Perpetua tapped for $1.8 billion loan to develop gold-antimony mine in Idaho

A 2020 feasibility study on the project showed proven and probable mineral reserves totalling 104.6 million tonnes grading 1.43 g/t gold and 0.06% antimony, containing 4.8 million oz. of gold and 148 million lb. antimony. Its average annual metal production during the first four years of operation is expected to be approximately 463,000 oz. of gold and 18.4 million lb. of antimony.

Currently, the US produces no antimony and thus is 100% dependent on imports. Meanwhile, its chief rivals China and Russia control over 70% of the global mined supply, according to the US Geological Survey. Nearly half of US imports come from China, the leading producer.

The funding for Stibnite would be made available through the bank’s “Make More in America” and “China and Transformational Exports Program” (CTEP) initiatives, both part of Washington’s strategy to offset China’s critical minerals sector dominance.

It reflects the Biden administration’s aim to use government funds on extractive projects with terms that are more favorable than those from private lenders, a practice the Chinese government has used for years to gain dominance in critical minerals.

According to EXIM, the loan would have a repayment term of 15 years, the same as Stibnite’s mine life, which is much longer than any potential private financing. The interest rate, set a closing, could also be “flexible” given the mine’s Chinese competitors, the bank said.

Perpetua has cleared the initial loan requirements to start the formal application process, which is expected to take 12 months. The letter also allows the company to start negotiations with equipment suppliers.

Upon receipt of an application for financing, EXIM will conduct the due diligence necessary to determine if a final commitment may be issued, it said.

“We are seeing a whole of government approach to bring antimony production home,” Perpetua CEO Jon Cherry said in a news release Monday, adding that the EXIM debt funding could “fund a substantial portion” of the estimated costs to build the Stibnite project.

According to Reuters, the $1.8 billion loan figure is based on an EXIM formula tied to the number of construction, operation and reclamation jobs at the mine. In 2020, the project’s initial cost was estimated at nearly $1.3 billion, which could easily rise due to inflation.

“This loan is a big piece of our financing puzzle,” Cherry said in a statement to Reuters, highlighting that it “provides a lot of certainty to move this project forward.”

The Stibnite project has already received serious financial backing from the US government. The Pentagon has so far committed almost $60 million to fund the mine’s permitting, which would include the cleaning and expanding of a site that was polluted during World War II.

Stibnite now becomes potentially the second mine project to receive billion-dollar backing to expedite its development. Earlier this year, the Department of Energy announced it would lend up to $2.26 billion to build Lithium Americas’ Thacker Pass mine in Nevada, viewed as a pivotal project in the US electric vehicle supply chain.

Perpetua Resources’ shares jumped 7.7% to $5.18 at market open on the announcement, then soared to a 52-week high of $6.16 in the early hours of trading before settling back to $5.88 by 1:35 p.m. ET.

On the TSX, the company has a market capitalization of C$526.3 million ($387.7m).