In a January 29, 2024 research note, Roth MKM analyst Mike Niehuser reiterated a Buy rating on Idaho Strategic Resources Inc. (IDR:NYSEAMERICAN) with a US$9 price target. The Idaho-based mining company has seen record gold production at its Golden Chest Mine while advancing rare earth elements exploration across the state.
IDR reported US$3.3 million in revenues in 3Q23 and production of approximately 2,200 ounces of gold. With the transition from open pit to underground mining completed, the company is now processing higher-grade ore, leading to improved recoveries over 91.5%. This boosted gross profit and operating cash flows to fund additional mine development and early-stage exploration.
Niehuser estimates IDR will produce up to 15,000 ounces of gold in 2023 based on strong 4Q performance. By installing a new paste backfill plant to extend tailings capacity, cash costs could fall below US$925 per ounce with all-in sustaining costs of US$1,121 per ounce — considerable improvements over 2022. Expanded production and lower costs could drive earnings to US$0.45 per share in 2024.
"We believe that there is potential to increase earnings in 2024 to US$0.45 per share. We base our valuation on 20x potential 2024 earnings, resulting in a US$9.00 price target (prior US$12)," Niehuser commented.
Beyond the core gold mining business, IDR controls over 28 square miles across Idaho's emerging rare earths and thorium district near Salmon. The properties include Diamond Creek, Lemhi Pass, and Mineral Hill, where mapping and sampling programs are underway. Partnerships with government and academic institutions will help advance these early-stage projects.
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Disclosures for Roth MKM, Idaho Strategic Resources, January 29, 2024
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