SECURITIES & EXCHANGE COMMISSION EDGAR FILING
United States Antimony Corp.
Form: 10-K
Date Filed: 2012-03-14
Corporate Issuer CIK: 101538
UAMY
Symbol:
3330
SIC Code:
12/31
Fiscal Year End:
© Copyright 2014, Issuer Direct Corporation. All Right Reserved. Distribution of this document is strictly prohibited, subject to the
terms of use.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☑ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2011
❑ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period ____________to ____________
Commission file number 001-08675
UNITED STATES ANTIMONY CORPORATION
(Exact name of registrant as specified in its charter)
Montana
(State or other jurisdiction of incorporation or
organization)
P.O. Box 643, Thompson Falls, Montana
(Address of principal executive offices)
81-0305822
(I.R.S. Employer Identification No.)
59873
(Zip Code)
Securities registered pursuant to Section 12(b) of the Act: None
Registrant's telephone number, including area code: (406) 827-3523
Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $.01 per share
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12
months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes ☑ No ❑
Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K contained in this form and will not be
contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. ☑
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “small reporting company” in Rule 12b-2 of the
Exchange Act.
Large Accelerated
Filer
❑
Non-Accelerated Filer ❑
Accelerated Filer
Smaller reporting
company
☑
❑
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ❑ No ☑
The aggregate market value of the voting stock held by non-affiliates of the registrant, based on the average bid price of such stock,
was $186,350,380 as of June 30, 2011.
At March 15, 2012, the registrant had 59,349,300 outstanding shares of par value $0.01 common stock.
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
TABLE OF CONTENTS
PART I
ITEM 1. DESCRIPTION OF BUSINESS
General
History
Overview-2011
Antimony Division
Zeolite Division
Environmental Matters
Employees
Other
ITEM 1A. RISK FACTORS
ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 2. DESCRIPTION OF PROPERTIES
Antimony Division
Zeolite Division
ITEM 3.
LEGAL PROCEEDINGS
ITEM 4. MINE SAFETY DISCLOSURES
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
ITEM 6. SELECTED FINANCIAL DATA
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
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ITEM 8.
FINANCIAL STATEMENTS
F-1-F-21
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9B. OTHER INFORMATION
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS AND COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE
ITEM 11. EXECUTIVE COMPENSATION
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
PART IV
ITEM 15. EXHIBITS AND REPORTS ON FORM 8-K
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
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SIGNATURES
CERTIFICATIONS
FINANCIAL STATEMENTS
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F-1-F-21
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
ITEM 1. DESCRIPTION OF BUSINESS
General
Explanatory Note: As used in this report, the terms "we," "us" and "our" are used to refer to United States Antimony
Corporation and, as the context requires, its management.
Some of the information in this Form 10-K contains forward-looking statements that involve substantial risks and uncertainties. You
can identify these statements by forward-looking words as "may," "will," "expect," "anticipate," "believe," "estimate" and "continue," or
similar words. You should read statements that contain these words carefully because they:
discuss our future expectations;
contain projections of our future results of operations or of our financial condition; and
state other "forward-looking" information.
·
·
·
History
United States Antimony Corporation, or USAC, was incorporated in Montana in January 1970 to mine and produce antimony
products. In December 1983, we suspended antimony mining operations but continued to produce antimony products from domestic
and foreign sources. In April 1998, we formed United States Antimony SA de CV or USAMSA, to mine and smelt antimony in
Mexico. Bear River Zeolite Company or BRZ, was incorporated in 2000, and it is mining and producing zeolite in southeastern
Idaho. On August 19, 2005, USAC formed Antimonio de Mexico, S. A. de C. V. to explore and develop antimony and silver deposits
in Mexico, which is presently being merged into USAMSA. Our principal business is the production and sale of antimony and zeolite
products.
Overview-2011
Antimony Sales
During 2011, sales of our antimony products increased approximately 66% from 2010. The profitability of the Antimony Division
increased from $903,560 in 2010 to $1,556,013 in 2011.
Zeolite Sales
During 2010, sales of zeolite decreased 15% in 2011 from 2010 and the gross profit decreased from $470,172 in 2010 to $118,185 in
2011.
Precious
Au (Oz)
Ag (Oz)
Metal Sales
Contained
Contained
6870.10
31.79725
39,494
483,307
21775.74
78.64239
667,813 179.18150 23630.758
Other Sales
Precious Metal Sales & Average Prices
Year
2009
2010
2011
$
$
$
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Antimony Division
Our antimony smelter and precious metals plant is located in the Burns Mining District of Sanders County, Montana, approximately
15 miles west of Thompson Falls, MT. We hold 2 patented mill sites where the plant is located. We have no "proven reserves" or
"probable reserves" of antimony, as these terms are defined by the Securities and Exchange Commission. Environmental restrictions
preclude mining at this site.
Prior to 1984, we mined antimony underground by driving drifts and using slushers in room and pillar type stopes. Mining was
suspended in December 1983, because antimony could be purchased more economically from foreign sources.
Because we depend on foreign sources for raw materials, there are risks of interruption in procurement from these sources and/or
volatile changes in world market prices for these materials that are not controllable by us. We are currently developing sources of
antimony through our sites in Mexico and working with suppliers in Central America, Europe and South America.
We currently own 100% of the common stock, equipment, and the lease on real property of United States Antimony, Mexico S.A. de
C.V. or USAMSA, which was formed in April 1998. We currently own 100% of the stock in Antimony de Mexico SA de CV (AM) which
owns the San Miguel property. USAMSA has three divisions (1) the Madero smelter in Coahuila that started operations in 2011, (2)
the Puerto Blanco flotation mill in Guanajuato that will start operating in 2012, and (3) the Los Juarez mineral deposit that includes
concessions in Queretaro that will also begin operating in 2012.
In our existing operations in Montana, we produce antimony oxide, sodium antimonate, antimony metal, and precious
metals. Antimony oxide is a fine, white powder that is used primarily in conjunction with a halogen to form a synergistic flame
retardant system for plastics, rubber, fiberglass, textile goods, paints, coatings and paper. Antimony oxide is also used as a color
fastener in paint, as a catalyst for production of polyester resins for fibers and film, as a phosphorescent agent in fluorescent light
bulbs and as an opacifier for porcelains. Sodium antimonate is primarily used as a fining agent (degasser) for glass in cathode ray
tubes used in television picture tubes and as a flame retardant. We also sell antimony metal for use in bearings, storage batteries
and ordnance.
We estimate (but have not independently confirmed) that our present share of the domestic market for antimony oxide products is
approximately 4%. We are the only significant U.S. producer of antimony products. China supplies 92% of the world antimony
demand.
Schedule of Antimony Sales
2011
2010
2009
Lbs of
Oxide
1,679,355
1,679,042
1,103,824
Lbs of
Metal
1,401,423
1,393,604
916,173
$
$ 10,406,636
$ 6,174,062
$ 2,526,663
Largest
Customer
28%
37%
40%
Concentration of Sales: During 2011, $7,544,305, or 72% of our sales, was made to three customers.
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Marketing: We employ full-time marketing personnel and have negotiated various commission-based sales agreements with other
chemical distribution companies.
Antimony Price Fluctuations: Our operating results have been, and will continue to be, directly related to the market prices of antimony
metal, which have fluctuated widely in recent years. The volatility of prices is illustrated by the following table, which sets forth the
average prices of antimony metal per pound, as reported by sources deemed reliable by us.
Year
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
USA
High/Lb
USA
Low/Lb
USA
Average
Price/Lb
Rotterdam
Average
Price/Lb
$
7.22 $
9.74
5.89
7.5
5.45
5.14
5.45
5.45
5.45
5.25
6.70 $
2.58
1.78
2.35
2.23
1.76
1.36
0.95
1.01
0.71
6.97 $
3.67
2.37
2.72
2.52
2.28
1.58
1.48
1.27
0.99
7.05
4.05
2.33
2.72
The range of sales prices for antimony oxide and antimony metal per pound was as follows for the periods indicated:
Year
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
$
Oxide
Average
Price/Lb
Metal
Average
Price/Lb
6.16 $
3.67 $
2.28 $
2.88 $
2.52 $
2.28 $
1.73 $
1.32 $
1.21 $
0.88 $
7.42
4.42
2.75
3.47
3.04
2.75
2.08
1.59
1.46
1.06
Antimony metal prices are determined by a number of variables over which we have no control. These include the availability and
price of imported metals, the quantity of new metal supply, and industrial and commercial demand. If metal prices decline and remain
depressed, our revenues and profitability may be adversely affected.
We use various antimony raw materials to produce our products. We currently obtain antimony raw material from sources in North
America, Mexico, Europe, South America and Australia.
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Zeolite Division
We own 100% of Bear River Zeolite Company,or BRZ, an Idaho corporation incorporated on June 1, 2000. BRZ has a lease with
Webster Farm, L.L.C. that entitles BRZ to surface mine and process zeolite on property located near Preston, Idaho, in exchange for
a royalty payment. In 2010 the royalty was adjusted to $10 per ton sold. The current minimum annual royalty is $60,000. In
addition, BRZ has more zeolite on U.S. Bureau of Land Management land. A company controlled by the estate of Al Dugan, a
significant stockholder and, as such, an affiliate of USAC, receives a payment equal to 3% of net sales on zeolite products. William
Raymond and Nancy Couse are paid a royalty that varies from $1 to $5 per ton. On a combined basis, royalties vary from 8%-
13%. BRZ has constructed a processing plant on the property and it has improved its productive capacity. Through December 31,
2011, we had spent approximately $3,900,000 to purchase and construct the processing plant and develop sales.
We have no "proven reserves" or "probable reserves" of zeolite, as these terms are defined by the Securities and Exchange
Commission.
"Zeolite" refers to a group of minerals that consist of hydrated aluminosilicates that hold cations such as calcium, sodium, ammonium,
various heavy metals, and potassium in their crystal lattice. Water is loosely held in cavities in the lattice. BRZ's zeolite deposits
have characteristics which make the mineral useful for a variety of purposes including:
· Soil Amendment and Fertilizer. Zeolite has been successfully used to fertilize golf courses, sports fields, parks and common
areas, and high value crops, including corn, potatoes, soybeans, red beets, acorn squash, green beans, sorghum sudangrass,
brussel sprouts, cabbage, carrots, tomatoes, cauliflower, radishes, strawberries, wheat, lettuce and broccoli.
· Water Filtration. Zeolite is used for particulate, heavy metal and ammonium removal in swimming pools, municipal water
systems, fisheries, fish farms, and aquariums.
· Sewage Treatment. Zeolite is used in sewage treatment plants to remove nitrogen and as a carrier for microorganisms.
· Nuclear Waste and Other Environmental Cleanup. Zeolite has shown a strong ability to selectively remove strontium, cesium
and various other radioactive isotopes from solution. Zeolite can also be used for the cleanup of soluble metals such as
mercury, chromium, copper, lead, zinc, arsenic, molybdenum, nickel, cobalt, antimony, calcium, silver and uranium.
· Odor Control. A major cause of odor around cattle, hog, and poultry feed lots is the generation of the ammonium in urea and
manure. The ability of zeolite to absorb ammonium prevents the formation of ammonia gas, which generates the odor.
· Gas Separation. Zeolite has been used for some time to separate gases, to re-oxygenate downstream water from sewage
plants, smelters, pulp and paper plants, and fish ponds and tanks, and to remove carbon dioxide, sulfur dioxide and hydrogen
sulfide from methane generators as organic waste, sanitary landfills, municipal sewage systems and animal waste treatment
facilities.
· Animal Nutrition. Feeding up to 2% zeolite increases growth rates, decreases conversion rates, prevents worms, and
increases longevity.
· Miscellaneous Uses. Other uses include catalysts, petroleum refining, building applications, solar energy and heat exchange,
desiccants, pellet binding, horse and kitty litter, floor cleaner and carriers for insecticides, pesticides and herbicides.
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Environmental Matters
Our exploration, development and production programs conducted in the United States are subject to local, state and federal
regulations regarding environmental protection. Some of our production and mining activities are conducted on public lands. We
believe that our current discharge of waste materials from our processing facilities is in material compliance with environmental
regulations and health and safety standards. The U.S. Forest Service extensively regulates mining operations conducted in National
Forests. Department of Interior regulations cover mining operations carried out on most other public lands. All operations by us
involving the exploration for or the production of minerals are subject to existing laws and regulations relating to exploration
procedures, safety precautions, employee health and safety, air quality standards, pollution of water sources, waste materials, odor,
noise, dust and other environmental protection requirements adopted by federal, state and local governmental authorities. We may
be required to prepare and present data to these regulatory authorities pertaining to the effect or impact that any proposed
exploration for, or production of, minerals may have upon the environment. Any changes to our reclamation and remediation plans,
which may be required due to changes in state or federal regulations, could have an adverse effect on our operations. The range of
reasonably possible loss in excess of the amounts accrued, by site, cannot be reasonably estimated at this time.
We accrue environmental liabilities when the occurrence of such liabilities is probable and the costs are reasonably estimable. The
initial accruals for all our sites are based on comprehensive remediation plans approved by the various regulatory agencies in
connection with permitting or bonding requirements. Our accruals are further based on presently enacted regulatory requirements
and adjusted only when changes in requirements occur or when we revise our estimate of costs required to comply with existing
requirements. As remediation activity has physically commenced, we have been able to refine and revise our estimates of costs
required to fulfill future environmental tasks based on contemporaneous cost information, operating experience, and changes in
regulatory requirements. In instances where costs required to complete our remaining environmental obligations are clearly
determined to be in excess of the existing accrual, we have adjusted the accrual accordingly. When regulatory agencies require
additional tasks to be performed in connection with our environmental responsibilities, we evaluate the costs required to perform
those tasks and adjust our accrual accordingly, as the information becomes available. In all cases, however, our accrual at year-end
is based on the best information available at that time to develop estimates of environmental liabilities.
Antimony Processing Site
We have environmental remediation obligations at our antimony processing site near Thompson Falls, Montana ("the Stibnite Hill
Mine Site"). We are under the regulatory jurisdiction of the U.S. Forest Service and subject to the operating permit requirements of
the Montana Department of Environmental Quality. At December 31, 2011, we have accrued $100,000 to fulfill our environmental
responsibilities.
BRZ
During 2001, we recorded a reclamation accrual for our BRZ subsidiary, based on an analysis performed by us and reviewed and
approved by regulatory authorities for environmental bonding purposes. The accrual of $7,500 represents the our estimated costs of
reclaiming, in accordance with regulatory requirements, the acreage disturbed by our zeolite operations and remains unchanged at
December 31, 2011.
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General
Reclamation activities at the Thompson Falls Antimony Plant have proceeded under supervision of the U.S. Forest Service and
Montana Department of Environmental Quality. We have complied with regulators' requirements and do not expect the imposition of
substantial additional requirements.
We have posted cash performance bonds with a bank and the U.S. Forest Service in connection with our reclamation activities.
We believe we have accrued adequate reserves to fulfill our environmental remediation responsibilities as of December 31,
2011. We have made significant reclamation and remediation progress on all our properties over the past three years and have
complied with regulatory requirements in our environmental remediation efforts.
Employees
As of December 31, 2011, we employed 24 full-time employees in Montana. In addition, we employed 15 people at our zeolite plant
in Idaho, and 37 employees at our mining, milling and smelting operation in Mexico. The number of full-time employees may vary
seasonally. None of our employees are covered by any collective bargaining agreement.
Other
We hold no material patents, licenses, franchises or concessions, however we consider our antimony processing plant proprietary in
nature. We use the trade name "Montana Brand Antimony Oxide" for marketing our antimony products.
We are subject to the requirements of the Federal Mining Safety and Health Act of 1977, the Occupational Safety and Health
Administration's regulations, requirements of the state of Montana and the state of Idaho, federal and state health and safety statutes
and Sanders County, Montana and Franklin County, Idaho health ordinances.
ITEM 1A. RISK FACTORS
There may be events in the future that we are not able to accurately predict or over which we have no control. The risk factors listed
below, as well as any cautionary language in this report, provide examples of risks, uncertainties and events that may cause our
actual results to differ materially from the expectations we describe in our forward-looking statements.
If we were liquidated, our common stockholders could lose part, or all, of their investment.
In the event of our dissolution, the proceeds (if any) realized from the liquidation of our assets will be distributed to our stockholders,
only after the satisfaction of the claims of our creditors and preferred stockholders. The ability of a purchaser of shares to recover all,
or any, portion of the purchase price for the shares, in that event, will depend on the amount of funds realized and the claims to be
satisfied by those funds.
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We may have unasserted liabilities for environmental reclamation.
Our research, development, manufacturing and production processes involve the controlled use of hazardous materials, and we are
subject to various environmental and occupational safety laws and regulations governing the use, manufacture, storage, handling,
and disposal of hazardous materials and some waste products. The risk of accidental contamination or injury from hazardous
materials cannot be completely eliminated. In the event of an accident, we could be held liable for any damages that result and any
liability could exceed our financial resources. We also have one ongoing environmental reclamation and remediation projects at our
current production facility in Montana. Adequate financial resources may not be available to ultimately finish the reclamation activities
if changes in environmental laws and regulations occur, and these changes could adversely affect our cash flow and profitability. We
do not have environmental liability insurance now, and we do not expect to be able to obtain insurance at a reasonable cost. If we
incur liability for environmental damages while we are uninsured, it could have a harmful effect on our financial condition and results
of operations. The range of reasonably possible losses from our exposure to environmental liabilities in excess of amounts accrued to
date cannot be reasonably estimated at this time.
We have accruals for asset retirement obligations and environmental obligations.
We have accruals totaling $241,500 on our balance sheet at December 31, 2011, for our environmental reclamation responsibilities
and estimated asset retirement obligations. If we are not able to adequately perform these activities on a timely basis, we could be
subject to fines and penalties from regulatory agencies.
ITEM 1B. UNRESOLVED STAFF COMMENTS
The Company does not have any unresolved staff comments at December 31, 2011.
ITEM 2. DESCRIPTION OF PROPERTIES
Antimony Division
Our antimony smelter and precious metals plant is located in the Burns Mining District, Sanders County, Montana, approximately 14
miles west of Thompson Falls on Montana Highway 471. This highway is asphalt, and the property is accessed by cars and trucks.
The property includes two five-acre patented mill sites that are owned in fee-simple by us. The claims are U. S. Antimony Mill Site No.
1 (Mineral Survey 10953) and U. S. Antimony Mill Site No. 2 (Mineral Survey 10953). There are three other patented Mill Site claims
known as the Station Mill Site (Mineral Survey 9190B, 4.394 acres), Excelsior Mill Site (Mineral Survey 9190B, 4.972 acres), and
Mammoth Mill Site (Mineral Survey 9190B, 5.000 acres) that we have paid taxes on for 39 years that are subject to a dispute with the
U. S. Forest Service concerning ownership. We have been paying Sanders County property taxes on three patented mill site claims
in the Burns Mining District of Montana since 1969 when we purchased the original block of claims. USAC was the registered owner
of the claims at the Sanders County Courthouse. The claims include the Station Mill Site (4.994 acres), Excelsior Mill Site (4.972
acres), and the Mammoth Mill Site (5.000 acres) Patent Survey No. 9190 A. We discovered that the BLM cancelled the patents on 12
January 2000, because “the claims were not filed with the BLM in accordance with the FLPMA and are deemed to be abandoned and
void by operation of law.” Neither we, nor the Sanders County Court House, were ever notified of this decision, and we continue to
pay taxes. Although we do not believe that this taking is valid, it does not have a substantial impact on us or our results of operations.
The U. S. Antimony Mill Sites were used to run a flotation mill and processing plant for antimony that we mined on adjacent claims
that have been sold. Presently, we run a smelter that includes nine furnaces of a proprietary design to produce antimony metal,
antimony oxide, and various other products. We also run a precious metals plant. The facility includes 6 buildings and our main office.
There are no plans to resume mining on the claims that have been sold or abandoned, although the mineral rights have been
retained on many of the patented mining claims. The U. S. Forest Service and Montana Department of Environmental Quality have
told us that the resumption of mining would require an Environmental Impact Statement, massive cash bonding, and would be
followed by years of law suits. The mill site is serviced with three-phase electricity from Northwest Power, and water is pumped from a
well.
We claim no reserves on any of these properties.
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Antimony mining and milling operations in the U.S. were curtailed during 1983 due to continued declines in the price of antimony. We
are currently purchasing foreign raw antimony materials and continue to produce antimony metal, oxide and sodium antimonate from
our antimony processing facility near Thompson Falls, Montana.
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LOS JUAREZ GROUP
We hold properties that are collectively called the “Los Juarez” property, in Queretaro, as follows:
MINE PROPERTIES
1. San Miguel I and II are being purchased by a USAC subsidiary, Antimonio de Mexico, S. A. de C. V, or AM, for $1,480,500. To
date, we have paid $726,370. The property consists of 40 hectares.
2. San Juan I and II are concessions owned by AM and include 466 hectares.
3. San Juan III is held by a lease agreement by AM in which we will pay a 10% royalty based, on the net smelter returns from
another USAC Mexican subsidiary, named United States Antimony Mexico, S. A. de C. V. or USAMSA. It consists of 214
hectares.
4. San Juan IV is owned by USAMSA and consists of 2,336 hectares.
The concessions collectively constitute 3,056 hectares. The claims are accessed by roads that lead to highways.
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Part of the USAC Mexican property, including San Miguel I, II and part of San Juan III, was originally drilled by Penoles in 1970,
when antimony metal prices were high. They did not proceed with the property, due to the complex metallurgy of antimony.
Subsequently, the Mexican Government did additional work and reported a reserve of 1,000,000 metric tons (mt) grading 1.8%
antimony and 8.1 ounces of silver per metric ton (opmt) in Consejo de Recursos Minerales (Publicacion M-4e). However, the
Securities and Exchange Commission does not recognize this report, and the Company claims no reserves.
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The mineralized zone is a classic jasperoid-type deposit in the Cretaceous El Doctor Limestone. The mineralization is confined to
silicified jasperiods and limestone. The zone strikes north 70 degrees west. The dimensions of the manto are still conjectural.
However, the strike length appears to be more than 4,500 meters.
The mineralization is typically very fine-grained stibnite with silver and minor amount of gold. It is primarily sulfide in nature due to its
encapsulation in silica. The mining for many years will be by open pit methods. Eventually it will be by underground methods. At the
present time, mining has included hauling dump rock and limited amounts of rock from mine faces.
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SOYATAL MINING DISTRICT, PINAL DE AMOLES, QUERETARO, MEXICO
USAC, through USAMSA, also holds a supply agreement with Pinar de Amores S. A. de C. V. on four concessions in the Soyatal
Mining District in the State of Queretaro, totaling 283 hectares. The concessions are the Chihuahua and three Fox-1’s. Reportedly,
the Soyatal District was the third largest producer of antimony in Mexico. U. S. Geological Survey Bulletin 960-B, 1948, Donald E.
White, Antimony Deposits of Soyatal District state of Queretaro, Mexico records the production from 1905-1943 at 25,000 tons of
antimony metal content. In 1942, the mines produced ore containing 1,737 tons of metal, and in 1943, they produced ore containing
1,864 tons of metal. This mining was performed primarily all hand labor, with no compressors, trammers, and the ore was transported
by mules, in sacks, to the railroad. Recoveries were less than 40% of the values. Mining continued throughout World War II.
White remarks p. 84 and 85”
In the Soyatal Mines, as in practically all antimony mines, it is difficult to estimate the reserves, for the following reasons. (1) The
individual deposits are so extremely irregular in size, shape, and grade that the amount of ore in any one of them is unknown until the
ore has been mined. (2) As only the relatively high grade shipping ore is recovered, the ore bodies are not systematically sampled
and assayed…The total reserves are thus unknown and cannot be estimated accurately, but they probably would suffice to maintain
a moderate degree of activity in the district for at least 10 years. The mines may even contain enough ore to equal the total past
production.”
USAMSA does not claim any reserves at Soyatal. However, hand-sorted rock and mill feed is being mined and purchased by
USAMSA, according to a schedule for direct shipping ore.
USAMSA PUERTO BLANCO FLOTATION MILL, GUANAJUATO, MEXICO
A flotation mill was completed at San Luis de la Paz, Guanajuato, Mexico. All of the permits to construct and operate the plant have
been obtained. The plant has a capacity of 150 metric tons per day. It includes a 10” x 36” jaw crusher, a 4’x 8’ double deck screen, a
29” cone crusher, a 8’x 48” Harding type ball mill, a 8’ No. 24 Denver sub A type flotation machines, a 8’ disc filter, front end loaders,
tools and other equipment. The plant will be used for the processing of rock from Los Juarez, Soyatal, and other properties.
USAMSA MADERO SMELTER, ESTACION MADERO, PARRAS DE LA FUENTE, COAHUILA, MEXICO.
USAC, through its wholly owned subsidiary, USAMSA, owns and operates a smelting facility at Estacion Madero, in the Municipio of
Parras de la Fuente, Coahuila, Mexico. The property includes 13.48 hectares. Four furnaces are operating. Other equipment includes
cooling ducting, dust collectors, scrubber, laboratory, warehouse, slag vault, stack, jaw crusher, screen, hammer mill, and a 3.5’ x 8’
rod mill. The plant has a capacity of 40 to 100 tons per month. Currently, crude antimony oxide and meta is being made.
Concentrates and hand-sorted rock from Mexico and other areas is being processed. The Madero production is shipped to the
Montana plant to produce finished products. Access to the plant is by road and railroad. Set forth below are location maps:
14
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Zeolite Division
LOCATION
The property is located in the southeast corner of Idaho, approximately seven miles west of Preston, Idaho, 34 miles north of Logan,
Utah, 79 miles south of Pocatello, Idaho, and 100 miles north of Salt Lake City, Utah.
The mine is located in the N ½ of section 10 and the W ½ of section 2, section 3, and the E ½ section 4, Township 15, Range 40 East
of the Boise Meridian, Franklin County, Idaho. The plant and the initial pit is located on the Webster Farm, L.L.C., which is private
land.
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EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
TRANSPORTATION
The property is accessed by seven miles of paved road and about l mile of gravel road from Preston, Idaho. Preston is near the major
north-south Interstate Highway 15 to Salt Lake City or Pocatello.
Several Union Pacific rail sidings may be available to the mine. Bonida is approximately 25 miles west of the mine and includes
acreage out of town where bulk rock could be stored possibly in existing silos or on the ground. Three- phase power is installed at
this abandoned site. Finished goods could be shipped from the Franklin County Grain Growers feed mill in the town of Preston on
the Union Pacific.
The Burlington Northern Railroad can be accessed at Logan, Utah.
Location Map
16
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
17
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
PROPERTY AND OWNERSHIP
BRZ leases 320 acres from the Webster Farm, L.L.C. The term of the lease is 15 years and it began on March 1, 2010. This includes
the mill site and zeolite in the area of the open pit. The property is the NW ¼ and W ½ of the SW ¼ of section 3 and the N ½ of the W
¼ of section 10, Township 15 South, Range 40 East of the Boise Meridian, Franklin County, Idaho. The lease requires a payment of
$10.00 per ton plus an additional annual payment of $10,000 on March 1st of each year. In addition, there are two other royalty
holders. Nick Raymond and the estate of George Desborough have a graduated royalty of $1.00 per ton to $5.00 per ton, depending
on the sale price.
The balance of the property is on Bureau of Land Management property and includes 480 acres held by 24, 20-acre Placer claims.
Should we drop our lease with Webster Farms LLC., we will retain these placer claims as follows:
BRZ 1
BRZ 2
BRZ 3
BRZ 4
BRZ 5
BRZ 6
BRZ 7
BRZ 8
BRZ 9
BRZ 10
BRZ 11
BRZ 12
IMC 185308
IMC 185309
IMC 185310
IMC 185311
IMC 185312
IMC 185313
IMC 185314
IMC 185315
IMC 185316
IMC 185317
IMC 185318
IMC 185319
BRZ 20
BRZ 21
BRZ 22
BRZ 23
BRZ 24
BRZ 25
BRZ 26
BRZ 27
BRZ 28
BRZ 29
BRZ 30
BRZ 31
18
IMC 186183
IMC 186184
IMC 186185
IMC 186186
IMC 186187
IMC 186188
IMC 186189
IMC 186190
IMC 186191
IMC 186192
IMC 186193
IMC 186194
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
GEOLOGY
Placer Claims
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EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
GEOLOGY
The deposit is a very thick, sedimentary deposit of zeolitized volcanic ash of Tertiary age known as the Salt Lake Formation. The
sedimentary interval in which the clinoptilolite occurs is more than 1000 feet thick in the area. Thick intervals of the zeolite are
separated by thin limestone beds deposited in the freshwater lake where the volcanic ash accumulated.
The deposit includes an 800- foot mountain. Zeolite can be sampled over a vertical extent of 800 feet and on more than 700 acres.
The current pit covers more than 3 acres. Despite the apparent size of the deposit, we claim no reserves.
EXPLORATION, DEVELOPMENT, AND MINING
Exploration has been limited to the examination and sampling of surface outcrops and mine faces.
MINING METHODS
Depending on the location, the zeolite is overlain by 1 to 12 feet of zeolite-rich soil. On the ridges, the cover is very little, and in the
draws the soil is thicker. The overburden is stripped using a tractor dozer, currently a Caterpillar D 8 K. It is moved to the toe of the
pit, and will eventually be dozed back over the pit for reclamation.
Although near-surface rock is easily ripped, it is more economical to drill and blast it. An Ingersol Rand LM 200 air track with a 750
cfm compressor is used to drill 10- foot holes on a 3 to 4 foot center basis. Holes are loaded with ammonium nitrate and primed with
powder and non L primers. Breakage is generally good. Initial benches were 20 to 30 foot, but these will be divided into 50 foot
benches. Each bench is accessed by a road.
Loading is best performed with a Liehberr R 965 excavator with a 2 yard bucket to allow sorting of the oversize. Alternatively, a
Caterpillar 988A loader with a 6 cubic yard bucket is used. The benches are cleaned with the D 8 K.
Haulage is over approximately 4000 foot of road on an uphill grade of 2.5% to the mill. On higher benches, the grade will eventually
be downhill. Caterpillar 769 A and 769 B rock trucks are used. They haul 18 to 20 tons per load, and the cycle time is about 30
minutes.
With both trucks and the other existing equipment, the mine is capable of producing 80 tons per hour.
MILLING
PRIMARY CRUSHER
The primary crushing circuit is a conventional closed circuit, utilizing a Stephens-Adamson 42” x 12’ apron feeder, Pioneer 30” x 42”
jaw crusher, Nordberg standard 3’ cone crusher, a 5’ by 12’ double deck Kohlberg screen, and has a self-cleaning dust collector.
The rock is crushed to minus 1 inch and the circuit has a rated capacity of more than 50 tons per hour.
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DRYER
There are two dryer circuits, one for lines one and two and one for the Raymond mill. The dryer circuits include one 50 ton feed bin,
and each dryer has a conveyor bypass around each dryer, a bucket elevator, and a dry rock bin. The dryers are 25 feet long, 5 feet in
diameter and are fired with propane at 750,000 BTU’s of fuel. One self-cleaning bag house services both dryers. Depending on the
wetness of the feed rock, the capacity is in the range of 10 tph per dryer. During most of the year, the dryers are not run.
COARSE PRODUCTS CIRCUITS
There are two lines to produce coarse products: line 1 and line 2.
Line 1 is a closed circuit with a Philadelphia CXFOO16, 15 H.P. hammer mill and a 4’ x 8’ high frequency Midwestern MEV triple
deck screen. Line 2 include a Jeffries 30” by 24” 60 HP hammer mill in closed circuit with two 5’ x 12’ triple deck Midwestern Multi
Vibe high frequency screens. The circuits also include bucket elevators, (3) 125 ton capacity product silos, a 6 ton capacity Crust
Buster blender, augers, Sweco screens, and dust collectors.
FINE PRODUCTS CIRCUIT
The fine products circuit is in one building and it includes (2) 3.5’ x 10.5’ Derrick 2 deck high frequency (3450 RPM) screens and
various bucket elevators, augers, bins, and Sweco screens for handling product. Depending on the screening sizes, the plants can
generate approximately 150 tons of granules and 125 tons of fines per 24-hour day.
RAYMOND MILL CIRCUIT
The Raymond mill circuit includes a 6058 high-side Raymond mill with a double whizzer, dust collector, two 100 ton product silos,
feed bin, conveyors, air slide, bucket elevators, and control booth. The Raymond mill has a rated capacity of more than 10 tons per
hour.
ITEM 3. LEGAL PROCEEDINGS
USAC is not a party to any material pending legal proceedings, and no such proceedings are known to be contemplated.
No director, officer or affiliate of USAC and no owner of record or beneficial owner of more than 5.0% of our securities or any
associate of any such director, officer or security holder is a party adverse to USAC or has a material interest adverse to USAC in
reference to pending litigation.
ITEM 4. MINE SAFETY DISCLOSURES
Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”),
issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to
disclose in their periodic reports filed with the SEC information regarding specified health and safety violations, orders and citations,
related assessments and legal actions, and mining-related fatalities. During the years ended December 31, 2011, 2010 and 2009, we
had no material specified health and safety violations, orders or citations, related assessments or legal actions, mining-related
fatalities, or similar events in relation to our United States operations requiring disclosure pursuant to Section 1503(a) of the Dodd-
Frank Act.
21
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
PART II
Currently, our common stock is traded on the Over the Counter Bulletin Board ("OTCBB") under the symbol "UAMY.OB." The
following table sets forth the range of high and low bid prices as reported by the OTCBB for the periods indicated. The quotations
reflect inter-dealer prices without retail mark-up, mark-down or commission, and may not necessarily represent actual transactions.
2011
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
2010
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
2009
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
$
$
$
High
Low
1.90 $
4.10
3.45
3.32
High
Low
0.52 $
0.60
0.60
0.60
High
Low
0.35 $
0.45
0.55
0.55
0.41
1.56
2.05
1.85
0.32
0.40
0.32
0.36
0.10
0.20
0.25
0.36
The approximate number of holders of record of our common stock at March 15, 2012 is 2,500.
We have not declared or paid any dividends to our stockholders during the last five years and do not anticipate paying dividends on
our common stock in the foreseeable future. Instead, we expect to retain earnings for the operation and expansion of our business.
22
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
ITEM 6. SELECTED FINANCIAL DATA
December 31,
Balance Sheet Data:
Current assets
Property, plant, and equipment
Restricted cash
Other assets
Total assets
Current liabilities
Long-term debt
Stock payable to directors for services
Accrued reclamation costs
Deferred revenue - non-current
Total Liabilities
Shareholders' equity
Total liabilities and shareholders' equity
Income Statement Data:
Revenues
Cost of revenues
Operating expenses
Other (income) expense
Total expenses
Income (loss) before income taxes
Income tax benefit (expense)
Net income (loss)
Per Share Data
Net income (loss) per share:
Basic
Diluted
Weighted average shares outstanding:
Basic
Diluted
2011
2010
2009
2008
2007
$ 2,816,981 $ 1,848,825 $
503,037
2,777,116
65,736
-
$ 8,993,528 $ 5,862,902 $ 4,017,884 $ 3,271,114 $ 3,345,889
3,845,000
74,311
94,766
6,047,004
74,777
54,766
3,404,154
73,916
2,960,624
80,664
229,826 $
539,814 $
-
-
$ 1,595,433 $
784,322 $
82,407
158,218
230,004
241,500
848,443 $ 1,325,575 $ 1,850,139
19,711
54,541
98,710
-
107,500
640,000
2,617,350
728,539
$ 8,993,528 $ 5,862,902 $ 4,017,884 $ 3,271,114 $ 3,345,889
107,500
-
1,487,616
1,783,498
974,229
4,888,673
2,225,155
6,768,373
1,054,653
2,963,231
107,500
107,500
-
-
-
-
-
-
$ 13,118,090 $ 9,073,324 $ 4,103,340 $ 5,275,987 $ 5,259,127
11,443,892
782,667
149,001
12,375,560
7,699,592
950,163
111,356
8,761,111
3,734,294
605,232
58,657
4,398,183
5,014,007
641,749
(712,133)
4,943,623
5,287,430
545,279
50,110
5,882,819
742,530
(105,610)
636,920 $
312,213
493,000
805,213 $
(294,843)
-
(294,843) $
332,364
-
332,364 $
(623,692)
-
(623,692)
0.01 $
0.01 $
0.01 $
0.01 $
(0.01) $
(0.01) $
0.01 $
0.01 $
(0.02)
(0.02)
$
$
$
58,855,348
68,136,200
54,356,693
60,000,000
49,855,229
49,885,229
43,049,076
43,549,076
41,375,287
41,375,287
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EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
Certain matters discussed are forward-looking statements that involve risks and uncertainties, including the impact of antimony prices
and production volatility, changing market conditions and the regulatory environment and other risks. Actual results may differ
materially from those projected. These forward-looking statements represent our judgment as of the date of this filing. We disclaim,
however, any intent or obligation to update these forward-looking statements.
Results of Operations
Antimony - Combined USA and Mexico
Lbs of Antimony Metal
Sales Price/Lb Metal
Cost of Operations/Lb Metal
Gross Profit/Lb Metal
2011
2010
1,401,423
7.43
$
(6.79)
$
0.64
1,423,637
4.34
$
(4.04)
$
0.30
$
$
2009
974,356
2.59
(2.27)
0.32
$ 10,406,636
667,813
(8,477,151)
(199,515)
(402,521)
(439,249)
$
$ 6,174,062
483,307
(5,080,588)
(168,808)
(287,648)
(216,765)
$
903,560
$ 2,526,663
40,444
(1,742,990)
(71,929)
(168,019)
(232,005)
352,164
$ 1,556,013
12,105
168.83
$
(159.06)
$
9.76
15,319
157.71
$
(127.02)
$
30.69
11,519
133.37
(131.90)
1.47
$
$
$ 2,043,641
$ 2,415,955
(1,221,101)
(206,231)
(183,333)
(197,371)
(117,420)
$
118,185
$
(1,254,375)
(187,068)
(86,737)
(229,352)
(188,251)
$
470,172
$ 1,536,233
(830,065)
(190,523)
(137,883)
(202,736)
(158,144)
16,882
$ 9,073,324
$ 13,118,090
(11,443,892)
1,674,198
(782,667)
5,205
(154,206)
-
(105,610)
$
636,920
$
(7,699,592)
1,373,732
(950,163)
7,751
(119,107)
-
493,000
$
805,213
$ 4,103,340
(3,734,294)
369,046
(605,232)
(5,605)
(90,124)
37,072
-
(294,843)
Gross antimony revenue
Precious metals revenue
Production costs
Depreciation
Direct Sales and Freight
General and Administrative
Gross Profit - Antimony
Zeolite
Tons sold
Sales Price/Ton
Cost of Operations/Ton
Gross Profit/Ton
Gross Revenue
Production costs
Depreciation
Direct Sales and Freight
Royalties
General and Administrative
Gross Profit - Zeolite
Company-wide
Gross Revenue
Cost of Operations
Gross Profit (Loss)
Other Operating Expenses
Net Interest
Factoring Expense
Extinguishment of Payables
Income Tax Benefit (Expense)
Net income (Loss)
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EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Overview
Although we are expanding our operations in Mexico, as in prior years, we still remain dependent on our suppliers. We will remain
an antimony producer for the future, although we anticipate greater precious metals and zeolite revenue. We are commencing
production of our own raw materials from our mine in Mexico to ensure a steady flow of products for sale. Our mine at Los Juarez,
our Puerto Blanco mill, and our smelter at Madero, Mexico, will be producing a significant portion of our raw materials commencing
with the second quarter of 2012.
The production of concentrated smelter feed from our Mexico operations shipped to our Montana smelter for refining is expected to
allow us to produce more products for sale during the ensuing reporting periods. We expect to have a lower production cost and a
greater recovery of precious metals due to the increased smelter feed from Mexico.
Our principal smelter and precious metals recovery operation remains in Montana, as is our company headquarters. With increased
production, we expect to widen our base of customers.
Results of Operations
Comparison of Years ended December 31, 2011, 2010, and 2009. During the three year period ending December 31, 2011, the most
significant event affecting our financial performance was the increase in the price of antimony. During the year ending December 31,
2011, the most significant event was the commencement of production at our Mexico operations. During the year ending December
31, 2010, we recorded an impairment loss of $199,302, which is included in other operating expenses in the above table. Going
forward, the increased supply of raw material from Mexico, and the metal prices for both antimony and precious metals, will be the
most significant factors influencing our operations. The following are highlights of the significant changes during the three year
period:
· Our revenues from antimony increased in 2011 by 68% from 2010 primarily due to the increase in the price of antimony
metal. Revenues in 2010 were 144% greater than 2009 due to an increase in both the price of antimony metal and the amount
of antimony sold. Sales in 2009 were depressed due to the fact that the poor world economy caused our main supplier of
antimony to reduce its production, and we did not have enough raw materials to operate at full capacity.
· Our cost of goods sold for antimony during 2011 and 2010 increased by 65% and 159%, respectively. The increase in cost of
goods sold in 2011 was primarily due to the increase in the cost of our raw materials, and the increase in 2010 was due to the
increase in the price of metal and increased production. During both 2011 and 2010, costs of goods sold include production
costs from Mexico operations. The cost of goods sold during 2011 was impacted by an increase in the cost of operating
supplies, such as vehicle fuel, trucking, insurance, refractoring costs, repairs, steel, and propane.
· Our revenues from zeolite were up substantially in 2010 due to a contract for nuclear remediation with the Department of
Energy that was not ongoing in 2011.
· General and administrative costs, as reported in our statement of operations, include fees paid to directors through stock based
compensation. General and administrative costs for 2011 include general and administrative costs related to commencement of
production at our facilities in Mexico.
· The increase in professional fees was primarily due to increased costs related to our audits and financial statement preparation.
·
Factoring expense increased for each year in the three year reporting period because of increased revenue and greater
amounts of accounts receivable available for factoring.
· For the year ending December 31, 2010, we determined that it was likely that we would be profitable in the future, and that it
was appropriate to record a tax benefit of $493,000 for the value of tax losses from prior years that could be used to reduce
income tax in future periods. For the year ending 2011, this benefit was reduced by $105,610 for tax expenses due to taxable
income in that year.
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EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Subsidiaries
The Company has a 100% investment in two subsidiaries in Mexico, USAMSA and AM, whose carrying value was assessed at
December 31, 2011 for impairment. Management’s assessment of the subsidiaries’ fair value was based on their future benefit to
us. During fiscal year 2010 USAMSA was forced to relocate to a new mill site, causing an impairment of approximately $200,000.
Financial Condition and Liquidity
Current Assets
Current liabilities
Net Working Capital
Cash provided (used) by operations
Cash (used) by investing
Cash provided (used) by financing:
Principal paid on long-term debt
Sale of Stock
Other
Net change in cash
2011
$ 2,816,981
2010
$ 1,848,825
(1,595,433)
$
(784,322)
$
$ 1,221,548
$ 1,064,503
2009
539,814
(848,443)
(308,629)
$
$
564,041
(2,239,441)
$
307,350
(965,919)
(358,187)
(590,815)
(124,722)
1,242,780
113,908
(443,434) $
(59,270)
1,003,229
(17,142)
$
268,248
(56,669)
1,135,576
(3,140)
126,765
$
Our financial condition and liquidity improved each year for the three years ended December 31, 2011. This was due to an increase
in our cash provided by operations and the sale of stock each year. We used most of our resources from operating cash flows and
the sale of stock to complete its’ mine, mill, and smelter production facility in Mexico. The majority of the Mexico plant has been
completed, and will not require the cash resources needed in prior years. We expect to maintain a positive net working capital in
future periods.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our earnings and cash flow are significantly affected by changes in the price of antimony. The price of antimony can fluctuate widely
and is influenced by numerous factors such as demand, production levels, and world political and economic events. During the past
ten years, the price of antimony metal has ranged from a low of $.88 per pound to a high of $6.97 per pound. Because a large part of
our cost of revenues/production is the cost to purchase antimony metal, our production costs do decrease as the price of antimony
decreases. We would still see significant decreases in gross revenues, gross profits, net income, and cash flow if the price of
antimony were to decrease substantially.
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EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
ITEM 8. FINANCIAL STATEMENTS
The consolidated financial statements of the registrant are included herein on pages F1-F21.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of disclosure controls and procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports
under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the
SEC’s rules and forms, and that such information is accumulated and communicated to management, as appropriate, to allow timely
decisions regarding required disclosure. Our president, who serves as the chief accounting officer, conducted an evaluation of the
effectiveness of USAC’s disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and
15d-15(e)) as of December 31, 2011. Based upon this evaluation, it was determined that there were material weaknesses affecting
our internal control over financial reporting (described below) and, as a result of those weaknesses, our disclosure controls and
procedures were ineffective as of December 31, 2011.
Internal control over financial reporting
Management's annual report on internal control over financial reporting
The management of USAC is responsible for establishing and maintaining adequate internal control over financial reporting. This
internal control system has been designed to provide reasonable assurance to our management and Board of Directors regarding the
preparation and fair presentation of our published financial statements.
All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be
effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
The management of USAC has assessed the effectiveness of our internal control over financial reporting as of December 31, 2011.
To make this assessment, we used the criteria for effective internal control over financial reporting described in Internal Control-
Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
27
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
As a result of our assessment, we concluded that we have material weaknesses in our internal control over financial reporting as of
December 31, 2011. These weaknesses are as follows:
•
•
Inadequate design of internal control over the preparation of the financial statements and over other significant accounts and
financial reporting processes;
Inadequate documentation of controls and monitoring of internal controls over significant accounts and processes including
controls associated with the period-end financial reporting process;
• The absence of proper segregation of duties within significant accounts and processes and the absence of controls over
management oversight, including antifraud programs and controls; and
• The absence of controls over the selection and application of accounting principles that are in conformity with generally
accepted accounting principles and the sufficient expertise in selecting and applying generally accepted accounting principles,
including controls over non-routine transactions and controls over the period-end financial reporting process.
We are aware of these material weaknesses and will develop procedures to ensure that independent review of material transactions
is performed. With the addition of a chief financial officer, we will develop internal control measures to mitigate the lack of segregation
of duties. We plan to consult with independent experts when complex transactions are entered into.
Because these material weaknesses exist, management has concluded that our internal control over financial reporting as of
December 31, 2011, is ineffective.
Our internal control over financial reporting as of December 31, 2011 has been audited by DeCoria, Maichel & Teague, P.S., an
independent registered public accounting firm, as stated in the attestation report which is included herein.
Changes in internal control over financial reporting
During the quarter ended December 31, 2011, the we hired a Certified Public Accountant to be the Chief Financial Officer. As Chief
Financial Officer, he will oversee the preparation of our quarterly and annual financial statements and SEC filings. He will assist the
Controller in application of generally accepted accounting principles as necessary, and will work on special projects as directed by the
Board of Directors and management.
28
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of United States Antimony Corporation:
We have audited United States Antimony Corporation’s internal control over financial reporting as of December 31, 2011, based on
criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). United States Antimony Corporation’s management is responsible for maintaining effective internal control over
financial reporting and for assessing of the effectiveness of internal control over financial reporting, included in the Item 9A,
Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the
company’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over
financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and
evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing
such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for
our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of
the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could
have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes
in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
A material weakness is a control deficiency, or combination of deficiencies, in internal control over financial reporting, such that there
is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented
or detected on a timely basis. The following material weaknesses have been identified and included in management’s assessment:
·
·
Inadequate design of internal control over the preparation of the financial statements and over other significant accounts and
financial reporting processes;
Inadequate documentation of controls and monitoring of internal controls over significant accounts and processes including
controls associated with the period-end financial reporting process;
· The absence of proper segregation of duties within significant accounts and processes and the absence of controls over
management oversight, including antifraud programs and controls; and
· The absence of controls over the selection and application of accounting principles that are in conformity with generally
accepted accounting principles and the sufficient expertise in selecting and applying generally accepted accounting principles,
including controls over non-routine transactions and controls over the period-end financial reporting process.
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
29
The effect of these material weaknesses resulted in the identification of material misstatements during our audit of the financial
statements for the year ended December 31, 2011 which were not initially identified by the Company’s internal controls.
These material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the
2011 consolidated financial statements, and this report does not affect our report dated March 12, 2012 on those financial
statements.
In our opinion, United States Antimony Corporation did not maintain effective internal control over financial reporting as of December
31, 2011, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the
consolidated balance sheets of United States Antimony Corporation as of December 31, 2011 and 2010, and the related consolidated
statements of operations, changes in stockholders’ equity and cash flows for each of the three years in the period ended December
31, 2011, and our report dated March 12, 2011 expressed an unqualified opinion thereon.
DeCoria, Maichel & Teague, P.S.
Spokane, Washington
March 12, 2012
ITEM 9B. OTHER INFORMATION
We file the following reports with the Securities and Exchange Commission, or SEC:
·
·
·
Form 10K Annual Report Under Section 13 or 15(d) of the Securities and Exchange Act of 1934
Form 10Q Quarterly Report Under Section 13 or 15(d) of the Securities and Exchange Act of 1934
Form 8K Current Report Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
The public may read and copy any materials that we file with SEC at the SEC’s Public Reference Room at 100 F Street, NE,
Washington, Dc 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-
800-SEC-0330. We file electronically with the SEC. The SEC maintains an internet site (http:/www.sec.gov), that contains reports,
proxy and information statements, and other information regarding issuers that file electronically.
Our internet address is www.usantimony.com. Our annual report on Form 10K, quarterly report on Form 10Q, current reports on
Form 8K, and any amendments to these reports is available, free of charge, as soon as practicable after such material is
electronically filed with the SEC.
On February 9, 2012, as reported on SEC Form 8K, the Company accepted the resignation of Patrick W. Dugan, Esq., from the
Board of Directors. Mr. Whitney Ferer was appointed to the Board of Directors in place of Mr. Dugan on February 22, 2012.
On January 7, 2012, the Company issued 1,102,500 shares of common stock at a price of $2.00 per share. Each share is
accompanied by a warrant to purchase an additional share for $2.50 for two years.
30
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS, COMPLIANCE WITH SECTION
16(A) OF THE EXCHANGE ACT
Identification of directors and executive officers at December 31, 2011, is as follows:
Name
Age
Affiliation
Expiration of Term
John C. Lawrence
John C. Gustavsen
Chairman, President, and Treasurer;
Director
73
Annual meeting
63 First Vice-President
Annual meeting
Russell C. Lawrence
43 Second Vice-President
Annual meeting
Matthew Keane
Daniel L. Parks
Alicia Hill
Leo Jackson
Gary D. Babbitt
Patrick W. Dugan, Esq.
Russell C. Lawrence
Hart W. Baitis
57 Third Vice-President
Annual meeting
63 Chief Financial Officer
Annual meeting
30 Secretary and Controller
Annual meeting
70 Director
66 Director
59 Director
43 Director
62 Director
Annual meeting
Annual meeting
Annual meeting
Annual meeting
Annual meeting
Business Experience of Directors and Executive Officers
John C. Lawrence. Mr. Lawrence has been the president and a director since our inception. Mr. Lawrence was the president and a
director of AGAU Mines, Inc., our corporate predecessor, since the inception of AGAU Mines, Inc. in 1968. He is a member of the
Society of Mining Engineers and a recipient of the Uuno Sahinen Silver Medallion Award presented by Butte Tech, University of
Montana. He has a vast background in mining, milling, smelting, chemical processing and oil and gas.
Leo Jackson. Mr. Jackson is a resident of El Paso, Texas. For the past 18 years, he has been a principal owner and the president
of Production Minerals, Inc. Mr. Jackson is one of the principal owners of Minera de Roja, S.A. de C.V., and has been involved in the
production and marketing of industrial minerals such as fluorspar and celestite in the United States and Mexico for 27 years. Mr.
Jackson speaks fluent Spanish and has a BBA degree from the Sul Ross State University in Texas.
Gary D. Babbitt. Mr. Babbitt has experience in mining industry with approximately 30 years dealing with joint ventures, purchases,
royalty leases and contracts. He has a working knowledge of Spanish and has negotiated supply and mining agreements in
Mexico. Mr. Babbitt has a B.A. from the Albertson College of Idaho, and earned his J.D. from the University of Chicago.
Patrick W. Dugan, Esq. Mr. Dugan has been a Director, Vice President and General Counsel of Nortex Corporation, a company
involved in the oil and gas business, for the past 20 years. He is also a Director, Vice President and General Counsel of San Luis
Development, L.P., and a Director of Gow Communications, LLC. Mr. Dugan graduated with a B.A. and a J.D. from the University of
Texas at Austin.
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EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Russell C. Lawrence. Mr. Lawrence has experience in the lines of applied physics, mining, refining, excavation, electricity,
electronics, and building contracting. He graduated from the University of Idaho in 1994 with a degree in physics, and worked for the
Physics Department at the University of Idaho for a period of 10 years. He has also worked as a building contractor and for USAC at
the smelter and laboratory at Thompson Falls, for USAMSA in the construction and operation of the USAMSA smelter in Mexico, and
for Antimonio de Mexico, S. A. de C. V. at the San Miguel Mine and the Cadereyta mill site in Mexico.
Hart W. Baitis. Mr. Baitis graduated from the University of Oregon in 1971 with a B.S. in Geology, and was awarded a Ph. D. in
Geology in 1976. He has 35 years of experience as an exploration geologist in the United States, Canada, Central America, and
Mexico. Mr. Baitis is experienced in numerous geologic environments and terrains, and has been involved in all phases of
exploration, ranging from field geologist, consultant, management, and acquisition team director.
Daniel L. Parks. Mr. Parks graduated from the University of Idaho in 1974 with a B.S. in Accounting, and was licensed as a certified
public accountant in 1976. He worked as an auditor for Coopers & Lybrand for three years, as controller for a lumber manufacturing
company for one year, and owned his own accounting practice for thirty years. Mr. Parks was extensively involved in auditing and
financial statement preparation during this time.
We are not aware of any involvement by our directors or executive officers during the past five years in legal proceedings that are
material to an evaluation of the ability or integrity of any director or executive officer.
Board Meetings and Committees. Our Board of Directors held four (4) regular meetings during the 2011 calendar year. Each
incumbent director, except Patrick W. Dugan, attended all of the meetings held during the 2011 calendar year, in the aggregate, by
the Board and each committee of the Board of which he was a member. Our Board of Directors does not have a Compensation
Committee or a Nominating Committee.
Our Board of Directors established an Audit Committee on December 10, 2011, consisting of three members, Gary Babbitt
(Chairman), Leo Jackson, and Hart Baitis. None of the Audit Committee members are involved in our day-to-day financial
management. Leo Jackson and Hart Baitis are considered financial experts.
Board Member Compensation. We paid directors' fees in the form of 26,000 shares of our common stock per director during
2010. In January of 2012, we issued the directors 149,500 shares, of which 95,835 shares were for services during 2011. The
remaining shares will be part of the directors’ compensation for 2012. Following is a summary of fees, cash
payments, stock awards, and other reimbursements to Directors during the year ended December 31, 2011.
Total Fees,
Salary,
Awards, and
Other
Compensation
126,000
87,233
77,084
124,859
62,327
29,999
40,001
547,503
$
47,232 $
1,083 $
24,858 $
22,326 $
$
$
95,499 $
Stock
Awards
Reimbursed
Expenses
40,001 $
40,001 $
40,001 $
40,001 $
29,999
40,001
230,004 $
Name and Principal Position
John C. Lawrence, President
John C. Lawrence,Chairman
Gary D. Babbitt, Director
Leo Jackson, Director
Russell Lawrence, Director
Hartmut Baitis, Director
Patrick Dugan, Director
Totals
Payments to Directors
Fees Earned
or
paid in Cash
Salary
$
$
$
36,000
60,000
$
$
96,000 $
126,000
$
$
$
85,000 $
$
$
126,000 $
32
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Section 16(a) Beneficial Ownership Reporting Compliance. Section 16(a) of the Securities Exchange Act of 1934 requires our
directors and executive officers and the holders of 10% or more of our common stock to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers, directors and stockholders holding more than 10% of our
common stock are required by the regulation to furnish us with copies of all Section 16(a) forms they have filed. Based solely on our
review of copies of Forms 3, 4 and 5 furnished to us, Mr. Lawrence, Mr. Jackson, Mr. Babbitt, Mr. Dugan and Mr. Lawrence did not
file timely Forms 3, 4 or Form 5 reports during 2010 or 2011.
Code of Ethics
The Company has adopted a Code of Ethics that applies to the Company's executive officers and its directors. The Company will
provide, without charge, a copy of the Code of Ethics on the written request of any person addressed to the Company at: United
States Antimony Corporation, P.O. Box 643, Thompson Falls, MT 59873.
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
The Securities and Exchange Commission requires the following table setting forth the compensation paid by USAC to its principal
executive officer for fiscal years ending December 31, 2011, 2010, and 2009.
Annual Compensation
Long-Term Compensation
Year
Salary
Bonus
Awards
Payouts
Other Annual
Compensation
(1)
Restricted
Options/Awards(2)
Securities
underlying
LTIP SARS
All Other
Payouts
All Other
Compensation
2011 $ 126,000 N/A $
5,538
None $ 86,058
None
2010 $ 102,500 N/A $
5,538 $
13,520
None $ 129,177
None
2009 $ 100,000 N/A $
5,538 $
6,500
None $ 102,049
None
Name and Principal
Position
John C. Lawrence,
President
John C. Lawrence,
President
John C. Lawrence,
President
(1)
(2)
Represents earned but unused vacation.
These figures represent the fair values, as of the date of issuance, of the annual director's fee payable to Mr. Lawrence in the
form of shares of USAC's common stock.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding beneficial ownership of our common stock as of March 25, 2011, by (i) each
person who is known by us to beneficially own more than 5% of our Series A, C, and D preferred stock or common stock; (ii) each of
our executive officers and directors; and (iii) all of our executive officers and directors as a group. Unless otherwise stated, each
person's address is c/o United States Antimony Corporation, P.O. Box 643, 1250 Prospect Creek Road, Thompson Falls, Montana
59873.
33
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Title of Class
Name and Address of
Beneficial Owner(1)
Amount and Nature of
Beneficial Ownership
Percent of
Class(1)
Common stock
Reed Family Limited Partnership
3,918,335
328 Adams Street
Milton, MA 02186
Common stock
The Dugan Family
6,362,927(3)
c/o A. W. Dugan
1415 Louisiana Street, Suite 3100
Houston, TX 77002
Richard A. Woods
59 Penn Circle West
Penn Plaza Apts.
Pittsburgh, PA 15206
Dr. Warren A. Evans
Brooklyn, CT 06234
Edward Robinson
1007 Spruce Street 1st Floor
Philadelphia, PA 19107
John C. Lawrence
Pat Dugan
Russ Lawrence
Leo Jackson
Gary Babbitt
Daniel Parks
Series C Preferred
Series C Preferred
Series C Preferred
Common stock
Common stock
Common stock
Common stock
Common stock
Common stock
Series D Preferred
Series D Preferred
John C. Lawrence
Leo Jackson
48,305(4)
48,305(4)
32,203(4)
4,103,653(2)
156,000
156,000
292,000
134,167
4,500
1,590,672(4)
102,000
7
11
27
27
18
7
Nil
Nil
Nil
Nil
Nil
91
5
Series D Preferred
All directors and executive officers as a
100
group (3 persons)
(1)
(2)
(3)
(4)
Beneficial Ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally
includes voting or investment power with respect to securities. Shares of common stock subject to options or warrants currently
exercisable or convertible, or exercisable or convertible within 60 days of March 15, 2012, are deemed outstanding for
computing the percentage of the person holding options or warrants but are not deemed outstanding for computing the
percentage of any other person. Percentages are based on a total of 56,307,382 shares of common stock, 177,904 shares of
Series C Preferred Stock, and 1,751,005 shares of Series D Preferred Stock outstanding on March 15, 2012.
Includes 3,801,653 shares of common stock and 250,000 stock purchase warrants. Excludes 183,324 shares owned by Mr.
Lawrence's sister, as to which Mr. Lawrence disclaims beneficial ownership.
Includes shares owned by Al W. Dugan and shares owned by companies owned and controlled by Al W. Dugan. Excludes
183,333 shares owned by Lydia Dugan as to which Mr. Dugan disclaims beneficial ownership.
The outstanding Series A, Series C and Series D preferred shares carry voting rights.
34
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Described below are transactions during the last three years to which we are a party and in which any director, executive officer or
beneficial owner of five percent (5%) or more of any class of our voting securities or relatives of our directors, executive officers or
five percent (5%) beneficial owners has a direct or indirect material interest. See also transactions described in notes 4, 9, 10, 11,
12, 15 and 19 to our Financial Statements as of December 31, 2011.
During 2009, John C. Lawrence, a director and Chief Executive Officer, converted a $100,000 note receivable into 500,000 shares of
common stock and exercised warrants for 1,000,000 shares of common stock in exchange for the forgiveness of $200,000 of related
party payables and accrued interest.
We reimbursed John C. Lawrence, a director and Chief Executive Officer, for operational and maintenance expenses incurred in
connection with our use of equipment owned by Mr. Lawrence, including welding trucks, backhoes, and an aircraft. Reimbursements
for 2011, 2010 and 2009 totaled $47,232, $53,932 and $100,150, respectively.
During 2011, the Company awarded 95,835 shares of its common stock to its Board of Directors as compensation for their services as
directors. In connection with the issuances, the Company recorded $230,004 in director compensation expense. The shares were
issued in January of 2012.
During 2010, the Company issued 130,000 of its common stock to its Board of Directors as compensation for their services as
directors. In connection with the issuances, the Company recorded $67,600 in director compensation expense.
During 2009, the Company issued 130,000 of its common stock to its Board of Directors as compensation for their services as
directors. In connection with the issuances, the Company recorded $65,000 in director compensation expense.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The Company's Board of Directors and audit committee reviews and approves audit and permissible non-audit services performed by
DeCoria, Maichel & Teague P.S., as well as the fees charged by DeCoria, Maichel & Teague P.S. for such services. In its review of
non-audit service fees and its appointment of DeCoria, Maichel & Teague P.S. as the Company's independent accountants, the Board
of Directors considered whether the provision of such services is compatible with maintaining DeCoria, Maichel & Teague P.S.
independence. All of the services provided and fees charged by DeCoria, Maichel & Teague P.S. in 2011 were pre-approved by the
Board of Directors and its audit committee.
Audit Fees
The aggregate fees billed by DeCoria, Maichel & Teague P.S. for professional services for the audit of the annual financial statements
of the Company and the reviews of the financial statements included in the Company's quarterly reports on Form 10-Q for 2011, 2010
and 2009 were $102,728, $73,976 and $64,888, respectively, net of expenses.
Audit-Related Fees
There were no other fees billed by DeCoria, Maichel & Teague P.S. during the last three fiscal years for assurance and related
services that were reasonably related to the performance of the audit or review of the Company's financial statements and not
reported under "Audit Fees" above.
Tax Fees
The aggregate fees billed by DeCoria, Maichel & Teague P.S. during the last two fiscal years for professional services rendered by
DeCoria, Maichel & Teague P.S. for tax compliance for 2011, 2010 and 2009 were $7,408, $5,236 and $5,433 respectively.
All Other Fees
There were no other fees billed by DeCoria, Maichel & Teague P.S. during the last two fiscal years for products and services provided
by DeCoria, Maichel & Teague P.S
35
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
ITEM 15. EXHIBITS AND REPORTS ON FORM 8-K
Exhibit
Number
Description
3.01
3.02
Articles of Incorporation of USAC, filed as an exhibit to USAC's Form 10-KSB for the fiscal year ended December 31,
1995 (File No.001-08675), are incorporated herein by this reference.
Amended and Restated Bylaws of USAC, filed as an exhibit to amendment No. 2 to USAC's Form SB-2 Registration
Statement (Reg. No. 333-45508) are incorporated herein by this reference.
3.03
Articles of Correction of Restated Articles of Incorporation of USAC.
3.04
4.01
Articles of Amendment to the Articles of Incorporation of United States Antimony Corporation, filed as an exhibit to
USAC's Form 10-QSB for the quarter ended September 30, 2002 (File No. 001-08675), are incorporated herein by this
reference.
Key Employees 2000 Stock Plan, filed as an exhibit to USAC's Form S-8 Registration Statement filed on March 10,
2000 (File No. 333-32216) is incorporated herein by this reference.
Documents filed with USAC's Annual Report on Form 10-KSB for the year ended December 31, 1995 (File No. 001-08675), are
incorporated herein by this reference:
10.10
Yellow Jacket Venture Agreement
10.11
Agreement Between Excel-Mineral USAC and Bobby C. Hamilton
10.12
Letter Agreement
10.13
Columbia-Continental Lease Agreement Revision
10.14
Settlement Agreement with Excel Mineral Company
10.15
Memorandum Agreement
10.16
Termination Agreement
10.17
Amendment to Assignment of Lease (Geosearch)
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EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
10.18
Series B Stock Certificate to Excel-Mineral Company, Inc.
10.19
Division Order and Purchase and Sale Agreement
10.20
Inventory and Sales Agreement
10.21
Processing Agreement
10.22
Release and settlement agreement between Bobby C. Hamilton and United States Antimony Corporation
10.23
Columbia-Continental Lease Agreement
10.24
Release of Judgment
10.25
Covenant Not to Execute
10.26
10.27
10.28
10.30
Warrant Agreements filed as an exhibit to USAC's Annual Report on Form 10-KSB for the year ended December 31,
1996 (File No. 001-08675), are incorporated herein by this reference
Letter from EPA, Region 10 filed as an exhibit to USAC's Quarterly Report on Form 10-QSB for the quarter ended
September 30, 1997 (File No. 001-08675) is incorporated herein by this reference
Warrant Agreements filed as an exhibit to USAC's Annual Report on Form 10-KSB for the year ended December 31,
1997 (File No. 001-08675) are incorporated herein by this reference
Answer, Counterclaim and Third-Party Complaint filed as an exhibit to USAC's Quarterly Report on Forms 10-QSB for
the quarter ended September 30, 1998 (File No. 001-08675) is incorporated herein by this reference
Documents filed with USAC's Annual Report on Form 10-KSB for the year ended December 31, 1998 (File No. 001-08675), are
incorporated herein by this reference:
10.31
Warrant Issue-Al W. Dugan
10.32
Amendment Agreement
Documents filed with USAC's Quarterly Report on Form 10-QSB for the quarter ended March 31, 1999 (File No. 001-08675) is
incorporated herein by this reference:
10.33
Warrant Issue-John C. Lawrence
10.34
PVS Termination Agreement
37
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Documents filed as an exhibit to USAC's Form 10-KSB for the year ended December 31, 1999 (File No. 001-08675) are incorporated
herein by this reference:
10.35
Maguire Settlement Agreement
10.36
Warrant Issue-Carlos Tejada
10.37
Warrant Issue-Al W. Dugan
10.38
Memorandum of Understanding with Geosearch Inc.
10.39
Factoring Agreement-Systran Financial Services Company
10.40
Mortgage to John C. Lawrence
10.41
10.42
10.43
10.44
10.45
10.46
Warrant Issue-Al W. Dugan filed as an exhibit to USAC's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 2000 (File No. 001-08675) is incorporated herein by this reference
Agreement between United States Antimony Corporation and Thomson Kernaghan & Co., Ltd. filed as an exhibit to
USAC form 10-QSB for the quarter ended June 30, 2000 (File No. 001-08675) are incorporated herein by this reference
Settlement agreement and release of all claims between the Estate of Bobby C. Hamilton and United States Antimony
Corporation filed as an exhibit to USAC form 10-QSB for the quarter ended June 30, 2000 (File No. 001-08675) are
incorporated herein by this reference.
Supply Contracts with Fortune America Trading Ltd. filed as an exhibit to USAC form 10-QSB for the quarter ended
June 30, 2000 (File No. 001-08675) are incorporated herein by this reference
Amended and Restated Agreements with Thomson Kernaghan & Co., Ltd, filed as an exhibit to amendment No. 3 to
USAC's Form SB-2 Registration Statement (Reg. No. 333-45508), are incorporated herein by this reference
Purchase Order from Kohler Company, filed as an exhibit to amendment No. 4 to USAC's Form SB-2 Registration
Statement (Reg. No. 333-45508) are incorporated herein by this reference
38
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Documents filed as an exhibit to USAC's Form 10-QSB for the quarter ended June 30, 2002 (File No. 001-08675) are incorporated
herein by this reference:
10.47
Bear River Zeolite Company Royalty Agreement, dated May 29, 2002
10.48
Grant of Production Royalty, dated June 1, 2002
10.49
Assignment of Common Stock of Bear River Zeolite Company, dated May 29, 2002
10.50
Agreement to Issue Warrants of USA, dated May 29, 2002
10.51
Secured convertible note payable - Delaware Royalty Company dated December 22, 2003*
10.52
Convertible note payable - John C. Lawrence dated December 22, 2003*
10.53
Pledge, Assignment and Security Agreement dated December 22, 2003*
10.54
Note Purchase Agreement dated December 22, 2003*
14.0
Code of Ethics*
31.1
32.1
44.1
Rule 13a-14(a)/15d-14(a) Certifications
Certification of John C. Lawrence*
Section 1350 Certifications
Certification of John C. Lawrence*
CERCLA Letter from U.S. Forest Service filed as an exhibit to USAC form 10-QSB for the quarter ended June 30, 2000
(File No. 001-08675) are incorporated herein by this reference and filed as an exhibit to USAC's Form 10-KSB for the
year ended December 31, 1995 (File No. 1-8675) is incorporated herein by this reference
__________________
* Filed herewith.
Reports on Form 8-K
39
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
ITEM 5. OTHER EVENTS - OCTOBER 10, 2003
Exhibit 21.01
Subsidiaries of Registrant, as of December 31, 2011
Bear River Zeolite Company
C/o Box 643
Thompson Falls, MT 59873
Antimonio de Mexico S.A. de C.V.
C/o Box 643
Thompson Falls, MT 59873
United States Antimony, Mexico S.A. de C.V.
C/o Box 643
Thompson Falls, MT 59873
40
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Pursuant to the requirements of Section 13 or 15(b) of the Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
UNITED STATES ANTIMONY CORPORATION
(Registrant)
By: John C. Lawrence, President, Director,
and Principal Executive Officer
By: Daniel L. Parks, Chief Financial Officer
Date: March 15,
2012
Date: March 15,
2012
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates indicated.
By: John C. Lawrence, Director and President
(Principal Executive)
By: Leo Jackson, Director
By: Gary D. Babbitt, Director
By: Patrick Dugan, Director
By: Russell Lawrence, Director
41
Date: March 15,
2012
Date: March 15,
2012
Date: March 15,
2012
Date: March 15,
2012
Date: March 15,
2012
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of United States Antimony Corporation:
We have audited the accompanying consolidated balance sheets of United States Antimony Corporation (“the Company”) as of
December 31, 2011 and 2010, and the related consolidated statements of operations, changes in stockholders’ equity and cash flows
for each of the three years in the period ended December 31, 2011. These consolidated financial statements are the responsibility of
the Company’s management. Our responsibility is to express an opinion on the consolidated financial statements based on our
audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated
financial position of United States Antimony Corporation as of December 31, 2011 and 2010, and the results of its consolidated
operations and cash flows for each of the three years in the period ended December 31, 2011, in conformity with accounting
principles generally accepted in the United States of America.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), United
States Antimony Corporation’s internal control over financial reporting as of December 31, 2011, based on criteria established in
Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)
and our report dated March 12, 2012 expressed an adverse opinion thereon.
DeCoria, Maichel & Teague, P.S.
Spokane, Washington
March 12, 2012
F-1
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
United States Antimony Corporation and Subsidiaries
Consolidated Balance Sheets
December 31, 2011 and 2010
ASSETS
Current assets:
Cash and cash equivalents
Accounts receivable, less allowance
for doubtful accounts of $7,600 both years
Inventories
Other current assets
Deferred tax asset
Total current assets
Properties, plants and equipment, net
Restricted cash for reclamation bonds
Other assets
Total assets
Current liabilities:
Checks issued and payable
Accounts payable
Accrued payroll, taxes and interest
Other accrued liabilities
Payables to related parties
Deferred revenue
Long-term debt, current
Total current liabilities
LIABILITIES AND STOCKHOLDERS' EQUITY
Long-term debt, net of current portion
Stock payable to directors for services
Asset retirement and accrued reclamation costs
Total liabilities
Commitments and contingencies (Note 3 and 12)
Stockholders' equity:
Preferred stock $0.01 par value, 10,000,000 shares authorized:
Series A: -0- shares issued and outstanding
Series B: 750,000 shares issued and outstanding
(liquidation preference $877,500 and $870,000,
respectively)
Series C: 177,904 shares issued and outstanding
(liquidation preference $97,847 both years)
Series D: 1,751,005 shares issued and outstanding
(liquidation preference $4,714,433 and $4,673,284,
respectively)
Common stock, $0.01 par value, 90,000,000 shares authorized;
59,349,300 and 56,307,382 shares issued and outstanding, respectively
Stock subscriptions receivable
Additional paid-in capital
Accumulated deficit
Total stockholders' equity
Total liabilities and stockholders' equity
The accompanying notes are an integral part of the consolidated financial statements
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
F-2
2011
2010
$
5,427 $
448,861
1,291,975
1,066,813
56,208
396,558
2,816,981
745,418
143,291
18,255
493,000
1,848,825
6,047,004
74,777
54,766
3,845,000
74,311
94,766
$ 8,993,528 $ 5,862,902
$
113,908 $
994,940
141,928
119,292
101,974
43,760
79,631
1,595,433
158,218
230,004
241,500
2,225,155
-
410,242
90,503
220,128
18,060
-
45,389
784,322
82,407
-
107,500
974,229
-
-
7,500
7,500
1,779
1,779
17,509
17,509
593,492
-
563,073
(82,563)
24,505,331
25,635,129
(19,487,036) (20,123,956)
4,888,673
$ 8,993,528 $ 5,862,902
6,768,373
United States Antimony Corporation and Subsidiaries
Consolidated Statements of Operations
For the years ended December 31, 2011, 2010 and 2009
REVENUES
COST OF REVENUES
GROSS PROFIT
OPERATING EXPENSES:
General and administrative
Professional fees
Gain on disposal of property
Impairment of properties, plants and equipment
TOTAL OPERATING EXPENSES
2011
2010
2009
$ 13,118,090 $ 9,073,324 $ 4,103,340
11,443,892
7,699,592
3,734,294
1,674,198
1,373,732
369,046
577,763
204,904
-
-
782,667
592,708
152,357
-
199,302
944,367
532,744
121,588
(49,100)
-
605,232
INCOME (LOSS) FROM OPERATIONS
891,531
429,365
(236,186)
OTHER INCOME (EXPENSE):
Interest income
Interest expense
Factoring expense
Extinguishment of payables
TOTAL OTHER INCOME (EXPENSE)
5,205
-
(154,206)
-
(149,001)
7,751
(5,796)
(119,107)
-
(117,152)
-
(5,605)
(90,124)
37,072
(58,657)
INCOME (LOSS) BEFORE INCOME TAXES
742,530
312,213
(294,843)
INCOME TAXES:
Income tax (expense) - current
Income tax (expense) benefit - deferred
TOTAL INCOME TAXES
NET INCOME (LOSS)
Preferred dividends
Net income (loss) available to
common shareholders
Net income (loss) per share of
common stock:
Basic
Diluted
Weighted average shares outstanding:
Basic
Diluted
(9,168)
(96,442)
(105,610)
-
493,000
493,000
-
-
-
636,920
(48,649)
805,213
(48,648)
(294,843)
(48,649)
$
588,271 $
756,565 $
(343,492)
$
$
0.01
0.01
$
$
0.01
0.01
$
$
(0.01)
(0.01)
58,855,348 54,356,693 49,855,229
68,136,200 60,000,000 49,855,229
The acompanying notes are an integral part of the consolidated financial statements
F-3
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
United States Antimony Corporation and Subsidiaries
Consolidated Statements of Changes in Stockholders' Equity (Deficit)
For the years ended December 31, 2011, 2010, and 2009
Total Preferred Stock
Common Stock
Stock
Subscriptions
Additional
Paid
Accumulated
Balances, December 31,
2008
Issuance of common
stock and warrants
Payment received for
outstanding stock
subscriptions
Conversion of outstanding
related party payable into
common stock
Issuance of common
stock to Directors for
services
Net loss
Balances, December 31,
2009
Issuance of common
stock and warrants for
cash
Payment received for
outstanding stock
subscriptions
Write off of uncollectible
stock subscriptions
Issuance of common
stock to Directors for
services
Net income
Balances, December 31,
2010
Issuance of common
stock for cash
Payment received for
outstanding stock
subscriptions
Net income
Balances, December 31,
2011
Shares
Amount
Shares
Amount
Receivable
In Capital
Deficit
Total
2,678,909 $26,788 45,868,535 $458,688 $
(83,333) $22,015,681 $(20,634,326) $1,783,498
5,600,234 55,999
(200,000) 1,266,244
1,122,243
13,333
13,333
1,500,000 15,000
285,000
300,000
130,000
1,300
37,700
39,000
(294,843)
(294,843)
2,678,909 26,788 53,098,769 530,987
(270,000) 23,604,625 (20,929,169) 2,963,231
3,492,502 34,925
(180,000)
944,597
799,522
203,707
203,707
(543,889)
(5,439)
163,730
(158,291)
-
260,000
2,600
114,400
117,000
805,213
805,213
2,678,909 26,788 56,307,382 563,073
(82,563) 24,505,331 (20,123,956) 4,888,673
3,041,918 30,419
1,129,798
1,160,217
82,563
82,563
636,920
636,920
2,678,909 $26,788 59,349,300 $593,492 $
- $25,635,129 $(19,487,036) $6,768,373
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
The accompanying notes are an integral part of the consolidated financial statements
F-4
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
United States Antimony Corporation and Subsidiaries
Consolidated Statements of Cash Flows
For the years ended December 31, 2011, 2010, and 2009
Cash Flows From Operating Activities:
Net income (loss)
Adjustments to reconcile net income (loss) to net cash
provided (used) by operating activities:
Depreciation expense
Allowance for doubtful accounts
Common stock payable to directors for services
Gain on sale of properties, plant and equipment
Impairment of properties, plant and equipment
Deferred income taxes
Extinguishment of payables
Change in:
Accounts receivable, net
Inventories
Other current assets
Other assets
Accounts payable
Accrued payroll, taxes and interest
Other accrued liabilities
Deferred revenue
Payables to related parties
Net cash provided (used) by operating activities
Cash Flows From Investing Activities:
Restricted cash for reclamation bonds
Purchase of properties, plants and equipment
Net cash used by investing activities
Cash Flows From Financing Activities:
Proceeds from sale of common stock, net of commissions
Principal payments of long-term debt
Proceeds from long term debt
Payments received on stock subscription agreements
Change in checks issued and payable
Net cash provided by financing activities
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid in cash (net of amount capitailzed)
Noncash investing and financing activities:
Properties, plants & equipment acquired with long-term debt
Stock issued for subscription receivable
Write-off of uncollectible stock subscriptions
Stock issued for conversion of note payable to related party and
warrants exercised forgiveness of payable to related party
Payment of long-term debt with equipment
2011
636,920
$
2010
805,213
$
2009
(294,843)
$
405,746
-
230,004
-
-
96,442
-
(546,557)
(923,522)
(37,953)
40,000
584,698
51,425
(100,836)
43,760
83,914
564,041
355,876
(272)
117,000
-
199,302
(493,000)
-
(583,381)
54,145
(18,255)
(94,766)
32,467
6,646
(8,357)
(73,022)
7,754
307,350
262,452
(2,128)
39,000
(49,100)
-
-
(37,072)
(92,876)
(88,219)
-
-
(116,729)
4,429
31,764
7,581
(22,446)
(358,187)
(466)
(2,238,975)
(2,239,441)
(395)
(965,524)
(965,919)
6,748
(597,563)
(590,815)
1,160,217
(124,722)
-
82,563
113,908
1,231,966
799,522
(59,270)
-
203,707
(17,142)
926,817
1,122,243
(57,901)
1,232
13,333
(3,140)
1,075,767
(443,434)
448,861
5,427
$
268,248
180,613
448,861
$
126,765
53,848
180,613
-
$
5,796
$
5,605
$
234,775
-
-
$
30,500
180,000
163,730
106,300
-
-
-
-
-
-
300,000
55,000
$
$
$
The accompanying notes are an integral part of the consolidated financial statements
F-5
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2011, 2010 and 2009
1. Background of Company and Basis of Presentation
AGAU Mines, Inc., predecessor of United States Antimony Corporation ("USAC" or "the Company"), was incorporated in June
1968 as a Delaware corporation to mine gold and silver. USAC was incorporated in Montana in January 1970 to mine and
produce antimony products. In June 1973, AGAU Mines, Inc. was merged into USAC. In December 1983, the Company
suspended its antimony mining operations when it became possible to purchase antimony raw materials more economically from
foreign sources. The principal business of the Company has been the production and sale of antimony products.
During 2000, the Company formed a 75% owned subsidiary, Bear River Zeolite Company ("BRZ"), to mine and market zeolite
and zeolite products from a mineral deposit in southeastern Idaho. In 2001, an operating plant was constructed at the zeolite site
and zeolite production and sales commenced. During 2002, the Company acquired the remaining 25% of BRZ and continued to
produce and sell zeolite products.
During 2005, the Company formed a 100% owned subsidiary, Antimonio de Mexico S.A. de C.V. (“AM”), to explore and develop
potential antimony properties in Mexico.
During 2006, the Company acquired 100% ownership in United States Antimony, Mexico S.A. de C.V. (“USAMSA”), which
became a wholly-owned subsidiary of the Company.
2. Concentrations of Risk
Concentration of Sales
The percent of sales to our largest customer was 28%, 37%, and 40% in 2011, 2010, and 2009, respectively. During 2011,
$7,544,305 (72%) of our sales was made to three customers.
The Company's revenues from antimony sales are strongly influenced by world prices for such commodities, which fluctuate and
are affected by numerous factors beyond the Company's control, including inflation and worldwide forces of supply and demand.
The aggregate effect of these factors is not possible to predict accurately.
3. Summary of Significant Accounting Policies
Principles of Consolidation
The Company's consolidated financial statements include the accounts of BRZ, USAMSA and AM, all wholly-owned
subsidiaries. Intercompany balances and transactions are eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Significant and critical estimates include property, plant and equipment impairment,
accounts receivable allowance, deferred income taxes, environmental remediation liabilities and asset retirement obligations.
Actual results could differ from those estimates.
Reclassifications
Certain reclassifications have been made to the 2010 and 2009 financial statements in order to conform to the 2011
presentation. These reclassifications have no effect on net income (loss), total assets or stockholders' equity as previously
reported.
F-6
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2011, 2010 and 2009
3. Summary of Significant Accounting Policies, continued
Cash and Cash Equivalents
The Company considers cash in banks and investments with original maturities of three months or less when purchased to be
cash equivalents.
Restricted Cash
Restricted cash at December 31, 2011 and 2010 consists of cash held for reclamation performance bonds, and is held as
certificates of deposit with financial institutions.
Accounts Receivable
Accounts receivable are stated at the amount that management expects to collect from outstanding balances. Management
provides for probable uncollectible amounts through an allowance for doubtful accounts. Changes to the allowance for doubtful
accounts are based on management’s judgment, considering historical write-offs, collections and current credit
conditions. Balances which remain outstanding after management has used reasonable collection efforts are written off through
a charge to the allowance for doubtful accounts and a credit to the applicable accounts receivable. Payments received on
receivables subsequent to being written off are considered a bad debt recovery.
Inventories
Inventories at December 31, 2011 and 2010 consisted primarily of finished antimony products, antimony metal, antimony ore, and
finished zeolite products that are stated at the lower of first-in, first-out cost or estimated net realizable value. Finished antimony
products, antimony metal and finished zeolite products costs include raw materials, direct labor and processing facility overhead
costs and freight allocated based on production quantity. Since the Company's antimony inventory is a commodity with a sales
value that is subject to world prices for antimony that are beyond the Company's control, a significant change in the world market
price of antimony could have a significant effect on the net realizable value of inventories. The Company periodically reviews its
inventories to identify excess and obsolete inventories and to estimate reserves for obsolete inventories as necessary to reflect
inventories at net realizable value.
Properties, Plants and Equipment
Properties, plants and equipment are stated at historical cost and are depreciated using the straight-line method over estimated
useful lives of five to fifteen years. Vehicles and office equipment are stated at cost and are depreciated using the straight-line
method over estimated useful lives of three to seven years. Maintenance and repairs are charged to operations as incurred.
Betterments of a major nature are capitalized. Expenditures for new property plant, equipment and improvements that extend the
useful life or functionality of the asset are capitalized. The Company capitalized $2,473,750 and $996,024 in plant construction
and other capital costs for the years ended December 31, 2011 and 2010, respectively. These amounts include capitalized
interest of $10,888 and none, respectively. When assets are retired or sold, the costs and related accumulated depreciation are
eliminated from the accounts and any resulting gain or loss is reflected in operations.
Management of the Company periodically reviews the net carrying value of all of its long-lived assets. These reviews consider the
net realizable value of each asset or group to determine whether a permanent impairment in value has occurred and the need for
any asset write-down. An impairment loss is recognized when the estimated future cash flows (undiscounted and without interest)
expected to result from the use of an asset are less than the carrying amount of the asset. Measurement of an impairment loss is
based on the estimated fair value of the asset if the asset is expected to be held and used.
F-7
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2011, 2010 and 2009
3. Summary of Significant Accounting Policies, continued
Translations of Foreign Currencies
All amounts are presented in US Dollars, and the US Dollar is the functional currency of the Company and its foreign
subsidiaries. All transactions are carried out in US Dollars, or translated at the time of the transaction. There are no accounts
carried in foreign currencies that would require translation at year end.
Mineral Rights
The cost to obtain the legal right to explore, extract and retain at least a portion of the benefits from mineral deposits are
capitalized as mineral rights in the year of acquisition. These capitalized costs will be amortized to the statement of operations
using the unit of production method when placed into production. Mineral rights are assessed for impairment when facts and
circumstances indicate that the potential for impairment exists. No impairment has been indicated for the years ended December
31, 2011 or 2010 as a result of this assessment. Mineral rights are subject to write down in the period the property is abandoned.
Exploration and Development
The Company records exploration costs as operating expenses in the period they occur, and capitalizes development costs on
discrete mineralized bodies that have proven reserves in compliance with SEC Industry Guide 7, and are in development or
production.
Reclamation and Remediation
All of the Company's mining operations are subject to reclamation and remediation requirements. Minimum standards for mine
reclamation have been established by various governmental agencies. Costs are estimated based primarily upon environmental
and regulatory requirements and are accrued. The liability for reclamation is classified as current or noncurrent based on the
expected timing of expenditures. Reclamation differs from an asset retirement obligation in that no associated asset is recorded
in the case of reclamation liabilities.
The Company records the fair value of an asset retirement obligation as a liability in the period in which the Company incurs a
legal obligation for the retirement of long-lived assets, it is probable that such costs will be incurred and they are reasonably
estimable. A corresponding asset is also recorded and depreciated over the life of the assets on a units of production
basis. After the initial measurement of the asset retirement obligation, the liability will be adjusted at the end of each reporting
period to reflect changes in the estimated future cash flows underlying the obligation. Determination of any amounts recognized
upon adoption is based upon numerous estimates and assumptions, including future retirement costs, future inflation rates, and
the credit-adjusted risk-free interest rates.
It is reasonably possible that because of uncertainties associated with defining the nature and extent of environmental
contamination, application of laws and regulations by regulatory authorities, and changes in remediation technology, the ultimate
cost of remediation and reclamation could change in the future. The Company continually reviews its accrued liabilities for such
remediation and reclamation costs as evidence becomes available indicating that its remediation and reclamation liability has
changed.
Off-Balance Sheet Arrangements
The Company has considered whether any off-balance sheet arrangements exist as a result of transactions occurring during the
year and has determined that there are none at December 31, 2011 and 2010.
F-8
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2011, 2010 and 2009
3. Summary of Significant Accounting Policies, continued
Revenue Recognition
Sales of antimony and zeolite products are recorded upon shipment and when title passes to the customer. Prepayments
received from customers prior to the time that products are shipped are recorded as deferred revenue. When the related
products are shipped, the amount recorded as deferred revenue is recognized as revenue. The Company's sales agreements
provide for no product returns or allowances.
Revenue from exclusive sales agreements with multiple elements is recognized pro-rata over the duration of each element within
the contracts.
Sales of precious metals (a by-product of the antimony production process) are recognized when pervasive evidence of an
arrangement exists, the price is fixed and determinable, the product has been delivered, title has transferred, and collection is
reasonably assured.
Common Stock Issued for Consideration Other than Cash
All transactions in which goods or services are received for the issuance of shares of the Company’s common stock are
accounted for based on the fair value of the consideration received or the fair value of the common stock issued, whichever is
more readily determinable.
Income Taxes
Income taxes are accounted for under the liability method. Under this method, deferred income tax liabilities or assets are
determined at the end of each period using the tax rate expected to be in effect when the taxes are actually paid or recovered. A
valuation allowance is recognized on deferred tax assets when it is more likely than not that some or all of these deferred tax
assets will not be realized.
The Company applies generally accepted accounting principles for recognition of uncertainty in income taxes and prescribing a
recognition threshold and measurement attribute for the recognition and measurement of a tax position taken or expected to be
taken in a tax return.
Income (Loss) Per Common Share
Basic earnings per share is calculated by dividing net income (loss) available to common stockholders by the weighted average
number of common shares outstanding during the period. Diluted earnings per share is calculated based on the weighted
average number of common shares outstanding during the period plus the effect of potentially dilutive common stock equivalents,
including warrants to purchase the Company's common stock and convertible preferred stock. Management has determined that
the calculation of diluted earnings per share for the year ended December 31, 2011 and 2010 adds 9,280,852 and 5,643,307
shares, respectively to basic weighted average shares, related to common stock purchase warrants and convertible preferred
stock. Total dilution presented related to convertible preferred stock was limited as of December 31, 2010 as there were not
sufficient authorized and unissued common shares available.
As of December 31, 2011, 2010 and 2009, the remaining potentially dilutive common stock equivalents not included in the
calculation of diluted earnings per share are as follows:
Warrants
Convertible preferred stock
Total possible dilution
F-9
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
December 31,
2011
December 31,
2010
-
-
-
-
3,333,079
3,333,079
December 31,
2009
921,734
2,466,889
3,388,623
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2011, 2010 and 2009
3. Summary of Significant Accounting Policies, continued
Fair Value of Financial Instruments
The Company’s financial instruments include cash, restricted cash and long-term debt. The carrying value of restricted cash and
long-term debt approximate fair value based on the contractual terms of those instruments.
Fair Value Measures
ASC 820, “Fair Value Measurements and Disclosures”, requires an entity to maximize the use of observable inputs and minimize
the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of
independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within
the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820
prioritizes the inputs into three levels that may be used to measure fair value:
· Level 1: Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
· Level 2: Applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or
liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in
markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which
significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
· Level 3: Applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant
to the measurement of the fair value of the assets or liabilities.
The table below sets forth our financial assets and liabilities that were accounted for at fair value on a recurring basis as of
December 31, 2011 and 2010, respectively, and the fair value calculation input hierarchy level that we have determined applies to
each asset and liability category.
Assets:
Cash and cash equivalents
Restricted cash
4. Sales of Accounts Receivable
2011
2010
Input
Hierarchy
Level
$
$
5,247
74,777
448,861
74,311
Level 1
Level 1
The Company sells selected accounts receivable
factoring
agreement. According to the terms of the agreement, the receivables are sold with full recourse and the Company assumes all
risks of collectability. Accordingly, the Company's allowance for doubtful accounts is based upon the expected collectability of all
trade receivables. The performance of all obligations and payments to the factoring company is personally guaranteed by John
C. Lawrence, the Company's president and a director. As consideration for Mr. Lawrence's guarantee, the Company granted a
mortgaged security interest to Mr. Lawrence collateralized by the Company's real and personal property.
financing company pursuant
terms of a
to a
the
to
F-10
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2011, 2010 and 2009
4. Sales of Accounts Receivable, continued
The factoring agreement requires the Company to pay a financing fee equal to 2% of the face amount of receivables
sold. Factoring fees paid by the Company during the years ended December 31, 2011, 2010 and 2009 were $154,206, $119,107
and $90,124, respectively. For the years ended December 31, 2011, 2010 and 2009, net accounts receivable of approximately
$7.39 million, $5.96 million and $3.07 million, respectively, were sold under the agreement.
Proceeds from the sales were used to fund inventory purchases and operating expenses. The agreement is for a term of one
year with automatic renewal for additional one-year terms.
5.
Inventories
The major components of the Company's inventories at December 31, 2011 and 2010 were as follows:
Antimony Metal
Antimony Oxide
Antimony Ore
Total antimony
Zeolite
2011
152,026
180,404
644,113
976,543
90,270
$ 1,066,813
$
$
2010
97,187
7,233
-
104,420
38,871
143,291
At December 31, 2011 and 2010, antimony metal consisted principally of recast metal from antimony-based compounds, and
metal purchased from foreign suppliers. Antimony oxide inventory consisted of finished product oxide held at the Company's
plant. Antimony ore was held primarily at sites in Mexico and is essentially raw material, carried at cost. The Company's zeolite
inventory consists of salable zeolite material held at BRZ's Idaho mining and production facility.
F-11
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2011, 2010 and 2009
6. Properties, Plants and Equipment
The major components of the Company's properties, plants and equipment at December 31, 2011 and 2010 are shown
below. Approximately $1.6 million and $63,000 of capitalized costs at December 31, 2011 and 2010, respectively, related
primarily to the construction of an antimony mill in Mexico, have not yet been placed in service and, therefore, have not been
subject to depreciation.
Antimony:
Equipment
Buildings
Mineral rights and obligations
Land
Accumulated depreciation
Total Antimony, net
Zeolite:
Equipment
Buildings
Accumulated depreciation
Total Zeolite, net
Properties, plants and equipment, net
6. Properties, Plants and Equipment, continued:
2011
2010
$ 2,209,542
1,436,149
807,906
1,567,327
6,020,924
(1,616,266)
4,404,658
$ 1,803,107
863,933
473,940
597,063
3,738,044
(1,416,751)
2,321,293
2,239,348
1,663,554
3,902,902
(2,260,556)
1,642,346
$ 6,047,004
2,125,748
1,452,284
3,578,032
(2,054,325)
1,523,707
$ 3,845,000
During 2010 the Company incurred an impairment charge of $199,302 on certain constructed assets at its Cal Los Arcos Mexican
mill site because it was determined that the mill site was no longer viable. Assets such as installation costs and concrete work
that were unable to be transported to the new mill site at Corral Blanco were deemed to be impaired and therefore written off.
During 2011, the Company assessed the obligation for removal and remediation costs relating to its plants and mine in
Mexico. Management assigned a cost to the expected work involved in complying with the requirements of the Mexico operating
permits. Management applied, based on a 20 year life, an cost inflation factor, and then discounted that cost to a current net
present value based on a discount rate of 6% (management’s estimate of its credit-adjusted interest rate). Management
determined a future cost in 2031 of approximately $430,000 with a net present value of $134,000.
Asset Retirement
Obligation:
Balance December 31, 2010
Additions during 2011
Balance December 31, 2011
$
$
-
134,000
134,000
The asset retirement obligation liability is combined with reclamation obligations for Idaho and Montana operations of $107,500 at
December 31, 2011.
F-12
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2011, 2010 and 2009
7. Long-Term Debt
Long-term debt at December 31, 2011 and 2010 is as follows:
Note payable to Western States Equipment Co., bearing interest
at 6.4%; payable in monthly installments of $2,066; maturing
December 2013; collateralized by equipment.
2011
2010
$
- $ 67,645
Note payable to Western States Equipment Co., bearing interest
at 6.15%; payable in monthly installments of $2,032; maturing
June 2015; collateralized by equipment.
77,040
-
Note payable to CNH Capital America, LLC, bearing interest
at 4.5%; payable in monthly installments of $505; maturing
June 2013; collateralized by equipment.
Note payable to GE Capital, bearing interest at 6.32%; payable in
monthly installments of $908; maturing June 2011; collateralized by
equipment.
Note payable to GE Capital, bearing interest at 2.25%; payable in
monthly installments of $359; maturing July 2013; collateralized by
equipment.
Note payable to Robert (a deceased and former director) and Phyllis
Rice, bearing interest at 1%; payable in monthly installments of
$1,000; maturing April 2011; collateralized by equipment.
Note payable to Robert and Phyllis Rice, bearing interest
at 1%; payable in monthly installments of $2,000; maturing
March 2015; collateralized by equipment.
Note payable to De Lage Landen Financial Services
at 5.2%; payable in monthly installments of $709; maturing
July 2014; collateralized by equipment.
Note payable to Catepillar Finance, bearing interest
at 6.15%; payable in monthly installments of $766; maturing
August 2014; collateralized by equipment.
Note payable to De Lage Landen Financial Services
at 5.2%; payable in monthly installments of $697; maturing
January 2015; collateralized by equipment.
Less current portion
Noncurrent portion
F-13
8,648 14,052
-
5,235
6,531 10,639
-
3,082
80,882
-
19,229 27,143
21,990
-
23,529
-
237,849 127,796
(45,389)
$ 158,218 $ 82,407
(79,631)
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2011, 2010 and 2009
At December 31, 2011, principal payments on debt are due as follows:
Year Ending December 31,
2012
2013
2014
2015
8. Stockholders' Equity
Issuance of Common Stock for Cash
$ 79,631
76,189
61,167
20,862
$237,849
In 2011, 2010, and 2009, the Company sold an aggregate of 3,041,918, 3,492,502, and 5,600,234 shares, respectively, of its
unregistered common stock to existing stockholders and other parties for $1,160,217, $799,522 and $1,122,243, respectively. In
connection with sales of the Company’s common stock in 2010, 350,000 warrants to purchase shares of the Company’s common
stock (200,000 for $0.30 per share and 150,000 for $0.40) were issued. No warrants to purchase shares of the Company’s
common stock were granted in 2011or 2009.
Issuance of Common Stock for Services and Property
During 2011, the Company declared, but did not issue 95,835 shares of unregistered common stock to be paid to its directors for
services, having a fair value of $230,004, based on the current stock price at the date declared. This expense is classified with
general and administrative expense in the consolidated statement of operations.
During 2010 and 2009, the Company awarded 260,000 and 130,000 shares, respectively, of unregistered common stock to its
directors for services, having fair values of $117,000 and $39,000, respectively, based on the current stock price at date of
grant. The expense is classified as general and administrative expense in the consolidated statement of operations.
F-14
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2011, 2010 and 2009
8. Stockholders' Equity, continued
Common Stock Warrants
The Company's Board of Directors has the authority to issue stock warrants for the purchase of preferred or unregistered common
stock to directors and employees of the Company.
Transactions in common stock warrants are as follows:
Balance, December 31, 2009
Granted in connection with sales of common stock
Warrants expired and cancelled
Balance, December 31, 2010
Warrants exercised
Balance, December 31, 2011
The above common stock warrants expire as follows:
Year Ended December 31:
2012
Thereafter
Preferred Stock
Number of Exercise
Warrants
Prices
921,734 $
350,000 $
(546,734) $
725,000 $
(125,000) $
600,000 $
0.20-
$0.75
0.30-
$0.40
0.30-
$0.60
0.20-
$0.75
0.20-
$0.75
0.20-
$0.75
350,000
250,000
600,000
The Company's Articles of Incorporation authorize 10,000,000 shares of $0.01 par value preferred stock available for issuance
with such rights and preferences, including liquidation, dividend, conversion, and voting rights, as the Board of Directors may
determine.
F-15
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2011, 2010 and 2009
Series B
During 1993, the Board established a Series B preferred stock, consisting of 750,000 shares. The Series B preferred stock has
preference over the Company's common stock and Series A preferred stock; has no voting rights (absent default in payment of
declared dividends); and is entitled to cumulative dividends of $0.01 per share per year, payable if and when declared by the
Board of Directors. In the event of dissolution or liquidation of the Company, the preferential amount payable to Series B
preferred stockholders is $1.00 per share plus dividends in arrears. No dividends have been declared or paid with respect to the
Series B preferred stock. At December 31, 2011, cumulative dividends in arrears on the outstanding Series B shares were
$127,500 or $0.17 per share. At December 31, 2010, cumulative dividends in arrears on the outstanding Series B shares were
$120,000, or $0.16 per share.
Series C
During 2000, the Board established a Series C preferred stock, consisting of 205,996 shares. The Series C preferred stock has
preference over the Company’s common stock and has voting rights, but no dividend rights. In the event of dissolution or
liquidation of the Company, the preferential amount payable to Series C preferred stockholders is $0.55 per share.
8. Stockholders' Equity, continued
Series D
During 2002, the Board established a Series D preferred stock, authorizing the issuance of up to 2,500,000 shares. The Series D
preferred stock has preference over the Company’s common stock but is subordinate to the liquidation preferences of the holders
of the Company’s outstanding Series A, Series B and Series C preferred stock. Series D preferred stock carries voting rights and
is entitled to annual dividends of $0.0235 per share. The dividends are cumulative and payable after payment and satisfaction of
the Series A, B and C preferred stock dividends. No dividends have been declared or paid with respect to the Series D preferred
stock. At December 31, 2011 and 2010, cumulative dividends in arrears on the 1,751,005 outstanding Series D shares were
$336,920 and $295,771, respectively, payable if and when declared by the Board of Directors. In the event of dissolution or
liquidation of the Company, the preferential amount payable to Series D preferred stockholders is $2.50 per share. At December
31, 2011 and 2010, the liquidation preference for Series D preferred stock was $4,377,513. Holders of the Series D preferred
stock have the right, subject to the availability of authorized but unissued common stock, to convert their shares at $0.20 into
shares of the Company's common stock without payment of additional consideration and are not redeemable unless by mutual
consent. The majority of Series D preferred shares are held by John Lawrence, president of the Company.
9.
2000 Stock Plan
In January 2000, the Company's Board of Directors resolved to create the United States Antimony Corporation 2000 Stock Plan
("the Plan"). The purpose of the Plan is to attract and retain the best available personnel for positions of substantial responsibility
and to provide additional incentive to employees, directors and consultants of the Company to promote the success of the
Company's business. The maximum number of shares of common stock or options to purchase common stock that may be
issued pursuant to the Plan is 500,000. At December 31, 2011 and 2010, 300,000 shares of the Company's common stock had
been issued under the Plan. There were no issuances under the Plan during 2011 and 2010.
F-16
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2011, 2010 and 2009
10. Income Taxes
The Company recorded a state and federal tax provision of $105,610 for 2011, a deferred income tax benefit of $493,000 for
2010, and did not recognize a tax provision or benefit for 2009. (The following table is only for two years since it relates to balance
sheet accounts.)
At December 31, 2011, 2010 and 2009, the Company had net deferred tax assets as follows:
Differences in the book and tax basis of
properties, plants and equipment
Other
Limitation in deduction of foreign
exploration costs
Foreign net operating loss carryforward
Federal net operating loss carryforward
Total deferred tax assets
Valuation allowance (foreign)
Valuation allowance (federal)
Net deferred tax assets
2011
2010
$ 79,164 $
2,926
28,000
-
249,309
390,000
65,159
256,000
210,000
698,000
786,558 1,192,000
(210,000)
(390,000)
(489,000)
-
$ 396,558 $ 493,000
10. Income Taxes, continued
The deferred tax assets were calculated based on an estimated 38.5% combined federal and state income tax rate for 2011, and
an estimated 34% income tax rate for 2010 and 2009. Existing and forecasted pretax earnings for financial reporting purposes
are sufficient to generate the estimated required future taxable income required to realize the recognized (federal) net deferred
tax asset as of December 31, 2011.
At December 31, 2011, the Company had unexpired federal regular tax net operating loss carryforwards of approximately
$170,000, which expire between 2026 and 2029. In addition, the Company has unexpired Montana state net operating loss
carryforwards of $20,000 which expire between 2013 and 2016 and approximately $1.3 million in Mexico which expires between
2019 and 2021.
F-17
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2011, 2010 and 2009
The income tax provision (benefit) differs from the amount of income tax determined by applying the U.S. federal income tax rate
to pretax income (loss) for the years ended December 31, 2011, 2010 and 2009 due to the following:
Computed expected tax provision
(benefit)
$ 252,460
34.0% $ 106,000
34.0% $(99,000)
(34%)
2011
2010
2009
Effect of permanent differences
Foreign taxes
Other (1)
Increase in valuation allowance
Release in valuation allowance
4,662
24,000
133,488
-
(309,000)
$ 105,610
0.6%
3.2%
118%
-
30,000
-
-
-
(142%) (629,000)
13.9% $(493,000)
9.6% 23,000
-
-
76,000
-
-
-
-
-
(202%)
(158%) $
7.9%
-
-
26.1%
-
-
(1) Rate differential as management has refined their estimate to 38.5% currently
During the years ended December 31, 2011, 2010, and 2009, there were no material uncertain tax positions taken by the
Company. The Company has determined that it is subject to examination of our income tax filings in the United States
jurisdictions for the 2008 through 2011 tax years, and 2010 and 2011 in Mexico. In the event that the Company is assessed
penalties and or interest, penalties will be charged to other operating expense and interest will be charged to interest expense.
11. Related-Party Transactions
Amounts due to related parties at December 31, 2011 and 2010 were as follows:
Payable to officer for antimony ore
John C. Lawrence, president and director(1)
2011
2010
54,131
47,843
101,974
$
-
18,060
18,060
$
(1) Transactions affecting the payable to Mr. Lawrence during 2011, 2010 and 2009 were as follows:
Balance, beginning of year
Aircraft rental charges
Conversion of payables and exercise of warrants
Payments and advances, net
Balance, end of year
2011
2010
$
18,060
86,058
-
$
8,394
129,177
-
(52,675)
$
47,843
(119,511)
$
18,060
2009
324,158
102,049
(328,132)
(89,681)
8,394
$
$
F-18
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2011, 2010 and 2009
11. Related-Party Transactions, continued
In addition to transactions described above and in Note 9, during 2011, 2010, and 2009, the Company had the following
transactions with related parties:
During 2009 a convertible note payable to John C. Lawrence, the Company's president and a director, was converted into
500,000 shares of the Company’s common stock. In addition, during 2009 $200,000 of payable to related parties payable,
including outstanding accrued interest payable, was used by Mr. Lawrence to exercise warrants initially issued in connection
with the convertible note payable, for the purchase of 1,000,000 shares of common stock.
During 2011, members of the audit committee were paid $24,000 in cash during 2011.
During 2011, 2010, and 2009, the Company paid $107,359, $55,469 and $159,995, respectively to a director for development
of Mexican mill sites and consulting fees.
A director of the Company acted as legal counsel to the Company. During the years ended December 31, 2011, 2010 and
2009, the Company paid legal fees and expenses to this director in the amount of $37,083, $32,000 and $23,500,
respectively.
Royalty expense based on sales of zeolite of $45,515, $54,587 and $46,867 was incurred for the years ended December 31,
2011, 2010 and 2009, respectively, to a company controlled by Al Dugan, a significant stockholder and the father of a
director.
12. Commitments and Contingencies
In 2005, AM signed an option agreement that gives AM the exclusive right to explore and develop the San Miguel I and San
Miguel II concessions for an annual payment of $50,000, and an option to purchase payment of $100,000 annually. Total
payments will not exceed $1,430,344, reduced by taxes paid. During the years ended December 31, 2011, 2010 and 2009,
$186,956, $186,956 and $86,956 was paid or accrued and capitalized as mineral rights in accordance with the Company’s
accounting policies.
From time to time, the Company is assessed fines and penalties by the Mine Safety and Health Administration (“MSHA”). Using
appropriate regulatory channels, management may contest these proposed assessments, and has accrued $27,503 and $40,604
in other accrued liabilities as of December 31, 2011, and 2010, respectively, related to these settled claims.
13. Business Segments
The Company has two operating segments, antimony and zeolite. Management reviews and evaluates the operating segments
exclusive of interest and factoring expenses. Therefore, interest and factoring expense is not allocated to the segments.
The Madero smelter at the Company’s Mexico operation brings antimony up to an intermediate stage, which must then be
shipped to the United States operation for finishing.
Selected information with respect to segments for the years ended December 31, 2011, 2010 and 2009 is as follows:
F-19
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2011, 2010 and 2009
13. Business Segments, continued
2011
2010
2009
$ 10,406,636 $ 6,174,062 $ 2,526,663
40,444
2,567,107
11,074,449
483,307
667,813
6,657,369
7,294,421
4,786,197
29,963
216,668
280,853
64,421
7,886,326
27,387
236,623
80,267
45,447
5,175,921
1,617,041
71,929
121,144
78,587
46,875
1,935,576
1,182,730
169,552
121,432
158,396
1,632,110
294,391
141,421
5,578
-
136,498
577,888
125,949
-
-
-
153,418
279,367
11,074,449
9,518,436
1,556,013
6,657,369
5,753,809
903,560
2,567,107
2,214,943
352,164
2,043,641
2,415,955
1,536,233
1,221,101
206,231
103,630
117,420
197,371
79,703
1,925,456
118,185
1,254,375
187,068
16,637
188,251
229,352
70,100
1,945,783
470,172
830,065
190,523
68,117
158,144
202,736
69,766
1,519,351
16,882
13,118,090
9,073,324
7,699,592
11,443,892
$ 1,674,198 $ 1,373,732 $
4,103,340
3,734,294
369,046
F-20
Antimony Division - United States:
Revenues - Antimony
Revenues - Precious metals
Domestic cost of sales:
Production costs
Depreciation
Freight and delivery
General and administrative
Direct sales expense
Total domestic antimony cost of sales
Cost of sales - Mexico
Production costs
Depreciation
Freight and delivery
Other mine and mill costs
General and administrative
Total Mexico antimony cost of sales
Total revenues - antimony
Total cost of sales - antimony
Total gross profit - antimony
Zeolite Division:
Revenues
Cost of sales:
Production costs
Depreciation
Freight and delivery
General and administrative
Royalties
Direct sales expense
Total cost of sales
Gross profit - zeolite
Total revenues - combined
Total cost of sales - combined
Total gross profit - combined
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2011, 2010 and 2009
13. Business Segments, continued
Capital expenditures:
Antimony
United States
Mexico (1)
Subtotal Antimony
Zeolite
Total Assets:
Antimony
United States
Mexico
Subtotal Antimony
Zeolite
2011
2010
$ 160,536 $
1,988,345
2,148,881
324,869
31,300
927,131
958,431
36,300
$2,473,750 $ 994,731
$1,187,322 $1,379,369
4,992,250 2,719,630
6,179,572 3,599,076
2,813,956 1,763,903
$8,993,528 $5,862,902
Segment disclosures regarding sales to major customers and for inventories and property, plant and equipment are located in
Notes 2, 5 and 6, respectively.
14. Subsequent Events
On January 9, 2012, the Company issued 1,102,500 shares of common stock for $2.00 per share. Total cash raised in the
offering was $2,205,000. Each share was accompanied by a warrant to purchase an additional share for $2.50 for a period of
two years after the issuance date.
F-21
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
US Antimony Corporation Audit Committee Report
US Antimony Corporation’s Audit Committee consists of three directors, each of whom has been determined by the Board to
be “independent” as defined by the listing standards of the New York Stock Exchange (NYSE) and the applicable rules of the
SEC. The members of the Committee are Gary Babbitt (chairman) ; Leo Jackson; and Hart Baitis, the Chair of the Audit
Committee. The Audit Committee is governed by a written charter adopted by the Board. A copy of the current Audit Committee
charter is at the Corporate Office in Thompson Falls, Montana.
US Antimony Corporation’s management is responsible for US Antimony’s internal controls and financial reporting and the
preparation of US Antimony’s consolidated financial statements. US Antimony independent accountant, Decoria , Maichel LLP ,
Teague of Spokane , Washington (DMT, and referred to also as independent auditors herein) are responsible for auditing US
Antimony’s annual consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight
Board. The independent auditors also are responsible for issuing a report on those financial statements and a report on US
Antimony’s internal control over financial reporting. The Audit Committee monitors these processes. The Audit Committee is
responsible for selecting, engaging, and overseeing US Antimony’s independent auditors. This is the first report of the Audit
Committee following its organization in December 2011.
As part of the oversight process, the Audit Committee has met with and will regularly meet with management of the Company
( CFO , Controller, and President), and the Company’s independent auditors. The Audit Committee often meets with each of these
groups separately in closed sessions. The Audit Committee had full access to management, and the Company’s independent
auditors. To fulfill its responsibilities, the Audit Committee did, among other things, the following:
· Reviewed and discussed with US Antimony’s management and the independent auditors US Antimony’s audited
consolidated financial statements for fiscal 2011;
· Reviewed management’s representations that those consolidated financial statements were prepared in accordance with
generally accepted accounting principles and fairly present the consolidated results of operations and consolidated
financial positions of the Company for the fiscal years covered by those consolidated financial statements;
· Discussed with the independent auditors the matters required by Statement on Auditing Standards 61, as modified or
supplemented, and SEC rules, including matters related to the conduct of the audit of US Antimony’s consolidated financial
statements;
· Reviewed with the internal auditors the staffing and procedure for auditing the Company’s operations in Mexico;
· Discussed with and received written disclosures and the letter from DMT required by applicable independence standards,
rules and regulations relating to DMT’s independence from US Antimony, and discussed with DMT its independence from
US Antimony;
· Based on the discussions with management , the independent auditors’ disclosures, letter to the Audit Committee, the
representations of management and the reports of the independent accountants, the Audit Committee recommended to the
board that US Antimony’s audited annual consolidated financial statements for fiscal 2011 filing filed with the SEC;
· Reviewed all audit services performed for US Antimony by DMT;
· Selected and appointed DMT as US Antimony’s independent auditors to audit and report on the annual consolidated
financial statements of US Antimony to be filed with the SEC prior to US Antimony’s Annual Shareholders’ Meeting to be
held in calendar year 2011;
· Monitored the progress and results of the testing of internal controls over financial reporting pursuant to Section 404 of
SOX, reviewed a report from management and the internal auditors of the Company regarding the design, operation and
effectiveness of internal controls over financial reporting, and regarding the effectiveness of internal controls over financial
reporting; and reviewed management plans to implement internal controls, and
· Received reports from management regarding the Company’s policies, processes, and procedures regarding compliance
with applicable laws and regulations and the Statement of Ethics, all in accordance with the Audit Committee’s charter.
The Audit Committee submits this report on March 9, 2012:
Gary Babbitt, Chairman
Leo Jackson
Hart Baitis
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
EXHIBIT 31.1
I, John C. Lawrence, certify that:
CERTIFICATION
(1) I have reviewed this annual report on Form 10-K of United States Antimony Corporation.
(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in
all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report;
(4) I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-
15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is
made known to me by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to
be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my
conclusion about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during
the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial
reporting; and
(5) I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's
auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and
report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant's internal control over financial reporting.
Date: March 15, 2012
John C. Lawrence, President, and Chief Executive Officer
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
I, Daniel L. Parks, certify that:
CERTIFICATION
(1) I have reviewed this annual report on Form 10-K of United States Antimony Corporation.
(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in
all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report;
(4) I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-
15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under my supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which
this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to
be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my
conclusion about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during
the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial
reporting; and
(5) I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's
auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and
report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in
the registrant's internal control over financial reporting.
Date: March 15, 2012
Daniel L. Parks, Chief Financial Officer
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
EXHIBIT 32.1
CERTIFICATION PURSUANT TO THE SARBANES-OXLEY ACT
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
I, John C. Lawrence, director and president of United States Antimony Corporation (the "Registrant") do hereby certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
1. This Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 2011, as filed with the Securities
and Exchange Commission (the "report"), fully complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934; and
2. The information contained in the report fairly presents, in all material respects, the financial condition and results of
operations of the Registrant.
Date: March 15, 2012
John C. Lawrence
President and Director
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
CERTIFICATION PURSUANT TO THE SARBANES-OXLEY ACT
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
EXHIBIT 32.2
I, Daniel L. Parks, chief financial officer of United States Antimony Corporation (the "Registrant") do hereby certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
1. This Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 2011, as filed with the Securities
and Exchange Commission (the "report"), fully complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934; and
2. The information contained in the report fairly presents, in all material respects, the financial condition and results of
operations of the Registrant.
Date: March 15, 2012
Daniel L. Parks
Chief Financial Officer
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.