A Member of Pat McKeough’s Inner Circle recently asked for his advice on Perpetua Resources, a development-stage mining company looking to restore an abandoned mine site that could become America’s only domestic source of mined antimony and a potentially significant gold producer.
Pat likes the firm’s exceptional strategic value and perfect market timing. It controls the only domestic antimony source in the U.S. at a time when China has banned antimony exports, creating unprecedented demand. However, Pat notes the company still faces significant execution risks while trading at an optimistic valuation as it aims to transition from a permitted development project to actual construction and production.
Perpetua Resources Corp. (Symbol PPTA on Toronto; www.perpetuaresources.com) is a development-stage company that acquires mining properties with the purpose of exploring, evaluating, and placing them into production. Currently, the company’s primary focus is on resurrecting the Stibnite gold project in Vally County, Idaho.
Incorporated in B.C. in 2011, the company operated under the name “Midas Gold Corp.” before changing its name to Perpetua Resources Corp. on February 15, 2021.
The Stibnite gold project contains several gold, silver, and antimony mineral deposits. Antimony is a silvery-white metal essential for national defense, clean energy, and technology applications. It’s used in many products including batteries, flame retardants, and alloys. Military applications include night vision goggles, flares, and nuclear weapons production.
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Mining began at Stibnite in 1899. Mining continued, on and off, during the twentieth century. In 1942, during the Second World War, miners discovered antimony and tungsten at Stibnite. Both minerals played critical roles in the war effort as well as in the Korean War from 1950 to 1953.
In 1992, mining ceased at Stibnite. In its wake, environmental problems with water quality and wildlife have persisted due to improper clean-up procedures at the site.
Meanwhile, Stibnite is one of the highest-grade, open pit gold deposits in the U.S. And it’s also the only mined source of antimony in that country.
Perpetua not only wants to restore Stibnite to production but to responsibly mine it. The company is committed to cleaning up the site and powering it from one of the lowest carbon emissions grids in the U.S.
Perpetua Resources’ world-class gold project advances toward 2028 production
Perpetua is currently involved in an extensive permitting process to redevelop and restore Stibnite. The company reached an important milestone on January 6, 2025, when the U.S. Forest Service issued a final decision authorizing approval of the project. But the company still has to secure more permits from federal, state and local agencies.
By the end of 2025, the company expects to make a construction decision. It hopes to start commercial operations in 2028.
The project has estimated gold reserves of 4.8 million ounces. The proposed mine is projected to produce 300,000 ounces of gold annually over a 15-year mine life. As a by-product of gold production, the project also has a reserve of 148 million pounds of antimony.
Since Perpetua is still in the development phase of the Stibnite Gold Project, it reports no revenue. It plans to fund the project through loans, grants, and other methods. For example, the Export-Import Bank of the United States has expressed interest in lending the company up to $1.8 billion. Meanwhile, for strategic purposes, the U.S. Department of Defense (DOD) has provided $59.4 million in funding. The estimated cost of the project is over $1.3 billion.
Despite Perpetua’s perceived attraction as a potential antimony investment, most of its revenue will likely come from gold. Based on the estimated reserves of gold and antimony at Stibnite, gold would make up about 94% of the mine’s estimated revenue.
Nonetheless, the project could supply more than a third of the U.S.’s annual antimony needs. This is important because China, which produces nearly half of the world’s antimony, has restricted exports of the metal. Demand for antimony should increase if global geopolitical tensions become greater in the future.
Stibnite could become one of the largest producing gold mines in the U.S. It’s also expected to be one of the lowest-cost producers in the country. And the high-grade nature of the deposit should help the mine withstand lower gold price environments.
As mentioned, in January, the U.S. Forest Services approved the mine plan for the Stibnite project. That permitting milestone paves the way for a construction decision as the company works towards finalizing the remaining federal and state permits and securing financing.
Going forward, while Perpetua’s outlook remains positive, there are sizeable risks involved with a development project of this size and the uncertainty of commodity (gold) prices.
Notably, though, Perpetua recently received initial terms for a $2 billion U.S. government loan that would almost completely fund restarting the Stibnite project. The Export-Import Bank of the U.S., 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.
Recommendation in Pat’s Inner Circle: Perpetua Resources Corp. is okay to hold, but only for aggressive investors.
