UAMY's Domestic Mining Push Faces Skepticism Amid Overvaluation

What happened

United States Antimony Corp is promoting a shift to domestic mining in Montana and Alaska, targeting gross margins above 60% by replacing costly imports. However, the company has a history of net losses, volatile free cash flow, and relies heavily on non-domestic ore, as noted in the DeepValue report. Execution risks remain high, with the Madero facility restart still unproven and financial leverage elevated at a net debt/EBITDA of 13.21x. Despite the optimistic narrative, the stock is severely overvalued with a P/E of -1499.80 and intrinsic value far below the current price. Investors should view this announcement critically until tangible improvements in operations and margins are demonstrated.

Implication

The potential for higher gross margins from domestic ore sourcing is speculative, given UAMY's weak execution history and ongoing losses. Elevated financial risk, with a net debt/EBITDA ratio of 13.21x and negative earnings, undermines stability. Regulatory pressures on antimony trioxide in flame-retardants could further erode demand, compounding sourcing challenges. Without evidence of a successful Madero restart and sustained profitability, the investment case remains weak. Thus, investors should avoid the stock until clear operational milestones and deleveraging are achieved.

Thesis delta

The announcement of domestic mining plans introduces a potential catalyst for margin expansion, but it does not alter the core overvaluation or execution risks identified in the DeepValue report. Investors should monitor actual progress on the Madero restart and margin improvements before reconsidering the negative stance.