UNITED STATES ANTIMONY CORP (UAMY) stock intrinsic value fair value estimate & owner earnings analysis

United States Antimony runs a rare U.S. antimony smelter at Thompson Falls, Montana. It buys antimony ore, mostly from one supplier in Canada plus some newer international sources and, since 2025, a small amount from its own Montana claims. It turns that ore into antimony oxide, metal ingots and trisulfide, which go into flame retardants, batteries, bearings, ammunition primers and ordnance. Gold and silver recovered from the ore are sold back to the ore supplier. Two plants in Mexico make antimony metal and a lower grade of oxide. Bear River Zeolite in Idaho mines and sells zeolite for filtration, animal feed and soil uses. Since late 2024 the company has also bought mining claims in Alaska, Montana and Ontario, including the $5.0 million Fostung tungsten property. None of these claims has reserves yet. THE RECORD. From 2016 to 2025 the business did not produce owner earnings. We measure those as operating cash flow with working-capital swings removed, less stock compensation and less the spending needed to keep the plants running. On that basis the company lost money in eight of the ten years, and the two positive years (2021 and 2022) each came in under $0.6 million. The median for 2016 to 2024 is about minus 1.4 cents a share. 2025 was the best price year in the company's history. The realized antimony price rose about 230% to $25.12 a pound, and revenue rose from $14.9 million to $39.3 million. Even so, operating cash flow before working capital and before stock compensation was only about $2.3 million. After $7.1 million of stock compensation and upkeep spending of about $1.2 million (roughly equal to depreciation), owner earnings were about minus $6 million. Read mechanically, 2025 looks much worse, about minus $29 million, because that reading counts most of the year's $27.8 million of capital spending as upkeep. Most of that spending was a one-time expansion: $17.1 million for the larger Thompson Falls smelter and $5.0 million for Fostung. We therefore left 2025 out of the normal earnings level. The first half of 2026 was weaker. Revenue was $14.7 million against $17.5 million a year earlier. Gross profit fell to $1.7 million from $5.2 million, which matches the company's own disclosure that ore suppliers now charge a larger share of market prices. The first half also showed an operating loss of $14.5 million and $7.7 million of stock compensation. We estimate first-half owner earnings at roughly minus $14 million. The quarterly working-capital detail we had was not complete enough to pin this down exactly. WHAT SHAREHOLDERS OWN. Debt is negligible: about $0.3 million of equipment notes, and nothing drawn on a $19.0 million margin line. Most of the value is the balance sheet, built from about $110 million of share sales in 2025 and more in 2026. At June 30, 2026 the company held: - $42.3 million of cash - $20.7 million of U.S. Treasury strips - about 10% of an Australian-listed antimony company, carried at its $43.2 million market value - a $4.0 million note receivable After setting aside $5 million of working cash, that is about $105 million, or roughly $0.69 a share on 151.8 million diluted shares. In return, the share count has more than doubled since 2019. We assume the rest of the smelter expansion is paid for by the $27.0 million Department of War award announced in March 2026, which is paid as project milestones are met. On that assumption the expansion neither adds to nor takes away from the balance sheet. WHAT WE CREDITED AND WHAT WE LEFT OUT. We credited these, because each can be named and checked: - The five-year, sole-source contract with the Defense Logistics Agency to supply antimony ingots to the National Defense Stockpile. It has a $248 million maximum through September 2030, but each order is priced when placed, and only about $12 million had been ordered by January 2026. - A five-year trioxide contract with an industrial customer. Monthly deliveries are fixed only through December 2026. - The government-funded smelter expansion now under construction, which the company expects to more than triple capacity. We left these out: the exploration claims in Alaska, Montana, Ontario and the southeastern U.S., because none has reserves; the idle Los Juarez claims in Mexico; and any lasting antimony price premium, since prices already eased in the second half of 2025. BASE CASE, $0.14 A SHARE. Losses continue at about the first-half 2026 pace for the rest of 2026 (minus $13 million). They narrow to minus $22 million in 2027 and to minus $12 million to minus $16 million a year in 2028 to 2030, as defense deliveries from the larger smelter cover part of a much larger overhead and stock-pay bill. They then settle at minus $4 million to minus $6 million a year through 2035, which fits a company that has never covered its overhead. Nothing we can name keeps earnings going after that, so the story ends there. - Business: worth about minus $83 million. - Plus financial assets of about $105 million, minus $0.3 million of debt. - Result: about $22 million, or $0.14 a share. In this case most of the cash raised gets spent. BEAR CASE, $0.01 A SHARE. Antimony prices fall the way they did from 2011 to 2016, when they dropped by roughly 60% from the peak. From 2016 to 2020 this company lost money every year at prices far below today's, so a similar fall would remove its processing margin. The Australian stake, a developer not yet in production, falls 60%. Losses of $20 million in 2027 ease to $6 million by 2032 and use up the liquid assets by about then. We assume no further funding after that. - Business: worth about minus $78 million. - Plus financial assets of about $79 million, minus $0.3 million of debt. - Result: about $1 million, or about one cent a share. With no debt, shareholders would not owe more than the company is worth, but almost nothing would be left. BULL CASE, $0.88 A SHARE. The larger smelter runs on regular defense orders plus the industrial contract. Losses shrink to minus $8 million in 2027. Owner earnings then reach plus $8 million a year in 2028 to 2030, which assumes about 4 million pounds a year at a gross spread of $5 to $7 a pound (2025 earned about $6.90), less overhead and stock pay. After that they run at plus $5 million a year through 2040, with the company as a domestic supplier to the stockpile. - Business: worth about plus $29 million. - Plus financial assets of about $105 million, minus $0.3 million of debt. - Result: about $134 million, or $0.88 a share. TESTING THE CASE. We checked the contract and margin assumptions against the filings. The defense contract is priced order by order, and the passages we reviewed disclose no minimum quantity. That supports the bull case but cannot carry a profit in the base case. The fall in first-half 2026 gross profit, with antimony prices still high, shows that higher antimony prices do not by themselves widen this company's margin, because ore suppliers price off the same market. WHAT CHANGED. Our earlier estimates used a different basis and are not comparable. Since then, the business has built up a large cash and securities balance from share sales, and its losses grew in the first half of 2026. MARGIN-OF-SAFETY PRICE. We have little confidence in any positive earnings level. Ten years of filings show none, and the best price year on record still produced a loss once stock pay is counted. The worst plausible outcome is a price collapse combined with continued spending on exploration and overhead, followed by more share sales at low prices. The company would survive that in a narrow sense, since it has no debt, physical plant and a government customer, but little would be left per share. The things we are most likely to be wrong about are: - how many defense orders arrive (upside) - how fast cash is spent (either way) - what the Australian stake is worth (either way) Shareholders receive nothing during the holding period: there is no dividend, and the share count keeps rising. With the median outcome spending most of the cash, no price alone gives confidence of 20% a year. The margin-of-safety price applies only after the business shows it can stop losing cash. If that happens with the balance sheet near today's level, each share would be backed by roughly $0.45 to $0.65 of cash and securities, with the losses stopped. At $0.15 a share, the Australian stake could halve and the company could lose money for another year, and the shares would still likely be worth well over $0.30 within three to four years. That implies more than 20% a year, which is why the margin-of-safety price is $0.15.