8-K: Perpetua Resources Taps Hatch for Stibnite Gold EPCM

Perpetua Resources Corp. subsidiary secures Hatch Ltd. for engineering, procurement, and construction management services for its Stibnite Gold Project, with an anticipated budget of $200-$220 million.

Summary

• Perpetua Resources Idaho, Inc. (PRII), a wholly-owned subsidiary of Perpetua Resources Corp., entered into an Engineering, Procurement, and Construction Management (EPCM) services agreement with Hatch Ltd. on December 18, 2025.
• The agreement covers design, engineering, procurement, construction management, testing, studies, and related services for defined portions of the Stibnite Gold Project.
• The scope is expected to include the balance of the process plant, the pressure oxidation facility (POX), associated on-site infrastructure, utilities, and facilities, along with overall integration and execution support.
• The anticipated Control Budget for the in-scope services is between $200 million and $220 million, based on current assumptions, but this is not a guaranteed maximum price.
• Hatch will be compensated on a cost of services-plus basis, including hourly labor rates, direct costs, reimbursable expenses, and a performance-based incentive pool.
• Excluded scopes, for which PRII retains direct responsibility, include off-site power transmission, the Burntlog Route roadway, tailings storage facility works, water treatment process design, and the diversion tunnel.
• An Executive Sponsor Committee, comprising senior management from both Perpetua and Hatch, has been formed to oversee the agreement and resolve project-level issues.
• Owner is pursuing financing for the Project from the Export-Import Bank of the United States (EXIM), expected to close in 2026.

Sentiment

Score: 7

Explanation: The agreement with Hatch Ltd. is a significant positive step for the Stibnite Gold Project, providing a clear path for engineering and construction management. The anticipated budget range and incentive structure are favorable. However, the budget is an estimate, not guaranteed, and certain project components remain outside Hatch's scope, introducing some residual risk. The reliance on EXIM financing also adds a layer of external dependency.

Positives

• Securing Hatch Ltd., a recognized EPCM firm, for a significant portion of the Stibnite Gold Project advances project execution.
• The agreement defines a clear scope of services, responsibilities, and a compensation structure, providing project clarity.
• A performance-based incentive pool for Hatch aligns the contractor's interests with project success in safety, environmental compliance, cost, and schedule.
• The establishment of an anticipated Control Budget range ($200-$220 million) provides initial cost visibility for a key project phase.
• The formation of an Executive Sponsor Committee enhances corporate governance and oversight for the project.
• The agreement includes a commitment to use reasonable efforts for local hiring in Idaho, supporting community engagement.

Negatives

• The anticipated Control Budget of $200-$220 million is an estimate and not a guaranteed maximum price, leaving potential for cost overruns.
• Significant project components, such as off-site power, tailings facility, and water treatment, are excluded from Hatch's scope, meaning PRII retains direct responsibility and associated risks.
• EPCM's total aggregate liability is capped, and certain damages (e.g., consequential, punitive) are waived, potentially limiting Owner's recourse in specific scenarios.
• Hatch is not responsible for overall site safety or security beyond its coordination and oversight obligations as a construction manager.

Risks

• The Control Budget is an estimate and subject to change, which could lead to increased project costs.
• The finalization of the Scope of Services (February 2026) and the EPCM Baseline Schedule (June 2026) introduces potential for adjustments and delays.
• Factors beyond the control of Owner and EPCM, such as labor and material costs or other market conditions, may impact actual project costs and schedules.
• EPCM's capped liability and the waiver of consequential damages shift some financial risk to the Owner.
• Owner retains direct contractual relationships and execution responsibility for several critical project components not included in Hatch's scope.
• The Project Site is subject to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) due to historic mining activities, requiring careful management to maintain Owner's bona fide prospective purchaser (BFPP) status.
• Reliance on financing from the Export-Import Bank of the United States (EXIM), which is expected to close in 2026, introduces external dependency and potential for additional conditions.

Future Outlook

The company anticipates finalizing the full Scope of Services by February 2026 and the EPCM Baseline Schedule by June 2026. The Control Budget for the anticipated Scope is expected to range between $200 million and $220 million, though this is subject to change. Financing for the Project from the Export-Import Bank of the United States (EXIM) is expected to close in 2026.

Management Comments

• Owner intends to form a cohesive, cooperative, and collaborative culture with EPCM and the Works Contractors to ensure timely and cost-effective, safe and quality construction of the Project.
• EPCM acknowledges that Owner has retained EPCM based on EPCMs good faith assurances that it and its personnel have the professional knowledge, skills, experience, education and staffing to efficiently and effectively perform the Services.

Industry Context

This EPCM agreement is a standard and critical step in the development of a large-scale mining project like the Stibnite Gold Project. Engaging a reputable firm like Hatch Ltd. for engineering and construction management is common practice to de-risk project execution and leverage specialized expertise. The project's location and historical mining activities necessitate careful consideration of environmental regulations, as evidenced by the explicit mention of CERCLA and the Owner's bona fide prospective purchaser (BFPP) status, which is a common challenge in brownfield mining developments.

Comparison to Industry Standards

• The 'cost of services-plus' compensation model with a performance-based incentive pool is a common industry standard for complex mining EPCM projects, balancing cost control with flexibility for unforeseen challenges.
• The establishment of an Executive Sponsor Committee for high-level oversight aligns with best practices for corporate governance and project management in large capital projects.
• The detailed dispute resolution process, including negotiation, mediation, and arbitration, is typical for large-scale engineering and construction contracts to manage potential conflicts efficiently.
• The explicit acknowledgment of CERCLA and the Owner's BFPP status, along with EPCM's obligations to comply with site-specific environmental requirements, reflects the stringent regulatory environment for mining projects, particularly those on historically impacted sites.
• Liability caps and waivers of consequential damages are standard contractual provisions in EPCM agreements, reflecting a common approach to risk allocation between owners and contractors in the industry.

Corporate Governance

Legal Proceedings

• The Project Site is subject to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) due to the presence of Hazardous Substances from historic mining activities.
• Owner has an Administrative Settlement and Order on Consent (ASAOC) with certain Governmental Agencies under CERCLA.
• EPCM's work must be performed in a manner consistent with Applicable Laws and regulations, conforming to site-specific requirements intended to maintain Owner's bona fide prospective purchaser (BFPP) status and other CERCLA defenses.

Stakeholder Impact

• Shareholders: Provides clarity on project development, cost estimates, and a significant step towards project execution, potentially increasing investor confidence.
• Employees: EPCM will assign personnel, and the agreement includes a commitment to use reasonable efforts for local hiring in Idaho.
• Customers: Advancement of the Stibnite Gold Project aims to bring gold and antimony to market, potentially securing future supply.
• Suppliers/Contractors: Hatch will manage procurement for its scope, and PRII will retain direct contractual relationships for excluded scopes, creating opportunities for other contractors.
• Creditors/Lenders: The pursuit of EXIM financing and EPCM's agreement to cooperate with lenders is positive for securing project funding.
• Local Community (Idaho): Explicit mention of local hiring goals indicates potential economic benefits for the region.

Next Steps

• Finalize the Scope of Services (Exhibit A) by February 5, 2026.
• Name a mutually agreeable Project Controls Lead by February 5, 2026.
• Establish a final, mutually acceptable EPCM Baseline Schedule (Exhibit J) by June 1, 2026.
• Establish a final, mutually acceptable form of Process Guarantee (Exhibit F) within 60 Business Days of the agreement's execution.
• EPCM to provide a proposed Manpower Plan for Owner's review and approval within five (5) Business Days of the Effective Date.
• EPCM to provide a procurement plan to Owner within twenty (20) Business Days after the Effective Date.
• Owner to continue pursuing financing from EXIM, with an expected closing in 2026.
• EPCM will actively monitor project progress, incurred costs, and hours charged, issuing Trend Alerts as needed to manage schedule and budget.

Key Dates

Recommendation

This 8-K filing details a crucial step in the Stibnite Gold Project's development by securing a major EPCM contractor and outlining an initial budget. While positive for project de-risking and execution, the budget is an estimate, not a firm commitment, and significant financing (EXIM) is still pending. The project's inherent complexities, including environmental considerations (CERCLA), and the phased finalization of scope and schedule, suggest that while progress is being made, there are still variables that warrant a cautious 'hold' stance rather than an immediate 'buy' or 'sell.' Investors should monitor the finalization of the budget, schedule, and financing.

Keywords

Stibnite Gold Project, EPCM Agreement, Hatch Ltd., Perpetua Resources, Mining Project, Gold Mining, Antimony Mining, Project Development, Construction Management, SEC Filing