SECURITIES & EXCHANGE COMMISSION EDGAR FILING
UNITED STATES ANTIMONY CORP
Form: 10-K
Date Filed: 2016-03-30
Corporate Issuer CIK: 101538
© Copyright 2016, 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, 2015
❑
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)
81-0305822
(I.R.S. Employer Identification No.)
P.O. Box 643, Thompson Falls, Montana
(Address of principal executive offices)
59873
(Zip Code)
Registrant's telephone number, including area code: (406) 827-3523
Securities registered pursuant to Section 12(b) of the Act: None
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. [X]
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 $31,817,284 as of June
30, 2015.
At March 30, 2016, the registrant had 66,316,278 outstanding shares of par value $0.01 common stock.
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
UNITED STATES ANTIMONY CORPORATION
2014 ANNUAL REPORT
TABLE OF CONTENTS
1.Highlights of 2015
·
·
·
Antimony production
Precious metal production
Zeolite production
2.Operations map
3.Chairman’s letter
4.Antimony operations
Antimony market
Antimony logistics
·
·
· Wadley
Soyatal
·
· Guadalupe
·
· Madero smelter.
· Montana smelter
· Hillgrove Mine
Puerto Blanco mill
5.Precious metal operations
Los Juarez
·
· Canadian source
· Hillgrove Mines Pty. Ltd.
6.Zeolite operations.
ITEM 1.
DESCRIPTION OF BUSINESS
PART I
General
History
Overview-2015
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
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
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ITEM 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 7B.
CRITICAL ACCOUNTING ESTIMATES
ITEM 8.
FINANCIAL STATEMENTS
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 ACT
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 SERVICE
PART IV
ITEM 15.
EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES
CERTIFICATIONS
FINANCIAL STATEMENTS
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EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Dear Shareholders:
CHAIRMAN’S LETTER
In 2015, we concluded a major addition to our smelting capacity at Madero, Mexico with the addition of a large furnace (LRF) and five smaller furnaces (SRFs) to
process high grade concentrates. The additional smelting capacity enabled us to achieve record sales of antimony for the year. Most of the plant was dedicated
to processing Australian concentrates, and we processed minimal raw material from our Mexican properties. The replacement of propane with natural gas at the
Madero smelter is saving 75% of the cost of fuel. We also saw a major increase in zeolite sales for 2015, setting a record for tons of zeolite sold. During 2015,
we perfected our method of recovering gold from antimony concentrates from Australia, and during the first quarter of 2016, we began selling gold to a
refinery. This process will be applicable to the concentrates from the Los Juarez mining property. Our progress in production and sales was offset by a
continued slide in the price of antimony which has continued since 2011. In 2015, we purchased the Guadalupe mining property that will produce a high-grade
concentrate that can be sold to the friction brake industry or used to make ordnance. Both products will sell for premium prices. In the third quarter of 2015,
Hillgrove and supply enough concentrates to Mines Pty Ltd, suspended mining operations in Australia. We were notified that they would continue milling
operations keep the LRF running through the end of 2016. In addition, USAMSAS will be allowed to use the Hillgrove furnace capacity for USAC’s Mexican
properties while Hillgrove explores for higher grade ore. We will ramp up production with smelter feed from Guadalupe, Wadley, Soyatal, and Los Juarez.
An all-time sales record for antimony of 2,487,321 pounds was achieved in 2015. The gross revenue from all sources of antimony for 2015 was $9,863,933, and
the loss was $1,349,934, which included $711,345 of depreciation and amortization. The loss was primarily due to:
•
•
A drop in the price of antimony for the year of $0.75 per pound from $4.71 in 2014 to $3.96 in 2015.
Holding costs of $1,086,440 or $0.44per pound due to 1) solving a metallurgical issue which delayed production at our Los Juarez silver-antimony-
gold property and its associated Puerto Blanco mill, and 2) fixed cost agreements for mining properties that are idle until we need more raw material.
An all-time sales record for zeolite of 15,901 tons was achieved in 2015. Even though the average price per ton decreased by approximately $22, we achieved
record sales of $2,753,644. The net income for zeolite was $511,403, which was after $221,441 of depreciation.
Management has been working to increase production and reduce costs as follows:
1. An all-out effort is being made to bring the Los Juarez gold-silver-antimony property into production. This includes the shake-down of the leach plant at
Madero and detailed flotation testing to determine whether a cyanide circuit is necessary. A shallow reconnaissance drilling program indicates a global
average grade of 0.057 ounces (1.432 grams) gold, 2.43 ounces (75.24 grams) silver per metric ton, and 0.343% antimony. The gross value is $125 per
ton based on gold at $1,230 per ounce, silver at $15 per ounce, and antimony at $2.45 per pound. USAC claims no reserves at Los Juarez per SEC
definitions, and the drilling does not comply with Canadian NI 43-101.
2. We are focused on reducing the holding costs (“Mexico excess production costs”) for Los Juarez, Wadley, Soyatal, Guadalupe, and the Puerto Blanco
mill, which included a write-down to market value of significant concentrates and direct shipping ore (DSO) mined in 2013 and 2014 at Wadley, Soyatal,
and other properties. These costs are included in our production costs and have a severe impact on profitability. The Mexico excess non-production
costs amounted to $0.98 per pound of antimony produced in Mexico in 2015 and $1.17 per pound in 2014. When considered for the total antimony
production of the Company as a whole, they amounted to $0.44 per pound in 2015 and $0.40 per pound in 2014.
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3. The Mexican furnace capacity has been limited to the processing of Australian concentrates. Within 60 days, production from the Mexican properties will
be resumed which will reduce the “Mexican excess production costs” and liquidate inventory.
4. At the Wadley, the holding costs have been reduced $69,600 per year, the mine grade is being raised from a minimum of 25% to a minimum of 35%, and
the purchase price of the ore has been adjusted to a significantly lower price indexed to Rotterdam. Wadley is expected to be the largest Mexican
producer of antimony by the end of this year.
5. The Soyatal property continues to produce 30% concentrates from legacy mine dumps that contain from 4.5 to 9% antimony. The dumps are substantial
and will provide a low cost feed with no mining costs.
6. The Guadalupe mine has been on care and maintenance, but production will resume in the second quarter.
Following is the outlook for 2016:
1. We are planning to increase the 2016 production of antimony with feed from Canada, Australia, and Mexico.
2. We hope to maintain this growth trajectory with returns from working down our Mexican concentrate inventories, the cash flow from increased antimony
production, and the Bear River Zeolite profits.
3. A metallurgical issue related to the Los Juarez silver-antimony-gold property was solved in late 2015 that will allow us to start processing the Los Juarez
concentrates in 2016.
USAC is an international, vertically-integrated company that provides antimony and zeolite from the mine to end users around the world. The Company has
significant sources of raw materials and has always been a reliable domestic and international supplier. Our mission is to dominate the domestic antimony
market.
Sincerely, John Lawrence
CEO and Chairman
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HIGHLIGHTS 2015
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Antimony Sales in Pounds
USA
Mexico
Total Sale in Pounds
Total sales in Dollars
Average price per pound
Precious Metals Sales
Silver/Gold
Montana
Ounces Gold Shipped (Au)
Ounces Silver Shipped (Ag)
Revenues
Ounces Gold Shipped (Au)
Ounces Silver Shipped (Ag)
Revenues
Mexico
All-Time Record Production
2011
2012
2013
2014
1,179,973
221,450
1,401,423
10,406,636
7.43
$
$
103,114
372,046
1,403,210
8,753,449
6.24
$
$
931,789
647,393
1,141,436
596,368
1,579,182
8,375,158
530.00
$
$
1,727,804
8,132,410
4.71
$
$
$
$
2015
1,381,971
1,105,350
2,487,321
9,863,933
3.97
Precious Metal Sales
2011
161.71
17,472.99
667,813
$
2012
102.32
20,237.70
647,554
$
2013
59.74
22,042.46
347,016
$
2014
64.77
29,480.22
461,083
$
2015
89.12
30,420.75
491,426
1.780
1,053.240
22,690
$
$
Total Revenues
$
667,813
$
647,554
$
369,706
$
461,083
$
491,426
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BEAR RIVER ZEOLITE
ZEOLITE PRODUCTION
2011
2012
2013
2014
Tons Shipped
Average Price Per Ton
Gross Revenues
Net Income
12,105
168.83 $
2,043,641 $
118,185 $
12,189
216.73 $
2,641,699 $
313,442 $
11,182
196.96 $
2,202,414 $
404,453 $
11,079
195.83 $
2,169,619 $
304,934 $
$
$
$
2015
15,901
173.17
2,753,644
511,403
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ANTIMONY OPERATIONS
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ANTIMONY MARKET
The United States used 23,600 metric tons (approximately 52,000,000 pounds) of antimony in 2015. Of this amount 35% went to metal products primarily
storage batteries and ammunition: 35% went to non-metal products including rubber, glass, and ceramics; and 30% went into flame retardants. The domestic
market for USAC antimony products remained strong even though global prices deteriorated in a weak economic environment. In 2013, the world-wide
production was 163,000 metric tons or 359,353,516 pounds. The Chinese control more than 90% of the world supply, and pricing can be volatile. Pricing of the
metal is generally based on the London Metal Exchange average price C.I.F. Rotterdam per metric ton (a metric ton contains 2,204.6 pounds). Antimony oxide
contains 83.1% antimony metal and it is typically our preferred product due to its premium pricing.
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1.
Following are the capital expenditures for 2015:
Division
Operation
Description
Amount
BRZ
BRZ
BRZ
BRZ
USAC Montana
USAC Montana
USAMSA
USAMSA
USAMSA
USAMSA
USAMSA
USAMSA
USAMSA
USAMSA
USAMSA
USAMSA
USAMSA
USAMSA
USAMSA
USAMSA
USAMSA
USAMSA
USAMSA
USAMSA
USAMSA
USAMSA
HILLGROVE
HILLGROVE
HILLGROVE
HILLGROVE
Zeolite
Zeolite
Zeolite
Zeolite
Antimony and precious metals
Antimony and precious metals
Madero
Madero
Madero
Madero
Madero
Madero
Puerto Blanco
Puerto Blanco
Puerto Blanco
Puerto Blanco
Puerto Blanco
Puerto Blanco
Guadalupe
Guadalupe
Guadalupe
Soyatal
Soyatal
Wadley
Wadley
OTHER
OTHER
OTHER
OTHER
OTHER
VSI Line 1 construction
Caterpillar 235 Excavator
Permitting
Major Equipment Repairs
Plant and Office Equipment
Two Caterpillar Forklifts
Buildings
Capitalized interest
Permitting
Plant construction
Leach Circuit
IVA Tax on Equipment
Buildings
Permitting
Leach Circuit
500 Ton Ball Mill
Land Payments San Miguel
Permitting
Property purchase
Capitalized amortization
Permitting
Permitting
Capitalized amortization
Plant Improvements
Used Truck
Software
Building construction
Permiting
Plant
Equipment
$
$
67,682
29,831
15,310
83,415
3,728
58,600
1,835
4,542
56,461
3,820
107,023
36,619
10,395
48,299
1,734
15,095
125,000
20,825
1,559,615
14,591
2,502
2,593
42,498
77,333
1,385
4,165
44,136
4,200
914,069
94,016
3,451,317
2.
The “Mexican excess production costs” include (1) holding costs for Los Juarez, Wadley, Soyatal, Guadalupe, and the Puerto Blanco mill, and (2) the
write-down of significant concentrates and direct shipping ore (DSO) mined in 2013 and 2014 at Wadley, Soyatal, and other properties. These costs are
included in our production costs and have a very severe impact on profitability. In 2015, they added $1,086,440 to the costs of the production of
antimony. These costs amounted to $.98 per pound of antimony production in Mexico.
WADLEY MINE AND MILL, SAN LUIS POTOSI, MEXICO
The Wadley produced more than 80% of the Madero smelter feed during 2014. During that time, and through 2015, reconfiguration and testing of the gravity
mill has proceeded. Mining is by hand methods without the benefit of compressed air and explosives. At one time, Wadley was shipping up to 600 tons per
month of hand sorted ore to Laredo, Texas, which amounted to approximately 5,000,000 pounds per year of antimony. For 2016, we have reduced our lease
costs for Wadley by approximately $70,000 from 2015, and raised the mine grade from a minimum of 25% to a minimum of 35%. We adjusted the purchase
price to a significantly lower price indexed to the Rotterdam price for antimony. Currently, the operation is in a care and maintenance mode until we need the
ore at our Madero smelter, but we expect Wadley to be the largest producer of Mexican antimony for us by the end of 2016. Contract miners from about 100
to 120 men are available at the present time. With increased mechanization and explosives, this property could produce much more antimony for us than it
has in the past. We do not claim any reserves at Wadley as defined by the SEC.
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SOYATAL DISTRICT, QUERETARO, MEXICO
USAC owns the Soyatal District mines. During 2014 and 2015, Soyatal produced a small amount of DSO (direct shipping ore for the smelter) and
concentrates from low grade and dumps. After sampling some of the extensive dumps, USAC has begun milling dumps in the 4.5 to 9% range with a
recovery of almost 50% at our Puerto Blanco mill. We expect the property to become a substantial producer of low cost feed. We do not claim any reserves
at Soyatal as defined by the SEC.
GUADALUPE, ZACETECAS, MEXICO
The Guadalupe mining property has been on care and maintenance, but production will resume in the second quarter of 2016. The ore from Guadalupe
results in very high grade concentrate of approximately 65% to 70% antimony tri-sulfide that could be shipped to the friction-brake industry for a premium
price. We do not claim any reserves at Guadalupe as defined by the SEC.
PUERTO BLANCO OXIDE/SULFIDE MILL, GUANAJUATO, MEXICO
In 2014, the Puerto Blanco mill processed 1,284 tons of sulfide ore from Guadalupe and 1,676 tons of oxide ore from Guadalupana and 458 tons of oxide
ore from Soyatal. In 2015, the mill processed legacy dump material from our Soyatal property using the oxide circuit. This constituted less than 10% of the
mill capacity. During 2015, the Puerto Blanco mill was primarily engaged in test runs of various ores to improve mineral recovery. CAPEX expenditures in
2015 were primarily the construction of the oxide circuit, the installation of cleaner flotation cells, the design and construction of a leach circuit, and limited
work on the 500 ton mill. In the second half of 2016, the mill will primarily be engaged in processing ore from our Los Juarez mining property.
MADERO SMELTER, COAHUILA, MEXICO
The Madero smelter produces very high quality antimony from Mexico. The Madero smelter has 17 small furnaces (SRF’S) and one large furnace
(LRF). The LRF and five of the SRF’s have been dedicated to processing concentrates from Australia during 2015. A natural gas pipeline has reduced our
per pound Mexican fuel costs by about 75%. During 2015, we built and installed four SRF’s for our own use, five SRF’s and one LRF for the Hillgrove
concentrate, a 100 foot stack for fume dispersion, and multiple improvements to our infrastructure. Hillgrove has notified us that they are not mining in
Australia at this time, and that we should expect that we will not receive the same amount of concentrates for 2016 that we received in 2015. We are
prepared to increase our production from our Mexican mining properties to keep the Madero smelter producing near capacity. We are presently installing a
leach plant at Madero to improve the recovery of precious metals from Los Juarez concentrates.
MONTANA SMELTER, THOMPSON FALLS, MONTANA
The Montana smelter at the USAC corporate headquarters in Thompson Falls, Mt., processes feed from Canadian, Mexican and Australian sources,
recovers precious metals, and makes finished antimony oxide and metal. We have made substantial improvements to our precious metals recovery circuit at
Thompson Falls in 2015.
HILLGROVE MINES, PTY. LTD. ARMIDALE, AUSTRALIA
USAC entered a purchase agreement with Hillgrove Mines Pty Ltd for 200 metric tons per month of 58% to 60% antimony concentrates that contain
approximately 20 grams (0.64 ounces) of gold per metric ton. This amounts to approximately 3,000,000 pounds of antimony and 1,500 ounces of gold
annually. Hillgrove provided funding to USAC to expand its smelter capacity in Mexico. In 2015, we processed 53 containers with approximately 1,084
metric tons of concentrate. We had approximately 20 containers on hand at the end of 2015, and we continue to receive containers at this time. Hillgrove
has notified us that it has shut down mining in Australia, and that we will not receive concentrates once they have shipped what they have at their mill. We
are recovering our processing costs, and we anticipate a 9.5% profit on sales.
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LOS JUAREZ, QUERETARO, MEXICO
PRECIOUS METALS OPERATIONS
USAC has mapped and mined central parts of the mineralized zones of Los Juarez that appear to be vertical breccia pipes over a strike length of 3.5 kilometers
with a maximum width of one kilometer. The mineralization is “open” on three sides and to depth.
After milling 3,500 metric tons of rock from the Mina Grande pit, the feed grade was determined to be approximately 0.789% antimony, 6.11 ounces of silver
(189 grams), and 0.049 ounces of gold (1.52 grams) per metric ton.
A shallow but widespread drilling program was started in 2015 to identify the higher grade ore in the deposit. The global average based on these drill holes and
rcok chip samples 0.057 ounces (1.77grams) gold, and 2.43 ounces (75.24 grams) silver, and 0.343% antimony per metric ton. To date, less than 5% of the
property has been drilled. A leach plant was built at Madero during 2015 to treat flotation concentrates from Puerto Blanco. Following the successful operation
of the 100 tons per day mill at Puerto Blanco and processing at Madero, an additional 500 ton per day mill will be completed and dedicated to Los Juarez ore at
either Puerto Blanco or adjacent to the open pit at Los Juarez. We claim no reserves at Los Juarez as defined by the SEC, and the drilling does not comply with
Canadian NI 43-101.
CANADIAN SOURCE
Precious metals will be recovered from an off-take agreement with a Canadian source and are sold back to the Canadian producer at a discount.
HILLGROVE MINES PTY. LTD.
Preparations are being made at our precious metal refinery in Montana to recover gold from Hillgrove concentrate. During the first quarter of 2016, we achieved
a good recovery of precious metals from the Hillgrove concentrates, and have started delivery to a refinery. The process being used for the Hillgrove
concentrates is transferable to the Los Juarez concentrates to be made at Puerto Blanco.
During 2015, BRZ sales of $2,753,644 generated a profit of $511,403. Depreciation was $221,441, and the operation contributed $732,844 (EBITDA) to
corporate growth. Following are the 2015 applications of BRZ:
ZEOLITE OPERATIONS
Application
Animal feed
Water filtration
Soil amendment
Traction control
Air filtration
Oil and gas
Home and miscellaneous
Odor control
Synthetic turf
Absorption
Remediation
Litter
Distribution
Pest control
Pigment
Total
The oil and gas and mining industries could become a large application for BRZ zeolite used for remediation.
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Percent
by dollars
Percent
by tons
41.46
18.34
14.85
9.02
8.68
2.06
1.41
1.38
0.83
0.66
0.50
0.35
0.33
0.25
0.08
100
30.35
20.00
18.20
11.20
12.50
2.80
0.70
1.10
0.80
0.90
0.80
0.30
0.20
0.30
0.07
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CORPORATE INFORMATION
UNITED STATES ANTIMONY CORPORATION
PO Box 643
Thompson Falls, Montana 59873
Phone: 406-827-3523 Fax: 406-827-3543
E-mail: tfl3543@blackfoot.net
NYSE MKT: TICKER SYMBOL“UAMY”
www.usantimony.com and www.bearriverzeolite.com
USAC BOARD OF DIRECTORS
·
·
·
·
Gary Babbitt has over 30 years experience in mining law and contracts and is a graduate of the University of Chicago.
John C. Lawrence, Geologist, Metallurgist graduated from the University of Wyoming and has more than 50 years of experience in oil and gas, and
most phases of mining, milling, and smelting.
Russell C. Lawrence, Physicist graduated from the University of Idaho where he worked in the Physics Department and later in all phases of
construction.
Hart W. Baits, Geologist graduated from the University of Oregon and has more than 30 years of experience as an exploration geologist with Western
Gold Exploration and Mining Company, Inspiration Mining, Inc., Noranda, Anaconda Mining Company, McMaster University, and Bear Creek Mining
Company.
· Whitney H. Ferer, Commodities Trader attended Colorado College and worked for 38 years in a 128-year old family owned trading company, Aaron
·
·
·
·
·
·
·
·
Ferer & Sons Co.
Jeffrey D. Wright . Mr. Wright graduated from North Carolina University in 1991, and from the University of Southern California, Marshall School of
Business (MBA) in 2004. From 2011 through 2013 he was the managing director metals and mining research for Global Hunter Securities, and he held
the same position for H.C. Wainwright for 2013 through 2015.
CORPORATE OFFICERS
John Lawrence: President and CEO
Russell C. Lawrence: Chemist, Executive Vice President Latin America
John C. Gustavsen: Executive Vice President North America graduated from Rutgers and worked for Harshaw Chemical Company where he
became President and produced more than 25,000,000 pounds per year of antimony oxide.
Dan Parks: CPA, CFO graduated from University of Idaho and worked for Coopers and Lybrand, Pack River Lumber, and more than 30 years in his
own accounting office.
Matt Keane: Director Sales graduated from Mankato State University and was a building contractor and the owner of a building supply business.
Alicia Hill: Corporate Secretary, Treasurer, and Controller
Paul Boyd, Stoel Rives, LLP, has practiced corporate and securities law for more than 30 years. He received his undergraduate degree from Stanford
University and his law degree from Georgetown.
CORPORATE COUNSEL
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Lexcorp Abogados
Decoria, Maichel, & Teague
Ceballos Contadores
Columbia Stock Transfer Company
Marilyn Sink: Plant Manager
Lance Sink: Assistant Manager
Matt Keane: Director Sales
Tony Lyght: Maintenance Foreman
Russell C. Lawrence: Director
Luis Valeriio Delgado: Smelter Manager
Sixto Beserra: Chemist Smelter
MEXICAN COUNSEL
AUDITORS
MEXICAN ACCOUTANTS
TRANSFER AGENT
HEADQUARTRERS, MONTANA.
MADERO SMELTER, COAHUILA MEXICO
Jose Jesus Heriberto Torres Montes: Mill Manager & Ore Buyer
PUERTO BLANCO MILL, GUANAJUATO, MEXICO
Reynaldo Angles: Mine Manager Los Juarez
LOS JUAREZ GROUP, QUERETARO, MEXICO
WADLEY, SAN LUIS POTOSI, MEXICO
Jesus Loera Rocha: Office Manager
Salvador Lora Garcia: Mill Manager
Juanito Rocha Candelario: Chief Ore Buyer
Antonio Rocha Medina: Mine Manager
Leo Jackson: Transportation, Negotiations
Sergio Rebolledo Mota: Permitting
Sara Lee Larso: General Manager
Juan Sanchez: Plant Manager
Dave Cole: Mine Manager
MEXICAN SUPPORT TEAM
BRZ ZEOLITE MINE, PRESTON, IDAHO
Brian Preddy: Lethbridge, Alberta, Ca.(403-715-0321)
BRZ ZEOLITE SALES CANADA
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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. Our principal business is the production and sale of antimony, silver, gold, and zeolite products. On May 16, 2012, we started trading on the
NYSE MKT under the symbol UAMY.
Overview
Antimony Sales
Although the volume of antimony sold (metal contained) increased 44% to 2,487,321 pounds in 2015 from 1,727,804 pounds in 2014, a decrease in the average
sales price of antimony (metal contained basis) of approximately $0.75 per pound saw our gross sales of antimony increase by only $1,731,523 (21%). Our loss
from antimony decreased from a loss of $1,926,126 in 2014 to a loss of $1,349,934 in 2015, a decrease of 30%. During 2015, the increase in sales of our
antimony products (approximately 760,000 lbs) from 2014 was due to an increase in volume of raw material received from our Canadian supplier and from
concentrates received from Hillgrove Mines of Australia. For our Mexican operations, we processed and sold approximately 907,000 pounds of antimony from
Hillgrove Mines, and approximately 198,000 pounds from our Mexican properties. The raw material received from our Mexican properties decreased from
approximately 586,000 lbs in 2014 to 198,000 pounds in 2015 because our furnace capacity was being used to process concentrates form Hillgrove.
Zeolite Sales
Our sales volume of zeolite in 2015 was 4,822 tons more than we sold in 2014, an increase of 44%. Our average sales price decreased by approximately $22
per ton, from $195.83 per ton to $173.17 per ton, a decrease of approximately 11%. The decrease in price was primarily due to sales of higher volume, lower
priced products. During 2015, total sales of zeolite increased approximately $584,000 from 2014, and the profit increased from $330,671 in 2014 to $511,403 in
2015.
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Precious Metals Sales
Precious Metals Sales
Silver/Gold
Montana
Ounces Gold Shipped (Au)
Ounces Silver Shipped (Ag)
Revenues
Ounces Gold Shipped (Au)
Ounces Silver Shipped (Ag)
Revenues
Mexico
Total Revenues
Antimony Division
2011
161.71
17,472.99
667,813
$
2012
102.32
20,237.70
647,554
$
2013
59.74
22,042.46
347,016
$
2014
64.77
29,480.22
461,083
$
2015
89.12
30,420.75
491,426
1.780
1,053.240
22,690
$
$
$
667,813
$
647,554
$
369,706
$
461,083
$
491,426
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.
Mining was suspended in December 1983, because antimony could be purchased more economically from foreign sources.
For 2015, and since 1983, we relied on foreign sources for raw materials, and 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 have developed sources of antimony in Mexico but we are still depending
on foreign companies for raw material in the future. We expect more raw materials from our own properties for 2016 and later years. We continue working with
suppliers in North America, Central America, Europe, Australia, and South America.
We currently own 100% of the common stock, equipment, and the leases 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 concession of the Los Juarez
property. USAMSA has three divisions (1) the Madero smelter in Coahuila that started expanded operations in late 2012, (2) the Puerto Blanco flotation mill and
oxide circuit in Guanajuato that started operating on a test basis in late 2012 and is ramping up for 2016, and (3) mining properties that include the Los Juarez
mineral deposit with concessions in Queretaro, the Wadley mining concessionin San Lis Potosi, the Soyatal deposits in Queretaro, and the Guadalupe
properties in Zacatecas.
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 catalyst for
production of polyethelene pthalate in plastic bottles, 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 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 and international market for antimony oxide products is
approximately 4% and less than 1%, respectively. We are the only significant U.S. producer of antimony products, while China supplies 92% of the world
antimony demand. We believe we are competitive both domestically and world-wide due to the following:
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· We have a reputation for quality products delivered on a timely basis.
· We are a non-Chinese producer of antimony products.
· We have two of the three operating antimony smelters in North and Central America.
· We are the sole domestic producer of antimony products.
· We can ship on short notice to domestic customers.
· We are vertically integrated, with raw materials from our own mines, mills, and smelter in Mexico, along with the raw materials from exclusive supply
agreements we have with numerous ore and raw material suppliers.
· As a vertically integrated company, we will have more control over our raw material costs.
Following is a five year schedule of our antimony sales:
Schedule of Antimony Sales
Year
2015
2014
2013
2012
2011
Metal
Contained
2,487,321
1,727,804
1,579,182
1,403,210
1,401,423
$
$
$
$
$
$
9,863,933 $
8,132,410 $
8,375,158 $
8,753,449 $
10,406,636 $
Average
Price/Lb
3.97
4.71
5.30
6.24
7.43
Concentration of Sales:
During the two years ended December 31, 2015, the following sales were made to our three largest customers:
Sales to Three
Largest Customers
Alpha Gary Corporation
East Penn Manufacturing Inc
General Electric
Kohler Corporation
Polymer Products Inc.
% of Total Revenues
For the Year Ended
December 31,
2015
3,142,586
1,236,250
$
December 31,
2014
3,289,766
720,966
$
1,736,914
-
6,115,750
$
2,091,565
-
6,102,297
$
46.65%
56.45%
While the loss of one of our three largest customers would be a problem in the short term, we have numerous requests from potential buyers that we cannot fill,
and we could quickly, in the present market conditions, be able to replace the lost sales. Loss of all three of our largest customers would be more serious and
may affect our profitability.
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, 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
2015
2014
2013
2012
2011
19
USA
Average
Price/Lb
Rotterdam
Average
Price/Lb
$
$
$
$
$
3.41 $
4.40 $
4.73 $
5.86 $
6.97 $
3.32
4.31
4.78
5.71
7.05
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
A six year price range of our sales prices for antimony oxide and antimony metal, per pound, was as follows:
Year
2015
2014
2013
2012
2011
2010
Oxide
Average
Price/Lb
Metal
Average
Price/Lb
Combined
Average
Price/Lb
$
$
$
$
$
$
3.34
4.00
4.41
5.14
6.16
3.67
$
$
$
$
$
$
3.71 $
4.18 $
4.69 $
5.58 $
7.42 $
4.42 $
3.97
4.71
5.30
6.24
7.43
4.34
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, Central America, and Australia.
Zeolite Division
We own 100% of Bear River Zeolite Company, (BRZ), an Idaho corporation that was 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. In addition to a large amount of fully depreciated
equipment that has been transferred from the USAC division, we have spent approximately $ 3,712,000 to purchase and construct the processing plant as of
December 31, 2015.
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 industrial 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 zeolite is regarded as one of the best zeolites in the world due
to its high CEC of approximately 180 meq/100 gr., its hardness and high clinoptilolite content, its absence of clay minerals, and its low sodium content. BRZ's
zeolite deposits’ characteristics which 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
agricultural crops
· 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, radium, uranium, 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.
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· 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 disperses 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, concrete, solar energy and heat exchange, desiccants, pellet binding, horse
and kitty litter, floor cleaner and carriers for insecticides, pesticides and herbicides.
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 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, 2014 and 2015, 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 remains unchanged at December 31, 2015.
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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, 2015. We have made significant
reclamation and remediation progress on all our properties over thirty years and have complied with regulatory requirements in our environmental remediation
efforts.
Employees
As of December 31, 2015, we employed 27 full-time employees in Montana. In addition, we employed 16 people at our zeolite plant in Idaho, and more than 40
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 plants proprietary in nature.
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.
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.
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We have accruals for asset retirement obligations and environmental obligations.
We have accruals totaling $260,327 on our balance sheet at December 31, 2015, 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
There are no unresolved staff comments from the Securities and Exchange Commission at December 31, 2015.
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). 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. 9190A. We discovered that the BLM cancelled
the patents on January 12, 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 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 producing our own raw materials from our properties in Mexico. We continue to produce antimony metal, oxide, sodium
antimonite, and precious metals from our processing facility near Thompson Falls, Montana.
LOS JUAREZ GROUP
MINERAL PROPERTIES
We hold properties that are collectively called the “Los Juarez” property, in Queretaro, as follows:
1.
2.
3.
San Miguel I and II are being purchased by a USAC subsidiary, Antimonio de Mexico, S. A. de C. V (AM), for $1,480,500. To date, we have paid
$1,415,500 on the property, and have incurred significant permitting costs. The property consists of 40 hectares.
San Juan I and II are concessions owned by AM and include 466 hectares.
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.
The concessions collectively constitute 720 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 the Penoles Company 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 deposit of mineralized material 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). Such a report does not qualify as a comprehensive evaluation, such as a final or bankable
feasibility study that concludes legal and technical viability, and economic feasibility. The Securities and Exchange Commission does not recognize this report,
and we claim no reserves.
The mineralized zone is a classic jasperoid-type deposit in the Cretaceous El Doctor Limestone. The mineralization is confined to silicified jasperiod pipes
intruded upwards in limestone. The zone strikes north 70 degrees west. The dimension of the deposit is still conjectural. However, the strike length of the
jasperoid is more than 3,500 meters.
The mineralization is typically very fine-grained stibnite with silver and 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 rock from mine
faces.
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SOYATAL MINING DISTRICT, PINAL DE AMOLES, QUERETARO, MEXICO
Soyatal
On October 30, 2009, the Company entered into a supply agreement with the owners of the Soyatal concessions similar to that of Guadalupe. During
the term of the supply agreement the Company funded certain of Soyatal’s equipment purchases, tax payments, labor costs, milling and trucking costs,
and other expenses incurred in the Soyatal mining operations for approximately $140,000. In addition to the advances for mining costs, the Company
purchased antimony ore from Soyatal that failed to meet agreed upon antimony metal recoveries and resulted in approximately $320,000 of excess
advances paid to Soyatal. On April 4, 2012, the Company negotiated an option to purchase the Soyatal properties for $1,500,000, and made a deposit
on the option of $55,000.
On August 5, 2013, the Company notified the owners of Soyatal that it was exercising the option to purchase the Soyatal property. The option exercise
agreement allowed the Company to apply all amounts previously due the Company (the “Purchase Price Credits”) by Soyatal of $420,411 to the
purchase price consideration. At December 31, 2013, the Company had Purchase Price Credits of approximately $325,000 which can be used as
payments on the obligation at the rate of $100,000 per year until gone. The Company is obligated to make payments of $200,000 annually through
2020, and a final payment of $100,000 is due in 2021. The debt payable for the Soyatal mine is non-interest bearing. In 2013, the Company recorded
the debt and the related Soyatal mine asset by determining the net present value of the contractual stream of payments due using a 6% discount rate.
The resulting discount on the Soyatal debt was approximately $212,000 at December 31, 2013, and is netted against the debt payable resulting in a
discounted amount of $762,541 at December 31, 2013. The discount is being amortized to interest expense using the effective interest method over the
life of the debt.
During 2014 and 2015, $45,752 and $88,250 of the discount was amortized to the Soyatal debt, resulting in a discounted amount owed of $820,272 and
a remaining debt discount of approximately $123,798 at December 31, 2015. The Company agreed to pay the Soyatal debt holder $100,000 during
2014 as part of the down payment agreement, and at December 31, 2015, this debt had been paid. The Company did not make the $100,000 payment
due in January of 2015. The Company has been making payments of $5,000 per month that have been informally agreed to by the parties while the
future payment terms of the Soyatal debt are negotiated. These payments have been recorded as reductions of long term debt.
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 25,600 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 by hand labor, with no compressors or 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.
Mr. 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:
·
·
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.
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 (mineralized deposit) to equal the total past production.”
Minimal ore, primarily through hand mining and sorting methods, has continued at the Soyatal properties since 1943. We do not claim any reserves at Soyatal
as defined by the SEC.
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USAMSA PUERTO BLANCO FLOTATION MILL, GUANAJUATO, MEXICO
During the fourth quarter of 2014, cleaner flotation machines were added the flotation mill at San Luis de la Paz (Puerto Blanco), Guanajuato, Mexico. All of the
permits to construct and operate the plant have been obtained. The flotation plant has a capacity of 140 metric tons per day. It includes a 30” x 42” jaw crusher, a
4’x 8’ double- deck screen, a 36” cone crusher, an 8’x 36” Harding type ball mill, and eight No. 24 Denver sub A type flotation machines, an 8’ disc filter, front
end loaders, tools and other equipment. The flotation circuit is used for the processing of rock from Los Juarez, Guadalupe, and other properties. We are in the
process of installing a 400 to 450 metric tons per day flotation mill that will be dedicated to processing ore from our Los Juarez property. The crushing equipment
currently in place is adequate for both flotation mills. 2014, less than 10% of the mill’s capacity was utilized. An oxide circuit was added to the plant in 2013 and
2014 to mill oxide ores from Soyatal and other properties. It includes a vertical shaft impactor, 3 ore bins, 8 conveyors, a 4’ x 6’ high frequency screen, jig, 8
standard concentrating tables, 5 pumps, sand screw and two buildings. The capacity of the oxide circuit is 50 tons per day.
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. Seventeen small rotating furnaces (SRF’s) and one large rotating furnace (LRF) with an associated
stack and scrubber were permitted and installed by the end of 2015. 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 feed capacity of five to six metric tons of direct shipping ore or
concentrates per day, depending on the quality of the feedstock. If the feedstock is in the mid-range of 45% antimony, the smelter could produce approximately
1.8 MM lbs of contained antimony annually. Concentrates from our flotation plant, and hand-sorted ore from Mexico sources and other areas, are being
processed. The Madero production is shipped to our Montana plant to produce finished Antimony products and other derivative by-products. Access to the plant
is by road and railroad. Set forth below are location maps:
28
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
ZEOLITE DIVISION
Location
This property is located in the southeast corner of Idaho, approximately seven miles east 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 are located on the Webster Farm, L.L.C., which is private land.
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 can also be shipped
from the Franklin County Grain Growers feed mill in the town of Preston on the Union Pacific Railroad.
The Burlington Northern Railroad can be accessed at Logan, Utah.
Location Map
29
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 each 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 IMC 185308
BRZ 2 IMC 185309
BRZ 3 IMC 185310
BRZ 4 IMC 185311
BRZ 5 IMC 185312
BRZ 6 IMC 185313
BRZ 7 IMC 185314
BRZ 8 IMC 185315
BRZ 9 IMC 185316
BRZ 10 IMC 185317
BRZ 11 IMC 185318
BRZ 12 IMC 185319
BRZ 20 IMC 186183
BRZ 21 IMC 186184
BRZ 22 IMC 186185
BRZ 23 IMC 186186
BRZ 24 IMC 186187
BRZ 25 IMC 186188
BRZ 26 IMC 186189
BRZ 27 IMC 186190
BRZ 28 IMC 186191
BRZ 29 IMC 186192
BRZ 30 IMC 186193
BRZ 31 IMC 186194
30
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 and sandstone 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.
31
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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-8K. 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. Breakage is generally good. Initial benches were 20 to 30 foot, and each
bench is accessed by a road.
Haulage is over approximately 4,000 foot of road on an uphill grade of 2.5% to the mill. On higher benches, the grade will eventually be downhill. Caterpillar 769
B rock trucks are being used. They haul 18 to 20 tons per load, and the cycle time is about 30 minutes.
With the 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.
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 burners
rated at 750,000 BTUs. One self-cleaning bag house services both dryers. Depending on the wetness of the feed rock, the capacity is in the range of 10 tons per
hour per dryer. During most of the year, the dryers are not run.
Coarse Products Circuit
There are two lines to produce coarse products:
·
·
Line 1 is a closed circuit with a 100 HP vertical shaft impactor and a 5 deck Midwestern multivibe screen.
Line 2 includes a Jeffries 30” by 24” 60 HP hammer mill in a 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.
32
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Item 3 Legal Proceedings
USAC has initiated an action against our prior investor relations consultant asking that he be ordered to desist from contacting any of our shareholders, and
restrained from derogatory actions intended to harm our Company’s reputation and causing financial harm to the company. The outcome of our suit is unknown
at this time.
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
The information concerning mine safety violations or other regulatory matters required by section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer
Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 to this Annual Report.
PART II
Item 5 Market for Common Equity and Related Stockholder Matters
Currently, our common stock is traded on the NYSE-MKT under the symbol UAMY. Prior to May 16, 2012, our common stock was traded 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 for the periods
indicated. The quotations were taken from a website available to the public, and generally believed to be accurate. The quoted prices may not necessarily
represent actual transactions.
2015
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
2014
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
$
$
High
Low
0.91 $
1.65
0.79
0.46
High
Low
2.14 $
2.17
1.76
1.35
0.48
0.52
0.35
0.24
1.67
1.41
1.15
0.60
The approximate number of holders of record of our common stock at March 30, 2016, 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.
33
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-net
Restricted cash
Other assets
Total assets
Current liabilities
Long-term debt, net of current portion
Hillgrove advances payable
Stock payable to directors for services
Accrued reclamation costs
Total liabilities
Shareholders' equity
Total liabilities and
shareholders' equity
Income Statement Data:
Revenues
Cost of revenues
Operating expenses
Gain on liability adjustments
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 and diluted
Weighted average shares outstanding:
Basic and diluted
$
$
$
2015
2014
$
$
$
2,136,326
16,030,333
76,012
17,530
18,260,201
2,429,830
1,717,745
1,254,846
137,500
260,327
5,800,248
12,459,953
2,303,669
13,511,803
75,754
653,805
16,545,031
2,292,640
715,328
161,339
125,000
255,190
3,549,497
12,995,534
$
18,260,201
$
16,545,031
$
13,109,003
$
10,772,192
13,521,363
1,311,407
(914,770)
29,534
13,947,534
11,111,533
1,213,548
42,566
12,367,647
(838,531)
-
(838,531)
$
(1,595,455)
-
(1,595,455)
(0.01)
$
(0.03)
66,207,241
64,605,253
$
$
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.
34
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
$
$
$
$
$
$
2015
1,381,971
1,105,350
2,487,321
3.97
(0.54)
9,863,933
491,426
(4,265,840)
(4,201,005)
(438,582)
(428,022)
(1,086,440)
(1,481,111)
914,770
(7,718)
(638,589)
2014
1,141,436
586,368
1,727,804
4.71
(1.11)
8,132,410
461,083
(4,864,603)
(2,609,338)
(295,334)
(288,602)
(688,619)
(1,234,597)
14,530
6,496
(1,366,574)
(711,345)
(559,552)
$
(1,349,934)
$
(1,926,126)
$
$
$
$
$
2015
2014
$
$
$
15,901
173.17
32.16
2,753,644
(1,266,687)
(286,235)
(279,435)
(108,847)
(80,229)
633
732,844
(221,441)
511,403
$
11,079
195.83
29.85
2,169,619
(1,109,386)
(170,964)
(222,054)
(81,852)
(63,765)
30,000
303
551,901
(221,230)
330,671
$
2015
13,109,003
(9,733,532)
(2,627,561)
(1,561,340)
2014
10,763,112
(8,583,327)
(1,747,425)
(1,298,362)
914,770
-
(7,085)
94,255
44,530
6,799
(814,673)
(932,786)
(780,782)
$
(838,531)
$
(1,595,455)
Resulta of Operations by Division
Antimony - Combined USA
and Mexico
Lbs of Antimony Metal USA
Lbs of Antimony Metal Mexico:
Total Lbs of Antimony Metal Sold
Average Sales Price/Lb Metal
Net income (loss)/Lb Metal
Gross antimony revenue - net of discount
Precious metals revenue
Production costs - USA
Product cost - Mexico
Direct sales and freight
General and administrative - operating
Mexico non-production costs
General and administrative - non-operating
Gain on liability adjustment
Non-operating gains
Net interest
EBITDA
Income taxes
Depreciation,& amortization
Net income (Loss) - antimony
Zeolite
Tons sold
Average Sales Price/Ton
Net income (Loss)/Ton
Gross zeolite revenue
Production costs
Direct sales and freight
Royalties
General and administrative - operating
General and administrative - non-operating
Non-operating gains
Net interest
EBITDA
Depreciation
Net income - Zeolite
Company-wide
Gross revenue
Production costs
Other operating costs
General and administrative - non-operating
Gain on liability adjustment
Non-operating gains
Net interest
EBITDA
Income tax benefit (expense)
Depreciation & amortization
Net income (Loss)
35
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Excess Mexico production costs
During the two year period ending December 31, 2015, we incurred excess production costs at our Mexico operations. At the beginning of each year,
management determined a standard, or expected, cost to produce antimony products for shipment to Montana for further processing. For 2015 and
2014, the standard costs per pound was $3.95 and $4.45, respectively. The production costs above the standard costs were calculated and reported in
the above schedule of results of operations by division as “excess Mexico production costs”, which were $1,086,440 and $688,619 in 2015 and 2014,
respectively. The excess Mexico production costs are primarily due to holding costs from inactivity at the Wadley and Los Juarez mines, the Puerto
Blanco mill, and the loss of production at the Madero smelter from metalurgical testing and experimenting with various production methods and
formulas.
Overview
Our cost of production was elevated for the years ended December 31, 2015 and 2014, because we were starting a major mining and production facility
in Mexico. The same workers responsible for production were also a significant part of building and testing the manufacturing plants and equipment at
Puerto Blanco and Madero, Mexico, which resulted in costs that won’t be incurred when construction and testing is complete. To a lesser degree, we
incurred similar testing costs at our plant in Thompson Falls, Montana. In Mexico, there will still be some overlapping costs in 2016 because the smelter
is finishing a major expansion in its physical plant. The production from Mexico should be greater for 2016 than 2015 once the plant expansion is
complete and the management and crew at the Madero smelter can concentrate their efforts on production activities.
The non-cash expense items totaled $1,075,423 for 2015 and included $932,786 for depreciation and amortization, $5,137 for accretion, and $137,500
for director compensation.
The non-cash expense items totaled $903,392 for 2014 and included $780,782 for depreciation and amortization, $(2,390) for accretion, and $125,000
for director compensation.
We are producing and buying raw materials, which will allow us to ensure a steady flow of products for sale. Our smelter at Madero, Mexico, was
producing a significant portion of our raw materials in 2014 and 2015. We will still purchase a significant portion of our raw materials from suppliers for
our smelter in Montana.
We completed installation of a natural gas pipeline to replace propane as the fuel used in our Mexico smelter in the fourth quarter of 2014. We expected
the pipeline to reduce our smelter fuel cost by approximately 75%. Our smelter fuel cost (propane) in Mexico was approximately $700,000 for 2013 and
$690,000 using 8 furnaces for the first nine months of 2014, resulting in a cost of approximately $1.27 per pound. Our natural gas cost was $348,260 to
produce 1,105,350 pounds of antimony in 2015, or approximately $0.32 per pound, a decrease of $0.95 per pound (74.8%).
We are proceeding with the installation of a 400 - 500 ton per day flotation mill that we expect to cost between $400,000 and $500,000 to install. The
concrete work for the mill has been completed, and work will be ongoing as we generate cash from operations. This mill will be dedicated to processing
ore from the Los Juarez mining property. We are in a waiting period for approval of permits necessary to process the Los Juarez ore. We have
adequate crushing capacity in place to feed the 500 ton per day mill and the existing mill.
When approved, the restart of production from Los Juarez will create a significant increase in our precious metals revenue for 2016 and years forward.
Our principal smelter, precious metals recovery operation, and our Company headquarters remain in Montana. With increased production, we expect to
widen our base of customers.
Results of Operations
36
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Comparison of Years ended December 31, 2015and 2014
Antimony Division - United States:
Revenues - Antimony (net of discount)
Revenues - Other
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 and amortization
Freight and delivery
Reclamation accrual
Land lease expense
Mexico non-production costs
General and administrative
Total Mexico antimony cost of sales
Total revenues - antimony
Total cost of sales - antimony
Total gross profit (loss) - 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 (loss) - combined
37
2015
2014
$
9,863,933
$
491,426
10,355,359
4,265,840
61,819
311,027
192,298
65,000
4,895,984
3,765,902
649,525
62,555
5,137
435,103
1,086,440
363,025
6,367,687
10,355,359
11,263,671
(908,312)
8,132,410
9,080
461,083
8,602,573
4,864,603
63,787
243,606
288,602
51,726
5,512,324
2,609,338
495,765
122,035
4,839
407,493
22,553
131,700
3,793,723
8,602,573
9,306,047
(703,474)
2,753,644
2,169,619
1,266,687
221,441
289,927
114,102
279,435
86,100
2,257,692
495,952
1,109,386
221,230
87,355
81,852
222,054
83,609
1,805,486
364,133
13,109,003
13,521,363
(412,360)
$
10,772,192
11,111,533
(339,341)
$
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
·
·
·
·
During the two year period ended December 31, 2015, the most significant event affecting our financial performance was the decrease in the price of
antimony (see table page 6). During the year ended December 31, 2015, the most significant event was construction and start-up of a plant to process
antimony concentrate for Hillgrove LTD of Australia. The expansion of production at our Mexico operations caused our reported operating costs to be
elevated when compared to years when we were not initiating the start-up of new production facilities. The Mexican production of antimony (metal
contained) and sold was 586,368 pounds during 2014 compared to 1,105,350 pounds for 2015, an increase of 88.5%. 2015 and 2014 are regarded as
“start- up years” during which the holding costs, permitting, and metallurgical research was categorized as a “non-production” operating expense. During
both years, Los Juarez concentrate was not produced and Soyatal oxide ore was in a research phase at the Puerto Blanco oxide circuit. Guadalupe was
not in production for most of 2015while they prepared the underground for mining higher grade rock. The Puerto Blanco mill circuits were utilized less
than 10% of their capacity. 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 2015 and the two year period
then ended:
a. Our sales of antimony for 2015 increased by approximately 759,000 pounds (44%) from 2014. Our revenues from antimony increased in 2015
by approximately $1,712,000 (21%) from 2014 due to an increase in the amount of antimony sold. The average sale price for antimony
contained in all products declined from $4.71 in 2014 to $3.96 per pound in 2015, a decrease of $0.75 (15.9%).
b. The metallurgical problem with the Los Juarez feed has been solved, and mining, milling, and smelting will resume when the necessary permits
are obtained. This will put the Puerto Blanco mill in operation. During 2015 and 2014, the Puerto Blanco mill was operating at less than 10% of
capacity.
c. The Soyatal oxide ore recovery problem has been solved, and high grade oxide concentrates can be produced. Oxide mineralized rock from
dumps will be mined and underground development will be started when the need for raw materials increases.
d. Explosives were permitted at Guadalupe in 2014, and underground development has started.
Assuming that Guadalupe and Los Juarez feed are going to the Puerto Blanco mill, the 500 ton per day mill that is estimated at 40% of completion will
need to be completed.
Our cost of goods sold for antimony increased by approximately $1,958,000 for 2015 because of the increase in antimony sold. For the year ended
December 31, 2015, costs of goods sold include operating and non-operating production costs from Mexico operations. Our switch to natural gas as a
fuel for our smelter at Madero in the fourth quarter of 2014 has provided a significant improvement in our Mexico operating costs for 2015. Prior to 2015,
the cost of propane was our second largest operating cost, and the switch to natural gas has decreased the per pound cost by 75%. The cost of goods
sold during both years has been impacted by increases in the cost of operating supplies, fuel, trucking, insurance, refractory costs, and steel.
Our volume of zeolite sold was up 44%, from 11,079 tons in 2014 to 15,901 tons in 2015. The tons of zeolite sold decreased by approximately 100 tons
in 2014 from 2013. Total revenue increased by approximately $584,000 in 2015 and decreased approximately $33,000 in 2014. Our cost of goods sold
increased by approximately $452,206 for 2015, and increased by approximately $55,000 for 2014 from 2013. Cost of sales increased for 2015 primarily
because we had an increase in the volume of product sold.
·
General and administrative costs, as reported in our statement of operations, include fees paid to directors through stock based compensation. In
2015 and 2014, we incurred $40,000 each year in fees to the NYSE MKT that was included in general and administrative expenses. General and
administrative costs for 2015 and 2014 include general and administrative costs related to commencement of production at our facilities in Mexico. The
combined general and administrative costs were 5.6%, and 5.8%, of sales for 2015 and 2014, respectively. The combined general and administrative
salaries were 3.3%, and 3.9% of sales for 2015 and 2014, respectively.
38
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
·
·
The increase in professional fees for 2015 (approximately $73,000) was primarily due to increased costs related to our audits and financial statement
preparation and for attorney fees related to alleged violations of an operating agreement with our former Investor Relations representative.
Factoring costs decreased in 2015 from approximately $49,000 in 2014 to approximately $41,000. Factoring costs decreased in 2014 by
approximately $22,000 as we were able to reduce our collection time for accounts receivable. The discounts we gave for early payments increased by
approximately $23,000 in 2015 from 2014.
Subsidiaries
The Company has a 100% investment in two subsidiaries in Mexico, USAMSA and AM, whose mineral property carrying values were assessed at
December 31, 2015 and 2014 for impairment. Management’s assessment of the subsidiaries’ fair value was based on their future benefit to us.
Financial Condition and Liquidity
Current Assets
Current liabilities
Net Working Capital
Cash provided (used) by operations
Cash used for capital outlay
Cash provided (used) by financing:
Net payments to factor
Proceeds from notes payable to bank
Proceeds from Hillgrove advances
Payment of notes payable to bank
Principal paid on long-term debt
Proceeds from sales of common stock
Proceeds from long-term debt
Received on notes receivable for stock
Net change in cash
$
$
$
2015
2,136,326
(2,429,830)
(293,504)
358,453
(1,704,037)
$
$
$
468
130,672
1,198,445
-
(94,141)
120,000
9,860
$
$
2014
2,303,669
(2,255,408)
48,261
(1,036,375)
(1,826,553)
(164,387)
198,571
(138,520)
(129,530)
3,070,134
130,000
0
103,340
Our net working capital decreased for the year ended December 31, 2015, from a positive amount of $48,261 at the beginning of the year to a negative
amount of $293,504 at the end of 2015. Our current assets decreased primarily due to an decrease in our inventories in Montana and in Mexico. The
capital improvements were paid for with cash and debt. Our current liabilities increased in most categories during 2015.
During the year ending December 31, 2016, we are planning to finance our improvements with operating cash flow. Our 2016 improvements are expected
to include completion of the installation at the Madero smelter, completion of cyanide leach circuits at both Madero and Puerto Blanco, and completing the
installation of a 400 - 500 ton per day flotation mill at Puerto Blanco.
In 2015, cash used by operations was primarily due to our net loss of approximately $840,000 which was mostly offset by depreciation and amortization of
approximately $932,000. We negotiated decreases in our current liabilities for raw material of approximately $915,000 during 2015.
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EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
The current portion of our long term debt is serviceable from the cash generated by operations.
Our stockholders’ equity section makes note that we have a liquidation preference of $5,884,376 for our preferred stock. This consists of a liquidation
payment of $5,281,519 due if we liquidate our company or sell substantially all our assets, and $602,857 of undeclared dividends. The Board of Directors’
does not intend to declare dividends on preferred stock as due and payable at any time in the near future. We do not feel that the liquidation preference
and undeclared dividends related to our preferred stock will be an impediment to raising capital in the future by issuing additional shares of common stock,
and are not going to affect our liquidity.
Item 7A Quantitative and Qualitative Disclosures about Market Risk
We sell our antimony products based on a world market price. 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 five years, our average sales price of antimony metal has ranged from a high of $7.43 per pound in 2011 to a low of
$3.96 per pound in 2015. Analysis of our costs indicate that, for the year ended December 31, 2015, raw material costs were approximately 50% of our
cost of revenues (cost of goods sold). Our raw material cost is tied to the sales price of antimony, but most of our production costs are fixed in nature, and
could not be decreased readily without decreasing our production. During the year ended December 31, 2015, a $0.50 per pound decrease in our sales
price would have likely caused our gross profit to decrease by $0.25 per pound. As we produce more of our raw material from our Mexico operations and
our raw material cost becomes less affected by world prices, a decrease in our sales price will have a smaller impact on our cost of revenues.
Item 7B Critical Accounting Estimates
We have, besides our estimates of the amount of depreciation on our assets, two critical accounting estimates. The value of our unprocessed ore in
inventory is assessed on assays taken at the time the ore is delivered, and may vary when the ore is processed and final settlement is made. Also, the
asset recovery obligation on our balance sheet is based on an estimate of the future cost to recover and remediate our properties as required by our
permits upon cessation of our operations, and may differ when we cease operations.
·
·
The value of unprocessed purchased ore in our inventory at the Wadley mining concession and Puerto Blanco mill is based on assays taken at the
time the ore is delivered, and may vary when the ore is processed and final settlement is made. We assay the purchased ore to estimate the
amount of antimony contained per metric ton, and then make a payment based on the Rotterdam price of antimony and the % of antimony
contained. Our payment scale incorporates a penalty for ore with a low percentage of antimony. It is reasonably likely that the initial assay will differ
from the amount of metal recovered from a given lot. If the initial assay of a lot of ore on hand at the end of a reporting period were different, it would
cause a change in our reported inventory and accounts payable amounts, but would not change our reported cost of goods sold or net income
amounts. At December 31, 2015, if we had overestimated the per cent of antimony in our total inventory of purchased ore by 2.5%, (a 10%
correction to the amount of antimony metal contained if we assayed 25.0% antimony per metric ton), the amount of our inventory and accounts
payable would be smaller by approximately $51,000. Our net income would not be affected. Direct shipping ore (DSO) purchased at our Madero
smelter is paid for at a fixed amount at the time of delivery and assaying, and is not subject to accounting estimates. The amount of the accounting
estimate for purchased ore at our Puerto Blanco mill is in a constant state of change because the amount of purchased ore and the per cent of metal
contained are constantly changing. Due to the amount of ore on hand at the end of a reporting period, as compared to the amount of total assets,
liabilities, equity, and the ore processed during a reporting period, any change in the amount of estimated metal contained would likely not result in a
material change to our financial condition.
The asset recovery obligation and asset on our balance sheet is based on an estimate of the future cost to recover and remediate our properties as
required by our permits upon cessation of our operations, and may differ when we cease operations. At December 31, 2011, we made an estimate
that the cost of the machine and man hours probable to be needed to put our properties in the condition required by our permits once we cease
operations would be $134,000. For purposes of the estimate, we used a probable life of 20 years and costs that, initially, are comparable to rates
that we would incur at the present. We are adding to (an accretion of 6%) the liability each year, and amortizing the asset over 20 years ($6,700
annually), which decreases our net income in total each year (by $11,837 for 2015). We will make periodic reviews of the remaining life of the mine
and other operations, and the estimated remediation costs upon closure, and adjust our account balances accordingly. At this time, we think that an
adjustment in our asset recovery obligation is not required, and an adjustment in future periods would not have a material impact in the year of
adjustment, but would change the amount of the annual accretion and amortization costs charged to our expenses by an undetermined amount.
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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-F23.
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 Chief Financial
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, 2015. 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, 2015.
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, 2015. To make this
assessment, we used the criteria for effective internal control over financial reporting described in Internal Control-Integrated Framework (2013), issued by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
As a result of our assessment, we concluded that we have material weaknesses in our internal control over financial reporting as of December 31,
2015. These weaknesses are as follows:
·
·
Inadequate design of internal control over the preparation of the financial statements and financial reporting processes;
Inadequate monitoring of internal controls over significant accounts and processes including controls associated with domestic and Mexican
subsidiary operations and the period-end financial reporting process; and
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EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
·
The absence of proper segregation of duties within significant processes and ineffective controls over management oversight, including antifraud
programs and controls.
We are aware of these material weaknesses and will develop procedures to ensure that independent review of material transactions is performed. The chief
financial officer will develop internal control measures to mitigate the lack of inadequate documentation of controls and the monitoring of internal controls
over significant accounts and processes including controls associated with the period-ending reporting processes, and to mitigate the segregation of duties
within significant accounts and processes and the absence of controls over management oversight, including antifraud programs and controls.
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, 2015, is ineffective.
Changes in internal control over financial reporting
There were no changes in internal control over financial reporting for the quarter ended December 31, 2015.
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 January 24, 2014, as reported on SEC Form 8K, the Company accepted the resignation of Bernard J. Guarnera, from the Board of Directors.
On June 28, 2014, the Company issued Mr. and Mrs. Robert Detwiler, stockholders of the Company, 100,000 shares of the Company’s common stock in
exchange for two notes receivable totaling $120,000. The notes receivable were renewed and mature on December 28, 2015, and bear interest at five percent.
On March 13, 2014, the Company issued Herbert Denton, the Company investor relations consultant, 25,000 shares of the Company’s common stock in
exchange for a notes receivable of $30,000. Mr. Denton’s note bears interest of six percent and is due in monthly payments of $2,000.
In 2014, the Company sold, and issued in connection with the exercise of warrants, an aggregate of 2,400,071, shares, of its unregistered common stock to
existing stockholders and other parties for $3,070,134.
During the year ended December 31, 2014, Mr. and Mrs. Robert Detwiler along with two other shareholders loaned the Company $330,000. The Company
issued 235,717 shares of its commons stock in satisfaction of these notes during the year ended December 31, 2014. The terms of the share payment were
identical to those offered other investors that purchased common stock during the time of the issuance.
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EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
On March 23, 2015, the Company issued the Board members 183,825 shares of the Company’s common stock for services in 2014 with a value of $125,000.
On July 1, 2015, Jeffrey Wright was elected as a board member.
On March 31 and August 11, 2015, the Company issued Herbert Denton, the Company investor relations consultant, 5,000 and 100,000 shares, respectively, of
the Company’s common stock in exchange for services. On September 30, 2105, a note receivable for $30,000 due from Mr. Denton for was cancelled, and
$30,000 was deleted from additional paid in capital.
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, 2015, is as follows:
Name
Age
Affiliation
Expiration of Term
John C. Lawrence
John C. Gustavsen
Russell C. Lawrence
Matthew Keane
Daniel L. Parks
Alicia Hill
Gary D. Babbitt
Whitney Ferer
Hart W. Baitis
Jeffrey D. Wright
77
67
47
60
67
34
70
57
66
Chairman, President, Director
First Vice-President
Annual meeting
Annual meeting
Second Vice-President and Director
Annual meeting
Third Vice-President
Chief Financial Officer
Annual meeting
Annual meeting
Secretary, Controller and Treasurer
Annual meeting
Director
Director
Director
Director
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 in 1969. Mr. Lawrence was the president and a director of AGAU
Mines, Inc., our corporate predecessor. 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.
Gary D. Babbitt. Mr. Babbitt has experience in the 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.
Russell C. Lawrence. Mr. Lawrence has experience in 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 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.
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EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Whitney Ferer. Mr. Ferer was nominated to the board of USAC in February 2012. He worked for 34 years for Aaron Ferer & Sons Co. headquartered in
Omaha, Nebraska, where he was the Vice President of Operations and Senior Trader, as well Vice Chairman of the Board of AF&S Co.. He has been involved
in the patenting of various processes for the breakdown of plastics and metal recovery, and was Vice President of the Lead & Zinc Division of AF&S. In addition,
Mr. Ferer has been active in the trading of all metals, and facilitated the opening of eight offices in the Far East and China for AF&S. Mr. Ferer has recently
opened his own company W.H. Ferer Co., LLC. He is one of the largest traders of antimony metal and oxides in the United States and, additionally, he handles
approximately 20-30 elements in various forms and grades.
Jeffrey D. Wright . Mr. Wright graduated from North Carolina University in 1991, and from the University of Southern California, Marshall School of Business
(MBA) in 2004. Mr. Wright was a naval officer from 1991 through 1996, serving aboard the aircraft carrier USS Carl Vinson and the destroyer USS John
Young. After duty in the military, Mr. Wright held successively more responsible positions in the securities and finance industry. From 2011 through 2013 he
was the managing director metals and mining research for Global Hunter Securities, and he held the same position for H.C. Wainwright for 2013 through 2015.
Alicia Hill. Ms. Hill was hired by the Company in 2006 as an accounting assistant, and was eventually promoted to chief accountant responsible for the
recording of transactions for three companies. In 2011, she was appointed Company Controller, Secretary, and Treasurer. Ms. Hill has guided the Company
through the listing on the NYSE-MKT, in the addition of a new division in Mexico, and has been the liaison with the Company’s auditors through a progressively
complicated reporting process.
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.
John C. Gustaven. Mr. Gustaven graduated from Rutgers University in 1970 with a BS in chemistry and started work for Harshaw Chemical (purchased by
Amspec Chemical Corporation), a major producer of antimony trioxide. Mr. Gustaven took engineering courses from 1976 through 1980, and became president
and treasurer of the company in 1983. He was promoted CEO in 1990. Mr. Gustaven designed a new type of production furnace for antimony trioxide that
eventually produced 20 million pounds of antimony trioxide per year. Mr. Gustaven is conversant in Spanish, Chinese, and other languages, and travelled to
many countries as part of his duties as president of Amspec Chemical Corporation. Mr. Gustaven came to work at United States Antimony Corporation in
November of 2011.
Matt Keane. Mr. Keane graduated from Mankato State University in 1978 with degrees in geography and environmental studies. Mr. Keane was owner of a
construction business and a retail building supply business before becoming the director of sales for United States Antimony Corporation in 2000. Mr. Keane
has developed the Company’s growing zeolite sales through Bear River Zeolite and the increase in the Company’s share of the domestic market for antimony
products.
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 2015 calendar year. Each incumbent director attended all
of the meetings held during the 2015 calendar year, in the aggregate, by the Board and each committee of the Board of which he was a member.
Our Board of Directors established an Audit Committee on December 10, 2011. It consists of four members, Gary Babbitt (Chairman), Whitney Ferer, Jeffrey
Wright, and Hart Baitis. None of the Audit Committee members are involved in our day-to-day financial management. Jeffrey Wright is considered a financial
expert.
During 2011, the Board also established a Compensation Committee and a Nominating Committee.
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EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Board Member Compensation Following is a summary of fees, cash payments, stock awards, and other reimbursements to Directors during the year ended
December 31, 2015:
Directors Compensation
Name and Principal Position
John C. Lawrence, Chairman
Gary D. Babbitt, Director
Russell Lawrence, Director
Hartmut Baitis, Director
Whitney Ferer, Director
Jeffrey Wright, Director
Totals
Fees Earned or
paid in Cash
Stock Awards
$
$
$
36,000 $
$
$
$
$
36,000 $
25,000 $
25,000 $
25,000 $
25,000 $
25,000 $
12,500 $
137,500 $
Total Fees,
Awards, and
Other
Compensation
25,000
61,000
25,000
25,000
25,000
12,500
173,500
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. Baitis, Mr. Babbitt,
Mr. Ferer, and Mr. Russell Lawrence did not file timely Forms 3, 4 or Form 5 reports during 2015 and 2014.
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 ended December 31, 2015 and 2014.
Name and Principal Position
John C. Lawrence,
President and Chief Executive Officer
John C. Gustaven,
Executive Vice President
Russell Lawrence,
Vice President for LatinAmerica
Year
2015
2014
2015
2014
2015
2014
$
$
$
$
$
$
Salary
Bonus
141,000
141,000
100,000
100,000
120,000
105,000
Stock Awards (2)
25,000
$
25,000
$
N/A
N/A
N/A
$
$
25,000
25,000
Total
166,000
166,000
100,000
100,000
145,000
130,000
$
$
$
$
$
$
(2)
These figures represent the fair value, as of the date of issuance, the annual director's fees payable to John C. Lawrence and Russell Lawrence in
shares of USAC's common stock.
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EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Compensation for all executive officers, except for the President/CEO position, is recommended to the compensation committee of the Board of
Directors by the President/CEO. The compensation committee makes the recommendation for the compensation of the President/CEO. The
compensation committee has identified a peer group of mining companies to aid in reviewing the President’s compensation recommendations for
executives, and for reviewing the compensation of the President/CEO. The full Board approves the compensation amounts recommended by the
compensation committee. Currently, the executive managements’ compensation only includes base salary and health insurance. The Company does
not have annual performance based salary increases, long term performance based cash incentives, deferred compensation, retirement benefits, or
disability benefits. For the year ended December 31, 2015, Russell Lawrence (VP) received an increase in base compensation of $15,000
annually. The Board of Directors determined that Mr. Lawrence’s compensation for the prior years was not adequate for the duties assigned to Mr.
Russell as the Vice President for Latin America, and that a raise was appropriate to compensate for management of the Latin American operations.
Two executive officers, the President/CEO and the Vice-President for the Latin American operations, receive restricted stock awards for their services as
Board members.
The following table sets forth information concerning the outstanding equity awards at December 31, 2015, held by our principal executive officer. There were
not any other outstanding equity awards or plan based awards to officers or directors as of December 31, 2015.
Name
Number of Securities Underlying
Unexercised Options
Exercisable
Unexercisable
#
#
Outstanding Equity
Awards at Fiscal
Year End
Number of
Securities
Underlying
Unexercised
Unearned Options
Average Exercise
Price
Option Exercise
Dates
John C. Lawrence
(Chairman of the Board Of
Directors and Chief Executive
Officer)
250,000
0
0
$
0.25
None
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 30, 2016, by (i) each person who is known by us to
beneficially own more than 5% of our Series B, 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, 47 Cox
Gulch, Thompson Falls, Montana 59873.
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EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Title of Class
Common Stock
Name and Address of Beneficial Owner (1)
Cardinal capital Management LLC
Four Greenwich Office Park Greenwich CT 06831
Common Stock
Common Stock
Series B Preferred
Series C Preferred
Series C Preferred
Series C Preferred
Reed Family Limited Partnership
328 Adams Street
Milton, MA 02186
The Dugan Family
c/o A.W.Dugan
1415 Louisana Street, Suite 3100
Houston, TX 77002
Excel Mineral Company
P.O. Box 3800
Santa Barbara, CA 93130
Richard A. Woods
59 Penn Circle West
Penn Plaza Apts.
Pittsburgh, PA 15206
Dr. Warren A. Evans
69 Ponfret Landing Road
Brooklyn, CT 06234
Edward Robinson
1007 Spruce Street, 1st floor
Philadelphia, PA 19107
Amount and
Nature of
Beneficial
Ownership
Percent of
Class (1)
Percent of all
Voting Stock
4,008,694
6.07%
4,018,335
6.09%
5.87%
5.88%
6,362,927(3)
9.64%
9.32%
750,000(5)
100.00%
N/A
48,305(4)
27.10%
32,203(4)
18.10%
32,203(4)
18.10%
*
*
*
*
Series C Preferred
All Series C Preferred Shareholders as a Group
177,904(4)
100.00%
Common Stock
John C. Lawrence
4,281,107(2)
83.35%
6.66%
Russell Lawrence
Hart Baitis
Garry Babbitt
Whitney Ferer
Jeffrey Wright
Mathew Keane
Daniel Parks
280,654
171,180
169,254
119,704
50,000
10,300
54,000
5.46%
3.33%
3.29%
2.33%
*
*
1.05
Common Stock
All Directors and Executive Officers as a Group
5,136,199
100.00%
Series D Preferred
John C. Lawrence
1,590,672(4)
90.80%
Leo Jackson
Garry Babbitt
102,000
58,333
5.80%
3.40%
Series D Preferred
All Series D Preferred Shareholders as a Group
1,751,005(4)
100.00%
Common Stock and Preferred Stock
w/voting rights
All Directors and Executive Officers as a Group
5,136,199(2)
72.55%
*
*
*
*
*
*
*
7.53%
2.40%
*
*
2.70%
7.53%
Common and Preferred Voting Stock
All Directors and Executive Officers as a Group
6,887,204
100.00%
10.09%
All preferred Shareholders that are officers or directors
1,751,005(4)
27.45%
2.56%
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EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
(1)
(2)
(3)
(4)
(5)
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 30, 2016, 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 66,316,278shares of common stock,
750,000 shares of Series B Preferred Stock, 177,904 shares of Series C Preferred Stock, and 1,751,005 shares of Series D Preferred Stock outstanding
on March 30, 2016. Total voting stock of 68,245,187 shares is a total of all the common stock issued, and all of the Series C and Series D Preferred
Stock.
Includes 4,031,107 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 the estate of Al W. Dugan and shares owned by companies owned and controlled by the estate of Al W. Dugan. Excludes
183,333 shares owned by Lydia Dugan as to which the estate of Mr. Dugan disclaims beneficial ownership.
The outstanding Series C and Series D preferred shares carry voting rights equal to the same number of shares of common stock.
The outstanding Series B preferred shares carry voting rights only if the Company is in default in the payment of declared dividends. The Board of
Directors has not declared any dividends as due and payable for the Series B preferred stock.
Item 13 Certain Relationships and Related Transactions
Described below are transactions during the last two 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, 2015.
On December 30, 2015, the Company declared, but did not issue approximately 474,000 shares of unregistered common stock to be paid to its directors for
services during 2015, having a fair value of $125,000, based on the stock price at the date declared.
During the year ended December 31, 2015, the Company issued 105,000 shares to Herbert Denton for investor relations services provided. The shares
estimated fair value at the time of issue was approximately $27,950. The Company also forgave a $30,000 note due from Mr. Denton for the purchase of
common stock, and reduced additional paid in capital by that amount.
On December 30, 2014, the Company declared, but did not issue 183,825 shares of unregistered common stock to be paid to its directors for services during
2014, having a fair value of $125,000, based on the stock price at the date declared. These shares were issued on March 23, 2015.
During the year ended December 31, 2014, the Company issued 24,000 shares to Herbert Denton for investor relations services provided. The shares estimated
fair value at the time of issue was approximately $39,000.
On December 27, 2013, the Company declared, but did not issue, shares of unregistered common stock to be paid to its directors for services during 2013,
having a fair value of $150,000, based on the current stock price at the date declared. During the nine months ended September 30, 2014, the Company
issued 83,334 shares in satisfaction of the obligation.
During 2013, the Company awarded, but did not issue, common stock with a value at December 31, 2013 of $150,000 to its Board of Directors as compensation
for their services as directors. In connection with the issuances, the Company recorded $150,000 in director compensation expense. At a closing price of $1.80
per share on June 28, 2014, the directors were issued 83,334 shares in 2014.
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EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
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 2015 and 2014 totaled $32,397 and $30,651,
respectively.
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 2013 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 2015 and 2014 were $151,741 and $149,168, 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 2015 and 2014 were $10,115 and $24,323, 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
Item 15. Exhibits and Reports on Form 8-K
Exhibit Number Description
3.01
3.02
3.03
3.04
4.01
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.
Articles of Correction of Restated Articles of Incorporation of USAC.
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
49
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
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)
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
50
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
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*
51
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
14.0
31.1
32.1
44.1
Code of Ethics*
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.
52
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__/s/John C. Lawrence______________Date: March 30, 2016
John C. Lawrence, President, Director,
and Principal Executive Officer
By_______/s/Daniel L. Parks__________ Date: March 30, 2016
Daniel L. Parks, Chief Financial Officer
By_______/s/Alicia Hill______________ Date: March 30, 2016
Alicia Hill, Controller
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____/s/John C. Lawrence___________ Date: March 30, 2016
John C. Lawrence, Director and President
(Principal Executive)
By______/s/Whitney Ferer____________ Date: March 30, 2016
Whitney Ferer, Director
By________/s/Gary Babbitt___________ Date: March 30, 2016
Gary D. Babbitt, Director
By_______/s/Hart Baitis______________ Date: March 30, 2016
Hart Baitis, Director
By______/s/Russell Lawrence_________ Date: March 30, 2016
Russell Lawrence, Director
By______/s/Jeffrey Wright_________ Date: March 30, 2016
Jeffrey Wright, Director
53
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 and subsidiaries (“the Company”) as of December 31,
2015 and 2014, and the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the years ended December 31, 2015
and 2014. 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 and Subsidiaries as of December 31, 2015 and 2015 and 2014, and the results of their consolidated operations and cash flows for the
years ended December 31, 2015 and 2014, in conformity with accounting principles generally accepted in the United States of America.
/s/: DeCoria, Maichel & Teague, P.S.
DeCoria, Maichel & Teague, P.S.
Spokane, Washington
March 30, 2016
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, 2015 and 2014
ASSETS
Current assets:
Cash and cash equivalents
Certificates of deposit
Accounts receivable, net of $4,031 allowance for doubtful accounts
Inventories
Other current assets
Total current assets
Properties, plants and equipment, net
Restricted cash for reclamation bonds
Other assets
Total assets
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
Due to factor
Accrued payroll, taxes and interest
Other accrued liabilities
Payables to related parties
Deferred revenue
Notes payable to bank
Long-term debt, current portion, net of discount
Total current liabilities
Long-term debt, net of discount and current portion
Hillgrove advances payable
Stock payable to directors for services
Asset retirement obligations and accrued reclamation costs
Total liabilities
Commitments and contingencies (Note 4 and 16)
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 $907,500 and $900,000
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 $4,879,029 and $4,837,880
respectively)
Common stock, $0.01 par value, 90,000,000 shares authorized;
66,316,278 and 66,027,453 shares issued and outstanding, respectively
Additional paid-in capital
Notes receivable from stock sales
Accumulated deficit
Total stockholders' equity
Total liabilities and stockholders' equity
$
$
$
2015
2014
$
$
$
133,543
250,414
422,673
1,094,238
235,458
2,136,326
16,030,333
76,012
17,530
18,260,201
1,629,972
13,782
221,446
141,545
32,396
78,730
130,672
181,287
2,429,830
1,717,745
1,254,846
137,500
260,327
5,800,248
123,683
249,147
454,674
1,433,539
42,626
2,303,669
13,511,803
75,754
653,805
16,545,031
1,821,673
13,314
135,245
38,811
8,357
78,730
-
159,278
2,255,408
715,328
198,571
125,000
255,190
3,549,497
-
-
7,500
1,779
7,500
1,779
17,509
17,509
663,162
35,890,733
-
(24,120,730)
12,459,953
18,260,201
$
660,274
35,740,671
(150,000)
(23,282,199)
12,995,534
16,545,031
$
The accompanying notes are an integral part of these consolidated financial statements.
F-2
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
United States Antimony Corporation and Subsidiaries
Consolidated Statements of Operations
For the years ended December 31, 2015 and 2014
REVENUES
COST OF REVENUES
GROSS PROFIT (LOSS)
OPERATING EXPENSES:
General and administrative
Salaries and benefits
Gain on liability adjustment (Note 3)
Hillgrove advance - earned credit (Note 9)
Professional fees
TOTAL OPERATING EXPENSES
INCOME (LOSS) FROM OPERATIONS
OTHER INCOME (EXPENSE):
Gain on sale of equipment
Interest income
Interest expense
Factoring expense
TOTAL OTHER INCOME (EXPENSE)
INCOME (LOSS) BEFORE INCOME TAXES
INCOME TAX PROVISION (BENEFIT)
NET INCOME (LOSS)
Preferred dividends
Net income (loss) available to
common stockholders
Net income (loss) per share of
common stock:
Basic and diluted
Weighted average shares outstanding:
Basic an diluted
2015
2014
$
13,109,003
$
10,772,192
13,521,363
11,111,533
(412,360)
(339,341)
736,265
436,897
(914,770)
(142,170)
280,415
396,637
623,569
418,083
-
-
207,346
1,248,998
(808,997)
(1,588,339)
5,200
6,383
-
(41,117)
(29,534)
35,450
7,916
(1,118)
(49,364)
(7,116)
(838,531)
(1,595,455)
-
-
(838,531)
(1,595,455)
(48,649)
(48,649)
$
(887,180)
$
(1,644,104)
$
(0.01)
$
(0.03)
66,207,241
64,605,253
The accompanying notes are an integral part of these 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
For the years ended December 31, 2015 and 2014
Total Preferred Stock
Common Stock
Shares
Amount
Shares
Amount
Additional
Paid
In Capital
Notes
Receivable
For
Stock Sales
Accumulated
Deficit
Total
Balances, December 31, 2013
26,789,909
$
26,788
63,156,206
$
631,562
$ 32,030,249
$ (21,686,744)
$ 11,001,855
Issuance of common stock and
exercise of warrants for
cash, net of offering costs
Issuance of common stock for
notes payable
Issuance of common stock to
directors for services
Issuance of common stock to
consultant for services
Issuance of common stock for
cashless exercise of warrants
Stock issued for notes
receivable
Net loss
2,400,071
24,001
3,046,133
`
3,070,134
235,717
2,357
327,643
83,334
24,000
3,125
833
240
31
149,167
38,760
(31)
330,000
150,000
39,000
-
125,000
1,250
148,750
$
(150,000)
(1,595,455)
-
(1,595,455)
Balances, December 31, 2014
26,789,909
$
26,788
66,027,453
$
660,274
$ 35,740,671
$
(150,000)
$ (23,282,199)
Issuance of common stock to
directors for services
Issuance of common stock to
consultant for services and
settlement agreement
Forgiveness of note receivable
Cash received on notes
receivable
Net loss
183,825
1,838
123,162
105,000
1,050
56,900
(30,000)
30,000
120,000
(838,531)
$ 12,995,534
-
125,000
57,950
-
120,000
(838,531)
Balances, December 31, 2015
26,789,909
$
26,788
66,316,278
$
663,162
$ 35,890,733
$
-
$ (24,120,730)
$ 12,459,953
The accompanying notes are an integral part of these 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, 2015 and 2014
Cash Flows From Operating Activities:
Net income (loss)
Adjustments to reconcile net income (loss) to net cash
provided (used) by operating activities:
Depreciation and amortization
Gain on sale of equipment
Bad debt expense
Hillgrove advance earned credit
Accretion of asset retirement obligation
Common stock issued for services
Common stock payable for directors fees
Change in:
Accounts receivable
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:
Cash received for sale of equipment
Purchase of properties, plants and equipment
Net cash used by investing activities
Cash Flows From Financing Activities:
Net payments to factor
Proceeds from sale of common stock and exercise of
warrants, net of offering costs
Proceeds from Hillgrove advances
Proceeds from notes payable to bank
Principal paid notes to bank
Principal payments of long-term debt
Proceeds from long term debt
Proceeds from related party loans
Payments on related party loans
Received on notes receivable for stock
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 capitalized)
Noncash investing and financing activities:
Properties, plants & equipment acquired with long-term debt
Properties, plants & equipment acquired with accrued liability
Imputed interest capitalized as property, plant and equipment
Properties, plants & equipment acquired with other long term assets
Common stock payable issued to directors
Common stock issued for debt payment
Common stock issued for note receivable
Equipment sold for other asset advances
Forgiveness of note receivable-stock
2015
$
(838,531)
$
2014
(1,595,455)
932,786
(5,200)
18,668
(142,170)
5,137
57,950
137,500
13,333
339,301
(194,357)
49,382
(191,701)
86,201
66,115
-
24,039
358,453
780,782
(35,450)
-
-
(2,390)
39,000
125,000
121,347
(398,769)
(12,596)
(104,524)
86,906
10,308
(11,934)
(31,408)
(7,192)
(1,036,375)
5,200
(1,709,237)
(1,704,037)
-
(1,826,553)
(1,826,553)
468
(164,387)
1,198,445
130,672
-
(94,141)
-
-
-
120,000
1,355,444
3,070,134
198,571
-
(138,520)
(129,530)
130,000
65,300
(65,300)
-
2,966,268
9,860
123,683
133,543
$
103,340
20,343
123,683
-
$
1,118
$
1,061,479
36,619
57,088
586,893
125,000
-
-
-
30,000
29,185
-
45,752
-
150,000
330,000
150,000
40,000
-
$
$
$
The accompanying notes are an integral part of these 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, 2015 and 2014
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
Sales to Three
Largest Customers
Alpha Gary Corporation
East Penn Manufacturing Inc
Kohler Corporation
% of Total Revenues
Three Largest
Accounts Receivable
Gopher Resources
Earth Innovations Inc
Teck American Inc
Milestone AV Technologies Inc.
Wildfire Construction
% of Total Receivables
For the Year Ended
December 31,
2015
3,142,586
1,236,250
1,736,914
6,115,750
$
$
December 31,
2014
3,289,766
720,966
2,091,565
6,102,297
$
$
46.70%
56.65%
December 31,
2015
December 31,
2014
$
141,570
80,946
43,327
265,843
$
$
62,019
227,239
42,075
-
331,333
62.90%
72.87%
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.
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, 2015 and 2014
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 depreciation and impairment, accounts receivable allowance, deferred income taxes, environmental
remediation liabilities and asset retirement obligations. Actual results could differ from those estimates.
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, 2015 and 2014 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, 2015 and 2014 consisted of finished antimony products, antimony metal, antimony concentrates, antimony ore, and finished
zeolite products, and are stated at the lower of first-in, first-out weighted average 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. Stockpiled ore is carried at the lower of average cost or net realizable value. 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.
Translations of Foreign Currencies
All amounts are presented in United States (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.
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, 2015 and 2014
3. Summary of Significant Accounting Policies, continued:
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 two to
thirty years. Vehicles and office equipment are stated at cost and are depreciated using the straight-line method over estimated useful lives of three to
twelve 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
$3,451,317 and $1,901,490 in plant construction and other capital costs for the years ended December 31, 2015 and 2014, respectively. These
amounts include capitalized interest of $66,965 and $81,703, 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.
Mineral properties are amortized over the estimated economic life of the mineral resource using the straight-line method, based upon estimated lives of
the properties, or the units-of-production method, based upon estimated units of mineral resource.
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.
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 are amortized on the statement of operations using the straight line method over the expected life if the
mineral deposit 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, 2015 or 2014 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.
Asset Retirement Obligations and Reclamation Costs
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.
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.
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, 2015 and 2014
3. Summary of Significant Accounting Policies, continued:
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 straight line basis. After the initial measurement of the asset retirement obligation, the liability will be
adjusted to reflect changes in the estimated future cash flows underlying the obligation. Determination of any amounts included in determination of fair
value is based upon numerous estimates and assumptions, including future retirement costs, future inflation rates, and the Company’s credit-adjusted
risk-free interest rates.
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 processed and 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 do not provide for product returns or allowances.
Sales of precious metals are recognized when pervasive evidence of an arrangement exists, the price is reasonably determinable, the product has been
delivered, no obligations remain, 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 years ended December 31, 2015, and
2014, does not add any shares to basic weighted average shares.
As of December 31, 2015 and 2014, 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
December 31,
2015
December 31,
2014
250,000
1,751,005
2,001,005
726,917
1,751,005
2,477,922
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, 2015 and 2014
3. Summary of Significant Accounting Policies, continued:
Fair Value of Financial Instruments
The Company’s financial instruments include cash and cash equivalents, certificates of deposits, restricted cash, due to factor, and long-term debt. The
carrying value of certificates of deposit, restricted cash, due to factor, and long-term debt approximates fair value based on the contractual terms of
those instruments.
Fair Value Measurements
Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements”, 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.
The Company discloses the following information for each class of assets and liabilities that are measured at fair value:
1. the fair value measurement;
2. the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using
quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant
unobservable inputs (Level 3);
3. for fair value measurements using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately
presenting changes during the period attributable to the following:
a. total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings, and a description
of where those gains or losses included in earnings are reported in the statement of operations;
b. the amount of these gains or losses attributable to the change in unrealized gains or losses relating to those assets or liabilities still
held at the reporting period date and a description of where those unrealized gains or losses are reported;
c. purchases, sales, issuances, and settlements (net); and
d. transfers into and/or out of Level 3.
4. the amount of the total gains or losses for the period included in earnings that are attributable to the change in unrealized gains or losses
relating to those assets and liabilities still held at the reporting date and a description of where those unrealized gains or losses are reported in
the statement of operations; and
5. in annual periods only, the valuation technique(s) used to measure fair value and a discussion of changes in valuation techniques, if any, during
the period.
The table below sets forth the Company’s financial assets that were accounted for at fair value on a recurring basis as of December 31, 2015 and 2014,
respectively, and the fair value calculation input hierarchy level that the Company determined applies to each asset category.
Assets:
Cash and cash equivalents
Certificates of deposit
Restricted cash
Total Cash
2015
2014
133,543
250,414
76,012
459,969
$
$
123,683
249,147
75,754
448,584
$
$
Input
Hierarchy
Level
Level I
Level I
Level I
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, 2015 and 2014
3. Summary of Significant Accounting Policies, continued:
Recent Accounting Pronouncements
In July 2013, the FASB issued ASU 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss,
or a Tax Credit Carryforward Exists” (“ASU 2013-11”). ASU 2013-11 provides guidance on the presentation of unrecognized tax benefits related to any
disallowed portion of net operating loss carryforwards, similar tax losses, or tax credit carryforwards, if they exist.
In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements—Going Concern.” The provisions of ASU No. 2014-15 require
management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S.
auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period
including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial
doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is
not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The
amendments in this ASU are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The
Company is currently assessing the impact of ASU No. 2014-15 on the Company’s consolidated financial statements once adopted.
In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU No. 2014-09 Revenue Recognition, replacing guidance currently codified in
Subtopic 605-10 Revenue Recognition-Overall with various SEC Staff Accounting Bulletins providing interpretive guidance. The guidance establishes a
new five step principle-based framework in an effort to significantly enhance comparability of revenue recognition practices across entities, industries,
jurisdictions, and capital markets. ASU No. 2014-09 is effective for annual and interim reporting periods beginning after December 15, 2017. We are in the
process of evaluating this guidance and our method of adoption.
In July 2015, the FASB issued ASU 2015-11 Inventory (Topic 330): Simplifying the Measurement of Inventory. The update provides for inventory to be
measured at the lower of cost and net realizable value, and is effective for the fiscal years beginning after December 15, 2016. We are currently evaluating
the potential impact of implementing this update on the consolidated financial statements.
In November 2015, the FASB issued ASU No. 2015-17 Income Taxes - Balance Sheet Classification of Deferred Taxes (Topic 740). The update is
designed to reduce complexity of reporting deferred income tax liabilities and assets into current and non-current amounts in a statement of financial
position. The FASB has proposed the presentation of deferred income taxes, changes to deferred tax liabilities and assets be classified as non-current in
the statement of financial position. The update is effective for fiscal years beginning after December 15, 2016. ASU No. 2015-17 is not expected to have a
material impact on our consolidated financial statements.
Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material
impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an
impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.
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, 2015 and 2014
4. Accounts Receivable and Due to Factor
The Company factors designated trade receivables pursuant to a factoring agreement with LSC Funding Group L.C., an unrelated factor (the
“Factor”). The agreement specifies that eligible trade receivables are factored with recourse. The performance of all obligations and payments to the
factoring company is personally guaranteed by John C. Lawrence, the Company’s President and Chairman of the Board of Directors. Selected trade
receivables are submitted to the factor, and the Company receives 85% of the face value of the receivable by wire transfer. Upon payment by the
customer, the remainder of the amount due is received from the Factor, less a one-time servicing fee of 2% for the receivables factored. This servicing
fee is recorded on the consolidated statement of operations in the period of sale to the factor.
Trade receivables assigned to the Factor are carried at the original invoice amount less an estimate made for doubtful accounts. Under the terms of the
recourse provision, the Company is required to reimburse the Factor, upon demand, for factored receivables that are not paid on time. Accordingly,
these receivables are accounted for as a secured financing arrangement and not as a sale of financial assets.
Receivables, net of allowances, are presented as current assets and the amount potentially due to the Factor is presented as a secured financing in
current liabilities.
Accounts Receivble
Accounts receivable - non factored
Accounts receivable - factored with recourse
less allowance for doubtful accounts
Accounts receivable - net
December 31,
2015
December 31,
2014
$
$
412,922
13,782
(4,031)
422,673
$
$
445,391
13,314
(4,031)
454,674
Factoring fees paid by the Company during the years ended December 31, 2015 and 2014, were $41,117 and $49,364, respectively. For the years
ended December 31, 2015 and 2014, net accounts receivable of approximately $2.10 million and $2.30 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, 2015 and 2014 were as follows:
Antimony Metal
Antimony Oxide
Antimony Concentrates
Antimony Ore
Total antimony
Zeolite
2015
102,207
332,068
133,954
319,631
887,860
206,378
1,094,238
$
$
2014
40,352
718,982
33,545
447,262
1,240,141
193,398
1,433,539
$
$
At December 31, 2015 and 2014, 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 concentrates and ore was held
primarily at sites in Mexico and is essentially raw material, carried at cost. At December 31, 2015, antimony inventory is valued at net realizable value.
The Company's zeolite inventory consists of salable zeolite material held at BRZ's Idaho mining and production facility, and is carried at cost.
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, 2015 and 2014
5.
Inventories, Continued:
Gain on Liability Adjustment
During the first quarter of 2015, we noted that the amounts we were being invoiced by our Canadian supplier did not appear to be in compliance with our
understanding of what we should be paying for the raw material supplied by them. We determined that since April of 2012 the supplier had been billing
us for the entire amount of pounds of antimony delivered to us, even though we believed that we should only pay for 90% of the delivered antimony since
we lost approximately 10% in processing. We contacted the supplier, and after a mutual review and modification of information that we had supplied to
them, the supplier proposed a settlement of $914,770 to be credited against amounts we owed them. We agreed to the settlement amount and recorded
it as a reduction of an account payable to the supplier and recognized a gain on liability adjustment in our statement of operations.
6. Properties, Plants and Equipment
The major components of the Company's properties, plants and equipment at December 31, 2015 and 2014 are shown below:
2015
2014
Plant & Equipment
Buildings
Mineral Rights and Interests
Land & Other
Accumulated Depreciation
Plant & Equipment
Buildings
Mineral Rights
Land & Other
Accumulated Depreciation
USAC
872,548
247,210
-
3,274,572
4,394,330
(2,456,928)
1,937,402
USAC
814,183
243,248
-
3,274,572
4,332,003
(2,395,109)
1,936,894
$
$
$
$
MEXICO
7,497,791
900,992
3,743,352
2,529,294
14,671,429
(2,131,624)
12,539,805
MEXICO
6,159,064
834,269
2,058,737
2,426,607
11,478,677
(1,482,098)
9,996,579
$
$
$
$
BRZ
3,347,629
349,946
-
15,310
3,712,885
(2,159,759)
1,553,126
BRZ
3,166,701
349,946
-
-
3,516,647
(1,938,317)
1,578,330
$
$
$
$
TOTAL
11,717,968
1,498,148
3,743,352
5,819,176
22,778,644
(6,748,311)
16,030,333
TOTAL
10,139,948
1,427,463
2,058,737
5,701,179
19,327,327
(5,815,524)
13,511,803
$
$
$
$
At December 31, 2015 and 2014, the Company had $891,576 and $1,113,847 of assets that were considered to be construction in progress and had not
yet been depreciated.
F-13
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, 2015 and 2014
7. Asset Retirement Obligation and Accrued Reclamation Costs
Changes to the Asset Retirement Obligation balance during 2015 and 2014 are as follows:
Asset Retirement Obligation
Balance December 31, 2013
Accretion adjustment during 2014
Balance December 31, 2014
Accretion during 2015
Balance December 31, 2015
$
$
150,080
(2,390)
147,690
5,137
152,827
The Company’s total asset retirement obligation and accrued reclamation costs of $260,327 and $255,190 at December 31, 2015 and 2014, respectively,
include reclamation obligations for Idaho and Montana operations of $107,500.
8. Other Assets
Guadalupe
On March 7, 2012 and on April 4, 2012 the Company entered into a supply agreement and a loan agreement, respectively, (“the Agreements”) with
several individuals collectively referred to as ‘Grupo Roga’ or ‘Guadalupe.’ During the term of the supply agreement the Company funded certain of
Guadalupe’s equipment purchases, tax payments, labor costs, milling and trucking costs, and other expenses incurred in the Guadalupe mining
operations for approximately $112,000. In addition to the advances for mining costs, the Company purchased antimony ore from Guadalupe that failed
to meet agreed upon antimony metal recoveries and resulted in approximately $475,000 of excess advances paid to Guadalupe.
The Agreements with Guadalupe granted the Company an option to purchase the concessions outright for $2,000,000. On September 29, 2015, the
Company notified the owners of Guadalupe that it was exercising the option to purchase the Guadalupe property. The option exercise agreement
allowed the Company to apply all amounts previously due the Company by Guadalupe of $586,893 to the purchase price consideration, resulting in a
net obligation for the purchase of the Guadalupe mine of $1,413,107. The Company is obligated to make annual payments that vary from $60,000 to
$149,077 annually through 2026. The debt payments are non-interest bearing. The Company determined the net present value of the future contractual
stream of payments to be $972,722 using a 6% discount rate. The Company recorded $972,722 as the cost of the concessions and the debt payable
equal to total payments due of $1,413,107 less a discount of $440,385. The discount is being amortized to interest expense using the effective interest
method over the life of the debt. As of December 31, 2015, the Company had made $15,000 in payments toward this debt and amortized $14,591 of
discount as interest expense. The net balance of the debt at December 31, 2015 was $972,312.
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, 2015 and 2014
9. Long-Term Debt:
Long-Term debt at December 31, 2015 and December 31, 2014, is as follows:
Note payable to First Security Bank, bearing interest at 6%;
payable in monthly installments of $917; maturing
September 2018; collateralized by equipment.
Note payable to Wells Fargo Bank, bearing interest at 4%;
payable in monthly installments of $477; maturing
December 2016; collateralized by equipment.
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.
Note payable to BMT Leasing, bearing interest
at 13.38%; payable in monthly installments of $786; maturing
December 2015; collateralized by equipment.
Note payable to Catepillar Financial, bearing interest at 5.95%;
payable in monthly installments of $827; maturing September 2015;
collateralized by equipment.
Note payable toDe Lage Landen Financial Services,
bearing interest at 5.30%; payable in monthly installments of $549;
maturing March 2016; collateralized by equipment.
Note payable to De Lage Landen Financial Services,
bearing interest at 5.12%; payable in monthly installments of $697;
maturing December 2014; collateralized by equipment.
Note payable to De Lage Landen Financial Services,
bearing interest at 3.15%; payable in monthly installments of $655;
maturing September 2019; collateralized by equipment.
Note payable to De Lage Landen Financial Services,
bearing interest at 3.15%; payable in monthly installments of $655;
maturing December 2019; collateralized by equipment.
Note payable to Phyllis Rice, bearing interest
at 1%; payable in monthly installments of $2,000; maturing
March 2015; collateralized by equipment.
Obligation payable for Soyatal Mine, non-interest bearing,
annual payments of $100,000 or $200,000 through 2019, net of discount.
Obligation payable for Guadalupe Mine, non-interest bearing,
annual payments from $60,000 to $149,078 through 2026, net of discount.
Less current portion
Long-term portion
F-15
December 31,
December 31,
2015
2014
$
27,845 $
-
5,399
10,245
-
11,977
-
9,254
-
8,051
2,171
7,951
-
689
27,587
29,300
-
-
14,146
18,146
820,272
808,293
972,312
1,899,032
(181,287)
1,717,745 $
-
874,606
(159,278)
715,328
$
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, 2015 and 2014
9. Long-Term Debt, Continued:
At December 31, 2015, principal payments on debt are due as follows:
Year Ending December 31,
2016
2017
2018
2019
2020
Thereafter
10. Notes Payable to Bank
At December 31, 2015, the Company had the following notes payable to the bank:
Promissory note payable to First Security Bank of Missoula,
bearing interest at 3.150%, maturing February 27, 2016,
payable on demand, collateralized by a lien on Certificate of
Deposit number 48614
Promissory note payable to First Security Bank of Missoula,
bearing interest at 3.150%, maturing February 27, 2016,
payable on demand, collateralized by a lien on Certificate of
Deposit number 48615
Total notes payable to bank
$
$
181,287
121,266
220,584
305,303
303,413
767,179
1,899,032
$
36,881
93,791
$
130,672
These notes are personally guaranteed by John C. Lawrence the Company’s President and Chairman of the Board of Directors. The maximum amount
available for borrowing under each note is $99,998. There were no notes payable to bank at December 31, 2014.
11. Hillgrove Advances Payable
On November 7, 2014, the Company entered into a loan and processing agreement with Hillgrove Mines Pty Ltd of Australia (Hillgrove) by which Hillgrove
will advance the Company funds to be used to expand their smelter in Madero, Mexico, and in Thompson Falls, Montana, so that they may process
antimony and gold concentrates produced by Hillgrove’s mine in Australia. The agreement requires that the Company construct equipment so that it can
process approximately 200 metric tons of concentrate initially shipped by Hillgrove, with a provision so that the Company may expand to process more
than that. The parties agreed that the equipment will be owned by USAC and USAMSA. The final terms of when the repayment takes place have not yet
been agreed on. The agreement called for the Company to sell the final product for Hillgrove, and Hillgrove to have approval rights of the customers for
their products. The agreement allows the Company to recover its operating costs as approved by Hillgrove, and to charge a 7.5% processing fee and a
2.0% sales commission. The initial term of the agreement is five years; however, Hillgrove may suspend or terminate the agreement at its discretion. The
Company may terminate the agreement and begin using the furnaces for their own production if Hillgrove fails to recommence shipments within 365 days
of a suspension notice. If a stop notice is issued between one year and two years, there is a formula to prorate the repayment amount from 50% to
81.25%. If a stop order is issued after two years, the repayment obligation is 81.25% of the funds advanced at that point. At December 31, 2015,
management has determined that it is likely that the Company’s repayment obligation will be 81.25% of the total amounts advanced. As of December 31,
2015, Hillgrove has advanced the Company a total of $1,397,016. Of this amount, approximately 18.75% or $262,408 has been recorded as deferred
earned credit and is being recognized ratably through the period ending November 7, 2016 which is when the 81.25% repayment terms of the agreement
is applicable. During the year ended December 31, 2015, $125,191 of the deferred earned credit was recognized with the remaining balance of $120,238
to be recognized in 2016. At December 31, 2015, the amount due to Hillgrove for the advances is $1,134,608 which is approximately 81.25% of the total
amount advanced.
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, 2015 and 2014
12. Stockholders' Equity
Issuance of Common Stock for Cash
The Company did not issue any common stock for cash in 2015.
In 2014, the Company sold, and issued in connection with the exercise of warrants, an aggregate of 2,400,071, shares of its common stock to existing
stockholders and other parties for $3,070,134. No warrants to purchase shares of the Company’s common stock were granted in 2014.
Issuance of Common Stock for Notes Receivable
During 2014, the Company issued Mr. and Mrs. Robert Detwiler, stockholders of the Company, 100,000 shares of the Company’s common stock in
exchange for two notes receivable totaling $120,000. The notes receivable mature in one year and bear interest at five percent. In addition, during 2014,
the Company issued Herbert Denton, the Company investor relations consultant, 25,000 shares of the Company’s common stock in exchange for a
notes receivable of $30,000. Mr. Denton’s note bears interest of six percent and is due in monthly payments of $2,000. During 2015, the Company
received $120,000 as payment on these notes. The remaining $30,000 due from Mr. Denton was forgiven in connection with a Settlement Agreement
and Supplemental Settlement Agreement (the “Settlement Agreement”), entered into during 2015 related to terminating Mr. Denton’s services for the
Company. (See Note 16).
Issuance of Common Stock for Notes Payable
During the year ended December 31, 2014, Mr. and Mrs. Robert Detwiler along with two other shareholders loaned the Company $330,000. The
Company issued 235,717 shares of its common stock in satisfaction of these notes during the year ended December 31, 2014. The terms of the share
payment were identical to those offered other investors that purchased common stock during the time of the issuance.
Issuance of Common Stock for Services to Directors and Consultants
On December 30, 2015, the Company declared, but did not issue approximately 474,000 shares of unregistered common stock to be paid to its
directors for services during 2015, having a fair value of $125,000, based on the stock price at the date declared.
During 2015, the Company issued 105,000 shares to Herbert Denton for investor relations services provided and in connection with the Settlement
Agreement. The shares estimated fair value at the time of issue was approximately $27,950.
On December 30, 2014, the Company declared, but did not issue 186,825 shares of unregistered common stock to be paid to its directors for services
during 2014, having a fair value of $125,000, based on the current stock price at the date declared. These shares were issued on March 23, 2015.
During the year ended December 31, 2014, the Company issued 24,000 shares to Herbert Denton for investor relations services he provided. The
shares estimated fair value at the time of issue was approximately $39,000.
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, 2015 and 2014
12. 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, 2013
Warrants exercised
Warrants expired
Balance, December 31, 2014
Warrants expired
Balance, December 31, 2015
Number of
Warrants
Exercise Prices
2,489,407 $
(310,625) $
(1,451,865)
726,917 $
(476,917)
250,000 $
0.25 - $4.50
1.20-$1.60
0.25 - $4.50
0.25
At December 31, 2015, warrants for purchase of 250,000 shares of the Company’s common stock for $0.25 per share are outstanding and have no
expiration date. These warrants are owned by the Company’s president.
Preferred Stock
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.
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. During the years ended December 31, 2015
and 2014 the Company recognized $7,500 in Series B preferred stock dividend. 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. The Series B Preferred stock is no longer convertible to shares of the Company’s common stock. At
December 31, 2015 and 2014, cumulative dividends in arrears on the outstanding Series B shares were $157,500 and $150,000, respectively.
Series C
During 2000, the Board established a Series C preferred stock, consisting of 205,996 shares. In 2002, 28,092 shares were converted to common stock
and cancelled, leaving 177,904 Series C preferred shares authorized and outstanding. The Series C preferred stock has preference over the Company’s
common stock and has voting rights equal to that number of shares outstanding, but no conversion or 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.
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, 2015 and 2014
12. 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, 2015 and 2014, the cumulative dividends in arrears on the 1,751,005
outstanding Series D shares were $501,515 and $460,366 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, 2015
and 2014, the liquidation preference for Series D preferred stock was $4,879,029 and $4,837,880, respectively. Holders of the Series D preferred stock
have the right, subject to the availability of authorized but unissued common stock, to convert their shares into shares of the Company's common stock
on a one-to-one basis 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.
13.
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, 2015 and 2014, 300,000 shares of the Company's common stock had been
previously issued and are outstanding under the Plan. There were no issuances under the Plan during 2015 and 2014.
14.
Income Taxes
Domestic and foreign components of income (loss) from operations before income taxes for the years ended December 31, 2015 and 2014, are as
follows:
Domestic
Foreign
Total
2015
982,901
(1,821,432)
(838,531)
$
2014
(345,293)
(1,250,162)
(1,595,455)
$
$
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, 2015 and 2014
14.
Income Taxes, continued:
At December 31, 2015 and 2014, the Company had net deferred tax assets as follows:
Deferred tax asset:
Foreign exploration costs
Foreign net operating loss carry forward
loss carry forward
Deferred tax asset
Valuation allowance (foreign)
Valuation allowance (federal)
Total deferred tax asset
Deferred tax liability:
Property, plant, and equipment
Other
Total deferred tax liability
Net Deferred Tax Asset
2015
2014
$
87,494
2,515,954
185,472
2,788,920
(2,515,954)
(90,220)
182,746
127,936
1,926,341
337,890
2,392,167
(1,926,341)
(266,711)
199,115
(181,224)
(1,522)
(182,746)
(197,593)
(1,522)
(199,115)
$
-
$
-
At December 31, 2015, the Company has United States net operating loss carry forwards of approximately $186,000 that expire at various dates
between 2030 and 2035. In addition, the Company has Montana state net operating loss carry forwards of approximately $2,313,000 which expire
between 2017 and 2022, and Idaho state net operating loss carry forwards of approximately $940,000, which expire between 2033 and 2035. The
Company has approximately $8.4 million of Mexican net operating loss carry forwards which expire between 2022 and 2025.
At December 31 2015 and 2014, the Company had deferred tax assets arising principally from net operating loss carry forwards for income tax
purposes. As management cannot determine that it is more likely than not the benefit of the net deferred tax asset will be realized, a valuation
allowance equal to 100% of the net deferred tax asset has been recorded at December 31, 2015 and 2014.
The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax loss for the years
ended December 31, 2015 and 2014, due to the following:
Computed expected tax provision (benefit)
State taxes
Foreign taxes
Other (1)
Change in valuation allowance U.S.
Change in valuation allowance Foreign
Total
2015
(293,486)
(32,283)
91,072
(178,414)
(176,502)
589,613
(0)
$
$
35% $
4%
-11%
21%
21%
-70%
0% $
2014
(558,409)
62,508
(1,346,130)
194,925
1,647,106
(0)
$
35%
-4%
84%
-12%
-103%
0
(1) In 2015 and 2014 there were revisions to estimates of foreign net operating loss carry forwards and adjsutments made based upon the US Income tax
return filed.
F-20
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, 2015 and 2014
14.
Income Taxes, continued:
During the year ended December 31, 2015, Mexican Tax authorities (‘SAT’) initiated an audit of the Company's Mexican subsidiary’s return for the year
ended December 31, 2013. Management has reviewed its tax positions and does not believe it is reasonably possible that its unrecognized tax benefits
would materially change in the next twelve months. If an issue addressed during the SAT audit is resolved in a manner inconsistent with management
expectations, the Company would adjust its net operating loss carryforward, or accrue any penalties, interest, and tax associated with the audit. The
audit is expected to be complete during 2016.
During the years ended December 31, 2015 and 2014, there were no material uncertain tax positions taken by the Company. The Company United
States income tax filings are subject to examination for the years 2013 through 2015, and 2011 and 2015 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.
15. Related-Party Transactions
The Company’s President and Chairman, John Lawrence, rents equipment and an aircraft to the Company and charges the Company for lodging and
meals provided to consultants, customers and other parties by an entity that Mr. Lawrence owns. Transactions due to (due from) Mr. Lawrence during
2015 and 2014 were as follows:
Balance, beginning of year
Aircraft rental charges
Payments and advances, net
Balance, end of year
2015
2014
8,357
30,867
(6,828)
32,396
$
$
15,549
30,561
(37,753)
8,357
$
$
In addition, during 2014, Mr. Lawrence loaned the Company $65,300 for short-term operating capital and was paid back without interest during 2014.
16. Commitments and Contingencies
In 2005, Antimonio de Mexico, S. A. (“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 annual payments. Total payments will not exceed $1,430,344, reduced by taxes paid. During the years ended December
31, 2015 and 2014, $127,500 and $200,000, respectively, was paid and capitalized as mineral rights in accordance with the Company’s accounting
policies. At December 31, 2015, the following payments are scheduled: $65,000 by March 31, 2016.
In June of 2013, the Company entered into a lease to mine antimony ore from concessions located in the Wadley Mining district in Mexico. The lease
calls for a mandatory term of one year and requires payments of $29,000 per month. The lease is renewable each year with a 15 day notice to the
lessor, and agreement of terms. The lease was renewed in June of 2015.
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. At December 31, 2015 and 2014, the Company has no accruals relating to such
assessments.
F-21
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, 2015 and 2014
16. Commitments and Contingencies, Continued:
In prior years, the Company utilized Providence Capital, Inc., a Delaware corporation (“Providence”), and Herbert A. Denton to provide investor
relations services. On April 1, 2015, we entered into an agreement with Providence to provide us services as our Investor Relations Representative.
We terminated this agreement in May 2015, and signed a Settlement Agreement dated July 27, 2015, and a Supplemental Settlement Agreement dated
August 1, 2015. These agreements provided for a payment to Mr. Denton of 100,000 shares of the Company’s common stock and $25,000 to be paid in
five equal installments. On August 31, 2015, we issued 100,000 shares of common stock valued at $0.55 per share or $55,000 to Mr. Denton. On
October 12, 2015, we served Mr. Denton with a notice of material breach of the termination agreements and suspended the remaining payments of
$15,000. We have subsequently filed an action in federal court to force Mr. Denton to comply with the terms of the termination agreements and for
damages related to his non-compliance. Subsequent to the Company’s filing, Mr. Denton filed a counterclaim against the Company seeking an award
for damages for breach of contract, conversion, defamation of character, failure to exercise business judgement and intentional infliction of emotional
duress and damage to reputation. Management believes that the likelihood of an unfavorable outcome in the litigation is remote and intends on
defending the claim vigorously. Accordingly, management has not accrued any amount on its financial statements related to a potential contingent
liability.
17. Business Segments
The Company is currently organized and managed by three segments, which represent the operating units: United States antimony operations, Mexican
antimony operations and United States zeolite operations. The Company’s Other operating costs include general and administrative expenses, freight
and delivery, and other non-production related costs. Other income and expense consists primarily of interest income and expense and factoring
expense.
The Madero smelter and Puerto Blanco mill at the Company’s Mexico operation brings antimony up to an intermediate stage, which is then shipped to
the United States operation for finishing and sales at the Thompson Falls, Montana plant. The Zeolite operation produces Zeolite near Preston, Idaho.
Almost all of the sales of products from the United States antimony and Zeolite operations are to customers in the United States.
Segment disclosures regarding sales to major customers and for property, plant, and equipment are located in Notes 2 and 6, respectively.
Properties, plants and equipment, net:
Antimony
United States
Mexico
Subtotal Antimony
Zeolite
Total
Total Assets:
Antimony
United States
Mexico
Subtotal Antimony
Zeolite
Total
December 31,
2015
December 31,
2014
$
$
$
$
1,937,402
12,539,805
14,477,207
1,553,126
16,030,333
December 31,
2015
2,676,263
13,367,960
16,044,223
2,215,978
18,260,201
$
$
$
$
1,936,894
9,996,579
11,933,473
1,578,330
13,511,803
December 31,
2014
3,045,426
11,415,198
14,460,624
2,084,407
16,545,031
F-22
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, 2015 and 2014
17. Business Segments, continued:
Capital expenditures:
Antimony
United States
Mexico
Subtotal Antimony
Zeolite
Total
Segment Operations for the
Year ended December 31, 2015
Total revenues
Depreciation and amortization
Income (loss) from operations
Other income (expense):
NET INCOME (LOSS)
Segment Operations for the
Year ended December 31, 2014
Total revenues
Depreciation and amortization
Income (loss) from operations
Other income (expense):
Income (loss) before income taxes
NET INCOME (LOSS)
For the year
ended
December 31,
2015
For the year
ended
December 31,
2014
$
$
62,328
13,367,960
16,044,223
196,238
18,260,201
$
$
70,076
1,706,647
1,776,723
124,767
1,901,490
Antimony
USAC
Antimony
Mexico
Bear River
Zeolite
Totals
$
10,347,824
$
7,535
$
2,753,644
$
13,109,003
61,819
649,526
221,441
932,786
4,990,865
(6,311,265)
511,403
(808,997)
(29,534)
$
(838,531)
Antimony
USAC
Antimony
Mexico
Bear River
Zeolite
Totals
$
8,580,035
$
22,538
$
2,169,619
$
10,772,192
63,787
495,765
221,230
780,782
1,971,677
(3,864,950)
304,934
(1,588,339)
(7,116)
(1,595,455)
$
(1,595,455)
F-23
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Exhibit 21.1
Subsidiaries of Registrant, as of December 31, 2014
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
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 30, 2016
/s/John C. Lawrence
John C. Lawrence
President and Chief Executive Officer
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Exhibit 31.2
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 30, 2016
/s/Daniel L. Parks
Daniel L. Parks, Chief Financial Officer
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Exhibit 31.3
I, Alicia Hill, 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 30, 2016
/s/Alicia Hill
Alicia Hill, Controller
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
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.
2.
This Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 2015, 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
The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
Exhibit 32.1
Date: March 30, 2016
/s/John C. Lawrence
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
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.
2.
This Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 2015, 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
The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
Exhibit 32.2
Date: March 30, 2016
/s/Daniel L. Parks
Daniel L. Parks
Chief Financial Officer
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
I, Alicia Hill, Controller 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.
2.
This Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 2015, 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
The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
Exhibit 32.3
Date: March 30, 2016
/s/Alicia Hill
Alicia Hill
Controller
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Exhibit 95
UNITED STATES ANTIMONY CORPORATION
POST OFFICE BOX 643
THOMPSON FALLS, MONTANA 59873-0643
406-827-3523
406-827-3543 FAX
tfl3543@blackfoot.net E-MAIL
Exhibit 95 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 year ended December 31, 2015, the Company had the following specified health and safety violations, orders or citations, related assessments or legal
actions, mining-related fatalities, or similar events in relation to the Company’s United States operations requiring disclosure pursuant to Section 1503(a) of
the Dodd-Frank Act.
Mine
Mine Act
§104(a)
Violations (1)
Mine Act
§104(b) Orders
(2)
Mine Act
§104(d)
Citations and
Orders (3)
Mine Act §(b)(2)
Violations (4)
Mine Act
§107(a) Orders
(5)
Proposed
Assessments
from MSHA (In
dollars$)
Mining Related
Fatalities
Bear River Zeolite
4
0
0
0
0 $
3,539.00
0
Pending
Legal Action
before
Federal Mine
Saftey and
Health
Review
Commission
(yes/no)
No
Mine Act
§104(e)
Notice
(yes/no) (6)
No
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
US Antimony Corporation Audit Committee Report 2015
Exhibit 99.1
US Antimony Corporation’s Audit Committee consists of four directors, each of whom has been determined by the Board of Directors to be
“independent” as defined by the listing standards of the NYSE and the applicable rules of the Securities Exchange Commission. The members of
the Committee are Hart Baitis, Whitney Frerer, Jeff Wright, and Gary Babbitt, Chairman.
US Antimony’s management is responsible for the company’s internal controls, financial reporting, and the preparation of the company’s
consolidated financial statements. The independent accountant for the company is Decoria, Maichel, Teague of Spokane, Washington (DMT) who
is also referred to as the “independent auditors”. DMT is responsible for auditing the company’s annual consolidated financial statements in
accordance with the standards of the PCOAB (Public Company Accounting Oversight Board). The independent auditors are also responsible for
issuing a report on those financial statements and a report on the company’s internal control over financial reporting. The Audit Committee
monitors the reporting. The Audit Committee is responsible for selecting, engaging and overseeing the independent auditors.
As part of the oversight process the Audit Committee has conferred with the independent auditors at least quarterly. The members of the Audit
Committee have the opportunity to confer with the management (CEO, CFO, Controller) monthly. The Audit Committee for the fiscal 2015 annual
report did:
- review and discuss the consolidated financial reports for fiscal 2015 the independent auditors;
- review the management’s representations that those consolidated financial statements were prepared in accordance with generally
accepted accounting principles (GAAP) and fairly present the consolidated financial positions of the company and its subsidiaries for the fiscal
year.
- discussed with the independent auditor the matters required by the Statement on Auditing Standards 61, as modified or supplemented
and the SEC rules including matters related to the conduct of the audit of the company’s consolidated financial statements;
- reviewed with the independent auditors the staffing and procedure for the audit of the company’s operations; and
- discussed and received from the auditor written disclosures and the letter required by applicable standards rules and regulations relating
to DMT’s independence from the company;
- discussed the auditor’ contact and review of Mexican operations with the Mexican accountants;
- the auditor had no knowledge fraud, theft, or misappropriation of assets or property by management, employees or third parties; and
- there are no investments by the Company which are not disclosed in the 10K.
Based on the conferences with the independent auditor and review of the financial statements the Audit Committee found no evidence of fraud,
misappropriation or theft by any employee or management.
Based on the discussions the independent auditor’s disclosures and reports and their letter to the Audit Committee, the Audit Committee
recommended that the company’s audited consolidated financial statements for fiscal 2015 to be filed with the SEC.
The Audit Committee has monitored the progress of the implementation and testing of internal controls over financial reporting pursuant to section
404 of Sarbanes Oxley. The Audit Committee has conferred over time with the independent auditors and management on internal controls
involving the operation and effectiveness of internal controls. The Audit Committee has conferred with the independent auditors and management
on compliance with applicable laws and regulations and compliance with ethics.
The Audit Committee submits this report on March 29, 2015.
Gary D. Babbitt, Chairman
Hart Baitis
Whitney Frerer
Jeff Wright
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