TSX-listed Perpetua Resources has entered into a royalty agreement with a wholly-owned subsidiary of Franco-Nevada pursuant to which Perpetua, through its subsidiaries, sold Franco-Nevada a royalty on the future payable silver production from the Stibnite gold project, in the US, in exchange for a cash payment of $8.5-million.
“This transaction allows Perpetua to monetise a non-strategic by-product from the Stibnite gold project and enhance our liquidity to cover a majority of our near-term priorities that are not covered by the funding we’ve received from the Department of Defence to advance permitting and construction readiness,” says Perpetua CEO and president Jon Cherry.
Franco-Nevada will receive all of the payable silver by-product revenue over the life-of-mine, subject to the terms of the agreement.
Silver represents less than 0.3% of projected life-of-mine revenue in a 2020 feasibility study for the project, Perpetua says.
The additional liquidity provided from the upfront payment complements the funding that the company has secured through the US Department of Defence.
Perpetua intends to use the proceeds for general corporate purposes.
“We appreciate Franco-Nevada’s continued confidence and support of the Stibnite gold project. We have been focused on minimising equity dilution and this transaction, combined with the full anticipated amount of Department of Defence funding, represents over $80-million in non-dilutive capital.
“Moving forward, we will continue to evaluate various financing options that unlock shareholder value as we receive permits for our world-class project and transition towards construction,” says Perpetua CFO Jessica Largent.
Perpetua’s proposed Stibnite gold project is designed to re-establish a US source of the critical mineral antimony as a by-product.
The additional funding will allow the company to continue advancing the construction readiness of the project and support general corporate expenses related to its progress through the National Environmental Policy Act review process, led by the US Forest Service, Perpetua points out.