IDR's Bullish News Masks High Valuation and Dilution Risks

What happened

Idaho Strategic Resources (IDR) recently reported record Q3 2025 results, with GAAP EPS of $0.20 and revenue up 80% year-over-year, driven by high gold prices and aggressive exploration spending. A Seeking Alpha article portrays this as a buy opportunity, emphasizing IDR's robust production and leading rare earth land position in the U.S. However, the DeepValue master report reveals that this growth is largely price-driven, with production up only 4.6% YoY, and highlights elevated all-in sustaining costs due to quadrupled exploration expenses. The stock trades at steep multiples of ~70x P/E and ~67x EV/EBITDA, pricing in perfect execution and significant REE value, while recent equity issuance has diluted shareholders by ~10% in nine months. Key near-term catalysts include the Golden Chest Technical Report in Q1 2026, which must show substantial reserve growth to justify current valuations amid ongoing dilution and insider selling.

Implication

The optimistic news may attract momentum buyers, but fundamentals suggest the stock is overvalued relative to peers and its single-mine profile. Continued reliance on high gold prices for revenue growth exposes IDR to commodity cycle downturns, which could rapidly compress margins. Aggressive equity issuance, including a $45M ATM, risks further dilution without proportional per-share value creation, especially if REE projects remain pre-resource. Insider selling, particularly by the CEO, signals potential lack of confidence at current price levels, adding to downside pressure. Investors should wait for concrete reserve additions from the upcoming technical report and monitor dilution rates before considering entry, as multiple compression is likely in the next 6-18 months.

Thesis delta

The new article reinforces the market's bullish sentiment but does not alter the core thesis from the DeepValue report. IDR remains a strong sell due to excessive valuation, ongoing dilution, and unproven REE assets, with the thesis unchanged unless the Golden Chest report shows transformative reserve growth.