China's New Export Rules Positive for US Co. With Antimony Mine

Source: Mike Kozak 08/23/2024

For this past-producing operation in Idaho, being advanced toward a restart, “permitting [is] potentially imminent,” noted a Cantor Fitzgerald report.

In a positive development for Perpetua Resources Corp. (PPTA:TSX; PPTA:NASDAQ), owner of the largest antimony reserve in the U.S., China will begin placing export controls on antimony starting Sept. 15, 2024, reported Cantor Fitzgerald analyst Mike Kozak in an Aug. 22 research note. China produces about half of the world’s antimony.

“[The] U.S. must reshore its antimony supply chain. . .now,” wrote Kozak.

A Speculative Buy

Given the announcement by China’s Ministry of Commerce, Cantor reiterated its Speculative Buy rating and CA$18.25 per share one-year target price on Perpetua, noted Kozak.

The return to target from the company’s current price of CA$11.94 is 57%.

Antimony’s Role in Defense

Antimony is a strategic metal with numerous military applications, including ammunition, infrared missiles, night vision goggles, and flame retardants, noted Kozak. To support the U.S. ammunition industrial production base during WWII and the Korean War, Perpetua’s 100%-owned Stibnite mine in Idaho produced antimony during the 1940s and 1950s.

Kozak pointed out that in the Ministry of Commerce’s announcement, it said the government is against any countries using products from China “to engage in activities that undermine China’s national sovereignty, security, and development interests.” This wording seems to refer to the use of antimony for military purposes, the analyst wrote.

Permitting Catalysts Nearing

Today, reported Kozak, Perpetua is advancing Stibnite toward production of gold and antimony via an open-pit mining operation, and the project now is in the permitting stage.

The next steps in the process are to be done by the federal regulatory agency involved, the U.S. Forest Service (USFS), and are expected to be completed soon. The USFS has targeted Q3/24 for publication of its final environmental impact statement and a draft record of decision and Q4/24 for release of its final record of decision.

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Disclosures Cantor Fitzgerald, Perpetua Resources Corp., Aug. 22

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Disclosures as of August 22, 2024

Cantor has provided investment banking services or received investment banking related compensation from Perpetua Resources Corp. within the past 12 months. The analysts responsible for this research report do not have, either directly or indirectly, a long or short position in the shares or options of Perpetua Resources Corp. The analyst responsible for this report has not visited the material operations of Perpetua Resources Corp. No payment or reimbursement was received for related travel costs.

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( Companies Mentioned: PPTA:TSX; PPTA:NASDAQ, )

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