IDR Reports Heavy REE Find at Diamond Creek, But Master Report Maintains Strong Sell on Valuation

What happened

Idaho Strategic Resources announced significant concentrations of heavy rare earth elements, including yttrium, at its Diamond Creek project on July 23, 2026, adding to its growing REE/thorium portfolio. The company's latest press release underscores the strategic optionality of its Idaho REE claims, but the DeepValue Master Report, issued before this news, already considered such potential and maintained a STRONG SELL rating due to extreme valuation multiples and ongoing dilution. At ~$46.68 per share, IDR trades at roughly 70x EPS and 67x EV/EBITDA, pricing in sustained high gold prices and material REE value that remains unconstrained. The company's Q3 2025 results showed revenue growth driven entirely by higher gold prices rather than production volume, while exploration spending quadrupled and the share count rose ~10% in nine months via an ATM equity program. While the REE announcement may generate short-term enthusiasm, it does not change the fundamental risk-reward: a single-asset gold miner with pre-resource REE projects trading at a premium that is unsupported by current cash flows or proven reserves.

Implication

Over the next 6-18 months, the stock faces headwinds from multiple compression, dilution risk, and a potential reset in REE enthusiasm when the market demands technical reports that are still lacking. The base case fair value of ~$32 suggests more than 30% downside from current levels, even with this exploration update.

Thesis delta

The REE discovery at Diamond Creek provides incremental validation of the company's exploration potential, but does not shift the fundamental thesis. The master report already incorporated this optionality into its bearish view, and the stock price implies a much higher probability of success than is reasonable given the early-stage nature of these assets. Investors should continue to view IDR as a high-risk, high-multiple story with asymmetric downside until the Golden Chest Technical Report in Q1 2026 provides clarity on the core gold asset.