Benzinga - by The Gold Report, Benzinga Contributor.
Source: Streetwise Reports 05/15/2024
Perpetua Resources Corp. (NASDAQ: PPTA) has released its unaudited condensed consolidated financial results for the first quarter ended March 31, 2024. The company is actively advancing its strategic initiatives to provide the U.S. with a domestic source of the critical mineral antimony and to develop one of the largest and highest-grade open-pit gold mines in the country at a restored brownfield site. The Stibnite Gold Project is progressing through the National Environmental Policy Act (NEPA) permitting process and enhancing its construction readiness.
During this period, Perpetua Resources maintained a strong safety and environmental record with zero lost time incidents or reportable environmental spills. Leadership enhancements were marked by the appointments of Jonathan Cherry as the new President and CEO and Jessica Largent, Chief Financial Officer, as a Director.
The company also entered into a new royalty agreement with Franco-Nevada Idaho Corporation, generating US$8.5 million in cash from net smelter return royalty on future payable silver production from the project properties. Furthermore, it continued to advance constructability reviews, value engineering studies, and detailed engineering.
Why Gold?
Hubert Moolman's Gold and Silver Research Analysis spoke highly of gold on May 5th. Moolman wrote, "Not only is gold in a bull run, but it has entered the phase which can be compared to a bank run (as previously explained) on the world financial system, with the U.S. dollar financial system acting as the world banker."The previous month, on April 8th, Stockhead spoke to XM Australia CEO Mr Peter McGuire about the reasons for gold's increased demand.
McGuire stated, "With the Chinese stock market suffering and cryptos being banned there, the options for vehicles that local investors can profit from become very limited, and that's maybe one of the reasons for increasing demand for gold. Indeed, the Shanghai benchmark gold has been rising faster than international prices for the last couple of years."
Catalysts for Future Growth
The additional US$34.4 million in funding obtained through the modified Technology Investment Agreement under Title III of the Defense Production Act represents a significant financial boost for Perpetua Resources, supporting its ongoing development activities at the Stibnite Gold Project.Roth MKM analyst Mike Niehuser wrote, "The potential for financing through the EXIM [Bank] significantly reduces the financing risk associated with the [Stibnite] project, increasing Perpetua's bargaining position with potential strategic investors and partners."This influx of capital is complemented by an indication of up to US$1.8 billion in financing from the Export-Import Bank of the United States, highlighting strong governmental backing and boosting the project's financial viability.
These funds are critical as they enable Perpetua Resources to continue its extensive preparatory work on the Stibnite Gold Project, ensuring the project's alignment with environmental and regulatory standards and preparing for the upcoming construction phase.
The potential financial support from U.S. EXIM Bank, coupled with strategic leadership changes and the establishment of new funding through royalty agreements, positions the company to effectively advance the Stibnite Gold Project.
These elements collectively enhance the company's ability to unlock significant value for stakeholders and solidify its position in the mining industry as it moves toward the expected Final Environmental Impact Statement and Draft Record of Decision.
Expert Analysis
Roth MKM analyst Mike Niehuser in an April 9 research note wrote about the target price, stating, "The potential for financing through the EXIM [Bank] significantly reduces the financing risk associated with the [Stibnite] project, increasing Perpetua's bargaining position with potential strategic investors and partners."As noted by Cantor Fitzgerald analyst Mike Kozak in a research note dated February 12. Kozak emphasized that this additional financial support is expected to fully fund Perpetua's Stibnite Gold-Antimony project through the completion of the federal permitting process.
He also reiterated the U.S. Forest Service's timeline for this process, projecting the Final Environmental Impact Statement and a Draft Record of Decision for Q2/24, followed by the Final Record of Decision in Q4/24.
Ownership and Share Structure
Refinitiv reports that management and insiders own approximately 0.38% of the company.According to Refinitiv, Director Christopher James Robinson owns 0.09% of the company, while CFO Jessica Marie Largent owns 0.13%, former President and CEO Laurel Sayer owns 0.14%, Vice President of Permitting Alan Douglas Haslam owns 0.09%, David L. Deisley owns 0.02%, General Counsel L. Michael Bogert owns 0.05%, Vice President of External Affairs Mckinsey Margaret Lyon owns 0.05%, Director Robert Alan Dean owns 0.01%, and Human Resources Manager Tanya Dawn Nelson owns 0.01%.
A strategic investor, Paulson & Co. Inc., owns 38.63% of the company.
According to Refinitiv, institutions own approximately 26.66% of the company, as Kopernik Global Investors, L.L.C. owns 8.19%, Sun Valley Gold, L.L.C. owns 7.28%, Krilogy Financial L.L.C. owns 2.6%, BlackRock Institutional Trust Company, N.A., owns 2.77%, B. Riley Financial Inc. owns 2.32%, Eidelman Virant Capital owns 1.49%,, Franklin Advisors Inc. owns 0.85%, Earth Resource Investment Group owns 0.73%, and State Street Global Advisors (U.S.) owns 0.7%.
Refinitiv reports that there are 64.12 million shares outstanding and 63.75 million free float traded shares. The company has a market cap of A$680m and trades in a 52-week range between CA$3.56 and CA$7.32.
Important Disclosures: