What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-03-19 compared with 2024-03-26 · 171 added, 142 removed, 139 unchanged (69% of the section changed)

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The Corporation’s principal asset is 100% ownership in subsidiaries that control the Stibnite Gold Project.

The Corporation currently operates in one segment, mineral exploration in the United States.

The registered office of the Perpetua Resources is Suite 1008-550 Burrard St, Vancouver, BC, V6C 2B5, Canada and the corporate head office is located at 201-405 S 8th St, Boise, ID 83702, USA.

The Corporation currently operates in one segment:

mineral exploration in the United States.

The registered office of Perpetua Resources is Suite 1008-550 Burrard St, Vancouver, BC, V6C 2B5, Canada and the corporate head office is located at 201-405 S 8th St, Boise, ID 83702, USA.

2024 Key Highlights

● Zero lost time incidents or reportable environmental spills.

● The 75-day comment period on the Supplemental Draft Environmental Impact Statement (“SDEIS”) for the Stibnite Gold Project concluded with more than 15,000 letters submitted in support of the Project.

● Added to the Russell 2000® Index and the broad-market Russell 3000® Index.

● Held 2024 Annual General Meeting and shareholders voted in favor of all proposals.

● Published 2022 Sustainability Report, the Company’s tenth annual sustainability report.

● Signed definitized Technology Investment Agreement (“TIA”) for critical minerals award of $24.8 million under Title III of the Defense Production Act.

● Clean Water Act Settlement Agreement with the Nez Perce Tribe filed in the U.S.

District Court for the District of Idaho.

● Continued voluntary legacy waste cleanup and water quality improvement actions in historical Stibnite Mining District.

● Appointed Vice President of Projects to lead the Stibnite Gold Project.

● Awarded up to $15.5 million in DOD funding to demonstrate a fully domestic antimony trisulfide supply chain.

● Published 2023 Sustainability Report, the Company’s eleventh annual sustainability report.

● Appointed mining industry veteran Jonathan Cherry as new President and CEO, and as a Director.

● Received $8.5 million in cash from Franco-Nevada through a new royalty agreement for net smelter return royalty on future payable silver production from the Project properties.

● Awarded additional funding of up to $34.4 million under the Technology Investment Agreement (“TIA”) under Title III of the Defense Production Act (“DPA”).

● Received indication for up to $1.8 billion financing from the Export-Import Bank of the United States (“U.S.

EXIM”) for the Project.

● United States Forest Service (“USFS”) published the Final Environmental Impact Statement (“FEIS”) and issued a Draft Record of Decision (“DROD”) for the Project.

● Closed $33.6M equity financing in November.

● Announced agreements with Sunshine Silver and U.S.

Antimony in December to advance domestic antimony supply chain.

Recent Highlights

● Appointed mining veteran Jonathan Cherry as new President and CEO and to the Board

● Appointed Jessica Largent, Chief Financial Officer, to the Board

● Received $8.5 million in cash from Franco-Nevada through a new royalty agreement for net smelter return royalty on future payable silver production from the Project properties to Franco-Nevada

● Awarded additional conditional funding of up to $34.6 million under the TIA

● USFS issued the Final Record of Decision (“ROD”) for the Project on January 3, 2025.

● Successful completion of Basic Engineering and publication of Financial Update (as defined herein) of the Stibnite Gold Project.

● Executed procurement contract with Idaho Power to begin down payments on several critical long-lead power line items.

2025 Outlook and Goals

Perpetua Resources’ vision is to provide the United States with a domestic source of the critical mineral antimony, develop one of the largest and highest-grade open pit gold mines in the country and restore an abandoned brownfield site.

In 2024, Perpetua Resources will continue to focus on advancing the permitting for the Stibnite Gold Project through the National Environmental Policy Act (“NEPA”) process in addition to state ancillary permits and other federal authorization.

The NEPA process is intended to ensure that federal agencies and the public are informed of a proposed action’s potential environmental impacts before a final decision is made by the agency regarding the action.

The Company is also advancing construction readiness activities in parallel with the permitting process.

In response to public and agency feedback on the Draft Environmental Impact Statement (“DEIS”) released by the United States Forest Service (“USFS”) in August 2020, Perpetua Resources proposed modifications to the mine plan analyzed in Alternative 2 in the DEIS and submitted a refined proposed action to the USFS in December 2020 (the “Modified Mine Plan”).

The Modified Mine Plan included refinements to reduce the project footprint, improve water quality, and lower water temperature.

The USFS decided to prepare a Supplemental Draft Environmental Impact Statement to further evaluate the project refinements and compare the Company’s proposed site access via Burntlog Route to another action alternative utilizing current roads.

After nearly two years of review of the Modified Mine Plan by the USFS and other agencies, the SDEIS was published on October 28, 2022 for a 75-day public comment period.

In the SDEIS, the USFS highlighted the net positive environmental outcomes that the Stibnite Gold Project can provide to the abandoned mine site based on the results of comprehensive scientific analysis conducted over the last six years.

The USFS identified Perpetua Resources’ proposed action, the “Modified Mine Plan,” as the Preferred Alternative and also concluded the Preferred Alternative would reasonably accomplish the purpose and need for consideration of approval of the Stibnite Gold Project, all while considering environmental, economic, and technical factors.

Under NEPA, a “Preferred Alternative” is identified by a Federal agency in a DEIS to advise the public which action the agency is leaning toward selecting as final.

However, identification by an agency of a “Preferred Alternative” does not represent a final decision and the USFS may still select an action based on the Modified Mine Plan or a combination of each of the alternatives analyzed in the SDEIS when developing the Final Environmental Impact Statement (“FEIS”).

The SDEIS public review period closed on January 10, 2023.

On January 1, 2024, the USFS released an updated schedule for the Project.

Based on the updated schedule, the Company anticipates that the USFS will publish a FEIS and a Draft Record of Decision in the second quarter of 2024 and a Final Record of Decision (“ROD”) in the fourth quarter of 2024.

The USFS has confirmed that cooperating agency review of the FEIS is nearing completion and is focused on progressing both documents towards final consultations and reviews in Washington D.C.

The publication of the permitting schedule does not indicate any commitments on the part of the USFS regarding the content or timing of a final decision.

In developing the FEIS, the USFS may select an action based on components of each of the alternatives analyzed in the SDEIS.

Furthermore, the USFS is not bound by the permitting schedule and anticipated milestones may be delayed materially or not be satisfied.

In 2025, Perpetua Resources is focused on receiving the final permits for the Stibnite Gold Project to support a construction decision in 2025 and advancing execution planning to prepare the Project to be construction-ready once all required permits are received.

NEPA Permitting Update

On September 6, 2024, the USFS published the FEIS and a DROD for the Stibnite Gold Project.

The FEIS analyzes the potential environmental effects and benefits of the mining and reclamation activities proposed as part of the Stibnite Gold Project.

The DROD outlined the USFS’s proposed decision to authorize the Modified Mine Plan and to approve a special use authorization for transmission line upgrades and installation of a new power transmission line with supporting infrastructure.

On January 3, 2025, the USFS published the ROD and FEIS Errata authorizing the Modified Mine Plan for the Project.

Per the requirements of the FEIS and ROD, numerous plans comprising the suite of Environmental Monitoring and Management Plans are in process and will incorporate Project updates as well as required mitigation measures, environmental protection measures, financial assurance, and design features.

This will include preparation of a Final Mine Plan of Operations.

Following the USFS’ publication of the ROD and FEIS authorizing the mine plan for the Project, claims were filed against the USFS, USDA, and other federal agencies on February 18, 2025 in the United States District Court for the District of Idaho by a number of claimants, including Save the South Fork Salmon, the Idaho Conservation League and other non-governmental organizations, alleging violations of NEPA and other federal laws in the regulatory process.

Among other remedies, the claimants seek to vacate the ROD, FEIS, Final Biological Opinions and Project approvals and enjoin any further implementation of the Project.

PRII has filed a motion with the court to intervene in this lawsuit.

The Company believes the federal permitting process was conducted thoroughly and completely by the relevant federal regulatory agencies.

However, there can be no assurance that the ROD, FEIS, and other Project approvals will be upheld upon judicial review.

The Company’s CWA Section 404 permit application, proposed Compensatory Mitigation Plan, and associated financial assurance remain under review by the Army Corps after the public comment period ended in October 2023.

The Army Corps has been a part of the review process as a cooperating agency since the Company began the federal NEPA process and has been formally evaluating the Section 404 permit application since 2023.

The Section 404 permit is the last remaining federal permit required to be issued prior to a construction decision.

Perpetua expects the permit to be issued in the first half of 2025.

For additional detail regarding the NEPA process, including ongoing challenges to the ROD, see Item 1, Business – Permitting and Environmental Matters .

Ancillary Permitting Update

The Company continued to advance work on several ancillary permits in 2023 which are being progressed in parallel with the NEPA process.

Recent updates include:

● The public comment period on the Company’s 404 permit application and Compensatory Mitigation Plan to the U.S.

Army Corps of Engineers ended in October 2023.

With receipt of the ROD, the Corporation is focused on advancing the Project towards a construction decision, including finalizing the remaining federal and state permits and securing project financing.

Recent permitting updates include:

Fish and Wildlife Service issued its Final Biological Opinion on September 6, 2024 and the National Marine Fisheries Service issued its Final Biological Opinion on October 7, 2024.

● In May 2024, the Idaho Department of Environmental Quality (“IDEQ”) issued its final CWA Section 401 Water Quality Certification for the Project (the “Certification”).

In the third quarter of 2024, certain parties initiated a state administrative challenge to the Certification that will require a contested case hearing on certain issues.

IDEQ recently filed an extension request in this proceeding that will require rescheduling of the hearing date that had been set for April 2025.

The new hearing date has not yet been set.

● IDEQ issued a Clean Air Act Permit to Construct (“PTC”) in 2022 that was followed by certain state administrative challenges.

In the third quarter of 2024, the Board of IDEQ issued an order remanding the PTC for a contested case hearing on certain matters.

The hearing was held in October 2024 and the hearing officer issued his decision January 7, 2025 finding in favor of IDEQ and Perpetua on all issues.

The petitioners in the contested case subsequently filed an appeal to the IDEQ Board, which has scheduled oral argument on the appeal for April 2025.

● The Company received a completeness determination from IDEQ on November 2, 2024 for the Project’s cyanidation facility permit and a completeness determination from Idaho Department of Lands on November 6, 2024 for the Project’s cyanidation facility Permanent Closure Plan.

On January 1, 2025, the IDEQ completed the Accuracy and Protectiveness Review for certain portions of the permit application and issued a draft cyanidation permit with respect to those portions for a 60-day public comment period.

● On January 24, 2025, the Director of the IDWR issued a final order granting the Company’s application for certain water rights to be used in connection with the Project.

● The Idaho Ground Water Management Final Point of Compliance determination was issued in August 2023 and the Company submitted the required groundwater sampling and well installation plans in October 2023.

● The Company submitted a Tailings Storage Facility (“TSF”) dam safety application to Idaho Department of Water Resources (“IDWR”) in July 2023.

IDWR sent a letter of conditional approval for the Company’s Stage 1 TSF in October 2023.

● The Company submitted a cyanidation facility permit application in August 2023 to the Idaho Department of Environmental Quality (“IDEQ”).

IDEQ issued a letter of incompleteness in September 2023.

The Company expects to resubmit an updated permit application in the second quarter of 2024.

● The Final Point of Compliance determination was issued in August 2023 and the Company submitted the required groundwater sampling and well installation plans in October 2023.

Previously submitted permit applications that are continuing through the administrative process and include Clean Air Act Permit to Construct and Idaho Pollutant Discharge Elimination System industrial outfalls with IDEQ in addition to water rights with IDWR.

Previously submitted permit applications are continuing through the administrative review process.

These include applications and plans to IDEQ for the Idaho Pollutant Discharge Elimination System discharge permits, to IDWR for financial assurance, and to IDWR for a stream alteration permit.

Department of Defense Funding

In September 2022, Perpetua Resources was awarded two funding grants of $100,000 each from the U.S.

Department of Defense (“DOD”) Defense Logistics Agency (“DLA”) under DLA’s “Production of Energetic Materials and Associated Precursors” Small Business Innovation Research (“SBIR”) grant solicitation to study the domestic production of military-grade antimony trisulfide, an essential component in ammunition and dozens of other defense materials.

Department of Defense (“DOD”) Defense Logistics Agency (“DLA”) under the DLA’s “Production of Energetic Materials and Associated Precursors” Small Business Innovation Research (“SBIR”) grant solicitation to study the domestic production of military-grade antimony trisulfide, an essential component in ammunition and dozens of other defense materials.

As described in the grant’s objective, the program is focused on reducing “foreign reliance and single points of failure for the domestic manufacturing of energetic materials” through the development of a domestic source.

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Under the DLA grants, Perpetua Resources evaluated whether antimony from the Stibnite Gold Project can meet military specifications (“mil-spec”) and also evaluated alternate methods for synthesizing antimony trisulfide.

During the years ended December 31, 2023 and 2022, $124,997 and $75,000, respectively, was recognized as grant income for these grants.

During the years ended December 31, 2024 and 2023, $nil and $124,997, respectively, was recognized as grant income for these grants.

The programs were complete in September 2023 and no further grant income is anticipated under these grants.

In December 2022, Perpetua Resources was awarded an undefinitized TIA of up to $24.8 million under Title III of the DPA.

On July 25, 2023, the TIA was definitized with the DOD, establishing the full not-to-exceed amount of $24.8 million.

On July 25, 2023, the TIA was definitized with the DOD, establishing the full not-to-exceed amount of $24.8 million and on May 2, 2024, the TIA was modified with an additional $34.4 million in funding, bringing the total amount of available funding under the TIA to $59.2 million.

The funding objective of the TIA, issued by the Air Force Research Laboratory, is to complete environmental and engineering studies necessary to obtain a FEIS, a ROD, and other ancillary permits to sustain the domestic production of antimony trisulfide capability for defense energetic materials.

The DPA funding allows the Company to advance the construction readiness of the Stibnite Gold Project while the Company continues through the ongoing permitting process, led by the USFS.

Under the funding agreement, Perpetua Resources may request reimbursement for certain costs incurred over 24 months related to environmental baseline data monitoring, environmental and technical studies and other activities related to advancing Perpetua’s construction readiness and permitting process for the Stibnite Gold Project.

The DPA funding does not interrupt the ongoing NEPA review process.

Under the funding agreement, Perpetua Resources may request reimbursement for certain costs incurred through June 16, 2025 related to environmental baseline data monitoring, environmental and technical studies and other activities related to advancing Perpetua’s construction readiness

and permitting process for the Stibnite Gold Project.

The DPA funding does not interrupt the completed and ongoing permitting process.

The TIA contains customary terms and conditions for technology investment agreements, including ongoing reporting obligations.

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government funding opportunities, including programs available through the DOD.

On February 12, 2024, the Company announced a conditional award of up to $34.6 million in additional funding under the TIA.

Full funding of the additional award is conditioned on modifying the existing TIA to expand the in-scope work for advancing permits and construction readiness and to extend the outside date to June 30, 2025.

The amendment will not change any other material terms of the definitized TIA.

The modification is anticipated to be completed in the first quarter of 2024.

During the year ended December 31, 2024, $33,619,111 was recognized as grant income related to the TIA.

Subject to approval of the TIA in-scope modification, the Company anticipates recognizing approximately $37,000,000 of additional grant income in 2024.

The Company anticipates recognizing the remaining funds of approximately $10,000,000 as reimbursement for expenses expected to be incurred through June 16, 2025.

During the year ended December 31, 2024, the Company was reimbursed $32,468,545 for certain costs incurred.

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Under the OTIA, the Company will be reimbursed for these activities on a cost-plus, fixed-fee basis over the 24-month period of performance.

The current estimated amount is $15.5 million, which is subject to adjustment by the DOD based on scope, costs, budget, or other factors as the program advances.

As of December 31, 2024, the current estimated amount of available funding was $15.5 million, which is subject to adjustment by the DOD based on scope, costs, budget, or other factors as the program advances.

Perpetua will be entitled to reimbursement for all costs incurred under the agreement, with the negotiated fee being 12%.

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Construction Readiness Activities

The Company is advancing construction readiness activities in parallel with the permitting process and these activities are reimbursable under the DPA funding outlined above.

The Company is advancing construction readiness activities in parallel with the permitting process.

Recent updates include:

● Appointed mining veteran Jonathan Cherry as new President and CEO

● Appointed mining industry veteran Jonathan Cherry as new President and CEO;

● Appointed Vice President of Projects to lead the Stibnite Gold Project;

● Completed project execution planning and scheduling;

● Continued construction manager general contractor contract negotiations with Ames Construction, while advancing constructability reviews, value engineering studies, and detailed engineering for the Burntlog Route, the Company’s proposed access route, with Ames and the road design consultants,

● Continued power line detailed scoping and engineering with Idaho Power, who has now engaged Kiewit, and identified long-lead items required for power line construction;

● Issued a Request for Proposal for Basic and Value Engineering

● Executed construction manager general contractor contract with Ames Construction, while advancing constructability reviews, value engineering studies, and detailed engineering for the Burntlog Route, the Company’s proposed access route, with Ames and the road design consultants;

● Continued power line detailed scoping and engineering with Idaho Power, who has engaged Kiewit, and identified and initiated procurement of long-lead items required for power line construction;

● Ausenco Engineering USA South Inc.

(“Ausenco”) was awarded Basic and Value Engineering Scope for the Stibnite Gold Project and Basic Engineering work was completed with updated Capital and Operating Costs;

● Hired key subject matter experts for the Owner’s Team to guide Basic Engineering and overall construction readiness;

● Commencement of detailed engineering studies with Ausenco;

● Agreements with Sunshine Silver and U.S.

Antimony signed in December 2024 to advance domestic antimony supply chain;

● Awarded early contractor involvement contracts to Ames, Ledcor and Sundt for early works planning and execution plan development.

On February 13, 2025, Perpetua entered into an agreement with Idaho Power Company (“IPCo”) to begin procurement of long lead equipment required to increase the electrical capacity to the plant.

This is an important step to ensure parts are available for installation under a future construction agreement.

Under the terms of the agreement, Perpetua is responsible for paying all costs incurred by IPCo as they procure new equipment from vendors with an estimated cost of $90.2 million.

All contractual commitments of $1.0 million or greater must be approved by Perpetua prior to IPCo entering a binding contractual commitment with a vendor.

The initial payment of $18.8 million was paid following execution and remaining payments are expected to be made quarterly through 2027.

Payment dates and amounts may be adjusted to reflect specific contracts entered into by IPCo.

If the agreement is terminated, IPCo will use commercially reasonable efforts to mitigate cancellation costs and recover value prior to the final true-up payment by Perpetua or refund to Perpetua.

Franco-Nevada Silver Royalty

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Perpetua intends to use the proceeds for general corporate purposes.

Nez Perce Tribe Litigation Settlement

On August 8, 2023, the Company and the Nez Perce Tribe (“Parties”) filed a final Settlement Agreement (“Settlement Agreement”) to resolve a Clean Water Act (“CWA”) lawsuit brought by the Nez Perce Tribe in 2019.

The Settlement Agreement provides for total payments of $5.0 million by Perpetua over a four-year period, which includes $4.0 million of contributions by Perpetua to a South Fork Salmon Water Quality Enhancement Fund to be used by the Nez Perce Tribe to support water quality improvement projects in the South Fork Salmon River watershed, and $1.0 million of reimbursements to the Nez Perce Tribe for legal expenses.

Perpetua intends to fund these payments from cash on hand or funds expected to be raised in connection with construction of the Project.

Following a 45-day review period by the United States Justice Department and the U.S.

Environmental Protection Agency (the “U.S.

EPA”), the U.S.

District Court for the District of Idaho approved the Stipulation for Dismissal and entered a Judgment on October 2, 2023 which resulted in the CWA lawsuit being dismissed without prejudice.

Under the Settlement Agreement, a dismissal with full prejudice will follow after completion of Perpetua’s required payments.

See Note 10 to the Consolidated Financial Statements for the year ended December 31, 2023 for more information regarding the CWA lawsuit and the terms of the settlement.

After giving effect to the receipt of the $8.5 million upfront payment from Franco-Nevada under the silver royalty on March 21, 2024, the Company’s latest liquidity forecast indicates that available cash resources are expected to be exhausted in the fourth quarter of 2024.

Although the Company’s current capital resources and liquidity include up to $24.8 million in total funding awarded under the TIA pursuant to Title III of the DPA ($59.4 million upon modification of the TIA to effect an additional conditional award of $34.6 million), such funding is available only for the specified costs related to permitting, environmental baseline data monitoring, environmental and technical studies, and advancing construction readiness and is not available to fund the Company’s costs under its ASAOC obligations and certain corporate expenses, including under the Settlement Agreement.

Although we expect the DPA funding to provide the Company with sufficient liquidity to complete permitting and environmental monitoring activities on the current timeline as well as additional liquidity to begin advancing construction readiness in 2024, due to costs of the ASAOC restoration obligations, payment obligations under the Settlement Agreement and other corporate expenses, we do not expect the Company will have sufficient assets to discharge its liabilities as they become due for at least 12 months from the date hereof.

Absent additional financing, the Company would no longer be able to meet its ongoing obligations or progress critical permitting efforts.

The Company’s latest liquidity forecast indicates that available cash resources for expenses not eligible for reimbursement under the DPA funding are expected to be exhausted in the third quarter of 2025.

The Company expects to incur other costs in the foreseeable future that are not eligible for DPA funding reimbursement and may incur unanticipated increases to costs as a result of inflation, increased fuel or labor costs or other factors.

Furthermore, only approximately $10 million remained available for reimbursement under the TIA as of December 31, 2024, and costs must be incurred on or before June 16, 2025 to be eligible for reimbursement.

Once such funding is exhausted or has expired, the Company will need to seek new funding sources for expenses currently reimbursed through the DPA funding.

The Company continues to explore various funding opportunities, which may include the issuance of additional equity, new debt, or project specific debt;

government funding;

and/or other financing opportunities.

and/or other financing or strategic opportunities.

In particular, the Company has engaged RBC Capital Markets and Endeavour Financial to assist with the evaluation of potential strategic and financing opportunities and to support the Company’s application process in connection with the U.S.

EXIM $1.8 billion Letter of Interest received in April 2024.

Any such financing or strategic transaction, or any funding commitment from U.S.

EXIM, will be subject to due diligence, the negotiation of funding terms and other conditions, and there can be no assurance of the amount, timing or nature of any such financing or strategic transaction, if any, and any such financing or strategic transaction may not be consummated at all.

Additionally, the potential costs of obtaining such financing or any strategic transaction can be significant and may put additional strains on our cash flows.

Absent additional financing, the Company would no longer be able to meet its ongoing obligations or advance construction readiness activities.

See “— Liquidity and Capital Resources ” for more information.

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OTHER EXPENSES (INCOME)

Change in fair value of warrant derivative

Foreign exchange loss (income)

Interest income

Other expenses (income)

Total other expenses (income)

Net loss for the year ended December 31, 2024, was $14.5 million compared with a net loss of $18.8 million for 2023.

This $9.9 million decrease for the year was primarily attributable to a $21.0 million increase in grant income, a $3.7 million decrease in environmental liability expense, and a $0.7 million decrease in professional fees.

These changes were offset by a $10.8 million increase in exploration costs and a $5.0 million charge for the CWA settlement expense.

This $4.3 million decrease for the year was primarily attributable to a $16.3 million increase in grant income and a $5.0 million decrease in CWA settlement expense.

These changes were partially offset by a $15.4 million increase in exploration costs, a $0.7 million increase in corporate salaries and benefits, and a $0.6 million increase in environmental liability expense.

As noted above, for the year ended December 31, 2024, the Corporation’s main focus was the continued evaluation and advancement of the Stibnite Gold Project.

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This expense results from salaries and benefits of the employees that are not directly related to the exploration and evaluation of the Stibnite Gold Project, primarily corporate employees.

Salaries and benefits for the year ended December 31, 2023 were $0.1 million, or 7.0%, lower than the previous year due to a higher corporate salary allocation in the previous year.

Salaries and benefits for the year ended December 31, 2024 were $0.7 million, or 37.1%, higher than the previous year due to a higher corporate salary and higher share-based compensation.

Directors’ Fees

Each of the Corporation’s non-executive directors is entitled to annual base fees paid in quarterly installments, with the Independent Lead Director, Chairs of Board Committees and Members of Board Committees receiving additional fees commensurate with each role.

Directors’ fees are inclusive of cash fees and share-based compensation (deferred share units and stock options).

This expense for the year ended December 31, 2023, is $0.2 million, or 30%, lower than the previous year primarily due to lower share-based compensation expense.

Directors’ fees are inclusive of cash fees and share-based compensation (deferred share units and share purchase options).

This expense for the year ended December 31, 2024, is $0.1 million, or 15.4%, higher than the previous year primarily due to higher share-based compensation expense.

This expense relates to all exploration and evaluation expenditures related to the Stibnite Gold Project, including labor, drilling, field office costs, engineering, permitting, environmental and legal and sustainability costs.

The Company’s exploration expenses of $29.9 million during the year ended December 31, 2023 are $10.8 million, or 57%, higher than the previous year primarily due to a $9.0 million increase in engineering, a $1.0 million increase in consulting and labor costs, a $0.9 million increase in permitting, and a $0.6 million increase in field office and drilling support partially offset by a $0.6 million decrease in legal and sustainability.

Engineering expenses for the year ended December 31, 2023 were higher than the previous year due to advancing construction readiness engineering and planning.

The Company’s exploration expenses of $45.3 million during the year ended December 31, 2024 are $15.4 million, or 51.4%, higher than the previous year primarily due to a $13.4 million increase in engineering costs, a $1.9 million increase in consulting and labor costs, and a $1.2 million increase in field office and drilling support costs partially offset by a $0.9 million decrease in permitting costs.

Engineering expenses for the year ended

December 31, 2024 were higher than the previous year due to advancing construction readiness engineering and planning.

Additional details of expenditures incurred are as follows:

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Cost estimates were developed with the use of engineering consultants, independent contractor quotes and the Company’s internal development team, and the timing of cash flows is based on the current schedule for early action items.

In the year ended December 31, 2023, the total cost estimate to complete Phase 1 early cleanup actions decreased $3.7 million over the same period in 2022 driven by a lower estimated increase in the current period for the remaining work to be performed.

As of December 31, 2023, the estimate for the remaining environmental liability was $0.8 million.

In the year ended December 31, 2024, the total cost estimate to complete Phase 1 early response actions increased $0.6 million compared to the same period in 2023, driven by a higher estimated increase in the current period for the remaining Phase 1 work to be performed.

As of December 31, 2024, the estimate for the remaining environmental liability for Phase 1 work under the ASAOC is $nil.

CWA Settlement Expense

This expense relates to the settlement with the Nez Perce Tribe to resolve the CWA litigation.

The Settlement Agreement provides for total payments of $5.0 million by Perpetua over a four-year period.

The Settlement Agreement provides for total payments of $5.0 million by the Company over a four-year period.

The Company recognized $5.0 million in 2023 for this settlement.

$2.0 million of the settlement is payable in 2024.

During 2024, the Company paid $2.0 million against this payable and a total balance of $3.0 million is accrued as of December 31, 2024.

General and Administration

This expense is predominantly insurance policies for the U.S.

offices and is $0.1 million, or 19%, lower for the year ended December 31, 2023 than the previous year primarily due to lower insurance premiums.

This expense is related predominantly to the costs of insurance policies for our U.S.

offices and is 4.1%, lower for the year ended December 31, 2024 than the previous year.

Professional Fees

This expense relates to the legal, accounting and consulting costs of the Corporation.

The expense for the year ended December 31, 2023 is $0.7 million, or 36%, lower than the previous year primarily due to legal and consulting work related to new filings required as a U.S.

domestic issuer and the associated costs in 2022.

Accounting expenses for the year ended December 31, 2022 were higher due to accounting fees related to the change in the basis of accounting for the Company’s consolidated financial statements from international standards to U.S.

The expense for the year ended December 31, 2024 is $0.1 million, or 7.1%, higher than the previous year primarily due to an increase in accounting and auditing fees and legal costs.

Shareholder and Regulatory

This expense relates to marketing, licenses and fees, and shareholder communications.

The expense for the year ended December 31, 2023 is $0.2 million, or 24%, lower than the previous year primarily due to a larger number of public filings and fees incurred during 2022.

Change in Fair Value of Warrant Derivative

The Corporation issued 200,000 warrants in a financing transaction in May 2013, with an exercise price denominated in Canadian dollars.

The Corporation determined that warrants with an exercise price denominated in a currency that is different from the entity’s functional currency should be classified as a derivative and carried at their fair value.

Any changes in their fair value from period to period have been recorded as a gain or loss in the Consolidated Statements of Operations.

There are no circumstances under which Perpetua Resources will be required to pay cash upon exercise or expiry of the warrants or finder’s options (see Note 6 in the Consolidated Financial Statements).

The gain on the change in fair value of warrants decreased $0.1 million or 98% in 2023 compared to 2022.

The warrants expired unexercised in 2023.

Foreign Exchange Loss

Changes in foreign exchange are driven by the change in value of the Canadian Dollar compared to the U.S.

Dollar and the impact the change has on transactions associated with the Corporation’s Canadian dollar denominated balances.

The impact was less during the year ended December 31, 2023 compared to the same period of 2022 primarily due to less cash being held in Canadian currency during the 2023 period.

The expense for the year ended December 31, 2024 is $0.02 million, or 4.8%, higher than the previous year primarily due to an increase in licenses and fees.

This income is from funding grants awarded to the Company from the DOD to study the domestic production of military-grade antimony trisulfide and to complete environmental and engineering studies necessary to obtain a FEIS, a ROD, and other ancillary permits to sustain the domestic production of antimony trisulfide capability for defense energetic materials.

During the year ended December 31, 2023, grant income increased $21.0 million as a result of two new larger grants received during the year (see Note 11 in the Consolidated Financial Statements).

During the year ended December 31, 2024, grant income increased $16.3 million as a result of two new larger grants received during 2023 that continued in 2024.

See also Note 10 to the Consolidated Financial Statements.

Interest Income

This income results from interest received on the Corporation’s cash balances.

There was no significant change in interest income recognized from 2022 to 2023.

The income for the year ended December 31, 2024 is $0.2 million, or 44.4%, lower than the previous year primarily due to lower average cash balance during 2024 than in 2023.

Liquidity and Capital Resources

Capital Resources

Capital resources of Perpetua Resources consist primarily of cash and liquid short-term investments.

As of December 31, 2024, Perpetua Resources had cash and cash equivalents totaling approximately $44.1 million, approximately $2.6 million in receivables, principally from DOD grants, $0.7 million in prepaid assets, and $5.7 million in trade and other payables.

On May 12, 2023, the Corporation entered into the Sales Agreement (the “Sales Agreement”) providing for the sale by the Corporation, from time to time, of the Corporation’s common shares having an aggregate gross offering price of up to $20.0 million (the “ATM Offering”).

During the year ended December 31, 2024, the Corporation sold 1,834,104 common shares in exchange for proceeds of approximately $10.4 million, which is net of offering costs of approximately $0.6 million.

During the year ended December 31, 2023, the Corporation sold 894,882 common shares in exchange for proceeds of approximately $2.1 million, which is net of offering costs of approximately $0.7 million.

As of December 31, 2024, an aggregate offering amount of $6.2 million of common shares remained available for issuance and sale under the program.

The Company may issue shares under the ATM from time to time.

Equity Offering

On November 18, 2024, the Corporation entered into an underwriting agreement providing for the sale by the Corporation of 3,439,465 of its common shares to the underwriters at a price of $10.17 per share.

Proceeds received from the offering were approximately $33.2 million, which is net of offering costs of approximately $1.8 million, and have been, or will be, used for down payments on long lead time materials, detailed engineering for the Project, and general corporate purposes.

The Corporation granted the underwriters an option to purchase up to an additional 515,919 shares within 30 days of the offering which they did not exercise.

In December 2022, the Company was awarded an undefinitized TIA of up to $24.8 million under Title III of the DPA.

On July 25, 2023, the TIA was definitized with the DOD, establishing the full not-to-exceed amount of $24.8 million.

On July 25, 2023, the TIA was definitized with the DOD, establishing the full not-to-exceed amount of $24.8 million and, on May 2, 2024, the TIA was modified to provide for an additional $34.4 million in funding, bringing the total amount of funding available under the TIA to $59.2 million.

Under the TIA, Perpetua Resources may request reimbursement for certain costs incurred through June 16, 2025 related to environmental baseline data monitoring, environmental and technical studies and other activities related to advancing Perpetua’s construction readiness and permitting process for the Stibnite Gold Project, which includes reimbursement of employee wages for activities included in the scope of the TIA.

During the year ended December 31, 2024, $33.6 million was recognized as grant income related to the TIA.

year ended December 31, 2023, the Company was reimbursed $14.4 million for certain costs incurred, and received reimbursement of an additional $1.2 million in February 2024 under the TIA with respect to expenses incurred in the year ended December 31, 2023.

On February 12, 2024, the Company announced a conditional award of up to $34.6 million in additional funding under the TIA.

The amendment will not change any other material terms of the definitized TIA.

The modification is anticipated to be completed in the first quarter of 2024.

On March 21, 2024, the Company granted a 100% silver net smelter return royalty on future payable silver production from the Project properties to Franco-Nevada in return for a cash payment of $8.5 million, which was paid at closing on March 21, 2024.

During the year ended December 31, 2024, the Company was reimbursed $32.5 million for certain costs incurred, and received reimbursement of an additional $2.4 million in February 2025 under the TIA with respect to expenses incurred in the year ended December 31, 2024.

As of December 31, 2024, $10.0 million of additional funding remained available under the TIA, which the Company expects to be incurred through June 16, 2025 and reimbursed.

EXIM Indication of Interest

On April 8, 2024, the Company announced that it received a non-binding and conditional Letter of Interest from U.S.

EXIM for potential debt financing of up to $1.8 billion through U.S.

EXIM’s “Make More in America” and “China and Transformational Exports Program” initiatives.

The Company expects to submit a formal application to U.S.

EXIM in the second quarter of 2025.

Upon receipt of an application for financing, U.S.

EXIM will conduct the due diligence necessary to determine if a final commitment may be issued.

Any final commitment will be dependent on meeting U.S.

EXIM’s underwriting criteria, authorization process, finalization and satisfaction of terms and conditions.

All final commitments must comply with U.S.

EXIM policies as well as program, legal and eligibility requirements.

There can be no assurance that the Company will be able to successfully satisfy any or all of such conditions on the expected timeline, or at all.

See Item 1A, Risk Factors - Funding under the U.S.

EXIM letter of interest is subject to an application

and diligence process, and the amount and timing of such funding, if any, is uncertain and subject to conditions outside the Company’s control .

Perpetua Resources’ current liquidity needs relate to its plans to:

● Continue to advance the regulatory process for the restoration and redevelopment of the Project;

● Advance construction readiness for the Project, including completing Detailed Engineering and ordering long-lead items;

● Continue to advance the regulatory process for the restoration and redevelopment of the Project and obtain final pre-construction permits;

● Continue engaging with Project stakeholders to provide those stakeholders with the opportunity for a better understanding of the Project concepts and to provide a forum for such stakeholders to provide further input into the Project;

● Continue to collect environmental baseline data in support of the ongoing regulatory processes related to permitting for site restoration and redevelopment of the Project;

● Continue to advance the voluntary early cleanup actions under the ASAOC;

● Advance construction readiness for the Project.

Although the Company’s current capital resources and liquidity include up to $24.8 million in funding awarded under the TIA pursuant to Title III of the DPA ($59.4 million upon modification of the TIA to effect an additional conditional award of $34.6 million), such funding is available only for the specified costs described above and is not available to fund the Company’s costs under its ASAOC obligations and certain corporate expenses, including payments under the Settlement Agreement.

Although we expect the DPA funding to provide the Company with sufficient liquidity to complete permitting on the current timeline as well as additional liquidity to begin advancing construction readiness in 2024, due to costs of the ASAOC restoration obligations, payments under the Settlement Agreement and other corporate expenses, we do not expect the Company will have sufficient assets to discharge its liabilities as they become due for at least 12 months from the date hereof.

The Company’s latest liquidity forecast after giving effect to the silver royalty payment indicates that available cash resources for expenses not eligible for reimbursement under the DPA funding are expected to be exhausted in the fourth quarter of 2024.

Absent additional financing, the Company would no longer be able to meet its ongoing obligations or progress critical permitting efforts.

The Company continues to explore various funding opportunities, which may include the issuance of additional equity, new debt, or project specific debt;

● Make required payments under the CWA Settlement Agreement.

Although the Company’s current capital resources and liquidity include up to $10.0 million in remaining funding available under the modified TIA as of December 31, 2024, such funding is available only for the specified costs described above.

Although we expect the DPA funding to provide the Company with sufficient liquidity to complete permitting on the current timeline as well as additional liquidity to advance some construction readiness activities, due to payments under the Settlement Agreement and other corporate expenses, as well as the expiration of the DPA funding, we do not expect the Company will have sufficient assets to discharge its liabilities as they become due for at least 12 months from the date hereof.

The Company’s latest liquidity forecast indicates that available cash resources for expenses not eligible for reimbursement under the TIA are expected to be exhausted in the third quarter of 2025.

Absent additional financing, the Company would no longer be able to meet its ongoing obligations or advance construction readiness activities.

The Company continues to explore various strategic and funding opportunities, which may include the issuance of additional equity, new debt, or project specific debt;

government funding;

and/or other financing opportunities.

On May 12, 2023, the Company entered into a Controlled Equity Offering SM Sales Agreement (the “Sales Agreement”) providing for the sale by the Company, from time to time, of its common shares having an aggregate gross offering price of up to $20.0 million.

As of December 31, 2023, $17.2 million remained available under the program.

Future sales under the program are subject to certain conditions, including market conditions, and there is no assurance that the Company will be able to raise additional funds under the program, at acceptable share prices or at all.

and/or other financing or strategic opportunities.

The Company has engaged RBC Capital Markets and Endeavour Financial to assist with the evaluation of potential strategic and financing opportunities and to support the Company’s application process in connection with the U.S.

EXIM $1.8 billion Letter of Interest.

Any such financing or strategic transaction, or any funding commitment from U.S.

EXIM, will be subject to due diligence and other conditions.

There can be no assurance of the amount, timing or nature of any such financing or strategic transaction, if any.

We believe our plans outlined above to obtain sufficient funding will be successful, although there is no certainty that these plans will result in needed liquidity for a reasonable period of time.

However, our expectation of incurring ASAOC costs, contributions due under the Settlement Agreement and other costs in the foreseeable future that are not eligible for DPA funding reimbursement and the need for additional funding to further support the development of our planned operations, raise substantial doubt regarding our ability to continue as a going concern for a period of one year after the date that these annual Consolidated Financial Statements are issued.

The future receipt of potential funding from equity, debt, pursuit of additional government funding opportunities and/or other means cannot be considered probable at this time because these plans are not entirely within our control as of the date hereof.

These Consolidated Financial Statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business and do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above.

Our anticipated expenditures for the fiscal year 2024 are approximately $49.9 million, of which approximately $37.0 million are expected to be funded from the DPA reimbursements (assuming approval of the modified TIA) and the remainder from cash on hand.

These expenditures include an estimated $11.3 million to fund permitting of the Stibnite Gold Project, $14.3 million for general corporate purposes, project financing and administrative costs, $18.2 million for engineering and design work, $5.2 million for field

operations and approximately $0.9 million to advance early restoration under the ASAOC.

These costs are subject to change due to cost over-runs, delays or other unbudgeted events, such as effects of inflation.

Our long-term liquidity requirements will require project financing to fund the capital costs to develop the Project, which was estimated to be approximately $1,263 million as of the third quarter of 2020 according to the TRS.

However, contributions due under the Settlement Agreement and our expectation of incurring other costs in the foreseeable future that are not eligible for DPA funding reimbursement and the need for additional funding to further support the development of our planned operations, raise substantial doubt regarding our ability to continue as a going concern for a period of one year after the date that the consolidated financial statements are issued.

The future receipt of potential funding from equity or debt issuances, pursuit of additional government funding opportunities and/or other means cannot be considered probable at this time because these plans are not entirely within our control as of the date hereof.

The consolidated financial statements included herein have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business and do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above.

Our anticipated expenditures for fiscal year 2025 are approximately $65.9 million, of which approximately $10.0 million are expected to be funded from the reimbursements under the TIA and the remainder from cash on hand and other sources.

These expenditures include an estimated $11.9 million to fund permitting of the Stibnite Gold Project, $16.2 million for general corporate purposes, project financing and administrative costs, $28.4 million for detailed engineering, design work and down payments on long lead time equipment, $8.0 million for field operations and approximately $1.5 million to advance ASAOC bridge phase planning and reporting on and monitoring the completed Phase 1 ASAOC work.

These costs are subject to change due to cost over-runs, delays or other unbudgeted events, such as effects of inflation, elevated interest rates and the potential impact of tariffs on U.S.

trading partners.

Our long-term liquidity requirements will require project financing to fund the capital costs to develop the Project, which was estimated to be approximately $2,215 million as of the fourth quarter of 2024 according to the 2024 Financial Update.

We anticipate making a construction decision for the Project in 2025.

As such, our capital expenditures for 2025 may increase significantly to reflect the

commencement of construction.

Any such expenditures would be subject to the timing and nature of project financing or any strategic transaction that may be executed in 2025.

Critical Accounting Estimates

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We account for all share-based payments and awards under the fair value-based method.

We account for the granting of stock options and stock awards using the fair value method whereby all awards to employees will be recorded at fair value on the date of the grant.

The fair value of all stock options is expensed over their vesting period with a corresponding increase to additional paid-in capital.

The fair value of stock options is determined using a Black-Scholes valuation model.

Option pricing models require the input of subjective assumptions including the length of time employees will retain their vested stock options before exercising them, expected share price volatility, and interest rate.

The fair value of share-based awards that do not contain market conditions is based on the valuation of the common stock on the date of grant.

The fair value of time-based awards that are ultimately expected to vest is recognized as an expense on a straight-line

basis over the requisite service period.

We account for the granting of share purchase options and share awards using the fair value method whereby all awards to employees will be recorded at fair value on the date of the grant.

The fair value of all share purchase options is expensed over their vesting period with a corresponding increase to additional paid-in capital.

The fair value of share purchase options is determined using a Black-Scholes valuation model.

Option pricing models require the input of subjective assumptions including the length of time employees will retain their vested share purchase options before exercising them, expected stock price volatility, and interest rate.

The fair value of share-based awards that do not contain market conditions is based on the valuation of the common share on the date of grant.

The fair value of time-based awards that are ultimately expected to vest is recognized as an expense on a straight-line basis over the requisite service period.

The fair value of performance-based awards is adjusted for the probability of achieving the performance conditions and is recognized on a straight line basis over the term of the award agreement.

The fair value of share-based awards with market conditions is estimated using a Monte Carlo simulation model.

Assumptions and estimates utilized in the model include expected share price volatilities and related indices, the interest rate, and the probability of awards expected to vest.

Assumptions and estimates utilized in the model include expected stock price volatilities and related indices, the interest rate, and the probability of awards expected to vest.

Changes in the input assumptions for options and share-based awards can materially affect the fair value estimate and the Company’s net loss.

6 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis