my girlfriend's bike got stolen so now I'm fixing up a heap of shit I got for free so she can ride it

pic very related: these things cost about $300 AUD brand new, replete with shit components including a 1" threaded fork, stem shifters, shimano's bottom-tier drivetrain, and buckled wheels. it's basically one rung above a department store bike.

anyway the standover height suits my girlfriend, the only thing is she's too casual for drop bars so I'm doing a flat bar conversion. there's an option for flat bars if you buy new but sadly I didn't have that luxury, so I went shopping.

here's what I got:

>a shitty steel flat bar
>NOS dia compe ss7 brake levers
>ODI pro grips
>new front brake pads (I heard the stock Tektro pads are trash)

so far I've spent about $80.

I can probably post some pictures as I progress, but for now I need some advice please:

the clamp bolt on the underside of the stem is rounded, someone definitely fucked around with it in the past and I can't get any purchase on it. I took the stem out of the steerer and it has gone pretty rusty and left a mess in there

do you think it's best to trash the stem and buy another?