Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-39918

Perpetua Resources Corp.

(Exact Name of Registrant as Specified in its Charter)

British Columbia, Canada

(State or other jurisdiction of
incorporation or organization)

N/A

(I.R.S. Employer
Identification No.)

405 S. 8th Street, Ste 201

Boise, Idaho

(Address of principal executive offices)

83702

(Zip Code)

(208) 901-3060

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares, without par value	PPTA	Nasdaq

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, an emerging growth company, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the eﬀectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 3, 2023, the registrant had 63,267,783 common shares outstanding.

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PERPETUA RESOURCES CORP.

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		Page
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		2

PART I.	FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.	Defaults Upon Senior Securities	26
Item 4.	Mine Safety Disclosures	26
Item 5.	Other Information	26
Item 6.	Exhibits	27

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report are “forward-looking statements” within the meaning of “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”) and “forward-looking information” within the meaning of applicable Canadian securities laws. All statements, other than statements of historical fact included in this Quarterly Report, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this Quarterly Report, the words “anticipate,” “believe,” “expect,” “estimate,” “intend,” “plan,” “project,” “outlook,” “may,” “will,” “should,” “would,” “could,” “can,” the negatives thereof, variations thereon and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Forward-looking statements are based on certain estimates, beliefs, expectations and assumptions made in light of management’s experience and perception of historical trends, current conditions and expected future developments, as well as other factors that may be appropriate.

Forward-looking statements necessarily involve unknown risks and uncertainties, which could cause actual results or outcomes to differ materially from those expressed or implied in such statements. Due to the risks, uncertainties and assumptions inherent in forward-looking information, you should not place undue reliance on forward-looking statements. Factors that could have a material adverse effect on our business, financial condition, results of operations and growth prospects can be found in Item 1A, Risk Factors, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this Quarterly Report and in Item 1A, Risk Factors and Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2022. These factors include, but are not limited to, the following:

●

planned expenditures and budgets and the execution thereof, including the ability of the Company to discharge its liabilities as they become due and to continue as a going concern;

●

access to capital and suitable financing sources to fund the exploration, permitting, development and construction of the Project;

●

permitting timelines and requirements, including with respect to the timing and outcome of the Final Environmental Impact Statement (“FEIS”), the draft Record of Decision, the Final Record of Decision and other permitting processes;

●

the intended environmental and other outcomes of the Fund (as defined below) related to the Nez Perce Tribe’s Clean Water Act (“CWA”) lawsuit, good faith discussions between the Company and the Nez Perce Tribe with respect to future permitting and activities at the Project and the anticipated source of funding of the Company’s payments required under the Settlement Agreement (as defined below);

●

regulatory and legal changes, requirements for additional capital, requirements for additional water rights and the potential effect of proposed notices of environmental conditions relating to mineral claims;

●

analyses and other information based on expectations of future performance and planned work programs;

●

possible events, conditions or financial performance that are based on assumptions about future economic conditions and courses of action;

●

assumptions and analysis underlying our mineral reserve estimates and plans for mineral resource exploration and development;

●

timing, costs and potential success of future activities on the Company’s properties, including but not limited to development and operating costs in the event that a production decision is made;

●

potential results of exploration, development and environmental protection and remediation activities;

●

future outlook and goals;

●

current or future litigation or environmental liability;

●

global economic, political and social conditions and financial markets;

●

inflation levels, particularly the recent rise to historically high levels, and government efforts to reduce inflation, including increased interest rates;

●

changes in gold and antimony commodity prices;

●

our ability to implement our strategic plan and to maintain and manage growth effectively;

●

loss of our key executives;

●

labor shortages and disruptions;

●

cyber-attacks and other security breaches of our information and technology systems; and

●

other factors and risks described under the heading “Risk Factors” in Item 1A of this Quarterly Report.

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Statements concerning mineral resource and mineral reserve estimates may also be deemed to constitute forward-looking information to the extent that such statements involve estimates of the mineralization that may be encountered if a property is developed.

With respect to forward-looking information contained herein, the Company has applied several material factors or assumptions including, but not limited to, certain assumptions as to production rates, operating cost, recovery and metal costs; that any additional financing needed will be available when needed on reasonable terms; that the current exploration, development, environmental and other objectives concerning the Company’s Stibnite Gold Project (the “Project” or “Stibnite Gold Project”) can be achieved and that the Company’s other corporate activities will proceed as expected; that the formal review process under the National Environmental Policy Act (“NEPA”) (including a joint review process involving the United States Forest Service (“USFS” or “Forest Service”), the State of Idaho and other agencies and regulatory bodies) as well as the environmental impact statements will proceed in a timely manner and as expected; payment and other settlement conditions under the final Settlement Agreement filed on August 8, 2023 and approved by the United States District Court for the District of Idaho on October 2, 2023 to resolve the CWA litigation (the “Settlement Agreement”) will proceed on the anticipated timeline and terms, the parties will engage in good faith discussions regarding the Project and the Fund (as defined below), that the Project will receive necessary permits and approvals, that Perpetua will be able to successfully obtain financing for the Project, and that all requisite information will be available in a timely manner; that the current price and demand for gold and other metals will be sustained or will improve; that general business and economic conditions will not change in a materially adverse manner and that all necessary governmental approvals for the planned exploration, development and environmental protection activities on the Project will be obtained in a timely manner and on acceptable terms; and that the continuity of economic and political conditions and operations of the Company will be sustained.

These risks are not exhaustive. Because of these risks and other uncertainties, our actual results, performance or achievement, or industry results, may be materially different from the anticipated or estimated results discussed in the forward-looking statements in this Quarterly Report. New risk factors emerge from time to time, and it is not possible for our management to predict all risk factors nor can we assess the effects of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in, or implied by, any forward-looking statements. Our past results of operations are not necessarily indicative of our future results. You should not rely on any forward-looking statements, which represent our beliefs, assumptions and estimates only as of the dates on which they were made, as predictions of future events. We undertake no obligation to update these forward-looking statements, even though circumstances may change in the future, except as required under applicable securities laws. We qualify all of our forward-looking statements by these cautionary statements.

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

Perpetua Resources Corp.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)


	September 30,		December 31,
	2023		2022
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	7,104,937	$	22,667,047
Receivables		1,978,508		280,150
Prepaid expenses		1,353,327		614,930
		10,436,772		23,562,127
NON-CURRENT ASSETS
Buildings and equipment, net		389,252		294,980
Right-of-use assets		54,836		68,675
Environmental reclamation bond (Note 5)		3,000,000		3,000,000
Mineral properties and interest (Note 3)		72,795,365		72,519,373
TOTAL ASSETS	$	86,676,225	$	99,445,155

LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Trade and other payables	$	5,535,730	$	2,741,516
Lease liabilities		55,279		70,449
CWA settlement payable (Note 6)		500,000		—
Environmental reclamation liabilities (Note 5)		2,297,523		9,590,766
		8,388,532		12,402,731
NON-CURRENT LIABILITIES
Warrant derivative		—		1,732
CWA settlement payable (Note 6)		4,500,000		—
Environmental reclamation liabilities (Note 5)		456,744		1,210,170
TOTAL LIABILITIES		13,345,276		13,614,633

COMMITMENTS AND CONTINGENCIES (Note 6)

SHAREHOLDERS’ EQUITY (Note 4)
Common shares, no par value, unlimited shares authorized, 63,202,408 and 63,011,777 shares outstanding, respectively		616,330,139		615,553,448
Additional paid-in capital		33,830,533		32,203,858
Accumulated deficit		(576,829,723)		(561,926,784)
TOTAL SHAREHOLDERS’ EQUITY		73,330,949		85,830,522

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	86,676,225	$	99,445,155

See accompanying notes to the unaudited condensed consolidated financial statements.

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Perpetua Resources Corp.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)


	For the three months ended September 30,				For the nine months ended September 30,
	2023		2022		2023		2022
EXPENSES
Corporate salaries and benefits	$	393,656	$	453,330	$	1,205,824	$	1,281,617
Depreciation		23,846		15,318		59,548		41,654
Directors’ fees		30,158		92,874		310,268		445,348
Exploration		8,664,205		4,589,966		20,683,257		13,456,304
Environmental liability expense		22,285		232,776		604,222		898,146
CWA settlement expense (Note 6)		—		—		5,000,000		—
General and administration		160,264		187,733		454,543		570,355
Professional fees		230,243		223,160		875,327		1,474,356
Shareholder and regulatory		91,177		142,984		388,307		418,050
OPERATING LOSS		9,615,834		5,938,141		29,581,296		18,585,830

OTHER EXPENSES (INCOME)
Change in fair value of warrant derivative		—		(6,021)		(1,732)		(100,766)
Foreign exchange loss (income)		12,571		(7,136)		15,193		26,210
Grant income		(6,905,691)		—		(14,273,148)		—
Interest income		(92,620)		(170,658)		(418,670)		(254,683)
Total other loss (income)		(6,985,740)		(183,815)		(14,678,357)		(329,239)

NET LOSS	$	2,630,094	$	5,754,326	$	14,902,939	$	18,256,591

NET LOSS PER SHARE, BASIC AND DILUTED	$	0.04	$	0.09	$	0.24	$	0.29

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING, BASIC AND DILUTED		63,176,063		62,987,859		63,120,580		62,982,688

See accompanying notes to the unaudited condensed consolidated financial statements.

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Perpetua Resources Corp.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

For the three and nine months ended September 30, 2023 and 2022


	Common Shares			Additional Paid		Accumulated
	Shares	Amount		in Capital		Deficit		Total
BALANCE, December 31, 2021	62,971,859	$	615,359,152	$	29,454,696	$	(533,213,253)	$	111,600,595
Share based compensation	—		—		676,249		—		676,249
Restricted and performance shares units distributed	1,667		12,378		(12,378)		—		—
Net loss for the period	—		—		—		(6,244,894)		(6,244,894)
BALANCE, March 31, 2022	62,973,526		615,371,530		30,118,567		(539,458,147)		106,031,950
Share based compensation	—		—		826,400		—		826,400
Restricted and performance shares units distributed	14,333		54,930		(54,930)		—		—
Net loss for the period	—		—		—		(6,257,371)		(6,257,371)
BALANCE, June 30,2022	62,987,859		615,426,460		30,890,037		(545,715,518)		100,600,979
Share based compensation	—		—		732,236		—		732,236
Net loss for the period	—		—		—		(5,754,326)		(5,754,326)
BALANCE, September 30, 2022	62,987,859	$	615,426,460	$	31,622,273	$	(551,469,844)	$	95,578,889

BALANCE, December 31, 2022	63,011,777	$	615,553,448	$	32,203,858	$	(561,926,784)	$	85,830,522
Share based compensation	—		—		840,827		—		840,827
Restricted and performance shares units distributed	115,256		449,909		(449,909)		—		—
Exercise of share purchase options	12,500		64,687		(24,015)		—		40,672
Net loss for the period	—		—		—		(4,600,093)		(4,600,093)
BALANCE, March 31, 2023	63,139,533		616,068,044		32,570,761		(566,526,877)		82,111,928
Share based compensation	—		—		784,282		—		784,282
Restricted and performance shares units distributed	13,334		54,936		(54,936)		—		—
Exercise of share purchase options	12,500		66,034		(24,515)				41,519
Net loss for the period	—		—		—		(7,672,752)		(7,672,752)
BALANCE, June 30, 2023	63,165,367		616,189,014		33,275,592		(574,199,629)		75,264,977
Share based compensation	—		—		696,066		—		696,066
Restricted and performance shares units distributed	5,475		22,064		(22,064)		—		—
Deferred share units distributed	31,566		119,061		(119,061)		—		—
Net loss for the period	—		—		—		(2,630,094)		(2,630,094)
BALANCE, September 30, 2023	63,202,408	$	616,330,139	$	33,830,533	$	(576,829,723)	$	73,330,949

See accompanying notes to the unaudited condensed consolidated financial statements.

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Perpetua Resources Corp.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


	For the nine months ended September 30,
	2023		2022
OPERATING ACTIVITIES:
Net loss	$	(14,902,939)	$	(18,256,591)
Adjustments to reconcile net loss to net cash used in operating activities:
Share based compensation (Note 4)		2,321,175		2,234,885
Depreciation		59,548		41,654
Change in fair value of warrant derivative		(1,732)		(100,766)
Environmental liability expense (Note 5)		604,222		898,146
Unrealized foreign exchange loss (gain)		(160)		4,286
Gain on sale of equipment		(25,000)		(49,173)
Changes in:
Receivables		(1,698,358)		159,186
Prepaid expenses		(738,397)		(11,768)
Trade and other payables		2,792,882		(116,024)
CWA settlement payable		5,000,000		—
Environmental reclamation liabilities		(8,650,891)		(2,920,780)
Net cash used in operating activities		(15,239,650)		(18,116,945)

INVESTING ACTIVITIES:
Investment in mineral properties and interest		(275,992)		(290,039)
Purchase of building and equipment		(153,820)		(98,125)
Proceeds from sale of equipment		25,000		49,173
Net cash used in investing activities		(404,812)		(338,991)

FINANCING ACTIVITIES:
Proceeds from exercise of share purchase options		82,191		—
Net cash provided by financing activities		82,191		—

Effect of foreign exchange on cash and cash equivalents		161		(4,286)

Net increase (decrease) in cash and cash equivalents		(15,562,110)		(18,460,222)
Cash and cash equivalents, beginning of period		22,667,047		47,852,846
Cash and cash equivalents, end of period	$	7,104,937	$	29,392,624

NONCASH INVESTING AND FINANCING ACTIVITIES
Recognition of operating lease liability and right-of-use asset	$	65,061	$	142,487

CASH AND CASH EQUIVALENTS
Cash	$	3,104,628	$	6,153,131
Investment savings accounts		4,000,309		17,131,902
GICs and term deposits		—		6,107,591
Total cash and cash equivalents	$	7,104,937	$	29,392,624

See accompanying notes to the unaudited condensed consolidated financial statements.

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Perpetua Resources Corp.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.Nature of Operations and Basis of Presentation

Perpetua Resources Corp. (the “Corporation”, the “Company”, “Perpetua Resources” or “Perpetua”) was incorporated on February 22, 2011 under the Business Corporation Act (British Columbia). The Company was organized to hold shares in wholly owned subsidiaries that locate, acquire, develop and restore mineral properties located principally in the Stibnite – Yellow Pine mining district in Valley County, Idaho, USA. The Company’s principal asset is 100% ownership in subsidiaries that control the Stibnite Gold Project (“Stibnite Gold Project” or the “Project”). The Company currently operates in one segment, mineral exploration in the United States.

The unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of Perpetua Resources Corp. and its wholly owned subsidiaries, Perpetua Resources Idaho, Inc. and Idaho Gold Resource Company, LLC. Intercompany transactions and balances have been eliminated.

The unaudited condensed consolidated financial statements do not include all disclosures required of annual consolidated financial statements and, accordingly, should be read in conjunction with our annual financial statements for the year ended December 31, 2022. Operating results for the nine months ended September 30, 2023 may not be indicative of results expected for the full year ending December 31, 2023. Management estimates that the Company’s 2023 effective tax rate will be 0% due to the Company’s cumulative loss position, historical net operating losses (“NOLs”), and other available evidence related to the Company’s ability to generate taxable income. Accordingly, there is no income tax provision or benefit for the nine month period ended September 30, 2023.

In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of the results for the interim periods reported.

The Company’s latest liquidity forecast indicates that available cash resources and other sources of liquidity are expected to be exhausted in the first quarter of 2024. In addition, the Company’s payment obligations under the Settlement Agreement will commence in the first half of 2024. The Company intends to fund these payments from cash on hand or funds expected to be raised in connection with construction of the Project. Although the Company’s current capital resources and liquidity include $24.8 million in funding awarded under the Technology Investment Agreement (“TIA”) pursuant to Title III of the Defense Production Act (“DPA”), 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 pursuant to its Administrative Settlement and Order on Consent (“ASAOC”) obligations, and certain corporate expenses. 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; 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 million. 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 funds under the program, at acceptable share prices or at all. As of September 30, 2023, $20 million remains available under the program.

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 significant 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 unaudited condensed consolidated financial statements are issued.

These 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.

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Loss per share

Basic loss per share is computed by dividing the net loss by the weighted average number of shares outstanding during the reporting period. Diluted loss per share is computed similar to basic loss per share except that the weighted average shares outstanding are increased to include additional shares for the assumed exercise of share purchase options and warrants, if dilutive. The Company’s potential dilutive common shares include outstanding share purchase options, restricted share units, performance share units, deferred share units and warrants. Potentially dilutive shares as of September 30, 2023 and 2022, are as follows:


	September 30
	2023	2022
Share purchase options	1,673,750	1,960,150
Share units	1,375,820	791,440
Warrants	—	200,000
Balance	3,049,570	2,951,590

All potentially dilutive shares were excluded from the calculation of diluted loss per share as their exercise and conversion would be anti-dilutive.

2.Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards did not or will not have a material impact on the Company’s consolidated financial statements upon adoption.

3.Mineral Properties and Interest

The Company’s mineral properties and interest at the Stibnite Gold Project totaled $72,795,365 and $72,519,373 as of September 30, 2023 and December 31, 2022, respectively.

The Company’s subsidiaries acquired mineral rights to the Stibnite Gold Project through several transactions. All mineral and surface rights, where applicable, are held by the Company’s subsidiaries through patented and unpatented lode mining claims and mill sites, except the Cinnabar option claims which are held under an option to purchase, and all of the Stibnite Gold Project is subject to a 1.7% net smelter returns royalty upon the sale of project-related gold production.

Included in mineral properties and interest are annual payments made under option agreements, where the Company is entitled to continue to make annual option payments or, ultimately, purchase certain properties. Annual payments due under option agreements during 2023 are $180,000.

As of September 30, 2023, it has not yet been determined that the Project’s mining deposits can be economically and legally extracted or produced because the Project’s estimated reserves do not yet meet the definition of proven reserves under the United States Securities and Exchange Commission (“SEC”) Regulation S-K 1300.

Accordingly, development costs related to such reserves will not be capitalized unless they are incurred after such determination. Upon commencement of commercial production, capitalized costs will be amortized over their estimated useful lives or units of production, whichever is a more reliable measure.

Although the Company has taken steps to review and verify mineral rights to the properties in which it has an interest, in accordance with industry standards for properties in the exploration stage, these procedures do not guarantee the Company’s title and interests. Mineral title may be subject to unregistered prior agreements and noncompliance with regulatory requirements.

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4.Shareholders’ Equity

Authorized

●

Unlimited number of common shares without par value.

●

Unlimited number of first preferred shares without par value.

●

Unlimited number of second preferred shares without par value.

ATM Offering

On May 12, 2023, the Company entered into the Sales Agreement providing for the sale by the Company, from time to time, of the Company’s common shares having an aggregate gross offering price of up to $20 million (the “ATM Offering”). The Company expects to raise relatively small amounts of capital from time to time through the ATM Offering for general corporate purposes, which may include, among other things, general corporate, legal and ASAOC expenses. As of September 30, 2023, no common shares have been sold under this agreement.

Share based compensation

Share based compensation was recognized in the unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2023 and 2022 as follows:


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Exploration	$	400,306	$	366,150	$	1,215,542	$	998,789
Corporate salaries and benefits		266,349		278,381		795,925		791,399
Directors’ fees		29,411		87,705		309,708		444,697
Total	$	696,066	$	732,236	$	2,321,175	$	2,234,885

Share purchase options

A summary of share purchase option activity within the Company’s share-based compensation plan (the “Plan”) for the year ended December 31, 2022 and nine months ended September 30, 2023 is as follows:


	Number of	Weighted Average
	Options	Exercise Price (C$)
Balance December 31, 2021	2,497,150	$	9.15
Options expired	(305,000)		8.71
Options cancelled or forfeited	(246,500)		9.11
Balance December 31, 2022	1,945,650	$	9.23
Options exercised	(25,000)		4.40
Options cancelled or forfeited	(35,500)		11.48
Options expired	(211,400)		6.97
Balance September 30, 2023	1,673,750	$	9.54

During the three and nine months ended September 30, 2023 and 2022, the Company’s total share based compensation from options was $49,628 (2022: $273,155) and $213,670 (2022: $822,415), respectively. No options were granted during the nine months ended September 30, 2023 nor 2022. During the three and nine months ended September 30, 2023, the intrinsic value of share purchase options exercised was $nil and $30,594, respectively.

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An analysis of outstanding share purchase options as of September 30, 2023 is as follows:


	Options Outstanding				Options Exercisable
Range of Exercise				Remaining				Remaining
Prices (C$)	Number	Price (C$)¹		Life²	Number	Price (C$)¹		Life²
$3.50 - $5.90	45,000		3.50	1.47	45,000		3.50	1.42
$5.91 - $7.20	428,875		6.26	1.21	428,875		6.26	1.21
$7.21 - $9.70	457,875		9.54	0.89	357,875		9.65	0.45
$9.71 - $11.80	742,000		11.80	2.31	556,500		11.80	2.31
$3.50 - $11.80	1,673,750		9.54	1.62	1,388,250		9.27	1.46

Weighted Average Exercise Price (C$)

Weighted Average Remaining Contractual Life (Years)

As of September 30, 2023, all unvested options are expected to vest and unvested compensation of $78,611 will be recognized. The weighted average remaining amortization period of vested options is 0.25 years. As of September 30, 2023, the intrinsic value of outstanding and exercisable share purchase options is $30,742 and $30,742, respectively.

Restricted Share Units

The following table summarizes activity for restricted share units (“RSUs”) awarded under the Plan that vest over the required service period of the participant.


		Weighted Average
	Share	Grant Date
	Units	Fair Value
Unvested, December 31, 2021	42,334	$	5.66
Granted	370,098		4.04
Distributed (vested)	(36,168)		5.00
Cancelled	(4,308)		4.03
Unvested, December 31, 2022	371,956	$	4.13
Granted	370,039		3.42
Distributed (vested)	(121,340)		4.04
Cancelled	(4,453)		3.77
Unvested, September 30, 2023	616,202	$	3.72

During the nine months ended September 30, 2023, the Company awarded 370,039 RSUs (2022: 370,098 RSUs) with a weighted average grant date fair value of $3.42 per RSU (2022: $4.04) or approximately $1.3 million in total (2022: $1.5 million).

During the three and nine months ended September 30, 2023 and 2022, the Company has recognized $306,265 (2022: $268,238)and $956,684 (2022: $700,494), respectively, in compensation expense related to RSUs and expects to record an additional $1.1 million in compensation expense over the next 1.44 years. The unvested units of September 30, 2023 are scheduled to vest as follows:


Remainder of 2023		21,166
2024		243,658
2025		228,660
2026		122,718
Total		616,202

Unvested units will be forfeited by participants upon termination of employment in advance of vesting, with the exception of termination due to retirement if certain criteria are met.

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Performance Share Units

The following table summarizes activity for performance share units (“PSUs”) and market-based performance share units (“MPSUs”) awarded under the Plan:


		Weighted Average
	Share	Grant Date
	Units	Fair Value
Unvested, December 31, 2021	10,750	$	5.66
Granted	267,451		6.73
Distributed	(3,750)		3.42
Cancelled	(11,185)		5.83
Unvested, December 31, 2022	263,266	$	6.77
Granted	301,035		5.80
Distributed	(12,725)		2.74
Cancelled	(3,644)		4.99
Unvested, September 30, 2023	547,932	$	6.34

During the three and nine months ended September 30, 2023 and 2022, the Company has recognized $292,971 (2022: $143,640) and $801,108 (2022: $360,626), respectively, in compensation expense related to PSUs and MPSUs and expects to record an additional $2.2 million in compensation expense over the next 2.0 years. The unvested units of September 30, 2023 are scheduled to vest as follows:


Remainder of 2023		—
2024		3,500
2025		257,524
2026		276,908
2027		10,000
Total		547,932

PSUs: These PSUs vest upon completion of the performance period and specific performance conditions set forth for each individual grant for individually defined reporting and operating measurement objectives. The Company determines the factor to be applied to that target number of PSUs, with such percentage based on level of achievement of the performance conditions. Upon the achievement of the conditions, any unvested PSUs become fully vested. During the nine months ended September 30, 2023, the Company awarded 23,500 PSUs (2022: 17,500 PSUs) that had a weighted average grant date fair value of $3.67 (2022: $2.97), or $86,165 (2022: $52,048) in total.

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Market-based PSUs: During the nine months ended September 30, 2023 and 2022, the Company granted MPSUs where vesting is based on the Company’s cumulative total shareholder return (“TSR”) as compared to the constituents that comprise the VanEck Junior Gold Miners ETF (“GDXJ Index”) a group of similar junior gold mining companies, over a three year period (the “Performance Period”). The ultimate number of MPSUs that vest may range from 0% to 200% of the original target number of shares depending on the relative achievement of the TSR performance measure at the end of the Performance Period. Because the number of MPSUs that are earned will be based on the Company’s TSR over the Performance Period, the MPSUs are considered subject to a market condition. Compensation cost is recognized ratably over the Performance Period regardless as to whether the market condition is actually satisfied; however, the compensation cost will reverse if an employee terminates prior to satisfying the requisite service period.

During the nine months ended September 30, 2023, the Company awarded 277,535 MPSUs (2022: 249,951 MPSUs) that had a weighted grant date fair value of $5.98 (2022: $6.99) per MPSU or approximately $1.65 million (2022: $1.75 million) in total. The grant date fair value of MPSUs was estimated using a Monte Carlo simulation model. Assumptions and estimates utilized in the model include expected volatilities of the Corporation’s share price and the GDXJ Index, the Company’s risk-free interest rate and expected dividends. The probabilities of the actual number of MPSUs expected to vest and resultant actual number of common shares expected to be awarded are reflected in the grant date fair values of the various MPSU awards. The per MPSU grant date fair value for the market condition was based on the following variables:


		2023			2022
Grant date fair value	$	5.98		$	6.99
Risk-free interest rate		4.15	%		1.61	%
Expected term (in years)		3.0			3.0
Expected share price volatility		65.74	%		63.35	%
Expected dividend yield		—			—

The expected volatility utilized is based on the historical volatilities of the Corporation’s common shares and the GDXJ Index in order to model the stock price movements. The volatility used was calculated over the most recent three year period. The risk-free interest rates used are based on the implied yield available on a U.S. Treasury zero-coupon bill with a term equivalent to the Performance Period. The expected dividend yield of zero was used since it is the mathematical equivalent to reinvesting dividends in each issuing entity over the Performance Period.

Deferred Share Units

The following table summarizes activity for deferred share units (“DSUs”) awarded under the Plan:


		Weighted Average
	Share	Grant Date
	Units	Fair Value
Outstanding, December 31, 2021	29,213	$	5.39
Granted	116,462		3.42
Outstanding, December 31, 2022	145,675		3.82
Granted	97,577		3.58
Distributed	(31,566)		3.77
Outstanding, September 30, 2023	211,686	$	3.72

Under the Plan, the Company may issue DSUs to non-employee directors. During the three and nine months ended September 30, 2023, 14,479 (2022: 23,368) and 97,577 (2022: 100,298) share units, respectively with a fair value of $47,202 (2022: $47,203) and $349,713 (2022: $351,350) were granted to the non-employee directors and the related compensation expense was charged to directors’ fees in the unaudited condensed consolidated statements of operations.

Warrants

There was a total of 200,000 warrants outstanding as of December 31, 2022 that expired on May 9, 2023.

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5.Environmental Reclamation Liability

On January 15, 2021, the Company agreed to an ASAOC. The Company has accounted for its obligation under the ASAOC as an environmental reclamation liability. The aggregate cost of the obligation was estimated to be approximately $7,473,805. Upon the signing of the ASAOC, the Company recorded an immediate expense of $7,473,805 and a corresponding environmental reclamation liability. The provision for the liability associated with the terms of the ASAOC is based on cost estimates developed with the use of engineering consultants, independent contractor quotes and the Company’s internal development team. The timing of cash flows is based on the latest schedule for early action items. The estimated environmental reclamation liability may be subject to change based on changes to cost estimates and is adjusted for actual work performed. On April 13, 2023, after conducting a competitive bidding process, the Company announced it selected Iron Woman Construction and Environmental Services to conduct certain environmental improvements pursuant to the Company’s obligations under the ASAOC. The contract terms, together with scope changes, inflation and increased estimates for fuel usage related to the restoration activities, resulted in an increase to the Company’s forecasted amounts for ASAOC restoration activities and are additions during the nine -month period ended September 30, 2023. During the nine-month period ended September 30, 2023, the Company spent $8.7 million expecting to improve water quality which included moving more than 300,000 tons of legacy mine waste and tailings away from sensitive waterways on site and relocating it to areas where it can be more safely stored. Perpetua anticipates completing the majority of the early action restoration work at site by the end of 2023.

Movements in the environmental reclamation liability during the nine months ended September 30, 2023 and 2022 are as follows:


	Nine months ended September 30,
	2023		2022
Balance at beginning of period	$	10,800,936	$	9,888,200
Additions		604,222		898,146
Work performed on early action items		(8,650,891)		(2,920,780)
Balance at end of period	$	2,754,267	$	7,865,566

Current portion	$	2,297,523	$	5,756,965
Non-current portion		456,744		2,108,601
Balance at end of period	$	2,754,267	$	7,865,566

In 2021, the Company provided $7.5 million in financial assurance for Phase 1 projects under the ASAOC. The Company paid $3.0 million in cash collateral for a surety bond related to the ASAOC statement of work in early 2021.

6.Commitments and Contingencies

a.Mining Claim Assessments

The Company currently holds mining claims and mill sites for which it has an annual assessment obligation of $275,992 to maintain the claims in good standing. The Company is committed to these payments indefinitely. Related to the mining claims assessments is a $335,000 bond related to the Company’s exploration activities.

Stibnite Foundation

Upon formation of the Stibnite Foundation on February 26, 2019, the Company became contractually liable for certain future payments to the Stibnite Foundation based on several triggering events, including receipt of a Final Record of Decision issued by the USFS, receipt of all permits and approvals necessary for commencement of construction, commercial production, and of the final reclamation phase. These payments could begin as early as the first half of 2024 based on the current permitting schedule and range from $0.1 million to $1 million (upon commencement of final reclamation phase) in cash and 150,000 common shares of the Company. During commercial production, the Company will make payments to the Stibnite Foundation equal to 1% of Total Comprehensive Income less debt repayments, or a minimum of $0.5 million each year.

The Stibnite Foundation will support projects that benefit the communities surrounding the Stibnite Gold Project and was created through the establishment of the Community Agreement between Perpetua Resources Idaho, Inc. and eight communities and counties throughout the West Central Mountains region of Idaho.

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Option Payments on Other Properties

The Company is obligated to make option payments on mineral properties in order to maintain an option to purchase these properties. As of September 30, 2023, the option payments due on these properties in 2023 are $180,000, which will be paid this year. The agreements include options to extend.

Off Balance Sheet Arrangements

The Company has no off-balance sheet arrangements as of September 30, 2023 and the date of this report.

e.Legal Update

On August 8, 2023, the Company and the Nez Perce Tribe filed a final Settlement Agreement (the “Settlement Agreement”) to resolve the CWA litigation. The parties jointly asked the court to approve the Settlement Agreement and dismiss the case without prejudice. The Settlement Agreement provides for total payments of $5 million by Perpetua over a four-year period. This includes $4 million of contributions by Perpetua to a South Fork Salmon Water Quality Enhancement Fund (the “Fund”) to be used by the Nez Perce Tribe to support water quality improvement projects in the South Fork Salmon River watershed and $1 million of reimbursements to the Nez Perce Tribe for legal expenses. Following a 45-day review period by the United States Justice Department and 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. Once Perpetua has satisfied its payment obligations under the Settlement Agreement, the parties will submit a Stipulation of Dismissal with Prejudice to the court. The Company recognized an expense of $5 million during the second quarter of 2023. At September 30, 2023, CWA settlement payable current portion is $500,000 with the remaining $4,500,000 classified as long-term.

The voluntary CERCLA ASAOC entered into by the Corporation, the U.S. EPA, and the United States Department of Agriculture requires numerous early cleanup actions to occur over the next several years at the Stibnite Gold Project site (the “Stibnite Site”). Perpetua Resources Idaho, Inc. is presently developing and executing the Phase 1 early cleanup actions (known under CERCLA as “time critical removal actions”) that, after final work plan approval by the federal agencies, are designated to efficiently improve water quality in a number of areas on the Stibnite Site. Construction of time critical removal actions began in the summer of 2022, and significant progress was achieved to complete the voluntary Phase 1 Stibnite Site cleanup during the limited work season. During the nine-month period ended September 30, 2023, the Company spent $8.7 million expecting to improve water quality which included moving more than 300,000 tons of legacy mine waste and tailings away from sensitive waterways on site and relocating it to areas where it can be more safely stored. Perpetua anticipates completing the majority of the early action restoration work at site by the end of 2023.Other longer-term proposed actions relating to Project operations are being evaluated through the NEPA process.

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7.Government Grants

Small Business Innovation Research (“SBIR”) Grant: In September 2022, the Company was awarded two separate funding grants from the U.S. Department of Defense (“DOD”) Defense Logistics Agency (“DLA”) totaling $200,000 to study the domestic production of military-grade antimony trisulfide. During the three and nine months ended September 30, 2023, $24,999 and $124,997, respectively, was recognized as grant income for these grants. The programs were complete in September 2023 so no additional grant income is anticipated under the program.

Defense Production Act (“DPA”) Grant: On December 16, 2022, the Company entered into an undefinitized Technology Investment Agreement (“TIA”) with the DOD - Air Force Research Laboratory for an award of up to $24,800,000 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 $24,812,062. The definitized TIA did not change any other material terms of the undefinitized TIA. The funding objective of the TIA is to complete environmental and engineering studies necessary to obtain a Final Environmental Impact Statement, a Final Record of Decision, and other ancillary permits to sustain the domestic production of antimony trisulfide capability for defense energetic materials at the Stibnite Gold Project. Proceeds from the grant will be used primarily to reimburse the Company for certain costs incurred over the next 24 months related to environmental baseline data monitoring, environmental and technical studies and other activities related to advancing the Company’s construction readiness and the permitting process for the Stibnite Gold Project. During the three and nine months ended September 30, 2023, $4,655,183 and $11,922,642, respectively, was recognized as grant income related to the TIA. The Company anticipates recognizing approximately $4,400,000 of additional grant income for the three months ended December 31, 2023. During the three and nine months ended September 30, 2023, the Company was reimbursed $6,185,455 and $10,430,060 for certain costs incurred.

DOD Ordnance Technology Consortium (“DOTC”) Grant: On August 18, 2023, the Company’s wholly owned subsidiary, Perpetua Resources Idaho, Inc., was awarded an Ordnance Technology Initiative Agreement (“OTIA”) of up to $15.5 million under the Prototype Other Transaction authority of the DOD through the DOTC. The funding objective of the OTIA is to demonstrate a fully domestic antimony trisulfide supply chain using ore from the Stibnite Gold Project site. The OTIA designates funding to the Company to conduct activities to meet this objective, including obtaining additional core samples from the Project site, conducting a pilot plant study to produce mil-spec antimony trisulfide from the samples, designing a full-scale process circuit, and delivering a modular pilot plant for the DOD to use in further investigations. 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. Perpetua will be entitled to reimbursement for all costs incurred under the agreement, with the negotiated fee being 12%. The OTIA contains customary terms and conditions for OTIAs, including ongoing reporting obligations.

During the three and nine months ended September 30, 2023, $2,225,509 and $2,225,509, respectively, were recognized as grant income within other income (expense) on the unaudited condensed consolidated statement of operations. No grant income was recognized during the same period in 2022. As of September 30, 2023 and December 31, 2022, grant receivable was $418,795 and $nil, respectively, and is included in receivables on the unaudited condensed consolidated balance sheets. The Company anticipates recognizing approximately $3,450,000 of additional grant income for the next three months ended December 31, 2023.

Accounting for these DOD grants does not fall under ASC 606, Revenue from Contracts with Customers, as the DOD does not meet the definition of a customer under this standard. The DOD grant proceeds, which will be used to reimburse expenses incurred, meet the definition of grants related to expenses as the primary purpose for the payments is to fund research and development on trisulfides and the advancement of the Company’s Stibnite Gold Project.

A total of $6,905,691 and $14,273,148 grant income was recognized within other income (expense) on the unaudited condensed consolidated statement of operations during the three and nine months ended September 30, 2023, respectively. No grant income was recognized during the same period in 2022. At September 30, 2023 and December 31, 2022, grant receivable was $1,919,706 and $50,000, respectively, and is included in receivables on the unaudited condensed consolidated balance sheets.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations for the three and nine months ended September 30, 2023 and 2022 with our consolidated financial statements and related notes and other financial information appearing in this Quarterly Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, operations, and product candidates, includes forward-looking statements that involve risks and uncertainties. You should review the sections of this Quarterly Report captioned “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” for a discussion of important factors that could cause our actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

Perpetua Resources (formerly Midas Gold Corp.) was incorporated on February 22, 2011 under the Business Corporations Act (British Columbia) (the “BCBCA”). The Corporation was organized to hold shares in wholly owned subsidiaries that locate, acquire, develop and restore mineral properties located principally in the Stibnite – Yellow Pine mining district in Valley County, Idaho, USA. 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.

Recent Key Developments

2023 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 2023, Perpetua Resources continues to focus on advancing the permitting for the Stibnite Gold Project through the National Environmental Policy Act (“NEPA”) process. 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.

Third Quarter 2023 Highlights

●

Zero lost time incidents or reportable environmental spills.

●

Signed definitized TIA for DOD critical minerals award of $24.8 million under DPA.

●

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.

Supplemental Draft Environmental Impact Statement (“SDEIS”)

In response to public and agency feedback on the Draft Environmental Impact Statement released by the 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, while giving consideration to environmental, economic, and technical factors. Under NEPA, a “Preferred Alternative” is identified by a Federal agency in a DEIS to let the public know 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 each of the alternatives analyzed in the SDEIS when developing the Final Environmental Impact Statement.

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The SDEIS public review period closed on January 10, 2023. Following completion of the comment period and analysis, the USFS updated the permitting schedule for the Project with a FEIS and draft Record of Decision expected by the end of 2023 and a Final Record of Decision anticipated in early 2024. 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.

Ancillary Permitting Update

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

●

Submitted the 404 Wetlands & Compensatory Mitigation Plan application to the U.S. Army Corps of Engineers (“USACE”) in April 2023 and USACE provided a 404 permit application completeness determination in July 2023.

●

Submitted the formal request to begin the 401 Water Quality Certification process to Idaho Department of Environmental Quality (“IDEQ”) in May 2023.

●

Submitted 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.

●

Submitted cyanidation permit application in August 2023 to IDEQ. IDEQ issued a letter of incompleteness in September 2023 and the Company expects to resubmit an updated permit application in the fourth quarter of 2023.

●

A 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.

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. 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. After a competitive review process, Perpetua Resources was awarded SBIR Phase 1 funding of $100,000 each for both programs. 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. Phase 2 funding could be made available for more advanced stage pilot-scale testing within the next year. Together, the Phase 1 and Phase 2 programs could confirm the Project’s ability to provide the domestic antimony source needed to meet the defense procurement demand and support commercial markets. During the three and nine months ended September 30, 2023, $24,999 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 a 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. The definitized TIA did not change any other material terms of the undefinitized TIA. 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 Final Record of Decision, 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. The TIA contains customary terms and conditions for technology investment agreements, including ongoing reporting obligations. Perpetua Resources is evaluating other U.S. government funding opportunities, including programs available through the DOD. During the three and nine months ended September 30, 2023, $4,655,183 and $11,992,642 respectively, was recognized as grant income related to the TIA. The Company anticipates recognizing approximately $4,400,000 of additional grant

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income over the next three months. During the nine months ended September 30, 2023, the Company was reimbursed $10,430,060 for certain costs incurred.

On August 18, 2023, the Company’s wholly owned subsidiary, Perpetua Resources Idaho, Inc. was awarded an Ordnance Technology Initiative Agreement (“OTIA”) of up to $15.5 million under the Prototype Other Transaction authority of the DOD through the DOD Ordnance Technology Consortium (“DOTC”). The OTIA will build on research conducted under a previously announced Small Business Innovation Research Grant. The funding objective of the OTIA is to demonstrate a fully domestic antimony trisulfide supply chain using ore from the Stibnite Gold Project site. The OTIA designates funding to the Company to conduct activities to meet this objective, including obtaining additional core samples from the Project site, conducting a pilot plant study to produce mil-spec antimony trisulfide from the samples, designing a full-scale process circuit, and delivering a modular pilot plant for the DOD to use in further investigations. 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. Perpetua will be entitled to reimbursement for all costs incurred under the agreement, with the negotiated fee being 12%. The OTIA contains customary terms and conditions for OTIAs, including ongoing reporting obligations. During the three and nine months ended September 30, 2023, $2,225,509 and $2,225,509, respectively, was recognized as grant income related to the OTIA. The Company anticipates recognizing approximately $3,450,000 of additional grant income over the next three months.

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. In the third quarter of 2023, Perpetua:

●

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

●

Continued 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; and,

●

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.

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 million by Perpetua over a four-year period, which includes $4 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 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 6(e) to the Interim Financial Statements for the three and nine months ended September 30, 2023 for more information regarding the CWA lawsuit and the terms of the settlement.

Inflation

The U.S. inflation rate increased throughout 2022 and into 2023 but has begun to stabilize in 2023. These inflationary pressures have resulted in and may result in additional increases to the costs of our goods, services and personnel, which in turn cause our capital expenditures and labor costs to rise, including the estimated costs to complete the ASAOC environmental reclamation work. In particular, on April 13, 2023, after conducting a competitive bidding process, the Company announced it selected Iron Woman Construction and Environmental Services to conduct certain environmental improvements pursuant to the Company’s obligations under the ASAOC. The bid, together with scope changes, inflation and increased estimates for fuel usage related to the restoration activities, resulted in an increase to the Company’s forecasted amounts for ASAOC restoration activities in the nine months ended September 30, 2023. Sustained levels of high inflation have likewise caused the U.S. Federal Reserve and other central banks to increase interest rates,

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which could have the effects of raising the cost of capital and depressing economic growth, either of which—or the combination thereof—could adversely affect our business.

Liquidity

The Company’s latest liquidity forecast indicates that available cash resources are expected to be exhausted in the first quarter of 2024. Although the Company’s current capital resources and liquidity include $24.8 million in funding awarded under the TIA pursuant to Title III of the DPA, 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 into 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 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. See “—Liquidity and Capital Resources” for more information.

The forward‐looking information contained in this section is subject to the risk factors and assumptions contained in the “Cautionary Note Regarding Forward-Looking Statements” section.

Results of Operations

Three and nine months ended September 30, 2023 compared to three and nine months ended September 30, 2022


	For the three months ended September 30,				For the nine months ended September 30,
	2023		2022		2023		2022
EXPENSES
Corporate salaries and benefits	$	393,656	$	453,330	$	1,205,824	$	1,281,617
Depreciation		23,846		15,318		59,548		41,654
Directors’ fees		30,158		92,874		310,268		445,348
Exploration		8,664,205		4,589,966		20,683,257		13,456,304
Environmental liability expense		22,285		232,776		604,222		898,146
CWA settlement expense		—		—		5,000,000		—
General and administration		160,264		187,733		454,543		570,355
Professional fees		230,243		223,160		875,327		1,474,356
Shareholder and regulatory		91,177		142,984		388,307		418,050
OPERATING LOSS		9,615,834		5,938,141		29,581,296		18,585,830

OTHER EXPENSES (INCOME)
Change in fair value of warrant derivative		—		(6,021)		(1,732)		(100,766)
Foreign exchange loss (income)		12,571		(7,136)		15,193		26,210
Grant income		(6,905,691)		—		(14,273,148)		—
Interest income		(92,620)		(170,658)		(418,670)		(254,683)
Total other loss (income)		(6,985,740)		(183,815)		(14,678,357)		(329,239)

NET LOSS	$	2,630,094	$	5,754,326	$	14,902,939	$	18,256,591

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Net Loss

Net loss for the three months ended September 30, 2023 was $2.6 million compared with a net loss of $5.8 million for the three months ended September 30, 2022. This $3.2 million decrease compared to the prior year period was primarily attributable to a $6.9 million increase in grant income, partially offset by an increase of $4.1 million in exploration expense. Net loss for the nine months ended September 30, 2023 was $14.9 million compared with a net loss of $18.3 million for the nine months ended September 30, 2022. This $3.4 million decrease compared to the prior year period was primarily attributable to a $14.3 million increase in grant income, a $0.6 million decrease in professional fees and a $0.3 million decrease in environmental liability expense. These changes were offset by $5.0 million recognized in the 2023 period for CWA settlement expense and an increase of $7.2 million in exploration expense. As noted above, for the nine months ended September 30, 2023, the Company’s main focus was the continued evaluation and advancement of the Stibnite Gold Project.

Corporate Salaries and Benefits

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 three and nine months ended September 30, 2023 were 13% and 6% lower than the 2022 comparative periods due to lower 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). This expense for the three and nine months ended September 30, 2023 was 68% and 30% lower than the 2022 comparative periods due to lower share-based compensation.

Exploration

This expense relates to all exploration and evaluation expenditures related to the Stibnite Gold Project, including labor, drilling, field operations, engineering, permitting, environmental, legal and sustainability costs. The Company’s exploration expenses of $8.7 million during the three months ended September 30, 2023 were $4.1 million, or 89%, higher than the three months ended September 30, 2022 primarily due to a $3.4 million increase in engineering and a $0.4 million increase in field operations and drilling support. The Company’s exploration expenses of $20.7 million during the nine months ended September 30, 2023 were $7.2 million, or 54%, higher than the nine months ended September 30, 2022 primarily due to a $4.9 million increase in engineering, $1.4 million increase in permitting, and a $0.6 million increase in consulting and labor cost.

Additional details of expenditures incurred are as follows:


	For the three months ended September 30,				For the nine months ended September 30,
	2023		2022		2023		2022
Consulting and labor cost	$	1,582,265	$	1,358,601	$	4,612,015	$	4,049,676
Engineering		3,664,528		229,049		5,411,118		527,519
Environmental and reclamation		52,686		22,631		134,453		111,012
Field operations and drilling support		840,814		490,152		1,940,037		1,508,714
Legal and sustainability		362,718		468,120		1,284,819		1,309,780
Permitting		2,161,194		2,021,413		7,300,815		5,949,603
TOTAL EXPLORATION	$	8,664,205	$	4,589,966	$	20,683,257	$	13,456,304

Environmental Liability Expense

This expense relates to the ASAOC signed in January 2021 to voluntarily address environmental conditions at the abandoned mine site. 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 three and nine months ended September 30, 2023, the total cost estimate to complete Phase 1 early cleanup actions decreased $0.2 million and $0.3 million, respectively over the same periods in 2022 driven by lower estimated increases in the current period for the remaining work to be performed. During the three months ended September 30, 2023, the estimated cost to complete was increased by $22,285 driven by slightly higher fuel prices. As of September 30, 2023, the estimate for the remaining environmental liability was $2.8 million, most of which is expected to be incurred in the three months ended December 31, 2023.

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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 million by Perpetua over a four-year period. The Company recognized $5.0 million in the second quarter of 2023 for this settlement.

General and Administrative

This expense is predominantly insurance policies for the U.S. offices. This expense for the three and nine months ended September 30, 2023 was 15% and 20% lower than the 2022 comparative periods primarily due to lower insurance premiums.

Professional Fees

This expense relates to the legal, accounting and consulting costs of the Corporation. This expense for the three and nine months ended September 30, 2023 was 3% higher and 41% lower than the 2022 comparative periods with the decrease driven by lower legal and accounting fees. During the first quarter 2022, higher legal fees were incurred to support the Company’s transition to a U.S. Domestic Issuer.

Shareholder and Regulatory

This expense relates to marketing, licenses and fees, and shareholder communications. This expense for the three and nine months ended September 30, 2023 was 36% and 7% lower than the 2022 comparative periods primarily due to a larger number of public Company filings in the third quarter of 2022 resulting in higher fees.

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 Company 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. The warrants expired in May 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 in the three and nine month periods ended September 30, 2023 compared to the same periods of 2022 primarily due to less cash being held in Canadian currency during the 2023 period.

Grant Income

This income results 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. Grant income increased $6.9 million and $14.3 million for the three and nine months ended September 30, 2023, compared to the previous year as the grants were awarded in September 2022, December 2022 and August 2023. No grant income was recognized during the same periods in 2022.

Interest Income

This income results from interest received on the Company’s cash balances. Interest income decreased $78,038 in the three months ended September 30, 2023 compared to the three months ended September 30, 2022 as a result of lower cash balances and increased $163,987 in the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 as a result of higher interest rates in the first nine months of 2023.

Liquidity and Capital Resources

Capital resources of Perpetua Resources consist primarily of cash and liquid short-term investments. As of September 30, 2023, Perpetua Resources had cash and cash equivalents totaling approximately $7.1 million, approximately $3.3 million in other current assets and $6.0 million in trade and other payables. As of October 31, 2023, Perpetua Resources had cash and cash equivalents totaling approximately $2.7 million.

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In August 2021, the Corporation completed a public offering for total gross proceeds of $57.5 million to be used to continue permitting, early restoration and field operations, engineering and design and general corporate purposes. In December 2022, the Corporation was awarded a 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. 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, which includes reimbursement of employee wages for activities included in the scope of the TIA. During the three and nine months ended September 30, 2023, $4.7 million and $11.9 million was recognized as grant income related to the TIA. The Company anticipates recognizing approximately $4.4 million of additional grant income over the next three months. During the three and nine months ended September 30, 2023, the Company was reimbursed $6.2 million and $10.4 million for certain costs incurred and received reimbursement of an additional $1.5 million in November 2023 with respect to expenses incurred in the three and nine months ended September 30, 2023.

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

●

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

●

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; and

●

Advance construction readiness for the Project.

Although the Company’s current capital resources and liquidity include $24.8 million in funding awarded under the TIA pursuant to Title III of the DPA, 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 into 2024, due to costs of the ASAOC restoration obligations 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 indicates that available cash resources for expenses not eligible for reimbursement under the DPA funding are expected to be exhausted in the first quarter of 2024. In addition, the Company’s payment obligations under the Settlement Agreement will commence in the first half of 2024. The Company intends to fund these payments from cash on hand or funds expected to be raised in connection with construction of the Project. 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; 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 million. As of September 30, 2023, $20 million remained available under the program. Subsequent to September 30, 2023 and as of October 27, 2023, the Company sold 65,375 common shares in exchange for net proceeds of approximately $235,234. 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.

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Our anticipated expenditures for the fiscal year 2023 are approximately $37.7 million, of which approximately $16.3 million are expected to be funded from the DPA reimbursements and the remainder from cash on hand. These expenditures include an estimated $10.5 million to fund permitting of the Stibnite Gold Project, $9.3 million for general corporate purposes and administrative costs, $5.4 million for engineering and design work and $12.5 million to advance early restoration under the ASAOC and continue field operations. 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 is estimated to be approximately $1,263 million according to the TRS.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of September 30, 2023 (the “Evaluation Date”). Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the Evaluation Date.

Changes in Internal Control Over Financial Reporting.

As of the Evaluation Date, there were no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2023 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

The Corporation and its subsidiaries have been parties to an ongoing legal proceeding with the Nez Perce Tribe for alleged violations of the Clean Water Act (“CWA”) related to historical mining activities. In August 2019, the Nez Perce Tribe filed suit in the United States District Court for the District of Idaho. The Corporation promptly filed a motion to dismiss and, in the alternative, a motion to stay the litigation. Both motions were denied. Subsequently, the Corporation filed an answer denying liability and later, the court allowed the Corporation to amend and file a third-party complaint against the Forest Service. The Corporation also filed a separate CWA citizen suit against the United States Forest Service (“USFS” or “Forest Service”) alleging that several of the point source discharges, as alleged by the Nez Perce Tribe in its complaint, were occurring on lands owned and controlled by the United States. Pursuant to the terms of the voluntary ASAOC executed in January 2021 with U.S. Environmental Protection Agency (the “U.S. EPA”) and the United States Department of Agriculture, the Corporation agreed to dismiss its pending actions against the Forest Service without prejudice. The remaining parties to the ongoing legal proceeding agreed to stay the litigation and explore Alternative Dispute Resolution options through court-ordered mediation. On August 8, 2023, the Company and the Nez Perce Tribe filed a final Settlement Agreement (the “Settlement Agreement”) to resolve the CWA litigation. The parties jointly asked the court to approve the Settlement Agreement and dismiss the case without prejudice. The Settlement Agreement provides for total payments of $5 million by Perpetua over a four-year period. This includes $4 million of contributions by Perpetua to a South Fork Salmon Water Quality Enhancement Fund (the “Fund”) to be used by the Nez Perce Tribe to support water quality improvement projects in the South Fork Salmon River watershed and $1 million of reimbursements to the Nez Perce Tribe for legal expenses. Following a 45-day review period by the United States Justice Department and 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. Once Perpetua has satisfied its payment obligations under the Settlement Agreement, the parties will submit a Stipulation of Dismissal with Prejudice to the court.

Certain of the Corporation’s property interests in the Project are also subject to existing judicial consent decrees due to Perpetua’s acquisition of several patented lode mining claims and mill sites which covers environmental liability and remediation responsibilities. Under the consent decrees, Perpetua is required to grant access to certain site areas by regulatory agencies and allow remediation activities to proceed if necessary and preserve the integrity of previous response actions. Several of the Corporation’s patented claims in the Hangar Flats and Yellow Pine properties are also subject to a consent decree which requires Perpetua to cooperate with the U.S. EPA and the USFS to implement appropriate response activities.

Item 1A. Risk Factors.

In addition to other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors and other cautionary statements described under the heading “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2022 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, which could materially affect our businesses, financial condition, or future results. Additional risks and uncertainties currently unknown to us, or that we currently deem to be immaterial, also may materially adversely affect our business, financial condition, or future results. Except as described below, there have been no material changes in our risk factors from those described in the Annual Report on Form 10-K for the year ended December 31, 2022 and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2023.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Recent Sales of Unregistered Securities; Issuer’s Purchases of Equity Securities

None.

Use of Proceeds from Registered Securities

On August 16, 2021, we completed an underwritten public offering pursuant to a prospectus supplement to our short form base shelf prospectus dated April 1, 2021, filed pursuant to General Instruction II.L. of Form F-10, and declared effective by the SEC on April 2, 2021 (File No. 333-254517, the “Prospectus Supplement”). The Corporation issued 10,952,382 common shares, which included 1,428,572 common shares issued pursuant to the overallotment option granted to the underwriters, at a public offering price of $5.25 per common share for gross proceeds of approximately $57.5 million before deducting underwriting discounts and commissions and offering expenses. The net proceeds from the issuance were $54.3 million, after deduction of underwriting discounts and commissions and offering expenses of $3.2 million. B. Riley Securities, Inc. and Cantor Fitzgerald Canada Corporation acted as joint-bookrunning managers for the offering.

The Prospectus Supplement included a proposed use of proceeds that would be compared to expenditures from October 1, 2021 onwards. A reconciliation of the use of proceeds is provided below. As a result of the DPA funding announced in December 2022, which is available for limited uses related to environmental baseline data monitoring, environmental and technical studies and other activities related to advancing construction readiness and permitting, we reduced our planned use of the proceeds from the offering for permitting, environmental field operations and engineering and design work and reallocated those funds to general corporate purposes and restoration work pursuant to the ASAOC, as shown in the table below. Except as described, there has been no material change in the planned use of proceeds as described in our Prospectus Supplement.


	Proposed Use of		Updated Use of		Actual Use of		Remaining to be
Expense Category (in Millions)	Proceeds		Proceeds		Proceeds		Spent/Difference (ii, iii)
Permitting	$	21.0	$	11.0	$	11.4	$	(0.4)
General Corporate Purposes(i)		20.1		25.3		20.8		4.5
Early Restoration & Field Operations		7.9		17.0		15.5		1.5
Engineering & Design		5.3		1.0		1.9		(0.9)
	$	54.3	$	54.3	$	49.6	$	4.7

(i)

Funds for general corporate purposes may be allocated for corporate expenses, business development and legal expenses.

(ii)

The remaining funds for Permitting and Engineering are negative as of September 30, 2023 due to a lag in DPA reimbursement for these expenses.

(iii)

Remaining to be spent is lower than actual cash balance due to use of proceeds being presented on an accrual basis.

None of the offering proceeds were paid directly or indirectly to any of our directors or officers (or their associates) or persons owning 10.0% or more of any class of our equity securities, to any other affiliates or to others.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Pursuant to Section 1503(a) of the Dodd-Frank Act, issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose specified information about mine health and safety in their periodic reports. These reporting requirements are based on the safety and health requirements applicable to mines under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”) which is administered by MSHA. During the nine months ended September 30, 2023, the Company and its subsidiaries were not subject to regulation by MSHA under the Mine Act and thus no disclosure is required under Section 1503(a) of the Dodd-Frank Act.

Item 5. Other Information.

None.

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Item 6. Exhibits.


Exhibit Number		Description
3.1		Certificate of Incorporation of Perpetua Resources Corp. (incorporated by reference to Exhibit 4.1 of the Company’s Registration Statement on Form S-8 (File No. 333-255147) filed with the SEC on April 9, 2021).
3.2		Notice of Articles and Articles filed under the Business Corporations Act (British Columbia) (incorporated by reference to Exhibit 4.2 of the Company’s Registration Statement on Form S-8 (File No. 333-255147) filed with the SEC on April 9, 2021).
3.3		Certificate of Change of Name (incorporated by reference to Exhibit 4.3 of the Company’s Registration Statement on Form S-8 (File No. 333-255147) filed with the SEC on April 9, 2021).
3.4		Amendment to Articles, dated May 25, 2022 (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K, filed with the SEC on May 27, 2022).
4.1		Description of Common Shares (incorporated by reference to Exhibit 4.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, filed with the SEC on August 12, 2022).
10.1*#		Technology Investment Agreement between the United States of America and Perpetua Resources Idaho, Inc., as modified as of July 25, 2023.
10.2*+		Employment Agreement between Michael Wright and Perpetua Resources Idaho, Inc.
10.3		Form of Indemnity Agreement.
31.1		Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002 (Rule 13a-14 (a) and 15d-14 (a) of the Exchange Act).
31.2		Certification of Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002 (Rule 13a-14 (a) and 15d-14 (a) of the Exchange Act).
32.1		Certification of Chief Executive Officer pursuant to Section 1350 of Title 18 of the United States Code.
32.2		Certification of Chief Financial Officer pursuant to Section 1350 of Title 18 of the United States Code.
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

+	Compensatory plan or agreement.

*	Portions of this exhibit have been redacted in compliance with Regulation S-K Item 601(b)(10)(iv).

#	Schedules have been omitted pursuant to Regulation S-K Item 601(b)(2). The Company agrees to furnish to the SEC a copy of any omitted schedule upon request.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 9, 2023	PERPETUA RESOURCES CORP.

	By:	/s/ Laurel Sayer
	Name:	Laurel Sayer
	Title:	President, Chief Executive Officer and Director

Exhibit 10.1

TIA Single Modification

between

The United States Of America

USAF/AFMC

AFRL WRIGHT RESEARCH SITE 2130 EIGHTH STREET BUILDING 45

WRIGHT-PATTERSON AFB OH 45433-7541

and

PERPETUA RESOURCES IDAHO INC

405 S 8TH ST

STE 201

BOISE ID 83702-7100

(208) 901-3060

CAGE: 9AXR4

Concerning

Defense Production Act Title III Program, Antimony Trisulfide Production Capability for Defense Energetic Materials

Change in Agreement No.:	FA8650-23-2-5522 PZ0001

Change in Total Amount of the Agreement:	$12,062.00

Change in Government share:	$12,062.00

Change in Recipient share:	$0.00

Change in Funds Allotted by Government:	$6,212,062.00

Effective Date:


For Perpetua Resources		For the United States of America
//signed//		//signed//
Name: Laurel Sayer		WHITNEY L. FOXBOWER
Title: President and CEO		Agreements Officer

[***] CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT PURSUANT TO REGULATION S-K, ITEM 601(b)(10) BECAUSE IT IS BOTH NOT MATERIAL AND IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL BUSINESS.

Distribution A. Approved for Public Release AFRL-2023-5431 [26 Oct 2023]

SCHEDULE

Pursuant to Article 3.002 MODIFICATIONS (APR 2000), the purpose of this modification is to definitize this Technology Investment Agreement and establish a final cost to the Government. In addition, this modification incorporates the final version of the Articles of this agreement and Statement of Work.

2.	The final definitized cost of this Agreement is:

Government Share: $24,812,062 Recipient Share: $0.00

Total Cost: $24,812,062

3.	Attachment 1A “Technology Investment Agreement (TIA) Definitization” is hereby deleted in its entirety.

4.	Attachment 1B “Agreement Articles”, executed under the Basic, is hereby deleted in its entirety, and replaced with Attachment 1B “Agreement Articles”, dated 24 July 2023.

5.	Attachment 3 “Statement of Objectives” is hereby deleted in its entirety, and replaced with Attachment 3 “Statement of Work” entitled “Securing the Only Domestic Antimony Trisulfide Production Capability for Defense Energetic Materials”, dated 7 March 2023.

8	All other attachments remain unchanged.

9	Article 4.005 Allotted Funding (OCT 2001) has been updated to show all funding actions performed, to include the obligation of this modification in the amount of $6,212,062. The consolidated history is as follows:

NTE-TIA: $18,600,000

PZ0001: $6,212,062

TOTAL: $24,812,062

The total amount allotted to this TIA is $24,812,062, and constitutes full funding to cover the Government Share. For full funding details, see Article 4.005.

9.	The Period of Performance stated in Article 2.001 “Term of the Agreement” is 27 months, and is summarized as follows:

Technical End Date: 16 December 2024

Final Report Due: 17 March 2025

10.	Except as noted herein, all other terms and conditions not specifically addressed in this modification remain unchanged and in full force and effect.

ATTACHMENTS	PGS	DATE	TITLE
ATTACHMENT 1B	45	24 JUL 2023	AGREEMENT ARTICLES
ATTACHMENT 3	10	07 MAR 2023	STATEMENT OF WORK - SECURING THE ONLY DOMESTIC ANTIMONY TRISULFIDE
PRODUCTION CAPABILITY FOR DEFENSE ENERGETIC MATERIALS
ATTACHMENT 8	1	27 JAN 2023	COST SHARING SUMMARY AND SCHEDULE


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TABLE OF CONTENTS

PART 1 ADMINISTRATIVE INFORMATION

1.000	AUTHORITY
1.001	ORDER OF PRECEDENCE
1.002	ADMINISTRATIVE RESPONSIBILITIES
1.003	DELEGATION OF ADMINISTRATIVE DUTIES
PART 2 TERM
2.000	TRAFFICKING IN PERSONS
2.001	TERM OF THE AGREEMENT
2.002	SCOPE OF THE AGREEMENT
2.003	TERMINATION
2.004	EXTENDING THE TERM

PART 3 MANAGEMENT OF THE PROGRAM

3.00	SCOPE AND MANAGEMENT OF THE PROGRAM
3.01	PROGRAM MANAGEMENT PLANNING PROCESS
3.02	MODIFICATIONS
3.03	PROPERTY
3.04	INSURANCE COVERAGE
3.05	PROPERTY MANAGEMENT

PART 4 FINANCIAL MATTERS
4.00	COST PRINCIPLES
4.01	STANDARDS FOR FINANCIAL MANAGEMENT SYSTEMS
4.02	PAYMENT - REIMBURSEMENT AND COST SHARING - WAWF (DCMA)
4.03	AUDIT
4.04	RETENTION AND ACCESS TO RECORDS - INCORPORATED BY REFERENCE
4.05	ALLOTTED FUNDING
4.06	PROGRAM INCOME - OTHER THAN RESEARCH
4.07	CONSIDERATION
4.08	COST SHARING

PART 5 CLAIMS, DISPUTES AND APPEALS
5.00	CLAIMS, DISPUTES AND APPEALS
5.01	OMBUDSMAN

PART 6 INTELLECTUAL PROPERTY RIGHTS
6.00	PATENT INFRINGEMENT
6.01	INVENTIONS
6.02	DATA RIGHTS
6.03	INVENTIONS / PATENTS
6.04	FOREIGN ACCESS TO TECHNOLOGY
6.05	EXPORT-CONTROLLED DATA RESTRICTIONS


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PART 7 TECHNICAL AND FINANCIAL REPORTING
7.00	FINAL REPORT
7.01	REPORTING SUBAWARDS AND EXECUTIVE COMPENSATION
7.02	FUNDS AND MANHOUR EXPENDITURE REPORT
7.03	RECIPIENT’S PROGRESS, STATUS AND MANAGEMENT REPORT
7.04	STRATEGIC BUSINESS PLAN
7.05	PROPERTY CONTROL LIST
7.06	PRESENTATION MATERIAL
7.07	DISTRIBUTION STATEMENT
7.08	MARKETING PLAN
7.09	DISCLOSURE OF INFORMATION

PART 8 MISCELLANEOUS PERFORMANCE ISSUES
8.00	ADMINISTRATIVE REQUIREMENTS FOR SUBAWARDS AND CONTRACTS
8.01	PROCUREMENT STANDARDS
8.02	CLOSEOUT
8.03	SYSTEM FOR AWARD MANAGEMENT AND UNIVERSAL ENTITY IDENTIFIER REQUIREMENTS

PART 9 NATIONAL POLICY MATTERS AND ASSURANCES
9.00	ASSURANCES
9.01	U.S. FLAG AIR CARRIERS
9.02	PROHIBITION ON USING FUNDS UNDER GRANTS AND COOPERATIVE AGREEMENTS WITH ENTITIES THAT REQUIRE CERTAIN INTERNAL CONFIDENTIALITY AGREEMENTS
9.03	SAFEGUARDING COVERED DEFENSE INFORMATION AND CYBER INCIDENT REPORTING
9.04	RECIPIENT COUNTERFEIT ELECTRONIC PART DETECTION AND AVOIDANCE SYSTEM
9.05	PROHIBITION ON MAKING AWARDS FOR CERTAIN TELECOMMUNICATIONS AND VIDEO SURVEILLANCE SERVICES OR EQUIPMENT (AUG 2020)
9.06	PROHIBITION ON A BYTEDANCE COVERED APPLICATION


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1.00AUTHORITY (MAR 2020)

This agreement is being issued under the authority of 10 U.S.C. 4001 and Title III of the Defense Production Act of 1950, as amended (50 U.S.C. 4501 et seq.)

1.01ORDER OF PRECEDENCE (APR 2000) (TAILORED)

In the event of conflict between the terms of this agreement and other governing documents, the conflict shall be resolved by giving precedence in descending order as follows:

(a)

The articles in this agreement

(b)

The attachments to this agreement, if any

(c)

DoD Grant and Agreement Regulations (Chapter 1, Subchapter C of Title 32, Code of Federal Regulations (CFR) and Chapter XI of Title 2, CFR)

(d)

Other applicable Federal statutes and regulations

1.02ADMINISTRATIVE RESPONSIBILITIES (MAR 2020)

(a)	Government representatives are:

Agreements Officer:

[***]

Agreements Negotiator:

[***]

Government Program Manager:

[***]

Finance:

[***]

Administration Office:

[***]

Payment Office:

[***]

For invention reporting

[***]

(b)	Recipient’s representatives are:


Jessica Largent	Mckinsey Lyon
CFO	VP External Affairs
Perpetua Resources	Perpetua Resources
[***]	[***]

1.003DELEGATION OF ADMINISTRATION (MAR 2015)

The administrative duties listed below have been delegated to the agreements administration office:


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(a)	During performance:

(1)

Approve provisionally all Requests for Advance or Reimbursement (SF 270).

(2)

Perform property administration.

(3)

Perform plant clearance.

(4)

Approve requests for Registration of Scientific and Technical Information Services (DD Form1540).

(5)

Perform cash management by reviewing quarterly Federal Financial Report (SF 425) and, after conferring with the AFRL agreements officer, make appropriate adjustments to predetermined scheduled payments by modifying the agreement.

(b)	Upon expiration of agreements:

(1)

Obtain final payment request, if any.

(2)

Obtain the final Federal Financial Report (SF 425).

(3)

Obtain final property report and dispose of Government property on those assistance awards containing residual Government Property.

(4)

Perform a review of final incurred costs and assist the awarding agreements officer in resolving exceptions, if any, resulting from questioned costs.

(5)

Perform cost sharing adjustments, if applicable.

(6)

Assure that all refunds due the Government are received.

(7)

Notify the agreements officer when the final SF270 and/or SF425 indicates an unexpended balance.

2.000TRAFFICKING IN PERSON (DEC 2007)

(a)	Provisions applicable to a recipient that is a private entity.


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(1)

You as the recipient, your employees, subrecipients under this award, and subrecipients’ employees may not—

(i)

Engage in severe forms of trafficking in persons during the period of time that the award is in effect;

(ii)

Procure a commercial sex act during the period of time that the award is in effect; or

(iii)

Use forced labor in the performance of the award or subawards under the award.

(2)

We as the Federal awarding agency may unilaterally terminate this award, without penalty, if you or a subrecipient that is a private entity –

(i)

Is determined to have violated a prohibition in paragraph a.1 of this award term; or

(ii)

Has an employee who is determined by the agency official authorized to terminate the award to have violated a prohibition in paragraph a.1 of this award term through conduct that is either—

(A)

Associated with performance under this award; or

(B)

Imputed to you or the subrecipient using the standards and due process for imputing the conduct of an individual to an organization that are provided in 2 CFR part 180, “OMB Guidelines to Agencies on Government-wide Debarment and Suspension (Nonprocurement),” as implemented by our agency at 2 CFR 180

(b)

Provision applicable to a recipient other than a private entity. We as the Federal awarding agency may unilaterally terminate this award, without penalty, if a subrecipient that is a private entity—

(1)

Is determined to have violated an applicable prohibition in paragraph a.1 of this award term; or

(2)

Has an employee who is determined by the agency official authorized to terminate the award to have violated an applicable prohibition in paragraph a.1 of this award term through conduct that is either--

(i)

Associated with performance under this award; or

(ii)

Imputed to the subrecipient using the standards and due process for imputing the conduct of an individual to an organization that are provided in 2 CFR part 180, “OMB Guidelines to Agencies on Government-wide Debarment and Suspension (Nonprocurement),” as implemented by our agency at 2 CFR part 180

(c)

Provisions applicable to any recipient.

(1)

You must inform us immediately of any information you receive from any source alleging a violation of a prohibition in paragraph a.1 of this award term.

(2)

Our right to terminate unilaterally that is described in paragraph a.2 or b of this section:

(i)

Implements section 106(g) of the Trafficking Victims Protection Act of 2000 (TVPA), as amended (22 U.S.C. 7104(g)), and

(ii)

Is in addition to all other remedies for noncompliance that are available to us under this award.

(3)

You must include the requirements of paragraph a.1 of this award term in any subaward you make to a private entity.

(d)

Definitions. For purposes of this award term:

(1)

“Employee” means either:

(i)

An individual employed by you or a subrecipient who is engaged in the performance of the project or program under this award; or

(ii)

Another person engaged in the performance of the project or program under this award and not compensated by you including, but not limited to, a volunteer or individual whose services are contributed by a third party as an in-kind contribution toward cost sharing or matching requirements.


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(2)

“Forced Labor’’ means labor obtained by any of the following methods: the recruitment, harboring, transportation, provision, or obtaining of a person for labor or services, through the use of force, fraud, or coercion for the purpose of subjection to involuntary servitude, peonage, debt bondage, or slavery.

(3)

“Private Entity”:

(i)

Means any entity other than a State, local government, Indian tribe, or foreign public entity, as those terms are defined in 2 CFR 175.25.

(ii)

Includes:

(A)

A nonprofit organization, including any nonprofit institution of higher education, hospital, or tribal organization other than one included in the definition of Indian tribe at 2 CFR 175.25(b).

(B)

A for-profit organization.

(4)

“Severe Forms of Trafficking In Persons,” “commercial sex act,” and “coercion” have the meanings given at section 103 of the TVPA, as amended (22 U.S.C. 7102).

2.01TERM OF THE AGREEMENT (APR 2000) TAILORED)

The term of this agreement for this effort is 27 months, 24 months for the technical effort and 3 months for completing the final report, commencing on the effective date shown on the first page of this agreement. The technical effort will be complete on 16 December 2024, and the final report will be due 17 March 2025.

(a)

If all funds are expended prior to the end of the term (including recipient contributions, both cash and in-kind), the parties have no obligation to continue and may elect to cease performance at that point.

(b)

Articles in this agreement which by their express terms or by necessary implication, apply for periods of time other than as specified in this article shall be given effect, notwithstanding this article.

2.02SCOPE OF THE AGREEMENT (MAR 2020)

(a)

Overall Project Intent. The Parties recognize that the ultimate intent of the project is to address the need to strengthen and expand the industrial base for antimony trisulfide production capability for defense energetic materials.

(b)

The Parties recognize the recipient will demonstrate a level of continued commitment in the research project. A portion of this continued commitment supports the Title III objective of economic viability and takes the form of strategic business planning, technical marketing support, and the Recipient’s cost share investment. The Recipient will designate the company’s existing strategic business plan as the current strategy business baseline with the intention of developing and implementing an enhanced strategic business plan and technical marketing effort that recognizes the increased business and marketing opportunities that result from this agreement.

2.03TERMINATION (APR 2000)

(a)	The Agreements Officer may terminate this agreement by written notice to the recipient upon a finding that the recipient has failed to comply with the material provisions of this agreement.

(b)

Additionally, this agreement may be terminated by either party upon written notice to the other party. Such written notice shall be preceded by consultation between the parties. If the recipient initiates the termination, written notification shall be provided to the Agreements Officer at least 30 days prior to the requested effective date. The notification shall state the reasons for the termination, the requested effective date, and, if a partial termination, the portion to be terminated. If the Agreements Officer


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determines, in the case of a partial termination, that the reduced or modified portion of the award will not accomplish the purpose for which the award was made, the Agreements Officer may terminate the award in its entirety.

(c)

The Government and the recipient will negotiate in good faith an equitable reimbursement for work performed toward accomplishment of program goals. The Government will allow full credit to the recipient for the Government share of the obligations properly incurred by the recipient prior to termination, and those noncancellable obligations that remain after the termination. The cost principles and procedures described in the article entitled “Cost Principles” shall govern all costs claimed, agreed to, or determined under this article.

(d)	If this agreement is incrementally funded, it may be terminated in the absence of additional Government funding as set forth in the article entitled “Incremental Funding”.

(e)	In the event of a termination, the Government shall have a paid-up Government purpose license in any subject invention, copyright work, and data made or developed under this agreement.

2.04EXTENDING THE TERM (APR 2000)

If the parties agree, the term of this agreement may be extended if funds are available and research opportunities reasonably warrant. Any extension shall be formalized through modification of the agreement by the Agreements Officer and the recipient.

3.00SCOPE AND MANAGEMENT OF THE PROGRAM (JUN 2001) (TAILORED)

(a)	The Government and the recipient are bound to each other by a duty of good faith and best effort to achieve the goals of this agreement. This agreement is not intended to be, nor shall it be construed as, by implication or otherwise, a partnership, a corporation, or other business organization.

(b)

The recipient shall perform a coordinated research and development program carried out in accordance with the Statement of Work entitled “DPA Title III Securing the Only Domestic Antimony Trisulfide Production Capability for Defense Energetic Materials” dated 7 March 2023, Attachment 3 to this agreement. The recipient shall submit all documentation required by Part 7, “Technical and Financial Reporting”.

(c)

The overall management, including technical, programmatic, reporting, financial and administrative matters, of the coordinated research program established under this agreement shall be accomplished by the recipient. The Government program manager will interact with the recipient to promote effective collaboration between the recipient and the Government. Changes to this agreement that would result in

(1)

a change in the scope or the objective of the project or program or

(2)

a need for additional federal funding must be approved by the Agreements Officer, and the agreement modified in accordance with the article entitled “Modifications”.

(d)	The recipient will establish a schedule of monthly technical meetings, and notify the Government program manager of the schedule. The Government program manager may participate in all technical meetings. Other Government personnel, as deemed appropriate, may also participate.

3.01PROGRAM MANAGEMENT PLANNING PROCESS (APR 2000)

(a)

The Program Plan provides a detailed schedule of project activities, commits the recipient to use its best efforts to meet specific performance objectives, includes forecasted expenditures and describes the payable milestones if applicable. The Program Plan will consolidate all prior adjustments in the program schedule, including revisions/modifications to payable milestones if applicable.


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(b)	For the first agreement year, the recipient will follow the plan as set forth in the recipient’s proposal.

(c)	The plan shall be updated, with Government program manager involvement, in each subsequent agreement year to reflect any changes necessary for conducting research.

3.02MODIFICATIONS (APR 2000)

(a)

Modifications to this agreement may be proposed by either party. Recipient recommendations for any modifications to this agreement, including justifications to support any changes to the statement of work or recipient’s proposal as incorporated by reference and/or the payable milestones, shall be submitted in writing to the government program manager with a copy to the Agreements Officer. The recipient shall detail the technical, chronological, and financial impact of the proposed modification to the program. Changes are effective only after the agreement has been modified. Only the Agreements Officer has the authority to act on behalf of the Government to modify this agreement.

(b)	The Agreements Officer or Administrative Agreements Officer may unilaterally issue minor or administrative agreement modifications (e.g., changes in the paying office or appropriation data, or changes to Government personnel identified in the agreement, etc.)

3.03PROPERTY (APR 2000) (TAILORED)

(a)

Recipients may purchase real property or equipment in whole or in part with federal funds under an award only with the prior approval of the Agreements Officer (except that additional approval is not required for such items included in the proposed/negotiated budget at the time of award). If the recipient purchases real property (other than land) or equipment with their own funding, and designates the real property or equipment as recipient cost share, the Government will have a financial interest in the real property or equipment. The financial interest of the Government is determined by the Federal participation in the project.

(b)	Equipment is defined as tangible nonexpendable personal property charged directly to the award having a useful life of more than one year and an acquisition cost of $5,000.00 or more per unit.

(c)

Title to all real property and equipment purchased by the recipient with federal funds under this agreement will vest with the Government throughout the agreement. The Government may elect to transfer title to all (or some) of the real property or equipment to the recipient at the end of the agreement, if the recipient’s performance is satisfactory, and subject to compliance with the criteria listed below in subparagraphs (c)(1), (c)(2), and (c)(3).

(1)

Use the real property or equipment for the authorized purposes of the project until funding for the project ceases, or until the property is no longer needed for the purposes of the project.

(2)

Not encumber the property without approval of the Agreements Officer.

(3)

Use and dispose of the property in accordance with paragraphs (d), (e), (f), and (g) of this article.

(d)

Title to all real property or equipment purchased by the recipient with recipient funds designated as recipient cost share under this agreement, will vest with the recipient subject to subparagraphs (c)(1), (c)(2) and (c)(3) above. As stated in paragraph (a) above, the Government will have a financial interest in the real property or equipment. The Government may relinquish all financial interest in the recipient purchased equipment at the end of the agreement, provided the recipient’s performance is satisfactory, and the recipient provides:


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(1)

Guaranteed, ongoing responsiveness to DoD requirements for products and services that require use of the equipment.

(2)

If the recipient’s performance is not satisfactory the provisions listed above in paragraph (c)(1) through (c)(3) will apply.

(e)

During the time the real property or equipment is used on this program, the recipient shall make it available for use on other projects or programs, if such other use will not interfere with the work on this program. Use of the real property or equipment on other projects will be in the following order of priority:

(1)

Activities sponsored by DoD Components’ grants, cooperative agreements, or other assistance awards;

(2)

Activities sponsored by other Federal agencies’ grants, cooperative agreements, or other assistance awards;

(3)

Activities under Federal procurement contracts;

(4)

Activities not sponsored by any Federal agency. If so used, mutually agreed to use charges shall be assessed to those activities. For real property or equipment, the use charges shall be at rates equivalent to those for which comparable real property or equipment may be leased. The use charges shall be treated as program income.

(f)	After Federal funding for the project ceases, or when the real property or equipment is no longer needed for the purposes of the project, the recipient may use the real property or equipment for other projects, insofar as:

(1)

There are federally sponsored projects for which the real property or equipment may be used. If the only use for the real property or equipment is for projects that have no Federal sponsorship, the recipient shall proceed with disposition of the real property or equipment, in accordance with paragraph (g) of this section.

(2)

The recipient obtains written approval from the Agreements Officer to do so. The Agreements Officer shall ensure that there is a formal change of accountability for the real property or equipment to a currently funded, Federal award.

(3)

The recipient’s use of the real property or equipment for other projects is in the same order of priority as described in paragraph (e) of this section.

(g)	Disposition. When an item of real property or equipment is no longer needed for Federally sponsored projects, the recipient shall proceed as follows:

(1)

If the property that is no longer needed is equipment (rather than real property), the recipient may wish to replace it with an item that is needed currently for the project. In that case, the recipient may use the original equipment as trade-in or sell it and use the proceeds to offset the costs of the replacement equipment, subject to the approval of the Agreements Officer.

(2)

The recipient may elect to retain title, without further obligation to the Federal Government, by compensating the Federal Government for that percentage of the current fair market value of the real property or equipment that is attributable to the Federal participation in the project or

(3)

The recipient may have an opportunity to retain title to the equipment provided the Government agrees to an exchange for financial resources, technical support, and/or deliverables that are of commensurate value to the Government. Examples include, but are not limited to the following:


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Direct purchase of the equipment by the contractor, with the terms and process for pricing the purchase established.

Ongoing maintenance and insurance of the equipment.

Guaranteed, continued government access to the equipment.

Guaranteed, ongoing responsiveness to DoD requirements for products and services that require use of the equipment.

Periodic reporting and data relating to the contractor’s production capabilities and continued economic viability.

Upon completion of the technical effort, the Title III project may be transitioned into a principally business-focused phase (no-cost monitoring phase) for the remaining accounting life of the equipment. If this alternative is pursued, Title III may choose to conduct periodic reviews with the Recipient assess and ensure that they remain responsive to the continuing and evolving needs of the DoD community. Upon successful completion of this business-focused phase, (typically one to five years), the government may elect to transfer title to the equipment to the Recipient.

(4)

If the recipient does not elect to retain title to real property or equipment (see paragraph (g)(2) of this section) or request approval to use equipment as trade-in or offset for replacement equipment (see paragraph (g)(1) of this section), the recipient shall request disposition instructions from the Agreements Officer.

3.04INSURANCE COVERAGE (MAR 2007)

The Recipient shall insure and be liable for the loss, damage, and/or destruction of all real property and equipment acquired under this agreement with Federal funds. The Recipient shall, at a minimum, provide the equivalent insurance coverage for real property, and equipment acquired under this agreement, as provided to real property and equipment owned by the Recipient. The Recipient will immediately notify the Agreements Officer and DCMA authorities as appropriate, in the event there is an incident of loss, damage, or destruction of the property.

3.05PROPERTY MANAGEMENT / CONTROL LIST (JUN 2001)

The recipient’s property management system shall include the following, for property that is federally owned, and for equipment that is acquired in whole or in part with Federal funds. Attachment 7 Property Control List, shall be utilized for the tracking of property under this Agreement and shall be submitted quarterly to the Government Program Manager identified in the Article 1.002 entitled “Administrative Responsibilities”.

(a)	Property records shall be maintained, to include the following information:

(1)

A description of the property.

(2)

Manufacturer’s serial number, model number, Federal stock number, national stock number, or any other identification number.

(3)

Source of the property, including the award number.

(4)

Whether title vests in the recipient or the Federal Government.

(5)

Acquisition date (or date received, if the property was furnished by the Federal Government) and cost.

(6)

Information from which one can calculate the percentage of Federal participation in the cost of the property (not applicable to property furnished by the Federal Government).

(7)

The location and condition of the property and the date the information was reported.


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(8)

Ultimate disposition data, including date of disposal and sales price or the method used to determine current fair market value where a recipient compensates the Federal Government for its share.

(b)	Federally owned equipment shall be marked, to indicate Federal ownership.

(c)

A physical inventory shall be taken and the results reconciled with the property records at least once every two (2) years. Any differences between quantities determined by the physical inspection and those shown in the accounting records shall be investigated to determine the causes of the difference. The recipient shall, in connection with the inventory, verify the existence, current utilization, and continued need for the property.

(d)

A control system shall be in effect to insure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft of property shall be investigated and fully documented; if the property was owned by the Federal Government, the recipient shall promptly notify the Federal agency responsible for administering the property.

(e)	Adequate maintenance procedures shall be implemented to keep the property in good condition.

4.00COST PRINCIPLES (JUN 2020)

(a)	The recipient shall establish or apply cost principles or standards in accordance with DoDGARS 37.625

(b)

For-profit participants that currently perform under expenditure-based Federal procurement contracts or assistance awards (other than TIAs) and therefore have existing systems for identifying allowable costs, shall apply the Government cost principles in 48 CFR parts 31 and 231. If there are programmatic or business reasons to do otherwise, the Government Agreements Officer may grant an exception from this requirement and use alternative standards that meet the minimum conditions in DoDGARS 37.625 (b).

(c)	For-profit participants that do not currently perform under expenditure-based Federal procurement contracts or assistance awards (other than TIAS), may establish alternative standards as long as the standards meet the minimum conditions outlined in DoDGARS 37.625 (b).

4.01STANDARDS FOR FINANCIAL MANAGEMENT SYSTEMS (APR 2000)

(a)	The recipient shall establish or use existing financial management systems in accordance with DoDGARS 37.615.

(b)

For-profit participants that currently perform under other expenditure-based Federal procurement contracts or assistance awards are subject to the same standards for financial management systems that apply to those other awards. If a for-profit participant has expenditure-based DoD assistance awards other than TIAs, apply the standards in 32 CFR 34.11. A for-profit participant that has other expenditure-based Federal Government awards may be granted an exception by the Government Agreements Officer to use an alternative set of standards that meets the minimum criteria in DoDGARS 37.615 (b), if there is a compelling programmatic or business reason to do so.

(c)	For-profit participants that do not currently perform under expenditure-based Federal procurement contracts or assistance awards (other than TIAS), shall use its existing financial management system as long as the system meets the minimum criteria outlined in DoDGARS 37.615 (b).

4.02PAYMENT – REIMBURSEMENT AND COST SHARING – WAWF (DCMA) (MAY 2014)(TAILORED)

(a)	The recipient shall be reimbursed by electronically submitting Standard Form (SF) 270, Requests for Advance or Reimbursement, through Wide Area Work Flow (WAWF), https://wawf.eb.mil. Each request


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for payment shall include the total costs incurred and the amounts of recipient and Government cost share. The Government agrees to reimburse the recipient no more than the Government cost share percentage of all but the final payment requests submitted. The final payment will reflect the percentage representing the balance of Government cost share. Final payment will be made only after delivery and acceptance of the final report prepared in accordance with the article entitled 7.000 “Final Report”.

(b)	The following codes will be required to route requests and emails correctly through WAWF.

Award Number: FA8650-23-2-5522

Type of Document: SF 270

Cage Code: 9AXR4

Issued By DODAAC: FA8650

Admin DODAAC: S4501A

Government Program Manager: [***]

Service Acceptor Office DODAAC: F4FBCN

Pay Office DODAAC: HQ0339

Approval Office DODAAC: S4501A

Send E-Mail Notifications for Completed SF 270: [***]

(c)	The customer service number for Vendor Pay is 800-756-4571 Option 1. Vendors may also check status of payments through MyInvoice, https://MyInvoice.csd.disa.mil. Recipients must register in MyInvoice to gain access.

(d)	Alternately, recipients may request reimbursement by submitting original SF 270, “Requests for Advance or Reimbursement”, to the Administrative Agreements Officer (AAO) with a copy to the AFRL Grants/Agreements Officer and AFRL Program Manager.

(e)	To the maximum extent possible, payments will be made by electronic funds transfer (EFT) after. AGO approval. Recipients may submit requests for monthly reimbursement when EFT payment is not used or as frequently as necessary when EFT payment is used.

(f)	Final payment of 1% the Government cost share will be made only after delivery and acceptance of the final report prepared in accordance with the Article entitled “Final Report”.

4.03AUDIT (JUL 2003) (TAILORED)

(a)

If the recipient expends $750,000 or more in one year under Federal awards they shall have an audit performed for that year by an independent auditor, in accordance with DoDGARs 34.16 and DoDGARS 37.640 through 37.680. The audit should be made a part of the regularly scheduled, annual audit of the recipient’s financial statements. However, the recipient may have Federal awards separately audited, if it elects to do so unless prohibited by Federal laws or regulations. (See DoDGARS Part 37 Appendix C for guidance on the desired coverage for periodic audits.)

(b)	Recipients currently working with the Defense Contract Audit Agency (DCAA) on a regular basis, due to the recipient currently performing under other federal awards, shall provide a copy of a DCAA audit to meet the requirements outlined in paragraph (a) above.

(c)	The Recipient shall provide a copy of the auditor’s report to the Agreements Officer and the agreements administration office within 60 days after audit.

4.04RETENTION AND ACCESS TO RECORDS - INCORPORATED BY REFERENCE (AUG 2001)

Recipient’s financial records, supporting documents, statistical records, and all other records pertinent to an award shall be retained and access to them permitted in accordance with DoDGARs 34.42.


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4.05ALLOTTED FUNDING (OCT 2001)

The following funds are allotted to this agreement:

ACRNs	FUND CITATION(S)	AMOUNT
AA	[***]	$24,812,062
	Descriptive data:
	MIPR LOA:
	[***]
ALD:AA
CIN: HQ06423782410001 JON:
FSR:
DSR:
CSR:

PR AND MIPR PARTIAL

4.06PROGRAM INCOME – OTHER THAN RESEARCH (APR 2000) TAILORED)

(a)

Other than any program/project income excluded pursuant to DoDGARS Part 34.14, paragraphs (a), (b), and (c), program/project income earned during the Title III project period shall be retained by the recipient and used in one or more of the following ways, as specified in program/project regulations or the terms and conditions of the award.

(1)

Added to funds committed to the program/project by the DoD Component and recipient and used to further eligible program/project objectives.

(2)

Used to finance the recipient cost share (non-Federal share) portion of the program/project.

(b)	The recipient has no obligation to the Government for program income earned after the end of the program/project period.

(c)	The recipient will have no obligation to the Government for program income earned from license fees and royalties for copyrighted material, patents patent applications, trademarks and inventions produced under the agreement.

(d)	The recipient may deduct costs associated with generating program income from gross income to determine program income, provided these costs are not charged to the agreement.

4.07CONSIDERATION (JUN 2006)

(a)

The Recipient agrees that the selling price to the Federal Government for antimony trisulfide will not exceed the price paid by any of the Recipient’s customers for the same or similar product or component sold in the same quantities. This article applies both when the Recipient is the prime contractor or when the Recipient is a supplier at any tier for the Federal Government.


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(b)	In no event shall such price be in excess of the Recipient’s sale price to any other of their customers for the same item in like quantity, or the current market price, whichever is lower.

(c)	All yield efficiencies resulting from Title III investment will be reflected in USG pricing for a minimum of five years from the conclusion of this agreement.

(d)	The above stated stipulations shall remain in effect for a period of five years from the conclusion of this agreement.

4.08COST SHARING (AUG 2001)

(a)

The parties estimate that the research and development work under this Agreement can only be accomplished with the Recipient aggregate resource contribution of $0 throughout the term of this Agreement. The Recipient agrees to provide the resources in the manner shown in Attachment 8, Cost Sharing Summary and Schedule. Failure of either party to provide its respective total contribution may result in a unilateral modification to the Agreement by the Agreements Officer to reflect a proportional reduction in funding for the other party.

(b)	The Recipient’s contributions may count as cost sharing only to the extent that they comply with DoDGARs 34.13.

5.000CLAIMS, DISPUTES AND APPEALS (JUN 2001)

(a)	General. Parties shall communicate with one another in good faith and in a timely and cooperative manner when raising issues under this article. The Department of Defense’s policy is to try to resolve all issues concerning agreements by mutual agreement at the Agreements Officer’s level.

(b)

Alternative Dispute Resolution (ADR): A mutually agreeable form of ADR may be utilized at any time to facilitate resolution of issues submitted under this article. ADR procedures are any voluntary means used to resolve issues in controversy without resorting to formal administrative appeals or litigation. ADR procedures may be initiated in lieu of submission of a written claim to the Agreements Officer or an appeal to the Grant Appeal Authority (GAA), or at any appropriate time during a dispute.

(c)

Claims Resolution Process.

(1)

Recipient Claims: Whenever disputes, disagreements, or misunderstandings arise, the parties shall attempt to resolve the issue(s) involved by discussion and mutual agreement as soon as practicable. Failing resolution by mutual agreement, the recipient may submit to the Agreements Officer, in writing, the relevant facts, including all data that supports the claim, identifying unresolved issues and specifying the clarification or remedy sought. Within 60 days of receipt of the written claim or issue in dispute, the Agreements Officer shall either:

(i)

Prepare a written decision on the issue, including the basis for the decision, or

(ii)

Notify the recipient of a specific date when he or she will render a written decision, if more time is required to do so. The notice will include the reason for delaying the decision.

(2)

Government Claims: Government claims against a recipient shall be the subject of a written decision by the Agreements Officer.

(3)

Appeals: In the event the recipient decides to appeal the decision of the Agreements Officer, they must do so within 90 days of receipt of the decision. The appeal must be submitted, in writing, to the Grant Appeal Authority (GAA). The GAA is AFMC/PK. The GAA shall conduct a review of the


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matter and render a decision in writing within 30 days of receipt of the written appeal. Any such decision is not subject to further administrative review and shall be final and binding.

(4)

Non-exclusivity of Remedies. Nothing in this article is intended to limit a recipient’s right to any remedy under the law.

5.001OMBUDSMAN (APR 2008)

(a)

An ombudsman has been appointed to hear and facilitate the resolution of concerns from offerors, potential offerors, and others for this agreement. When requested, the ombudsman will maintain strict confidentiality as to the source of the concern. The existence of the ombudsman does not affect the authority of the program manager, Agreements Officer, or Evaluation Review Official. Further, the ombudsman does not participate in the evaluation of proposals, the evaluation process, or the adjudication of protests or formal contract disputes. The ombudsman may refer the party to another official who can resolve the concern.

(b)

If resolution cannot be made by the Agreements Officer, concerned parties may contact the AFRL ombudsman:

Primary: AFRL/PK Director

Alternate Ombudsman: AFRL/PK Deputy Director

1864 Fourth St

Wright-Patterson AFB OH 45433-7130 937-904-9700

Email: Afrl.pk.workflow@us.af.mil

(c)

The ombudsman has no authority to render a decision that binds the agency.

(d)

Do not contact the ombudsman to request copies of the solicitation, verify offer due date, or clarify technical requirements. Such inquiries shall be directed to the Agreements Officer.

6.00PATENT INFRINGEMENT (APR 2000)

The recipient agrees not to hold the U.S. Government responsible for any and all patent infringement cases that may arise under any research projects conducted under this agreement. In addition, the recipient shall indemnify the Government against all claims and proceedings for actual or alleged direct or contributory infringement of, or inducement to infringe, any U.S. or foreign patent, trademark, or copyright arising under this agreement and the recipient shall hold the government harmless from any resulting liabilities and losses provided the recipient is reasonably notified of such claims and proceedings.

6.01INVENTIONS (JUN 2001)

(a)	Definitions:

(1)

“Invention” means any invention or discovery which is or may be patentable or otherwise protectable under Title 35 of the United States Code, or any novel variety of plant which is or may be protected under the Plant Variety Protection Act (7 U.S.C. 2321 et seq.).

(2)

“Subject invention” means any invention of the recipient conceived or first actually reduced to practice in the performance of work under this agreement, provided that in the case of a variety of plant, the date of determination (as defined in section 41(d) of the Plant Variety Protection Act, 7 U.S.C. 2401(d)) must also occur during the period of agreement performance.


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(3)

“Practical Application” means to manufacture in the case of a composition or product, to practice in the case of a process or method, or to operate in the case of a machine or system; and, in each case, under such conditions as to establish that the invention is being utilized and that its benefits are, to the extent permitted by law or government regulations, available to the public on reasonable terms.

(4)

“Made” when used in relation to any invention means the conception or first actual reduction to practice of such invention.

(5)

“Small Business Firm” means a small business concern as defined at section 2 of Pub. L. 85-536 (15 U.S.C. 632) and implementing regulations of the Administrator of the Small Business Administration. For the purpose of this article, the size standards for small business concerns involved in Government procurement and subcontracting at 13 CFR 121.3-8 and 13 CFR 121.3- 12, respectively, will be used.

(6)

“Nonprofit Organization” means a university or other institution of higher education or an organization of the type described in section 501(c)(3) of the Internal Revenue Code of 1954 (26 U.S.C. 501(c) and exempt from taxation under section 501(a) of the Internal Revenue Code (25 U.S.C.501(a)) or any nonprofit scientific or educational organization qualified under a state nonprofit organization statute.

(b)	Allocation of Principal Rights:

(1)

The recipient may retain the entire right, title, and interest throughout the world to each subject invention subject to the provisions of this article and 35 U.S.C. 203. With respect to any subject invention in which the recipient retains title, the Government shall have a nonexclusive, nontransferable, irrevocable, paid-up license to practice or have practiced for or on behalf of the United States the subject invention throughout the world.

(c)	Invention Disclosure, Election of Title and Filing of Patent Application by Recipient:

(1)

The recipient will disclose each subject invention to the Government within 2 months after the inventor discloses it in writing to recipient personnel responsible for patent matters. The disclosure to the Government shall be in the form of a written report and shall identify the agreement under which the invention was made and the inventor(s). It shall be sufficiently complete in technical detail to convey a clear understanding to the extent known at the time of the disclosure, of the nature, purpose, operation, and the physical, chemical, biological or electrical characteristics of the invention. The disclosure shall also identify any publication, on sale or public use of the invention and whether a manuscript describing the invention has been submitted for publication and, if so, whether it has been accepted for publication at the time of disclosure. In addition, after disclosure to the Government, the recipient will promptly notify the Government of the acceptance of any manuscript describing the invention for publication or of any on sale or public use planned by the recipient.

(2)

The recipient will elect in writing whether or not to retain title to any such invention by notifying the Government within 2 years of disclosure to the Government. However, in any case where publication, on sale or public use has initiated the one year statutory period wherein valid patent protection can still be obtained in the United States, the period for election of title may be shortened by the Government to a date that is no more than 60 days prior to the end of the statutory period.

(3)

The recipient will file its initial patent application on a subject invention to which it elects to retain title within 1 year after election of title or, if earlier, prior to the end of any statutory period wherein


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valid patent protection can be obtained in the United States after a publication, on sale, or public use. The recipient will file patent applications in additional countries or international patent offices within either 10 months of the corresponding initial patent application or 6 months from the date permission is granted by the Commissioner of Patents and Trademarks to file foreign patent applications where such filing has been prohibited by a Secrecy Order.

(4)

Requests for extension of the time for disclosure, election, and filing under subparagraphs (1), (2), and (3) may, at the discretion of the Government, be granted.

(d)	Conditions When the Government May Obtain Title: The recipient will convey to the Government, upon written request, title to any subject invention—

(1)

If the recipient fails to disclose or elect title to the subject invention within the times specified in (c), above, or elects not to retain title; provided that the Government may only request title within 60 days after learning of the failure of the recipient to disclose or elect within the specified times.

(2)

In those countries in which the recipient fails to file patent applications within the times specified in (c) above; provided, however, that if the recipient has filed a patent application in a country after the times specified in (c) above, but prior to its receipt of the written request of the Government, the recipient shall continue to retain title in that country.

(3)

In any country in which the recipient decides not to continue the prosecution of any application for, to pay the maintenance fees on, or defend in reexamination or opposition proceeding on, a patent on a subject invention.

(e)	Minimum Rights to Recipient and Protection of the Recipient Right to File:

(1)

The recipient will retain a nonexclusive royalty-free license throughout the world in each subject invention to which the Government obtains title, except if the recipient fails to disclose the invention within the times specified in (c), above. The recipient’s license extends to its domestic subsidiary and affiliates, if any, within the corporate structure of which the recipient is a party and includes the right to grant sublicenses of the same scope to the extent the recipient was legally obligated to do so at the time the agreement was awarded. The license is transferable only with the approval of the Government except when transferred to the successor of that party of the recipient’s business to which the invention pertains.

(2)

The recipient’s domestic license may be revoked or modified by the Government to the extent necessary to achieve expeditious practical application of the subject invention pursuant to an application for an exclusive license submitted in accordance with applicable provisions at 37 CFR part 404 and Government licensing regulations (if any). This license will not be revoked in that field of use or the geographical areas in which the recipient has achieved practical application and continues to make the benefits of the invention reasonably accessible to the public. The license in any foreign country may be revoked or modified at the discretion of the Government to the extent the recipient, its licensees, or the domestic subsidiaries or affiliates have failed to achieve practical application in that foreign country.

(3)

Before revocation or modification of the license, the Government will furnish the recipient a written notice of its intention to revoke or modify the license, and the recipient will be allowed 30 days (or such other time as may be authorized by the Government for good cause shown by the recipient) after the notice to show cause why the license should not be revoked or modified. The recipient has the right to appeal, in accordance with applicable regulations in 37 CFR part 404 and Government regulations (if any) concerning the licensing of Government-owned inventions, any decision concerning the revocation or modification of the license.

(f)	Recipient Action to Protect the Government’s Interest:


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(1)

The recipient agrees to execute or to have executed and promptly deliver to the Government all instruments necessary to (i) establish or confirm the rights the Government has throughout the world in those subject inventions to which the recipient elects to retain title, and (ii) convey title to the Government when requested under paragraph (d) above and to enable the Government to obtain patent protection throughout the world in that subject invention.

(2)

The recipient agrees to require, by written agreement, its employees, other than clerical and nontechnical employees, to disclose promptly in writing to personnel identified as responsible for the administration of patent matters and in a format suggested by the recipient each subject invention made under an agreement in order that the recipient can comply with the disclosure provisions of paragraph (c), above, and to execute all papers necessary to file patent applications on subject inventions and to establish the Government’s rights in the subject inventions. This disclosure format should require, as a minimum, the information required by (c)(1), above. The recipient shall instruct such employees through employee agreements or other suitable educational programs on the importance of reporting inventions in sufficient time to permit the filing of patent applications prior to U.S. or foreign statutory bars.

(3)

The recipient will notify the Government of any decisions not to continue the prosecution of a patent application, pay maintenance fees, or defend in a reexamination or opposition proceeding on a patent, in any country, not less than 30 days before the expiration of the response period required by the relevant patent office.

(4)

The recipient agrees to include, within the specification of any United States patent applications and any patent issuing thereon covering a subject invention, the following statement, ”This invention was made with Government support under (identify the agreement) awarded by (identify the Federal Agency). The Government has certain rights in the invention.”

(g)

Lower Tier Agreements: The recipient will include this article, suitably modified to identify the parties, in all lower tier agreements, regardless of tier, for experimental, developmental or research work. Each subrecipient will retain all rights provided for the recipient in this article, and the recipient will not, as part of the consideration for awarding a subrecipient award, obtain rights in a subrecipients’ subject inventions.

(h)

Reporting on Utilization of Subject Inventions: The recipient agrees to submit on request periodic reports no more frequently than annually on the utilization of a subject invention or on efforts at obtaining such utilization that are being made by the recipient or its licensees or assignees. Such reports shall include information regarding the status of development, date of first commercial sale or use, gross royalties received by the recipient, and such other data and information as the Government may reasonably specify. The recipient also agrees to provide additional reports as may be requested by the Government in connection with any march-in proceeding undertaken by the Government in accordance with paragraph (j) of this article. As required by 35 U.S.C. 202(c)(5), the Government agrees it will not disclose such information to persons outside the Government without permission of the recipient.

(i)

Preference for United States Industry: Notwithstanding any other provision of this article, the recipient agrees that neither it nor any assignee will grant to any person the exclusive right to use or sell any subject inventions in the United States unless such person agrees that any products embodying the subject invention or produced through the use of the subject invention will be manufactured substantially in the United States. However, in individual cases, the requirement for such an agreement may be waived by the Government upon a showing by the recipient or its assignee that reasonable but unsuccessful efforts have been made to grant licenses on similar terms to potential licensees that would be likely to manufacture substantially in the United States or that under the circumstances domestic manufacture is not commercially feasible.

(j)

March-in Rights: The recipient agrees that with respect to any subject invention in which it has acquired title, the Government has the right in accordance with the procedures in 37 CFR 401.6 and any supplemental regulations of the Government to require the recipient, an assignee or exclusive licensee


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of a subject invention to grant a nonexclusive, partially exclusive, or exclusive license in any field of use to a responsible applicant or applicants, upon terms that are reasonable under the circumstances, and if the recipient, assignee, or exclusive licensee refuses such a request the Government has the right to grant such a license itself if the Government determines that:

(1)

Such action is necessary because the recipient or assignee has not taken, or is not expected to take within a reasonable time, effective steps to achieve practical application of the subject invention in such field of use.

(2)

Such action is necessary to alleviate health or safety needs which are not reasonably satisfied by the recipient, assignee or their licensees;

(3)

Such action is necessary to meet requirements for public use specified by Federal regulations and such requirements are not reasonably satisfied by the recipient, assignee or licensees; or

(4)

Such action is necessary because the agreement required by paragraph (i) of this article has not been obtained or waived or because a licensee of the exclusive right to use or sell any subject invention in the United States is in breach of such agreement.

(5)

Special Provisions for Agreements with Nonprofit Organizations

(k)	If the recipient is a nonprofit organization, it agrees that:

(1)

Rights to a subject invention in the United States may not be assigned without the approval of the Government, except where such assignment is made to an organization which has as one of its primary functions the management of inventions, provided that such assignee will be subject to the same provisions as the recipient;

(2)

The recipient will share royalties collected on a subject invention with the inventor, including Federal employee co-inventors (when the Government deems it appropriate) when the subject invention is assigned in accordance with 35 U.S.C. 202(e) and 37 CFR 401.10;

(3)

The balance of any royalties or income earned by the recipient with respect to subject inventions, after payment of expenses (including payments to inventors) incidental to the administration of subject inventions, will be utilized for the support of scientific research or education; an

(4)

It will make efforts that are reasonable under the circumstances to attract licensees of subject invention that are small business firms and that it will give a preference to a small business firm when licensing a subject invention if the recipient determines that the small business firm has a plan or proposal for marketing the invention which, if executed, is equally as likely to bring the invention to practical application as any plans or proposals from applicants that are not small business firms; provided, that the recipient is also satisfied that the small business firm has the capability and resources to carry out its plan or proposal. The decision whether to give a preference in any specific case will be at the discretion of the recipient. However, the recipient agrees that the Secretary may review the recipient’s licensing program and decisions regarding small business applicants, and the recipient will negotiate changes to its licensing policies, procedures, or practices with the Secretary when the Secretary’s review discloses that the recipient could take reasonable steps to implement more effectively the requirements of this paragraph (k)(4).

(l)	Communication: The point of contact on matters relating to this article will be the servicing Staff Judge Advocate’s office identified in the article entitled Administrative Responsibilities.

6.02DATA RIGHTS (AUG 2001)


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(a)	Definitions:

“Government Purposes”, as used in this article, means any activity in which the United States Government is a party, including cooperative agreements with international or multinational defense organizations, or sales or transfers by the United States Government to foreign governments or international organizations. Government purposes include competitive procurement, but do not include the rights to use, modify, reproduce, release, perform, display, or disclose data for commercial purposes or authorize others to do so.

“Government Purpose Rights”, as used in this article, means the right to –

(1)

Use, modify, reproduce, release, perform, display, or disclose technical data within the Government without restriction; and

(2)

Release or disclose technical data outside the Government and authorize persons to whom release or disclosure has been made to use, modify, reproduce, release, perform, display, or disclose that data for United States government purposes.

“Limited rights”, means the rights to use, modify, reproduce, release, perform, display, or disclose technical data, in whole or in part, within the Government. The Government may not, without the written permission of the party asserting limited rights, release or disclose the technical data outside the Government, use the technical data for manufacture; or authorize the technical data to be used by another party, except that the Government may reproduce, release, or disclose such data or authorize the use of reproduction of the data by persons outside the Government if –

(1)

The reproduction, release, disclosure, or use is -

(A)

Necessary for emergency repair and overhaul; or

(B)

A release or disclosure to –

A covered government support contractor, for use, modification, reproduction, performance, display, or release or disclosure to authorized person(s) in performance of a Government contract.

ii.

A foreign government, of technical data, other than detailed manufacturing or process data, when use of such data by the foreign government is in the interest of the government and is required for evaluation or information purposes;

(2)

The Recipient of the technical data is subject to a prohibition on the further reduction, release, disclosure, or use of the technical data; and

(3)

The contractor or subcontractor asserting the resection is notified of such reproduction, release, disclosure, or use.

“Unlimited Rights”, as used in this article, means rights to use, modify, reproduce, perform, display, release, or disclose data in whole or in part, in any manner, and for any purpose whatsoever, and to have or authorize others to do so.

“Data”, as used in this article, means recorded information, regardless of form or method or recording, which includes but is not limited to, technical data, software, trade secrets, and mask works. The term does not include financial, administrative, cost, pricing or management information and does not include subject inventions included under the article entitled Inventions.

“Practical Application”, as used in this article, means to manufacture in the case of a composition or product, to practice in the case of a process or method, or to operate in the case of a machine or system; and, in each case, under such conditions as to establish that the invention is being utilized and


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that its benefits are, to the extent permitted by law or government regulations, available to the public on reasonable terms.

(b)	Allocation of Principal Rights:

(1)

Ownership rights to data generated under this agreement shall vest in the recipient. This agreement shall be performed with mixed Government and recipient funding and the parties agree that in consideration for Government funding, the recipient intends to reduce to practical application items, components and processes developed under this agreement.

(2)

The recipient agrees to retain and maintain in good condition until 3 years after completion or termination of this agreement, all data necessary to achieve practical application. In the event of exercise of the Government’s march-in rights as set forth under the Article entitled Inventions, the recipient agrees, upon written request from the Government, to deliver at no additional cost to the Government, all data necessary to achieve practical application within 60 days from the date of the written request. The Government shall have unlimited rights to this delivered data.

(3)

With respect to data generated under this agreement, including data delivered pursuant to Part 7 of this agreement, “Technical and Financial Reporting,” the Government shall receive Government Purpose rights.” In the event Perpetua asserts “Limited Rights” on any data, the Government may need to add a “Limited Rights” marking under paragraph (c) of this article.

(c)	Marking of Data:

(1)

Pursuant to subparagraph (b)(3) above, any data delivered under this agreement shall be marked with the following legend:

Government Purpose Rights

Agreement No.:

Recipient’s Name:

Recipient’s Address:

The Government may use, modify, reproduce, release, perform, display or disclose these data within the Government without restriction, and may release or disclose outside the Government and authorize persons to whom such release or disclosure has been made to use, modify, reproduce, release, perform, display or disclose that data for United States Government purposes, including competitive procurement.

(2)

Any trade secrets and commercial or financial information the recipient wishes to protect from release under Freedom of Information Act (FOIA) requirements must be marked with a legend identifying it as privileged or confidential information.

(d)	Lower Tier Agreements: The recipient shall include this article, suitably modified to identify the parties, in all subcontracts or lower tier agreements, regardless of tier, for experimental, developmental, or research work.

6.003INVENTIONS / PATENTS (NOV 2011) (TAILORED)

(a)

The clause entitled Patent Rights (Small Business Firms and Nonprofit Organizations, (37 CFR 401.14(a)) is hereby incorporated by reference and is modified as follows: replace the word “contractor” with “recipient”; replace the words “agency,” “Federal Agency” and “funding Federal Agency” with “Government”; replace the word “contract” with “agreement”; delete paragraphs (g)(2), (g)(3) and the words “to be performed by a small business firm or domestic nonprofit organization” from paragraph (g)(1). Paragraph (l), Communications, point of contact on matters relating to this clause will be the servicing Staff Judge Advocate’s office.


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(b)

Interim or final Invention Reports 1) listing subject invention(s) and stating that all subject inventions have been disclosed, or 2) stating that there are no such inventions, shall be sent to both the Administrative Agreements Officer at the address located in the agreement and to the Agreements Officer / patent administrator at afmclo.jaz@us.af.mil, with a courtesy copy (cc:) to the government Program Manager/Project Engineer. Please include in the subject line of the e-mail the contract number followed by the words “Invention Reporting.” Also include in the body of the e-mail the names of the Government Project Engineer/Program Manager and his/her office symbol. The recipient shall file Invention (Patent) Reports on the DD Form 882, Report of Inventions and Subcontracts, as of the close of each performance year and at the end of the term for this agreement. Annual reports are due 90 days after the end of each year of performance and final reports are due 90 days after the expiration of the final performance period. Negative reports are also required annually.

(c)	The DD Form 882 may also be used for the notification of any subaward(s) for experimental, developmental or research work which contain a “Patent Rights” clause, with a cc: to the Government Program Manager/Project Engineer.

(d)	All other notifications (e.g., disclosure of each subject invention to the Agreements Officer within 2 months after the inventor discloses it) shall also be sent to the e-mail address above, with a cc: to the Government Program Manager/Project Engineer.

(e)

This provision also constitutes the request for the following information for any subject invention for which the recipient has retained ownership: 1) the filing date, 2) serial number and title, 3) a copy of the patent application and 4) patent number and issue date. Submittal shall be to the Agreements Officer / patent administrator e-mail address listed above, with a cc: to the government Program Manager/Project Engineer.

6.004FOREIGN ACCESS TO TECHNOLOGY (APR 2000)

(a)	Definitions:

“Foreign Firm or Institution” means a firm or institution organized or existing under the laws of a country other than the United States, its territories, or possessions. The term includes, for purposes of this agreement, any agency or instrumentality of a foreign government, and firms, institutions or business organizations which are owned or substantially controlled by foreign governments, firms, institutions, or individuals.

“Know-how” means all information including, but not limited to, discoveries, formulas, materials, inventions, processes, ideas, approaches, concepts, techniques, methods, software, programs, documentation, procedures, firmware, hardware, technical data, specifications, devices, apparatus and machines.

“Technology” means discoveries, innovations, know-how and inventions, whether patentable or not, including computer software, recognized under U.S. law as intellectual creations to which rights of ownership accrue, including, but not limited to, patents, trade secrets, mask works, and copyrights developed under this agreement.

(b)

General: The parties agree that research findings and technology developments in the production of antimony trisulfide may constitute a significant enhancement to the national defense, and to the economic vitality of the United States. Accordingly, access to important technology developments under this agreement by foreign firms or institutions must be carefully controlled. The controls contemplated in this article are in addition to, and are not intended to change or supersede, the provisions of the International Traffic in Arms Regulation (22 CFR pt. 120 et seq.), the DOD Industrial Security Regulation (DOD 5220.22-R) and the Department of Commerce Export Regulation (15 CFR pt. 770 et seq.).


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(c)	Restrictions on Sale or Transfer of Technology to Foreign Firms or Institutions.

(1)

In order to promote the national security interests of the United States and to effectuate the policies that underlie the regulations cited above, the procedures stated in subparagraphs C.2, C.3, and C.4 below shall apply to any transfer of technology. For purposes of this paragraph, a transfer includes a sale of the company, and sales or licensing of technology. Transfers do not include:

(i)

Sales of products or components, or

(ii)

Licenses of software or documentation related to sales of products or components, or

(iii)

Transfer to foreign subsidiaries of the recipient (recipient participants) for purposes related to this agreement, or

(iv)

Transfer which provides access to technology to a foreign firm or institution which is an approved source of supply or source for the conduct of research under this agreement provided that such transfer shall be limited to that necessary to allow the firm or institution to perform its approved role under this agreement.

(2)

The recipient shall provide timely notice to the Government of any proposed transfer from the recipient of technology developed under this agreement to foreign firms or institutions. If the Government determines that the transfer may have adverse consequences to the national security interests of the United States, the recipient, its vendors, and the Government shall jointly endeavor to find alternatives to the proposed transfer which obviate or mitigate potential adverse consequences of the transfer but which provide substantially equivalent benefits to the recipient.

(3)

In any event, the recipient shall provide written notice to the Agreements Officer and Government program manager of any proposed transfer to a foreign firm or institution at least 60 days prior to the proposed date of transfer. Such notice shall cite this article and shall state specifically what is to be transferred and the general terms of the transfer. Within 30 days of receipt of the recipient’s written notification, the Agreements Officer shall advise the recipient whether it consents to the proposed transfer. In cases where the Government does not concur or 60 days after receipt and the Government provides no decision, the recipient may utilize the procedures under the article entitled Claims, Disputes and Appeals. No transfer shall take place until a decision is rendered.

(4)

Except as provided in subparagraph C.1 above and in the event the transfer of technology to foreign firms or institutions is not approved by the Government, but the transfer is made nonetheless, the recipient shall (a) refund to the Government the funds paid for the development of the technology and (b) negotiate a license with the Government to the technology under terms that are reasonable under the circumstances.

(d)	Lower Tier Agreements: The recipient shall include this article, suitably modified to identify the parties, in all subcontracts or lower tier agreements, regardless of tier, for experimental, development, or research work.

(e)	This article shall remain in effect during the term of the agreement and for 5 years thereafter.

6.005EXPORT-CONTROLLED DATA RESTRICTIONS (AUG 2013)

(a)	For the purpose of this article,

(1)

Foreign person is any person who is not a citizen or national of the U.S. or lawfully admitted to the U.S. for permanent residence under the Immigration and Nationality Act, and includes foreign corporations, international organizations, and foreign governments;


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(2)

Foreign representative is anyone, regardless of nationality or citizenship, acting as an agent, representative, official, or employee of a foreign government, a foreign-owned or influence firm, corporation or person;

(3)

Foreign sources are those sources (vendors, subcontractors, and suppliers) owned and controlled by a foreign person.

(b)	The Recipient shall place an article/clause in subawards/subcontracts containing appropriate export control restrictions, set forth in this article.

(c)	Nothing in this article waives any requirement imposed by any other U.S. Government agency with respect to employment of foreign nationals or export-controlled data and information.

(d)

All information generated and delivered under this agreement shall be reviewed to determine whether it is subject to additional requirements under the International Traffic in Arms Regulation (ITAR), 22 CFR Sections 121 through 128. If any information is determined to be subject to additional requirements, it shall be protected accordingly. An export license may be required before assigning any foreign source to perform work under this agreement or before granting access to foreign persons to any information generated or delivered during performance (see 22 CFR Section 125).

7.00FINAL REPORT (JUN 2001) (TAILORED)

(a)

The Final Report shall be submitted within 90 days of the end of the technical effort. Two (2) copies of the report shall be provided to the following person(s) listed in the article entitled Administrative Responsibilities: Government Program Manager. The technical portion of the report should be suitable for publication and is to provide a recap of the program and program accomplishments. With the approval of the Government Program Manager, reprints of published articles may be submitted or attached to the technical portion of the Final Report. The business portion of the report shall contain separate discussion of total cost incurred, total costs contributed by each Recipient member with an explanation for any deviation from the original business plan.

(b)

The report shall be tailored to include the official “Title III/OSD” emblem to be placed in the upper right hand corner of the front cover with affected entries adjusted as required (AFRL will supply a copy of the emblem). Draft report shall be unbound, in standard size type, double-spaced and single sided. Reproducible shall be:

Camera ready, unbound, suitable for offset reproduction, and

On CD-ROM or ZIP drive disk compatible with MS-Office for Windows, and both shall incorporate all changes made in the corrected draft.

All photos shall be glossy finished. Submit the reproducible(s) with the final corrected version only.

(c)	The Recipient is reminded that the National Industrial Security Program Operating Manual, DOD 5220.22-M, Chapter 4, Paragraph 4-208(a), dated January 1995 requires that records be maintained when documents derive classified from multiple sources.

(d)	The Recipient shall receive approval/disapproval by letter from the Air Force Program Manager within 30 days after receipt of Air Force comments. Disapproval requires correction/resubmission within 30 days after receipt of Air Force comments.

(e)	The Final Report submission to the Government is exempt from disclosure requirements of 5 U.S.C. 552 (Freedom of Information Act - Exemption 4 thereunder) for a period of 5 years from the date identifying the documents as being submitted on a confidential basis.


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(f)	Distribution Statement. In addition to any other required legend, mark all data delivered under this agreement with the distribution statement located in Article 7.007.

7.01REPORTING SUBAWARDS AND EXECUTIVE COMPENSATION (OCT 2010) (TAILORED)

(a)	Reporting of First-Tier Subawards:

(1)

Applicability. Unless you are exempt as provided in paragraph d. of this award term, you must report each action that obligates $25,000 or more in Federal funds that does not include Recovery funds (as defined in section 1512(a)(2) of the American Recovery and Reinvestment Act of 2009, Pub. L. 111-5) for a subaward to an entity (see definitions in paragraph e. of this award term).

(2)

Where and When to Report:

(i)

You must report each obligating action described in paragraph (a)(1) of this award term to http://www.fsrs.gov.

(ii)

For subaward information, report no later than the end of the month following the month in which the obligation was made. (For example, if the obligation was made on November 7, 2010, the obligation must be reported by no later than December 31, 2010.)

(3)

What to Report. You must report the information about each obligating action that the submission instructions posted at http://www.fsrs.gov specify.

(b)	Reporting Total Compensation of Recipient Executives:

(1)

Applicability and What to Report. You must report total compensation for each of your 5 most highly compensated executives for the preceding completed fiscal year, if

(i)

The total Federal funding authorized to date under this award is $25,000 or more;

(ii)

In the preceding fiscal year, you received-

(A)

80 percent or more of your annual gross revenues from Federal procurement contracts (and subcontracts) and Federal financial assistance subject to the Transparency Act, as defined at 2 CFR 170.320 (and subawards); and

(B)

$25,000,000 or more in annual gross revenues from Federal procurement contracts (and subcontracts) and Federal financial assistance subject to the Transparency Act, as defined at 2 CFR 170.320 (and subawards); and

(iii)

The public does not have access to information about the compensation of the executives through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986. (To determine if the public has access to the compensation information, see the U.S. Security and Exchange Commission total compensation filings at http://www.sec.gov/answers/execomp.htm.)

(2)

Where and When to Report: You must report executive total compensation described in paragraph (b)(1) of this award term:

(i)

As part of your registration profile at https://SAM.gov

(ii)

By the end of the month following the month in which this award is made, and annually thereafter.

(c)	Reporting of Total Compensation of Subrecipient Executives:


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(1)

Applicability and what to report. Unless you are exempt as provided in paragraph d. of this award term, for each first-tier subrecipient under this award, you shall report the names and total compensation of each of the subrecipients’ five most highly compensated executives for the subrecipients preceding completed fiscal year, if-

(i)In the subrecipients preceding fiscal year, the subrecipient received-

(A)

80 percent or more of its annual gross revenues from Federal procurement contracts (and subcontracts) and Federal financial assistance subject to the Transparency Act, as defined at 2 CFR 170.320 (and subawards); and

(B)

$25,000,000 or more in annual gross revenues from Federal procurement contracts (and subcontracts), and Federal financial assistance subject to the Transparency Act (and subawards); and

(ii)The public does not have access to information about the compensation of the executives through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986. (To determine if the public has access to the compensation information, see the U.S. Security and Exchange Commission total compensation filings at http://www.sec.gov/answers/execomp.htm.)

(2)

Where and When to Report. You must report subrecipient executive total compensation described in paragraph (c)(1) of this award term:

(i)

To the Recipient:

(ii)

By the end of the month following the month during which you make the subaward. For example, if a subaward is obligated on any date during the month of October of a given year (i.e., between October 1 and 31), you must report any required compensation information of the subrecipient by November 30 of that year.

(d)	Exemptions: If, in the previous tax year, you had gross income, from all sources, under $300,000, you are exempt from the requirements to report:

(1)

Subawards, and

(2)

The total compensation of the five most highly compensated executives of any subrecipient.

(e)	Definitions. For purposes of this award term:

(1)

“Entity” means all of the following, as defined in 2 CFR part 25:

(i)

A Governmental organization, which is a State, local government, or Indian tribe;

(ii)

A foreign public entity;

(iii)

A domestic or foreign nonprofit organization;

(iv)

A domestic or foreign for-profit organization;

(v)

A Federal agency, but only as a subrecipient under an award or subaward to a non-Federal entity.

(2)

“Executive” means officers, managing partners, or any other employees in management positions.


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(3)

“Subaward”:

(i)

This term means a legal instrument to provide support for the performance of any portion of the substantive project or program for which you received this award and that you as the recipient award to an eligible subrecipient.

(ii)

The term does not include your procurement of property and services needed to carry out the project or program (for further explanation, see 2 CFR part 200, subpart F, “Audit Requirements”).

(iii)

A subaward may be provided through any legal agreement, including an agreement that you or a subrecipient considers a contract.

(4)

“Subrecipient” means an entity that:

(i)

Receives a subaward from you (the recipient) under this award; and

(ii)

Is accountable to you for the use of the Federal funds provided by the subaward.

(5)

Total compensation means the cash and noncash dollar value earned by the executive during the recipient’s or subrecipients preceding fiscal year and includes the following (for more information see 17 CFR 229.402(c)(2)):

(i)

Salary and bonus.

(ii)

Awards of stock, stock options, and stock appreciation rights. Use the dollar amount recognized for financial statement reporting purposes with respect to the fiscal year in accordance with the Statement of Financial Accounting Standards No. 123 (Revised 2004) (FAS 123R), Shared Based Payments.

(iii)

Earnings for services under non-equity incentive plans. This does not include group life, health, hospitalization or medical reimbursement plans that do not discriminate in favor of executives, and are available generally to all salaried employees.

(iv)

Change in pension value. This is the change in present value of defined benefit and actuarial pension plans.

(v)

Above-market earnings on deferred compensation which is not tax-qualified.

(vi)

Other compensation, if the aggregate value of all such other compensation (e.g. severance, termination payments, value of life insurance paid on behalf of the employee, perquisites or property) for the executive exceeds $10,000.

7.02FUNDS AND MANHOUR EXPENDITURE REPORT (SEP 2005)

(a)

The Funds and Man-hour Expenditure Report shall be submitted on a quarterly basis. First submission shall commence at the close of the Recipient’s monthly accounting period. One copy of the Report shall be provided to the following persons listed in the Article entitled “Administrative Responsibilities”: Government Program Manager, Agreements Officer, Financial Management, and Administration Office. Report may be submitted via e-mail. This report shall contain the following:

(1)

A tabular listing of funding and man-hour expenditures inclusive of the reporting period compared to original baseline values, including to-completion estimates;


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(2)

A graphical plot of planned versus actual funding expenditures to include Government and Cost Share Funding, and

(3)

A graphical plot of planned and actual percentage of work completed.

(b)

Each task, job-order, sub-task, or unit of work will be separately addressed. If schedule or milestone reporting is also a reporting requirement under the Agreement, the breakdown of work task elements should be consistent with that reporting. Attachment 5 entitled Funds and Man-hour Report is provided for use in meeting this requirement.

(c)	The report identified in paragraph (a) above, shall contain the following data elements:

(1)

Original Negotiated Agreement - A summary of all cost elements associated with the original negotiated Agreement. This is defined as the Recipient’s original cost proposal, as negotiated and accepted by the Government. It is that cost as it appears on the original award document. Its elements shall contain that cost estimate breakdown by category (i.e., direct labor, burden/overhead, material/parts, travel, subsistence, fringe, General and Administrative, fee, outstanding commitments, etc.) as provided in the accepted proposal. Items and amounts specified in this entry shall remain constant on successive reports during the term of the award.

(2)

Latest Negotiated Agreement Changes - A summary of the latest negotiated Agreement changes. It shall be a recapitulation of the Original Negotiated Agreement data elements provided above reflecting all subsequent changes resulting from agreement modifications. Breakdown by category shall “none” if revised proposals have no effect.

(3)

Reporting Period Expenditures - Expenditure data for the current reporting period for the work task categories used in Original Negotiated Agreement and Latest Negotiated Agreement Changes (as applicable), and covering man hours, funds, and the change (new orders minus fulfilled orders) in outstanding commitments.

(4)

Cumulative Expenditure to Date - Cumulative man hour, funds, and outstanding commitments expenditure data through the current reporting period for the work task categories used in Original Negotiated Agreement and Latest Negotiated Agreement Changes (as applicable). Additionally, how cumulative costs as a percentage of those costs.

(5)

Estimated Cost-to-Complete - The estimated costs required to complete the work task from the reporting date to the date of completion. This estimate shall be defined by categories as they appear in the Original Negotiated Agreement and Latest Negotiated Agreement Changes. All estimates shall be justified.

(6)

Latest Cost Estimate - An estimate of the final cost at completion of the work effort. This is derived from Cumulative Expenditure to Date and Estimated Cost-to-Complete. Deviations between the original award and/or latest negotiated award change shall be justified/explained in footnote remarks.

(d)	The Funds Expenditure Graph identified above, shall contain the following:

The graph shall be reproducible to enable periodic changes reflecting current award funding status to be entered. The graph shall portray, on a periodic basis, the planned versus actual total dollar expenditures and the percentage of the total award dollars that the expenditure represents.

(e)	The Work Completed Graph identified in paragraph (c) above, shall contain the following:


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(1)

A Work Completed Graph shall reflect the percentage of work completed by the awardee through the current reporting period. The graph shall plot actual completion versus planned completion, and shall be maintained current and be fully legible and reproducible.

Distribution Statement. In addition to any other required legend, mark all data delivered under this Agreement with the distribution statement located in Article 7.007 below.

7.03RECIPIENT’S PROGRESS, STATUS AND MANAGEMENT REPORT (SEPT 2005)

The Recipient’s Progress, Status, and Management Report shall be submitted on a quarterly basis. First submission shall commence at the close of the Recipient’s monthly accounting period. The report can be tailored to allow Recipient’s format. One copy each shall be provided to the following persons as listed in the article entitled, Administrative Responsibilities: Government Program Manager. Report may be submitted via e-mail.

This report shall contain the following:

(a)	A front cover sheet, which includes the Recipient’s name and address, the agreement number, the name of the program, the date of the report, the period covered by the report, the title of the report, the security classification and the name of the issuing Government activity.

(b)	Description of the progress made against milestones during the reporting period.

(c)	Results, positive or negative, obtained related to previously identified program areas, with conclusions and recommendations.

(d)	Any significant changes to the Recipient’s organization or method of operation, to the project management network, or to the milestone chart.

(e)	Problem areas affecting technical or scheduling elements, with background and any recommendations for solutions beyond the scope of the agreement.

(f)	Problem areas affecting cost elements, with background and any recommendations for solutions beyond the scope of the agreement.

(g)	Any trips and significant results.

(h)	Agreement schedule status.

(i)	Plans for activities during the following reporting period.

(j)	Name and telephone number of preparer of the report.

(k)	Appendices for any necessary tables, references, photographs, illustrations, and charts.

(l)	A Gantt chart in Microsoft Project or other available software to include:

(i)

Tasks and subtasks

(ii)

Milestones

(iii)

Equipment milestones on material delivery, payment schedule, and installation dates

(iv)

Percent of work complete for each task and subtask.


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(m)	Distribution Statement. In addition to any other required legend, mark all data delivered under this agreement with the distribution statement located in Article 7.007.

7.04STRATEGIC BUSINESS PLAN (SEP 2005)

(a)

The Strategic Business Plan shall be submitted no later than 9 months after agreement award. Attachment 4 may be used as an outline for the topic areas to be addressed in the report. The report can be tailored to allow the Recipient’s format. One copy of the report shall be provided to the following persons listed in the article entitled Administrative Responsibilities: Government Program Manager.

(b)

Report may be submitted via e-mail. The Recipient shall receive approval or disapproval by letter from the Air Force Program Manager within 30 days after receipt. Disapproval requires correction/resubmission within 30 days after receipt of Air Force comments. Submit reproducible on media compatible with MS-Office for Windows.

(c)	Strategic Business Plan submissions to the Government are exempt from disclosure requirements of 5

U.S.C. 552 (Freedom of Information Act - Exemption 4 thereunder) for a period of five years from the date the Department receives the information. The Recipient shall mark such information with a legend identifying the documents as being submitted on a confidential basis.

(d)	Distribution Statement: In addition to any other required legend, mark all data delivered under this agreement with the distribution statement located in Article 7.007.

7.05PROPERTY CONTROL LIST (JAN 2009)

Attachment 7, Property Control List, shall be utilized for the tracking of property under this agreement and shall be submitted quarterly to the Government Program Manager identified in Article 1.002 Administrative Responsibilities. Report may be submitted via e-mail. This list shall track:

Federally owned equipment,

Equipment acquired in whole or in part with Federal funds, and

Equipment provided by the recipient as their non-federal share (cost share) contribution.

Distribution Statement. In addition to any other required legend, mark all data delivered under this agreement with the distribution statement located in Article 7.007.

7.06PRESENTATION MATERIAL (APR 2005)

Presentation Material shall be submitted after each briefing or review as appropriate. The maximum quantity of view graphs shall not exceed 250 per presentation. If requested, the Government may remove any Recipient insignia, trade names or symbols from presentation material. One electronic copy (via email or CD) shall be provided to the following persons as listed in the article entitled Administrative Responsibilities: Government Program Manager. Submit reproducible in a PowerPoint file on media compatible with MS- Office for Windows.

If requested, some presentation material shall include text information in sufficient detail to explain key points pertaining to the individual chart(s). The text shall include the following statement: “The publication of this material does not constitute approval by the Government of the findings or conclusion herein. Wide distribution or announcement of this material shall not be made without specific approval by the sponsoring Government activity.”

Distribution Statement: In addition to any other required legend, mark all data delivered under this agreement with this distribution statement located in Article 7.007.


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7.07DISTRIBUTION STATEMENT (AUG 2007)

DISTRIBUTION STATEMENT B. Distribution authorized to US Government agencies and approved DoD contractors functioning as technical advisors to the Government Title III program team. Other requests shall be referred to:

AFRL/RXM

2977 Hobson Way, Building 653

Wright-Patterson AFB, OH 45433-7739

All non-government personnel having access to data obtained/created/developed under this agreement will be required to sign non-disclosure agreement.

This statement may be used on unclassified and classified technical documents.

7.08MARKETING PLAN (JUN 2006)

(a)

The Marketing Plan shall be submitted no later than 6 months after Agreement award. The report can be tailored to allow for Recipient’s desired format. Attachment 6 is provided to guide the Recipient in the level of detailed required. One copy each shall be provided to the following persons as listed in the article entitled “Administrative Responsibilities: Government Program Manager”.

(b)

The report may be submitted via e-mail. The Recipient shall receive approval or disapproval by letter from the Air Force Program Manager within 30 days after receipt. Disapproval requires correction/resubmission within 30 days after receipt of Air Force comments. Submit reproducible on media compatible with MS-Office for Windows.

(c)

Marketing Plan submissions to the Government are exempt from disclosure requirements of 5 U.S.C 552 (Freedom of Information Act - Exemption 4 thereunder) for a period of five years from the date the Department receives the information. The Recipient shall mark such information with a legend identifying the documents as being submitted on a confidential basis.

(d)	Distribution Statement: In addition to any other legend, mark all data delivered under this agreement with the distribution statement located in Article 7.007.

7.09DISCLOSURE OF INFORMATION (MAY 2005)

(a)	The Recipient shall not release to anyone outside the Recipient’s organization any unclassified information, regardless of medium (e.g. film, tape, document, media announcements, etc.) pertaining to any part of this agreement or any program related to this agreement unless –

(1)

The Agreements Officer has given prior written approval; or

(2)

The information is otherwise in the public domain before the date of release.

(b)	Requests for approval shall identify the specific information to be released, the medium to be used, and the purpose for the release. The Recipient shall submit its request to the Agreements Officer at least 65 days before the proposed date for release.

(c)	The Recipient agrees to include a similar requirement in each sub-agreement under this agreement. Sub-recipients shall submit requests for authorization to release through the prime Recipient to the Agreements Officer.

8.000ADMINISTRATIVE REQUIREMENTS FOR SUBAWARDS AND CONTRACTS (APR 2000) (TAILORED)


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(a)	The recipients shall apply to each subaward the administrative requirements of 2 CFR 200 applicable to awards to universities or other nonprofit organizations and awards to state and local governments, and DoDGARs Part 34 shall be applied to for-profit entities.

(b)	Recipients awarding contracts under this agreement shall assure that contracts awarded contain, as a minimum, the provisions in Appendix A to DoDGARs Part 34.

8.01PROCUREMENT STANDARDS (AUG 2001)

The recipient will:

(a)	Follow basic principles of business intended to produce rational decisions and fair treatment in all contracts entered into under this agreement.

(b)	Comply with federal statutes, executive orders, regulations, and other legal requirements applicable to contracts entered into under this agreement.

(c)	The recipient shall comply with DoDGARS 37.705 and 32 CFR 34.31 Purchasing Standards under this TIA.

8.02CLOSEOUT (AUG 2001)

(a)	The cognizant Administrative Agreements Officer shall, at least 60 days prior to the expiration date of the award, contact the recipient to establish:

(1)

All steps needed to close out the award, including submission of financial and performance reports, liquidation of obligations, and decisions on property disposition.

(2)

A schedule for completing those steps.

(b)	The following provisions shall apply to the closeout:

(1)

The responsible Agreements Officer and payment office shall expedite completion of steps needed to close out awards and make prompt, final payments to a recipient for allowable reimbursable costs under the award being closed out.

(2)

The recipient shall promptly refund any unobligated balances of cash that the DoD Component has advanced or paid and that is not authorized to be retained by the recipient for use in other projects. For unreturned amounts that become delinquent debts see DoDGARs 22.820.

(3)

The Agreements Officer may make a settlement for any downward adjustments to the Federal share of costs after closeout reports are received.

(4)

The recipient shall account for any real property and personal property acquired with Federal funds or received from the Federal Government in accordance with the terms of the agreement.

(5)

If a final audit is required and has not been performed prior to the closeout of an award, the DoD Component shall retain the right to recover an appropriate amount after fully considering the recommendations on disallowed costs resulting from the final audit.

(c)	The closeout of an award does not affect any of the following:


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(1)

The right of the Department of Defense to disallow costs and recover funds on the basis of a later audit or other review.

(2)

The obligation of the recipient to return any funds due as a result of later refunds, corrections, or other transactions.

(3)

Any specified audit requirements.

(4)

Any specified property management requirements.

(5)

Records retention as required by the agreement.

(d)

After closeout of an award, a relationship created under an award may be modified or ended in whole or in part with the consent of the Agreements Officer and the recipient, provided the responsibilities of the recipient referred to in the agreement, including those for property management as applicable, are considered and provisions made for continuing responsibilities of the recipient, as appropriate.

8.03SYSTEM FOR AWARD MANAGEMENT AND UNIVERSAL ENTITY IDENTIFIER REQUIREMENTS (APR 2022)

(a)

Requirement for System for Award Management (SAM): Unless you are exempted from this requirement under 2 CFR 25.110, you as the recipient must maintain the currency of your information in the SAM until you submit the final financial report required under this award or receive the final payment, whichever is later. This requires that you review and update the information at least annually after the initial registration, and more frequently if required by changes in your information or another award term.

(b)	Requirement for Unique Entity Identifier (UEI): If you are authorized to make subawards under this award, you:

(1)

Must notify potential subrecipients that no entity (see definition in paragraph C of this award term) may receive a subaward from you unless the entity has provided its UEI to you.

(2)

May not make a subaward to an entity unless the entity has provided its UEI to you.

(c)	Definitions: For purposes of this award term:

(1)

System for Award Management (SAM) means the Federal repository into which an entity must provide information required for the conduct of business as a recipient. Additional information about registration procedures may be found at the SAM Internet site (currently at https://SAM.gov).

(2)

Unique Entity Identifier (UEI) number means the unique identifier established and assigned by the General Services Administration (GSA) within the SAM.gov website.

(3)

Entity, as it is used in this award term, means all of the following, as defined at 2 CFR part 25, subpart C:

(i)

A Governmental organization, which is a State, local government, or Indian Tribe;

(ii)

A foreign public entity;

(iii)

A domestic or foreign nonprofit organization;

(iv)

A domestic or foreign for-profit organization; and


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(v)

A Federal agency, but only as a subrecipient under an award or subaward to a non-Federal entity.

(4)

Subaward:

(i)

(ii)

The term does not include your procurement of property and services needed to carry out the project or program (for further explanation, see 2 CFR part 200, subpart F).

(iii)

A subaward may be provided through any legal agreement, including an agreement that you consider a contract.

(5)

Subrecipient means an entity that:

(i)

Receives a subaward from you under this award; and

(ii)

Is accountable to you for the use of the Federal funds provided by the subaward.

9.000ASSURANCES (FEB 2001)

(a)	By signing or accepting funds under the agreement, the recipient assures that it will comply with applicable provisions of the following National policies on:

(1)

Prohibiting discrimination:

(i)

On the basis of race, color, or national origin, in Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d, et seq.), as implemented by DoD regulations at 32 CFR part 195;

(ii)

On the basis of age, in the Age Discrimination Act of 1975 (42 U.S.C. 6101, et seq.) as implemented by Department of Health and Human Services regulations at 45 CFR part 90;

(iii)

On the basis of handicap, in Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), as implemented by Department of Justice regulations at 28 CFR part 41 and DoD regulations at 32 CFR part 56;

(2)

The Clean Air Act (42 U.S.C. 7401, et seq.) and Clean Water Act (33 U.S. 1251, et seq.), as implemented by Executive Order 11738 (3 CFR, 1971-1975 Comp., p. 799).

(b)	The recipient shall obtain assurances of compliance from contractors and recipients at lower tiers.

9.001U.S. FLAG AIR CARRIERS (NOV 1999)

Travel supported by U.S. Government funds under this agreement shall use US-flag air carriers (air carriers holding certificates under 49 U.S.C. 41102) for international air transportation of people and property to the extent that such service is available, in accordance with the International Air Transportation Fair Competitive Practices Act of 1974 (49 U.S.C. 40118) and the interpretative guidelines issued by the Comptroller General of the United States in the March 31, 1981, amendment to Comptroller General Decision B138942. (See General Services Administration amendment to the Federal Travel Regulations, Federal Register (Vol 63, No. 219, 63417-63421.))

9.002 PROHIBITION ON USING FUNDS UNDER GRANTS AND COOPERATIVE AGREEMENTS WITH ENTITIES THAT REQUIRE CERTAIN INTERNAL CONFIDENTIALITY AGREEMENTS (JUN 2015)


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(a)

The recipient may not require its employees, contractors, or subrecipients seeking to report fraud, waste, or abuse to sign or comply with internal confidentiality agreements or statements prohibiting investigative or law enforcement representative of a Federal department or agency authorized to receive such information.

(b)	The recipient must notify its employees, contractors, or subrecipients that the prohibitions and restrictions of any internal confidentiality agreements inconsistent with paragraph (a) of this award provisions are no longer in effect.

(c)	The prohibition in paragraph a of this award provision does not contravene requirements applicable to Standard Form 312, Form 4414, or any other form issued by a Federal department or agency governing the nondisclosure of classified information.

(d)	If the Government determines that the recipient is not in compliance with this award provision it:

(1)

Will prohibit the recipient’s use of funds under this award, in accordance with section 743 of Division E of the Consolidated and Further Continuing Resolution Appropriations Act, 2015 (Pub. L. 113- 235) or any successor provision of law; and

(2)

May pursue other remedies available for the recipient’s material failure to comply with award terms and conditions.

9.03SAFEGUARDING COVERED DEFENSE INFORMATION AND CYBER INCIDENT REPORTING (DEC 2019)

(a)	Definitions. As used in this article –

Adequate security means protective measures that are commensurate with the consequences and probability of loss, misuse, or unauthorized access to, or modification of information.

Compromise means disclosure of information to unauthorized persons, or a violation of the security policy of a system, in which unauthorized intentional or unintentional disclosure, modification, destruction, or loss of an object, or the copying of information to unauthorized media may have occurred.

Recipient attributional/proprietary information means information that identifies the recipients(s), whether directly or indirectly, by the grouping of information that can be traced back to the recipient(s) (e.g., program description, facility locations), personally identifiable information, as well as trade secrets, commercial or financial information, or other commercially sensitive information that is not customarily shared outside of the company.

Controlled technical information means technical information with military or space application that is subject to controls on the access, use, reproduction, modification, performance, display, release, disclosure, or dissemination. Controlled technical information would meet the criteria, if disseminated, for distribution statements B through F using the criteria set forth in DoD Instruction 5230.24, Distribution Statements on Technical Documents. The term does not include information that is lawfully publicly available without restrictions.

Covered recipient information system means an unclassified information system that is owned, or operated by or for, a recipient and that processes, stores, or transmits covered defense information.

Covered defense information means unclassified controlled technical information or other information, as described in the Controlled Unclassified Information (CUI) Registry at http://www.archives.gov/cui/registry/category-list.html, that requires safeguarding or dissemination controls pursuant to and consistent with law, regulations, and Government wide policies, and is -


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(1)

Marked or otherwise identified in the agreement and provided to the recipient by or on behalf of DoD in support of the performance of the agreement; or

(2)

Collected, developed, received, transmitted, used, or stored by or on behalf of the recipient in support of the performance of the agreement.

Cyber incident means actions taken through the use of computer networks that result in a compromise or an actual or potentially adverse effect on an information system and/or the information residing therein.

Forensic analysis means the practice of gathering, retaining, and analyzing computer-related data for investigative purposes in a manner that maintains the integrity of the data.

Information system means a discrete set of information resources organized for the collection, processing, maintenance, use, sharing, dissemination, or disposition of information.

Malicious software means computer software or firmware intended to perform an unauthorized process that will have adverse impact on the confidentiality, integrity, or availability of an information system.

This definition includes a virus, worm, Trojan horse, or other code-based entity that infects a host, as well as spyware and some forms of adware.

Media means physical devices or writing surfaces including, but is not limited to, magnetic tapes, optical disks, magnetic disks, large-scale integration memory chips, and printouts onto which covered defense information is recorded, stored, or printed within a covered recipient information system.

Operationally critical support means supplies or services designated by the Government as critical for airlift, sealift, intermodal transportation services, or logistical support that is essential to the mobilization, deployment, or sustainment of the Armed Forces in a contingency operation.

Rapidly report means within 72 hours of discovery of any cyber incident.

Technical information means technical data or computer software. Examples of technical information include research and engineering data, engineering drawings, and associated lists, specifications, standards, process sheets, manuals, technical reports, technical orders, catalog-item identifications, data sets, studies and analyses and related information, and computer software executable code and source code.

(b)	Adequate security. The Recipient shall provide adequate security on all covered recipient information systems. To provide adequate security, the Recipient shall implement, at a minimum, the following information security protections:

(1)

For covered recipient information systems that are part of an information technology (IT) service or system operated on behalf of the Government, the following security requirements apply:

(i)

Cloud computing services shall be subject to the security requirements specified in the 48 CFR §252.239-7010, Cloud Computing Services.

(ii)

Any other such IT service or system (i.e., other than cloud computing) shall be subject to the security requirements specified elsewhere in this Agreement.

(2)

For covered recipient information systems that are not part of an IT service or system operated on behalf of the Government and therefore are not subject to the security requirement specified at paragraph (b)(1) of this article, the following security requirements apply:

(i)

Except as provided in paragraph (b)(2)(ii) of this article, the covered recipient information system shall be subject to the security requirements in National Institute of Standards and Technology (NIST) Special Publication (SP) 800-171, “Protecting Controlled Unclassified Information in Nonfederal Information Systems and Organizations” (available via the internet


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at http://dx.doi.org/10.6028/NIST.SP.800-171) in effect at the time the solicitation is issued or as authorized by the Agreements officer.

(ii)

(A)

The Recipient shall implement NIST SP 800-171, as soon as practical, but not later than December 31, 2017. For all agreements awarded prior to October 1, 2017, the Recipient shall notify the DoD Chief Information Officer (CIO), via email at osd.dibcsia@mail.mil, within 30 days of contract/agreement award, of any security requirements specified by NIST SP 800-171 not implemented at the time of contract or agreement award.

(B)

The Recipient shall submit requests to vary from NIST SP 800-171 in writing to the Agreements officer, for consideration by the DoD CIO. The Recipient need not implement any security requirement adjudicated by an authorized representative of the DoD CIO to be nonapplicable or to have an alternative, but equally effective, security measure that may be implemented in its place.

(C)

If the DoD CIO has previously adjudicated the recipient’s requests indicating that a requirement is not applicable or that an alternative security measure is equally effective, a copy of that approval shall be provided to the Agreements officer when requesting its recognition under this agreement.

(D)

If the Recipient intends to use an external cloud service provider to store, process, or transmit any covered defense information in performance of this agreement, the Recipient shall require and ensure that the cloud service provider meets security requirements equivalent to those established by the Government for the Federal Risk and Authorization Management Program (FedRAMP) Moderate baseline (https://www.fedramp.gov/resources/documents/) and that the cloud service provider complies with requirements in paragraphs (c) through (g) of this article for cyber incident reporting, malicious software, media preservation and protection, access to additional information and equipment necessary for forensic analysis, and cyber incident damage assessment.

(3)

Apply other information systems security measures when the Recipient reasonably determines that information systems security measures, in addition to those identified in paragraphs (b)(1) and (2) of this article, may be required to provide adequate security in a dynamic environment or to accommodate special circumstances (e.g., medical devices) and any individual, isolated, or temporary deficiencies based on an assessed risk or vulnerability. These measures may be addressed in a system security plan.

(c)	Cyber incident reporting requirement.

(1)

When the Recipient discovers a cyber incident that affects a covered recipient information system or the covered defense information residing therein, or that affects the recipient’s ability to perform the requirements of the agreement that are designated as operationally critical support and identified in the agreement, the Recipient shall –

(i)

Conduct a review for evidence of compromise of covered defense information, including, but not limited to, identifying compromised computers, servers, specific data, and user accounts. This review shall also include analyzing covered recipient information system(s) that were part of the cyber incident, as well as other information systems on the Recipient’s network(s), that may have been accessed as a result of the incident in order to identify compromised covered defense information, or that affect the Recipient’s ability to provide operationally critical support; and

(ii)

Rapidly report cyber incidents to DoD at https://dibnet.dod.mil.


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(2)

Cyber incident report. The cyber incident report shall be treated as information created by or for DoD and shall include, at a minimum, the required elements at https://dibnet.dod.mil.

(3)

Medium assurance certificate requirement. In order to report cyber incidents in accordance with this article, the Recipient or Subrecipients/Subcontractors shall have or acquire a DoD-approved medium assurance certificate to report cyber incidents. For information on obtaining a DoD-approved medium assurance certificate, see https://public.cyber.mil/eca/.

(d)

Malicious software. When the Recipient or subrecipients/subcontractors discover and isolate malicious software in connection with a reported cyber incident, submit the malicious software to DoD Cyber Crime Center (DC3) in accordance with instructions provided by DC3 or the Agreements officer. Do not send the malicious software to the Agreements officer.

(e)

Media preservation and protection. When a Recipient discovers a cyber incident has occurred, the Recipient shall preserve and protect images of all known affected information systems identified in paragraph (c)(1)(i) of this article and all relevant monitoring/packet capture data for at least 90 days from the submission of the cyber incident report to allow DoD to request the media or decline interest.

(f)	Access to additional information or equipment necessary for forensic analysis. Upon request by DoD, the Recipient shall provide DoD with access to additional information or equipment that is necessary to conduct a forensic analysis.

(g)	Cyber incident damage assessment activities. If DoD elects to conduct a damage assessment, the Agreements officer will request that the Recipient provide all of the damage assessment information gathered in accordance with paragraph (e) of this article.

(h)

DoD safeguarding and use of recipient attributional/proprietary information. The Government shall protect against the unauthorized use or release of information obtained from the recipient (or derived from information obtained from the recipient) under this article that includes recipient attributional/proprietary information, including such information submitted in accordance with paragraph (c). To the maximum extent practicable, the Recipient shall identify and mark attributional/proprietary information. In making an authorized release of such information, the Government will implement appropriate procedures to minimize the recipient attributional/proprietary information that is included in such authorized release, seeking to include only that information that is necessary for the authorized purpose(s) for which the information is being released.

(i)	Use and release of recipient attributional/proprietary information not created by or for DoD. Information that is obtained from the recipient (or derived from information obtained from the recipient) under this article that is not created by or for DoD is authorized to be released outside of DoD –

(1)

To entities with missions that may be affected by such information;

(2)

To entities that may be called upon to assist in the diagnosis, detection, or mitigation of cyber incidents;

(3)

To Government entities that conduct counterintelligence or law enforcement investigations;

(4)

For national security purposes, including cyber situational awareness and defense purposes (including with Defense Industrial Base (DIB) participants in the program at 32 CFR part 236); or

(5)

To a support services contractor (“recipient”) that is directly supporting Government activities under a contract/agreement that includes 48 CFR §252.204-7009, Limitations on the Use or Disclosure of Third-Party Contractor Reported Cyber Incident Information.

(j)

Use and release of recipient attributional/proprietary information created by or for DoD. Information that is obtained from the recipient (or derived from information obtained from the recipient) under this article that is created by or for DoD (including the information submitted pursuant to


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paragraph (c) of this article) is authorized to be used and released outside of DoD for purposes and activities authorized by paragraph (i) of this article, and for any other lawful Government purpose or activity, subject to all applicable statutory, regulatory, and policy based restrictions on the Government’s use and release of such information.

(k)

The Recipient shall conduct activities under this article in accordance with applicable laws and regulations on the interception, monitoring, access, use, and disclosure of electronic communications and data.

(l)

Other safeguarding or reporting requirements. The safeguarding and cyber incident reporting required by this article in no way abrogates the Recipient’s responsibility for other safeguarding or cyber incident reporting pertaining to its unclassified information systems as required by other applicable articles of this agreement, or as a result of other applicable U.S. Government statutory or regulatory requirements.

(m)

Subrecipients/Subcontracts. The Recipient shall -

(1)

Include this article, including this paragraph (m), to subrecipient or subcontracts or similar contractual instruments, for operationally critical support, or for which subrecipient/subcontract performance will involve covered defense information, including subcontracts for commercial items, without alteration, except to identify the parties. The Recipient shall determine if the information required for subrecipient/subcontractor performance retains its identity as covered defense information and will require protection under this article, and, if necessary, consult with the Agreements Officer; and

(2)

Require subrecipients/subcontractors to -

(i)

Notify the prime Recipient (or next higher-tier subrecipient/subcontractor) when submitting a request to vary from a NIST SP 800-171 security requirement to the Agreements Officer, in accordance with paragraph (b)(2)(ii)(B) of this article; and

(ii)

Provide the incident report number, automatically assigned by DoD, to the prime Recipient (or next higher-tier subrecipient/subcontractor) as soon as practicable, when reporting a cyber incident to DoD as required in paragraph (c) of this article.

9.04RECIPIENT COUNTERFEIT ELECTRONIC PART DETECTION AND AVOIDANCE SYSTEM (AUG 2016)

(a)	This article applies only to recipients and agreements that are subject to Cost Accounting Standards as stated in 41 U.S.C §1502(c).

(b)	Definitions. As used in this article—

“Authorized aftermarket manufacturer” means an organization that fabricates a part under a contract or agreement with, or with the express written authority of, the original component manufacturer based on the original component manufacturer’s designs, formulas, and/or specifications.

“Authorized supplier” means a supplier, distributor, or an aftermarket manufacturer with a contractual arrangement with, or the express written authority of, the original manufacturer or current design activity to buy, stock, repackage, sell, or distribute the part.

“Contract manufacturer” means a company that produces goods under contract for another company under the label or brand name of that company.

“Contractor-approved supplier” means a supplier that does not have a contractual agreement with the original component manufacturer for a transaction, but has been identified as trustworthy


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by a contractor or subcontractor.

“Counterfeit electronic part” means an unlawful or unauthorized reproduction, substitution, or alteration that has been knowingly mismarked, misidentified, or otherwise misrepresented to be an authentic, unmodified electronic part from the original manufacturer, or a source with the express written authority of the original manufacturer or current design activity, including an authorized aftermarket manufacturer. Unlawful or unauthorized substitution includes used electronic parts represented as new, or the false identification of grade, serial number, lot number, date code, or performance characteristics.

“Electronic part” means an integrated circuit, a discrete electronic component (including, but not limited to, a transistor, capacitor, resistor, or diode), or a circuit assembly (section 818(f)(2) of Pub. L. 112-81).

“Obsolete electronic part” means an electronic part that is no longer available from the original manufacturer or an authorized aftermarket manufacturer.

“Original component manufacturer” means an organization that designs and/or engineers a part and is entitled to any intellectual property rights to that part.

“Original equipment manufacturer” means a company that manufactures products that it has designed from purchased components and sells those products under the company’s brand name.

“Original manufacturer” means the original component manufacturer, the original equipment manufacturer, or the contract manufacturer.

“Suspect counterfeit electronic part” means an electronic part for which credible evidence (including, but not limited to, visual inspection or testing) provides reasonable doubt that the electronic part is authentic.

(c)Acceptable counterfeit electronic part detection and avoidance system. The Awardee shall establish and maintain an acceptable counterfeit electronic part detection and avoidance system. Failure to maintain an acceptable counterfeit electronic part detection and avoidance system, as defined in this article, may result in disapproval of the purchasing system by the Agreements Officer and/or withholding of payments and affect the allowability of costs of counterfeit electronic parts or suspect counterfeit electronic parts and the cost of rework or corrective action that may be required to remedy the use or inclusion of such parts (see 48 CFR §231.205-71).

(d)System criteria. A counterfeit electronic part detection and avoidance system shall include risk-based policies and procedures that address, at a minimum, the following areas:

(1)The training of personnel.

(2)The inspection and testing of electronic parts, including criteria for acceptance and rejection. Tests and inspections shall be performed in accordance with accepted Government- and industry-recognized techniques. Selection of tests and inspections shall be based on minimizing risk to the Government. Determination of risk shall be based on the assessed probability of receiving a counterfeit electronic part; the probability that the inspection or test selected will detect a counterfeit electronic part; and the potential negative consequences of a counterfeit electronic part being installed (e.g., human safety, mission success) where such consequences are made known to the Awardee.

(3)Processes to abolish counterfeit parts proliferation.

(4)Risk-based processes that enable tracking of electronic parts from the original manufacturer to product acceptance by the Government, whether the electronic parts are supplied as


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discrete electronic parts or are contained in assemblies, in accordance with paragraph (c) of the clause at 252.246-7008, Sources of Electronic Parts (also see paragraph (c)(2) of this article).

(5)Use of suppliers in accordance with the clause at 48 CFR §252.246-7008.

(6)Reporting and quarantining of counterfeit electronic parts and suspect counterfeit electronic parts. Reporting is required to the Agreements Officer and to the Government-Industry Data Exchange Program (GIDEP) when the Awardee becomes aware of, or has reason to suspect that, any electronic part or end item, component, part, or assembly containing electronic parts purchased by the DoD, or purchased by a Recipient for delivery to, or on behalf of, the DoD, contains counterfeit electronic parts or suspect counterfeit electronic parts. Counterfeit electronic parts and suspect counterfeit electronic parts shall not be returned to the seller or otherwise returned to the supply chain until such time that the parts are determined to be authentic.

(7)Methodologies to identify suspect counterfeit parts and to rapidly determine if a suspect counterfeit part is, in fact, counterfeit.

(8)Design, operation, and maintenance of systems to detect and avoid counterfeit electronic parts and suspect counterfeit electronic parts. The Awardee may elect to use current Government- or industry-recognized standards to meet this requirement.

(9)Flow down of counterfeit detection and avoidance requirements, including applicable system criteria provided herein, to subcontractors/subrecipients at all levels in the supply chain that are responsible for buying or selling electronic parts or assemblies containing electronic parts, or for performing authentication testing.

(10)Process for keeping continually informed of current counterfeiting information and trends, including detection and avoidance techniques contained in appropriate industry standards, and using such information and techniques for continuously upgrading internal processes.

(11)Process for screening GIDEP reports and other credible sources of counterfeiting information to avoid the purchase or use of counterfeit electronic parts.

(12)Control of obsolete electronic parts in order to maximize the availability and use of authentic, originally designed, and qualified electronic parts throughout the product’s life cycle.

(e)The Awardee shall include the substance of this article in subcontracts and subrecipients, including subcontracts for commercial items, for electronic parts or assemblies containing electronic parts.

9.05 PROHIBITION ON MAKING AWARDS FOR CERTAIN TELECOMMUNICATIONS AND VIDEO SURVEILLANCE SERVICES OR EQUIPMENT (AUG 2020)

(a)	Definitions. As used in this article—

Backhaul means intermediate links between the core network, or backbone network, and the small subnetworks at the edge of the network (e.g., connecting cell phones/towers to the core telephone network). Backhaul can be wireless (e.g., microwave) or wired (e.g., fiber optic, coaxial cable, Ethernet).

Covered foreign country means The People’s Republic of China.

Covered telecommunications equipment or services means—


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(1)

Telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation (or any subsidiary or affiliate of such entities);

(2)

For the purpose of public safety, security of Government facilities, physical security surveillance of critical infrastructure, and other national security purposes, video surveillance and telecommunications equipment produced by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company (or any subsidiary or affiliate of such entities);

(3)

Telecommunications or video surveillance services provided by such entities or using such equipment; or

(4)

Telecommunications or video surveillance equipment or services produced or provided by an entity that the Secretary of Defense, in consultation with the Director of National Intelligence or the Director of the Federal Bureau of Investigation, reasonably believes to be an entity owned or controlled by, or otherwise connected to, the government of a covered foreign country.

Critical technology means—

(1)

Defense articles or defense services included on the United States Munitions List set forth in the International Traffic in Arms Regulations under subchapter M of chapter I of title 22, Code of Federal Regulations;

(2)

Items included on the Commerce Control List set forth in Supplement No. 1 to part 774 of the Export Administration Regulations under subchapter C of chapter VII of title 15, Code of Federal Regulations, and controlled—

(i)

Pursuant to multilateral regimes, including for reasons relating to national security, chemical and biological weapons proliferation, nuclear nonproliferation, or missile technology; or

(ii)

For reasons relating to regional stability or surreptitious listening;

(3)

Specially designed and prepared nuclear equipment, parts and components, materials, software, and technology covered by part 810 of title 10, Code of Federal Regulations (relating to assistance to foreign atomic energy activities);

(4)

Nuclear facilities, equipment, and material covered by part 110 of title 10, Code of Federal Regulations (relating to export and import of nuclear equipment and material);

(5)

Select agents and toxins covered by part 331 of title 7, Code of Federal Regulations, part 121 of title 9 of such Code, or part 73 of title 42 of such Code; or

(6)

Emerging and foundational technologies controlled pursuant to section 1758 of the Export Control Reform Act of 2018 (50 U.S.C. 4817).

Interconnection arrangements means arrangements governing the physical connection of two or more networks to allow the use of another’s network to hand off traffic where it is ultimately delivered (e.g., connection of a customer of telephone provider A to a customer of telephone company B) or sharing data and other information resources.

Reasonable inquiry means an inquiry designed to uncover any information in the entity’s possession about the identity of the producer or provider of covered telecommunications equipment or services used by the entity that excludes the need to include an internal or third-party audit.


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Roaming means cellular communications services (e.g., voice, video, data) received from a visited network when unable to connect to the facilities of the home network either because signal coverage is too weak or because traffic is too high.

Substantial or essential component means any component necessary for the proper function or performance of a piece of equipment, system, or service.

(b)	Prohibition.

(1)

Section 889(a)(1)(A) of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (Pub. L. 115-232) prohibits the head of an executive agency on or after August 13, 2019, from procuring or obtaining, or extending or renewing an award to procure or obtain, any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system. The Recipient is prohibited from providing to the Government any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system, unless an exception at paragraph (c) of this article applies or the covered telecommunication equipment or services are covered by a waiver by the Secretary of the Air Force in consultation with the Office of the Director of National Intelligence (ODNI).

(2)

Section 889(a)(1)(B) of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (Pub. L. 115-232) prohibits the head of an executive agency on or after August 13, 2020, from entering into an award, or extending or renewing an award, with an entity that uses any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system, unless an exception at paragraph (c) of this article applies or the covered telecommunication equipment or services are covered by a waiver by the Secretary of the Air Force in consultation with the Office of the Director of National Intelligence (ODNI). This prohibition applies to the use of covered telecommunications equipment or services, regardless of whether that use is in performance of work under a Federal award.

(c)	Exceptions. This article does not prohibit Recipients from providing—

(1)

A service that connects to the facilities of a third-party, such as backhaul, roaming, or interconnection arrangements; or

(2)

Telecommunications equipment that cannot route or redirect user data traffic or permit visibility into any user data or packets that such equipment transmits or otherwise handles.

(d)	Reporting requirement.

(1)

In the event the Recipient identifies covered telecommunications equipment or services used as a substantial or essential component of any system, or as critical technology as part of any system, during award performance, or the Recipient is notified of such by a subrecipient at any tier or by any other source, the Recipient shall report the information in paragraph (d)(2) of this article to the Agreements Officer, unless elsewhere in this award are established procedures for reporting the information; in the case of the Department of Defense, the Recipient shall report to the website at https://dibnet.dod.mil. For indefinite delivery agreements, the Recipient shall report to the Agreements Officer for the indefinite delivery agreement and the Agreements Officer(s) for any affected order or, in the case of the Department of Defense, identify both the indefinite delivery award and any affected orders in the report provided at https://dibnet.dod.mil.

(2)

The Recipient shall report the following information pursuant to paragraph (d)(1) of this article:


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(i)

Within one business day from the date of such identification or notification: The award number; the order number(s), if applicable; supplier name; supplier unique entity identifier (if known); supplier Commercial and Government Entity (CAGE) code (if known); brand; model number (original equipment manufacturer number, manufacturer part number, or wholesaler number); item description; and any readily available information about mitigation actions undertaken or recommended.

(ii)

Within 10 business days of submitting the information in paragraph (d)(2)(i) of this article: Any further available information about mitigation actions undertaken or recommended. In addition, the Recipient shall describe the efforts it undertook to prevent use or submission of covered telecommunications equipment or services, and any additional efforts that will be incorporated to prevent future use or submission of covered telecommunications equipment or services.

(e)	Subawards. The Recipient shall insert the substance of this article, including this paragraph (e) and excluding paragraph (b)(2), in all subawards and other contractual instruments, including awards for the acquisition of commercial items.

9.06PROHIBITION ON A BYTEDANCE COVERED APPLICATION (JUN 2023)

(a)	Definitions. As used in this article—

Covered application means the social networking service TikTok or any successor application or service developed or provided by ByteDance Limited or an entity owned by ByteDance Limited.

Information technology, as defined in 40 U.S.C. 11101(6)—

(1)

Means any equipment or interconnected system or subsystem of equipment, used in the automatic acquisition, storage, analysis, evaluation, manipulation, management, movement, control, display, switching, interchange, transmission, or reception of data or information by the executive agency, if the equipment is used by the executive agency directly or is used by an awardee under an award with the executive agency that requires the use—

(i)	Of that equipment; or

(ii)	Of that equipment to a significant extent in the performance of a service or the furnishing of a product;

(2)

Includes computers, ancillary equipment (including imaging peripherals, input, output, and storage devices necessary for security and surveillance), peripheral equipment designed to be controlled by the central processing unit of a computer, software, firmware and similar procedures, services (including support services), and related resources; but

(3)	Does not include any equipment acquired by a Federal awardee incidental to a Federal award.

(b)

Prohibition. Section 102 of Division R of the Consolidated Appropriations Act, 2023 (Pub. L. 117-328), the No TikTok on Government Devices Act, and its implementing guidance under Office of Management and Budget (OMB) Memorandum M-23-13, dated February 27, 2023, “No TikTok on Government Devices” Implementation Guidance, collectively prohibit the presence or use of a covered application on executive agency information technology, including certain equipment used by Federal awardee(s). The Awardee is prohibited from having or using a covered application on any information technology owned or managed by the Government, or on any information technology used or provided by the Awardee under this award, including equipment provided by the Awardee’s employees; however, this prohibition does not apply if the Grants Office/Agreements Officer provides written notification to the Awardee that an exception has been granted in accordance with OMB Memorandum M-23-13.


Distribution A. Approved for Public Release AFRL-2023-5431 [26 Oct 2023]	44

FA8650-23-2-5522

Attachment 1B

24 July 2023

(c)	Subcontracts/Subrecipients. The Awardee shall insert the substance of this article, including this paragraph (c), in all subawards, including subawards for the acquisition of commercial products or commercial services.

(End of Article)


Distribution A. Approved for Public Release AFRL-2023-5431 [26 Oct 2023]	45

Exhibit 10.2

Perpetua Resources Corp.

405 S. 8th Street, Ste. 201

Boise, ID 83702

Nasdaq: PPTA TSX: PPTA

www.perpetuaresources.com

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”) is dated effective August 14, 2023 (the “Effective Date”).

BETWEEN:

PERPETUA RESOURCES IDAHO, INC., an Idaho corporation, with offices at the address above (“Employer”)

AND:

Michael Wright having an address of [***] (“Employee”)

RECITALS

A.The Employer carries on the business of mineral exploration and development.

B.The Employer employs the Employee and the Employee has agreed to continue to serve the Employer on an at-will basis on the terms and conditions hereinafter set forth.

C.This Agreement supersedes all prior agreements and is the only and entire agreement concerning Employee’s employment by Employer.

AGREEMENT

NOW THEREFORE, for good and valuable consideration and the mutual covenants and agreements contained herein, the parties mutually agree as follows.

Definitions

1.In this Agreement:

●

“Short Term Incentive Plan” means the Employer’s annual incentive plan, to be effective when adopted by the Board, and which may be revised or terminated thereafter from time to time;

●

“Board” means the board of directors of the Employer;

●

“Bonus” means any payment by Employer to Employee made in accordance with the Short Term Incentive Plan or any other bonus or incentive plan established by the Employer, and on commencement of employment, is prorated for the number of calendar days Employee is employed by Employer in any Bonus Year;

●

“Bonus Year” means the period of January 1 to December 31 each year, used by the Employer to assess awards to the Employee under the Short Term Incentive Plan or any other bonus or incentive plan established by the Employer;

●

“Cause” means:

● Disobedience by Employee of orders or directives of Employer, or interference with the performance by employees of Employer of their duties if such disobedience or interference is either (A) of such a nature that no reasonable doubt can exist as to its material adverse effect on the Employer, or (B) continues after specific instruction relating thereto has been given by the Employer; or

● Material acts of dishonesty, disloyalty or competition related to the business of the Employer or its relationships with its employees, suppliers, customers or those with whom the Employer does business; or

● Refusal or failure to furnish significant information concerning the Employer’s affairs as reasonably requested by the Employer, or material falsification of such information; or

● Any other action or course of conduct (specifically including, by way of illustration and not limitation, the breach of any material term of this Agreement or failure to comply with any Employer policy) which has or reasonably may be expected to have a material adverse effect on the Employer or its business or financial position, if such action or course of conduct is either (A) of such a nature that no reasonable doubt can exit as to its material adverse effect on the Employer, or (B) continues after specific instruction relating thereto have been given by or under the authority of the Board; or

● Commission of an act constituting fraud, unethical behavior, immoral behavior, intentional dishonesty, or similar conduct; or

● The Employee’s failure or inability to perform at a level satisfactory to the Employer after receiving a warning of needed improvement;

●

“Change of Control” means; the acquisition by any person or entity (or by any person or entity and a person or entity acting jointly or in concert with the other) whether directly or indirectly (in any case, a “Third Party Acquirer”), of voting securities which, when added to all other voting securities of the Employer at the time held by the Third Party Acquirer, totals for the first time not less than fifty percent (50%) of the outstanding voting securities of the Employer or the votes attached to those securities are sufficient, if exercised, to elect a majority of the Board. Notwithstanding the foregoing, no acquisition of voting securities by any entity affiliated in any way with the Employer, whether as a parent, subsidiary, or sister entity, shall be considered a Change of Control.

●

“Disability” means a physical or mental condition, verified in writing by an independent and qualified medical practitioner, which prevents the Employee from continuing active work in Employee’s existing or a similar position for a period of four (4) weeks.

●

“Good Reason” means the occurrence of any of the following upon or within the 12 months following a Change of Control without the Employee’s written consent:

●

a meaningful and detrimental change in the Employee’s position, title, duties or responsibilities from those in effect as of the Effective Date;

●

any reduction of fifteen percent (15%) or more of the Employee’s Salary; or

●

a demand by the Employer that the Employee cease working or providing services for remuneration to an entity where the Employer and Employee had previously agreed that the Employee could engage in such activities, provided that a demand that the Employee not increase the average monthly hours devoted to the third entity shall not constitute Good Reason, and provided that a demand that Employee cease such work due to a conflict of interest or a violation of Section 8 of this Agreement shall not constitute Good Reason; provided that, any of the above events will constitute “Good Reason” only if the Employee provides notice to the Employer within 30 days of the

above event initially occurring, and the Employer has 30 days from receipt of the notice during which to cure.

●

“Omnibus Equity Incentive Plan” means the Omnibus Equity Incentive Plan as may be amended or terminated from time to time;

●

“Incentive Share Options/Units” means any share options/units granted under the Omnibus Equity Incentive Plan to Employee from time to time;

●

“LTIP” means any long-term incentive plan that may be adopted by the Employer from time to time and as may be revised or terminated from time to time;

●

“LTIP Share Options/Units” means share options/units granted under the LTIP to Employee from time to time.

2.Employment

●

The Employer confirms the ongoing employment of the Employee in the position set out in Schedule “A”.

●

The Employee will provide the services of such position and will exercise the powers and fulfill the responsibilities set forth in Schedule “B”.

●

The Employee’s employment will continue according to the terms of this Agreement whether or not Employee becomes or ceases to be an elected officer or a director of the Employer.

3. Compensation

(a)

The Employee’s gross salary will be that amount set out in Schedule “A” (the “Salary”). So long as the Employee is employed pursuant to this Agreement, the Salary less any applicable deductions authorized by the Employee or lawfully required or made by the Employer, will be payable twice a month in 24 equal installments on the 15th and the last business day in each month. The Salary shall be subject to adjustment from time to time by the Employer upon notice to Employee.

(b)

Employee will be eligible to receive Incentive Share Options and/or Units as set out in Schedule “A”.

(c)

Employee will be eligible to receive LTIP Share Options and/or Units under the Company’s Omnibus Equity Incentive Plan.

(d)

Employee will be eligible to participate in the Short Term Incentive Plan as set out in Schedule “A” and an extract from the current compensation policy that relates to the Short Term Incentive Plan is attached as Schedule “C”.

4. Expenses

(a)

The Employer will provide, by way of direct paymentor reimbursement, out-of-pocket expenses reasonably incurred by the Employee in performing Employee’s duties in accordance with the Employer’s policies on expense reimbursement set forth in the Employer’s Employee Handbook. By signing this Agreement, Employee hereby authorizes Employer, in its discretion, to deduct any unauthorized expenses from Employer’s wages.

5.Vacation

(a)

The Employee shall be entitled to the paid vacation in accordance with the Employer’s Employee Handbook, except as may otherwise be set out in Schedule “A”.

6.Benefits

(a)

The Employee shall be entitled to the benefits provided by the Employer as set forth in the Employer’s Employee Handbook, except as may otherwise be set out in Schedule “A”. All benefit plans are subject to amendment or termination by Employer at any time.

7.Illness, Injury or Accident Caused by Performing Duties

●

If the Employee is, at any time, incapacitated by illness, injury or accident, in any such case, caused by performing Employee’s duties, and furnishes the Employer with evidence satisfactory to the Employer of such incapacity and the cause of it, then, in the event that Employee is unable to substantially perform Employee’s job, the Employee will be entitled to payment of Employee’s Salary at the full rate less any other benefits receivable by Employee (including payment made under any applicable workman’s compensation law or payment made under any short or long-term disability insurance, if applicable), for a period of 17 weeks and will thereafter be entitled to no further payment from the Employer during Employee’s incapacity.

8.Employee’s Covenants During and After Employment

During employment, the Employee hereby covenants and agrees that:

●

The Employee will attend at the offices and worksites of the Employer and will attend at any other time or times as may be necessary for the proper discharge of the Employee’s duties;

●

The Employee will, in the exercise of Employee’s duties, at all times follow the lawful instructions given and any regulations made by the Board and will, from time to time, and at all times when required to do so, give an account to the Board, President, and/or Employee’s supervisor of all transactions, matters and things relating to the Employer;

●

The Employee will, during the continuance of this Agreement, unless prevented by incapacity as noted in Section 7 above, or unless the Employee and Employer have previously agreed that the Employee may work or provide services for remuneration to another entity;

●

devote the Employee’s whole time and attention to the Employee’s duties in the Employee’s employment position, provided that the Employee may provide services for remuneration for the entities and in the capacity described in Schedule “A” or as otherwise agreed by the parties in writing;

●

perform the Employee’s duties to the best of the Employee’s abilities;

●

do Employee’s utmost to promote, develop and extend the business of the Employer;

●

comply with all provisions of the Employer’s Handbook and other policies adopted by the Employer from time to time;

●

protect the confidential information of the Employer and comply with all trade secret and confidentiality policies and agreements of the Employer;

●

give to the Employer the benefit of the Employee’s advice and experience with respect to the business and affairs of the Employer; and

●

faithfully perform all other covenants made by Employee under this Agreement;

●

During employment and for a period of twelve (12) months after employment (the “Restricted Period”), Employee hereby covenants and agrees that:

●

Employee will not, without the prior written consent of the Employer, do any of the following in any capacity:

serve (whether paid or unpaid) a Restricted Entity (defined below) as a partner, employee, consultant, contractor, officer, director, manager, agent, associate, investor, advisor, expert witness, or official; or

own, purchase, acquire, finance, invest in, operate, or organize a Restricted Entity, or take preparatory steps for the organization of a Restricted Entity.

●

For purposes of this Agreement, the term “Restricted Entity,” means any (w) entity that engages or plans to engage in the business of mineral exploration and development in the Restricted Territory (defined below), any (x) state, federal, or local governmental entity that has jurisdiction over the Employer’s current or proposed mining projects in the Restricted Territory, any (y) non-governmental organization or entity that has historically influenced, sought to influence, or may reasonably seek to influence during the Restricted Period, the Employer’s current or proposed mining projects in the Restricted Territory, and any (z) Native American Indian tribe, whether federally recognized or not, that has historically influenced, sought to influence, or may reasonably seek to influence during the Restricted Period, the Employer’s current or proposed mining projects in the Restricted Territory.

●

The restrictions set forth in this Section 8(b) shall only apply to Employee’s activities to the extent Employee’s activities and/or influence, or the activities and/or influence of the applicable Restricted Entity, relate to mining operations within the Idaho counties of Valley or Adams (the “Restricted Territory”).

●

In connection with the covenants set forth in this Section 8(b), Employee makes the following acknowledgments:

I acknowledge that my fulfillment of the obligations contained in this Agreement is necessary to protect the Employer’s confidential information and to preserve the trade secrets, business plans, value and goodwill of the Employer.

I acknowledge the time, geographic and scope limitations of my obligations are reasonable, especially in light of the Employer’s desire to protect its confidential information, business plans, value, goodwill, and trade secrets, and that I will not be precluded from gainful employment if I am obligated to comply with such obligations.

I will, by virtue of my position with the Employer, have and gain a high level of inside knowledge regarding the Employer and its business, and as a result, will have the ability to harm or threaten its legitimate business interests.

I have and will continue to provide services or have significant presence or influence on behalf of the Employer within the restricted territory due to the nature of the Employer’s business and its business plans.

I have received sufficient consideration in exchange for the covenants made herein.

●

The covenants contained in this Section 8 shall survive the termination or assignment of this Agreement. The Employer shall have the right to seek and secure an injunction to enforce the provisions of the covenants contained in Section 8, but that remedy shall not be exclusive. The Employer shall not be required to post any bond in such event.

●

In the event that one or more of the provisions of this Section 8 or any other provision of this Agreement shall for any reason be held to be illegal or unenforceable, this Agreement shall be revised only to the extent necessary to make such provision(s) legal and enforceable. Without limiting the foregoing, in the event the provisions of Section 8 are deemed in any judicial proceeding to exceed the time, geographic or scope of limitations permitted by law, then such provisions shall be reformed to the maximum time, geographic or scope limitations, as the case may be, then permitted by law.

9.Termination

●

In General/At-Will Employment. Either Employee or Employer may terminate Employee’s employment at any time for any reason. If Employment is terminated in specific circumstances as noted below in this section 9, then the Employee shall be eligible to receive the advance notice or severance and Bonus set out in Schedule “A.” Employer may condition any severance or Bonus payments upon a release of all claims against the Employer and such other terms as the Employer may determine in its sole discretion and in a form acceptable to Employer. If Employee elects not to provide such release, Employee shall not be entitled to severance or to any Bonus that has not yet been approved by the Board and become earned and payable under the terms of the applicable Short Term Incentive Plan.

On termination of employment, however caused:

the Employee will deliver to Employer all property and confidential information of the Employer in the Employee’s possession or under his control including, without limitation, all notes, memoranda and other business documents in Employee’s possession, including administrative and technical documents and materials concerning any of the business of the Employer.

ii.

Employee’s rights with regard to Employee’s Incentive Share Options/Units and any LTIP Share Options/Units shall be as set forth in the Omnibus Equity Incentive Plan and LTIP.

Other obligations of the parties upon termination under specific circumstances are set forth below in this Section 9.

Payments, if any, made under this Agreement shall be due and payable at such time as determined by the Employer, consistent with the parties’ intent that all payments and benefits under this Agreement comply with Internal Revenue Service Code Section 409A. (“Code Section 409A”) and accordingly, to the maximum extent permitted, this Agreement will be interpreted to be in compliance therewith. In no event whatsoever will the Employer be liable for any additional tax, interest or penalty that maybe imposed on the Employee under Code Section 409A or damages for failing to comply with Code Section 409A.

(a)

Termination by Employer. Employer may terminate Agreement for Cause or without Cause. If Employer terminates this Agreement for Cause at any time, then all compensation not yet due and payable to Employee shall cease and Employee shall

not be entitled to any Bonus. If Employer terminates this Agreement without Cause or on Change of Control then, subject to other provisions of this Agreement, Employer shall provide the applicable advance notice or severance and Bonus indicated in Schedule A.

(b)

Termination by Employee. Employee may terminate employment for Good Reason or without Good Reason. If Employee terminates this Agreement for Good Reason then, subject to other provisions of this Agreement, Employer shall provide the applicable advance notice or severance and Bonus indicated in Schedule A. If Employee terminates this Agreement without Good Reason no severance or Bonus is payable.

●

Automatic Termination in the Event of Disability or Death of Employee. Employee’s employment shall terminate automatically on the day that is seventeen (17) weeks after Employee’s Disability. Thereafter, (i) the Employee shall be eligible to receive the applicable Bonus set out in Schedule “A”. Employee’s employment shall terminate automatically in the event of the death of Employee. Thereafter, the Employee’s estate shall be eligible to the benefits provided under any relevant life insurance component of the benefits plan.

10. Miscellaneous

●

Each of the parties hereby covenants and agrees that at any time upon the request of the other party, it will execute, acknowledge and deliver all such further acts deeds, assignments, transfers, conveyances, powers of attorney and assurance as may be required for the better carrying out and performance of all the terms of this Agreement.

●

This Agreement shall be governed by and subject to the laws and exclusive jurisdiction of the courts of the State of Idaho.

●

This Agreement will be binding upon and inure to the benefit of the parties hereto and their respective heirs and executors and successors and assigns as the case may be. This Agreement may not be assigned without the prior written consent of the other party, provided, however that Employer may assign this Agreement without Employee’s consent to any entity affiliated with Employer, which shall include without limitation a parent, subsidiary, or sister entity.

●

This Agreement constitutes the entire agreement between the parties and supersedes all prior letters of intent, agreements, representation, warranties, statements, promises, information, arrangements and understandings, whether oral or written, express or implied. The recitals and any schedules form a part of and are incorporated by reference into this Agreement.

●

In the event any provision of this Agreement will be deemed invalid or void, in whole or part, by any court of competent jurisdiction, the remaining terms and provision will remain in full force and effect.

●

The Employer may, in its sole discretion, amend its Annual Incentive Plan, Bonus, Omnibus Equity Incentive Plan, LTIP and benefit plans and any such amendments shall not constitute a breach of this Agreement nor Good Reason under this Agreement.

●

This Agreement may be executed in counterparts which counterparts taken together shall constitute one and the same instrument and any facsimile or signature delivered by electronic means shall be taken as an original.

IN WITNESS WHEREOF the parties have executed this Agreement as effective the day and year first above written.



PERPETUA RESOURCES IDAHO, INC.:	//Signed//
	Per Authorized Signatory

EMPLOYEE:	//Signed//
	Michael Wright

SCHEDULE “A”

1.	Employment Position (Title)

●

Vice President, Projects, Perpetua Resources Idaho, Inc.

2.	Principle Place of Work

●

The work location will be considered remote, with the potential for future Boise relocation. The position will require travel to the site, Boise, and other locations as needed.

3.	Salary

●

Employee’s gross annual salary shall be $ 300,000.

4.	Incentive Share Options/Units

The Employee shall be eligible from time to time to receive Incentive Share Options/Units, subject to the confirmation and in the discretion of the Board of Directors of Perpetua Resources Corp. and/or the committee of the Directors authorized to administer the Omnibus Equity Incentive Plan pursuant to its terms.

In addition, the Company offers you the following one-time share unit grants:

●

10,000 Performance Share Units– vesting 8/31/2025 and upon successful delivery of the following Performance Criteria:

Successfully establish a lean but effective Owner’s Team.

ii.

Present options and select most appropriate construction strategies and select the best firm(s) to execute that strategy.

iii.

Oversee Detailed Engineering (update, optimize, and ensure flexibility)

●

10,000 Performance Share Units vesting 8/31/2027 and upon successful delivery of the following Performance Criteria:

Deliver project within final Board approved construction timeline and capital estimate.

ii.

Drive safety-focused culture and complete construction better than industry standards around Lost Time Incident (LTI) rates and reportable spills.

5.	Short Term Incentive Plan

The Employee shall be entitled to receive 35% of the annual salary under the terms of the Employer’s annual Short Term Incentive Plan (refer to Schedule “C”). The Short Term Incentive Plan is designed to obtain maximum performance of the employee and not an entitlement for payment on performance of job description. If Performance Objectives are not met the entitlement may be zero.

6.	Vacation and Holidays

The Employee will be entitled to 20 days paid vacation in addition to the Employer’s 11 recognized holidays.

7.	Benefits

The Employee is eligible to enroll in the Employer’s health, vision, dental and life insurance plans as well as Employer’s 401(k) plan, each as set forth in the Employee Handbook or whatever benefits program is in force at the time, which may change at the discretion of the Employer.

8.	Annual Review

The Employer, on an annual basis, will review the Employee’s performance and compensation.

9.	Payments on Termination

On termination, after one year of employment, notice or payments in lieu, if any, will be determined in accordance with the following table:

Reason for Termination	Notice or Severance in Lieu of Notice (reduced by 50% in first year of employment)	Bonus
By Employer for Cause	None	Not Eligible
By Employer without Cause	12 months	Amount equal to previous year’s Bonus
By Employee without Good Reason	None	Not Eligible
By Employer for Good Reason	12 months	Amount equal to target amount under Short Term Incentive Plan
On Disability of Employee	None	Amount equal to previous year’s Bonus
On Death of Employee	None	Not Eligible

In the event the Employee’s employment is terminated during the first year of employment, notice or payments in lieu, if any, will be determined at 50% of the amount indicated in the table above.

All payments are to be made in a lump sum payment within 60 days following the Employee’s termination or employment with the Employer.

10.

Required Deductions

Any payments made by the Employer to the Employee under this Agreement shall be subject to any deductions required at law.



PERPETUA RESOURCES IDAHO, INC.:	//Signed//
	Per Authorized Signatory

EMPLOYEE:	//Signed//
	Michael Wright

SCHEDULE “B”

Duties (Job Description)

Date:	August 14, 2023
Job Title:	Vice President, Projects
Reports to:	President/CEO
Classification:	Full-Time, Regular Employee
FLSA Designation:	Exempt

Job Description:

The VP, Projects is a key member of the executive team, reporting and oversees all EPCM activities of $1.3 billion CAPEX (2020 FS) over a ~3-year construction timeline, which includes starting to build the road, powerline, tailings diversion, camp in Year 1, and finishing all on-site infrastructure in Year 3. The position will manage preconstruction planning, select engineering firms, support project financing, and build an owner’s representative team.

Essential Duties and Responsibilities:

●

Ensure the health and safety of all personnel associated with the Project. Make sure every employee and contractor has the right training, the necessary resources and is held to the highest standards.

●

Ensure a comprehensive suite of fit-for-purpose systems is in place and being used across the Project (including Project Management Systems, Business Process Framework, Health, Safety and Environmental Transformation, Supply Chain Management, Risk Management, etc.).

●

Lead all EPCM activities from selection, engineering, pre-construction planning and scheduling to construction and commissioning.

●

Ensuring the Project delivers to plan and budget. Conduct regular budget and cost forecasting.

●

Ensure timely and accurate reporting for the Project, the Perpetua leadership team and other internal and external parties as appropriate.

●

Contribute productively as a member of Perpetua’s leadership team.

●

Optimize the business processes for identifying and managing business risks, lowering company costs, capital, and program funding, and increasing the value-add consistent with the achievement of the Project strategy; all aligned with the Perpetua’s development strategy.

●

Build a high-performing owner’s team for development and construction.

●

Maintain a strong working relationship with client representatives, local indigenous community members, local government and community leaders, subcontractors, suppliers, and employees.

The above items are not intended to be an exhaustive list of all accountabilities and duties. Other duties are required as assigned.

Logistics:

The VP, Projects is a remote position, with potential for future Boise relocation. The position will require travel to site, Boise and other locations as needed.

Knowledge, Skills, and Abilities:

●

Extensive knowledge of business capital, developmental and operational discipline controls / scheduling / reporting / improvement / management.

●

Strong technical knowledge of mining, processing, and construction management, preferably with gold processing and autoclaves.

●

Successful track record of building and leading high-performing teams, consultants, and contractors.

●

Demonstrated ability to create a strong culture of performance with zero harm, health, and safety as priorities.

●

Exceptional interpersonal, communications (verbal and written), and conflict management skills.

●

Experience working and building relationships with external stakeholders, such as communities and government to support permitting and social license to build and operate.

●

Strong environmental performance history.

●

Ability to operate with substantial latitude in a fast-paced environment.

●

Good understanding and working knowledge of the applicable legislation and regulations for mines in Idaho preferred.

●

Experience with government contracts preferred.

Minimum Qualifications:

●

A degree in Engineering, Project Management, or Construction Management, or equivalent relevant experience.

●

An advanced degree qualification in a project or mining-related discipline is preferred.

●

20+ years of experience in mining development projects from study phase into construction and through commissioning.

●

Proven leadership and track record in the delivery of a successful mining project of relative scale and complexity (capital projects >$1B).

Physical Requirements:

●

Prolonged periods sitting at a desk and working on a computer

●

General work is in an office environment but must be able to travel as needed

About Perpetua Resources:

Perpetua Resources Corp., through its wholly owned subsidiaries, is focused on the exploration, site restoration and redevelopment of gold-antimony-silver deposits in the Stibnite-Yellow Pine district of central Idaho that are encompassed by the Stibnite Gold Project. The Project is one of the highest-grade, open pit gold deposits in the United States and is designed to apply a modern, responsible mining approach to restore an abandoned mine site and produce both gold and the only mined source of antimony in the United States. Further advancing Perpetua Resources’ ESG and sustainable mining goals, the Project will be powered by the lowest carbon emissions grid in the nation and a portion of the antimony produced from the Project will be supplied to Ambri, a US-based company commercializing a low-cost liquid metal battery essential for the low-carbon energy transition. Perpetua Resources has been awarded a Technology Investment Agreement of up to $24.8 million in Defense Production Act Title III funding to advance construction readiness and permitting of the Project. Antimony trisulfide from Stibnite is the only known domestic source of antimony that can meet U.S. defense needs for many small arms, munitions, and missile types. In addition to the company’s commitments to transparency, accountability, environmental stewardship, safety and community engagement, Perpetua Resources adopted formal ESG commitments which can be found at www.perpetuaresources.com.


Signature of Employee:			Date:

Signature of Supervisor:			Date:

SCHEDULE “C”

Short Term Incentive Plan

Perpetua Resources will incentivize employees on an annual basis through an annual Short-Term Incentive Plan (“STIP”). The STIP will be performance-based, with the performance of the Corporation as a whole and the individual’s performance being considered.

A target percentage will be determined at the commencement of employment and reviewed on an annual basis through the annual performance review process. The STIP has two components, the Corporation’s Performance and the Individual’s Performance. An individual’s maximum incentive bonus in any year will equal the individual’s bonus Rate times the percentage determined for the Corporation’s Performance and the percentage determined for the Individual’s Performance, as described below (the “Bonus”).

For example, if an individual’s Bonus Rate is 30% of the individual’s annual salary of $150,000, the Corporate Performance Percentage is determined to be 75%, and the Individual’s Performance percentage is determined to be 60%, the Bonus is $20,250 for the year ($150,000 x 30% x 75% x 60%).

Corporation’s Performance

On an annual basis, the Corporation’s board of directors will approve a set of corporate objectives, with measurable targets and a percentage allocation to each objective that will be communicated to all employees. For example, the corporate objectives could include five components, each allocated a percentage of the overall measure of corporate performance:

Objective A	25%
Objective B	15%
Objective C	35%
Objective D	15%
Objective E	10%
Total	100%

At the completion of the calendar year, the Corporation’s actual performance will be assessed by the board and a percentage will be approved for allocation to the Corporation’s component of annual Bonuses. The board will measure each objective achieved in accordance with the following scale in order to determine the performance level achieved:

Performance factor

120%

100%

75%

50%

25%

Performance Level Achieved

Results are extraordinary

Results well beyond those expected

Results satisfactory, objective adequately met

Met most, but not all, aspects of the objective

Met adequate portion of aspects of the objective

Where circumstances beyond the Corporation’s control effect the achievement of an objective, the Board shall consider amending objectives throughout the year should the need arise.

Individual Performance

On an annual basis, an employee’s immediate supervisor, in conjunction with an employee and in consideration of the Corporation’s approved annual corporate objectives, will set individual objectives

for each employee under their supervision and allocate a percentage of the employee’s individual Bonus to each objective set.

For example, an individual’s objectives could include five components, each allocated a percentage of the overall measure of corporate performance:

Objective A	15%
Objective B	15%
Objective C	45%
Objective D	10%
Objective E	15%
Total	100%

At the completion of each calendar year, the employee’s actual performance against objectives will be assessed by the respective supervisor and a recommendation made to the President and CEO on a percentage for allocation to the Individual component of the annual Bonus

The supervisor will measure each objective achieved in accordance with the following scale in order to determine the performance level achieved:

Performance factor

120%

100%

75%

50%

25%

Performance Level Achieved

Results are extraordinary

Results well beyond those expected

Results satisfactory, objective adequately met

Met most, but not all, aspects of the objective

Met adequate portion of aspects of the objective

This calculation would be performed for each objective and the total for all objectives aggregated to determine the overall performance of the individual employee.

Where circumstances beyond the Corporation or Individual’s control effect the achievement of an objective, the Board or where appropriate the President & CEO shall consider amending objectives throughout the year should the need arise.

Overall STIP Determination

Once the Corporation’s performance against corporate objectives and individual performance against individual objectives has been assessed, the CEO will make a recommendation, inclusive of percentages and dollars to be paid, for all employees (excluding the CEO) to the Compensation Committee of the board of directors for their approval.

The Compensation Committee has absolute discretion to determine and approve the final Bonus amount, and can reduce or increase the calculated Bonus amount, or determine not to bay a Bonus amount at all, regardless of the calculated performance metrics. The Compensation Committee will determine the amount of any Bonus amount shortly following the completion of the year for which the Bonuses are calculated, and the Bonus will be paid no later than March of the year following the year for which the Bonuses are calculated. For example, a Bonus paid upon 2023 metrics will be paid no later than March 2024. No Bonus shall be considered earned by or payable to an employee unless the employee is employed at the time the Compensation Committee has designated for payment of the Bonus.

SCHEDULE “D”

Perpetua Resources Corp. Omnibus Equity Incentive Plan

Effective Date of April 16, 2021

*See attached Form S-8 Prospectus for Omnibus Equity Incentive Plan

Exhibit 10.3

FORM OF INDEMNITY AGREEMENT

THIS AGREEMENT is made as of , 20

B E T W E E N:

PERPETUA RESOURCES CORP.,

a corporation governed by the laws of the

Province of British Columbia,

(the “Corporation”),

- and -

, an individual resident of

Address:

(the “Indemnified Party”).

RECITALS:

A.	The Indemnified Party is or has been duly elected or appointed as a director and/or officer of the Corporation or, at the request of the Corporation, a duly elected or appointed director and/or officer of an Other Entity (as defined below).

The Corporation considers it desirable and in the best interests of the Corporation to enter into this Agreement to set out the circumstances and manner in which the Indemnified Party may be indemnified in respect of certain liabilities or expenses which the Indemnified Party may incur as a result of acting as a director and/or officer of the Corporation or Other Entity.

C.	In order to induce the Indemnified Party to serve and to continue to so serve as a director and/or officer of the Corporation or Other Entity, the Corporation has agreed to provide the indemnity in this Agreement.

D.	The Articles of the Corporation contemplate that the Indemnified Party may be indemnified in certain circumstances.

NOW THEREFORE in consideration of the Indemnified Party acting or continuing to act as a director and/or officer of the Corporation or Other Entity, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1

DEFINITIONS AND PRINCIPLES OF INTERPRETATION

1.1

Definitions

Whenever used in this Agreement, the following words and terms shall have the meanings set out below:

(a)

“Act” means the Business Corporations Act (British Columbia), as the same exists on the date of this Agreement or may hereafter be amended.

(b)

“Agreement” means this agreement, including all schedules, and all amendments or restatements as permitted, and references to “Article” or “Section” mean the specified Article or Section of this Agreement.

(c)

“Articles” means the articles of the Corporation, including any amendments or alterations thereto.

(d)

“Business Day” means any day, other than a Saturday or Sunday, on which commercial banks in Vancouver, British Columbia are open for commercial banking business during normal banking hours.

(e)

“Claim” includes any civil, criminal, administrative, investigative, demand, inquiry, hearing, discovery or other proceeding of any nature or kind (including arbitrations and mediations) in which the Indemnified Party is involved (excluding claims brought by the Indemnified Party) by reason of the Indemnified Party being or having been a director and/or officer of the Corporation or Other Entity whether threatened, anticipated, pending, commenced, continuing or completed, and any appeal thereof, as well as any other circumstances or situation in respect of which an Indemnified Party reasonably requires legal advice or representation concerning actual, possible or anticipated Losses by reason of the Indemnified Party being or having been a director and/or officer of the Corporation or Other Entity.

(f)

“Control Transaction” means any merger, amalgamation, take-over bid, arrangement, recapitalization, consolidation, liquidation, wind-up, dissolution, share exchange, material sale of assets or similar transaction in respect of the Corporation.

(g)

“Court” means a court of competent jurisdiction in British Columbia.

(h)

“Losses” includes all costs, disbursements, charges, awards, expenses, losses, damages (including punitive and exemplary), fees (including any legal, professional or advisory fees or disbursements), liabilities, amounts paid to settle or dispose of any Claim or satisfy any judgment, fines, penalties or liabilities, including as a result of a breach or alleged breach of any statutory or common law duty imposed on directors and/or officers, without limitation, and whether incurred alone or jointly with others, including any amounts

which the Indemnified Party may reasonably suffer, sustain, incur or be required to pay in respect of the investigation, defence, settlement or appeal of or preparation for any Claim or with any action to establish a right to indemnification under this Agreement, and for greater certainty, includes all taxes (including income taxes), interest, penalties and related outlays of the Indemnified Party arising from any indemnification of the Indemnified Party by the Corporation pursuant to this Agreement.

(i)

“Notice of Articles” means the notice of articles of the Corporation, including any amendments or alterations thereto.

(j)

“Other Entity” means a Subsidiary and any other entity in respect of which the Indemnified Party was specifically requested by the Corporation to serve as a duly appointed director and/or officer or similar position(s) of such Other Entity.

(k)

“Parties” means the Corporation and the Indemnified Party collectively and “Party” means any one of them.

(l)

“Policy” means the directors’ and officers’ insurance policy listed on Schedule A, and any successor to such policy entered into by the Corporation (and any renewals or replacements thereof).

(m)

“Run-Off Coverage” has the meaning set out in Section 3.1(c).

(n)

“Subsidiary” has the meaning set out in the Act.

(o)

“Termination Date” has the meaning set out in Section 5.1(a).

1.2

Certain Rules of Interpretation

In this Agreement:

(a)

Governing Law - This Agreement is a contract made under and shall be governed by and construed in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable in the Province of British Columbia.

(b)

Submission to Jurisdiction - Each Party submits to the exclusive jurisdiction of any British Columbia court sitting in Vancouver, British Columbia in any action, application, reference or other proceeding arising out of or relating to this Agreement and consents to all claims in respect of any such action, application, reference or other proceeding being heard and determined exclusively in such British Columbia court. Each of the Parties irrevocably waives, to the fullest extent it may effectively do so, the defence of an inconvenient forum to the maintenance of such action, application or proceeding.

(c)

Headings - Headings of Articles and Sections are inserted for convenience of reference only and do not affect the construction or interpretation of this Agreement.

(d)

Number - Unless the context otherwise requires, words importing the singular include the plural and vice versa.

(e)

Severability - If, in any jurisdiction, any provision of this Agreement or its application to any Party or circumstance is restricted, prohibited or unenforceable, the provision shall, as to that jurisdiction, be ineffective only to the extent of the restriction, prohibition or unenforceability without invalidating the remaining provisions of this Agreement and without affecting the validity or enforceability of such provision in any other jurisdiction or without affecting its application to other Parties or circumstances.

(f)

Entire Agreement - This Agreement constitutes the entire agreement between the Parties and sets out all the covenants, promises, warranties, representations, conditions and agreements between the Parties in connection with the subject matter of this Agreement and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, pre-contractual or otherwise, including, without limitation, any previous Indemnity Agreement between the Corporation and the Indemnified Party dated prior to the date hereof. There are no covenants, promises, warranties, representations, conditions or other agreements, whether oral or written, pre-contractual or otherwise, express, implied or collateral, between the Parties in connection with the subject matter of this Agreement except as specifically set forth in this Agreement.

ARTICLE 2

OBLIGATIONS

2.1

Obligations of the Corporation

(a)

General Indemnity - The Corporation agrees to indemnify and hold the Indemnified Party harmless, to the fullest extent permitted by law, including but not limited to the indemnity under the Act, under the Notice of Articles and Articles of the Corporation and this Agreement, except to the extent limited or prohibited by the Act, from and against any and all Losses which the Indemnified Party may reasonably suffer, sustain, incur or be required to pay in respect of any Claim, provided that the indemnity provided for in this Section 2.1(a) will only be available if:

(i)

the Indemnified Party was acting honestly and in good faith with a view to the best interests of the Corporation or Other Entity, as the case may be, in relation to the subject matter of the Claim; and

(ii)

in the case of a proceeding that is not a civil action/proceeding, the Indemnified Party had reasonable grounds for believing that the Indemnified Party’s conduct in respect of which the action/proceeding was brought was lawful.

(b)

Derivative Claims and Claims by the Corporation - In respect of any proceeding by or on behalf of the Corporation or Other Entity to procure a judgment in its favour against the Indemnified Party, in respect of which the Indemnified Party is made a party by reason of the Indemnified Party being or having been a director and/or officer of the Corporation or Other Entity, the Indemnified Party may make an application, on its own behalf, or on behalf of the Corporation, at its expense, for the approval of a Court to advance monies to the Indemnified Party for costs, charges and expenses reasonably incurred by the Indemnified Party in connection with such action and to indemnify and save harmless the Indemnified Party for such costs, charges and expenses of such action provided the Indemnified Party fulfils the conditions set out in Sections 2.1(a)(i) and 2.1(a)(ii) above and provided that such advance or indemnification is not prohibited under any applicable statute. The Indemnified Party hereby agrees to repay such funds advanced if the Indemnified Party ultimately does not fulfil the conditions set out in Sections 2.1(a)(i) and 2.1(a)(ii) above. In the event that the Indemnified Party is successful in its application, it shall be reimbursed by the Corporation for the expense incurred by the Indemnified Party in making the application.

(c)

Advance of Expenses - Subject to Section 2.1(b) of this Agreement, the Corporation shall, at the request of the Indemnified Party, advance to the Indemnified Party sufficient funds, or arrange to pay on behalf of or reimburse the Indemnified Party within 60 days of receiving an invoice in respect thereof for any costs, charges or expenses, including legal or other fees, actually and reasonably incurred by the Indemnified Party in investigating, defending, appealing, preparing for, providing evidence in or instructing and receiving the advice of the Indemnified Party’s counsel or other professional advisors in regard to any Claim or other matter for which the Indemnified Party may be entitled to an indemnity or reimbursement under this Agreement, and such amounts shall be treated as a non-interest bearing advance or loan to the Indemnified Party. In the event it is ultimately determined by a Court in a final non-appealable judgment that the Indemnified Party did not fulfil the conditions set out in Sections 2.1(a)(i) and 2.1(a)(ii) above; that the payment(s) is/are prohibited under the Act; or that the Indemnified Party was not entitled to be fully so indemnified, the Indemnified Party shall (and hereby agrees to) repay such loan or advance, or the appropriate portion thereof, upon written notice of such determination being given by the Corporation to the Indemnified Party detailing the basis for such determination and such loan or advance shall bear interest from the date of such notice until repaid at the prime rate prescribed from time to time by the Corporation’s principal bankers. The Corporation will have the burden of establishing that any expense it wishes to challenge is not reasonable. The

Corporation shall not make any payments referred to in this Subsection 2.1(c) unless the Corporation first receives from the Indemnified Party a written undertaking that, if it is ultimately determined that the payment of expenses is prohibited by the Act or this Agreement, the Indemnified Party will repay the amounts advanced or reimbursed.

2.2

Notice of Proceedings

The Indemnified Party shall give notice in writing to the Corporation as soon as practicable upon being served with any statement of claim, writ, notice of motion, indictment, subpoena, investigation order or other document commencing, threatening or continuing any Claim involving the Corporation or Other Entity or the Indemnified Party which may result in a claim for indemnification under this Agreement, and the Corporation agrees to give the Indemnified Party notice in writing as soon as practicable upon it or any Other Entity being served with any statement of claim, writ, notice of motion, indictment, subpoena, investigation order or other document commencing or continuing any Claim involving the Indemnified Party. Such notice shall include a description of the Claim, a summary of the facts giving rise to the Claim and, if possible, an estimate of any potential liability arising under the Claim. Failure by the Indemnified Party to so notify the Corporation of any Claim shall not relieve the Corporation from liability under this Agreement except to the extent that the failure materially prejudices the Corporation.

2.3

Subrogation

Promptly after receiving written notice from the Indemnified Party of any Claim (other than a Claim by or on behalf of the Corporation or Other Entity to procure a judgment in its favour against the Indemnified Party), the Corporation may by notice in writing to the Indemnified Party, in a timely manner assume conduct of the defence thereof and retain counsel on behalf of the Indemnified Party who is reasonably satisfactory to the Indemnified Party, to represent the Indemnified Party in respect of the Claim. On delivery of such notice by the Corporation, the Corporation shall not be liable to the Indemnified Party under this Agreement for any fees and disbursements of counsel the Indemnified Party may subsequently incur with respect to the same matter. In the event the Corporation assumes conduct of the defence on behalf of the Indemnified Party, the Indemnified Party consents to the conduct thereof and of any action taken by the Corporation, in good faith, in connection therewith, and the Indemnified Party shall fully cooperate in such defence including, without limitation, the provision of documents, attending examinations for discovery, making affidavits, meeting with counsel, testifying and divulging to the Corporation all information reasonably required to defend or prosecute the Claim.

2.4

Separate Counsel

If the Indemnified Party is named as a party or a witness to any Claim, or the Indemnified Party is questioned or any of his or her actions, omission or activities are in any way investigated, reviewed, or examined in connection with or in anticipation of any actual or potential Claims, the Indemnified Party will be entitled to retain independent legal counsel at the Corporation’s expense (limited to reasonable attorney’s fees and expenses) to act on the Indemnified Party’s behalf to provide an initial assessment to the Indemnified Party of

the appropriate course of action for the Indemnified Party. The Indemnified Party will be entitled to continued representation by independent counsel at the Corporation’s expense (limited to reasonable attorney’s fees and expenses) beyond the initial assessment if:

(a)

the Indemnified Party and the Corporation have mutually agreed to the retention of such other counsel;

(b)

representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them (including the availability of different defences); or

(c)

the Corporation has not retained reasonably satisfactory counsel for the Indemnified Party within ten Business Days of any receipt of notice pursuant to Section 2.2 above.

2.5

Settlement of Claim

No admission of liability with respect to the Indemnified Party shall be made by the Corporation without the prior written consent of the Indemnified Party unless such settlement includes an unconditional general release of the Indemnified Party without any admission of negligence, misconduct, liability or responsibility by the Indemnified Party.

2.6

Presumptions / Knowledge

(a)For purposes of any determination hereunder, the Indemnified Party will be deemed, subject to compelling evidence to the contrary, to have acted in good faith and in the best interests of the Corporation (or any Other Entity). The Corporation will have the burden of establishing otherwise.

(b)Unless a Court otherwise has held or decided that the Indemnified Party is not entitled to be fully or partially indemnified under this Agreement, the determination of any Claim by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create any presumption for the purposes of this Agreement that the Indemnified Party is not entitled to indemnity under this Agreement.

(c)The knowledge and/or actions, or failure to act, of any other director, officer, agent or employee of the Corporation or any Subsidiary or Other Entity will not be imputed to the Indemnified Party for purposes of determining the right to indemnification under this Agreement.

ARTICLE 3

INSURANCE

3.1

Insurance

(a)The Policy - The Corporation will ensure that its liabilities under this Agreement, and the potential liabilities of the Indemnified Party that are subject to indemnification by the Corporation pursuant to this Agreement, are at all times supported by the Policy. The Corporation shall pay all premiums payable under the Policy and, provided

that such insurance is, in the Corporation’s reasonable and good faith opinion, available on commercially reasonable terms, take all steps necessary to maintain the coverage provided under the Policy. As may be required by the Policy, the Corporation will immediately notify the Policy’s insurers of any occurrences or situations that could potentially trigger a claim under the Policy and will promptly advise the Indemnified Party that the insurers have been notified of the potential claim. If, for any reason whatsoever, any directors’, and officers’ liability insurer asserts that the Indemnified Party is subject to a deductible under any existing or future directors’ and officers’ liability insurance purchased and maintained by the Corporation for the benefit of the Indemnified Party and the Indemnified Party’s heirs and legal representatives, the Corporation shall pay the deductible for and on behalf of the Indemnified Party. If any payments made by an insurer under a Policy are deemed to constitute a taxable benefit or otherwise become subject to any tax payable by the Indemnified Party, the Corporation agrees to pay any amount as may be necessary to ensure that the amount received by or on behalf of the Indemnified Party after the payment of, or withholding for, such tax, fully reimburses the Indemnified Party for the actual cost, expense or liability incurred by or on behalf of the Indemnified Party.

(b)Variation of Policies - So long as the Indemnified Party is a director, officer or holder of a similar office of the Corporation or an Other Entity and provided that such insurance is, in the Corporation’s reasonable and good faith opinion, available on commercially reasonable terms, the Corporation shall not seek to amend adversely or discontinue the Policy or allow the Policy to lapse (without entering into a renewal or replacement thereof on similar terms) without the Indemnified Party’s prior written consent, acting reasonably. Should the Indemnified Party cease to be a director and/or officer of the Corporation, for any reason whatsoever, the Corporation shall continue to purchase and maintain directors’ and officers’ liability insurance for the benefit of the Indemnified Party and the Indemnified Party’s heirs and legal representatives, such that the Indemnified Party’s insurance coverage is, at all times up to and including the Termination Date, the same as any insurance coverage the Corporation purchases and maintains for the benefit of its then current directors and/or officers from time to time.

(c)Run-Off Coverage - In the event the Policy is discontinued for any reason, or in the event of a consummation of a Control Transaction, the Corporation shall purchase, maintain and administer, or cause to be purchased, maintained and administered for a period of six years after such discontinuance or the effective time of the Control Transaction, insurance for the benefit of the Indemnified Party (the “Run-Off Coverage”), on similar terms to the extent permitted by law and provided such Run-Off Coverage is available on commercially acceptable terms and premiums (as determined by the board of directors in its reasonable and good faith opinion), provided that the premiums for the Run-Off Coverage will be deemed to be commercially acceptable if the total premiums for such Run-Off Coverage do not exceed 300% of annual premiums under the Policy at the time they are discontinued). The Run-Off Coverage shall provide coverage only in respect of events occurring prior to the discontinuance of the Policy or the effective time of the Control Transaction. The Corporation will provide to the Indemnified Party a copy of each policy of insurance providing the coverages contemplated by this subsection 3.1(c) promptly after coverage is obtained and evidence of each annual renewal thereof and will promptly notify

the Indemnified Party if the insurer cancels, makes material changes to coverage, or refuses to renew coverage (or any part of the coverage).

(d)Exclusion of Indemnity - Notwithstanding any other provision in this Agreement, the Corporation shall not be obligated to indemnify the Indemnified Party for any Losses for which the Indemnified Party is entitled to indemnity to pursuant any valid and collectible policy of insurance obtained and maintained by the Corporation, to the extent of the amounts actually collected by the Indemnified Party under such insurance policy. Where partial indemnity is provided by such insurance policy, the obligation of the Corporation under Section 2.1 shall continue in effect but be limited to that portion of the Losses for which indemnity is not provided by such insurance policy.

ARTICLE 4

MISCELLANEOUS

4.1

Corporation and Indemnified Party to Cooperate

The Corporation and the Indemnified Party shall, from time to time, provide such information and cooperate with the other, as the other may reasonably request, in respect of all matters under this Agreement.

4.2

Effective Time

This Agreement shall be deemed to have effect as and from the first date that the Indemnified Party became a director or officer, or held a position equivalent to that of a director or officer, of the Corporation or Other Entity and shall apply to all actions and proceedings, whether such action or proceeding is in respect of facts arising before or subsequent to the effective date of this Agreement.

4.3

Insolvency

The liability of the Corporation under this Agreement shall not be affected, discharged, impaired, mitigated or released by reason of the discharge or release of the Indemnified Party in any bankruptcy, insolvency, receivership or other similar proceeding of creditors to the extent permitted by applicable laws.

4.4

Multiple Proceedings

No action or proceeding brought or instituted under this Agreement and no recovery pursuant thereto shall be a bar or defence to any further action or proceeding which may be brought under this Agreement.

4.5

Non-Exclusive Indemnification

The Corporation shall provide the Indemnified Party with all of the indemnifications, protections and benefits it may provide pursuant to the Act. The indemnification provided by this Agreement shall not exclude any separate rights of indemnification to which the Indemnified Party may otherwise be entitled under the Articles of the Corporation, the Act, any valid and lawful agreement, vote of shareholders or

disinterested directors or otherwise, both as to action in the Indemnified Party’s official capacity and as to action in another capacity while holding such office, and such separate rights of indemnification shall continue if the Indemnified Party has ceased to be a director or officer of the Corporation or Other Entity, as the case may be, and shall enure to the benefit of the heirs, executors and administrators of the Indemnified Party.

4.6

Compliance with the Act

To the extent that the terms of this Agreement are contrary to the provisions of the Act, as amended from time to time, or other applicable laws, the terms of this Agreement shall be deemed to be amended to comply therewith (it being understood that nothing contained herein shall be considered to impose an obligation upon the Corporation which it is prohibited from complying with by virtue of such legislation). To the extent that the terms of this Agreement are contrary to the provisions of the Act, as amended from time to time, or other applicable laws, the terms of this Agreement shall be deemed to be amended to comply therewith (it being understood that nothing contained herein shall be considered to impose an obligation upon the Corporation which it is prohibited from complying with by virtue of such legislation).

ARTICLE 5

GENERAL

5.1

Term

(a)The obligations of the Corporation under this Agreement shall survive until the date (the “Termination Date”) that is six years after the Indemnified Party has ceased to be a director and/or officer of the Corporation or Other Entity, except with respect to Claims that have been commenced as of the Termination Date in respect of which the Indemnified Party is entitled to claim indemnification under this Agreement.

(b)The obligations of the Corporation under this Agreement with respect to Claims that have been commenced as of the Termination Date in respect of which the Indemnified Party is entitled to claim indemnification under this Agreement shall survive until the final termination or resolution of such Claims.

5.2

Assignment

Neither Party may assign this Agreement or any rights or obligations under this Agreement without the prior written consent of the other Party.

5.3

Enurement

This Agreement enures to the benefit of and is binding upon the Parties and the heirs, attorneys, guardians, estate trustees, executors, trustees, administrators and permitted assigns of the Indemnified Party and the successors (including any successor by reason of amalgamation) and permitted assigns of the Corporation.

5.4

Amendments

No amendment, supplement, modification or waiver or termination of this Agreement and, unless otherwise specified, no consent or approval by any Party, is binding unless executed in writing by the Party to be so bound. For greater certainty, the rights of the Indemnified Party under this Agreement shall not be prejudiced or impaired by permitting or consenting to any assignment in bankruptcy, receivership, insolvency or any other creditor’s proceedings of or against the Corporation or by the winding-up or dissolution of the Corporation.

5.5

Notices

Any notice, consent or approval required or permitted to be given in connection with this Agreement (in this Section referred to as a “Notice”) shall be in writing and shall be sufficiently given if delivered (whether in person, by courier service or other personal method of delivery), or if transmitted by e-mail:

(a)	in the case of a Notice to the Indemnified Party at:

	Address:

	E-mail:

(b)	in the case of a Notice to the Corporation at:

	Perpetua Resources Corp.
	c/o Suite 201 – 405 S 8^th Street
	Boise, Idaho
	USA 83702

	Attention:	President, CEO
	Email:

Any Notice delivered or transmitted to a Party as provided above shall be deemed to have been given and received on the day it is delivered or transmitted, provided that it is delivered or transmitted on a Business Day prior to 5 :00 p.m. local time in the place of delivery or receipt. If the Notice is delivered or transmitted after 5:00 p.m. local time or if such day is not a Business Day, then the Notice shall be deemed to have been given and received on the next Business Day.

Any Party may, from time to time, change its address by giving Notice to the other Party in accordance with the provisions of this Section.

5.6

Further Assurances

The Corporation and the Indemnified Party shall, with reasonable diligence, do all things and execute and deliver all such further documents or instruments as may be necessary or desirable for the purpose of assuring and conferring on the Indemnified Party the rights created or intended by this Agreement and giving effect to and carrying out the

intention or facilitating the performance of the terms of this Agreement, or evidencing any loan or advance made pursuant to Section 2.1(c) hereof. The Corporation further covenants and agrees that it will not take any action, including, without limitation, the enacting, amending, or repealing of any by-law, which would in any manner adversely affect or prevent the Corporation’s ability to perform its obligations under this Agreement.

5.7

Independent Legal Advice

The Indemnified Party acknowledges that the Indemnified Party has been advised to obtain independent legal advice with respect to entering into this Agreement, that the Indemnified Party has obtained such independent legal advice or has expressly determined not to seek such advice, and that the Indemnified Party is entering into this Agreement with full knowledge of the contents hereof, of the Indemnified Party’s own free will and with full capacity and authority to do so.

5.8

Execution and Delivery

This Agreement may be executed by the Parties in any number of counterparts, each of which is deemed to be an original, and such counterparts together shall constitute one and the same instrument. Transmission of an executed signature page by facsimile, email or other electronic means is as effective as a manually executed counterpart of this Agreement.

[Remainder of page left intentionally blank.]

IN WITNESS OF WHICH the Parties have duly executed this Agreement as of the date first written above.

	PERPETUA RESOURCES CORP.


	by
		Name:
		Title:



	Indemnified Party

SCHEDULE A

List of Insurance Policies as of , 20

	Insurer	Policy No.
Primary
First Excess
Second Excess
Third Excess
Lead Side A
Excess Side A

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF THE SECURITIES

EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Laurel Sayer, President and Chief Executive Officer of Perpetua Resources Corp. certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 of Perpetua Resources Corp.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant, as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2023

/s/ Laurel Sayer
Laurel Sayer
President and Chief Executive Officer

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF THE SECURITIES

EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Jessica Largent, Chief Financial Officer of Perpetua Resources Corp. certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 of Perpetua Resources Corp.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant, as of, and for, the periods presented in this report;

(a)

(b)

(c)

(d)

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2023

/s/ Jessica Largent
Jessica Largent
Chief Financial Officer

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Perpetua Resources Corp., (the “Company”) on Form 10-Q for the quarter ended September 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Laurel Sayer, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 9, 2023

	/s/ Laurel Sayer
	Laurel Sayer
	President and Chief Executive Officer

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Perpetua Resources Corp., (the “Company”) on Form 10-Q for the quarter ended September 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jessica Largent, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 9, 2023

	/s/ Jessica Largent
	Jessica Largent
	Chief Financial Officer

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2023	Nov. 03, 2023
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	001-39918
Entity Registrant Name	Perpetua Resources Corp.
Entity Incorporation, State or Country Code	CA
Entity Tax Identification Number	00-0000000
Entity Address, Address Line One	405 S. 8th Street
Entity Address, Address Line Two	Ste 201
Entity Address State Or Province	ID
Entity Address, City or Town	Boise
Entity Address, Postal Zip Code	83702
City Area Code	208
Local Phone Number	901-3060
Title of 12(b) Security	Common Shares, without par value
Trading Symbol	PPTA
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		63,267,783
Entity Central Index Key	0001526243
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Amendment Flag	false

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
CURRENT ASSETS
Cash and cash equivalents	$ 7,104,937	$ 22,667,047
Receivables	1,978,508	280,150
Prepaid expenses	1,353,327	614,930
TOTAL CURRENT ASSETS	10,436,772	23,562,127
NON-CURRENT ASSETS
Buildings and equipment, net	389,252	294,980
Right-of-use assets	54,836	68,675
Environmental reclamation bond (Note 5)	3,000,000	3,000,000
Mineral properties and interest (Note 3)	72,795,365	72,519,373
TOTAL ASSETS	86,676,225	99,445,155
CURRENT LIABILITIES
Trade and other payables	5,535,730	2,741,516
Lease liabilities	55,279	70,449
CWA settlement payable (Note 6)	500,000
Environmental reclamation liabilities (Note 5)	2,297,523	9,590,766
TOTAL CURRENT LIABILITIES	8,388,532	12,402,731
NON-CURRENT LIABILITIES
Warrant derivative		1,732
CWA settlement payable (Note 6)	4,500,000
Environmental reclamation liabilities (Note 5)	456,744	1,210,170
TOTAL LIABILITIES	13,345,276	13,614,633
COMMITMENTS AND CONTINGENCIES (Note 6)
SHAREHOLDERS' EQUITY (Note 4)
Common shares, no par value, unlimited shares authorized, 63,202,408 and 63,011,777 shares outstanding, respectively	616,330,139	615,553,448
Additional paid-in capital	33,830,533	32,203,858
Accumulated deficit	(576,829,723)	(561,926,784)
TOTAL SHAREHOLDERS' EQUITY	73,330,949	85,830,522
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 86,676,225	$ 99,445,155

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, shares outstanding	63,202,408	63,011,777

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
EXPENSES
Corporate salaries and benefits	$ 393,656	$ 453,330	$ 1,205,824	$ 1,281,617
Depreciation	23,846	15,318	59,548	41,654
Directors' fees	30,158	92,874	310,268	445,348
Exploration	8,664,205	4,589,966	20,683,257	13,456,304
Environmental liability expense	22,285	232,776	604,222	898,146
CWA settlement expense (Note 6)			5,000,000
General and administration	160,264	187,733	454,543	570,355
Professional fees	230,243	223,160	875,327	1,474,356
Shareholder and regulatory	91,177	142,984	388,307	418,050
OPERATING LOSS	9,615,834	5,938,141	29,581,296	18,585,830
OTHER EXPENSES (INCOME)
Change in fair value of warrant derivative		(6,021)	(1,732)	(100,766)
Foreign exchange loss (income)	12,571	(7,136)	15,193	26,210
Grant income	(6,905,691)		(14,273,148)	0
Interest income	(92,620)	(170,658)	(418,670)	(254,683)
Total other loss (income)	(6,985,740)	(183,815)	(14,678,357)	(329,239)
NET LOSS	$ 2,630,094	$ 5,754,326	$ 14,902,939	$ 18,256,591
NET LOSS PER SHARE, BASIC	$ 0.04	$ 0.09	$ 0.24	$ 0.29
NET LOSS PER SHARE, DILUTED	$ 0.04	$ 0.09	$ 0.24	$ 0.29
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING, BASIC	63,176,063	62,987,859	63,120,580	62,982,688
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING, DILUTED	63,176,063	62,987,859	63,120,580	62,982,688

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) - USD ($)	Common Shares	Additional Paid in Capital	Accumulated Deficit	Total
Beginning balance at Dec. 31, 2021	$ 615,359,152	$ 29,454,696	$ (533,213,253)	$ 111,600,595
Beginning balance (in shares) at Dec. 31, 2021	62,971,859
Share based compensation		676,249		676,249
Restricted and performance shares units distributed	$ 12,378	(12,378)
Restricted and performance shares units distributed (in shares)	1,667
Net loss for the period			(6,244,894)	(6,244,894)
Ending balance at Mar. 31, 2022	$ 615,371,530	30,118,567	(539,458,147)	106,031,950
Ending balance (in shares) at Mar. 31, 2022	62,973,526
Beginning balance at Dec. 31, 2021	$ 615,359,152	29,454,696	(533,213,253)	111,600,595
Beginning balance (in shares) at Dec. 31, 2021	62,971,859
Net loss for the period				(18,256,591)
Ending balance at Sep. 30, 2022	$ 615,426,460	31,622,273	(551,469,844)	95,578,889
Ending balance (in shares) at Sep. 30, 2022	62,987,859
Beginning balance at Mar. 31, 2022	$ 615,371,530	30,118,567	(539,458,147)	106,031,950
Beginning balance (in shares) at Mar. 31, 2022	62,973,526
Share based compensation		826,400		826,400
Restricted and performance shares units distributed	$ 54,930	(54,930)
Restricted and performance shares units distributed (in shares)	14,333
Net loss for the period			(6,257,371)	(6,257,371)
Ending balance at Jun. 30, 2022	$ 615,426,460	30,890,037	(545,715,518)	100,600,979
Ending balance (in shares) at Jun. 30, 2022	62,987,859
Share based compensation		732,236		732,236
Net loss for the period			(5,754,326)	(5,754,326)
Ending balance at Sep. 30, 2022	$ 615,426,460	31,622,273	(551,469,844)	95,578,889
Ending balance (in shares) at Sep. 30, 2022	62,987,859
Beginning balance at Dec. 31, 2022	$ 615,553,448	32,203,858	(561,926,784)	85,830,522
Beginning balance (in shares) at Dec. 31, 2022	63,011,777
Share based compensation		840,827		840,827
Restricted and performance shares units distributed	$ 449,909	(449,909)
Restricted and performance shares units distributed (in shares)	115,256
Exercise of share purchase options	$ 64,687	(24,015)		40,672
Exercise of share purchase options (in shares)	12,500
Net loss for the period			(4,600,093)	(4,600,093)
Ending balance at Mar. 31, 2023	$ 616,068,044	32,570,761	(566,526,877)	82,111,928
Ending balance (in shares) at Mar. 31, 2023	63,139,533
Beginning balance at Dec. 31, 2022	$ 615,553,448	32,203,858	(561,926,784)	85,830,522
Beginning balance (in shares) at Dec. 31, 2022	63,011,777
Net loss for the period				(14,902,939)
Ending balance at Sep. 30, 2023	$ 616,330,139	33,830,533	(576,829,723)	73,330,949
Ending balance (in shares) at Sep. 30, 2023	63,202,408
Beginning balance at Mar. 31, 2023	$ 616,068,044	32,570,761	(566,526,877)	82,111,928
Beginning balance (in shares) at Mar. 31, 2023	63,139,533
Share based compensation		784,282		784,282
Restricted and performance shares units distributed	$ 54,936	(54,936)
Restricted and performance shares units distributed (in shares)	13,334
Exercise of share purchase options	$ 66,034	(24,515)		41,519
Exercise of share purchase options (in shares)	12,500
Net loss for the period			(7,672,752)	(7,672,752)
Ending balance at Jun. 30, 2023	$ 616,189,014	33,275,592	(574,199,629)	75,264,977
Ending balance (in shares) at Jun. 30, 2023	63,165,367
Share based compensation		696,066		696,066
Restricted and performance shares units distributed	$ 22,064	(22,064)
Restricted and performance shares units distributed (in shares)	5,475
Deferred share units distributed	$ 119,061	(119,061)
Deferred share units distributed (in shares)	31,566
Net loss for the period			(2,630,094)	(2,630,094)
Ending balance at Sep. 30, 2023	$ 616,330,139	$ 33,830,533	$ (576,829,723)	$ 73,330,949
Ending balance (in shares) at Sep. 30, 2023	63,202,408

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
OPERATING ACTIVITIES:
Net loss			$ (14,902,939)	$ (18,256,591)
Adjustments to reconcile net loss to net cash used in operating activities:
Share based compensation (Note 4)			2,321,175	2,234,885
Depreciation	$ 23,846	$ 15,318	59,548	41,654
Change in fair value of warrant derivative		(6,021)	(1,732)	(100,766)
Environmental liability expense (Note 5)	22,285	232,776	604,222	898,146
Unrealized foreign exchange loss (gain)			(160)	4,286
Gain on sale of equipment			(25,000)	(49,173)
Changes in:
Receivables			(1,698,358)	159,186
Prepaid expenses			(738,397)	(11,768)
Trade and other payables			2,792,882	(116,024)
CWA settlement payable			5,000,000
Environmental reclamation liabilities			(8,650,891)	(2,920,780)
Net cash used in operating activities			(15,239,650)	(18,116,945)
INVESTING ACTIVITIES:
Investment in mineral properties and interest			(275,992)	(290,039)
Purchase of building and equipment			(153,820)	(98,125)
Proceeds from sale of equipment			25,000	49,173
Net cash used in investing activities			(404,812)	(338,991)
FINANCING ACTIVITIES:
Proceeds from exercise of share purchase options			82,191
Net cash provided by financing activities			82,191
Effect of foreign exchange on cash and cash equivalents			161	(4,286)
Net increase (decrease) in cash and cash equivalents			(15,562,110)	(18,460,222)
Cash and cash equivalents, beginning of period			22,667,047	47,852,846
Cash and cash equivalents, end of period	7,104,937	29,392,624	7,104,937	29,392,624
NONCASH INVESTING AND FINANCING ACTIVITIES
Recognition of operating lease liability and right-of-use asset			65,061	142,487
CASH AND CASH EQUIVALENTS
Cash	3,104,628	6,153,131	3,104,628	6,153,131
Investment savings accounts	4,000,309	17,131,902	4,000,309	17,131,902
GICs and term deposits		6,107,591		6,107,591
Total cash and cash equivalents	$ 7,104,937	$ 29,392,624	$ 7,104,937	$ 29,392,624

Nature of Operations and Basis of Presentation

9 Months Ended

Sep. 30, 2023

Nature of Operations and Basis of Presentation

Nature of Operations and Basis of Presentation

1.Nature of Operations and Basis of Presentation

Loss per share


	September 30
	2023	2022
Share purchase options	1,673,750	1,960,150
Share units	1,375,820	791,440
Warrants	—	200,000
Balance	3,049,570	2,951,590

All potentially dilutive shares were excluded from the calculation of diluted loss per share as their exercise and conversion would be anti-dilutive.

Recently Issued Accounting Pronouncements

9 Months Ended

Sep. 30, 2023

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

2.Recently Issued Accounting Pronouncements

Mineral Properties and Interest

9 Months Ended

Sep. 30, 2023

Mineral Properties and Interest

Mineral Properties and Interest

3.Mineral Properties and Interest

The Company’s mineral properties and interest at the Stibnite Gold Project totaled $72,795,365 and $72,519,373 as of September 30, 2023 and December 31, 2022, respectively.

Shareholders' Equity

9 Months Ended

Sep. 30, 2023

Shareholders' Equity

Shareholders' Equity

4.Shareholders’ Equity

Authorized

●

Unlimited number of common shares without par value.

●

Unlimited number of first preferred shares without par value.

●

Unlimited number of second preferred shares without par value.

ATM Offering

Share based compensation

Share based compensation was recognized in the unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2023 and 2022 as follows:


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Exploration	$	400,306	$	366,150	$	1,215,542	$	998,789
Corporate salaries and benefits		266,349		278,381		795,925		791,399
Directors’ fees		29,411		87,705		309,708		444,697
Total	$	696,066	$	732,236	$	2,321,175	$	2,234,885

Share purchase options


	Number of	Weighted Average
	Options	Exercise Price (C$)
Balance December 31, 2021	2,497,150	$	9.15
Options expired	(305,000)		8.71
Options cancelled or forfeited	(246,500)		9.11
Balance December 31, 2022	1,945,650	$	9.23
Options exercised	(25,000)		4.40
Options cancelled or forfeited	(35,500)		11.48
Options expired	(211,400)		6.97
Balance September 30, 2023	1,673,750	$	9.54

An analysis of outstanding share purchase options as of September 30, 2023 is as follows:


	Options Outstanding				Options Exercisable
Range of Exercise				Remaining				Remaining
Prices (C$)	Number	Price (C$)¹		Life²	Number	Price (C$)¹		Life²
$3.50 - $5.90	45,000		3.50	1.47	45,000		3.50	1.42
$5.91 - $7.20	428,875		6.26	1.21	428,875		6.26	1.21
$7.21 - $9.70	457,875		9.54	0.89	357,875		9.65	0.45
$9.71 - $11.80	742,000		11.80	2.31	556,500		11.80	2.31
$3.50 - $11.80	1,673,750		9.54	1.62	1,388,250		9.27	1.46

Weighted Average Exercise Price (C$)

Weighted Average Remaining Contractual Life (Years)

Restricted Share Units

The following table summarizes activity for restricted share units (“RSUs”) awarded under the Plan that vest over the required service period of the participant.


		Weighted Average
	Share	Grant Date
	Units	Fair Value
Unvested, December 31, 2021	42,334	$	5.66
Granted	370,098		4.04
Distributed (vested)	(36,168)		5.00
Cancelled	(4,308)		4.03
Unvested, December 31, 2022	371,956	$	4.13
Granted	370,039		3.42
Distributed (vested)	(121,340)		4.04
Cancelled	(4,453)		3.77
Unvested, September 30, 2023	616,202	$	3.72


Remainder of 2023		21,166
2024		243,658
2025		228,660
2026		122,718
Total		616,202

Unvested units will be forfeited by participants upon termination of employment in advance of vesting, with the exception of termination due to retirement if certain criteria are met.

Performance Share Units

The following table summarizes activity for performance share units (“PSUs”) and market-based performance share units (“MPSUs”) awarded under the Plan:


		Weighted Average
	Share	Grant Date
	Units	Fair Value
Unvested, December 31, 2021	10,750	$	5.66
Granted	267,451		6.73
Distributed	(3,750)		3.42
Cancelled	(11,185)		5.83
Unvested, December 31, 2022	263,266	$	6.77
Granted	301,035		5.80
Distributed	(12,725)		2.74
Cancelled	(3,644)		4.99
Unvested, September 30, 2023	547,932	$	6.34


Remainder of 2023		—
2024		3,500
2025		257,524
2026		276,908
2027		10,000
Total		547,932


		2023			2022
Grant date fair value	$	5.98		$	6.99
Risk-free interest rate		4.15	%		1.61	%
Expected term (in years)		3.0			3.0
Expected share price volatility		65.74	%		63.35	%
Expected dividend yield		—			—

Deferred Share Units

The following table summarizes activity for deferred share units (“DSUs”) awarded under the Plan:


		Weighted Average
	Share	Grant Date
	Units	Fair Value
Outstanding, December 31, 2021	29,213	$	5.39
Granted	116,462		3.42
Outstanding, December 31, 2022	145,675		3.82
Granted	97,577		3.58
Distributed	(31,566)		3.77
Outstanding, September 30, 2023	211,686	$	3.72

Warrants

There was a total of 200,000 warrants outstanding as of December 31, 2022 that expired on May 9, 2023.

Environmental Reclamation Liability

9 Months Ended

Sep. 30, 2023

Environmental Reclamation Liability

Environmental Reclamation Liability

5.Environmental Reclamation Liability

Movements in the environmental reclamation liability during the nine months ended September 30, 2023 and 2022 are as follows:


	Nine months ended September 30,
	2023		2022
Balance at beginning of period	$	10,800,936	$	9,888,200
Additions		604,222		898,146
Work performed on early action items		(8,650,891)		(2,920,780)
Balance at end of period	$	2,754,267	$	7,865,566

Current portion	$	2,297,523	$	5,756,965
Non-current portion		456,744		2,108,601
Balance at end of period	$	2,754,267	$	7,865,566

Commitments and Contingencies

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies.

Commitments and Contingencies

6.Commitments and Contingencies

a.Mining Claim Assessments

Stibnite Foundation

Option Payments on Other Properties

Off Balance Sheet Arrangements

The Company has no off-balance sheet arrangements as of September 30, 2023 and the date of this report.

e.Legal Update

Government Grants

9 Months Ended

Sep. 30, 2023

Government Grants

Government Grants

7.Government Grants

Nature of Operations and Basis of Presentation (Tables)

9 Months Ended

Sep. 30, 2023

Nature of Operations and Basis of Presentation

Schedule of potentially dilutive shares


	September 30
	2023	2022
Share purchase options	1,673,750	1,960,150
Share units	1,375,820	791,440
Warrants	—	200,000
Balance	3,049,570	2,951,590

Shareholders' Equity (Tables)

9 Months Ended

Sep. 30, 2023

Schedule of share based compensation recognized in the consolidated statement of operations


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Exploration	$	400,306	$	366,150	$	1,215,542	$	998,789
Corporate salaries and benefits		266,349		278,381		795,925		791,399
Directors’ fees		29,411		87,705		309,708		444,697
Total	$	696,066	$	732,236	$	2,321,175	$	2,234,885

Schedule of options activity


	Number of	Weighted Average
	Options	Exercise Price (C$)
Balance December 31, 2021	2,497,150	$	9.15
Options expired	(305,000)		8.71
Options cancelled or forfeited	(246,500)		9.11
Balance December 31, 2022	1,945,650	$	9.23
Options exercised	(25,000)		4.40
Options cancelled or forfeited	(35,500)		11.48
Options expired	(211,400)		6.97
Balance September 30, 2023	1,673,750	$	9.54

Schedule of option exercise price ranges

An analysis of outstanding share purchase options as of September 30, 2023 is as follows:


	Options Outstanding				Options Exercisable
Range of Exercise				Remaining				Remaining
Prices (C$)	Number	Price (C$)¹		Life²	Number	Price (C$)¹		Life²
$3.50 - $5.90	45,000		3.50	1.47	45,000		3.50	1.42
$5.91 - $7.20	428,875		6.26	1.21	428,875		6.26	1.21
$7.21 - $9.70	457,875		9.54	0.89	357,875		9.65	0.45
$9.71 - $11.80	742,000		11.80	2.31	556,500		11.80	2.31
$3.50 - $11.80	1,673,750		9.54	1.62	1,388,250		9.27	1.46

Weighted Average Exercise Price (C$)

Weighted Average Remaining Contractual Life (Years)

Schedule of activity for restricted share units awarded


		Weighted Average
	Share	Grant Date
	Units	Fair Value
Unvested, December 31, 2021	42,334	$	5.66
Granted	370,098		4.04
Distributed (vested)	(36,168)		5.00
Cancelled	(4,308)		4.03
Unvested, December 31, 2022	371,956	$	4.13
Granted	370,039		3.42
Distributed (vested)	(121,340)		4.04
Cancelled	(4,453)		3.77
Unvested, September 30, 2023	616,202	$	3.72

Schedule of restricted share units scheduled to vest


Remainder of 2023		21,166
2024		243,658
2025		228,660
2026		122,718
Total		616,202

Schedule of activity for performance share units


		Weighted Average
	Share	Grant Date
	Units	Fair Value
Unvested, December 31, 2021	10,750	$	5.66
Granted	267,451		6.73
Distributed	(3,750)		3.42
Cancelled	(11,185)		5.83
Unvested, December 31, 2022	263,266	$	6.77
Granted	301,035		5.80
Distributed	(12,725)		2.74
Cancelled	(3,644)		4.99
Unvested, September 30, 2023	547,932	$	6.34

Schedule of performance share units scheduled to vest


Remainder of 2023		—
2024		3,500
2025		257,524
2026		276,908
2027		10,000
Total		547,932

Schedule of activity in deferred share units


		Weighted Average
	Share	Grant Date
	Units	Fair Value
Outstanding, December 31, 2021	29,213	$	5.39
Granted	116,462		3.42
Outstanding, December 31, 2022	145,675		3.82
Granted	97,577		3.58
Distributed	(31,566)		3.77
Outstanding, September 30, 2023	211,686	$	3.72

MPSU's

Schedule of assumptions to value options and performance shares


		2023			2022
Grant date fair value	$	5.98		$	6.99
Risk-free interest rate		4.15	%		1.61	%
Expected term (in years)		3.0			3.0
Expected share price volatility		65.74	%		63.35	%
Expected dividend yield		—			—

Environmental Reclamation Liability (Tables)

9 Months Ended

Sep. 30, 2023

Environmental Reclamation Liability

Schedule of movements in the environmental reclamation liability


	Nine months ended September 30,
	2023		2022
Balance at beginning of period	$	10,800,936	$	9,888,200
Additions		604,222		898,146
Work performed on early action items		(8,650,891)		(2,920,780)
Balance at end of period	$	2,754,267	$	7,865,566

Current portion	$	2,297,523	$	5,756,965
Non-current portion		456,744		2,108,601
Balance at end of period	$	2,754,267	$	7,865,566

Nature of Operations and Basis of Presentation (Details)			9 Months Ended
	Sep. 30, 2023 USD ($)	May 12, 2023 USD ($)	Sep. 30, 2023 USD ($) segment
Nature of Operations and Basis of Presentation
Number of operating segments \| segment			1
Effective tax rate			0.00%
Income tax provision (benefit)			$ 0
Funding awarded under the Technology Investment Agreement	$ 24,800,000		$ 24,800,000
Maximum \| Controlled Equity Offering
Nature of Operations and Basis of Presentation
Common shares aggregate gross offering price	$ 20,000,000	$ 20,000,000
Subsidiaries that control the Stibnite Gold Project.
Nature of Operations and Basis of Presentation
Principal asset percentage of ownership	100.00%		100.00%

Nature of Operations and Basis of Presentation - Potentially dilutive shares (Details) - shares	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Nature of Operations and Basis of Presentation
Balance	3,049,570	2,951,590
Share purchase options
Nature of Operations and Basis of Presentation
Balance	1,673,750	1,960,150
Share units
Nature of Operations and Basis of Presentation
Balance	1,375,820	791,440
Warrants
Nature of Operations and Basis of Presentation
Balance		200,000

Mineral Properties and Interest (Details) - USD ($)	9 Months Ended
Mineral Properties and Interest (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Mineral Properties and Interest
Mineral properties and interest	$ 72,795,365	$ 72,519,373
Percentage of net smelter returns royalty	1.70%
Annual payments due under option agreements	$ 180,000

Shareholders' Equity - Authorized (Details) - USD ($) $ / shares in Units, $ in Millions		9 Months Ended
	May 12, 2023	Sep. 30, 2023
Shareholders' Equity
Common stock, shares authorized (unlimited)		Unlimited
Common stock, no par value		$ 0
ATM offering
Shareholders' Equity
Common stock, shares issued		0
Maximum \| ATM offering
Shareholders' Equity
Common shares aggregate gross offering price	$ 20
First preferred shares
Shareholders' Equity
Preferred stock, shares authorized (unlimited)		Unlimited
Preferred stock, no par value		$ 0
Second preferred shares
Shareholders' Equity
Preferred stock, shares authorized (unlimited)		Unlimited
Preferred stock, no par value		$ 0

Shareholders' Equity - Share based compensation recognized in Consolidated Statement of Operations (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Shareholders' Equity
Share based compensation	$ 696,066	$ 732,236	$ 2,321,175	$ 2,234,885
Exploration
Shareholders' Equity
Share based compensation	400,306	366,150	1,215,542	998,789
Corporate salaries and benefits
Shareholders' Equity
Share based compensation	266,349	278,381	795,925	791,399
Directors' fees
Shareholders' Equity
Share based compensation	$ 29,411	$ 87,705	$ 309,708	$ 444,697

Shareholders' Equity - Share purchase option activity within the Company's share-based compensation plan (Details) - Stock Option Plan - Share purchase options - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Number of Options
Balance, beginning of the year	1,945,650	2,497,150
Options expired	(211,400)	(305,000)
Options exercised	(25,000)
Options cancelled or forfeited	(35,500)	(246,500)
Balance, end of the year	1,673,750	1,945,650
Weighted Average Exercise Price (C$)
Balance, beginning of the year, Weighted Average Exercise Price	$ 9.23	$ 9.15
Options expired, Weighted Average Exercise Price	6.97	8.71
Options cancelled or forfeited, Weighted Average Exercise Price		9.11
Options exercised, Weighted Average Exercise Price	4.40
Options cancelled or forfeited, Weighted Average Exercise price	11.48
Balance, end of the year, Weighted Average Exercise Price	$ 9.54	$ 9.23

Shareholders' Equity - Analysis of outstanding share purchase options (Details) - Stock Option Plan - Share purchase options	9 Months Ended
	Sep. 30, 2023 $ / shares shares	Sep. 30, 2023 $ / shares $ / shares shares	Dec. 31, 2022 $ / shares shares	Dec. 31, 2021 $ / shares shares
Shareholders' Equity
Options Outstanding, Number \| shares	1,673,750	1,673,750	1,945,650	2,497,150
Options Outstanding, Price	$ 9.54	$ 9.54	$ 9.23	$ 9.15
$3.50 - $5.90
Shareholders' Equity
Range of Exercise Prices, minimum	3.50
Range of Exercise Prices, maximum	$ 5.90
Options Outstanding, Number \| shares	45,000	45,000
Options Outstanding, Price	$ 3.50	$ 3.50
Options Outstanding, Remaining Life	1 year 5 months 19 days	1 year 5 months 19 days
Options Exercisable, Number \| shares	45,000	45,000
Options Exercisable, Price	$ 3.50	$ 3.50
Options Exercisable, Remaining Life	1 year 5 months 1 day	1 year 5 months 1 day
$5.91 - $7.20
Shareholders' Equity
Range of Exercise Prices, minimum	$ 5.91
Range of Exercise Prices, maximum	$ 7.20
Options Outstanding, Number \| shares	428,875	428,875
Options Outstanding, Price	$ 6.26	$ 6.26
Options Outstanding, Remaining Life	1 year 2 months 15 days	1 year 2 months 15 days
Options Exercisable, Number \| shares	428,875	428,875
Options Exercisable, Price	$ 6.26	$ 6.26
Options Exercisable, Remaining Life	1 year 2 months 15 days	1 year 2 months 15 days
$7.21 - $9.70
Shareholders' Equity
Range of Exercise Prices, minimum	$ 7.21
Range of Exercise Prices, maximum	$ 9.70
Options Outstanding, Number \| shares	457,875	457,875
Options Outstanding, Price	$ 9.54	$ 9.54
Options Outstanding, Remaining Life	10 months 20 days	10 months 20 days
Options Exercisable, Number \| shares	357,875	357,875
Options Exercisable, Price	$ 9.65	$ 9.65
Options Exercisable, Remaining Life	5 months 12 days	5 months 12 days
$9.71 - $11.80
Shareholders' Equity
Range of Exercise Prices, minimum		$ 9.71
Range of Exercise Prices, maximum		$ 11.80
Options Outstanding, Number \| shares	742,000	742,000
Options Outstanding, Price	$ 11.80	$ 11.80
Options Outstanding, Remaining Life	2 years 3 months 21 days	2 years 3 months 21 days
Options Exercisable, Number \| shares	556,500	556,500
Options Exercisable, Price	$ 11.80	$ 11.80
Options Exercisable, Remaining Life	2 years 3 months 21 days	2 years 3 months 21 days
$3.50 - $11.80
Shareholders' Equity
Range of Exercise Prices, minimum		$ 3.50
Range of Exercise Prices, maximum		$ 11.80
Options Outstanding, Number \| shares	1,673,750	1,673,750
Options Outstanding, Price	$ 9.54	$ 9.54
Options Outstanding, Remaining Life	1 year 7 months 13 days	1 year 7 months 13 days
Options Exercisable, Number \| shares	1,388,250	1,388,250
Options Exercisable, Price	$ 9.27	$ 9.27
Options Exercisable, Remaining Life	1 year 5 months 15 days	1 year 5 months 15 days

Shareholders' Equity - Share purchase options (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Shareholders' Equity
Share based compensation	$ 696,066	$ 732,236	$ 2,321,175	$ 2,234,885
Grant date fair value of options granted		47,203		351,350
Stock Option Plan \| Share purchase options
Shareholders' Equity
Share based compensation	49,628	$ 273,155	$ 213,670	$ 822,415
Options granted			0	0
Unvested compensation not yet recognized	78,611		$ 78,611
Unvested compensation period for recognition			3 months
Intrinsic value of outstanding share purchase options	30,742		$ 30,742
Intrinsic value of exercisable share purchase options	30,742		30,742
Grant date fair value of options granted	$ 0		$ 30,594

Shareholders' Equity - Activity for restricted share units awarded (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Shareholders' Equity
Share based compensation	$ 696,066	$ 732,236	$ 2,321,175	$ 2,234,885
Grant date fair value			$ 1,300,000	$ 1,500,000
Restricted Share Units
Shareholders' Equity
Unvested shares balance at beginning of the year			371,956	42,334	42,334
Granted (in shares)			370,039	370,098	370,098
Distributed (vested), (in shares)			121,340		36,168
Cancelled (in shares)			(4,453)		(4,308)
Unvested shares balance at end of the year	616,202		616,202		371,956
Unvested, Weighted Average Grant Date Fair Value, balance at beginning of the year			$ 4.13	$ 5.66	$ 5.66
Granted, Weighted Average Grant Date Fair Value			3.42	$ 4.04	4.04
Distributed (vested), Weighted Average Grant Date Fair Value			4.04		5.00
Cancelled, Weighted Average Grant Date Fair Value			3.77		4.03
Unvested, Weighted Average Grant Date Fair Value, balance at end of the year	$ 3.72		$ 3.72		$ 4.13
Share based compensation	$ 306,265	$ 268,238	$ 956,684	$ 700,494
Unvested compensation not yet recognized	$ 1,100,000		$ 1,100,000
Remaining life of exercisable options			1 year 5 months 8 days

Shareholders' Equity - Restricted share units and Performance share units scheduled to vest (Details) - shares	Sep. 30, 2023	Dec. 31, 2022	Dec. 31, 2021
Restricted Share Units
Shareholders' Equity
Remainder of 2023	21,166
2024	243,658
2025	228,660
2026	122,718
Total	616,202	371,956	42,334
PSUs and MPSUs
Shareholders' Equity
2024	3,500
2025	257,524
2026	276,908
2027	10,000
Total	547,932	263,266	10,750

Shareholders' Equity - Activity for Performance share units (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Shareholders' Equity
Share based compensation	$ 696,066	$ 732,236	$ 2,321,175	$ 2,234,885
Performance Share Units
Shareholders' Equity
Unvested shares balance at end of the year	547,932		547,932		263,266
Granted (in shares)			301,035		267,451
Distributed (vested), Shares			(12,725)		(3,750)
Cancelled (in shares)			(3,644)		(11,185)
Unvested shares balance at beginning of the year			263,266	10,750	10,750
Granted, Weighted Average Grant Date Fair Value			$ 5.80		$ 6.73
Distributed (vested), Weighted Average Grant Date Fair Value			2.74		3.42
Cancelled, Weighted Average Grant Date Fair Value			4.99		5.83
Unvested, Weighted Average Grant Date Fair Value, balance at end of the year	$ 6.34		6.34		6.77
Unvested, Weighted Average Grant Date Fair Value, balance at beginning of the year			$ 6.77	$ 5.66	$ 5.66
Share based compensation	$ 292,971	$ 143,640	$ 801,108	$ 360,626
Unvested compensation not yet recognized	$ 2,200,000		$ 2,200,000
Unvested compensation period for recognition			2 years

Shareholders' Equity - PSUs, MPSUs and Deferred share units (Details) - USD ($)	3 Months Ended		9 Months Ended		36 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Mar. 05, 2025
Shareholders' Equity
Grant date fair value of options granted		$ 47,203		$ 351,350
Performance Share Units
Shareholders' Equity
Share units granted			23,500	17,500
Weighted average grant date fair value option granted			$ 3.67	$ 2.97
Total fair value of units awarded			$ 86,165	$ 52,048
Deferred Share Units
Shareholders' Equity
Share units granted	14,479	23,368	97,577	100,298
Grant date fair value of options granted	$ 47,202		$ 349,713
MPSU's
Shareholders' Equity
Share units granted			277,535	249,951
Total fair value of units awarded			$ 1,650,000	$ 1,750,000
Performance Period					3 years
Granted, Weighted Average Grant Date Fair Value			$ 5.98	$ 6.99
MPSU's \| Minimum
Shareholders' Equity
Vesting right percentage					0.00%
MPSU's \| Maximum
Shareholders' Equity
Vesting right percentage					200.00%

Shareholders' Equity - Weighted average inputs used in the Monte Carlo simulation model (Details) - $ / shares	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Shareholders' Equity
Grant date fair value	$ 5.98	$ 6.99
Risk-free interest rate	4.15%	1.61%
Expected term (in years)	3 years	3 years
Expected share price volatility	65.74%	63.35%

Shareholders' Equity - Activity for deferred share units (Details) - Deferred Share Units - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Shareholders' Equity
Balance, beginning of the year	145,675	29,213
Granted	97,577	116,462
Distributed (vested), Shares	(31,566)
Balance, end of the year	211,686	145,675
Balance, beginning of the year, Weighted Average Exercise Price	$ 3.82	$ 5.39
Granted, Weighted Average Exercise Price	3.58	3.42
Distributed (vested), Weighted Average Grant Date Fair Value	3.77
Balance, end of the year, Weighted Average Exercise Price	$ 3.72	$ 3.82

Shareholders' Equity - Warrants (Details)	Dec. 31, 2022 shares
Shareholders' Equity
Number of warrants outstanding	200,000

Environmental Reclamation Liability (Details)		3 Months Ended		9 Months Ended
Environmental Reclamation Liability (Details)	Jan. 15, 2021 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) T	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
Environmental Reclamation Liability
Aggregate undiscounted cost of the obligation	$ 7,473,805
Environmental liability expense (Note 5)	7,473,805	$ 22,285	$ 232,776	$ 604,222	$ 898,146
Payment for cash collateral						$ 7,500,000
Cash collateral for a surety bond	$ 3,000,000.0
Amounts paid to improve water quality				$ 8,700,000
Mine waste and tailings relocated (in tons) \| T				300,000

Environmental Reclamation Liability - Movements in the environmental reclamation liability (Details) - USD ($)		3 Months Ended		9 Months Ended
	Jan. 15, 2021	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Environmental Reclamation Liability
Balance at beginning of period				$ 10,800,936	$ 9,888,200
Environmental liability expense	$ 7,473,805	$ 22,285	$ 232,776	604,222	898,146
Work performed on early action items				(8,650,891)	(2,920,780)
Current portion		2,297,523	5,756,965	2,297,523	5,756,965	$ 9,590,766
Non-current portion		456,744	2,108,601	456,744	2,108,601	$ 1,210,170
Balance at end of period		$ 2,754,267	$ 7,865,566	$ 2,754,267	$ 7,865,566

Commitments and Contingencies (Details)			3 Months Ended	9 Months Ended
Commitments and Contingencies (Details)	Aug. 08, 2023 USD ($)	Feb. 26, 2019 USD ($) community shares	Jun. 30, 2023 USD ($)	Sep. 30, 2023 USD ($) T
Commitment and Contingencies
Off-balance sheet arrangements				$ 0
CWA settlement expense (Note 6)				5,000,000
Settlement expense, current				500,000
Settlement expense, long-term				4,500,000
Amounts paid to improve water quality				$ 8,700,000
Mine waste and tailings relocated (in tons) \| T				300,000
CWA litigation settlement agreement
Commitment and Contingencies
Settlement amount awarded to other party	$ 5,000,000
Litigation settlement amount payable period	4 years
Review period to request court approval of Dismissal and Settlement Agreement	45 days
CWA settlement expense (Note 6)			$ 5,000,000
Settlement expense, current				$ 500,000
Settlement expense, long-term				4,500,000
Nez Perce Tribe \| CWA litigation settlement agreement
Commitment and Contingencies
Settlement amount to be paid to the South Fork Salmon Water Quality Enhancement Fund	$ 4,000,000
Settlement amount to be paid to reimburse other party for legal expenses	$ 1,000,000
Related Party \| Stibnite Foundation
Commitment and Contingencies
Capital commitments payable in common shares \| shares		150,000
Percentage of total comprehensive income payable		1.00%
Minimum payments to be made during commercial production		$ 500,000
Number of communities with whom Community Agreement was established \| community		8
Related Party \| Stibnite Foundation \| Minimum
Commitment and Contingencies
Commitments payable		$ 100,000
Related Party \| Stibnite Foundation \| Maximum
Commitment and Contingencies
Commitments payable		$ 1,000,000
Mining Claim Assessments
Commitment and Contingencies
Annual assessment obligation				275,992
Bond issued				335,000
Option Payments On Other Properties
Commitment and Contingencies
Commitments payable				$ 180,000

Government Grants (Details)		1 Months Ended	3 Months Ended	9 Months Ended
Government Grants (Details)	Jul. 25, 2023 USD ($)	Sep. 30, 2022 USD ($) item	Sep. 30, 2023 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Aug. 18, 2023 USD ($)	Dec. 31, 2022 USD ($)	Dec. 16, 2022 USD ($)
Government Assistance
Grant income			$ 6,905,691	$ 14,273,148	$ 0
Government grants receivable			1,919,706	1,919,706			$ 50,000
Other income (expense)
Government Assistance
Grant income			6,905,691	14,273,148
Small Business Innovation Research ("SBIR") Grant
Government Assistance
Number of grants awarded \| item		2
Amount of grants awarded		$ 200,000			$ 200,000
Estimated additional grant income				0
Small Business Innovation Research ("SBIR") Grant \| Other income (expense)
Government Assistance
Grant income			24,999	124,997
Defense Production Act ("DPA") Grant
Government Assistance
Reimbursed costs incurred			6,185,455	10,430,060
Estimated additional grant income				$ 4,400,000
Period for receiving additional grant income				3 months
Air force research laboratory award maximum	$ 24,812,062
Defense Production Act ("DPA") Grant \| Maximum
Government Assistance
Amount of grants awarded								$ 24,800,000
Defense Production Act ("DPA") Grant \| Other income (expense)
Government Assistance
Grant income			4,655,183	$ 11,922,642
DOD Ordnance Technology Consortium ("DOTC") Grant
Government Assistance
Grant income				0
Current estimated amount						$ 15,500,000
Reimbursement for negotiating fee (in percent)						12.00%
Government grants receivable			418,795	418,795
Estimated additional grant income				$ 3,450,000
Period for receiving additional grant income				3 months
DOD Ordnance Technology Consortium ("DOTC") Grant \| Maximum
Government Assistance
Amount of grants awarded						$ 15,500,000
DOD Ordnance Technology Consortium ("DOTC") Grant \| Other income (expense)
Government Assistance
Grant income			$ 2,225,509	$ 2,225,509