The proceeds from the sale of silver royalty will complement the funding Perpetua has received through the Department of Defense to continue advancing permitting and construction readiness activities at the Stibnite gold project
Perpetua to sell silver royalty from the Stibnite project. (Credit: shamprakash from Pixabay)
US-based mining company Perpetua Resources, through its subsidiaries, has agreed to sell a royalty on the future payable silver production from the Stibnite gold project, for $8.5m in cash.
Perpetua has signed the royalty agreement with a fully owned subsidiary of Canada-based gold-focused royalty and streaming company Franco-Nevada.
Under the terms of the agreement, Franco-Nevada will receive all the payable silver by-product revenue over the life of the mine.
The silver payable to Franco-Nevada represents less than 0.3% of the projected life-of-mine revenue in the 2020 Feasibility Study.
Perpetua intends to use the proceeds from the royalty sale for its general corporate purposes.
The additional liquidity provided from the upfront payment complements the funding that the company has secured through the US Department of Defense
Perpetua Resources president and CEO Jon Cherry said: “This transaction allows Perpetua to monetize 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 Defense to advance permitting and construction readiness.
“Establishing a domestic source of the critical mineral antimony is more important than ever, and we stand ready to responsibly produce critical resources here at home and help strengthen America’s national and economic security.”
Perpetua said that its Stibnite gold project is designed to re-establish a source of the critical mineral antimony as a by-product of one of the highest-grade open pit gold resources in the US.
The additional funding will allow the company to advance the construction readiness of the Stibnite gold project and support general corporate expenses.
The funding will also support the project’s progress through the National Environmental Policy Act (NEPA) review process, led by the United States Forest Service (USFS).
Perpetua Resources CFO Jessica Largent said: “We appreciate Franco-Nevada’s continued confidence and support of the Stibnite Gold Project.
“We have been focused on minimizing equity dilution and this transaction combined with the full anticipated amount of Department of Defense funding represents over $80m 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.”