Perpetua advances potential $2B Stibnite loan

[Ben Graham]

Perpetua Resources (TSX, NASDAQ: PPTA) says it received initial terms for a $2 billion US government loan that would almost completely fund restarting the fast-tracked Stibnite project in Idaho, which shut in the 1990s as the last domestic source of antimony used in weapons.

The Export-Import Bank of the United States, which is conducting due diligence on Perpetua’s application, sent the company a preliminary project letter with its initial findings and a non-binding term sheet, according to a statement issued late Monday.

Perpetua is continuing to work with the lender to advance the project through the next stages of the loan application process. If the due diligence is successful, the company expects to close the debt financing next year.

Financing from Exim Bank would go a long way toward funding the $2.2 billion capex project, which may become the only mined source of antimony in the US and was one of several chosen for fast-tracking this year by the Trump administration. In June, Perpetua sold about $425 million worth of shares to a group of banks and investors – including a $100 million investment from Paulson & Co. – to help advance the project.

“We are pleased to see the project letter update,” National Bank Financial mining analyst Rami Nizabi said Tuesday in a note. “It gives an indication to the market that the Exim loan diligence process is unfolding on schedule as previously guided by management.”

Shares in Perpetua fell 6.7% to C$23.29 Tuesday morning in Toronto, giving the company a market value of about C$2.5 billion. The stock has ranged between C$11.12 and C$27.23 in the past year.

Commercial production

Boise, Idaho-based Perpetua wants Stibnite to supply all of the country’s demand for the mineral used in ammunitions, semi-conductors and other military applications, about 100 million lb. over its 15-year life. Full construction could begin as early as next year, with commercial production starting by 2028, depending on final permitting and financing.

Following the equity offering, Perpetua “is focused on finalizing a potential royalty or stream arrangement with financial assurance guarantees, commencing early works construction in the fall of 2025 while advancing the Exim debt financing,” CEO Jon Cherry said in the statement.

Investors should expect news on a potential royalty or stream financing of up to $250 million in the second half of 2025, Nizabi said. Perpetua is also working on securing a financial assurance guarantee for $155 million, he added.

Perpetua had $425.4 million of cash as of June 30.

A $2 billion debt financing from Exim Bank would represent one of the largest potential federal loans ever offered to a domestic mining project. The US Department of Defense has also granted Perpetua more than $80 million, citing antimony’s essential use in munitions and other defence systems.

Chinese dominance

Should it go ahead, Stibnite would help to reduce China’s dominance of the antimony market.

An open-pit operation at Stibnite may produce 337,000 oz. of gold annually in the first four years and about 301,000 oz. per year over the life of mine for about 4 million oz. gold over its mine life, according to a 2020 feasibility study. At a gold price of $1,600 per oz. and $3.75 per lb. of antimony, the project would have an after-tax net present value (NPV) of $1.32 billion at a 5% discount rate, with an internal rate of return (IRR) of 22% and payback in under three years.

At spot prices used in the 2025 financial update, the NPV increases to $3.65 billion and the IRR rises to 27%, with a payback of 2.2 years. All-in sustaining costs are estimated at about $435 per oz. in the early years and $756 per oz. over the life of the mine, placing it among the lowest-cost gold projects in a tier-one jurisdiction.

Located in Idaho’s Stibnite-Yellow Pine district, about 160 km northeast of Boise, the project hosts 104.6 million proven and probable tonnes grading 1.43 grams gold per tonne and 0.064% antimony for 4.8 million oz. gold and 148 million lb. antimony, according to the feasibility study.