SECURITIES & EXCHANGE COMMISSION EDGAR FILING
UNITED STATES ANTIMONY CORP
Form: 10-K
Date Filed: 2019-04-01
Corporate Issuer CIK: 101538
© Copyright 2019, 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)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2018
[ ] 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 [X]
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 $23,523,836 as of June
30, 2018.
At April 1, 2019, the registrant had 68,427,171 outstanding shares of par value $0.01 common stock.
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UNITED STATES ANTIMONY CORPORATION
2018 ANNUAL REPORT
TABLE OF CONTENTS
PART I
ITEM 1.
ITEM1A.
ITEM 1B.
ITEM 2.
ITEM 3.
ITEM 4.
PART II
ITEM 5.
ITEM 6.
ITEM 7.
ITEM 7A.
ITEM 7B.
ITEM 8.
ITEM 9.
ITEM 9A.
ITEM 9B.
ART III
ITEM 10.
ITEM 11.
ITEM 12.
ITEM 13.
ITEM 14
PART IV
ITEM 15
DESCRIPTION OF BUSINESS
RISK FACTORS
UNRESOLVED STAFF COMMENTS
DESCRIPTION OF PROPERTIES
LEGAL PROCEEDINGS
MINE SAFETY DISCLOSURES
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
SELECTED FINANCIAL DATA
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
CRITICAL ACCOUNTING ESTIMATES
FINANCIAL STATEMENTS
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
CONTROLS AND PROCEDURES
OTHER INFORMATION
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS AND COMPLIANCE WITH
SECTION 16(A) OF THE EXCHANGE ACT
EXECUTIVE COMPENSATION
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
PRINCIPAL ACCOUNTANT FEES AND SERVICE
EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES
CERTIFICATIONS
FINANCIAL STATEMENTS
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General
Item 1. Description of Business
General
PART I
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 (now NYSE AMERICAN) under the symbol UAMY.
Antimony Division
Our antimony smelter and precious metals plant is located in the Burns Mining District of Sanders County, Montana, approximately 15 miles west of Thompson
Falls, MT. We hold 2 patented mill sites where the plant is located. We have no "proven reserves" or "probable reserves" of antimony, as these terms are defined
by the Securities and Exchange Commission. Environmental restrictions preclude mining at this site.
Mining was suspended in December 1983, because antimony could be purchased more economically from foreign sources.
For 2018, 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 2019 and later years. We continue working with
suppliers in North America, Central America, Europe, Australia, and South America.
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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, (2) the Puerto Blanco flotation mill and oxide circuit in Guanajuato that is ramping up
for 2019, and (3) mining properties that include the Los Juarez mineral deposit with concessions in Queretaro, the Wadley mining concession in San Luis 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 polyethylene 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:
● We have a reputation for quality products delivered on a timely basis.
● 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
2018
2017
2016
2015
2014
4
Lbs Metal
Contained
1,359,316
1,891,439
2,936,880
2,487,321
1,727,804
$
$
$
$
$
$
6,113,014
7,588,470
8,744,170
9,863,933
8,132,410
Average Price/Lb
4.50
$
4.01
$
2.98
$
3.97
$
4.71
$
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Concentration of Sales:
During the two years ended December 31, 2018 and 2017, the following sales were made to our three largest customers:
Sales to
Largest Customers
Mexichem Specialty Compounds Inc.
East Penn Manufacturing Inc
Kohler Corporation
Ampacet
% of Total Revenues
For the Year Ended
December 31,
2018
2,698,770
-
1,441,197
538,922
4,678,889
$
$
December 31,
2017
3,335,046
512,621
1,928,692
-
5,776,359
$
$
51.79%
56.50%
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.
A five year price range of prices for antimony oxide and antimony metal, per pound, was as follows:
USAC SALES
Oxide
Metal
Combined
USA
Rotterdam
Average
Price/Lb
(Metal Contained Price)
Average
Average
Average
Price/Lb
Price/Lb
Price/Lb
Average
Price/Lb
3.77 $
3.40 $
3.11 $
3.34 $
4.00 $
3.70 $
3.41 $
2.62 $
3.71 $
4.18 $
4.50 $
4.01 $
2.98 $
3.97 $
4.71 $
3.82 $
3.77 $
2.99 $
3.41 $
4.40 $
3.74
3.78
2.94
3.32
4.31
$
$
$
$
$
5
Year
2018
2017
2016
2015
2014
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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 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 Canada and Mexico.
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 has improved its productive capacity. We have constructed a new warehouse in 2018 to expedite our shipping and
packaging for customers.
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 180-220 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 make the mineral useful for a variety of purposes including:
● Soil Amendment and Fertilizer . Zeolite has been successfully used to fertilize golf courses, sports fields, parks and common areas, and high value
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.
● 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 scours, 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.
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Environmental Matters
Our exploration, development and production programs conducted in the United States are subject to local, state and federal regulations regarding environmental
protection. Some of our production and mining activities are conducted on public lands. We believe that our current discharge of waste materials from our
processing facilities is in material compliance with environmental regulations and health and safety standards. The U.S. Forest Service extensively regulates
mining operations conducted in National Forests. Department of Interior regulations cover mining operations carried out on most other public lands. All operations
by us involving the exploration for or the production of minerals are subject to existing laws and regulations relating to exploration procedures, safety precautions,
employee health and safety, air quality standards, pollution of water sources, waste materials, odor, noise, dust and other environmental protection requirements
adopted by federal, state and local governmental authorities. We may be required to prepare and present data to these regulatory authorities pertaining to the
effect or impact that any proposed exploration for, or production of, minerals may have upon the environment. Any changes to our reclamation and remediation
plans, which may be required due to changes in state or federal regulations, could have an adverse effect on our operations. The range of reasonably possible
loss in excess of the amounts accrued, by site, cannot be reasonably estimated at this time.
We accrue environmental liabilities when the occurrence of such liabilities is probable and the costs are reasonably estimable. The initial accruals for all our sites
are based on comprehensive remediation plans approved by the various regulatory agencies in connection with permitting or bonding requirements. Our accruals
are further based on presently enacted regulatory requirements and adjusted only when changes in requirements occur or when we revise our estimate of costs 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, 2018 and 2017, 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 our estimated costs of reclaiming, in accordance with regulatory requirements,
the acreage disturbed by our zeolite operations, and remains unchanged at December 31, 2018.
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, 2018. 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, 2018, we employed 28 full-time employees in Montana. In addition, we employed 19 people at our zeolite plant in Idaho, and more than 60
employees at our mining, milling and smelting operation in Mexico. We also employ approximately 100 contracted miners. The number of full-time employees may
vary seasonally. None of our employees are covered by any collective bargaining agreement.
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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 un-asserted 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 project at our current production facility in Montana. Adequate financial resources may not be available to ultimately finish the reclamation activities if
changes in environmental laws and regulations occur, and these changes could adversely affect our cash flow and profitability. We do not have environmental
liability insurance now, and we do not expect to be able to obtain insurance at a reasonable cost. If we incur liability for environmental damages while we are
uninsured, it could have a harmful effect on our financial condition and results of operations. The range of reasonably possible losses from our exposure to
environmental liabilities in excess of amounts accrued to date cannot be reasonably estimated at this time.
We have accruals for asset retirement obligations and environmental obligations.
We have accruals totaling $277,720 on our balance sheet at December 31, 2018, 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
Not Applicable
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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).
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.
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.
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ANTIMONY MINERAL PROPERTIES
Los Juarez Group
We hold properties that are collectively called the “Los Juarez” property, in Queretaro, as follows:
1.
2.
3.
San Miguel I and II were purchased by a USAC subsidiary, Antimonio de Mexico, S. A. de C. V (AM), for $1,480,500. As of December 31, 2018, we have
paid for 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 1a.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 into 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
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.
USAMSA Puerto Blanco Flotation Mill, Guanajuato, Mexico
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 metric ton 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. 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. We are
presently installing a cyanide leach circuit and settling pond that will be used to recover precious metals from our Los Juarez mine. During 2018 and 2017, less
than 10% of the mill’s capacity was utilized.
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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 pounds
of contained antimony annually. Concentrates from our flotation plant, and hand-sorted ore from Mexico sources and other areas, are being processed. During
2017, we completed the installation of a leach circuit to process concentrates from the Puerto Blanco cyanide leach plant containing precious metals from our Los
Juarez Mining property. We are currently installing a second LRF and expect it to be in production by mid-year 2019. The Madero production is either sold or
shipped to our Montana plant to produce finished Antimony products and precious metals. Access to the plant is by road and railroad. Set forth below are location
maps:
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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
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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
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EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Geology
The deposit is a very thick, sedimentary deposit of zeolitized volcanic ash of Tertiary age known as the Salt Lake Formation. The sedimentary interval in which the
clinoptilolite occurs is more than 1000 feet thick in the area. Thick intervals of the zeolite are separated by thin limestone 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.
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 feet 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.
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Fine Products Circuit
The fine products circuit is in one building and it includes (2) 3.5’ x 10.5’ Derrick 2 deck high frequency (3450 RPM) screens and various bucket elevators, augers,
bins, and Sweco screens for handling product. Depending on the screening sizes, the plants can generate approximately 150 tons of granules and 125 tons of
fines per 24-hour day.
Raymond Mill Circuit
The Raymond mill circuit includes a 6058 high-side Raymond mill with a double whizzer, dust collector, two 100 ton product silos, feed bin, conveyors, air slide,
bucket elevators, and control booth. The Raymond mill has a rated capacity of more than 10 tons per hour.
Item 3 Legal Proceedings
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-AMERICAN under the symbol UAMY.
The approximate number of holders of record of our common stock at April 1, 2019, 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.
During the year ended December 31, 2018, the Company awarded, but did not issue, common stock with a value of $175,000 to its Board of Directors as
compensation for their services as directors. In connection with the issuances, the Company recorded $175,000 in director compensation expense and accrued
common stock payable.
In May 2018, the Company issued the Board members 739,018 shares of the Company’s common stock for services provided during 2017 which was accrued at
December 31, 2017, with a value of $175,000.
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Item 6 Selected Financial Data
Not Applicable.
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.
Overview
Company-wide
For the year ended December 31, 2018, we reported net income of $873,225, after depreciation and amortization of $904,844, compared to a loss of $1,134,394
for 2017 after depreciation and amortization of $968,888. Our company-wide EBITDA was $1,445,737 for 2018, compared to a negative EBITDA of $165,506 for
2017.
Net non-cash expense items for 2018 totaled $1,169,327 and included $904,844 for depreciation and amortization, $83,991 for amortization of debt discount,
$175,000 for director compensation and $5,492 for other items.
For the year ended December 31, 2017, we incurred a loss of $1,134,394 after depreciation and amortization of $968,888 compared to a loss of $1,309,200 for
2016, after depreciation and amortization of $999,737 and an income tax provision of $298,138 for our Mexican operations. Our company-wide EBITDA was a
negative $165,506 for 2017, compared to a negative EBITDA of $11,325 for 2016.
Net non-cash expense items for 2017 totaled $1,275,071 and included $968,888 for depreciation and amortization, $93,450 for amortization of debt discount,
$175,000 for director compensation and $37,773 for other items.
During the year ending December 31, 2018, there were several transactions that had a material impact on the Company’s net income and balance sheet.
● On August 31, 2018, we completed an agreement to acquire a company that was an antimony processing plant in Reynosa, Mexico for which we were
paid $1,500,000. As part of the demolition, we were able to salvage a significant amount of equipment and plant infrastructure which will enhance our
Mexican operations. As of December 31, 2018, we had incurred approximately $378,562 of expenses decommissioning the antimony plant, of which we
treated $225,925 as a capital expenditure for salvaged equipment, and $152,636 were included in other operating expense. We will incur additional costs
in 2019. We will use the equipment to improve and increase capacity at our smelter at Madero, complete the cyanide leach plant at Puerto Blanco for
processing the precious metals ore from the Los Juarez mine, and provide equipment for our mines.
● In the third quarter of 2018, we settled an income tax liability in Mexico for $443,110 with a finding of no tax due. We paid our Mexican attorneys and
accountants $157,500 to represent us in this matter.
● In November 2018, we sold the real property we acquired with the Reynosa processing plant for $700,000. We were paid $300,000 in 2018 and received
the remainder by March 5, 2019.
Antimony Sales
During 2018, we saw our average sale price increase by $0.49 per pound to $4.50 per pound from an average price of $4.01 per pound for 2017. During 2018,
we saw our raw material from our North American supplier temporarily decrease by approximately 660,000 pounds and our supply of raw material from our
Mexican mines increase by approximately 128,000 pounds. This resulted in estimated decreased sales of $1.5 million (532,123 pounds of antimony). Normal
shipments from our North American supplier have resumed in 2019, and we expect to see a significant increase in the antimony produced by our Mexican mines
in 2019.
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In 2017, due to the loss of our supply of antimony concentrates from Australia, the volume of antimony sold (metal contained) decreased from a record of
2,936,880 pounds in 2016 to 1,891,439 pounds sold in 2017, a decrease of 1,045,441 pounds. During 2017, our production and sales from Mexican sources was
approximately 530,000 pounds from our mines and approximately 35,000 pounds from Australian concentrates.
In November of 2017, we renegotiated our sodium antimonite supply agreement to recognize that antimony prices were in a world-wide slump, and that our
general and administrative costs were a larger percent of our revenues than they were under the previous agreement. The new price agreement was implemented
in December of 2017, and resulted in lower antimony production costs and an improved cash flow for 2018.
Zeolite Sales
Our sales volume of zeolite in 2018 was 1,944 tons more than we sold in 2017, an increase of 16%. Our average sales price increased by approximately $3 per
ton, from $183 per ton in 2017 per ton to $186 per ton in 2018 (2%). During 2018, total sales of zeolite increased by $400,308 from 2017. The zeolite division had
EBIDTA of $638,764 for 2018, compared to EBITDA of $554,201 for 2017. Net income increased from $331,472 in 2017 to $449,961 in 2018, approximately
$118,000.
Our sales volume of zeolite in 2017 was 766 tons less than we sold in 2016, a decrease of 6%. Our average sales price decreased by approximately $5 per ton,
from $188 per ton in 2016 per ton to $183 per ton in 2017 (3%). During 2017, total sales of zeolite decreased by $206,458 from 2016. The zeolite division had
EBIDTA of $554,201 for 2017, compared to EBITDA of $447,775 for 2016. Net income increased from $233,907 in 2016 to $331,472 in 2017, approximately
$98,000.
Precious Metals Sales
Ounces Gold Shipped (Au)
Ounces Silver Shipped (Ag)
Revenues
Ounces Gold Shipped (Au)
Revenues - Gross
Revenues to Hillgrove
Revenues to USAC
Total Revenues
Precious Metals Sales
Silver/Gold - Montana
Australian - Hillgrove
2014
2015
2016
2017
64.77
29,480
461,083 $
89.12
30,421
491,426 $
108.10
38,123
556,650 $
107.00
32,021
480,985 $
$
$
$
491,426 $
496.65
597,309 $
(481,088)
116,221 $
672,871 $
90.94
96,471
(202,584)
(106,113)
374,872 $
$
461,083 $
2018
68.91
18,278
254,445
-
-
-
-
254,445
For the years ended December 31, 2018, and 2017, the EBITDA for precious metals was $254,445 and $374,872, respectively.
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EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Results of Operations by Division
Antimony Division - United States:
Revenues - Antimony (net of discount)
Domestic cost of sales:
Production costs
Depreciation
Freight and delivery
Indirect production costs
Direct sales expense
Total domestic antimony cost of sales
Cost of sales - Mexico
Production costs
Depreciation and amortization
Freight and delivery
Land lease expense
Indirect production costs
Total Mexico antimony cost of sales
Total revenues - antimony
Total cost of sales - antimony
Total gross profit (loss) - antimony
Precious Metals Division:
Revenues
Cost of sales:
Depreciation
Total cost of sales
Gross profit - precious metals
Zeolite Division:
Revenues
Cost of sales:
Production costs
Depreciation
Freight and delivery
Indirect production costs
Royalties
Direct sales expense
Total cost of sales
Gross profit - zeolite
Total revenues - combined
Total cost of sales - combined
Total gross profit (loss) - combined
22
2018
2017
$
6,113,014
$
7,588,470
2,958,396
52,681
263,673
189,380
65,738
3,529,868
2,287,694
595,317
54,943
166,800
199,561
3,304,315
6,113,014
6,834,183
(721,169)
3,784,037
57,761
321,282
328,411
65,652
4,557,143
2,223,663
623,899
45,461
190,116
391,504
3,474,643
7,588,470
8,031,786
(443,316)
254,445
374,872
68,042
68,042
186,403
64,499
64,499
310,373
2,666,944
2,266,636
1,290,747
188,803
177,932
108,913
272,821
91,419
2,130,635
536,309
919,876
222,729
175,303
176,566
235,021
128,738
1,858,233
408,403
9,034,403
9,032,860
1,543
$
10,229,978
9,954,518
275,460
$
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Earnings before income taxes
depreciation and amortization
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
Cost of sales - domestic
Cost of sales - Mexico
Operating income (expenses):
Operating expenditures
Gain on plant acquisition
Gain on sale of land
Non-operating income (expenses)
Income tax benefit
Net income (loss) - antimony
Depreciation and amortization
Income tax benefit
EBITDA - antimony
Precious Metals
Ounces sold
Gold
Silver
Gross precious metals revenue
Cost of sales
Net income - precious metals
Depreciation
EBITDA - precious metals
Zeolite
Tons sold
Average Sales Price/Ton
Net income /Ton
Gross zeolite revenue
Cost of sales
Operating expenses
Non-operating expenses
Net income - zeolite
Depreciation
EBITDA - zeolite
Company-wide
Gross revenue
Production costs
Operating income (expenses)
Non-operating income (expenses)
Income tax benefit
Net income (loss)
Depreciation,& amortization
Income tax benefit
EBITDA
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EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
2018
665,964
693,352
1,359,316
4.50
0.17
6,113,014
(3,529,868)
(3,304,315)
(1,580,141)
1,500,000
700,000
5,839
332,332
236,861
647,999
(332,332)
552,528
$
$
$
$
69
18,278
254,445
(68,042)
186,403
68,042
254,445
$
$
14,321
186.23
31.42
2,666,944
(2,130,635)
(74,366)
(11,982)
449,961
188,803
638,764
9,034,403
(9,032,860)
545,493
(6,143)
332,332
873,225
904,844
(332,332)
1,445,737
$
$
$
$
$
$
2017
1,326,659
564,780
1,891,439
4.01
(0.94)
7,588,470
(4,557,142)
(3,474,643)
(1,170,922)
-
-
(162,002)
-
(1,776,239)
681,660
-
(1,094,579)
107
32,021
374,872
(64,499)
310,373
64,499
374,872
12,377
183.13
26.78
2,266,636
(1,858,234)
(64,237)
(12,693)
331,472
222,729
554,201
10,229,978
(9,954,518)
(1,235,159)
(174,695)
-
(1,134,394)
968,888
-
(165,506)
$
$
$
$
$
$
$
$
$
$
$
$
During the period ended December 31, 2018, the most significant event affecting our financial performance was the decrease in our sources of antimony raw
material. During 2017, we stopped receiving antimony concentrate from Hillgrove Mines, Ltd., of Australia and started production from our own mines in
Mexico. There had not been any production from our own mines in Mexico during 2016 due to the processing of concentrates from Hillgrove. We received
approximately 1,327,000 pounds of antimony from our North American supplier and produced approximately 530,000 pounds from our Mexican properties in
2017. In 2018, we only received 50% of our expected supply from North American sources, but we increased our raw material from Mexico by approximately
130,000 pounds. Going forward, we anticipate the doubling of raw material from Mexico and the resumption of normal shipments from our North American
supplier.
We are proceeding with the opening and mining of ore at our Guadalupe mine with the expectations that we will produce approximately 250,000 pounds of
antimony in 2019. We will likely produce approximately 40,000 pounds of antimony from our Soyatal mine in 2019, and expand that to 250,000 pounds in
2020.
Our plans are to process 10,000 tons of ore from the Los Juarez mine in 2019 and double that in 2020. We think that the gross value of the ore is $125 per
ton.
In both 2018 and 2017, the Puerto Blanco mill circuits were utilized less than 10% of their capacity, but with the completion of the cyanide leach circuit in 2019
we expect it to be fully utilized processing precious metals ore from the Los Juarez mine. Some antimony will be realized as a by-product of processing the
Los Juarez ore.
The estimated recovery of precious metals per metric ton, after the caustic leach and cyanide leach circuits, is as follows at Los Juarez is as follows:
Schedule of Los Juarez recovery values
Metal
Assay
Recovery
Gold
Silver
Antimony
Total
0.035 opmt
3.27 opmt
0.652%
24
90%
90% $
70%
Value
$1295/oz
15.20/oz
3.80/lb
Value/Mt
40.72
44.73
38.12
123.57
$
$
$
$
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
The following are highlights of the significant changes during 2018:
Antimony:
● The sale of antimony during 2018 was 1,359,316 pounds compared to 1,891,439 pounds in 2017, a decrease of 532,123 pounds (28%).
● The average sales price of antimony during 2018 was $4.50 per pound compared to $4.01 during 2017, an increase of $0.49 per pound (12%).
During the beginning of 2019, the Rotterdam price of antimony is approximately $3.75 per pound.
● The metallurgical problem with the Los Juarez concentrates has been solved with the cyanide and caustic leach plants, and pilot mining, milling, and
smelting will resume. This will put the Puerto Blanco mill in operation during 2019. During 2018 and 2017, the Puerto Blanco mill was operating at
less than 10% of capacity, while undergoing major construction during 2018.
● The net income per pound of antimony sold was $0.27 in 2018. This was after $2,643,110 of revenue from non-recurring events. Without these items,
we would have incurred a net loss of $1.67 per pound. The net loss per pound in 2017 was $0.94 per pound.
● Our cost of goods sold for antimony decreased from $8,031,796 in 2017 to $6,834,183 in 2018. This was primarily due to the decrease in raw
material from our North American supplier and lower production cost in Mexico. For the years ended December 31, 2018 and 2017, costs of goods
sold include operating and non-operating production costs from Mexico operations.
● Our cost of production for the years ended December 31, 2018 and 2017 included metallurgical testing at Puerto Blanco and Madero, Mexico, and to a
lesser degree, our plant in Thompson Falls, Montana.
● 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 primarily from concentrates from Australia in 2016. Production from Madero during 2018 and 2017 was primarily from our own Mexican
properties, and although we only received 50% of expected raw materials from our North American supplier, we purchased a significant portion of the
raw materials for our smelter in Montana.
● We are producing ingots of antimony metal to be shipped directly to customers from our Madero smelter in 2019. This will significantly reduce our
production and shipping costs.
● We are proceeding with the testing of the Los Juarez ore in the 100 ton per day mill at Puerto Blanco. A 400 ton per day flotation mill is permitted and
is partially installed. This mill will be dedicated to processing rock from the Los Juarez mining property. We have adequate crushing capacity in place
to feed the 400 ton per day mill and the existing mill. We estimate that we have approximately 30,000 tons of ore stockpiled at our Los Juarez mine.
● Our principal smelter, precious metals recovery operation, and our Company headquarters remain in Montana.
Zeolite:
During 2018, BRZ sold 14,321 tons compared to 12,377 tons in 2017, an increase of 1,944 tons (16%). BRZ realized a net income of $449,961 in
2018 after depreciation of $188,803 compared to a net income of $331,472 in 2017 after depreciation of $222,729. Production efficiency at the plant
in Preston, Idaho, increased in 2018 due to repairs and new equipment. Sales activity in 2018 includes a number of new customers.
General and Administrative:
General and administrative costs, as reported in our statement of operations, include fees paid to directors through stock based compensation,
office expenses, and fees to the NYSE AMERICAN, and other non-operating costs. The combined general and administrative costs were 8.8%, and
6.3%, of sales for 2018 and 2017, respectively.
The increase in professional fees for 2018(approximately $147,000) was primarily due to attorney fees of approximately $157,500 paid to our
Mexican tax attorney and accountants for representation during the audit of our Mexican subsidiary, which was resolved in our favor. Our
accounting fees for 2018 related to our annual audit and our quarterly SEC filings $116,716 compared to $118,292 for 2017.
The decrease in professional fees for 2017 compared to 2016 (approximately $91,000) was primarily due to attorney fees of approximately $72,000
paid in 2016 related to our former Investor Relations representative. Our accounting fees for 2017 related to our annual audit and our quarterly SEC
filings decreased by approximately $15,000 from the prior year.
Factoring costs decreased in 2018 from approximately $36,000 in 2017 to approximately $5,000 in 2018.
The discounts we gave for early payments were approximately $110,000 for 2017and $100,000 for 2018.
Subsidiaries
The Company's consolidated financial statements include the accounts of its wholly-owned subsidiaries BRZ, USAMSA, AM, and, since August 31,
2018, Lanxess Laurel and Lanxess Laurel Mexico. All intercompany balances and transactions are eliminated in consolidation.
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Financial Condition and Liquidity
Financial Condition and Liquidity
Current assets
Current liabilities
Net Working Capital
Cash provided (used) by operations
Cash provided (used) by investing:
Cash used for capital outlay
Proceeds from plant acquisition
Proceeds from sale of land
Cash provided (used) by financing:
Net payments (to) from factor
Proceeds from notes payable to bank
Principal paid on long-term debt
Advances from related party
Payments on advances from related party
Checks issued and payable
Net change in cash and restricted cash
2018
1,903,256
(3,517,618)
(1,614,362)
$
$
2017
1,562,270
(3,934,726)
(2,372,456)
$
$
$
(656,631)
$
716,776
(899,119)
1,500,000
300,000
5,644
(8,648)
(236,915)
135,000
(135,000)
18,234
22,565
$
(365,541)
-
-
(139,519)
25,248
(211,529)
-
-
(7,434)
18,001
$
Our net working capital increased for the year ended December 31, 2018 from a negative amount of $2,372,456 at the beginning of the year to a negative
amount of $1,614,362 at the end of 2018. Our current assets increased primarily due to an increase in a note receivable from the sale of land in Mexico and
an increase in accounts receivable, which was partially offset by a decrease in inventories. Our current liabilities decreased by $417,108 primarily due to a
decrease in income taxes payable and accounts payable, which was partially offset by the increase in the current portion of long-term debt. Capital
improvements were paid for with cash and debt.
For the year ending December 31, 2019, we are planning to finance our improvements with operating cash flow. Our 2019 improvements are expected to
include improvements related to completing the cyanide leach circuit at Puerto Blanco.
The current portion of our long term debt is serviceable from the cash generated by operations.
26
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Going Concern Consideration
At December 31, 2018, the Company’s consolidated financial statements show negative working capital of approximately $1.6 million and an accumulated
deficit of approximately $25.7 million. Although the Company had net income for the current year, we have incurred losses for the prior three years. The
net income in 2018 was primarily due to non-recurring events which contributed approximately $2.5 million to net income. These factors indicate that there
may be doubt regarding the ability to continue as a going concern for the next twelve months.
The continuing losses are principally a result of the Company’s antimony operations and in particular the production costs incurred in Mexico. The other two
operating divisions, precious metals and zeolite, had gross profits of $186,403 and $536,309 in 2018 and $310,373 and $408,403 in 2017, respectively. The
Company is expecting an increase in cash flow from both of these divisions in 2019. The Company will get more precious metals from their North American
raw material as they have resumed normal shipments, and zeolite sales should continue to increase. The Company’s largest zeolite customer believes that
they will be doubling its orders in 2019, and the Company has built a warehouse to accommodate its needs.
Regarding the antimony division, in 2016 the Company endured some of the lowest prices for antimony in the past seven years, with an average sales price
of only $2.98 per pound of metal contained. Prices improved during 2017 with an average sale price of $4.01. Through 2018, the average sale price for
antimony was approximately $4.50 per pound. However due to a temporary decrease in raw material from the Company’s North American supplier, overall
antimony production decreased.
In 2017, the Company reduced costs for labor at the Mexico locations which has resulted in a lower overall production costs in Mexico which continued
through 2018. In the fourth quarter 2017, the Company also adjusted operating approaches at Madero that will likely result in a decrease in operating costs
for fuel, natural gas, electricity, and reagents. Although total production activity in Mexico decreased in 2018 and 2017 due to the lack of Hillgrove
concentrates, the Company’s 2019 plan involves ramping up production at its own antimony properties in Mexico. The expected increase in production will
result in a significant decrease in the per-unit cost of operations. The Company is presently making antimony metal in Mexico and shipping directly to
customers. This will decrease production costs in Mexico and shipping costs for raw materials previously sent to Montana. The Company is already seeing
approximately twice the production from the Wadley mine in 2019 than was experienced in 2018. In addition, a new leach circuit expected to come on line
during 2019 in Mexico will result in more extraction of precious metals from the Los Juarez mine. The Company has approximately 30,000 tons of ore
mined and broken awaiting transport to the Puerto Blanco plant.
In 2017 and 2018, management implemented wage and other cost reductions at the corporate level that will keep administrative costs stable in 2019. The
Company expects to continue paying a low cost for propane in Montana, which in years past has been a major operating cost.
Over the past several years, the Company has been able to make required principal payments on its debt from cash generated from operations without the
need for additional borrowings or selling shares of its common stock. The Company plans to continue keeping current on its debt payments in 2019 through
cash flows from operations.
Management believes that the current circumstances and cost reduction actions taken will enable the Company to meet its obligations for the next twelve
months.
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EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Critical Accounting Estimates
We have, besides our estimates of the amount of depreciation on our assets, two critical accounting estimates. The percentage of antimony contained in our
unprocessed ore in inventory is based on assays taken at the time the ore is delivered, and may vary when the ore is processed. 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 ore is based on assays taken at the time the ore is delivered, and may vary when the ore is processed. We assay the 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, but would not change our accounts payable, reported cost of goods sold or net income amounts.
At December 31, 2018, 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 $5,000. 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 retirement 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 $12,848 for 2018 and $12,490 for 2017). We 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.
Item 7A Quantitative and Qualitative Disclosures about Market Risk
Not Applicable.
Item 8 Financial Statements
The consolidated financial statements of the registrant are included herein on pages F1-F22.
Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None
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EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Item 9A Controls and Procedures
Evaluation of disclosure controls and procedures
At the end of the period covered by this Annual Report on Form 10-K, an evaluation was carried out under the supervision of and with the participation of our
management, including the Principal Executive Officer and the Principal Financial Officer of the effectiveness of the design and operations of our disclosure
controls and procedures (as defined in Rule 13a – 15(e) and Rule 15d – 15(e) under the Exchange Act) as of the end of the period covered by this report.
Based on that evaluation, the Principal Executive Officer and the Principal Financial Officer have concluded that our disclosure controls and procedures were
not effective in ensuring that: (i) information required to be disclosed by the Company in reports that it files or submits to the Securities and Exchange
Commission under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in applicable rules and forms and (ii)
material information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our
CEO and CFO, as appropriate, to allow for accurate and timely decisions regarding required disclosure.
Disclosure controls and procedures were not effective due primarily to material weaknesses in the Company’s internal control of financial reporting as
discussed below.
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, 2018. 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, 2018.
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
● 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 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, 2018, 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, 2018.
29
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
PART III
Item 10 Directors, Executive Officers, Promoters and Control Persons, Compliance with
Section 16(a) of the Exchange Act
Identification of directors and executive officers at December 31, 2018, is as follows:
Name
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 Wright
Craig Thomas
Age
80
70
50
63
70
37
73
60
69
49
44
Affiliation
Expiration of Term
Chairman, President, Director
First Vice-President
Second Vice-President, Director
Third Vice-President
Chief Financial Officer
Secretary, Controller, and Treasurer
Director
Director
Director
Director
Director
Annual meeting
Annual meeting
Annual meeting
Annual meeting
Annual meeting
Annual meeting
resigned 1st Qtr of 2019
resigned 1st Qtr of 2019
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. Mr. Babbitt resigned as director during the first quarter of 2019 .
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.
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. Mr. Ferer resigned as director during the first quarter of 2019.
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EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
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.
Craig W. Thomas. Mr. Thomas is a professional investor with fifteen years of investing experience. He is currently the co-founder of Shareholder Advocates for
Value Enhancement and the managing member of various investment partnerships. Mr. Thomas is currently a director of Full House Resorts, Inc. Mr. Thomas
earned a B.A. from Stanford University and an M.B.A. from the Graduate School of Business at Stanford University.
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 2018 calendar year. Each incumbent director attended all of
the meetings held during the 2018 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 at December 31, 2018, Gary Babbitt (Chairman),
Whitney Ferer, Jeffrey Wright, and Craig Thomas. Gary Babbitt and Whitney Ferer resigned as of March 18, 2019. None of the Audit Committee members are
involved in our day-to-day financial management. Jeffrey Wright and Craig Thomas are considered financial experts.
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, 2018:
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
Craig Thomas, Director
Totals
Fees Earned or
paid in Cash
$
18,000
$
18,000
Total Fees,
Awards, and
Other
Stock Awards
Compensation
$
$
$
$
$
$
$
$
25,000
25,000
25,000
25,000
25,000
25,000
25,000
175,000
$
$
$
$
$
$
$
$
25,000
43,000
25,000
25,000
25,000
25,000
25,000
193,000
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 2018 and 2017.
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, 2018 and 2017.
Name and Principal Position
John C. Lawrence,
President and Chief
Executive Officer
John C. Gustaven,
Executive Vice
President
Russell Lawrence, Vice
President for Latin
America
Year
2018
2017
2018
2017
2018
2017
Salary
$141,000
$141,000
$100,000
$100,000
$110,000
$110,000
Bonus
N/A
N/A
N/A
Stock Awards (2)
$25,000
$25,000
$25,000
$25,000
Total
$166,000
$166,000
$100,000
$100,000
$135,000
$135,000
(2)
These figures represent the fair value, as of the date of issuance, the annual director's fees for John C. Lawrence and Russell Lawrence payable in
shares of USAC's common stock.
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.
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EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
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, 2018, 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, 2018.
Outstanding
Equity Awards
at Fiscal Year
End
Awards
Equity
Incentive Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Exercise
Price
Expiration
Date
Name
Number of Securities Underlying
Unexercised Warrants
Exercisable
#
Unexercisable
#
John C. Lawrence
(Chairman of the Board of Directors and Chief Executive Officer)
250,000
-
0
-
0 $
-
0.25
None
-
-
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EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
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 April 1, 2019, 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.
Title of Class
Common Stock
Common Stock
Series B Preferred
Series C Preferred
Series C Preferred
Series C Preferred
Name and Address of Beneficial Owner (1)
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
Series C Preferred
All Series C Preferred Shareholders as a Group
Common Stock
John C. Lawrence
Russell Lawrence
Hart Baitis
Garry Babbitt
Whitney Ferer
Jeffrey Wright
Mathew Keane
Daniel Parks
Craig Thomas
Common Stock
All Directors and Executive Officers as a Group
John C. Lawrence
Leo Jackson
Garry Babbitt
Series D Preferred
Series D Preferred
Common Stock and
Preferred Stock
w/voting rights
Common and Preferred
Voting Stock
Amount and
Nature of
Beneficial
Ownership
Percent of Class
(1)
Percent of all
Voting Stock
4,018,335
5.89%
5.80%
6,362,927(3)
9.33%
9.19%
750,000(5)
100.00%
N/A
48,305(4)
27.10%
32,203(4)
18.10%
32,203(4)
177,904(4)
4,449,181(2)
353,179
339,254
377,060
268,074
235,804
10,300
464,500
678,285
7,175,637
1,590,672(4)
102,000
58,333
18.10%
100.00%
62.07%
4.92%
4.72%
5.25%
3.75%
3.30%
0.14%
6.45%
9.40%
100.00%
90.80%
5.80%
3.40%
*
*
*
*
6.52%
*
*
*
*
*
*
*
*
10.51%
2.33%
*
*
2.52%
9.16%
-
2.52%
All Series D Preferred Shareholders as a Group
1,751,005(4)
100.00%
All Directors and Executive Officers as a Group
All preferred Shareholders that are officers or directors
7,175,637(2)
-
1,649,005(4)
78.38%
-
21.62%
All Directors and Executive Officers as a Group
8,824,642
100.00%
12.93%
(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 April 1, 2019, 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 68,427,171 shares 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 April 1, 2019.
Total voting stock of 70,356,080 shares is a total of all the common stock issued, and all of the Series C and Series D Preferred Stock outstanding at April
1, 2019.
Includes 4,031,107 shares of common stock and 250,000 stock purchase warrants. Excludes 183,324 shares owned by the estate of 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.
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
34
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Item 13 Certain Relationships and Related Transactions
Described below are transactions during the last 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.
During the year ended December 31, 2018, the Company awarded, but did not issue, common stock with a value of $175,000 to its Board of Directors as
compensation for their services as directors. In connection with the issuances, the Company recorded $175,000 in director compensation expense and accrued
common stock payable.
In May 2018, the Company issued the Board members 739,018 shares of the Company’s common stock for services provided during 2017 which was accrued at
December 31, 2017, with a value of $175,000.
During 2017, the Company awarded, but did not issue, common stock with a value at December 31, 2017, of $175,000 to its Board of Directors as compensation
for their services as directors. In connection with the issuances, the Company recorded $175,000 in director compensation expense. On May 3, 2018, the shares
were issued to the directors.
During 2016, the Company awarded, but did not issue, common stock with a value at December 31, 2016, of $168,750 to its Board of Directors as compensation
for their services as directors. In connection with the issuances, the Company recorded $168,750 in director compensation expense. In March of 2017, at a price
of $0.40 per share, the directors were issued 421,875 shares for 2016.
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. The amount due to Mr. Lawrence as of December 31, 2018 and 2017
was $93,567 and $22,668, respectively. Expenses paid to Mr. Lawrence for the years ended December 31, 2018 and 2017 were $9,634 and $13,603,
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 2018 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 2018 and 2017 were $116,716 and $119,985, 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 2018 and 2017 were $12,465 and $8,985, respectively.
All Other Fees
There were no other fees billed by DeCoria, Maichel & Teague P.S. during 2017. During 2018, we paid $5,998 for services related to the acquisition of Lanxess,
LLC, provided by DeCoria, Maichel & Teague P.S.
35
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Item 15. Exhibits and Reports on Form 8-K
Exhibit
Number
Description
3.01
3.02
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:
10.1
10.11
10.12
10.13
10.14
10.15
10.16
10.17
10.18
10.19
10.2
10.21
10.22
Yellow Jacket Venture Agreement
Agreement Between Excel-Mineral USAC and Bobby C. Hamilton
Letter Agreement
Columbia-Continental Lease Agreement Revision
Settlement Agreement with Excel Mineral Company
Memorandum Agreement
Termination Agreement
Amendment to Assignment of Lease (Geosearch)
Series B Stock Certificate to Excel-Mineral Company, Inc.
Division Order and Purchase and Sale Agreement
Inventory and Sales Agreement
Processing Agreement
Release and settlement agreement between Bobby C. Hamilton and United States Antimony Corporation
36
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
10.23
10.24
10.25
10.26
10.27
10.28
10.3
Columbia-Continental Lease Agreement
Release of Judgment
Covenant Not to Execute
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
10.32
Warrant Issue-Al W. Dugan
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
10.34
Warrant Issue-John C. Lawrence
PVS Termination Agreement
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
10.36
10.37
10.38
10.39
10.4
Maguire Settlement Agreement
Warrant Issue-Carlos Tejada
Warrant Issue-Al W. Dugan
Memorandum of Understanding with Geosearch Inc.
Factoring Agreement-Systran Financial Services Company
Mortgage to John C. Lawrence
37
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
10.41
10.42
10.43
10.44
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
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
10.48
10.49
10.50
10.51
10.52
10.53
10.54
14
31.1
31.2
32.1
32.2
4.1
Bear River Zeolite Company Royalty Agreement, dated May 29, 2002
Grant of Production Royalty, dated June 1, 2002
Assignment of Common Stock of Bear River Zeolite Company, dated May 29, 2002
Agreement to Issue Warrants of USA, dated May 29, 2002
Secured convertible note payable - Delaware Royalty Company dated December 22, 2003*
Convertible note payable - John C. Lawrence dated December 22, 2003*
Pledge, Assignment and Security Agreement dated December 22, 2003*
Note Purchase Agreement dated December 22, 2003*
Code of Ethics*
Rule 13a-14(a)/15d-14(a) Certifications, Certification of John C. Lawrence*
Rule 13a-14(a)/15d-14(a) Certifications, Certification of Daniel L. Parks*
Section 1350 Certifications, Certification of John C. Lawrence*
Section 1350 Certifications, Certification of Daniel L. Parks*
CERCLA Letter from U.S. Forest Service filed as an exhibit to USAC form 10-QSB for the quarter ended June 30, 2000 (File No. 001-08675) are
incorporated herein by this reference and filed as an exhibit to USAC's Form 10-KSB for the year ended December 31, 1995 (File No. 1-8675) is
incorporated herein by this reference
______________________
* Filed herewith.
Reports on Form 8-K
Item 5.Other Events - October 10, 2003.
38
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: April 1, 2019
John C. Lawrence, President, Director, and Principal Executive Officer
By: /s/ Daniel L. Parks Date: April 1, 2019
Daniel L. Parks, Chief Financial Officer
By: /s/ Alicia Hill Date: April 1, 2019
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: April 1, 2019
John C. Lawrence, Director and President
(Principal Executive)
By: /s/ Hart Baitis Date: April 1, 2019
Hart Baitis, Director
By: /s/ Russell Lawrence Date: April 1, 2019
Russell Lawrence, Director
By: /s/ Jeffrey Wright Date: April 1, 2019
Jeffrey Wright, Director
By: /s/ Craig Thomas Date: April 1, 2019
Craig Thomas, Director
39
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Report of Independent Registered Public Accounting Firm
To the shareholders and the board of directors of United States Antimony Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of United States Antimony Corporation and Subsidiaries (the "Company") as of December 31,
2018 and 2017, the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the years then ended, and the related notes
(collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the
Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for the years then ended, in conformity with accounting
principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial
statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and
are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were
we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control
over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.
Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
DeCoria, Maichel & Teague, P.S.
We have served as the Company's independent auditor since 1998.
Spokane, Washington
March 29, 2019
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, 2018 and 2017
ASSETS
Current assets:
Cash and cash equivalents
Certificates of deposit
Accounts receivable
Inventories
Note receivable - sale of land
Other current assets
Total current assets
Properties, plants and equipment, net
Restricted cash for reclamation bonds
IVA receivable and other assets
Total assets
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Checks issued and payable
Accounts payable
Due to factor
Accrued payroll, taxes and interest
Other accrued liabilities
Payables to related party
Deferred revenue
Notes payable to bank
Income taxes payable (Note 14)
Long-term debt, current portion, net of discount
Total current liabilities
Long-term debt, net of discount and current portion
Hillgrove advances payable (Note 10)
Stock payable to directors for services
Asset retirement obligations and accrued reclamation costs
Total liabilities
Commitments and contingencies (Note 4, 10 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 $930,000 and $922,500
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 $5,002,470 and $4,961,324
respectively)
Common stock, $0.01 par value, 90,000,000 shares authorized;
68,227,171 and 67,488,153 shares issued and outstanding, respectively
Additional paid-in capital
Accumulated deficit
Total stockholders' equity
Total liabilities and stockholders' equity
$
$
$
2018
2017
$
$
$
56,650
252,954
438,391
755,261
400,000
-
1,903,256
15,227,172
57,247
369,448
17,557,123
46,482
1,926,320
16,524
159,037
353,911
93,567
32,400
183,917
-
705,460
3,517,618
1,027,730
1,134,221
175,000
277,720
6,132,289
27,987
252,298
362,579
914,709
-
4,697
1,562,270
15,132,897
63,345
372,742
17,131,254
28,248
2,276,357
10,880
185,283
168,578
22,668
60,049
192,565
443,110
546,988
3,934,726
1,239,126
1,134,221
175,000
271,572
6,754,645
-
-
7,500
1,779
7,500
1,779
17,509
17,509
682,271
36,406,874
(25,691,099)
11,424,834
17,557,123
$
674,881
36,239,264
(26,564,324)
10,376,609
17,131,254
$
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, 2018 and 2017
REVENUES
COST OF REVENUES
GROSS PROFIT
OPERATING EXPENSES (INCOME):
General and administrative
Salaries and benefits
Gain on sale of land
Gain on plant acquisition (Note 11)
Other operating expenses
Professional fees
TOTAL OPERATING EXPENSES (INCOME)
INCOME (LOSS) FROM OPERATIONS
OTHER INCOME (EXPENSE):
Interest income
Gain on tax settlement
Interest expense
Factoring expense
Foreign exchange loss
TOTAL OTHER INCOME (EXPENSE)
INCOME (LOSS) BEFORE INCOME TAXES
INCOME TAX BENEFIT -CURRENT
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
Diluted
2018
2017
$
9,034,403
10,229,978
9,032,860
9,954,518
1,543
275,460
795,833
375,788
(700,000)
(1,500,000)
119,076
363,810
(545,493)
647,566
371,162
-
-
-
216,431
1,235,159
547,036
(959,699)
864
110,778
(99,970)
(4,969)
(12,846)
(6,143)
873
-
(106,975)
(35,993)
(32,600)
(174,695)
540,893
(1,134,394)
332,332
-
873,225
(1,134,394)
(48,649)
(48,649)
$
824,576
(1,183,043)
$
0.01
$
(0.02)
67,978,132
68,097,924
67,413,025
67,413,025
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 Statement of Changes in Stockholders' Equity
For the years ended December 31, 2018 and 2017
Total Preferred Stock
Common Stock
Paid
Accumulated
Shares
Amount
Shares
Amount
In Capital
Deficit
Total
Additional
Balances, December 31, 2016
2,678,909 $
26,788 67,066,278 $
670,662 $36,074,733 $(25,429,930) $11,342,253
Issuance of common stock to directors for
services
Net loss
Balances, December 31, 2017
Issuance of common stock to directors for
services
Net income
Balances, December 31, 2018
2,678,909
26,788 67,488,153
421,875
2,678,909 $
26,788 68,227,171 $
739,018
4,219
164,531
168,750
(1,134,394) (1,134,394)
674,881 36,239,264 (26,564,324) 10,376,609
7,390
167,610
175,000
873,225
682,271 $36,406,874 $(25,691,099) $11,424,834
873,225
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, 2018 and 2017
Cash Flows From Operating Activities:
Net income (loss)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization
Amortization of debt discount
Accretion of asset retirement obligation
Common stock accrued for directors fees
Foreign exchange loss
Gain on sale of land
Gain on plant acquisition
Non-cash miscellaneous income
Change in:
Accounts receivable
Inventories
Other current assets
IVA receivable and other assets
Accounts payable
Accrued payroll, taxes and interest
Other accrued liabilities
Deferred revenues
Payables to related party
Income taxes payable
Net cash provided (used) by operating activities
Cash Flows From Investing Activities:
Proceeds from sale of land
Proceeds from plant acquisition
Purchase of properties, plants and equipment
Net cash provided (used) by investing activities
Cash Flows From Financing Activities:
Net proceeds (to) from factor
Proceeds from notes payable to bank, net of payments
Principal payments of long-term debt
Advances from related party
Payments on advances from related party
Change in checks issued and payable
Net cash provided (used) by financing activities
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents and restricted cash at beginning of year
Cash and cash equivalents and restricted cash at end of year
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid in cash
Noncash investing and financing activities:
Properties, plants & equipment acquired with long-term debt
Common stock payable issued to directors
Note receivable-sale of land
2018
2017
$
873,225
$
(1,134,394)
904,844
83,991
6,148
175,000
-
(700,000)
(1,500,000)
(656)
(75,812)
159,448
4,697
3,294
(350,037)
(26,246)
185,333
(27,649)
70,899
(443,110)
(656,631)
300,000
1,500,000
(899,119)
900,881
5,644
(8,648)
(236,915)
135,000
(135,000)
18,234
(221,685)
22,565
91,332
113,897
$
$
968,888
93,450
5,790
175,000
32,600
-
-
(657)
189,540
(59,072)
18,404
(58,539)
479,106
(28,412)
45,610
(18,681)
8,143
-
716,776
-
-
(365,541)
(365,541)
(139,519)
25,248
(211,529)
-
-
(7,434)
(333,234)
18,001
73,331
91,332
$
15,928
$
14,632
100,000
175,000
400,000
40,278
168,750
-
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, 2018 and 2017
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.
In 2018, the Company acquired 100% ownership in Lanxess Laurel US LLC (“Lanxess Laurel”), a Delaware limited liability company and Lanxess Laurel
de Mexico, S.A. de C.V (“Lanxess Laurel Mexico”), a Mexico corporation, both of which became a wholly-owned subsidiary of the Company. See Note 11.
2. Summary of Significant Accounting Policies
Principles of Consolidation
The Company's consolidated financial statements include the accounts of its wholly-owned subsidiaries BRZ, USAMSA, AM, and, since August 31, 2018,
Lanxess Laurel and Lanxess Laurel Mexico. All 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 potential impairment, metal content of mineral resources, accounts receivable allowance for uncollectible accounts,
deferred income taxes, income taxes payable, 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, 2018 and 2017 consists of cash held for reclamation performance bonds and is held in certificates of deposit with financial
institutions.
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, 2018 and 2017
2. Summary of Significant Accounting Policies, continued:
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, 2018 and 2017 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 in the financial statements are presented in U.S. dollars, which is the functional currency for all of the Company’s operations. Foreign
translation gains and losses relating to Mexican subsidiaries are recognized as foreign exchange gain or loss in the consolidated statement of operations.
Going Concern Consideration
At December 31, 2018, the Company’s consolidated financial statements show negative working capital of approximately $1.6 million and an accumulated
deficit of approximately $25.7 million. Although the Company had net income for the current year, they have incurred losses for the prior three years. The
net income in 2018 was primarily due to non-recurring events which contributed approximately $2.5 million to net income. These factors indicate that there
may be doubt regarding the ability to continue as a going concern for the next twelve months.
The continuing losses are principally a result of the Company’s antimony operations and in particular the production costs incurred in Mexico. The other two
operating divisions, precious metals and zeolite, had gross profits of $186,403 and $536,309 in 2018 and $310,373 and $408,403 in 2017, respectively. The
Company is expecting an increase in cash flow from both of these divisions in 2019. The Company will get more precious metals from their North American
raw material as they have resumed normal shipments, and zeolite sales should continue to increase. The Company’s largest zeolite customer believes that
they will be doubling its orders in 2019, and the Company has built a warehouse to accommodate its needs.
Regarding the antimony division, in 2016 the Company endured some of the lowest prices for antimony in the past seven years, with an average sales price
of only $2.98 per pound of metal contained. Prices improved during 2017 with an average sale price of $4.01. Through 2018, the average sale price for
antimony was approximately $4.50 per pound. However due to a temporary decrease in raw material from the Company’s North American supplier, overall
antimony production decreased.
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, 2018 and 2017
2. Summary of Significant Accounting Policies, continued:
In 2017, the Company reduced costs for labor at the Mexico locations which has resulted in a lower overall production costs in Mexico which continued
through 2018. In the fourth quarter 2017, the Company also adjusted operating approaches at Madero that will likely result in a decrease in operating costs
for fuel, natural gas, electricity, and reagents. Although total production activity in Mexico decreased in 2018 and 2017 due to the lack of Hillgrove
concentrates, the Company’s 2019 plan involves ramping up production at its own antimony properties in Mexico. The expected increase in production will
result in a significant decrease in the per-unit cost of operations. The Company is presently making antimony metal in Mexico and shipping directly to
customers. This will decrease production costs in Mexico and shipping costs for raw materials previously sent to Montana. The Company is already seeing
approximately twice the production from the Wadley mine in 2019 than was experienced in 2018. In addition, a new leach circuit expected to come on line
during 2019 in Mexico will result in more extraction of precious metals from the Los Juarez mine. The Company has approximately 30,000 tons of ore
mined and broken awaiting transport to the Puerto Blanco plant.
In 2017 and 2018, management implemented wage and other cost reductions at the corporate level that will keep administrative costs stable in 2019. The
Company expects to continue paying a low cost for propane in Montana, which in years past has been a major operating cost.
Over the past several years, the Company has been able to make required principal payments on its debt from cash generated from operations without the
need for additional borrowings or selling shares of its common stock. The Company plans to continue keeping current on its debt payments in 2019 through
cash flows from operations.
Management believes that the current circumstances and cost reduction actions taken will enable the Company to meet its obligations for the next twelve
months.
Mineral Rights
The costs 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 of 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, 2018 or 2017 as a result of this assessment. Mineral rights are subject to write
down in the period the property is abandoned.
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. 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.
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, 2018 and 2017
2. Summary of Significant Accounting Policies, continued:
Exploration and Development
The Company recognizes 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 Securities and Exchange Commission 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.
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 if 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
Products consist of the following:
● Antimony: includes antimony oxide, sodium antimonate, antimony trisulfide, and antimony metal
● Zeolite: includes coarse and fine zeolite crushed in various sizes
● Precious Metals: includes unrefined and refined gold and silver
For antimony and zeolite products, revenue is recognized upon the completion of the performance obligation which is met when the transaction price can be
reasonably estimated and revenue is recognized generally at the time when risk is transferred. The Company has determined the performance obligation is
met and title is transferred either upon shipment from the Company’s warehouse locations or upon receipt by the customer as specified in individual sales
orders. The performance obligation is met because at that time, 1) legal title is transferred to the customer, 2) the customer has accepted the product and
obtained the ability to realize all of the benefits from the product, 3) the customer has the significant risks and rewards of ownership to it, 4) it is very unlikely
product will be rejected by the customer upon physical receipt, and 5) the Company has the right to payment for the product. Shipping costs related to the
sales of antimony and zeolite products are recorded to cost of sales as incurred. For zeolite products, royalty expense due a third party by the Company is
also recorded to cost of sales upon sale in accordance with terms of underlying royalty agreements.
For sales of precious metals, the performance obligation is met, the transaction price is known, and revenue is recognized at the time of transfer of control
of the agreed-upon metal quantities to the customer. Refining and shipping costs related to sales of precious metals are recorded to cost of sales as
incurred.
F-9
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, 2018 and 2017
2. Summary of Significant Accounting Policies, continued:
The Company has determined that its contracts do not include a significant financing component. Prepayments, which are not common, received from
customers prior to the time that products are processed and shipped, are recorded as deferred revenue. For antimony and zeolite sales contracts, the
Company may factor certain receivables and receive final payment within 30 days of the performance obligation being met. For antimony and zeolite
receivables not factored, the Company typically receives payment within 10 days. For precious metals sales, a provisional payment of 75% is typically
received within 45 days of the date the product is delivered to the customer. After an exchange of assays, a final payment is normally received within 90
days of product delivery.
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 stock options, warrants to purchase the Company's common stock, and
convertible preferred stock. The calculation of diluted earnings per share for the year ended December 31, 2018 includes 250,000 warrants.
For the years ended December 31, 2018 and 2017, potentially dilutive common stock equivalents not included in the calculation of diluted earnings per
share because they were anti-dilutive are as follows:
Warrants
Convertible preferred stock
Total possible dilution
Fair Value of Financial Instruments
December 31,
2018
December 31,
2017
-
1,751,005
1,751,005
250,000
1,751,005
2,001,005
The Company’s financial instruments include cash and cash equivalents, certificates of deposits, note receivable for land, restricted cash, due to factor,
notes payable to bank, and long-term debt. The carrying value of these instruments approximates fair value based on their contractual terms.
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, 2018 and 2017
2. Summary of Significant Accounting Policies, continued:
Fair Value Measurements
When required to measure assets or liabilities at fair value, the Company uses a fair value hierarchy based on the level of independent, objective evidence
surrounding the inputs used. The Company determines the level within the fair value hierarchy in which the fair value measurements in their entirety fall.
The categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Level 1 uses
quoted prices in active markets for identical assets or liabilities, Level 2 uses significant other observable inputs, and Level 3 uses significant unobservable
inputs. The amount of the total gains or losses for the period are 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. The Company has no financial assets or liabilities that are adjusted to fair value on a
recurring basis.
Recent Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09 Revenue Recognition,
replacing guidance previously codified in Subtopic 605-10 Revenue Recognition-Overall. The new ASU establishes a five step principles-based framework
in an effort to significantly enhance comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets. In August
2015, the FASB issued ASU No. 2015-14 Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. ASU No. 2015-14 deferred
the effective date of ASU No. 2014-09 until annual and interim reporting periods beginning after December 15, 2017. The Company adopted ASU No. 2014-
09 as of January 1, 2018 using the modified-retrospective transition approach.
The Company performed an assessment of the impact of implementation of ASU No. 2014-09, and concluded it does not change the timing of revenue
recognition or amounts of revenue recognized compared to how it recognized revenue under previous policies. Revenues contracts and customers do not
involve multiple types of performance obligations and revenues are generally recognized at the time of shipment or receipt by the customer depending on
shipping terms.
Adoption of ASU No. 2014-09 involves additional disclosures, where applicable, concerning (i) contracts with customers, (ii) significant judgments and
changes in judgments in determining the timing of satisfaction of performance obligations and the transaction price, and (iii) assets recognized for costs to
obtain or fulfill contracts. See Note 3 for information on sales of products.
In August 2016, the FASB issued ASU No. 2016-15 Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.
The update provides guidance on classification of cash receipts and payments related to eight specific issues. The update is effective for fiscal years
beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The Company adopted this update as of
January 1, 2018, and there were no material impacts on the consolidated financial statements.
In November 2016, the FASB issued ASU No. 2016-18 Statement of Cash Flows (Topic 230): Restricted Cash. The update requires that a statement of
cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted
cash equivalents. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early
adoption permitted. The Company adopted this update as of January 1, 2018. Cash, cash equivalents, and restricted cash on the consolidated statement of
cash flows includes restricted cash of $57,247 as of December 31, 2018, $63,345 as of December 31, 2017, and $63,274 as of December 31, 2016 as well
as amounts previously reported for cash and cash equivalents.
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, 2018 and 2017
2. Summary of Significant Accounting Policies, continued:
In January 2017, the FASB issued ASU No. 2017-01 Business Combinations (Topic 805): Clarifying the Definition of a Business. The update clarifies the
definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions
(or disposals) of assets or businesses. The Company adopted this update as of January 1, 2018. The Company will apply the applicable provisions of the
update to any future acquisitions.
In February 2016, the FASB issued ASU No. 2016-02 Leases (Topic 842). The update modifies the classification criteria and requires lessees to recognize
the assets and liabilities on the balance sheet for most leases. The update is effective for fiscal years beginning after December 15, 2018, with early
adoption permitted. Upon implementation of the new guidance, the Company will be required to recognize a liability and right-of-use asset for all operating
leases. The Company has elected the transition option to apply the new guidance at the effective date without adjusting comparative periods presented.
The Company has no capital leases at December 31, 2018. The Company’s operating leases, which will be impacted upon adoption, are not significant and
the Company does not anticipate a material impact upon adoption on January 1, 2019.
Reclassifications
Certain reclassifications have been made to conform the prior year’s data to the current year’s presentation. These reclassifications have no effect on
previously reported operations, stockholders’ equity or cash flows.
3. Revenue Recognition
Sales of products for the years ended December 31, 2018, and 2017, were as follows:
Antimony
Zeolite
Precious metals
Fiscal Year Ended
December 31,
2018
6,113,014
2,666,944
254,445
9,034,403
$
$
2017
7,588,470
2,266,636
374,872
10,229,978
$
$
The following is sales information by geographic area based on the location of customers for the years ended December 31, 2018, and 2017.
United States
Canada
Sales of products to significant customers were as follows for the years ended December 31, 2018, and 2017:
Sales to
Largest Customers
Mexichem Specialty Compounds Inc.
East Penn Manufacturing Inc
Kohler Corporation
Ampacet
% of Total Revenues
F-12
Fiscal Year Ended
December 31,
2018
8,242,141
792,262
9,034,403
$
$
2017
9,510,211
719,767
10,229,978
$
$
For the Year Ended
December 31,
2018
2,698,770
-
1,441,197
538,922
4,678,889
$
$
December 31,
2017
3,335,046
512,621
1,928,692
-
5,776,359
$
$
51.79%
56.50%
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, 2018 and 2017
3. Revenue Recognition, continued:
Accounts receivable from largest customers were as follows for December 31, 2018, and 2017:
Largest
Accounts Receivable
Nutreco Canada Inc.
DanaMart
Teck American Inc
Axens North America Inc.
Earth Innovations Inc.
Ralco Mix Products
% of Total Receivables
December 31,
2018
December 31,
2017
$
$
143,890
-
34,912
35,967
-
214,769
$
$
$
25,657
-
241,267
-
-
16,000
282,924
49.00%
78.10%
The Company’s trade accounts receivable balance related to contracts with customers was $438,391 at December 31, 2018 and $362,579 at December 31,
2017.
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 is for a term of one year with automatic renewal for additional one-year terms. 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
Accounts receivable - net
December 31,
2018
December 31,
2017
$
$
421,867
16,524
438,391
$
$
351,699
10,880
362,579
Factoring fees paid by the Company during the years ended December 31, 2018 and 2017, were $4,969 and $35,993, respectively. For the years ended
December 31, 2018 and 2017, net accounts receivable of approximately $0.25 million and $1.70 million, respectively, were sold under the agreement.
Proceeds from the sales were used to fund inventory purchases and operating expenses.
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, 2018 and 2017
5. Inventories
The major components of the Company's inventories at December 31, 2018 and 2017 were as follows:
Antimony Metal
Antimony Oxide
Antimony Concentrates
Antimony Ore
Total antimony
Zeolite
2018
2017
8,127
255,782
2,214
257,067
523,190
232,071
755,261
$
$
-
408,217
35,554
187,133
630,904
283,805
914,709
$
$
At December 31, 2018 and 2017, 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 were held primarily at
sites in Mexico and are essentially raw material. At December 31, 2018 and 2017, the antimony oxide and concentrates inventory in Mexico was valued at
estimated net realizable value. The Company's zeolite inventory consists of salable zeolite material held in a Canadian warehouse and at BRZ's Idaho
mining and production facility, and is carried at cost.
6. Properties, Plants and Equipment
The major components of the Company's properties, plants and equipment by segment at December 31, 2018 and 2017 are shown below:
2018
2017
Plant & Equipment
Buildings
Mineral Rights and Interests
Land & Other
Accumulated Depreciation
Plant & Equipment
Buildings
Mineral Rights and Interests
Land & Other
Accumulated Depreciation
Antimony Segment
Zeolite
Segment
$
BRZ
USAMSA
USAC
743,767 $ 8,466,461 $ 3,690,249 $
391,305
900,992
247,210
3,664
- 3,793,502
3,274,572 2,529,294
15,310
4,265,549 15,690,249 4,100,528
(2,630,234) (4,029,480) (2,785,159)
$ 1,635,315 $ 11,660,769 $ 1,315,369 $
Antimony Segment
Zeolite
Segment
$
BRZ
USAMSA
USAC
743,767 $ 7,655,777 $ 3,577,055 $
349,946
900,992
247,210
3,664
3,793,502
15,310
3,274,572 2,529,294
4,265,549 14,879,565 3,945,975
(2,577,552) (3,427,058) (2,596,356)
$ 1,687,997 $ 11,452,507 $ 1,349,619 $
Precious
Metals
Segment
TOTAL
792,628 $13,693,105
- 1,539,507
- 3,797,166
- 5,819,176
792,628 24,848,954
(176,909) (9,621,782)
615,719 $15,227,172
Precious
Metals
Segment
TOTAL
751,640 $12,728,239
- 1,498,148
- 3,797,166
- 5,819,176
751,640 23,842,729
(108,866) (8,709,832)
642,774 $15,132,897
At December 31, 2018 and 2017, the Company had $1,270,289 and $521,896, respectively, of assets that were not yet placed in service and have not yet
been depreciated.
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, 2018 and 2017
7. Asset Retirement Obligation and Accrued Reclamation Costs
Changes to the asset retirement obligation balance during 2018 and 2017 are as follows:
Asset Retirement Obligation
Balance December 31, 2016
Accretion during 2017
Balance December 31, 2017
Accretion during 2018
Balance December 31, 2018
$
$
158,282
5,790
164,072
6,148
170,220
The Company’s total asset retirement obligation and accrued reclamation costs of $277,720 and $271,572, at December 31, 2018 and 2017, respectively,
include reclamation obligations for the Idaho and Montana operations of $107,500.
8. Long-Term Debt:
Long-Term debt at December 31, 2018 and December 31, 2017, is as follows:
Note payable to Zeo Inc., non interest bearing,
payable in 11 quarterly installments of $8,300 with a final payment of $8,700;
maturing December 2022; uncollateralized.
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 Cat Financial Services, bearing interest at 6%;
payable in monthly installments of $1,300; maturing
August 2019; collateralized by equipment.
Note payable to Cat Financial Services, bearing interest at 6%;
payable in monthly installments of $778; maturing
December 2022; collateralized by equipment.
Note payable to De Lage Landen Financial Services,
bearing interest at 3.51%; payable in monthly installments of $655;
maturing September 2019; collateralized by equipment.
Note payable to De Lage Landen Financial Services,
bearing interest at 3.51%; 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; originally maturing
March 2015; collateralized by equipment.
Obligation payable for Soyatal Mine, non-interest bearing,
annual payments of $100,000 or $200,000 through 2020, net of discount
of $22,321 and $49,360, respectively
Obligation payable for Guadalupe Mine, non-interest bearing,
annual payments from $60,000 to $149,078 through 2026, net of discount
of $252,444 and $309,397 respectively
Less current portion
Long-term portion
F-15
December 31,
December 31,
2018
2017
$
100,000
$
-
-
8,054
14,022
27,096
34,390
40,278
5,851
13,344
8,371
15,776
12,146
14,146
639,747
715,709
918,663
1,733,190
(705,460)
1,027,730
$
951,711
1,786,114
(546,988)
1,239,126
$
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, 2018 and 2017
8. Long-Term Debt, continued:
At December 31, 2018, principal payments on debt are due as follows:
Year Ending December 31,
2019
2020
2021
2022
2023
Thereafter
9. Notes Payable to Bank
At December 31, 2018 and 2017, the Company had the following notes payable to bank:
Promissory note payable to First Security Bank of Missoula,
bearing interest at 3.150%, payable on demand, collateralized
by a lien on Certificate of Deposit
Promissory note payable to First Security Bank of Missoula,
bearing interest at 3.150%, payable on demand, collateralized
by a lien on Certificate of Deposit
Total notes payable to the bank
Principal
Payment
$
$
776,205
289,930
190,396
191,292
151,681
408,451
2,007,955
$
$
Discount
Net
(70,745)
(54,044)
(42,342)
(35,938)
(29,150)
(42,546)
(274,765)
$
$
705,460
235,886
148,054
155,354
122,531
365,905
1,733,190
December 31,
December 31,
2018
2017
$
83,918
$
98,863
99,999
93,702
$
183,917
$
192,565
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 $99,999.
10. Hillgrove Advances Payable
On November 7, 2014, the Company entered into an advance and concentrate processing agreement with Hillgrove Mines Pty Ltd of Australia (Hillgrove).
The terms of the agreement require payment of the advance upon Hillgrove’s issuance of a stop notice. Under terms of the agreement, if a stop order is
issued after two years, the repayment obligation is 81.25% of the funds advanced at that point. As no stop notice was issued during the initial two year
period ended November 7, 2016, the Company’s obligation to Hillgrove is 81.25% of total advanced funds. Through December 31, 2016, Hillgrove
advanced the Company a total of $1,396,721, resulting in a net liability of $1,134,221 which is 81.25% of monies advanced. No funds were advanced in
2017 or 2018. Based on conversations with Hillgrove, management does not anticipate receiving a stop notice in 2019, thus the entire amount is classified
as long term.
11. Plant Acquisition and Sale of Land
On August 31, 2018, the Company closed a Member Interest and Capital Share Agreement (the “Agreement”) with Great Lakes Chemical Corporation and
Lanxess Holding Company US Inc., as the sellers, and the Company as the buyer. Under the Agreement, the Company acquired subsidiaries of the sellers
which include an antimony plant, equipment and land located in Reynosa, Mexico. In addition, the Company was paid $1,500,000 by the sellers which was
recognized as operating income in the year ended December 31, 2018. The transaction was accounted for as an asset acquisition as there was no
business associated with the acquired assets. The Company is disassembling, salvaging, and transporting the antimony plant and equipment for use in its
existing operations in both Mexico and the United States. The project involves moving heavy equipment and has been completed as of March 31, 2019.
During November 2018, the Company sold the land acquired with the plant for $700,000, and the Company received $300,000 in 2018 and the remainder
of the $700,000 in 2019. The Company recognized a gain on the sale of land during the year ended December 31, 2018.
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, 2018 and 2017
12. Stockholders' Equity
Issuance of Common Stock for Cash
The Company did not issue any common stock for cash in 2018 or 2017.
Issuance of Common Stock for Services to Directors and Consultants
During the year ended December 31, 2018, the Company awarded, but did not issue, common stock with a value of $175,000 to its Board of Directors as
compensation for their services as directors. In connection with the issuances, the Company recorded $175,000 in director compensation expense and
accrued common stock payable.
In May 2018, the Company issued the Board members 739,018 shares of the Company’s common stock for services provided during 2017 which was
accrued at December 31, 2017, with a value of $175,000.
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.
At December 31, 2018 and 2017, 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 (none of which are outstanding); 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 each of the
years ended December 31, 2018 and 2017 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, 2018 and 2017, cumulative dividends in arrears on the outstanding Series B shares were $180,000 and $172,500, 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-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, 2018 and 2017
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, 2018 and 2017, the cumulative dividends in arrears on the 1,751,005 outstanding Series D shares
were $624,960 and $583,812, 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, 2018 and 2017, the liquidation
preference for Series D preferred stock was $5,002,470 and $4,961,324, 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 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, 2018 and 2017, 300,000 shares of the Company's common stock had
been previously issued under the Plan. There were no issuances under the Plan during 2018 and 2017.
14. Income Taxes
During the year ended December 31, 2018 and 2017, the Company recognized an income tax benefit (provision) of $332,332 and nil, respectively. The
2018 benefit which is a current foreign benefit, is a result of a positive outcome to an audit of USAMSA’s 2018 income tax return in Mexico.
Domestic and foreign components of income (loss) from operations before income taxes for the years ended December 31, 2018, and 2017, are as follows:
Domestic
Foreign
Total
2018
3,675,095
(3,134,202)
540,893
$
$
2017
(374,478)
(759,916)
(1,134,394)
$
$
F-18
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2018 and 2017
14. Income Taxes, continued:
The income tax provision (benefit) differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income (loss) for
the years ended December 31, 2018 and 2017, due to the following:
Tax benefit at federal statutory rate
State income tax effect
Foreign income tax effect
Non-deductible items
Percentage depletion
Impact on change in federal tax rate
Change in prior year estimate
Change in valuation allowance - Domestic
Change in valuation allowance - Foreign
Gain on settlement of foreign tax assessment
Income tax provision (benefit)
At December 31, 2018 and 2017, the Company had net deferred tax assets as follows:
Deferred tax assets:
Foreign net operating loss carry forward
Domestic net operating loss carry forward
Other
Deferred tax assets
Valuation allowance (foreign)
Valuation allowance (domestic)
Total deferred tax assets
Deferred tax liabilities:
Property, plant, and equipment
Net deferred tax assets
$
$
$
2018
113,588
12,602
(102,078)
492
(47,341)
-
(95,687)
(221,837)
340,261
(332,332)
(332,332)
$
$
2017
(397,038)
(34,609)
37,996
930
(58,056)
(6,660)
-
229,462
227,975
-
-
2018
2017
$
1,877,681
219,666
1,006
2,098,353
1,537,420
443,100
16,827
1,997,347
(1,877,681)
(94,956)
125,716
(1,537,420)
(316,793)
143,134
(125,716)
-
$
(143,134)
-
$
At December 31, 2018, the Company has federal net operating loss (“NOL”) carry forwards of approximately $156,000 that expire at various dates between
2026 and 2037. In addition, the Company has Montana state net operating loss carry forwards of approximately $2.2 million which expire between 2019 and
2026, and Idaho state net operating loss carry forwards of approximately $1.2 million, which expire between 2032 and 2038. The Company has
approximately $5.5 million of Mexican net operating loss carry forwards which expire between 2023 and 2028.
At December 31, 2018 and 2017, 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, 2018 and 2017.
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, 2018 and 2017
14. Income Taxes, continued:
As disclosed in Note 11, the Company acquired new subsidiaries in 2018. The subsidiaries have net operating loss carryforwards in Mexico of
approximately $800,000. Due to limitations, it is likely that a portion of this carryforward will not be available to offset the Company’s future taxable income in
Mexico. Management is still determining the amount of the limitation, if any.
On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (the "Act") resulting in significant modifications to existing law. The Company
completed the accounting for the effects of the Act during the year ended December 31, 2017. The Company did not incur any income tax benefit or
provision for the year ended December 31, 2017 as a result of the changes to tax laws and tax rates under the Act. The Company’s net deferred tax asset
was reduced by approximately $7,000 during the year ended December 31, 2017, which consisted primarily of the re-measurement of federal deferred tax
assets and liabilities from 35% to 21%.
During the years ended December 31, 2018 and 2017, there were no material uncertain tax positions taken by the Company. The Company’s United States
income tax filings are subject to examination for the years 2015 through 2017, and 2014 through 2017 in Mexico. The Company charges penalties on
assessments to general and administrative expense and charges interest to interest expense.
Mexican Tax Assessment
In 2015, the Mexican tax authority (“SAT”) initiated an audit of the USAMSA’s 2013 income tax return. In October 2016, as a result of its audit, SAT
assessed the Company $13.8 million pesos, which was approximately $666,400 in U.S. Dollars (“USD”) as of December 31, 2016. Approximately $285,000
USD of the total assessment was interest and penalties. SAT’s assessment was based on the disallowance of specific costs that the Company deducted on
the 2013 USAMSA income tax return. These disallowed costs were incurred by the Company for USAMSA’s business operations. Management reviewed
the assessment notice from SAT and believed numerous findings have no merit. The Company engaged accountants and tax attorneys in Mexico to defend
its position. An appeal was filed.
At December 31, 2017, the Company had accrued a potential tax liability of $443,110 associated with this assessment. In 2018, SAT finalized its procedures
with no assessment against the Company. The accrual of $443,110 was reversed and recognized as income tax benefit of $332,332 and a gain on tax
settlement of $110,778 which represented previously accrued interest and penalties. The Company paid Mexican tax representatives $157,500 to negotiate
this settlement that were recognized as professional fees expense during the year ended December 31, 2018.
The Company has been notified that SAT has re-opened its assessment of USAMSA’s 2013 income tax return which could result in a separate assessment.
It is too early in the process to estimate any potential outcome. At December 31, 2018, the Company does not believe it will be assessed any taxes, interest
or penalties as a result of this assessment.
15. Related-Party Transactions
During the years ended December 31, 2018 and 2017, the Company paid $9,634 and $13,603, respectively to John Lawrence, the Company’s President
and Chief Executive Officer, as reimbursement for equipment used by the Company. In addition, Mr. Lawrence advanced the Company $135,000 for
ongoing expenses during the year ended December 31, 2018, which has been repaid as of December 31, 2018. The amount payable to Mr. Lawrence as
of December 31, 2018 and 2017 was $93,567 and $22,668, respectively, for expenses that Mr. Lawrence paid on behalf of the Company during the year.
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, 2018 and 2017
16. Commitments and Contingencies
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 $10,000 plus IVA tax of $1,600 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 2018.
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, 2018 and 2017, the Company has no accruals relating to such
assessments.
17. Business Segments
The Company is currently organized and managed by four segments, which represent the three operating units: United States antimony operations,
Mexican antimony operations and United States zeolite operations, and a separate segment for revenue received from the sale of precious metals
recovered from the antimony process. The Company’s precious metals segment was added as a new reporting segment in 2016. The precious metals
activity has been reclassified from the antimony segment for 2018 and 2017. 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. Precious metal revenues are from
sales to customers in the United States and Canada.
Segment disclosures regarding sales to major customers and for property, plant, and equipment are located in Notes 3 and 6, respectively.
Total Assets:
Antimony
United States
Mexico
Subtotal Antimony
Precious Metals
Zeolite
Total
Capital expenditures:
Antimony
United States
Mexico
Subtotal Antimony
Precious metals
Zeolite
Total
December 31,
2018
December 31,
2017
$
$
2,199,694
12,824,291
15,023,985
615,719
1,917,419
2,510,323
12,073,219
14,583,542
642,774
1,904,938
$
17,557,123
$
17,131,254
For the year
ended
December 31,
2018
For the year
ended
December 31,
2017
$
$
-
803,579
803,579
40,988
154,552
$
999,119
$
32,961
87,396
120,357
185,668
99,794
405,819
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, 2018 and 2017
17. Business Segments, continued:
Segment Operations for the
Year ended December 31, 2018
Antimony
USA
Antimony
Mexico
Total
Antimony
Precious
Metals
Bear River
Zeolite
Totals
Total revenues
$ 6,113,014 $
- $ 6,113,014 $
254,445 $ 2,666,944 $ 9,034,403
Depreciation and amortization
52,681
595,318
647,999
68,042
188,803
904,844
Income (loss) from operations
3,046,782 (3,148,092)
(101,310)
186,403
461,943
547,036
Other income (expense)
Income tax benefit
(8,051)
13,890
5,839
-
(11,982)
(6,143)
-
332,332
332,332
-
-
332,332
NET INCOME (LOSS)
$ 3,038,731 $ (2,801,870) $
236,861 $
186,403 $
449,961 $
873,225
Segment Operations for the
Year ended December 31, 2017
Antimony
USA
Antimony
Mexico
Total
Antimony
Precious
Metals
Bear River
Zeolite
Totals
Total revenues
$ 7,588,470 $
- $ 7,588,470 $
374,872 $ 2,266,636 $10,229,978
Depreciation and amortization
57,761
623,899
681,660
64,499
222,729
968,888
Income (loss) from operations
1,965,573 (3,579,810) (1,614,237)
310,373
344,165
(959,699)
Income tax expense
Other income (expense)
-
-
-
-
-
-
(35,853)
(126,149)
(162,002)
-
(12,693)
(174,695)
NET INCOME (LOSS)
$ 1,929,720 $ (3,705,959) $ (1,776,239) $
310,373 $
331,472 $ (1,134,394)
F-22
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Exhibit 21.01
Subsidiaries of Registrant, as of December 31, 2018
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: April 1, 2019
/s/John C. Lawrence
John C. Lawrence
President and Chief Executive Officer
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
I, Daniel L. Parks, certify that:
CERTIFICATION
(1) I have reviewed this annual report on Form 10-K of United States Antimony Corporation.
Exhibit 31.2
(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: April 1, 2019
/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, John C. Lawrence, director and president of United States Antimony Corporation (the "Registrant") do hereby certify, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
1.
This Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 2018, as filed with the Securities and Exchange
Commission (the "report"), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.
The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
Exhibit 32.1
Date: April 1, 2019
/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.
This Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 2018, as filed with the Securities and Exchange
Commission (the "report"), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.
The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
Exhibit 32.2
Date: April 1, 2019
/s/Daniel L. Parks
Daniel L. Parks
Chief Financial Officer
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
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, 2018, we had no material specified health and safety violations, orders or citations, related assessments or legal actions, mining-
related fatalities, or similar events in relation to our United States operations requiring disclosure pursuant to Section 1503(a) of the Dodd-Frank Act, except as
follows:
Exhibit 95
MSHA Actions for the year ended December 31, 2018
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
Mine Act
§104(e) Notice
(yes/no) (6)
Bear River
Zeolite
0
0
0
0
0
$944.00
0
No
Pending Legal
Action before
Federal Mine
Saftey and
Health Review
Commission
(yes/no)
No
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.