UNITED STATES ANTIMONY CORP - Annual Report: 2020 (Form 10-K)

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, 2020
☐	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		81-0305822
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
P.O. Box 643, Thompson Falls, Montana		59873
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code: (406) 827-3523

 

Securities registered under Section 12(b) of the Exchange Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	N/A	N/A

 

Securities registered under Section 12(g) of the Exchange Act:

Title of each class	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	☐		Accelerated filer	☐
Non-accelerated filer Emerging Growth Company	☐ ☐		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 $31,287,606, based on the reported last sale price of common stock on June 30, 2020, 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 March 26, 2021: 102,800,100 shares.

 

 

UNITED STATES ANTIMONY CORPORATION

2020 ANNUAL REPORT

 

TABLE OF CONTENTS

 

PART I
ITEM 1.	DESCRIPTION OF BUSINESS	1
ITEM 1A.	RISK FACTORS	5
ITEM 1B.	UNRESOLVED STAFF COMMENTS	6
ITEM 2.	DESCRIPTION OF PROPERTIES	6
ITEM 3.	LEGAL PROCEEDINGS	12
ITEM 4.	MINE SAFETY DISCLOSURES	12
PART II
ITEM 5.	MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS	12
ITEM 6.	SELECTED FINANCIAL DATA	13
ITEM 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS	13
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	20
ITEM 7B.	CRITICAL ACCOUNTING ESTIMATES	20
ITEM 8.	FINANCIAL STATEMENTS	20
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	20
ITEM 9A.	CONTROLS AND PROCEDURES	21
ITEM 9B.	OTHER INFORMATION
PART III
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS AND COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT	22
ITEM 11.	EXECUTIVE COMPENSATION	34
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	25
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	26
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICE	26
PART IV
ITEM 15.	EXHIBITS AND REPORTS ON FORM 8-K	27
SIGNATURES		32
CERTIFICATIONS
FINANCIAL STATEMENTS		F-1-F-24

 

 

PART I

 

General

 

Item 1. Description of Business

 

General

 

Explanatory Note: As used in this report, the terms "we," "us" and "our" are used to refer to United States Antimony Corporation and, as the context requires, its management.

  

Some of the information in this Form 10-K contains forward-looking statements that involve substantial risks and uncertainties. You can identify these statements by forward-looking words as "may," "will," "expect," "anticipate," "believe," "estimate" and "continue," or similar words. You should read statements that contain these words carefully because they:

 

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 2020, 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 2021 and later years. We continue working with suppliers in North America, Central America, 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 and (3) the Los Juarez mineral deposit.

 

 

 

In our existing operations in Montana, we produce antimony oxide, 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. 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:

 

 

Following is a five year schedule of our antimony sales:

 

Schedule of Antimony Sales
	Lbs Metal		Average
Year	Contained	$	Price/Lb
2020	815,310	$2,942,628	$3.61
2019	1,566,585	$5,450,649	$3.48
2018	1,486,120	$6,113,014	$4.11
2017	1,891,439	$7,588,470	$4.01
2016	2,936,880	$8,744,170	$2.98

 

Concentration of Sales:

 

During the years ended December 31, 2020 and 2019, the following sales were made to our three largest customers:

 

	For the Year Ended
Sales to Three	December 31,	December 31,
Largest Customers	2020	2019
Mexichem Specialty Compounds Inc.	$633,846	$1,823,194
GE Chaplin, Inc.	589,384	-
Nyacol Nanotechnologies	417,501	1,099,504
Kohler	345,899	1,132,674
	$1,986,630	$4,055,372
% of Total Revenues	38%	49%

 

In July of 2020, following a major change in management, the Company temporarily halted its sale of antimony to a few of its customers in order to minimize its losses during a period for which the antimony price was below production costs. The company in 2021 has since resumed sale to most of these customers and is experiencing a marked increase in the price of antimony.

 

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:

 

USAC SALES
	Metal
	Contained
Year	Price
2020	$3.61
2019	$3.48
2018	$4.11
2017	$4.01
2016	$2.98

 

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% of sales. Shortly after inception BRZ constructed a processing plant on the property which improved its productive capacity. We constructed a new warehouse in 2018 to expedite our shipping and packaging for customers.

 

We have no "proven reserves" or "probable reserves" of zeolite, as these terms are defined by the Securities and Exchange Commission.

 

"Zeolite" refers to a group of industrial minerals that consist of hydrated aluminosilicates that hold cations such as calcium, sodium, ammonium, various heavy metals, and potassium in their crystal lattice. Water is loosely held in cavities in the lattice. BRZ zeolite is regarded as one of the best zeolites in the world due to its high CEC of approximately 180-220 meq/100 gr., its hardness and high clinoptilolite content, its absence of clay minerals, and its low sodium content. BRZ's zeolite deposits’ characteristics which make the mineral useful for a variety of purposes including:

 

 

 

 

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, 2020 and 2019, we have accrued $100,000 to fulfill our environmental responsibilities.

 

BRZ

 

During 2001, we recorded a reclamation accrual for our BRZ subsidiary, based on an analysis performed by us and reviewed and approved by regulatory authorities for environmental bonding purposes. The accrual of $7,500 represents our estimated costs of reclaiming, in accordance with regulatory requirements, the acreage disturbed by our zeolite operations, and remains unchanged at December 31, 2020.

 

 

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, 2020. 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, 2020, we employed 14 full-time employees in Montana. In addition, we employed 15 people at our zeolite plant in Idaho, and 27 employees at our mining, milling and smelting operation in Mexico. We no longer employ any contract miners in Mexico. The number of full-time employees may vary seasonally. None of our employees are covered by any collective bargaining agreement.

 

Other

 

We hold no material patents, licenses, franchises or concessions. However, we consider our antimony processing plants proprietary in nature.

 

We are subject to the requirements of the Federal Mining Safety and Health Act of 1977, the Occupational Safety and Health Administration's regulations, requirements of the state of Montana and the state of Idaho, federal and state health and safety statutes and Sanders County, Montana and Franklin County, Idaho health ordinances.

 

Item 1A Risk Factors

 

There may be events in the future that we are not able to accurately predict or over which we have no control. The risk factors listed below, as well as any cautionary language in this report, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements.

 

If we were liquidated, our common stockholders could lose part, or all, of their investment.

 

In the event of our dissolution, the proceeds, if any, realized from the liquidation of our assets will be distributed to our stockholders only after the satisfaction of the claims of our creditors and preferred stockholders. The ability of a purchaser of shares to recover all, or any portion, of the purchase price for the shares, in that event, will depend on the amount of funds realized and the claims to be satisfied by those funds.

 

We may have un-asserted liabilities for environmental reclamation.

 

Our research, development, manufacturing and production processes involve the controlled use of hazardous materials, and we are subject to various environmental and occupational safety laws and regulations governing the use, manufacture, storage, handling, and disposal of hazardous materials and some waste products. The risk of accidental contamination or injury from hazardous materials cannot be completely eliminated. In the event of an accident, we could be held liable for any damages that result and any liability could exceed our financial resources. We also have one ongoing environmental reclamation and remediation project at our current production facility in Montana. Adequate financial resources may not be available to ultimately finish the reclamation activities if changes in environmental laws and regulations occur, and these changes could adversely affect our cash flow and profitability. We do not have environmental liability insurance now, and we do not expect to be able to obtain insurance at a reasonable cost. If we incur liability for environmental damages while we are uninsured, it could have a harmful effect on our financial condition and results of operations. The range of reasonably possible losses from our exposure to environmental liabilities in excess of amounts accrued to date cannot be reasonably estimated at this time.

  

 

We have accruals for asset retirement obligations and environmental obligations.

 

We have accruals totaling $291,719 on our balance sheet at December 31, 2020, 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 lawsuits. The mill site is serviced with three-phase electricity from Northwest Power, and water is pumped from a well.

 

We claim no reserves on any of these properties.

 

Antimony mining and milling operations in the U.S. were curtailed during 1983 due to continued declines in the price of antimony. We are currently purchasing foreign raw antimony materials and producing our own raw materials from our properties in Mexico. We continue to produce antimony metal, oxide, sodium antimonite, and precious metals from our processing facility near Thompson Falls, Montana.

 

ANTIMONY MINERAL PROPERTIES

 

Los Juarez Group

 

We hold properties that are collectively called the “Los Juarez” property, in Queretaro, as follows:

 

 

 

The concessions collectively constitute 720 hectares (1,780 acres). The claims are accessed by roads that lead to highways.

 

 

 

 

Part of the USAC Mexican property, including San Miguel I, II and part of San Juan III, was originally drilled by the Penoles Company in 1970, when antimony metal prices were high. They did not proceed with the property, due to the complex metallurgy of antimony. Subsequently, the Mexican Government did additional work and reported a deposit of mineralized material of 1,000,000 metric tons (mt) grading 1.8% antimony and 8.1 ounces of silver per metric ton (opmt) in Consejo de Recursos  Minerales (Publicacion M-4e). Such a report does not qualify as a comprehensive evaluation, such as a final or bankable feasibility study that concludes legal and technical viability, and economic feasibility. The Securities and Exchange Commission does not recognize this report, and we claim no reserves.

 

 

The mineralized zone is a classic jasperoid-type deposit in the Cretaceous El Doctor Limestone. The mineralization is confined to silicified 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.

 

 

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. An oxide circuit was added to the plant in 2013 and 2014 to mill oxide ores from Los Juarez 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.

 

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. 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 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. In 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 or finished oxide 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:

 

 

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

 

  

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.

 

 

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:

 

 

 

 

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 March 31, 2021, is 2,387.

 

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 2020, the Company sold units consisting of 5,742,858 from sale of shares of its common stock and 5,742,858 warrants to purchase shares of common stock for total proceeds of $2,010,000. Offering costs associated with the sale totaled $196,932.

 

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 total proceeds of $433,960. Offering costs associated with the sale totaled $29,761.

 

During the year ended December 31, 2020, the Company awarded, but did not issue, common stock with a value of $110,000 to its Board of Directors as compensation for their services as directors. In connection with the issuances, the Company recorded $110,000 in director compensation expense and accrued common stock payable.

 

In June 2020, the Company issued the Board members 295,463 shares of the Company’s common stock for services provided during 2019 which was accrued at December 31, 2019, with a value of $130,483.

 

During the years 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 prior Chief Financial Officer, 200,000 shares of the Company’s common stock with a fair value of $136,000 to retain his services.

 

 

Not Applicable.

 

 

 

Certain matters discussed are forward-looking statements that involve risks and uncertainties, including the impact of antimony prices and production volatility, changing market conditions and the regulatory environment and other risks. Actual results may differ materially from those projected. These forward-looking statements represent our judgment as of the date of this filing. We disclaim, however, any intent or obligation to update these forward-looking statements.

 

Overview

 

Company-wide

For the year ended December 31, 2020, we reported net loss of $3,286,804 after depreciation and amortization of $885,843, compared to a net loss of $3,672,891 for 2019 after depreciation and amortization of $895,990. Our company-wide EBITDA was a negative $2,400,961 for 2020, compared to a negative EBITDA of $2,776,901 for 2019.

 

Net non-cash expense items for 2020 totaled $1,317,644 and included $318,502 for the loss on mineral properties, $885,843 for depreciation and amortization, $106,108 for stock-based director compensation, and $7,191 for other items.

 

Net non-cash expense items for 2019 totaled $2,653,757 and included $1,410,736 for the loss on abandonment of 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.

 

During the year ending December 31, 2020, the following transactions had a material impact on the Company’s net loss.

 

 

During the year ending December 31, 2019, the following transaction had a material impact on the Company’s net loss.

 

 

 

Antimony Sales

 

During 2020, we saw our average sale price increase by $0.13 per pound from an average of $3.48 per pound for 2019 to an average of $3.61 per pound for 2020. Following the change in management in June and the suppressed price of antimony, the Company temporarily suspended sale of antimony oxide. This decision was made principally in order to minimize the loss per pound in sales at a time for which our production acquisition contracts were being renegotiated. As consequence of these decisions, the Company is, as of the first quarter of 2021, obtaining its raw materials from its Mexican sources at a substantial savings as compared to the previous year. These savings are due to the withdrawal of overhead from the staff it had at the Wadley mine. Additionally, the Company is now processing antimony products at its Madero facility at a substantial savings compared with all previous years. These savings were due to the renegotiating of its natural gas contract for the Madero smelter.

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 decreased 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.

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 the third quarter of 2019, and resulted in lower antimony production costs and an improved cash flow for 2019 and better expectations for the North American operations going forward. The Company is currently engaged in a renewal of the contract with this supplier. The nature of the contract will likely be altered in order to establish a better agreement for both parties.

Zeolite Sales

Our sales volume of zeolite in 2020 was 3,019 tons less than we sold in 2019, a decrease of 22%. Our average sales price increased by approximately $6 per ton, from $192 per ton in 2019 to $199 per ton in 2020 (3.6%). During 2020, total sales of zeolite decreased by $504,294 from 2019. The zeolite division had an EBIDTA of $445,481 for 2020, compared to an EBITDA of $683,936 for 2019. Net income decreased from $497,470 in 2019 to $262,861 in 2020 ($234,609).

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.

Precious Metals Sales

Precious Metal Sales Silver/Gold	For the Year Ended December 31,
	2020	2019
Ounces Gold Shipped (Au)	30.79	48.13
Ounces Silver Shipped (Ag)	11,434	11,714
Revenues	$174,079	$194,239

 

For the years ended December 31, 2020 and 2019, the EBITDA for precious metals was $174,079 and $194,239, respectively.

 

 

Results of Operations by Division
For the years ended December 31, 2020 and 2019
Antimony Division	2020	2019
Revenues - Antimony (net of discount)	$2,942,628	$5,450,649
Domestic cost of sales:
Production costs	1,388,065	2,352,959
Depreciation	25,809	43,738
Freight and delivery	169,662	243,341
Indirect production costs	139,035	164,876
Direct sales expense	-	65,652
Total domestic antimony cost of sales	1,722,571	2,870,566
Mexico cost of sales:
Production costs	471,598	3,268,277
Depreciation and amortization	590,579	596,719
Land lease expense	-	166,800
Indirect production costs	363,206	71,329
Total Mexico antimony cost of sales	1,425,383	4,103,125
Total revenues - antimony	2,942,628	5,450,649
Total cost of sales - antimony	3,147,954	6,973,691
Total gross profit (loss) - antimony	(205,326)	(1,523,042)
Precious Metals Division:
Revenues	174,079	194,239
Cost of sales:
Depreciation	86,835	69,067
Total cost of sales	86,835	69,067
Gross profit - precious metals	87,244	125,172
Zeolite Division:
Revenues	2,118,823	2,623,117
Cost of sales:
Production costs	1,000,772	1,160,502
Depreciation	182,620	186,466
Freight and delivery	223,545	269,251
Indirect production costs	163,231	158,891
Royalties	224,875	266,388
Total cost of sales	1,795,043	2,041,498
Gross profit - zeolite	323,781	581,619
Company-wide
Total revenues - combined	5,235,530	8,268,005
Total cost of sales - combined	5,029,832	9,084,256
Total gross profit (loss) combined	$205,698	$(816,251)

 

 

Earnings before income taxes
depreciation and amortization
For the years ended December 31, 2020 and 2019
Antimony - Combined USA
and Mexico	2020	2019
Lbs of Antimony Metal USA	514,837	794,770
Lbs of Antimony Metal Mexico	300,473	771,815
Total Lbs of Antimony Metal Sold	815,310	1,566,585
Average Sales Price/Lb Metal	$3.61	$3.48
Net loss/Lb Metal	$(4.46)	$(2.74)
Gross antimony revenue	$2,942,628	$5,450,649
Cost of sales - domestic	(1,722,571)	(2,870,566)
Cost of sales - Mexico	(1,425,383)	(4,103,125)
Operating expenses	(3,134,889)	(1,451,267)
Non-operating expenses	21,808	87,798
Loss on mineral properties	(318,502)	(1,409,022)
	(6,579,537)	(9,746,182)
Net loss - antimony	(3,636,909)	(4,295,533)
Depreciation,& amortization	616,388	640,457
EBITDA - antimony	$(3,020,521)	$(3,655,076)
Precious Metals
Ounces sold
Gold	31	48
Silver	11,434	11,714
Gross precious metals revenue	$174,079	$194,239
Production costs	(86,835)	(69,067)
Net income - precious metals	87,244	125,172
Depreciation	86,835	69,067
EBITDA - precious metals	$174,079	$194,239
Zeolite
Tons sold	10,661	13,680
Average Sales Price/Ton	$198.75	$191.75
Net income (Loss)/Ton	$24.66	$36.36
Gross zeolite revenue	$2,118,823	$2,623,117
Cost of sales	(1,795,043)	(2,041,498)
Operating expenses	(57,049)	(68,567)
Non-operating expenses	(3,870)	(15,582)
Net income - zeolite	262,861	497,470
Depreciation	182,620	186,466
EBITDA - zeolite	$445,481	$683,936
Company-wide
Gross revenue	$5,235,530	$8,268,005
Production costs	(5,029,832)	(9,084,256)
Operating expenses	(3,191,938)	(1,519,834)
Non-operating expenses	17,938	72,216
Loss on mineral properties	(318,502)	(1,409,022)
Net income (loss)	(3,286,804)	(3,672,891)
Depreciation,& amortization	885,843	895,990
EBITDA	$(2,400,961)	$(2,776,901)

 

 

During the period ending December 31, 2020, the most significant factors affecting our financial performance were as follows:

 

 

During the period ended December 31, 2019, the most significant event affecting our financial performance was the continued low 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 2021. 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 plan for the remainder of 2021 is to process approximately:

 

 

In addition to the processing goals stated above, US Antimony intends to continue to improve its production capacity and sales of zeolite at its subsidiary Bear River Zeolite (BRZ). Funds obtained in early 2021 from two public placements of stock will assist greatly to this goal as well as the improvement of the facilities in Madero, Thompson Falls, Puerto Blanco, and Los Juarez.

 

In 2020, we only received 50% of our expected supply from North American sources. 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 2020 and 2019, 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. In 2020, US Antimony has been involved in renegotiating its supply contract with its North American source, that will likely result in a mutual improvement in the supply contract. Additionally, the price of antimony in early 2021 is double what it was in 2019.

 

 

The estimated recovery of precious metals per metric ton, after the caustic leach and cyanide leach circuits, is as follows at Los Juarez:

 

Schedule of Los Juarez

 

recovery values		Metal	Assay	Recovery	Value	Value/Mt
		Gold	0.035 opmt	87.40%	$1,732/oz	$52.98
		Silver	3.27 opmt	64.30%	$25.90/oz	$54.46
		Antimony	0.652%	41.80%	$5.23/lb	$31.41
		Total				$138.85

 

The following are highlights of the significant changes during 2020:

 

Antimony:

 

 

Zeolite:

 

During 2020, the Company sold 10,661 tons compared to 13,680 tons in 2019, a decrease of 3,019 tons (22%). BRZ realized a net income of $262,862 in 2020 after depreciation of $182,620 compared to a net income of $497,470 in 2019 after depreciation of $186,466.

 

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 11.6%, and 8.2%, of sales for 2020 and 2019, respectively.

 

 

Financial Condition and Liquidity

 

Financial Condition and Liquidity	2020	2019
Current assets	$1,808,161	$1,279,755
Current liabilities	(4,477,543)	(3,975,681)
Net Working Capital	$(2,669,382)	$(2,695,926)
	2020	2019
Cash provided (used) by operations	$(1,305,664)	$(11,355)
Cash provided (used) by investing:
Cash used for capital outlay	(243,091)	(792,925)
Proceeds from sale of land	-	400,000
Cash provided (used) by financing:
Proceeds from notes payable to bank, net of payments	(97,066)	13,149
Principal paid on long-term debt	(46,670)	(127,683)
Advances from related party	-	237,400
Payments on advances from related parties	(83,419)	(35,066)
Proceeds from CARES Act note payable	443,400
Stock issued for cash	1,813,068	404,199
Checks issued and payable	69,052	(28,849)
Net change in cash and restricted cash	$549,610	$58,870

 

Our net working capital increased for the year ended December 31, 2020 from a negative amount of $2,695,926 at the beginning of the year to a negative amount of $2,669,382 at the end of 2020. Current assets increased due to an increase in cash and cash equivalents. Our current liabilities increased by $501,862, which included a decrease of approximately $584,000 in accounts payables and payables to related parties, but an overall increase due to Mexican export tax liability. Capital improvements were paid for with cash and debt.

 

For the year ending December 31, 2021, we are planning to use funds acquired from the two stock offerings raised in Q1 2021 to make significant improvements to our operations at Madero, Puerto Blanco, Bear River Zeolite, and Thompson Falls facilities with the goal of increasing production and decreasing costs.

 

Going Concern Consideration

 

At December 31, 2020, the Company’s consolidated financial statements show negative working capital of approximately $2.7 million and an accumulated deficit of approximately $32.7 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. 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 2021 from the sale of precious metals extracted from the leach circuit that came on line in Mexico in the second half of 2020.  

 

Over the past several years, the Company has been able to make required principal payments on its debt from cash generated from operations.  The Company is confident it can make debt payments when due.  In March 2020, the Company applied for and received funds from a note payable under the CARES Act for $443,400. In July 2020 the Company was successful in raising $1,813,068 from the sale of shares of common stock and warrants to fund capital projects in Mexico. In the first quarter of 2021, the Company raised $23,497,180 (net of $1,499,820 in agent’s fees) from sale of shares of its common stock and warrants that will be used for general corporate purposes, working capital, and to fund a geochemical, geological and geophysical program at the Los Juarez property. With the funds raised, management believes the Company has sufficient funds to sustain its operations and meet its financial obligations during the 12 months following the date of issuance of the consolidated financial statements.

  

 

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.

 

 

 

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-F24.

 

Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 

None

 

 

Item 9A Controls and Procedures

 

Evaluation of disclosure controls and procedures

 

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 Accounting 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 Accounting 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 Interim CEO and Interim President, 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, 2020. 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, 2020. These weaknesses are as follows:

 

 

 

 

We are aware of these material weaknesses and will develop procedures to ensure that independent review of material transactions is performed. The Principal Executive 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, 2020, 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, 2020.

 

PART III

 

 

Identification of directors and executive officers at December 31, 2020, is as follows:

 

Name	Age	Affiliation	Expiration of Term
John C. Gustavsen	72	Interim CEO	Annual meeting
Russell C. Lawrence	52	Interim President & Director	Annual meeting
Alicia Hill	38	Secretary, Controller,	Annual meeting
		and Treasurer
Hart W. Baitis	70	Director	Annual meeting
Dr. Blaise Aguirre	55	Director	Annual meeting
Joseph Bardswich	73	Director	Annual meeting

 

Business Experience of Directors and Executive Officers

 

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.

 

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.

 

 

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.

 

Lloyd Joseph Bardswich Mr. Bardswich has extensive experience in mining, mining engineering, management, drilling, metallurgy and plant design. He is a registered professional mining engineer, can served as a QP (qualified person) regarding reporting to NI43-101 standards and has worked as a Shift Boss, Mine Safety Engineer, Mine Foreman, Mine Manager, and Mining Consultant.

 

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.

 

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 2020 calendar year. Each incumbent director attended all of the meetings held during the 2020 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 consisted of two members at December 31, 2020, Jeffrey Wright, and Hart Baitis. None of the Audit Committee members are involved in our day-to-day financial management. Jeffrey Wright was considered a financial expert. Jeffrey Wright resigned from the board effective January 1, 2021. Craig Thomas resigned from the board on January 13, 2021.

 

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, 2020:

  

 

Directors Compensation

 

			Total Fees,
			Awards, and
Name and Principal	Fees Earned	Fees Earned	Other
Position	paid in Cash	paid in Stock	Compensation
Russell Lawrence,	-	$20,000	$20,000
Interim President
Hartmut Baitis,	-	$20,000	$20,000
Director
Dr. Blaise Aquirre,	-	$20,000	$20,000
Director
Jeffrey Wright,	-	$20,000	$20,000
Director
Craig Thomas,	-	$20,000	$20,000
Director
John Lawrence,	-	$10,000	$10,000
Previous President
Totals	$-	$110,000	$110,000

 

 

Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers and the holders of 10% or more of our common stock to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and stockholders holding more than 10% of our common stock are required by the regulation to furnish us with copies of all Section 16(a) forms they have filed. Based solely on our review of copies of Forms 3, 4 and 5 furnished to us, Mr. 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, 2020 and 2019.

 

Name and Principal Position	Year	Salary	Bonus	Stock Awards (2)	Total
Russell Lawrence, Interim President	2020 2019	$110,000 $110,000	N/A	$20,000 $25,000	$130,000 $135,000
John C. Gustaven, Interim CEO	2020 2019	$100,000 $100,000		N/A	$100,000 $100,000

 

 

 

The Interim President receives restricted stock awards for their services as Board members.

 

There were not any outstanding equity awards or plan based awards to officers or directors as of December 31, 2020. John Lawrence, previous President and Chairman, 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 was used to reduce advances payable to Mr. Lawrence.

 

Item 12 Security Ownership of Certain Beneficial Owners and Management

 

The following table sets forth information regarding beneficial ownership of our common stock as of March 26, 2021 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		Name and Address of Beneficial Owner (1)	Amount and Nature of Beneficial Ownership	Percent of Class (1)	Percent of all Voting Stock
Series B Preferred		Excel Mineral Company P.O. Box 3800 Santa Barbara, CA 93130	750,000	100%	N/A
Series C Preferred		Richard A. Woods 59 Penn Circle West Penn Plasa Apts. Pittsburgh, PA 15206	48,305(4)	27.1%	*
Series C Preferred		Dr. Warren A Evans 69 Ponfret Landing Road Brooklyn, CT 06234	32,203(4)	18.1%	*
Series C Preferred		Edward Robinson 1007 Spruce Street, 1st flor Philadelphia, PA 19107	32,203(4)	18%	*
Series C Preferred		All Series C Preferred Shareholders as a Group	177,904	100%	*
		John C. Lawrence	4,496,350	82.5%	4.2%
		Russell Lawrence	495,897	9.1%	*
		Hart Baitis	441,978	8.1%	*
		Blaise Aquirre	17,688	0.3%	*
Common Stock		All Directors and Executive Officers as a Group	5,451,913	100%
		John C. Lawrence	1,590,672	90.8%	1.5%
Series D Preferred		Leo Jackson	102,000	5.8%	*
		Garry Babbitt	58,333	3.3%	*
Series D Preferred		All Series D Preferred Shareholders as a Group	1,751,005	100%	1.7%
Common Stock and Preferred Stock w/voting rights		All Directors and Executive Officers as a Group	5,451,913	75.7%	5.1%
Common Stock and Preferred Stock w/voting rights		All Preferred Shareholders that are officers or directors	1,751,005	24.3%	1.7%
Common and Preferred Voting Stock			7,202,918	100.0%	6.8%

 

 

(1)

Beneficial Ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock subject to options or warrants currently exercisable or convertible, or exercisable or convertible within 60 days of March 26, 2021, 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 108,994,999 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 December 31, 2020. Total voting stock of 77,878,666 shares is a total of all the common stock issued, and all of the Series C and Series D Preferred Stock outstanding at December 31, 2020.

 

(2)	The outstanding Series C and Series D preferred shares carry voting rights equal to the same number of shares of common stock.

 

 

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.

 

In January 2019, the Company issued Daniel Parks, the Company’s Prior Chief Financial Officer, 200,000 shares of the Company’s common stock with a fair value of $136,000 to retain his services.

 

During the year ended December 31, 2020, the Company awarded, but did not issue, common stock with a value of $110,000 to its Board of Directors as compensation for their services as directors.  In connection with the issuances, the Company recorded $110,000 in director compensation expense and accrued common stock payable.

 

In June 2020, the Company issued the Board members 295,463 shares of the Company’s common stock for services provided during 2019 which was accrued at December 31, 2019, with a value of $130,483.

 

During the years 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.

 

The Company’s previous President and Chairman, John Lawrence, rented equipment to the Company and charged 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, 2020 and 2019 was $171,017 and $156,974, respectively. Expenses paid to Mr. Lawrence for the years ended December 31, 2020 and 2019 were $1,533 and $9,799, respectively

 

During 2019, John Lawrence made advances to the Company totaling $227,200, of which $170,985 had been repaid as of December 31, 2020, leaving an advance payable of $56,215. John C. Gustaven, Interim CEO, advanced the Company $10,200 during 2019, of which $10,000 had been repaid as of December 31, 2020, leaving a balance of $200.

 

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 Assure CPA (formerly DeCoria, Maichel & Teague P.S.), as well as the fees charged by Assure CPA for such services. In its review of non-audit service fees and its appointment of Assure CPA as the Company's independent accountants, the Board of Directors considered whether the provision of such services is compatible with maintaining Assure CPA independence. All of the services provided and fees charged by Assure CPA in 2020 were pre-approved by the Board of Directors and its audit committee.

 

 

Audit Fees

The aggregate fees billed by Assure CPA 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 2020 and 2019 were $122,500 and $118,998, respectively, net of expenses.

 

Audit-Related Fees

There were no other fees billed by Assure CPA during the last two 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 Assure CPA during the last two fiscal years for professional services rendered by Assure CPA for tax compliance for 2020 and 2019 were $12,100 and $11,833, respectively.

 

All Other Fees

There were $1,123 in other fees billed by Assure CPA during 2020 and none during 2019.

 

Item 15. Exhibits and Reports on Form 8-K

 

 

 

 

 

 

 

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:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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:

 

 

 

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:

 

 

 

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:

 

 

 

 

 

 

 

 

 

 

 

 

 

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:

 

 

 

 

 

 

 

 

 

 

 

 

______________________

* Filed herewith.

 

 

Reports on Form 8-K

 

 

Exhibit 21.01

 

Subsidiaries of Registrant, as of December 31, 2020

 

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

 

AGUA Mines, Inc

C/0 Box 643

Thompson Falls, MT 59873

 

 

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, 2020, 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, 2020

 

 

SIGNATURES

 

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.

 

 

UNITED STATES ANTIMONY CORPORATION

(Registrant)

 

By /s/Russell Lawrence   Date: March 31, 2021

  Russell Lawrence, Interim President, Director, and Principal Executive Officer

 

By /s/Alicia Hill    Date: March 31, 2021

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/Russell Lawrence    Date: March 31, 2021

Russell Lawrence, Interim Director and President

(Principal Executive)

 

By /s/Hart Baitis    Date: March 31, 2021

Hart Baitis, Director

 

By /s/Blaise Aguirre    Date: March 31, 2021

Blaise Aguirre, Director

 

By /s/ Joseph Bardswich    Date: March 31, 2021

Joseph Bardswich, Director

  

 

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 (the "Company") as of December 31, 2020 and 2019, the related consolidated statements of operations, changes in stockholders’ equity and cash flows for each of 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, 2020 and 2019, and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

Critical Audit Matter

 

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

 

 

Assessment of Properties, Plants and Equipment for Impairment

 

As described in Note 2 to the consolidated financial statements, management reviews and evaluates the net carrying value of properties, plants and equipment for impairment upon the occurrence of events or changes in circumstances that indicate that the related carrying amounts may not be recoverable. If deemed necessary based on this review and evaluation, management performs a test for impairment. The determination of whether an impairment has occurred is based on an estimate of undiscounted future net cash flows attributable to the assets as compared to the carrying value of the assets.

 

In its review and evaluation, management determined that the carrying amount of properties, plants and equipment located in Mexico (“Mexican PPE”), which has a carrying value of $8,438,413 as of December 31, 2020, may not be recoverable and prepared an undiscounted future net cash flows analysis to determine recoverability. Based on its analysis, management concluded that the undiscounted future net cash flow exceeded the net carrying value of the Mexican PPE and an impairment was not recognized.

 

The undiscounted future net cash flow analysis prepared by management is sensitive to assumptions including quantities of recoverable minerals, expected metal prices, production levels, and estimated operating costs of production and capital.

 

We identified the impairment assessment of the Mexican PPE as a critical audit matter due to the materiality of the Mexican PPE balance, the high degree of auditor judgment and an increased level of effort when performing audit procedures to evaluate the reasonableness of management’s assumptions in determining the undiscounted future net cash flows. The primary procedures we performed to address this critical audit matter included:

 

●	Evaluation of the Company’s identification of significant events or changes in circumstances that have occurred indicating the underlying Mexican PPE may not be recoverable by performing an independent assessment.

 

●	Discussion with management of future business plans for the Mexican PPE and assessment as to whether the undiscounted future net cash flow analysis was consistent with the plans.

 

●

Comparison of key assumptions utilized in the current undiscounted future net cash analysis to assumptions used in past analyses and assessed whether the current analysis appropriately reflected the impact of changes to the Company’s business plans and operations, current metal prices, actual operating costs, and industry-specific events.

 

●	In addition to ensuring key assumptions were consistent with evidence obtained in other areas of the audit, evaluation of the significant assumptions and judgements used in the Company’s analysis including:

 

 

 

 

/s/ Assure CPA, LLC

Assure CPA, LLC (formerly DeCoria, Maichel & Teague, P.S.)

 

We have served as the Company's independent auditor since 1998.

Spokane, Washington

March 31, 2021

 

 

United States Antimony Corporation and Subsidiaries
Consolidated Balance Sheets
December 31, 2020 and 2019
ASSETS
	2020	2019
Current assets:
Cash and cash equivalents	$665,102	$115,506
Certificates of deposit	254,212	253,552
Accounts receivable	238,634	284,453
Inventories	650,213	626,244
Total current assets	1,808,161	1,279,755
Properties, plants and equipment, net	11,225,594	12,186,848
Restricted cash for reclamation bonds	57,275	57,261
IVA receivable and other assets	208,472	170,111
Total assets	$13,299,502	$13,693,975
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Checks issued and payable	$86,685	$17,633
Accounts payable	1,876,874	2,328,977
Payable to related parties	227,432	359,309
Accrued liabilities	635,626	638,288
Notes payable to bank	100,000	197,066
Export tax assessment payable (Note 13)	1,120,730	-
Hillgrove advances payable (Note 10)	378,074	378,074
Long-term debt, current portion	52,122	56,334
Total current liabilities	4,477,543	3,975,681
Long-term debt, net of current portion	34,304	76,762
Hillgrove advances payable (Note 10)	756,147	756,147
CARES Act note payable (Note 17)	443,400	-
Stock payable to directors for services	110,000	134,375
Asset retirement obligations and accrued reclamation costs	291,719	283,868
Total liabilities	6,113,113	5,226,833
Commitments and contingencies (Notes 13 and 15)
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 $945,000 and $937,500
respectively)	7,500	7,500
Series C: 177,904 shares issued and outstanding
(liquidation preference $97,847 both years)	1,779	1,779
Series D: 1,751,005 shares issued and outstanding
(liquidation preference $5,084,770 and $5,043,622
respectively)	17,509	17,509
Common stock, $0.01 par value, 150,000,000 shares authorized;
75,949,757 and 69,661,436 shares issued and outstanding, respectively	759,496	696,614
Additional paid-in capital	39,050,899	37,107,730
Accumulated deficit	(32,650,794)	(29,363,990)
Total stockholders' equity	7,186,389	8,467,142
Total liabilities and stockholders' equity	$13,299,502	$13,693,975