UAMY's Critical Minerals Facility Buy Masks Underlying Financial Weaknesses

What happened

United States Antimony Corp's stock rose after announcing the acquisition of a fully operational critical-minerals flotation facility, aligning with its strategy to build a North American critical minerals platform. This move follows previous aggressive, equity-funded expansion attempts highlighted in the DeepValue report, such as the rejected Larvotto bid. However, the report details that UAMY remains loss-making with negative operating income, a high P/B ratio of 12.8x, and heavy reliance on equity issuance, raising concerns about dilution. The acquisition may enhance processing capabilities but adds to capital intensity without addressing core profitability issues or the unproven DLA contract execution. Thus, the stock's increase appears driven by sentiment rather than fundamental improvement, overlooking persistent financial risks.

Implication

The acquisition likely requires additional funding, increasing the probability of further equity issuance and share dilution, which erodes per-share value. UAMY's history of capex overruns and negative operating leverage, with a Q3 2025 operating loss of $(4.9)m, suggests new assets may not improve profitability. Market sentiment remains crowded and volatile, as noted in the report, making price swings unreliable indicators of fundamental health. Without evidence of DLA contract revenue recognition or cost control, the current valuation at ~$866m market cap is unsupported by the $26.2m 9M 2025 revenue. Therefore, investors are advised to avoid new positions and consider reducing exposure, consistent with the STRONG SELL rating and base case value of $4.00.

Thesis delta

The acquisition does not materially alter the negative thesis on UAMY; it reinforces concerns about capital allocation discipline and potential dilution without addressing profitability or execution risks. The core issues of high valuation multiples, negative operating income, and reliance on unproven DLA contract utilization remain unchanged. Thus, the STRONG SELL rating and cautious investment stance are upheld, with no shift in the bearish outlook.