I. BUSINESS OVERVIEW

Perpetua Resources is a pre-revenue, development-stage mining company with a single asset: the Stibnite Gold Project in central Idaho. The project is a brownfield redevelopment (historical mining 1920s-1990s) designed as an open-pit gold mine with antimony as a critical mineral by-product.

What they produce (eventually): Gold dore bars and antimony-silver concentrate from three deposits — Yellow Pine, Hangar Flats, and West End — processed through a 20,000 tonnes/day facility using flotation, pressure oxidation, and CIP leaching.

Production profile (from 2025 Financial Update):

The antimony by-product credit is the key economic lever. At the Financial Update's consensus antimony price ($10/lb), the credit is $220/oz gold over life of mine. At current spot (≈$30/lb), the credit approximately triples to ≈$650/oz, driving effective gold production cost toward $100-200/oz — first-decile globally.

Revenue mix: Gold dominates regardless of pricing assumptions. At consensus ($2,100 Au, $10 Sb): gold = 89%, antimony = 11%. At current spot ($5,162 Au, $30 Sb): gold = 87%, antimony = 13%. Antimony's impact is not on revenue share but on unit cost reduction through by-product credits.

The antimony angle: Stibnite holds the only identified US antimony reserve (148 Mlbs per USGS). Antimony is a designated US Critical Mineral. China (36.4%) and Russia (29.1%) together control ≈65% of global production. China imposed export controls in September 2024; a temporary suspension for US exports runs through November 27, 2026. At full production, Stibnite would produce roughly 30x current total US antimony output.

Capital costs:

NPV sensitivity (5% discount, after-tax, 100% equity):

The Financial Update explicitly disclaims all figures: "not updated to reflect developments in engineering, contracting, financing and other developments during 2025 and 2026, which, when finalized, may result in material changes to the estimated cash flows."

Mineral reserves (S-K 1300, at $1,600 Au, $3.50 Sb): All Probable, no Proven. Total: 104.6 Mt at 1.43 g/t Au, 0.064% Sb. Contained gold: 4.82 Moz. Contained antimony: 148.7 Mlbs. Additional M&I resources: ≈1.2 Moz Au. Inferred: ≈1.2 Moz Au.

Corporate structure: Incorporated in British Columbia, Canada. Dual-listed on NASDAQ and TSX. Operations entirely in Idaho. Subject to both US and Canadian taxation.

II. FINANCIAL PROFILE

The Story in Four Acts

Act 1 — Permitting (FY2021-2023): Slow burn. Operating cash use of $21-29M/yr. Cash depleted from $48M to $3.2M. Nearly died.

Act 2 — Revival (FY2024): DoD lifeline. Cash bottomed at $3.2M. DPA Title III grants ($33.6M TIA + $3.7M OTIA) partially offset operating losses. Raised $47M equity. Survived.

Act 3 — Transformation (FY2025): All-in. Raised $867M equity across multiple tranches (Jun-Dec 2025) at $13.20-$28.84/share. Share count: 70M to 122M (+73% dilution). Cash: $44M to $720M. Engineering spend doubled. Hatch selected as EPCM contractor.

Act 4 — Construction gate (FY2026+): EXIM binary. $2,215M initial capex required. $720M cash + $172M warrants = $892M. Gap without EXIM: $1.3B. Management: "Would not commence full construction until full project financing is in place."

Income Statement

Zero revenue. The cost structure:

Engineering costs are the dominant and fastest-growing expense: $32.5M of $56.2M exploration spend in 9mo 2025 (58%), up 94% year-over-year as EPCM preparation accelerated.

Balance Sheet

Zero debt. Cash as of December 31, 2025: ≈$720M (includes Q4 strategic placements). Accumulated deficit of $595M+ from 20+ years of development.

Runway

Pre-construction (current): ≈$200M/yr approved spend. Runway at current rate: ≈3.6 years. Full construction (post-FID): ≈$738M/yr. Cash alone covers ≈12 months. EXIM is existential.

Tax Shield

Cumulative NOLs from $595M+ accumulated deficit. Zero effective tax rate through at least FY2025. When production starts, NOLs will shield initial profits. Section 382 limitation explicitly acknowledged — massive 2024-2025 equity raises may have triggered ownership change, capping annual NOL usage. Combined effective rate when applicable: 26.45%.

III. COMPETITIVE POSITION

PPTA has a dual identity: a mid-tier gold developer (commodity, no moat, 88% of revenue) and the only US antimony reserve holder (strategic, defensible, 12% of revenue). The market prices it primarily as the second; the economics are driven by the first.

Antimony Competition

UAMY (US Antimony Corp): Only current US antimony producer and smelter. Awarded $245M sole-source DLA contract (5-year). Revenue guidance $125M FY2026. Stock +422% 1Y. SVP Government Relations Melissa Pagen (Q2 2025): "Only one of us truly has experience with this material." EVP/Chief Mining Engineer Bardswich (Q3 2024) explicitly named Perpetua as an example of what to avoid: "Avoid federal lands, NEPA... like Perpetuate."

USAS/Galena Complex: Largest US antimony mine (561K lbs produced in 2025). JV with UAMY (51%/49%) to build hydromet processing plant in Idaho.

Larvotto/Hillgrove (Australia): Gold-antimony project, ≈5,100 MT/yr antimony (≈7% of global demand). Targeting mid-2026 production — potentially 3 years ahead of PPTA.

Scale comparison: PPTA at full production would be ≈30x current total US antimony production and ≈2x Hillgrove's planned output. But it is 3+ years from first production.

Gold Competition

As a gold producer, PPTA would be mid-tier (≈296 Koz/yr LOM, 463 Koz early years). Gold is a commodity — no customer switching costs, no pricing power. The competitive advantage in gold comes entirely from the antimony by-product credit reducing AISC.

Moat Assessment

The moat is real but narrow: "only US antimony reserve with government backing at scale." And it is conditional on China remaining adversarial on antimony export policy. The temporary suspension through November 2026 means the scarcity narrative can soften.

Cross-Ticker Pattern

"US Critical Minerals / Domestic Security" is emerging as a realized factor, not idiosyncratic to PPTA. Multiple tickers load on the same China export control catalyst: UAMY, USAS, MP (rare earths), UEC (uranium), FEAM (boron), LPTH (germanium). Five companies across different minerals cite identical policy mechanisms (DPA, Office of Strategic Capital, Executive Orders). This is sector exposure, not company-specific alpha.

IV. MANAGEMENT & GOVERNANCE

CEO Transition — Permitter to Builder

Laurel Sayer (CEO 2016-2024) guided PPTA through the entire NEPA process and secured the ROD. Resigned March 2024, transitioned to Senior Advisor.

Jonathan Cherry (CEO March 2024-present) is a mine builder: 33+ years mining, CEO of PolyMet Mining (2012-2023, similar permitting complexity), VP at Resolution Copper / Rio Tinto, General Manager at Eagle Mine / Rio Tinto. The board replaced a permitting CEO with a construction CEO — deliberate timing.

Compensation: Base $660K (raised from $425K in Dec 2025), target bonus 100%, equity 200% of base ($1.32M/yr). One-time PSUs: 100K shares (50K on all permits + 50K on FID). Change-of-control: 2.99x multiplier (maximum before golden parachute tax). PSU benchmark: GDXJ (junior gold miners index).

SVP Projects — Hatch Integration

James Norine hired December 2025 directly from Hatch, where he was Regional Director, Metals, Western USA. Previous VP Projects Michael Wright resigned "effective immediately" December 3 — days before Hatch EPCM was announced. Norine's PSUs: 50% vest on FID, 50% on 50% construction completion.

Board

9 members: 5 independent, 2 Paulson nominees (Chairman Marcelo Kim + Andrew Cole), 2 management (Cherry, CFO Largent). Paulson controls Chairman seat while holding >20% ownership.

Ownership

Insider Buying (Feb 2026 — Code P Open Market Purchases)

Three officers, $4.3M in open market purchases in a single month at ≈$33/share. This is the strongest insider signal available.

Capital Allocation Track Record

Strengths: Survived near-death ($3.2M cash). Raised $867M at progressively higher prices. Attracted strategic investors (AEM, JPM, Hatch). Secured $74.7M in DoD grants. No wasteful M&A — single-asset focus.

Concerns: 73% dilution in 2025. Near-death experience raises earlier planning questions. Zero operating history as a mine builder. $2.2B construction ahead.

V. FACTOR PROFILE

Factor Regression Results

PPTA was regressed against six model specifications. The standard tool (iev regress) using SPY/MTUM/XLB gives a misleading 83% idiosyncratic variance because it uses factors inappropriate for a gold-antimony developer. The correct model:

Factor loadings (correct model):

PPTA = 0.93 x GDXJ + 0.17 x UAMY + 0.20 x SPY + residual

GDXJ (junior gold miners):  β = 0.93    36.4% of variance
UAMY (antimony):            β = 0.17    12.8% of variance
SPY (market):               β = 0.20     1.0% of variance
Idiosyncratic:                           49.8% of variance

%Idio = 49.8% — below the 75% threshold. PPTA is a factor bet, not a company bet.

Return Decomposition (1Y, Mar 2025 - Mar 2026)

PPTA total return:      +301%
  GDXJ contribution:    +169%   (56%)
  UAMY contribution:    +109%   (36%)
  SPY contribution:       +5%   ( 1%)
  Factor total:          +283%   (94%)
  Idiosyncratic:         +18%   ( 6%)

94% of PPTA's trailing return is factor-explained. The idiosyncratic component is positive but small (+18% of +301%). A synthetic portfolio (0.93 x GDXJ + 0.17 x UAMY) returned +317% versus PPTA's +301% — replication outperformed by 16 percentage points, meaning the factor proxies delivered the return more efficiently.

Annualized orthogonal alpha: 12.7% — within Paleologo's realistic 5-15% bound. This is genuine idiosyncratic return, but modest relative to the factor contribution. Risk-adjusted: GDXJ Sharpe (2.42) exceeds PPTA Sharpe (2.15) — the excess return comes from higher volatility (factor + binary risk), not better risk-adjusted performance.

Caveat: Trailing Sharpe ratios are backward-looking. For a stock with binary catalysts (EXIM, FID) that have not yet occurred, backward-looking risk-adjusted metrics capture factor exposure, not catalyst optionality. The 12.7% alpha may represent the market's partial pricing of EXIM probability increasing over the period.

Rolling Correlation: Converging with Sector

60-day rolling correlation with GDXJ has increased from 0.17 (June 2024) to 0.82 (March 2026). Split-period analysis: H1 idio = 75.1% (at threshold), H2 idio = 49.8% (well below). The stock is becoming MORE factor-driven as institutional ownership broadens — the opposite of what an idiosyncratic thesis requires.

Edge Audit

VI. FORWARD EXPECTATIONS GAP

What $32.81 Requires

For a pre-revenue developer, price = probability-weighted option on a mine:

Equity Value = P(success) x [NPV - debt service - remaining equity] + (1-P) x salvage

Estimated NPV at current metals ($5,162 Au, $30 Sb): ≈$9,000-10,000M (extrapolated from Financial Update sensitivity). Adjusted equity NPV if fully built: ≈$8,000M. Salvage value if project fails: ≈$600M.

$4,300M = P x $8,000M + (1-P) x $600M
P(success) = 50%

Market implies a coin flip on reaching production at current metal prices.

Gold Sensitivity Dominates

A $500 move in gold changes implied P(success) by 8-13 percentage points. The stock is more sensitive to gold than to any company-specific variable.

Options-Implied Distribution (Jan 2027 LEAPS, 311 days)

P(below $20):     ≈14%     EXIM fail + gold weakness
P($20-40):        ≈36%     Status quo or delayed catalyst
P(above $40):     ≈50%     EXIM progress + gold holds

Max pain for Jan 2027 LEAPS sits at $20 — 39% below current price. Market makers are hedged around a core value significantly below where the stock trades.

IV term structure shows a trough at 100 days (June 2026 — 76.4%) with re-expansion at 164 days (August — 82.7%). The market prices a binary catalyst resolution in the June-August window, consistent with management's "spring 2026" EXIM board guidance.

Five Disconnects Between Consensus and Reality

1. Capex is understated. Every model uses $2,215M (Q4 2024). The company's own 8-K disclaims this figure. 25% steel tariff (effective March 2025) adds an estimated $50-100M+. PPTA's Phase 1 CERCLA cleanup overran 2.6x ($7.5M to $19.2M). The Hatch EPCM control budget covers $204M in engineering/procurement/construction management services; the remaining capex flows through Hatch-managed procurement but also includes excluded scopes (road, tailings, water treatment, tunnel) that Hatch does not manage. The EPCM is cost-of-services-plus with no guaranteed maximum price. Direction of risk on capex is clearly upward — magnitude is uncertain.

2. All public NPV figures are 78% stale on gold. The Financial Update "Spot" scenario uses $2,900/oz gold. Actual spot: $5,162. Analyst targets ($30-41) appear built on $2,500-3,500 gold assumptions. When models update, targets should rise substantially — but gold could also fall.

3. Three-way circular dependency. EXIM needs binding antimony offtake. Offtake counterparties need committed financing. FID requires both. Management presents these as sequential milestones. They are simultaneous-or-nothing, gated by the slowest element. The December 2025 8-K explicitly linked offtake delays to "ongoing project financing negotiations."

4. Dilution math doesn't close under stress. If EXIM approves $1.5B instead of $2.0B, and capex reaches $2.7B, there is a $680M equity gap — 17-22% additional dilution that no published model incorporates.

5. Franco-Nevada coordination. FNV holds a first-priority lien on all project land and mineral interests. EXIM project debt typically requires first-priority security. Either FNV subordinates (at a cost), EXIM accepts second priority (unusual), or an intercreditor agreement is negotiated (adds time). This structural issue is absent from analyst commentary.

Peer Valuation (EV/NPV)

PPTA's 0.36x EV/NPV is within normal range for a permitted developer. EXIM approval would re-rate it to 0.5-0.7x ($36-50/share). EXIM denial would de-rate it to 0.15-0.25x ($11-19/share).

VII. KEY RISKS

Binary / Existential

EXIM financing. The single largest risk. Without $2B in project debt, the $2,215M+ capex cannot be financed from equity alone without catastrophic dilution. EXIM is a political institution — technical readiness does not equal political certainty. The preliminary term sheet is non-binding and explicitly conditional.

NEPA litigation. Nez Perce Tribe and conservation groups (filed Feb 2025) seek to vacate the ROD, FEIS, Biological Opinions, and enjoin all project implementation. A new dimension: plaintiffs also challenge the validity of certain unpatented mining claims — an attack on title, not just process. If a preliminary injunction is granted, all construction could freeze pending resolution (12-24 months).

Financial

Going concern. PwC issued an explanatory paragraph on PPTA's FY2024 10-K. Non-TIA cash was "expected to be exhausted in the third quarter of 2025." The $867M equity raises resolved this through 2025, but the going concern language reflects the structural reality: the company cannot fund full construction from existing resources.

Capex inflation. The $2,215M estimate is 15+ months stale and explicitly disclaimed by the company. Steel tariffs (25%) and general construction inflation push the direction clearly upward. PPTA's own Phase 1 CERCLA overran 2.6x ($7.5M to $19.2M). Contingency at 8.5% ($192M) may be insufficient. Magnitude of overrun is uncertain, but an updated figure materially above $2,215M should be expected at FID.

Further dilution. Even with full EXIM at $2B, additional equity of $300-500M appears necessary after accounting for pre-FID burn and capex inflation. At current prices: 9-15M additional shares (7-12% dilution). Under stress: significantly more.

Securities class action. Filed February 2025 covering April 2024-February 2025 period. Company "believes claim is without merit." For a company seeking $2B in government financing, ongoing securities litigation adds reputational and distraction risk.

Grant disgorgement. If TIA/OTIA conditions are not met, up to ≈$58M in already-disbursed government funds could be required to be returned. Not accrued as a liability on the balance sheet.

Structural

Franco-Nevada first-priority lien. FNV holds senior security interest on the entire project. Combined with 1.7% NSR on gold, 100% NSR on silver (Years 7-15), and the first-priority lien, FNV has material economic and structural claims ahead of equity.

Paulson concentration. 26% ownership (diluted from 34.8% in March 2025 after $867M equity raises — a 25% relative reduction in control). Still holds 2 board seats (including Chairman) while >20%. De facto veto on strategic transactions. If Paulson decides to exit, the 26% overhang creates persistent selling pressure. At 10-20% ownership, Paulson loses one board seat per IRA terms.

TIA foreign counterparty restrictions. The DPA Technology Investment Agreement "contains limitations on the Corporation's ability to share or sell certain assets, interests or technology to foreign counterparties." This constrains strategic optionality for M&A or partnerships with foreign miners.

Stibnite Foundation payments. Milestone payments triggered by ROD (already occurred Jan 2025), permits, commercial production, and final reclamation. During production: a percentage of Total Comprehensive Income less debt repayments, with annual minimums. Dollar amounts redacted in filings. Functions as a perpetual royalty-like encumbrance on equity returns, in addition to Franco-Nevada's 1.7% NSR.

Dual taxation. Subject to both Canadian and US taxation. Structural inefficiency irrelevant until production but material at scale.

Operational

Construction execution. $2.2B+ capex for a company with zero mine-building history. Cherry has construction experience but not as CEO of a $2B+ build. The Hatch EPCM is cost-of-services-plus (no guaranteed maximum price). While Hatch manages procurement and construction across most scopes, several major items are excluded from Hatch's management entirely: the Burntlog access road (≈40 miles), tailings storage facility, water treatment, and diversion tunnel — each a significant cost and schedule risk.

Antimony processing. The INL pilot plant partnership (December 2025) to demonstrate feasibility of producing military-spec antimony trisulfide suggests the processing pathway is not yet fully validated.

China export suspension. The temporary antimony export suspension through November 2026 means the scarcity narrative is conditional on policy. If China opens supply permanently, antimony prices normalize and the strategic premium compresses.

VIII. WHAT TO WATCH

Primary Signals

Hatch Tranche 2 share issuance. 69,348 shares issue on the later of FID and signing definitive project financing. This is a direct, public, binary confirmation that both FID and financing are complete. Track via Form 4 / insider transaction filings.

EXIM board consideration. Management guides "spring 2026." IV term structure prices a catalyst resolution in the June-August window. Any public announcement of board scheduling, approval, or denial is the primary catalyst.

Antimony offtake announcement. Pushed to 2026, linked to financing negotiations. Resolution of the chicken-and-egg dependency is likely simultaneous with EXIM — watch for a package announcement.

Secondary Signals

Updated capex estimate. The Financial Update is stale. Any new engineering cost disclosure (FID announcement, investor presentation update, or 10-K update) will reveal the true capex. Watch for numbers north of $2.5B.

Nez Perce litigation. Preliminary injunction motion is the critical near-term legal event. A granted injunction freezes construction; a denied injunction clears a significant overhang.

Gold price. PPTA's dominant factor loading (0.93 x GDXJ). A sustained move below $4,000/oz would make the current stock price require >85% P(success) — mathematical stress. Above $6,000, even a failed EXIM scenario still leaves a valuable option.

China antimony policy. November 27, 2026 suspension expiry. Reimposition = scarcity returns, antimony spikes. Extension = supply normalizes, strategic premium compresses.

Counterparty Behavior

AEM activity. CEO Al-Joundi (Q3 2025), paraphrasing a senior geologist: "the most exciting U.S. gold project in many years." Framed as Orla playbook (invest early to learn). Note: AEM's Orla precedent ended with a profitable EXIT, not an acquisition — the playbook can go either way. Watch for: additional equity purchases, board involvement, or conversely, share dispositions.

FNV guidance updates. Stibnite has appeared in FNV's 5-year GEO guidance for 4 consecutive quarters (targeting 2029 contribution). Any removal or timeline change in FNV's guidance is a strong negative signal from a counterparty with real money at stake.

Insider transactions. $4.3M in open market buying in February 2026 from 3 officers. Continuation of buying = continued insider conviction. Any selling (Code S, not M/F) would be a reversal signal.

IX. FACTOR PROFILE: LR SIGNAL

LR = 0.9 (mild bearish — analysis roughly confirms market pricing)

The market prices PPTA at ≈50% P(success) at current metals. This is approximately correct, perhaps slightly low given the Hatch EPCM contract language (EXIM foreclosure provisions, step-in rights) suggesting advanced project finance structuring. Against this: capex inflation risk and the EXIM/offtake/FID circular dependency are modestly bearish disconnects not fully reflected in consensus.

Factor profile context: %Idio = 49.8% is below the 75% portfolio construction target. This does not mean the stock should be rejected — the framework prescribes hedging the non-edge factor exposure (GDXJ), not passing entirely. The backward-looking factor analysis captures factor loading, not forward catalyst optionality. Three officers buying $4.3M at ≈$33 in February 2026 is a strong signal that insiders see company-specific value the factor model cannot capture — they are buying the EXIM catalyst, not gold exposure.

The honest framing: PPTA has genuine company-specific catalysts (EXIM, FID) that may be modestly underpriced based on filing evidence. But ≈93% of the position's trailing variance comes from gold/antimony factors where we have no edge. The correct sizing response is small, hedged, and catalyst-contingent — not zero.

The dominant driver of this stock's future returns will be gold price, not company-specific catalysts. A gold thesis is not a PPTA thesis. But company-specific catalysts exist and are potentially mispriced.

Evidence

Coverage based on: 10-K (FY2024), six 8-K filings (Nov 2025 - Mar 2026), 5,457 earnings transcripts cross-searched, factor regression (6 model specifications, statsmodels OLS, 1Y daily returns), 21 worldview evidence items, 4 pending predictions, yfinance market data and options chain. All primary sources. No summaries or secondary research used.