SECURITIES & EXCHANGE COMMISSION EDGAR FILING
UNITED STATES ANTIMONY CORP
Form: 10-K
Date Filed: 2020-04-14
Corporate Issuer CIK: 101538
© Copyright 2020, 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
☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 2019
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from 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
Title of each class
None
Title of each class
Securities registered under Section 12(b) of the Exchange Act:
Trading
Symbol(s)
Name of each exchange on which registered
N/A
N/A
Securities registered under Section 12(g) of the Exchange Act:
Trading
Symbol(s)
Name of each exchange on which registered
Common stock, $0.01 par value
UAMY
NYSE American
Indicate by checkmark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☑
Indicate by checkmark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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 ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes ☑ No ☐
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of
registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the
definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
Non-accelerated filer
Emerging Growth Company
☐
☐
☐
Accelerated filer
Smaller reporting company
☐
☑
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑
The aggregate market value of the registrant’s common stock held by non-affiliates was $34,673,569, based on the reported last sale price of common stock on
June 30, 2019, which was the last business day of the registrant’s most recently completed second fiscal quarter. For purposes of this computation, all executive
officers and directors were deemed affiliates.
The number of shares outstanding of the registrant's common stock as of April 14, 2020: 69,661,436 shares.
UNITED STATES ANTIMONY CORPORATION
2019 ANNUAL REPORT
TABLE OF CONTENTS
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
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F-1-F-23
ITEM 1.
DESCRIPTION OF BUSINESS
ITEM 1A.
RISK FACTORS
ITEM 1B.
UNRESOLVED STAFF COMMENTS
DESCRIPTION OF PROPERTIES
LEGAL PROCEEDINGS
MINE SAFETY DISCLOSURES
ITEM 2.
ITEM 3.
ITEM 4.
ITEM 5.
ITEM 6.
ITEM 7.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
SELECTED FINANCIAL DATA
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
PART I
PART II
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 7B.
CRITICAL ACCOUNTING ESTIMATES
ITEM 8.
ITEM 9.
FINANCIAL STATEMENTS
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
ITEM 9A.
CONTROLS AND PROCEDURES
ITEM 9B.
OTHER INFORMATION
ITEM 10.
ITEM 11.
ITEM 12.
ITEM 13.
ITEM 14.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS AND COMPLIANCE WITH
SECTION 16(A) OF THE EXCHANGE ACT
PART III
EXECUTIVE COMPENSATION
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
PRINCIPAL ACCOUNTANT FEES AND SERVICE
PART IV
ITEM 15.
EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES
CERTIFICATIONS
FINANCIAL
STATEMENTS
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
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 2019, 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 sources of antimony in Mexico but we are still depending on foreign
companies for raw material in the future. We expect to receive raw materials from our owned and leased properties for 2019 and later years. We continue
working with suppliers in North America, Central America, Europe, Australia, and South America.
We currently own 100% of the common stock, equipment, and the leases on real property of United States Antimony, Mexico S.A. de C.V. or “USAMSA”, which
was formed in April 1998. We currently own 100% of the stock in Antimony de Mexico SA de CV (AM) which owns the San Miguel concession of the Los Juarez
property. USAMSA has three divisions, (1) the Madero smelter in Coahuila, (2) the Puerto Blanco flotation mill and oxide circuit in Guanajuato that is ramping up
for 2020, and (3) the Los Juarez mineral deposit with concessions in Queretaro and the Wadley mining concession in San Luis Potosi.
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 major 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.
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Following is a five year schedule of our antimony sales:
Schedule of Antimony Sales
Year
2019
2018
2017
2016
2015
Concentration of Sales:
Lbs Metal
Contained
1,566,585
1,486,120
1,891,439
2,936,880
2,487,321
$
$
$
$
$
$
5,450,649
6,113,014
7,588,470
8,744,170
9,863,933
$
$
$
$
$
Average
Price/Lb
3.48
4.11
4.01
2.98
3.97
During the two years ended December 31, 2019 and 2018, the following sales were made to our three largest customers:
Sales to
Largest Customers
Mexichem Specialty Compounds Inc.
Nyacol Nanotechnologies
Kohler Corporation
Ampacet
% of Total Revenues
For the Year Ended
December 31,
2019
1,823,194
1,099,504
1,132,674
-
4,055,372
$
$
December 31,
2018
2,698,770
-
1,441,197
538,922
4,678,889
$
$
49.05%
51.79%
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 range of prices for antimony oxide and antimony metal, per pound, was as follows:
Year
2019
2018
2017
2016
2015
USAC SALES
Oxide
Metal
Combined
USA
(Metal Contained Price)
Rotterdam
Average
Price/Lb
Average
Price/Lb
Average
Price/Lb
Average
Price/Lb
Average
Price/Lb
$
$
$
$
$
3.14 $
3.77 $
3.40 $
3.11 $
3.34 $
3.46 $
3.70 $
3.41 $
2.62 $
3.71 $
3.48 $
4.11 $
4.01 $
2.98 $
3.97 $
3.05 $
3.82 $
3.77 $
2.99 $
3.41 $
3.03
3.74
3.78
2.94
3.32
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. The
Company pays various royalties on the sale of 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 constructed
a new warehouse in 2018 to expedite our shipping and packaging for customers.
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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, animal waste treatment facilities, and is excellent in pressure swing apparatuses.
● Animal Nutrition. According to other research, feeding up to 2% zeolite increases growth rates, decreases conversion rates, and prevents scours.
BRZ does not make these claims.
● Miscellaneous Uses. Other uses include catalysts, petroleum refining, concrete, solar energy and heat exchange, desiccants, pellet binding, horse
and kitty litter, floor cleaner and carriers for insecticides, pesticides and herbicides.
Environmental Matters
Our exploration, development and production programs conducted in the United States are subject to local, state and federal regulations regarding environmental
protection. Some of our production and mining activities are conducted on public lands. We believe that our current discharge of waste materials from our
processing facilities is in material compliance with environmental regulations and health and safety standards. The U.S. Forest Service extensively regulates
mining operations conducted in National Forests. Department of Interior regulations cover mining operations carried out on most other public lands. All
operations by us involving the exploration for or the production of minerals are subject to existing laws and regulations relating to exploration procedures, safety
precautions, employee health and safety, air quality standards, pollution of water sources, waste materials, odor, noise, dust and other environmental protection
requirements adopted by federal, state and local governmental authorities. We may be required to prepare and present data to these regulatory authorities
pertaining to the effect or impact that any proposed exploration for, or production of, minerals may have upon the environment. Any changes to our reclamation
and remediation plans, which may be required due to changes in state or federal regulations, could have an adverse effect on our operations. The range of
reasonably possible loss in excess of the amounts accrued, by site, cannot be reasonably estimated at this time.
We accrue environmental liabilities when the occurrence of such liabilities is probable and the costs are reasonably estimable. The initial accruals for all our sites
are based on comprehensive remediation plans approved by the various regulatory agencies in connection with permitting or bonding requirements. Our
accruals are further based on presently enacted regulatory requirements and adjusted only when changes in requirements occur or when we revise our estimate
of costs to comply with existing requirements. As remediation activity has physically commenced, we have been able to refine and revise our estimates of costs
required to fulfill future environmental tasks based on contemporaneous cost information, operating experience, and changes in regulatory requirements. In
instances where costs required to complete our remaining environmental obligations are clearly determined to be in excess of the existing accrual, we have
adjusted the accrual accordingly. When regulatory agencies require additional tasks to be performed in connection with our environmental responsibilities, we
evaluate the costs required to perform those tasks and adjust our accrual accordingly, as the information becomes available. In all cases, however, our accrual at
year-end is based on the best information available at that time to develop estimates of environmental liabilities.
Antimony Processing Site
We have environmental remediation obligations at our antimony processing site near Thompson Falls, Montana ("the Stibnite Hill Mine Site"). We are under the
regulatory jurisdiction of the U.S. Forest Service and subject to the operating permit requirements of the Montana Department of Environmental Quality. At
December 31, 2019 and 2018, we have accrued $100,000 to fulfill our environmental responsibilities.
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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, 2019.
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, 2019. 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, 2019, we employed 28 full-time employees in Montana. In addition, we employed 19 people at our zeolite plant in Idaho, and more than 50
employees at our mining, milling and smelting operation in Mexico. We also employ approximately 80 contracted miners. The number of full-time employees may
vary seasonally. None of our employees are covered by any collective bargaining agreement.
Other
We hold no material patents, licenses, franchises or concessions. However, we consider our antimony processing plants proprietary in nature.
We are subject to the requirements of the Federal Mining Safety and Health Act of 1977, the Occupational Safety and Health Administration's regulations,
requirements of the state of Montana and the state of Idaho, federal and state health and safety statutes and Sanders County, Montana and Franklin County,
Idaho health ordinances.
Item 1A Risk Factors
There may be events in the future that we are not able to accurately predict or over which we have no control. The risk factors listed below, as well as any
cautionary language in this report, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations
we describe in our forward-looking statements.
If we were liquidated, our common stockholders could lose part, or all, of their investment .
In the event of our dissolution, the proceeds, if any, realized from the liquidation of our assets will be distributed to our stockholders only after the satisfaction of
the claims of our creditors and preferred stockholders. The ability of a purchaser of shares to recover all, or any portion, of the purchase price for the shares, in
that event, will depend on the amount of funds realized and the claims to be satisfied by those funds.
We may have 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.
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We have accruals for asset retirement obligations and environmental obligations.
We have accruals totaling $283,868 on our balance sheet at December 31, 2019, 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.
Global health crises may adversely affect our planned operations.
Our business could be materially and adversely affected by the risks, or the public perception of the risks, related to a pandemic or other health crisis, such as
the recent outbreak of novel coronavirus (COVID-19). A significant outbreak of contagious diseases in the human population could result in a widespread health
crisis that could adversely affect our planned operations. Such events could result in the complete or partial closure of our operations. In addition, it could impact
economies and financial markets, resulting in an economic downturn that could impact our ability to raise capital.
Item 1B Unresolved Staff Comments
Not Applicable
Item 2 Description of Properties
ANTIMONY DIVISION
Our antimony smelter and precious metals plant is located in the Burns Mining District, Sanders County, Montana, approximately 14 miles west of Thompson
Falls on Montana Highway 471. This highway is asphalt, and the property is accessed by cars and trucks. The property includes two five-acre patented mill sites
that are owned in fee-simple by us. The claims are U. S. Antimony Mill Site No. 1 (Mineral Survey 10953) and U. S. Antimony Mill Site No. 2 (Mineral Survey
10953). We also own five acre Black Jack millsite.
The U. S. Antimony Mill Sites were used to run a flotation mill and processing plant for antimony that we mined on adjacent claims that have been sold. Presently,
we run a smelter that includes furnaces of a proprietary design to produce antimony metal, antimony oxide, and various other products. We also run a precious
metals plant. The facility includes 6 buildings and our main office. There are no plans to resume mining on the claims that have been sold or abandoned, although
the mineral rights have been retained on many of the patented mining claims. The U. S. Forest Service and Montana Department of Environmental Quality have
told us that the resumption of mining would require an Environmental Impact Statement, massive cash bonding, and would be followed by years of law suits. The
mill site is serviced with three-phase electricity from Northwest Power, and water is pumped from a well.
We claim no reserves on any of these properties.
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Antimony mining and milling operations in the U.S. were curtailed during 1983 due to continued declines in the price of antimony. We are currently purchasing
foreign raw antimony materials and producing our own raw materials from our properties in Mexico. We continue to produce antimony metal, oxide, sodium
antimonite, and precious metals from our processing facility near Thompson Falls, Montana.
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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. San Miguel I and II were purchased by a USAC subsidiary, Antimonio de Mexico, S. A. de C. V (AM), for $1,480,500, which was paid in full as of December
31, 2018. As of December 31, 2019, we have paid for the property and have incurred significant permitting costs. The property consists of 40 hectares (100
acres)
2.
San Juan I and II are concessions owned by AM and include 466 hectares (1,152 acres)
3.
San Juan III is held by a lease agreement by AM in which we will pay a 10% royalty, based on the net smelter returns from another USAC Mexican
subsidiary, named United States Antimony Mexico, S. A. de C. V. or USAMSA. It consists of 214 hectares (529 acres).
The concessions collectively constitute 720 hectares (1,780 acres). The claims are accessed by roads that lead to highways.
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Part of the USAC Mexican property, including San Miguel I, II and part of San Juan III, was originally drilled by the Penoles Company in 1970, when antimony
metal prices were high. They did not proceed with the property, due to the complex metallurgy of antimony. Subsequently, the Mexican Government did
additional work and reported a deposit of mineralized material of 1,000,000 metric tons (mt) grading 1.8% antimony and 8.1 ounces of silver per metric ton
(opmt) in Consejo de Recursos Minerales (Publicacion M-4e). Such a report does not qualify as a comprehensive evaluation, such as a final or bankable
feasibility study that concludes legal and technical viability, and economic feasibility. The Securities and Exchange Commission does not recognize this report,
and we claim no reserves.
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EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
The mineralized zone is a classic jasperoid-type deposit in the Cretaceous El Doctor Limestone. The mineralization is confined to silicified jasperoid 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.
Soyatal Mining District, Pinal De Amoles, Queretaro, Mexico
Soyatal
We abandoned the Soyatal mining property and the associated debt in the fourth quarter of 2019, and reported a loss on abandonment of mineral properties on
our consolidated statement of operations.
USAMSA Puerto Blanco Flotation Mill, Guanajuato, Mexico
The flotation plant has a capacity of 100 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 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
have installed a cyanide leach circuit and settling pond that will be used to recover precious metals from our Los Juarez mine. We expect to be in commercial
production of precious metals by the third quarter of 2020. During 2019 and 2018, less than 2% of the mill’s capacity was utilized.
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 (30 acres). Seventeen small rotating furnaces (SRF’s) and four large rotating furnaces (LRF) with an
associated stack and scrubbers, were permitted and installed by the end of 2019. 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 twenty to thirty 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
as much as 10MM pounds of contained antimony annually. Concentrates from our flotation plant, and hand-sorted ore from Mexico sources and other areas, are
being processed. During 2019, 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. The Madero production is either sold as metal directly to customers 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:
10
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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
11
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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
12
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 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 are 20 feet high, 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 Multi Vibe high frequency 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 14, 2020, 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, 2019, the Company awarded, but did not issue, common stock with a value of $134,375 to its Board of Directors as
compensation for their services as directors. In connection with the issuances, the Company recorded $134,375 in director compensation expense and accrued
common stock payable.
In January 2019, the Company issued Daniel Parks, the Company’s Chief Financial Officer, 200,000 shares of the Company’s common stock with a fair value of
$136,000 to retain his services. As part of the agreement, Mr. Parks’ hours worked and cash compensation was reduced.
In April 2019, the Company issued the Board members 330,183 shares of the Company’s common stock for services provided during 2018 which was accrued
at December 31, 2018, with a value of $175,000.
During 2019, the Company sold units consisting of 904,082 shares of its common stock and 452,041 warrants to purchase shares of common stock for $0.48 per
unit for total proceeds of $433,960. The warrants are exercisable at $0.65 and expire in 2022. Offering costs associated with the sale totaled $29,761.
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.
14
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Overview
Company-wide
For the year ended December 31, 2019, we reported net loss of $3,672,891, after depreciation and amortization of $895,990, compared to a net income of
$873,225 for 2018 after depreciation and amortization of $904,844. Our company-wide EBITDA was a negative $2,776,901 for 2019, compared to a positive
EBITDA of $1,445,737 for 2018.
Net non-cash expense items for 2019 totaled $2,653,757 and included $1,410,736 for abandonment of Mexican mineral properties, $895,990 for depreciation
and amortization, $54,112 for amortization of debt discount, $134,375 for stock-based director compensation, $136,000 for stock-based employee compensation,
$16,396 for the write-down of inventory, and $6,148 for other items.
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 $1,234,685 and included $904,844 for depreciation and amortization, $83,991 for amortization of debt discount,
$175,000 for stock-based director compensation, $64,702 for the write-down of inventory and $6,148 for other items.
During the year ending December 31, 2019, there was a major transaction that had a material impact on the Company’s net income and balance sheet.
● During the fourth quarter of 2019, it was decided to abandon two mining claims in Mexico, known as the Guadalupe mine and the Soyatal mine. This
decision was prompted by the low prices for antimony and the expected cost to develop the properties. The effect of abandoning the properties was a
non-cash loss of $1,410,736 which was the carrying value of the mineral properties less the balance of related debt.
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 2019, we saw our average sale price decrease by $0.63 per pound from an average price of $4.11 per pound for 2018 to $3.48 per pound for 2019.
During 2019, our raw material from our North American supplier increased by approximately 100,000 pounds and our supply of raw material from our Mexican
mines decrease by approximately 20,000 pounds. Even though our sales volume increased, our total sales of antimony decreased due to the decrease in our
sales price. This resulted in estimated decreased sales of approximately $662,000. Normal shipments from our North American supplier resumed in 2019 at a
lower level than we expected, and we do not expect an increase from this supplier in the near future. We do not expect to see a significant increase in the
antimony produced by our Mexican mines in 2020.
During 2018, we saw our average sale price increase by $0.10 per pound to $4.11 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 (approximately 532,000 pounds of
antimony).
In the third quarter of 2019, we renegotiated our sodium antimonite supply agreement from our North American supplier 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 quarter three of 2019, and resulted in lower antimony production costs and an improved cash flow for 2019 and better
expectations for the North American operations for 2020.
15
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Zeolite Sales
Our sales volume of zeolite in 2019 was 641 tons less than we sold in 2018, a decrease of 4.5%. Our average sales price increased by approximately $6 per
ton, from $186 per ton in 2018 to $192 per ton in 2019 (2.7%). During 2019, total sales of zeolite decreased by $43,827 from 2018. The zeolite division had an
EBIDTA of $683,936 for 2019, compared to an EBITDA of $638,764 for 2018. Net income increased from $449,961 in 2018 to $497,470 in 2019, approximately
$47,000.
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.
Precious Metals Sales
Ounces Gold Shipped (Au)
Ounces Silver Shipped (Ag)
Revenues
Ounces Gold Shipped (Au)
Ounces Silver Shipped (Ag)
Revenues - Gross
Revenues to Hillgrove
Revenues to USAC
Total Revenues
Precious Metals Sales
Silver/Gold - Montana
Mexico
16
2018
2019
68.91
18,278
254,445
$
39.92
10,986
171,668
$
Mexico
8.21
728
22,571
0
22,571
-
-
-
-
$
$
$
$
254,445
$
194,239
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
For the years ended December 31, 2019 and 2018, the EBITDA for precious metals was $194,239 and $254,445, respectively.
2019
2018
$
5,450,649
$
6,113,014
2,352,959
43,738
243,341
164,876
65,652
2,870,566
3,268,277
596,719
-
166,800
71,329
4,103,125
5,450,649
6,973,691
(1,523,042)
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)
194,239
254,445
69,067
69,067
125,172
68,042
68,042
186,403
2,623,117
2,666,944
1,160,502
186,466
200,140
158,891
266,388
69,111
2,041,498
581,619
1,290,747
188,803
177,932
108,913
272,821
91,419
2,130,635
536,309
8,268,005
9,084,256
(816,251)
$
9,034,403
9,032,860
1,543
$
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
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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 Gross Income per Lb Metal
Net income (loss) per Lb Metal
Gross antimony revenue - net of discount
Cost of sales - domestic
Cost of sales - Mexico
Operating income (expenses):
Operating expenditures
Gain (loss) on plant acquisition
Gain on sale of land
Loss on abandonment of mineral properties
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
18
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
$
$
$
$
$
$
$
$
$
2019
794,770
771,815
1,566,585
3.48
(2.74)
5,450,649
(2,870,566)
(4,103,125)
(1,451,267)
-
-
(1,409,022)
87,798
-
(4,295,533)
640,457
-
(3,655,076)
$
$
$
$
48
11,714
194,239
(69,067)
125,172
69,067
194,239
$
$
$
$
$
13,680
191.75
36.36
2,623,117
(2,041,498)
(68,567)
(15,582)
497,470
186,466
$
683,936
$
$
$
8,268,005
(9,084,256)
(2,928,856)
72,216
-
(3,672,891)
895,990
-
2018
693,861
792,259
1,486,120
4.11
0.16
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)
$
(2,776,901)
$
1,445,737
During the period ended December 31, 2019, the most significant event affecting our financial performance was the decrease in the price of antimony. This
decrease in prices caused us to re-evaluate our commitment to the two antimony mines we were purchasing in Mexico. We made the decision that with the
depressed prices and the cost of developing the mines, it was in our best interest to abandon these properties and look at re-acquiring them in the future if
antimony prices improved. It was decided that our resources should be directed to completing our precious metals facility at Puerto Blanco and starting
precious metals production in 2020. In connection with the low antimony prices, we negotiated a lower cost agreement with our North American supplier
which will help us with future cash flow.
Our plans are to process 14,000 tons of ore from the Los Juarez mine in 2020 and 24,000 tons in 2021. We think that the gross value of the ore is
approximately $120 per ton.
In 2018, we only received 50% of our expected supply from North American sources, and we increased our raw material from Mexico by approximately
130,000 pounds. We anticipated increasing the raw material from Mexico and the resumption of normal shipments from our North American supplier in 2019,
but these plans did not materialize due to low overall metal prices and the low antimony prices in particular.
In both 2019 and 2018, the Puerto Blanco mill circuits were utilized less than 2% of their capacity, but with the completion of the cyanide leach circuit 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:
Antimony:
Schedule of Los Juarez recovery values
Metal
Assay
Recovery
Gold
Silver
Antimony
Total
0.035 opmt
3.27 opmt
0.652%
90%
90% $
70%
The following are highlights of the significant changes during 2019:
Value
$1500/oz
$
$
$
12.00/oz
3.15/lb
Value/Mt
47.00
35.32
33.86
$
116.18
● The sale of antimony during 2019 was 1,566,585 pounds compared to 1,486,120 pounds in 2018, an increase of 80,465 pounds (5%).
● The average sales price of antimony during 2019 was $3.48 per pound compared to $4.11 during 2018, a decrease of $0.63 per pound (15%).
During the beginning of 2020, the Rotterdam price of antimony is approximately $3.15 per pound.
● The metallurgical problem with the Los Juarez concentrates has been solved with the cyanide and caustic leach plants, and initial production will
begin. This will put the Puerto Blanco mill in operation during 2020. During 2019 and 2018, the Puerto Blanco mill was operating at less than 10% of
capacity, while undergoing major construction during 2019 and 2018.
● The net loss for antimony sold was $2.81 per pound in 2019. This was after a $1,409,022 ($.90 per pound) non-cash loss from the abandonment of
mineral properties in Mexico.
● Our cost of goods sold for antimony increased from $6,834,183 in 2018 to $6,973,691 in 2019. This was primarily due to the increase in raw
material cost in Mexico. For the years ended December 31, 2019 and 2018, costs of goods sold include operating and non-operating production
costs from Mexico operations.
● Our cost of production for the years ended December 31, 2019 and 2018 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 ore from the Wadley mine in 2019. Production from Madero during 2019 and 2018 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 produced ingots of antimony metal to be shipped directly to customers from our Madero smelter in 2019. We intend to increase this for 2020 and
beyond. This will significantly reduce our production and shipping costs.
● We are proceeding with the processing of Los Juarez ore in the 100 ton per day mill at Puerto Blanco. We expect to process approximately 14,000
tons in 2020, and 24,000 tons per year in 2021 and 2022. A 400 ton per day flotation mill is permitted and is partially installed, and we expect to have
it completed by the end of 2022. This mill will be dedicated to processing rock from the Los Juarez mining property, and we expect the volume of ore
processed will increase to 500 tons per day, or approximately 120,000 tons per year. 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, a precious metals recovery operation, and our Company headquarters remain in Montana.
Zeolite:
During 2019, BRZ sold 13,680 tons compared to 14,321 tons in 2018, a decrease of 641 tons (4%). BRZ realized a net income of $497,470 in
2019 after depreciation of $186,466 compared to a net income of $449,961 in 2018 after depreciation of $188,803.
19
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
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 8.1%,
and 8.8%, of sales for 2019 and 2018, respectively.
The decrease in professional fees from 2018(approximately $118,000) was primarily due to a decrease in attorney fees paid to our Mexican tax
attorney and accountants in 2018 for representation during the audit of our Mexican subsidiary, which was resolved in our favor. Our accounting
fees for 2019 related to our annual audit and our quarterly SEC filings $118,998 compared to $116,716 for 2018.
Factoring costs increased in 2019 from approximately $5,000 in 2018 to approximately $8,500 in 2019.
The discounts we gave for early payments were approximately $100,000 for 2018 and $85,000 for 2019.
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.
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
Proceeds from common stock issued
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
2019
1,279,755
(3,975,681)
(2,695,926)
$
$
2018
1,903,256
(3,517,618)
(1,614,362)
(5,711)
$
(656,631)
(792,925)
-
400,000
(5,644)
13,149
404,199
(127,683)
237,400
(35,066)
(28,849)
58,870
$
(899,119)
1,500,000
300,000
5,644
(8,648)
-
(236,915)
135,000
(135,000)
18,234
22,565
$
$
$
$
Our net working capital decreased for the year ended December 31, 2019 from a negative amount of $1,614,362 at the beginning of the year to a negative
amount of $2,695,926 at the end of 2019. Our current assets decreased primarily due to payment of a $400,000 note receivable from the sale of land in
Mexico, a decrease in accounts receivable and inventories. Our current liabilities increased by $458,063, which included a decrease of approximately
$649,000 in the current portion of long-term debt related to the write-off of the Soyatal and Guadalupe properties and, increases in accounts payable and
other accrued liability accounts and the reclassification of the Hillgrove/Red River Resources debt of $378,074 from long term debt to current liabilities.
Capital improvements were paid for with cash and debt.
For the year ending December 31, 2020, we are planning to finance our improvements with operating cash flow. Our 2020 improvements are expected to
include improvements related to the cyanide leach circuit at Puerto Blanco.
Going Concern Consideration
At December 31, 2019, the Company’s consolidated financial statements show negative working capital of approximately $2.7 million and an accumulated
deficit of approximately $29.4 million. With the exception of 2018, the Company has incurred losses for the past several 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 is substantial doubt
regarding the ability to continue as a going concern for the next twelve months.
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EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Over the past several years, the Company has been able to make required principal payments on its debt from cash generated from operations. The
abandonment of the mineral properties in Mexico (see Note 6) resulted in the removal of approximately $1,500,000 of debt and the related payments
which were $86,000 in 2019 and $193,000 in 2018. Current portion of outstanding debt at December 31, 2019 was $56,334 compared to $705,460 at
December 31, 2018. The Company is confident it can make debt payments when due. During 2019, the Company was successful in raising $404,199
from sale of shares of its common stock to fund capital projects in Mexico.
The continuing losses are principally a result of the Company’s antimony operations due to both depressed antimony prices and production costs incurred
in Mexico. To improve conditions, the Company plans to continue searching for areas to reduce these production costs. Management expects
improvement in cash flow in 2020 from the sale of precious metals extracted from the leach circuit scheduled to come on line in Mexico in the second half
of 2020.
There can be no assurance that management plans will alleviate the doubt regarding the Company’s ability to continue as a going concern over the next
twelve months, particularly during the current period of market instability related to the COVID-19 pandemic. If the going concern assumption were not
appropriate for these financial statements, then adjustments would be necessary to the carrying values of the assets and liabilities, the reported revenues
and expenses, and the balance sheet classifications used.
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, 2019, 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 2019). 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
21
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, 2019. 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, 2019.
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, 2019, 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, 2019.
22
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, 2019, is as follows:
Name
John C. Lawrence
John C. Gustavsen
Russell C. Lawrence
Matthew Keane
Daniel L. Parks
Alicia Hill
Hart W. Baitis
Jeffrey Wright
Craig Thomas
Dr. Blaise Aguirre
Age
81
71
51
64
71
38
70
50
45
55
Affiliation
Chairman, President, Director
First Vice-President
Second Vice-President, Director
Third Vice-President
Chief Financial Officer
Secretary, Controller, and Treasurer
Director
Director
Director
Director
Expiration of Term
Annual meeting
Annual meeting
Annual meeting
Annual meeting
Annual meeting
Annual meeting
Annual meeting
Annual meeting
Annual meeting
Annual meeting
Business Experience of Directors and Executive Officers
John C. Lawrence. Mr. Lawrence has been the president and a director since our inception 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.
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.
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.
Dr. Blaise Aguirre. Blaise Aguirre, MD joined the Board of Directors of United States Antimony Corp. on August 14 2019, to replace a Director that retired for
medical reasons. He received his Medical Doctor’s degree in 1989 from the University of the Witwatersrand, Johannesburg, South Africa, and performed his
residency at Boston University School of Medicine from 1991 to 1994. He is an Assistant Professor of Psychiatry at Harvard Medical School and he is the
founding Medical Director of 3East at McLean Hospital. Dr. Aguirre is fluent in Spanish and lectures worldwide. He was elected to the Board at Investors Capital
Holdings, Ltd in 2011 and remained on the Board until it was sold to RCAP. He sits on the boards of various privately held companies. He developed and
maintains enduring relationships with institutional money managers, venture capitalists, Angel investors and developed an expertise as a small cap stock analyst
as a broker with series 7 and 63 securities licenses.
23
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
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 2019 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 three members at December 31, 2019, Craig Thomas (Chairman),
Jeffrey Wright, and Hart Baitis. 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.
Board Member Compensation Following is a summary of fees, cash payments, stock awards, and other reimbursements to Directors during the year ended
December 31, 2019:
Directors Compensation
Name and Principal Position
John C. Lawrence, Chairman
Russell Lawrence, Director
Hartmut Baitis, Director
Dr. Blaise Aguirre, Director
Jeffrey Wright, Director
Craig Thomas, Director
Totals
Fees Earned paid
in Stock
Total Fees,
Awards, and
Other
Compensation
$
$
$
$
$
$
$
25,000
$
25,000
$
25,000
$
9,375
$
25,000
25,000
134,375
$
$
$
25,000
25,000
25,000
9,375
25,000
25,000
134,375
Fees Earned paid in Cash
$0
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EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive
officers and the holders of 10% or more of our common stock to file reports of ownership and changes in ownership with the Securities and Exchange
Commission. Officers, directors and stockholders holding more than 10% of our common stock are required by the regulation to furnish us with copies of
all Section 16(a) forms they have filed. Based solely on our review of copies of Forms 3, 4 and 5 furnished to us, Mr. Hart Baitis and Mr. Russell
Lawrence did not file timely Forms 3, 4 or Form 5 reports during 2019 and 2018.
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, 2019 and 2018.
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
2019
2018
2019
2018
2019
2018
Salary
Bonus
$
$
$
$
$
$
141,000
141,000
100,000
100,000
110,000
110,000
Stock Awards (2)
25,000
$
$
25,000
$
$
25,000
25,000
Total
166,000
166,000
100,000
100,000
135,000
135,000
$
$
$
$
$
$
N/A
N/A
N/A
N/A
N/A
N/A
(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.
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, 2019, 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, 2019. (John Lawrence, CEO, exercised
his warrants at a price of $0.25 per share for 250,000 shares on March 20, 2020. The receipt of $62,500 from the warrants will be used to reduce loans
payable to Mr. Lawrence.)
Number of Securities
Underlying Unexercised
Warrants
Unexercisable
Exercisable
#
#
Outstanding Equity
Awards at Fiscal Year End
Awards
Equity Incentive Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Exercise
Price
Expiration
Date
250,000
0
0 $
0.25
None
25
Name
John C. Lawrence,
(Chairman of the Board of Directors and
Chief Executive Officer)
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
Series B Preferred
Series C Preferred
Series C Preferred
Series C Preferred
Series C Preferred
Common Stock
Common Stock
Series D Preferred
Series D Preferred
Name and Address of Beneficial Owner (1)
Excel Mineral Company P.O. Box 3800 Santa
Barbara, CA 93130
Richard A. Woods 59 PennCircle 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
All Series C Preferred Shareholders as a Group
John C. Lawrence
Russell Lawrence
Hart Baitis
Blaise Aguirre
Jeffrey Wright
Mathew Keane
Daniel Parks
Craig Thomas
All Directors and Executive Officers as a Group
John C. Lawrence
Leo Jackson
Garry Babbitt
All Series D Preferred Shareholders as a Group
Common Stock and Preferred Stock w/voting rights All Directors and Executive Officers as a Group
All preferred Shareholders that are officers or directors
Common and Preferred Voting Stock
Amount and
Nature of
Beneficial
Ownership
Percent of Class (1)
Percent of all
Voting Stock
750,000
100.00%
N/A
48,305(4)
27.10%
32,203(4)
18.10%
32,203(4)
177,904(4)
4,545,350(2)
400,348
386,243
308,169
282,973
10,300
464,500
602,536
7,000,599
1,590,672(4)
102,000
58,333
1,751,005(4)
7,000,599
1,590,672
8,591,271
18.10%
100.00%
64.93%
5.72%
5.52%
4.40%
4.04%
0.15%
6.64%
8.60%
100.00%
90.80%
5.80%
3.40%
100.00%
81.48%
18.52%
100.00%
*
*
*
*
6.35%
*
*
*
*
*
*
*
9.78%
2.22%
*
*
2.45%
9.78%
2.22%
12.00%
(1)
(2)
(4)
Beneficial Ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of common stock subject to options or warrants currently exercisable or convertible, or exercisable
or convertible within 60 days of April 1, 2020, 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 69,661,436 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 14, 2020. Total voting stock of 71,590,345 shares is a total of all the common stock issued, and all of the Series C and Series D Preferred Stock
outstanding at April 14, 2020.
Includes 4,295,350 shares of common stock and 250,000 stock purchase warrants.
The outstanding Series C and Series D preferred shares carry voting rights equal to the same number of shares of common stock.
26
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, 2019, the Company awarded, but did not issue, common stock with a value of $134,375 to its Board of Directors as
compensation for their services as directors. In connection with the issuances, the Company recorded $134,375 in director compensation expense and accrued
common stock payable.
In January 2019, the Company issued Daniel Parks, the Company’s Chief Financial Officer, 200,000 shares of the Company’s common stock with a fair value of
$136,000 to retain his services. As part of the agreement, Mr. Parks’ hours worked and cash compensation was reduced.
In April 2019, the Company issued the Board members 330,183 shares of the Company’s common stock for services provided during 2018 which was accrued
at December 31, 2018, with a value of $175,000.
The Company’s President and Chairman, John Lawrence, rents equipment 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, 2019 and 2018 was
$156,974 and $93,567, respectively. Expenses paid to Mr. Lawrence for the years ended December 31, 2019 and 2018 were $9,799 and $9,634, respectively
During 2019, the Company’s President and Chairman, John Lawrence, made loans to the Company totaling $227,200, of which $35,006 had been repaid as of
December 31, 2019, leaving a note balance of $192,134. John C. Gustaven, First Vice-President, loaned the company $10,200 during 2019, of which none had
been repaid as of December 31, 2019.
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.
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 2019 and 2018 were $118,998 and $116,716, 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 2019 and 2018 were $11,833 and $12,465, respectively.
All Other Fees
There were no other fees billed by DeCoria, Maichel & Teague P.S. during 2019. During 2018, we paid $5,998 for services related to the acquisition of Lanxess,
LLC, provided by DeCoria, Maichel & Teague P.S.
27
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Item 15. Exhibits and Reports on Form 8-K
Exhibit Number
3.01
3.02
3.03
3.04
4.01
Description
Articles of Incorporation of USAC, filed as an exhibit to USAC's Form 10-KSB for the fiscal year ended December 31, 1995 (File No.001-
08675), are incorporated herein by this reference.
Amended and Restated Bylaws of USAC, filed as an exhibit to amendment No. 2 to USAC's Form SB-2 Registration Statement (Reg. No.
333-45508) are incorporated herein by this reference.
Articles of Correction of Restated Articles of Incorporation of USAC.
Articles of Amendment to the Articles of Incorporation of United States Antimony Corporation, filed as an exhibit to USAC's Form 10-
QSB for the quarter ended September 30, 2002 (File No. 001-08675), are incorporated herein by this reference.
Key Employees 2000 Stock Plan, filed as an exhibit to USAC's Form S-8 Registration Statement filed on March 10, 2000 (File No. 333-
32216) is incorporated herein by this reference.
Documents filed with USAC's Annual Report on Form 10-KSB for the year ended December 31, 1995 (File No. 001-08675), are incorporated herein by this
reference:
10.10
10.11
10.12
10.13
10.14
10.15
10.16
10.17
10.18
10.19
10.20
10.21
10.22
10.23
10.24
10.25
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
Inventorynd Sales Agreement
Processing Agreement
Release and settlement agreement between Bobby C. Hamilton and United States Antimony Corporation
Columbia-Continental Lease Agreement
Release of Judgment
Covenant Not to Execute
28
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
10.26
10.27
10.28
10.30
Warrant Agreements filed as an exhibit to USAC's Annual Report on Form 10-KSB for the year ended December 31, 1996 (File No. 001-
08675), are incorporated herein by this reference
Letter from EPA, Region 10 filed as an exhibit to USAC's Quarterly Report on Form 10-QSB for the quarter ended September 30, 1997
(File No. 001-08675) is incorporated herein by this reference
Warrant Agreements filed as an exhibit to USAC's Annual Report on Form 10-KSB for the year ended December 31, 1997 (File No. 001-
08675) are incorporated herein by this reference
Answer, Counterclaim and Third-Party Complaint filed as an exhibit to USAC's Quarterly Report on Forms 10-QSB for the quarter ended
September 30, 1998 (File No. 001-08675) is incorporated herein by this reference
Documents filed with USAC's Annual Report on Form 10-KSB for the year ended December 31, 1998 (File No. 001-08675), are incorporated herein by this
reference:
10.31
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
10.40
10.41
10.42
10.43
10.44
10.45
10.46
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
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.
Suply Contracts with Fortune America Trading Ltd. filed as an exhibit to USAC form 10-QSB for the quarter ended June 32000 (File No.
001-08675) are incorporated herein by this reference
Amended and Restated Agreements with Thomson Kernaghan & Co., Ltd, filed as an exhibit to amendment No. 3 to USAC's Form SB-2
Registration Statement (Reg. No. 333-45508), are incorporated herein by this reference
Purchase Order from Kohler Company, filed as an exhibit to amendment No. 4 to USAC's Form SB-2 Registration Statement (Reg. No.
333-45508) are incorporated herein by this reference
29
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Documents filed as an exhibit to USAC's Form 10-QSB for the quarter ended June 30, 2002 (File No. 001-08675) are incorporated herein by this reference:
10.47
10.48
10.49
10.50
10.51
10.52
10.53
10.54
14.0
31.1
32.1
44.1
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*
Section 1350 Certifications Certification of John C. Lawrence*
CERCLA Letter from U.S. Forest Service filed as an exhibit to USAC form 10-QSB for the quarter ended June 30, 2000 (File No. 001-
08675) are incorporated herein by this reference and filed as an exhibit to USAC's Form 10-KSB for the year ended December 31, 1995
(File No. 1-8675) is incorporated herein by this reference
* Filed herewith.
Reports on Form 8-K
Item 5. Other Events - October 10, 2003.
30
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 14, 2020
John C. Lawrence, President, Director,
and Principal Executive Officer
By /s/Daniel L. Parks Date: April 14, 2020
Daniel L. Parks, Chief Financial Officer
By /s/Alicia Hill Date: April 14, 2020
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 14, 2020
John C. Lawrence, Director and President
(Principal Executive)
By /s/Hart Baitis Date: April 14, 2020
Hart Baitis, Director
By /s/Russell Lawrence Date: April 14, 2020
Russell Lawrence, Director
By /s/Jeffrey Wright Date: April 14, 2020
Jeffrey Wright, Director
By /s/Craig Thomas Date: April 14, 2020
Craig Thomas, Director
By /s/Blaise Aguirre Date: April 14, 2020
Blaise Aguirre, Director
31
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,
2019 and 2018, 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, 2019 and 2018, 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.
The Company’s Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2
to the financial statements, the Company has negative working capital and accumulated deficit. These factors raise substantial doubt about its ability to continue
as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
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
April 14, 2020
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, 2019 and 2018
ASSETS
Current assets:
Cash and cash equivalents
Certificates of deposit
Accounts receivable
Inventories
Note receivable - sale of land
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
Hillgrove advances payable (Note 10)
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 $937,500 and $930,000
respectively)
Series C: 177,904 shares issued and outstanding
(liquidation preference $97,847 both years)
Series D: 1,751,005 shares issued and outstanding
(liquidation preference $5,043,622 and $5,002,473
respectively)
Common stock, $0.01 par value, 90,000,000 shares authorized;
69,661,436 and 68,227,171 shares issued and outstanding, respectively
Additional paid-in capital
Accumulated deficit
Total stockholders' equity
Total liabilities and stockholders' equity
$
$
$
2019
2018
$
$
$
115,506
253,552
284,453
626,244
-
1,279,755
12,186,848
57,261
170,111
13,693,975
17,633
2,328,977
10,880
260,800
334,208
359,309
32,400
197,066
378,074
56,334
3,975,681
76,762
756,147
134,375
283,868
5,226,833
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
-
-
7,500
1,779
7,500
1,779
17,509
17,509
696,614
37,107,730
(29,363,990)
8,467,142
13,693,975
$
682,271
36,406,874
(25,691,099)
11,424,834
17,557,123
$
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, 2019 and 2018
REVENUES
COST OF REVENUES
GROSS PROFIT (LOSS)
OPERATING EXPENSES (INCOME):
General and administrative
Salaries and benefits
Gain on sale of land
Gain on plant acquisition (Note 11)
Loss on abandonment of mineral properties
Other operating expenses
Professional fees
TOTAL OPERATING EXPENSES (INCOME)
INCOME (LOSS) FROM OPERATIONS
OTHER INCOME (EXPENSE):
Gain on tax settlement
Interest expense
Other income (expense)
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
2019
2018
$
8,268,005
$
9,034,403
9,084,256
9,032,860
(816,251)
1,543
665,924
518,758
-
-
1,410,736
88,347
245,091
2,928,856
795,833
375,788
(700,000)
(1,500,000)
-
119,076
363,810
(545,493)
(3,745,107)
547,036
-
(78,344)
150,560
72,216
110,778
(99,970)
(16,951)
(6,143)
(3,672,891)
540,893
-
332,332
(3,672,891)
873,225
(48,649)
(48,649)
$
(3,721,540)
$
824,576
$
(0.05)
$
0.01
69,004,897
69,004,897
67,978,132
68,097,924
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, 2019 and 2018
Total Preferred Stock
Common Stock
Paid
Accumulated
Shares
Amount
Shares
Amount
In Capital
Deficit
Total
Additional
Balances, December 31, 2017
2,678,909 $
26,788 67,488,153 $
674,881 $36,239,264 $(26,564,324) $10,376,609
Issuance of common stock to directors for
services
Net income
Balances, December 31, 2018
Issuance of common stock to chief financial
officer for services
Issuance of common stock to directors for
services
Issuance of common stock and warrants for
cash, net of offering costs
Net loss
Balances, December 31, 2019
2,678,909
26,788 68,227,171
739,018
7,390
167,610
175,000
873,225
682,271 36,406,874 (25,691,099) 11,424,834
873,225
200,000
2,000
134,000
330,183
3,302
171,698
136,000
175,000
2,678,909 $
26,788 69,661,436 $
904,082
9,041
395,158
404,199
(3,672,891) (3,672,891)
696,614 $37,107,730 $(29,363,990) $ 8,467,142
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, 2019 and 2018
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
Loss on abandonment of mineral properties
Write-down of inventory to net realizable value
Accretion of asset retirement obligation
Common stock issued for services
Common stock accrued for directors fees
Gain on sale of land
Gain (loss)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 revenue
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
Proceeds from sale of common stock and warrants, net
Proceeds from related party loans
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
2019
2018
$
(3,672,891)
$
873,225
895,990
54,112
1,410,736
16,396
6,148
136,000
134,375
-
-
(598)
153,938
112,621
-
199,337
402,657
101,763
(19,703)
-
63,408
-
(5,711)
400,000
-
(792,925)
(392,925)
(5,644)
13,149
(127,683)
404,199
237,400
(35,066)
(28,849)
457,506
58,870
113,897
172,767
$
$
904,844
83,991
-
64,702
6,148
-
175,000
(700,000)
(1,500,000)
(656)
(75,812)
94,746
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
$
24,233
$
15,928
-
175,000
-
100,000
175,000
400,000
The accompanying notes are an integral part of these consolidated financial statements.
F-5
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2019 and 2018
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 Stibnite Holding Company US Inc. (previously Lanxess Holding Company US Inc.), Antimony Mining
and Milling US LLC (previously Lanxess Laurel US LLC), 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,
Stibnite Holding Company US Inc., and Antimony Mining and Milling US LLC. 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, 2019 and 2018 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, 2019 and 2018
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, 2019 and 2018 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, 2019, the Company’s consolidated financial statements show negative working capital of approximately $2.7 million and an accumulated
deficit of approximately $29.4 million. With the exception of 2018, the Company has incurred losses for the past several 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 is substantial doubt
regarding the ability to continue as a going concern for the next twelve months.
Over the past several years, the Company has been able to make required principal payments on its debt from cash generated from operations. The
abandonment of the mineral properties in Mexico (see Note 6) resulted in the removal of approximately $1,500,000 of debt and the related payments
which were $86,000 in 2019 and $193,000 in 2018. Current portion of outstanding debt at December 31, 2019 was $56,334 compared to $705,460 at
December 31, 2018. The Company is confident it can make debt payments when due. During 2019, the Company was successful in raising $404,199
from sale of shares of its common stock to fund capital projects in Mexico.
The continuing losses are principally a result of the Company’s antimony operations due to both depressed antimony prices and production costs incurred
in Mexico. To improve conditions, the Company plans to continue searching for areas to reduce these production costs. Management expects
improvement in cash flow in 2020 from the sale of precious metals extracted from the leach circuit scheduled to come on line in Mexico in the second half
of 2020.
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, 2019 and 2018
2. Summary of Significant Accounting Policies, continued:
There can be no assurance that management plans will alleviate the doubt regarding the Company’s ability to continue as a going concern over the next
twelve months, particularly during the current period of market instability related to the COVID-19 pandemic. If the going concern assumption were not
appropriate for these financial statements, then adjustments would be necessary to the carrying values of the assets and liabilities, the reported revenues
and expenses, and the balance sheet classifications used.
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. 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.
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.
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, 2019 and 2018
2. Summary of Significant Accounting Policies, continued:
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.
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.
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, 2019 and 2018
2. Summary of Significant Accounting Policies, continued:
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, 2019 and 2018, 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,
2019
December 31,
2018
702,041
1,751,005
2,453,046
-
1,751,005
1,751,005
The Company’s financial instruments include cash and cash equivalents, certificates of deposits, restricted cash, due to factor, notes payable to bank, and
notes payable. The carrying value of these instruments approximates fair value based on their contractual terms.
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.
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, 2019 and 2018
2. Summary of Significant Accounting Policies, continued:
Contingencies
In determining accruals and disclosures with respect to loss contingencies, the Company evaluates such accruals and contingencies for each reporting
period. Estimated losses from loss contingencies are accrued by a charge to income when information available prior to issuance of the financial
statements indicates that it is probable that a liability could be incurred and the amount of the loss can be reasonably estimated. Legal expenses
associated with the contingency are expensed as incurred. If a loss contingency is not probable or reasonably estimable, disclosure of the loss
contingency is made in the financial statements when it is at least reasonably possible that a material loss could be incurred.
Recent Accounting Pronouncements
Accounting Standards Updates Adopted
In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02 Leases (Topic 842). The
update modified the classification criteria and requires lessees to recognize the assets and liabilities on the balance sheet for most leases. The update was
effective for fiscal years beginning after December 15, 2018, with early adoption permitted. Adoption of this update as of January 1, 2019 did not have a
material impact on the Company’s consolidated financial statements because the Company has no long-term operating leases.
In June 2018, the FASB issued ASU No. 2018-07 Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment
Accounting. The update involves simplification of several aspects of accounting for nonemployee share-based payment transactions by expanding the
scope of Topic 718 to include nonemployee awards. The update was effective for fiscal years beginning after December 15, 2018, and interim periods
within those fiscal years, with early adoption permitted. Adoption of this update as of January 1, 2019 did not have a material impact on the Company’s
consolidated financial statements.
Accounting Standards Updates to Become Effective in Future Periods
In August 2018, the FASB issued ASU No. 2018-13 Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure
Requirements for Fair Value Measurement. The update removes, modifies and makes additions to the disclosure requirements on fair value
measurements. The update is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. Management is evaluating the
impact of this update on the Company’s fair value measurement disclosures.
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, 2019 and 2018 were as follows:
Antimony
Zeolite
Precious metals
F-11
Year Ended
December 31,
2019
5,450,649
2,623,117
194,239
8,268,005
$
$
2018
6,113,014
2,666,944
254,445
9,034,403
$
$
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, 2019 and 2018
3. Revenue Recognition Continued:
The following is sales information by geographic area based on the location of customers for the years ended December 31, 2019 and 2018.
United States
Canada
Sales of products to significant customers were as follows for the years ended December 31, 2019 and 2018:
Sales to
Largest Customers
Mexichem Specialty Compounds Inc.
Nyacol Nanotechnologies
Kohler Corporation
Ampacet
% of Total Revenues
Accounts receivable from largest customers were as follows for December 31, 2019 and 2018:
Largest
Accounts Receivable
Nutreco Canada Inc.
DanaMart
Lake Shore Gold
Axens North America Inc.
Earth Innovations Inc.
Commerce Industrial Chemical
% of Total Receivables
Year Ended
December 31,
2019
7,454,163
813,842
8,268,005
$
$
2018
8,242,141
792,262
9,034,403
$
$
For the Year Ended
December 31,
2019
1,823,194
1,099,504
1,132,674
-
4,055,372
$
$
December 31,
2018
2,698,770
-
1,441,197
538,922
4,678,889
$
$
49.05%
51.79%
December 31,
2019
December 31,
2018
$
$
21,219
-
27,854
-
-
54,684
103,757
$
$
143,890
-
34,912
35,967
-
214,769
36.48%
49.00%
The Company’s trade accounts receivable balance related to contracts with customers was $284,453 at December 31, 2019 and $438,391 at December
31, 2018.
F-12
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2019 and 2018
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,
2019
December 31,
2018
$
$
273,573
10,880
284,453
$
$
421,867
16,524
438,391
Factoring fees paid by the Company during the years ended December 31, 2019 and 2018, were $8,570 and $4,969, respectively. For the years ended
December 31, 2019 and 2018, net accounts receivable of approximately $0.43 million and $0.25 million, respectively, were sold under the agreement.
5. Inventories
The major components of the Company's inventories at December 31, 2019 and 2018 were as follows:
Antimony Metal
Antimony Oxide
Antimony Concentrates
Antimony Ore
Total antimony
Zeolite
2019
2018
$
$
-
204,550
5,654
151,841
362,045
264,199
626,244
$
$
8,127
255,782
2,214
257,067
523,190
232,071
755,261
At December 31, 2019 and 2018, 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, 2019 and 2018, the antimony oxide and concentrates inventory in Mexico was valued at
estimated net realizable value resulting in write-downs of $16,396 and $64,702, respectively. The Company's zeolite inventory consists of salable zeolite
material.
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, 2019 and 2018
6. Properties, Plants and Equipment
The major components of the Company's properties, plants and equipment by segment at December 31, 2019 and 2018 are shown below:
2019
2018
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
783,290 $ 9,164,600 $ 3,729,061 $
410,780
902,707
247,210
3,664
816,786
-
3,274,572 2,529,294
15,310
4,305,072 13,413,387 4,158,815
(2,673,972) (4,612,567) (2,971,625)
$ 1,631,100 $ 8,800,820 $ 1,187,190 $
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 $
Precious
Metals
Segment
TOTAL
813,714 $14,490,665
- 1,560,697
-
820,450
- 5,819,176
813,714 22,690,988
(245,976) (10,504,140)
567,738 $12,186,848
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
In the fourth quarter of 2019, the Company abandoned the Soyatal and Guadalupe mineral properties in Mexico. The net carrying value of the mineral
properties of $2,937,259 less the outstanding related notes payable balances, resulted in a loss of $1,410,736 recognized on the abandonment of
mineral properties.
At December 31, 2019 and 2018, the Company had $1,306,579 and $1,270,289, respectively, of assets that were not yet placed in service and have not
yet been depreciated.
7. Asset Retirement Obligation and Accrued Reclamation Costs
Changes to the asset retirement obligation balance during 2019 and 2018 are as follows:
Asset Retirement Obligation
Balance December 31, 2017
Accretion during 2018
Balance December 31, 2018
Accretion during 2019
Balance December 31, 2019
$
$
164,072
6,148
170,220
6,148
176,368
The Company’s total asset retirement obligation and accrued reclamation costs of $283,868 and $277,720, at December 31, 2019 and 2018,
respectively, include reclamation obligations for the Idaho and Montana operations of $107,500.
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, 2019 and 2018
8. Long-Term Debt:
Long-Term debt at December 31, 2019 and December 31, 2018 is as follows:
Note payable to Zeo Inc., non interest bearing,
payable in 11 quarterly installments of $8,300, starting the first quarter of 2020,
with a final payment of $8,700; maturing December 2022; uncollateralized.
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 September 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 2019, net of discount.
Obligation payable for Guadalupe Mine, non-interest bearing,
annual payments from $60,000 to $149,078 through 2026, net of discount.
Less current portion
Long-term portion
At December 31, 2019, principal payments on debt are due as follows:
12 Months Ending December 31,
2020
2021
2022
2023
December 31,
December 31,
2019
2018
$
100,000
$
100,000
-
14,022
26,250
34,390
-
5,851
700
8,371
6,146
12,146
-
639,747
-
133,096
(56,334)
76,762
$
918,663
1,733,190
(705,460)
1,027,730
$
Principal
Payment
56,334
41,187
33,915
1,660
133,096
$
$
In the fourth quarter 2019, the Company abandoned the Soyatal and Guadalupe mineral properties in Mexico. The balances of the related debt, net of
discount, on the date of abandonment is $603,743 and $922,780, respectively. The carrying value of the mineral properties, less the outstanding related
notes payable balances resulted in a loss of $1,410,736 recognized on the abandonment of mineral properties.
F-15
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2019 and 2018
9. Notes Payable to Bank
At December 31, 2019 and 2018, 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
December 31,
December 31,
2019
2018
$
97,067
$
83,918
99,999
99,999
$
197,066
$
183,917
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)
in which the Company was advanced funds from Hillgrove to build facilities to process Hillgrove antimony concentrate. The Company has not processed
Hillgrove concentrate for the past two years. The agreement requires the Company to pay the advance balance after Hillgrove issues a stop notice.
Payments would begin 90 days after the stop notice issue date and be made in six equal and quarterly installments. The balance of the advance liability
due to Hillgrove was $1,134,221 at both December 31, 2019 and 2018. Hillgrove was acquired by Red River Resources LTD (“Red River”) during 2019.
Although the Company has not received a stop notice through the date these financial statements were issued, management has determined that one
might be forthcoming in 2020. Based on management’s assessment of likelihood and the payment terms of the agreement, $378,074 of the balance is
classified as current as of December 31, 2019.
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 involved moving heavy equipment and was 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 $400,000 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, 2019 and 2018
12. Stockholders' Equity
Issuance of Common Stock for Cash
During 2019, the Company sold units consisting of 904,082 shares of its common stock and 452,041 warrants to purchase shares of common stock for
$0.48 per unit for total proceeds of $433,960. The warrants are exercisable at $0.65 and expire in 2022. Offering costs associated with the sale totaled
$29,761.
The Company did not issue any common stock or warrants for cash in 2018.
Issuance of Common Stock for Services to Directors and Consultants
In January 2019, the Company issued Daniel Parks, the Company’s Chief Financial Officer, 200,000 shares of the Company’s common stock with a fair
value of $136,000 to retain his services. As part of the agreement, Mr. Parks’ hours worked and cash compensation was reduced.
During the year ended December 31, 2019, the Company awarded, but did not issue, common stock with a value of $134,375 to its Board of Directors as
compensation for their services as directors. In connection with the issuances, the Company recorded $134,375 in director compensation expense and
accrued common stock payable.
In April 2019, the Company issued the Board members 330,183 shares of the Company’s common stock for services provided during 2018 which was
accrued at December 31, 2018, with a value of $175,000.
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, 2019 and 2018, 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.
In addition to the warrants owed by the Company’s president, common stock purchase warrants were sold with shares of common stock during the year
ended December 31, 2019. Total warrants for purchase of 452,041 shares of the Company’s common stock were issued with an exercise price of $0.65
per share and expire in 2022. None were exercised in 2019 and all are outstanding at December 31, 2019.
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, 2019 and 2018 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, 2019 and 2018, cumulative dividends in arrears on the outstanding Series B shares were $187,500 and $180,000, respectively.
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, 2019 and 2018
12. Stockholders' Equity continued:
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.
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, 2019 and 2018, the cumulative dividends in arrears on the 1,751,005 outstanding
Series D shares were $666,109 and $624,960, 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, 2019 and 2018, the
liquidation preference for Series D preferred stock was $5,043,622 and $5,002,473, 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, 2019 and 2018, 300,000 shares of the Company's common stock
had been previously issued under the Plan. There were no issuances under the Plan during 2019 and 2018.
14. Income Taxes
During the year ended December 31, 2019 and 2018, the Company recognized an income tax benefit (provision) of nil and $332,332, respectively. The
2018 benefit, which is a current foreign benefit, is a result of a positive outcome to an audit of USAMSA’s 2013 income tax return in Mexico.
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, 2019 and 2018
14. Income Taxes, continued:
Domestic and foreign components of income (loss) from operations before income taxes for the years ended December 31, 2019, and 2018, are as
follows:
Domestic
Foreign
Total
2019
$
$
462,292
(4,135,183)
(3,672,891)
$
$
2018
3,675,095
(3,134,202)
540,893
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, 2019 and 2018, due to the following:
Tax benefit at federal statutory rate
State income tax effect
Foreign income tax effect
Non-deductible items
Percentage depletion
Adjustment to prior year tax esimates - Domestic
Adjustment to prior year tax esimates - Foreign
Impact on change in foreign exchange rate
Change in valuation allowance - Domestic
Change in valuation allowance - Foreign
Foreign tax assessment (benefit)
Total
At December 31, 2019 and 2018, the Company had net deferred tax assets as follows:
Deferred tax asset:
Domestic net operating loss carry forward
Foreign net operating loss carry forward
Other
Deferred tax asset
Valuation allowance (domestic)
Valuation allowance (foreign)
Total deferred tax asset
Deferred tax liability
Property, plant, and equipment
Other
Total deferred tax liability
Net deferred tax asset
$
$
$
2019
(771,307)
(177,435)
(147,166)
801
(52,416)
(269,906)
641,438
103,218
926,873
(254,101)
-
-
$
$
2018
113,588
12,602
(102,078)
492
(47,341)
-
-
-
(295,984)
318,721
(332,332)
(332,332)
2019
2018
$
1,111,779
1,623,580
-
2,735,359
219,666
1,877,681
1,006
2,098,353
(1,021,829)
(1,623,580)
89,950
(94,956)
(1,877,681)
125,716
(88,292)
(1,658)
(89,950)
(125,716)
(125,716)
$
-
$
-
At December 31, 2019 and 2018, 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, 2019 and 2018.
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, 2019 and 2018
14. Income Taxes, continued:
At December 31, 2019, the Company has federal net operating loss (“NOL”) carry forwards of approximately $0.7 million that expire at various dates
between 2034 and 2037. In addition, the Company has federal NOL carry forwards of $2.7 million that will never expire but utilization of which is limited to
80% of taxable income in any future year. The Company has Montana state NOL carry forwards of approximately $4.6 million which expire between 2020
and 2027, and Idaho state NOL carry forwards of approximately $2.8 million, which expire between 2033 and 2039. The Company has approximately $4.7
million of Mexican NOL carry forwards which expire between 2024 and 2029.
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.
During the years ended December 31, 2019 and 2018, 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 2016 through 2018, and 2015 through 2018 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. 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 had 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 which represented the potential
contingent fee it would be required to pay its attorney representing the Company in the appeal. 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
was recognized as professional fees expense during the year ended December 31, 2018.
In early 2019, the Company was notified that SAT re-opened its assessment of USAMSA’s 2013 income tax return and, in November 2019, SAT assessed
the Company $16.3 million pesos, which was approximately $866,000 USD as of December 31, 2019 (approximately $691,000 USD on April 9, 2020) .
Management has reviewed the 2019 assessment notice from SAT and, similar to the earlier assessment, believes the findings have no merit. The
Company has engaged a tax attorney in Mexico to defend its position. An appeal was filed by the Company in November 2019 suspending SAT from
taking immediate action regarding the assessment. The Company posted a guarantee of the amount in March 2020 as is required under the appeal
process. Management expects the appeal process to continue through 2020 and into 2021.
At December 31, 2019, management assessed the possible outcomes for this tax audit and believes, based on its discussions with its tax attorney in
Mexico, that the most likely outcome will be that the Company will be successful in its appeal resulting in no tax due. Management determined that no
amount should be accrued at December 31, 2019 relating to this potential tax liability. There can be no assurance that the Company’s ultimate liability, if
any, will not have a material adverse effect on the Company’s results of operations or financial position.
If an issue addressed during the SAT audit is resolved in a manner inconsistent with management expectations, the Company will adjust its net operating
loss carryforward, or accrue penalties, interest, and tax associated with the assessment.
15. Related-Party Transactions
The Company’s President and Chairman, John Lawrence, rents equipment 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, 2019 and 2018 was
$156,975 and $93,567, respectively. Expenses paid to Mr. Lawrence for the years ended December 31, 2019 and 2018 were $9,799 and $9,634,
respectively
During 2019, the Company’s President and Chairman, John Lawrence, made loans to the Company totaling $227,200, of which $35,066 had been repaid
as of December 31, 2019, leaving a note balance of $192,134. During 2018, Mr. Lawrence advanced the Company $135,000 for ongoing expenses, this
amount had been fully repaid as of December 31, 2018.
John C. Gustaven, First Vice-President, loaned the Company $10,200 during 2019, of which none had been repaid as of December 31, 2019.
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, 2019 and 2018
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 2019 with the same terms through June 2020.
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, 2019 and 2018, the Company had accrued liabilities of $624 and $0,
respectively, relating to such assessments.
The Company pays various royalties on the sale of zeolite products. On a combined basis, royalties vary from 8%-13%. During the year ended December
31, 2019 and 2018, the Company had royalty expense of $266,388 and $272,821, respectively. At December 31, 2019 and 2018, the Company had
accrued royalties payable of $280,314 and $201,083, respectively.
17. Business Segments
The Company is currently organized and managed by four segments, which represent the three operating units: United States antimony, Mexican
antimony, United States zeolite, and precious metals. 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 a finished product or an intermediate stage, which is
then either shipped directly to customers or 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 recovered from the antimony process in the United States and Mexico is typically sold 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.
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, 2019 and 2018
17. Business Segments, continued:
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,
2019
December 31,
2018
$
$
2,166,041
9,193,521
11,359,562
567,738
1,766,675
13,693,975
$
$
2,199,694
12,824,291
15,023,985
615,719
1,917,419
17,557,123
For the year
ended
December 31,
2019
For the year
ended
December 31,
2018
$
$
8,429
705,123
713,552
21,086
58,287
792,925
$
$
-
803,579
803,579
40,988
154,552
999,119
Segment Operations for the
Year ended December 31, 2019
Antimony
USA
Antimony
Mexico
Total
Antimony
Precious
Metals
Bear River
Zeolite
Totals
Total revenues
$ 5,450,649 $
- $ 5,450,649 $
194,239 $ 2,623,117 $ 8,268,005
Depreciation and amortization
43,738
596,719
640,457
69,067
186,466
895,990
Income (loss) from operations
(144,208) (4,239,123) (4,383,331)
125,172
513,052 (3,745,107)
Other income (expense)
Income tax benefit
(16,142)
103,940
87,798
(15,582)
72,216
-
-
-
-
NET INCOME (LOSS)
$
(160,350) $ (4,135,183) $ (4,295,533) $
125,172 $
497,470 $ (3,672,891)
F-22
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2019 and 2018
17. Business Segments, continued:
Segment Operations for the
Year ended December 31, 2018
Antimony
Antimony
Total
Precious
Bear River
USA
Mexico
Antimony
Metals
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
F-23
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Exhibit 21.01
Subsidiaries of Registrant, as of December 31, 2019
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
Stibnite Holding Company US Inc.
C/o Box 643
Thompson Falls, MT 59873
Antimony Mining and Milling US LLC
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 14, 2020
/s/John C. Lawrence
John C. Lawrence
President and Chief Executive Officer
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Exhibit 31.2
I, Daniel L. Parks, certify that:
CERTIFICATION
(1) I have reviewed this annual report on Form 10-K of United States Antimony Corporation.
(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
(4) I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those
entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusion about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial reporting; and
(5) I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of
the registrant's Board of Directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control
over financial reporting.
Date: April 14, 2020
/s/Daniel L. Parks
Daniel L. Parks, Chief Financial Officer
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Exhibit 32.1
CERTIFICATION PURSUANT TO THE SARBANES-OXLEY ACT
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
I, John C. Lawrence, director and president of United States Antimony Corporation (the "Registrant") do hereby certify, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
1.
This Annual Report on Form 10-K of the Registrant for the fiscal year ended December 31, 2019, as filed with the Securities and Exchange
Commission (the "report"), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.
The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
Date: April 14, 2020
/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, 2019, 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 14, 2020
/s/Daniel L. Parks
Daniel L. Parks
Chief Financial Officer
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
[Insert Image]
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.
Exhibit 95
Mine Safety Disclosures
Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), issuers that are operators, or
that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic reports filed with the SEC
information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities. During the
year ended December 31, 2019, 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:
MSHA Actions for the year ended December 31, 2019
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)
Pending Legal
Action before
Federal Mine
Saftey and Health
Review
Commission
(yes/no)
0
0
0
0
0 $
1,350.00
0
No
No
Mine
Bear River
Zeolite
EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.