Perpetua Resources Corp. · TSX:PPTA
Perpetua Resources — Gold Fundamentals Webinar (September 2021)
38 slides from Perpetua Resources's conference presentation, Sep 30, 2021
Slide 1: Perpetua Resources Gold Fundamentals Webinar
September 30, 2021 T S X : P P TA N A S DAQ :P P TA Perpetua Resources Gold Fundamentals Webinar Re s p o n s i b l e M i n i n g . C r i t i c a l Re s o u rc e s . C l e a n F u t u re .
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Information and statement contained in this presentation that are not historical facts are “forward-looking information” or “forward-looking statements” (collectively, “Forward-Looking Information”) within the meaning of applicable Canadian securities legislation and the U
Slide 3: Why Perpetua Resources?
WHY PERPETUA RESOURCES? Redeveloping one of largest, highest grade and lowest cost gold projects in the U.S.* Superior project economics with ~15 year reserve life and <3 year payback period * Providing a U.S critical mineral to power batteries enabling the low-carbon energy transition and for
Slide 4: The Stibnite Gold Project
THE STIBNITE GOLD PROJECT We can take an area abandoned after 100 years of mining activity and use a sustainable approach to restore the environment and develop a modern mining project helping power a lower carbon future through critical mineral production. 4
Slide 5: Restoring an Abandoned Brownfields Site
RESTORING AN ABANDONED BROWNFIELDS SITE ENVIRONMENTAL SOLUTIONS FUNDED THROUGH MINE DEVELOPMENT SEDIMENTATION METAL LEACHING BLOCKED FISH MIGRATION Early repair of the largest Pick up, reprocess, reuse and Re-establish fish migration and provide source of sedimentation safely store 10.5M tons of tem
Slide 6: U.S. Critical Minerals Supply Chain Risk
U.S. CRITICAL MINERALS SUPPLY CHAIN RISK USES FOR ANTIMONY “Critical Minerals” are metals and non-metals essential to economic and national security Energy and are vulnerable to supply chain disruptions World Antimony 2020 Production (USGS) CRITICAL Flame Ceramics Turkey Australia Bolivia Burma Reta
Slide 7: Expected to Average >35% of U.S. Demand
EXPECTED TO AVERAGE >35% OF U.S. DEMAND 1 Stibnite Gold Project Recovered Antimony2 50,000,000 45,000,000 2020 U.S. Annual Consumption1 40,000,000 35,000,000 Antimony (lbs) 59% 30,000,000 51% 25,000,000 38% 39% 20,000,000 15,000,000 24% 17% 10,000,000 5,000,000 0 Year 1 Year 2 Year 3 Year 4 Year 5 Y
Slide 8: Perpetua to Power Ambri's Low-Cost Battery
PERPETUA TO POWER AMBRI’S LOW-COST BATTERY Agreement to supply only responsible & domestically mined source of antimony for stationary, long duration, daily cycle energy storage enabling the transition to carbon-free power grids • Current commitment of Perpetua’s antimony can power over 13 GWh of en
Slide 9: One of the Largest Gold Reserves in the U.S.
ONE OF THE LARGEST GOLD RESERVES IN THE U.S. 1,2 Independent Gold Project Mineral Reserves1,2 3 Perpetua (Stibnite) 4.8 Marigold 3.6 Castle Mountain 3.6 Haile 2.9 Round Mountain 2.2 Bald Mountain 1.1 0.0 1.0 2.0 3.0 4.0 5.0 2020 Year-End Proven & Probable Mineral Reserves - Gold (Moz) Source: S&P Gl
Slide 10: Poised to Be One of Largest U.S. Gold Mines
POISED TO BE ONE OF LARGEST U.S. GOLD MINES Independent Producing Gold Mines1 Perpetua(Stibnite) Yrs 1-4* 463 Round Mountain 324 Perpetua(Stibnite) LoM* 297 Marigold 234 Bald Mountain 191 Haile 137 Wharf 93 0 50 100 150 200 250 300 350 400 450 500 2020 Annual Gold Production (koz) Source: S&P Global
Slide 11: Lowest Quartile All-in-Sustaining Costs
LOWEST QUARTILE ALL-IN-SUSTAINING COSTS 1 $2,500 Global Gold Mine Cost Curve1 All-in-Sustaining Cost ($/oz) $2,000 $1,500 Perpetua Resources Stibnite Gold Project1 $1,000 Yr1-4 LoM $500 $0 Average Annual Gold Sales (represented as bar width) Source: S&P Global – Market Intelligence Valuable antimony
Slide 12: Inflation, Interest Rates, Debt and the Dollar: Why the longer run outlook for gold
September 30, 2021 T S X : P P TA N A S DAQ :P P TA Inflation, Interest Rates, Debt and the Dollar: Why the longer run outlook for gold prices remains very bullish PHILIP KLAPWIJK Managing Director, Precious Metals Insights Limited
Slide 13: Inflation, Interest Rates, Debt and the Dollar
Inflation, Interest Rates, Debt and the Dollar: Why the longer run outlook for gold prices remains very bullish Inflation • Not “transitory”: A long-term shift has started from a disinflationary to an inflationary environment: • Demographics/Labour Force; Global Trade; Reversing Inequality; Governme
Slide 14: Inflation Expectations
US short-term inflation expectations have risen dramatically this year but long-term ones have stabilised at just above the 2% level 6 University of Michigan Survey (expected price change next 12 months) 5 Inflation Expectations in % 4 3 2 1 5-Year, 5-Year Forward Inflation Expectation Rate 0 Source
Slide 15: M2 Stock and Velocity
US M2 Stock continues to rise rapidly while M2 Velocity has stabilised, which together is an inflationary combination 21000 2.6 20000 2.5 19000 2.4 2.3 18000 M2 Stock ($ billions) 2.2 M2 Stock in $ billions 17000 2.1 16000 2.0 1.9 M2 Velocity 15000 1.8 14000 1.7 13000 1.6 12000 1.5 11000 1.4 10000 1
Slide 16: Growth in US M2 money stock
Growth in US M2 money stock has slowed but it was still running at 13% year-on-year in early September Source: Federal Reserve Bank of St. Louis Precious Metals Insights 16
Slide 17: Demographic reversal and working age population
Demographic reversal in terms of trends in the Working Age Population coupled with some degree of de-Globalisation are expected to favour higher prices and wages in the Developed Market economies in future Working Age Population growth in China and Eastern Europe After several decades when it rose i
Slide 18: PPI inflation rate in the US
PPI inflation rate in the US was at 20% Y-o-Y in August, which suggests that inflationary pressures remain considerable Precious Metals Insights 18 Source: Federal Reserve Bank of St. Louis
Slide 19: Fed balance sheet and tapering
Tapering will merely slow the increase in the Fed’s balance sheet. A meaningful reduction in its size is most unlikely and it will grow quickly again once more QE is deemed necessary to counter financial stress/economic slowdown 9000 8000 Federal Reserve Banks’ Assets 7000 ($ billions, monthly) 6000
Slide 20: Effective & Real Fed Funds Rates
Any Fed rate increase(s) in 2022/23 will be less pronounced and even more rapidly reversed than in the previous tightening cycle. No chance of the US policy rate becoming positive in real terms. 18 17 16 15 Fed Funds Rate Effective & Real Fed Funds Rates 14 13 (quarterly averages in %) 12 11 10 9 8
Slide 21: US stock market value to GDP ratio
Ratio of value of US stock market to GDP is unprecedented and signals major vulnerability to shocks such as higher interest rates 2.00 Ratio of Value of the Wilshire 5000 to US Nominal GDP Ratio of Value of Wilshire 5000 to US Nominal GDP 1.75 1.50 1.25 (Quarterly) 1.00 0.75 0.50 0.25 0.00 Source: F
Slide 22: Corporate Bond market in bubble territory
Corporate Bond market is in extreme “bubble” territory and would be highly exposed to a pick up in rates and spreads Source: Federal Reserve Bank of St. Louis 22 Precious Metals Insights
Slide 23: US Housing Market bubble
The US Housing Market is also now in a “bubble”, blown up in large measure by ultra-low interest rates and money creation Source: FRB St. Louis Precious Metals Insights 23
Slide 24: Ratio of US Domestic Non-Financial Debt to GDP
US domestic debt level has soared and this precludes any major tightening of monetary policy by the Fed; expect instead “financial repression” and a greater tolerance of inflation 325% Ratio of Total US Domestic Non-Financial Debt* to Nominal GDP Ratio of US Domestic Non-Financial Debt to GDP 300% 2
Slide 25: Increase in US domestic non-financial debt
$5.0tn of the $7.7tn increase in US domestic non-financial debt from end-Q4 2019 to end-Q1 2021 has come from the Federal Government Households Business Federal Government State & Local Government 65000 60000 55000 (end-quarter, US$ Billions) 50000 Debt by Sector 45000 40000 35000 30000 25000 20000
Slide 26: US Federal Debt Held by the Public
US Federal Debt Held by the Public has increased to over 100% of GDP and is set to rise further even under the Government’s optimistic forecast for the budget deficit over 2022-26 125 0 -2 US Federal Debt Held by the Public US Federal Budget Deficit (% of GDP) 100 -4 -6 (% of GDP) 75 -8 -10 50 -12 F
Slide 27: DXY US Dollar Index forecast
An overvalued USD is forecast to be in a cyclical downturn over 2022-25 due to rising US inflation, ultra-loose US monetary & fiscal policy, worrying debt levels and a decline in the US currency’s international role 160 155 150 DXY decline from DXY US Dollar Index (monthly) 145 140 current 93 level
Slide 28: USD:EUR Exchange Rate and PPP
OECD Purchasing Power Parity data points to significant scope in future for an overvalued US Dollar to devalue in future against the Euro 1.50 USD:EUR Exchange Rate 1.50 1.40 1.40 USD:EUR Exchange Rate and PPP 1.30 1.30 (end-year) 1.20 OECD PPP for USD:EUR 1.20 1.10 1.10 1.00 1.00 0.90 0.90 0.80 0.8
Slide 29: US Trade Deficit
US Trade Deficit is running at over $70bn per month and can only be reduced by a weaker dollar and/or a US economic recession Source: Federal Reserve Bank of St Louis 29 Precious Metals Insights
Slide 30: US Net International Investment Position
Huge budget and current account deficits have led to a substantial deterioration in America’s net international investment position; a major US dollar devaluation is the only practical way to reverse this trend 1000 0 -1000 US Net International Investment Position -2000 -3000 -4000 -5000 ($ billions
Slide 31: Gold price longer-term prospects
Whilst gold may continue to be under pressure well into 2022, its longer-term price prospects are excellent, with gains of over one- third from current levels probable by 2025 2,100 2,000 Gold price (daily) 1,900 1,800 1,700 US$/oz 1,600 1,500 1,400 1,300 1,200 1,100 1,000 900 800 700 Precious Metal
Slide 32: Why Perpetua
WHY PERPETUA 32
Slide 33: Significant Leverage to Higher Gold Prices
SIGNIFICANT LEVERAGE TO HIGHER GOLD PRICES 1 TRADING AT DEEP DISCOUNT TO PROJECT NET PRESENT VALUE $2,350 $4,603 $2,943 $3,815 Gold Price (US$/oz) $2,100 $2,404 $1,850 $3,026 $1,864 $1,600 $2,232 NPV at 0% $1,320 NPV at 5% $1,350 $1,434 $771 Perpetua Mkt Cap2 $335 Current Mkt Cap2 Only 18% of NPV2 (
Slide 34: Gaining Momentum with Near-Term Catalysts
GAINING MOMENTUM WITH NEAR-TERM CATALYSTS Recent Accomplishments: Upcoming Milestones: Draft Environmental Impact Statement and Inclusion in multiple indices due to Nasdaq listing (2021/22) successful comment period (Aug - Oct 2020) Supplemental Draft Environmental Impact Statement Feasibili
Slide 35: Valuation Set to Re-rate Once Permitted
VALUATION SET TO RE-RATE ONCE PERMITTED 150% Pre-Permitting Permitted Market Cap As % of Spot NAV3,4 107% 100% 77% 80% 74% 50% 47% 36% 31% 23% 18% 0% 1,2 Perpetua Integra Gold Standard Artemis Skeena Ascot Marathon NovaGold Orla 1. Perpetua Resources Market Cap based on Fully Diluted Market Cap as o
Slide 36: A Unique American Opportunity
A UNIQUE AMERICAN OPPORTUNITY Redeveloping one of largest, highest grade and lowest cost gold projects in the U.S.* Superior project economics with ~15 year reserve life and <3 year payback period * Providing a U.S critical mineral to power batteries enabling the low-carbon energy transition a
Slide 37: Regulatory Information
REGULATORY INFORMATION The FS was compiled by M3 Engineering & Technology Corporation (“M3”) in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) under the direction of independent qualified persons (as defined in NI 43-101) (“Independent QPs”).
Slide 38: Precious Metals Insights Disclaimer
PRECIOUS METALS INSIGHTS DISCLAIMER The information and opinions contained in this presentation have been obtained from sources believed to be reliable, but no representation, guarantee, condition or warranty, express or implied, is made that such information is accurate or complete and it should no
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