA process.

“As Perpetua continues advancing our project through the permitting process, we are honoured to enter this agreement to help advance our construction readiness for future development,” said Laurel Sayer, president and CEO of Perpetua.

“Our vision remains unchanged, which is to redevelop a world-class gold deposit, provide the country with a critical mineral and restore an abandoned brownfield site. Today, we continue to build momentum towards turning our vision into a reality.”

Perpetua’s proposed Stibnite gold project is in the sixth year of review under the NEPA. The project is designed to restore environmental conditions in the historic Stibnite mining district while responsibly redeveloping one of the highest-grade open-pit gold resources in the US and becoming the only domestically mined source of the critical mineral antimony.

Perpetua expects that current cash resources, combined with the full DPA agreement, would provide the company with sufficient liquidity to complete permitting and early restoration activities on the current timeline as well as additional liquidity to begin advancing construction readiness.

Shares of Perpetua Resources jumped 12.8% by noon ET following the latest announcement. The company’s market capitalization has now shot up to $177.6 million.