UAMY

United States Antimony ($UAMY) Soars 10x on $245M Pentagon Deal, Target Price $7.50

09/30/2025 23:48

United States Antimony ($UAMY) is a specialty mining company based in Texas that produces antimony and zeolite, founded in 1968 with approximately 60 employees. The company operates antimony facilities in Montana and Mexico, and a zeolite facility in Idaho, supplying products for various industrial applications including flame retardants, ammunition primers, bearings, and storage batteries. $UAMY stock has delivered extraordinary returns to investors over the past year. Starting at $0.69 in October 2024, it has surged to $5.60 by September 2025, representing approximately an 8-fold increase. The dramatic upward trajectory began particularly in December 2024, directly correlating with China's antimony export ban. China imposed a complete ban on exports of strategic minerals including gallium, germanium, and antimony to the United States in December 2024. Given that China accounts for 48% of global antimony production, this measure caused antimony prices to surge over 200%. This geopolitical shift created an extremely favorable environment for $UAMY, which operates North America's only two antimony smelters. Even more noteworthy is the consistent insider buying activity. From August 2024 to September 2025, executives made seven separate stock purchases. Notably, Chairman Gary Evans invested $289,400 in December 2024 and $613,200 in September 2025. The chairman's substantial purchase at $6.13 per share, even after the stock's significant run-up, demonstrates strong management confidence. The most critical turning point in $UAMY's growth story was the Pentagon contract signed in September 2025. The company secured a sole-source, five-year contract worth up to $245 million with the U.S. Defense Logistics Agency to supply antimony ingots for defense stockpiles. This guarantees approximately $50 million in annual stable revenue, double the company's 2024 annual revenue of $25 million. Financially, $UAMY is showing dramatic improvement. Annual revenue for 2025 reached $25.73 million, up 72% year-over-year, with quarterly growth rates of 187.3%. While the company still posted a net loss of $890,000, this represents significant improvement from losses of $1.73 million in 2024 and $6.35 million in 2023. Operating margin also turned positive at 0.19%, approaching profitability. The company's financial health remains solid. With a debt-to-equity ratio of only 2.59% and virtually no financial leverage, plus a current ratio of 2.21 ensuring adequate short-term liquidity, $UAMY maintains a conservative balance sheet. Recent $18 million equity financing provided cash for restarting the Mexico smelter and expanding production capacity. However, investors must consider risk factors. Current valuation multiples are stretched, with a forward P/E ratio of 32.89 and price-to-book ratio of 20-21 times. The price-to-sales ratio of 28-30 times far exceeds the typical 5-10 times for mining companies, indicating very high market expectations for future growth. Short interest at 13.8% reflects some investor skepticism. Additionally, since antimony prices have been artificially elevated due to China's export ban, price volatility could be significant as alternative supply sources develop or policies change. Nevertheless, $UAMY's medium to long-term outlook remains positive. As U.S.-China trade tensions persist, supply chain diversification for strategic minerals becomes essential for national security. The company's position as North America's only antimony smelter operator provides a competitive advantage. Beyond the Pentagon contract, growing industrial demand and strengthening environmental regulations driving flame retardant market expansion are additional positive factors. Investors should focus on the earnings announcement scheduled for November 11th. This will be the first earnings report following the Pentagon contract, with specific revenue guidance and production expansion plans expected. Progress toward the Mexico smelter's monthly 200-ton production target will also be a key observation point. Analysts' current target price of $7.50 suggests significant upside potential. However, given high valuations, short-term volatility is inevitable. For long-term investors, $UAMY represents an attractive play on the structural shift in strategic mineral supply chains, though continuous monitoring of earnings improvement pace and geopolitical risks remains essential.