8-K: Perpetua Resources Reaffirms Robust Economics of Stibnite Gold Project with Updated Cash Flow Model

Perpetua Resources' updated cash flow model reaffirms the Stibnite Gold Project's strong economics, projecting a $1.4 billion after-tax NPV (5%) and 15.4% after-tax IRR at long-term consensus prices.

Summary

• Perpetua Resources released an updated cash flow model for the Stibnite Gold Project, based on engineering work completed in January 2025.
• The update reaffirms the project's robust economics, indicating a $1.4 billion after-tax Net Present Value (NPV) (5%) and a 15.4% after-tax Internal Rate of Return (IRR) at long-term consensus prices.
• At current spot prices, the Financial Update indicates an increase to $3.7 billion after-tax NPV (5%) and over a 27% after-tax IRR.
• All-In Sustaining Costs (AISC) are expected to average $435 per gold ounce over the first four years and under $760 per ounce over the life-of-mine (LOM).
• The Financial Update supports Perpetua's loan application process with the U.S. Export-Import Bank (EXIM) for a $1.8 billion Letter of Interest.
• The project is projected to increase job-years by over 15%, potentially supporting an increase to the existing $1.8 billion indication of interest from EXIM.
• Perpetua has entered into an agreement with Idaho Power Company (IPCo) to procure long lead equipment to increase electrical capacity to the plant, with an estimated cost of $90.2 million.
• An initial payment of $18.8 million is due upon execution, with remaining payments expected quarterly through 2027.
• The Financial Update reflects the progression of the Project plan to a Basic Engineering level, resulting in minor improvements and adjustments to certain infrastructure designs, equipment selection and processing designs.
• The Financial Update also applies fourth quarter 2024 cost estimates for construction and operations, consistent with the Basic Engineering analysis, as well as current and consensus commodity pricing for sales.
• The Company did not revise its mineral reserves or resources in connection with the Financial Update or Basic Engineering work.

Sentiment

Score: 7

Explanation: The document presents a positive outlook for the Stibnite Gold Project, highlighting its robust economics and potential for low-cost gold production. However, the reliance on commodity prices and the conditional nature of the EXIM Letter of Interest introduce some uncertainty.

Positives

• The updated cash flow model reaffirms the robust economics of the Stibnite Gold Project.
• The project is expected to have industry-leading operating costs.
• The Financial Update is a key milestone to support Perpetua in formalizing its loan application process with EXIM.
• The project is projected to increase job-years, potentially supporting an increase to the existing $1.8 billion indication of interest from EXIM.
• The agreement with IPCo ensures parts are available for installation under a future construction agreement.

Negatives

• Initial Capital Expenses increased from $1,263 million in the 2020 Feasibility Study to $2,215 million in the Financial Update, mainly driven by cost inflation and indirect cost related to overall project execution.
• Life of Mine All-in Sustaining Cost increased from $636 per gold ounce in the 2020 Feasibility Study to $756 per ounce in the Financial Update mainly driven by higher sustaining capital, mining costs, processing costs and general & administrative services.

Risks

• The U.S. EXIM Letter of Interest is non-binding and conditional, and does not represent a financing commitment.
• Commodity prices can be volatile and there is the potential for positive or negative deviation from the forecast.
• The Company's ability to achieve the results in the Financial Update is subject to various assumptions, qualifications and limitations.
• The Company's ability to comply with and obtain permits related to the Stibnite Gold Project is not guaranteed.
• The Company's ability to successfully implement and fund the Project and the occurrence of the expected benefits from the Project, including creation of jobs and environmental benefits is not guaranteed.

Future Outlook

The Financial Update confirms the financial viability of the Project at current costs and consensus commodity pricing, with significant upside potential at higher commodity price sensitivities. Perpetua is advancing execution planning to prepare the Project to be construction-ready once all required permits are received.

Industry Context

The Stibnite Gold Project aims to become the lowest cost gold project in the United States, Canada, and Australia, based on a comprehensive list of gold projects with over 250,000 ounces of gold production expected in 2025 from Wood Mackenzie as of December 2024.

Comparison to Industry Standards

• The Stibnite Gold Project aims to be a low-cost gold producer compared to other projects in the United States, Canada, and Australia.
• The project's AISC is projected to be competitive with industry benchmarks.
• The project's NPV and IRR are comparable to other gold mining projects in similar jurisdictions.

Stakeholder Impact

• Shareholders: The updated cash flow model and potential financing from EXIM could positively impact shareholder value.
• Employees: The project is projected to increase job-years, creating employment opportunities.
• Local Communities: The project could bring economic benefits to the local communities.
• Creditors: The potential financing from EXIM could provide additional security for creditors.

Next Steps

• Formalizing the loan application process with the U.S. Export-Import Bank (EXIM).
• Advancing execution planning to prepare the Project to be construction-ready once all required permits are received.
• Continuing to evaluate potential strategic and financing opportunities.

Key Dates