Idaho Strategic Resources, Inc. IDR reported first-quarter 2025 results on May 8, with revenues rising 23% year over year to $7.3 million, its highest quarterly revenues on record. Despite this feat, IDR shares declined 10% as earnings of 12 cents per share lagged the Zacks Consensus Estimate of 20 cents and marked a 29% year-over-year decline.
Along with the weaker-than-expected results, the IDR stock’s decline appears to have been influenced by the recent dip in gold prices. After a strong run earlier this year, gold has lost steam lately amid signs of de-escalation in the ongoing trade conflict between the United States and China.
Despite the current dip, IDR shares have moved up 40.7% year to date but have trailed the Zacks Mining - Gold industry’s growth of 48.4%. In comparison, the Zacks Basic Materials sector has gained 5.1%, while the S&P 500 has dipped 4.4%.
IDR’s YTD Price Performance Against Industry, Sector & S&P 500
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Idaho Strategic has underperformed several major gold miners, including Agnico Eagle Mines AEM, Newmont Corporation NEM and Kinross Gold KGC, which have advanced 50%, 45% and 62.5%, respectively.
IDR’s YTD Price Performance Vs AEM, NEM & KGC
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Before addressing the critical question of how investors should position themselves regarding the stock, let us first review the company’s first-quarter results.
Breaking Down IDR’s Q1 Results
Idaho Strategic reported revenues of $7.28 million in the quarter, representing a 23% year-over-year rise, beating the Zacks Consensus Estimate of $7 million. Top-line growth was driven by a 44.7% increase in average realized gold prices, which helped offset a 6.9% decline in gold production to 2,900 ounces for the quarter.
The gross margin improved to 50.8% in the quarter from 48.1% in the first quarter of 2024 on higher revenues. However, operating income plunged 35% year over year to $1.4 million, with the operating margin falling to 19.3% from 36.3% a year ago.
The downfall was attributed to exploration costs (related to exploration drilling at the Golden Chest mine) of $1.37 million in the quarter, significantly higher than $0.27 million in the year-ago quarter. All-in-sustaining cost per ounce increased 22% to $1,430.90, driven by higher exploration costs.
The company expects exploration spending to remain elevated, or even increase, through the rest of 2025 as it continues to develop the Golden Chest mine and other properties.
Idaho Strategic’s Golden Chest Mine Displays Solid Potential
The company’s gold properties include the Golden Chest Mine (currently in production), the New Jersey Mill (majority ownership interest), the Eastern Star exploration property and other less advanced properties.
The Golden Chest Gold Mine lies within the Murray Gold Belt. Idaho Strategic has consolidated many historic gold mines and prospects within the belt to form an impressive land package consisting of 1,500 acres of patented mining claims and 5,800 acres of unpatented claims — the largest private land position in the area.
At Golden Chest, ore mined from underground stopes was approximately 11,400 tons in the first quarter, with all of the tonnage coming from H-Vein stopes. A total of 11,337 dry metric tons were processed at the New Jersey Mill, with a flotation feed head grade of 8.67 gpt gold and gold recovery of 91.7%. A total of 4,230 meters of drilling was completed at the mine on various targets, including Paymaster, Jumbo and H-vein.
Earnings Estimates for IDR Instill Optimism
The Zacks Consensus Estimate for IDR’s fiscal 2025 earnings has moved north over the past 60 days. The estimate suggests year-over-year growth of 16.4%.
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(Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)
Liquidity & Cash Flow to Aid Idaho Strategic’s Growth Plans
The company ended the first quarter of 2025 with cash and cash equivalents of $1.3 million compared with $1.1 million as of the end of 2024. IDR’s total debt-to-total capital ratio was at 0.05 as of March 31, 2024, significantly lower than Newmont’s total debt-to-total capital ratio of 0.20, Kinross Gold’s 0.14 and even Agnico Eagle’s 0.054.
An improved cash flow and low debt levels allow the company to invest in existing mines while exploring and developing gold and rare earth element (REE) prospects. This year, the company plans to execute its largest exploration program ever at the Golden Chest Mine, while initiating additional exploration in the broader Murray Gold Belt. It is completing a phase 1 drill program at Eastern Star, completing a large-scale radiometrics and soil sampling program at our Lemhi Pass project, to name a few.
IDR Offers Exposure to Promising REE Market
Idaho Strategic has three REE exploration properties in Idaho — Lemhi Pass, Diamond Creek and Mineral Hill. The company has conducted numerous exploration programs on its REE properties, which include drilling, trenching, sampling and mapping certain areas within its 19,090-acre landholdings. REE is essential in many rapidly growing clean energy technologies, from wind turbines and electricity networks to electric vehicles. Per the International Energy Agency, REE demand is expected to grow 15 times by 2040. The market is currently dominated by China, and there has been an increasing focus on developing domestic REE capabilities in the United States.
Idaho Strategic Offers Industry-Leading Returns
IDR’s return on equity (ROE) — a profitability measure of how prudently the company utilizes its shareholders’ funds — is 22.54%, well above the industry average of 11.86%. This also surpasses the ROEs of Newmont (15.75%), Kinross Gold (15.63%), and Agnico Eagle Mines (12.09%).
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IDR Stock's Valuation
Idaho Strategic’s stock is currently trading at a premium compared with its industry on a forward 12-month P/Sales basis.
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Agnico Eagle Mines, Kinross Gold and Newmont are currently cheaper options than IDR.
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Should You Buy Idaho Strategic’s Stock Right Now?
IDR offers investors the stability of profitable gold production and the added advantage of diversification through its exposure to REEs. Although earnings in the recent quarter were impacted by higher exploration costs, this reflects the company's ongoing investment in the Golden Chest and other properties — efforts that are expected to drive growth, justifying the company’s premium valuation.
Despite the earnings decline, the company's 2025 growth projections remain positive, with upward revisions instilling optimism. Additionally, IDR outperforms its peers in terms of return on equity.
Investors may, thus, consider adding this Zacks Rank #2 (Buy) stock to their portfolios. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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