  We combined optical spectroscopy and first principles electronic structure
calculations to reveal the charge gap in the polar magnet Fe$_2$Mo$_3$O$_8$.
Iron occupation on the octahedral site draws the gap strongly downward compared
to the Zn parent compound, and subsequent occupation of the tetrahedral site
creates a narrow resonance near the Fermi energy that draws the gap downward
even further. This resonance is a many-body effect that emanates from a flat
valence band in a Mott-like state due to screening of the local moment -
similar to expectations for a Zhang-Rice singlet, except that here, it appears
in a semi-conductor. We discuss the unusual hybridization in terms of orbital
occupation and character as well as the structure-property relationships that
can be unveiled in various metal-substituted systems (Ni, Mn, Co, Zn).
