UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

(Mark One)

 

☒

Quarterly Report Pursuant to Section 13 Or 15(d) Of The Securities Exchange Act of 1934

 

For the quarterly period ended June 30, 2024

 

☐

Transition Report Under Section 13 Or 15(d) Of The Securities Exchange Act of 1934

 

For the transition period ________ to ________ 

 

COMMISSION FILE NUMBER 001-08675

 

 UNITED STATES ANTIMONY CORPORATION

(Exact name of registrant as specified in its charter) 

 

Montana

 

81-0305822

(State or other jurisdiction of incorporation or organization)

 

 (IRS Employer Identification No.)

 

 

 

P.O. Box 643

Thompson Falls, MT

 

 59873

(Address of principal executive office)

 

(Postal Code)

 

(406) 827-3523

(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class

 

Trading Symbol

Name of Each Exchange on Which Registered

Common Stock, $0.01 par value

 

UAMY

NYSE American

 

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 checkmark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post filed). Yes ☒ No ☐

 

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “Accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):

 

Large Accelerated Filer

☐

Accelerated Filer

☐

Non-accelerated Filer

☒

Smaller Reporting Company

☒

Emerging Growth Company

☐

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

As of August 7, 2024, there were 108,438,984 shares outstanding of the registrant’s $0.01 par value common stock. 

 

 

 

 

Table of Contents

 

PART I - FINANCIAL INFORMATION

 

 

 

 

 

 

 

ITEM 1.

FINANCIAL STATEMENTS

 

3

 

 

 

 

 

 

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION.

 

23

 

 

 

 

 

 

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

36

 

 

 

 

 

 

ITEM 4.

CONTROLS AND PROCEDURES

 

36

 

 

 

 

 

 

PART II - OTHER INFORMATION

 

 

 

 

 

 

 

ITEM 1.

LEGAL PROCEEDINGS.

 

37

 

 

 

 

 

 

ITEM 1A.

RISK FACTORS.

 

37

 

 

 

 

 

 

ITEM 2.

RECENT SALES OF UNREGISTERED SECURITIES.

 

37

 

 

 

 

 

 

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.

 

37

 

 

 

 

 

 

ITEM 4.

MINE SAFETY DISCOSURES.

 

37

 

 

 

 

 

 

ITEM 5.

OTHER INFORMATION.

 

37

 

 

 

 

 

 

ITEM 6.

EXHIBITS.

 

38

 

 

 
2

Table of Contents

 

PART I - FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

  

UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 

 

 

June 30, 2024

 

 

December 31, 2023

 

ASSETS

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$12,391,431

 

 

$11,899,574

 

Certificates of deposit

 

 

22,216

 

 

 

72,898

 

Accounts receivable, net

 

 

1,393,760

 

 

 

625,256

 

Inventories, net

 

 

462,354

 

 

 

1,019,154

 

Prepaid expenses and other current assets

 

 

291,229

 

 

 

92,369

 

Current assets held for sale (Note 11)

 

 

50,798

 

 

 

366,955

 

Total current assets

 

 

14,611,788

 

 

 

14,076,206

 

Properties, plants and equipment, net

 

 

7,798,594

 

 

 

7,765,045

 

Restricted cash for reclamation bonds

 

 

55,060

 

 

 

55,061

 

Other assets

 

 

20,217

 

 

 

18,098

 

Non-current assets held for sale (Note 11)

 

 

6,443,581

 

 

 

6,180,585

 

Total assets

 

$28,929,240

 

 

$28,094,995

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

Accounts payable

 

$544,100

 

 

$330,147

 

Accrued liabilities

 

 

157,001

 

 

 

109,341

 

Accrued liabilities - directors

 

 

161,249

 

 

 

124,810

 

Royalties payable

 

 

113,917

 

 

 

153,429

 

Long-term debt, current portion

 

 

129,967

 

 

 

28,443

 

Current liabilities held for sale (Note 11)

 

 

145,930

 

 

 

151,288

 

Total current liabilities

 

 

1,252,164

 

 

 

897,458

 

 

 

 

 

 

 

 

 

 

Long-term debt, net of current portion

 

 

262,127

 

 

 

-

 

Stock payable to directors

 

 

38,542

 

 

 

38,542

 

Asset retirement obligations

 

 

1,138,102

 

 

 

1,101,561

 

Non-current liabilities held for sale (Note 11)

 

 

536,466

 

 

 

536,466

 

Total liabilities

 

 

3,227,401

 

 

 

2,574,027

 

COMMITMENTS AND CONTINGENCIES (Note 8 and 11)

 

 

 

 

 

 

 

 

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 $971,250 and $967,500, 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:  0 shares issued and outstanding

 

 

-

 

 

 

-

 

Common stock, $0.01 par value, 150,000,000 shares authorized; 108,438,984 and 107,647,317 shares issued and outstanding, respectively

 

 

1,084,389

 

 

 

1,076,472

 

Additional paid-in capital

 

 

64,146,766

 

 

 

63,853,836

 

Accumulated deficit

 

 

(39,538,595)

 

 

(39,418,619)

Total stockholders' equity

 

 

25,701,839

 

 

 

25,520,968

 

Total liabilities and stockholders' equity

 

$28,929,240

 

 

$28,094,995

 

 

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

 

 
3

Table of Contents

 

UNITED STATES ANTIMONY CORPORATION AND SUBSDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 

 

 

For the three months ended

 

 

For the six months ended

 

 

 

June 30, 2024

 

 

June 30, 2023

 

 

June 30, 2024

 

 

June 30, 2023

 

REVENUES

 

$2,813,780

 

 

$2,265,117

 

 

$5,645,170

 

 

$4,475,961

 

COST OF REVENUES

 

 

1,905,139

 

 

 

1,878,558

 

 

 

3,913,625

 

 

 

3,694,559

 

GROSS PROFIT

 

 

908,641

 

 

 

386,559

 

 

 

1,731,545

 

 

 

781,402

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

477,366

 

 

 

247,419

 

 

 

932,760

 

 

 

388,690

 

Salaries and benefits

 

 

285,359

 

 

 

145,412

 

 

 

526,964

 

 

 

273,104

 

Professional fees

 

 

221,529

 

 

 

191,063

 

 

 

398,686

 

 

 

237,067

 

Loss on disposal of property, plant and equipment

 

 

-

 

 

 

-

 

 

 

17,494

 

 

 

-

 

Other operating expenses

 

 

137,991

 

 

 

-

 

 

 

137,991

 

 

 

-

 

TOTAL OPERATING EXPENSES

 

 

1,122,245

 

 

 

583,894

 

 

 

2,013,895

 

 

 

898,861

 

LOSS FROM OPERATIONS

 

 

(213,604)

 

 

(197,335)

 

 

(282,350)

 

 

(117,459)

OTHER INCOME (EXPENSE):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and investment income

 

 

151,921

 

 

 

167,781

 

 

 

302,772

 

 

 

290,153

 

Trademark and licensing income

 

 

8,360

 

 

 

11,381

 

 

 

14,728

 

 

 

18,906

 

Other miscellaneous income (expense)

 

 

(2,381)

 

 

(4,859)

 

 

(4,753)

 

 

78,749

 

TOTAL OTHER INCOME

 

 

157,900

 

 

 

174,303

 

 

 

312,747

 

 

 

387,808

 

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

 

 

(55,704)

 

 

(23,032)

 

 

30,397

 

 

 

270,349

 

Income tax expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

INCOME (LOSS) FROM CONTINUING OPERATIONS

 

 

(55,704)

 

 

(23,032)

 

 

30,397

 

 

 

270,349

 

Discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from discontinued operations before income taxes

 

 

258,496

 

 

 

(313,433)

 

 

(150,373)

 

 

(1,413,798)

Income tax expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Income (loss) from discontinued operations (Note 11)

 

 

258,496

 

 

 

(313,433)

 

 

(150,373)

 

 

(1,413,798)

Net income (loss)

 

 

202,792

 

 

 

(336,465)

 

 

(119,976)

 

 

(1,143,449)

Preferred dividends

 

 

(1,875)

 

 

(1,875)

 

 

(3,750)

 

 

(3,750)

Net income (loss) available to common stockholders

 

$200,917

 

 

($338,340)

 

 

($123,726)

 

 

($1,147,199)

 

Basic and diluted earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

$nil

 

 

$nil

 

 

$nil

 

 

$nil

 

Income (loss) from discontinued operations

 

$nil

 

 

$nil

 

 

$nil

 

 

$(0.01)

Net income (loss)

 

$nil

 

 

$nil

 

 

$nil

 

 

$(0.01)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

108,438,984

 

 

 

107,647,317

 

 

 

108,173,645

 

 

 

107,504,628

 

Diluted

 

 

108,943,126

 

 

 

107,647,317

 

 

 

108,425,716

 

 

 

107,504,628

 

 

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

 

 
4

Table of Contents

 

UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

For the three and six months ended June 30, 2024 and 2023

 

 

 

Total Preferred Stock

 

 

Common stock

 

 

Additional

Paid In

 

 

Shares

to be

returned

to

 

 

Accumulated

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

treasury

 

 

Deficit

 

 

Total

 

Balances, December 31, 2022

 

 

2,620,576

 

 

$26,205

 

 

 

106,373,341

 

 

$1,063,732

 

 

$64,052,630

 

 

($202,980)

 

 

($33,070,332)

 

 

$31,869,255

 

Conversion of Preferred Series D to common stock

 

 

(1,692,672)

 

 

(16,926)

 

 

1,692,672

 

 

 

16,927

 

 

 

(1)

 

 

-

 

 

 

-

 

 

 

-

 

Common stock buyback and retirement

 

 

-

 

 

 

-

 

 

 

(418,696)

 

 

(4,187)

 

 

(198,793)

 

 

202,980

 

 

 

-

 

 

 

-

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(806,984)

 

 

(806,984)

Balances, March 31, 2023

 

 

927,904

 

 

$9,279

 

 

 

107,647,317

 

 

$1,076,472

 

 

$63,853,836

 

 

 

-

 

 

($33,877,316)

 

 

$31,062,271

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(336,465)

 

 

(336,465)

Balances, June 30, 2023

 

 

927,904

 

 

$9,279

 

 

 

107,647,317

 

 

$1,076,472

 

 

$63,853,836

 

 

$-

 

 

 

(34,213,781)

 

$30,725,806

 

Balances, December 31, 2023

 

 

927,904

 

 

$9,279

 

 

 

107,647,317

 

 

$1,076,472

 

 

$63,853,836

 

 

 

-

 

 

($39,418,619)

 

 

$25,520,968

 

Share-based compensation

 

 

-

 

 

 

-

 

 

 

791,667

 

 

 

7,917

 

 

 

198,008

 

 

 

-

 

 

 

-

 

 

 

205,925

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(322,768)

 

 

(322,768)

Balances, March 31, 2024

 

 

927,904

 

 

$9,279

 

 

 

108,438,984

 

 

$1,084,389

 

 

$64,051,844

 

 

 

-

 

 

$(39,741,387)

 

$25,404,125

 

Share-based compensation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

94,922

 

 

 

-

 

 

 

-

 

 

 

94,922

 

Net Income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

202,792

 

 

 

202,792

 

Balances, June 30, 2024

 

 

927,904

 

 

$9,279

 

 

 

108,438,984

 

 

$1,084,389

 

 

$64,146,766

 

 

$-

 

 

$(39,538,595)

 

$25,701,839

 

 

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

 

 
5

Table of Contents

 

UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 

 

 

For the six months ended

 

 

 

June 30, 2024

 

 

June 30, 2023

 

CASH FLOWS FROM OPERATING ACTIVITIES OF CONTINUING OPERATIONS:

 

 

 

 

 

 

Net income from continuing operations

 

$30,397

 

 

$270,349

 

Adjustments to reconcile net income from continuing operations to net cash

 

 

 

 

 

 

 

 

provided (used) by operating activities of continuing operations:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

220,633

 

 

 

154,458

 

Accretion of asset retirement obligation

 

 

36,541

 

 

 

750

 

Loss on disposal of property, plant, and equipment

 

 

17,494

 

 

 

-

 

Write down of inventory to net realizable value

 

 

10,501

 

 

 

-

 

Share-based compensation

 

 

300,847

 

 

 

-

 

Allowance for doubtful accounts on accounts receivable

 

 

(14,258)

 

 

43,560

 

Other non-cash items

 

 

(16,106)

 

 

(13,621)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(754,246)

 

 

(567,077)

Inventories, net

 

 

546,299

 

 

 

(265,804)

Prepaid expenses and other current assets

 

 

(198,860)

 

 

(240,225)

Other assets

 

 

(2,119)

 

 

-

 

Accounts payable

 

 

213,953

 

 

 

(253,580)

Accrued liabilities

 

 

47,660

 

 

 

(52,935)

Accrued liabilities – directors

 

 

36,439

 

 

 

145,413

 

Royalties payable

 

 

(39,512)

 

 

(389,716)

Net cash provided (used) by operating activities of continuing operations

 

 

435,663

 

 

 

(1,168,428)

CASH FLOWS FROM INVESTING ACTIVITIES OF CONTINUING OPERATIONS:

 

 

 

 

 

 

 

 

Proceeds from redemption of certificates of deposit

 

 

50,682

 

 

 

-

 

Purchases of properties, plant, and equipment

 

 

(150,721)

 

 

(1,195,534)

Net cash used by investing activities of continuing operations

 

 

(100,039)

 

 

(1,195,534)

CASH FLOWS FROM FINANCING ACTIVITIES OF CONTINUING OPERATIONS:

 

 

 

 

 

 

 

 

Payments on dividends payable

 

 

-

 

 

 

(787,730)

Principal payments on long-term debt

 

 

(39,071)

 

 

(46,370)

Net cash used by financing activities of continuing operations

 

 

(39,071)

 

 

(834,100)

Net cash flows provided (used) by continuing operations

 

 

296,553

 

 

 

(3,198,062)

CASH FLOWS FROM DISCONTINUED OPERATIONS:

 

 

 

 

 

 

 

 

Net cash provided (used) by operating activities

 

 

195,303

 

 

 

(2,023,067)

Net cash used by investing activities

 

 

-

 

 

 

(152,322)

Net cash flows provided (used) by discontinued operations

 

 

195,303

 

 

 

(2,175,389)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

 

 

491,856

 

 

 

(5,373,451)

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD

 

 

11,954,635

 

 

 

19,117,666

 

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD

 

$12,446,491

 

 

$13,744,215

 

 

 

 

 

 

 

 

 

 

NON-CASH FINANCING AND INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Common stock buyback and retirement

 

 

-

 

 

$202,980

 

Conversion of Preferred Series D to Common Stock

 

 

-

 

 

$16,927

 

Equipment purchased with note payable

 

$402,722

 

 

$0

 

 

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

 

 
6

Table of Contents

 

UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2024

 

NOTE 1 - NATURE OF OPERATIONS

 

United States Antimony Corporation and its subsidiaries in the U.S. and Mexico (“USAC”, the “Company”, “Our”, “Us”, or “We”) sell processed antimony, zeolite, and precious metals products in the U.S. and Canada. The Company processes antimony ore primarily into antimony oxide, antimony metal, and antimony trisulfide. Our antimony oxide is used to form a flame-retardant system for plastics, rubber, fiberglass, textile goods, paints, coatings, and paper, as a color fastener in paint, and as a phosphorescent agent in fluorescent light bulbs. Our antimony metal is used in bearings, storage batteries, and ordnance. Our antimony trisulfide is used as a primer in ammunition. In its operations in Idaho, the Company mines and processes zeolite, a group of industrial minerals used in soil amendment and fertilizer, water filtration, sewage treatment, nuclear waste and other environmental cleanup, odor control, gas separation, animal nutrition, and other miscellaneous applications. We recover certain amounts of precious metals, primarily gold and silver, at our plant in Montana from antimony concentrates.

 

Developments in the Current Period

 

The Company has two subsidiaries in Mexico, US Antimony de Mexico, S.A. de C.V. (“USAMSA”) and Antimonio de Mexico, S.A. de C.V. (“ADM”). On March 11, 2024, the Company shut down the operations of USAMSA and announced its plans to sell its USAMSA subsidiary. The USAMSA subsidiary primarily includes the Company’s Madero antimony and precious metals plant in Parras de la Fuente Coahuila, Mexico and its Puerto Blanco antimony and precious metals plant in San Luis de la Paz Guanajuato, Mexico. The Company intends to sell its USAMSA subsidiary over the next year and has initiated an active search for buyers of its operations and/or assets. While the Company will maintain its existing Los Juarez mining claims and concessions in Mexico, which are included in our ADM subsidiary, there are presently no active operations at Los Juarez. See Note 11 for further information.

 

In May 2024, the Company made the decision to sell the personal residence it owns in Idaho that was previously used for management located near its Bear River Zeolite Company (“BRZ”) operation (“BRZ Home”). BRZ is a wholly-owned subsidiary of USAC. The Company also signed an agreement with a realtor in May 2024 to assist with the sale of its BRZ Home. An active search for a buyer began after signing the agreement with the realtor and the Company expects the BRZ Home to be sold sometime over the next year. See Note 11 for further information.

 

BRZ financed the purchase of a wheel loader in the second quarter of 2024. See Note 7 for further information.

 

NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

 

In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of June 30, 2024, and its results of operations and cash flows for the three and six months ended June 30, 2024 and 2023. The Condensed Consolidated Balance Sheet as of December 31, 2023, was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements.

 

 
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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2024

 

These unaudited interim financial statements have been prepared by management in accordance with generally accepted accounting principles used in the United States of America (“U.S. GAAP”). These unaudited interim financial statements should be read in conjunction with the annual audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on April 12, 2024.

 

This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. These accounting policies conform to U.S. GAAP and have been consistently applied in the preparation of the financial statements.

 

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company's consolidated financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions, which could have a material effect on the reported amounts of the Company's consolidated financial position and results of operations. Operating results for the three and six-month periods ended June 30, 2024, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2024.

 

Reclassifications

 

Certain reclassifications have been made to conform prior period amounts to the current presentation. These reclassifications have no effect on the results of operations, stockholders’ equity and cash flows as previously reported. 

 

Assets Held for Sale and Discontinued Operations

 

The Company classifies assets and liabilities to be sold ("Disposal Group") as held for sale in the period when all of the applicable criteria are met, including: (i) management commits to a plan to sell, (ii) the Disposal Group is available to sell in its present condition, (iii) there is an active program to locate a buyer, (iv) the Disposal Group is being actively marketed at a reasonable price in relation to its fair value, (v) significant changes to the plan to sell are unlikely, and (vi) the sale of the Disposal Group is generally probable of being completed within one year. Management performs an assessment at least quarterly or when events or changes in business circumstances indicate that a change in classification may be necessary.

 

Assets and liabilities held for sale are presented separately within the Condensed Consolidated Balance Sheets with any adjustments necessary to measure the Disposal Group at the lower of its carrying value or fair value less costs to sell. Depreciation of property and equipment are not recorded while these assets are classified as held for sale. For each period the Disposal Group remains classified as held for sale, its recoverability is reassessed and any necessary adjustments are made to its carrying value. 

 

The Company categorizes the assets and liabilities of a Disposal Group, or business component, as discontinued operations once management commits to a plan to sell, the business segment is available for immediate sale, management has initiated a plan to sell at a price that is reasonable in relation to its fair value, management anticipates the sale will occur within one year, and it is unlikely that significant changes will be made to the plan to sell. In addition, the business component must be comprised of operations and cash flows that are clearly distinguished from the rest of the entity. The results of discontinued operations are aggregated and presented separately in the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Operations.

 

 
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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2024

 

Share-Based Compensation

 

The Company’s share-based awards consist of restricted stock units (“RSUs”) and stock options granted to employees and non-employee directors.

 

RSUs are stock awards entitling the award recipient to a specified number of shares of the Company’s common stock as the award vests. Each RSU granted includes a service-based vesting condition, which is the only vesting condition related to the RSU grants. The Company calculates the fair value of RSUs on the grant date using the closing market price of the Company’s common stock on the grant date. The Company recognizes the grant date fair value of RSUs as share-based compensation expense ratably over the requisite service period, other than RSUs or portions of RSUs that vest on the grant date, in which case the grant date fair value of that RSU or portion of RSU is recognized as share-based compensation expense on the grant date. The Company recognizes forfeitures as they occur.

 

Stock options grant award recipients the option to purchase a specified number of shares of the Company’s common stock at an exercise price per share specified in the grant agreement as the stock options vest. Stock option grants include either a service-based vesting condition or performance-based vesting conditions with a specified contractual term. The Company calculates the fair value of stock options on the grant date using the Black-Scholes option-pricing model, which requires the Company to make estimates and assumptions, such as expected volatility, expected term, and risk-free interest rate. Service and performance conditions are not considered in determining the award’s fair value on the grant date. The Company recognizes share-based compensation expense related to stock option awards from the grant date through the vesting date. For service-based vesting stock option grants, the Company expenses the grant date fair value of the award ratably over the requisite service period. For performance-based vesting stock option grants, the Company expenses the grant date fair value of the award ratably from the grant date through the vesting date based on the probability and timing of achieving the performance conditions. The Company recognizes forfeitures and expirations as they occur.

 

The expense related to employee and non-employee director share-based awards is recorded in “Salaries and benefits” and “General and administrative,” respectively, in the Condensed Consolidated Statements of Operations.

 

 
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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2024

 

Recent Accounting Pronouncements

 

Management does not believe that any recently issued but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.

 

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, amending reportable segment disclosure requirements to include disclosure of incremental segment information on an annual and interim basis. Among the disclosure enhancements are new disclosures regarding significant segment expenses that are regularly provided to the chief operating decision-maker and included within each reported measure of segment profit or loss, as well as other segment items bridging segment revenue to each reported measure of segment profit or loss. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and for interim periods beginning January 1, 2025, and are applied retrospectively. Early adoption is permitted. We are currently evaluating the effect the updated standard will have on our consolidated financial statements and disclosures.

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures, amending income tax disclosure requirements for the effective tax rate reconciliation and income taxes paid. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024 and are applied prospectively. Early adoption and retrospective application of the amendments are permitted. We are currently evaluating the effect the updated standard will have on our consolidated financial statements and disclosures.

 

NOTE 3 – EARNINGS PER SHARE

 

Basic Earnings Per Share (“EPS”) is computed as net income (loss) available to common stockholders divided by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from common shares issuable through convertible preferred stock, stock options, RSUs, and warrants.

 

At June 30, 2024 and 2023, the potentially dilutive common stock equivalents not included in the calculation of diluted earnings per share as their effect would have been anti-dilutive were as follows:

 

 

 

June 30, 2024

 

 

June 30, 2023

 

Warrants

 

 

12,346,215

 

 

 

12,346,215

 

Stock options and RSU awards

 

 

3,945,000

 

 

 

-

 

Total possible dilution

 

 

16,291,215

 

 

 

12,346,215

 

 

 
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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2024

 

NOTE 4 – REVENUE RECOGNITION

 

Products consist of the following:

 

 

·

Antimony: includes antimony oxide, antimony metal, antimony trisulfide.

 

·

Zeolite: includes coarse and fine zeolite crushed in various sizes.

 

·

Precious metals: includes unrefined and refined gold and silver.

 

Sales of products for the three months ended June 30, 2024 and 2023 were as follows:

 

 

 

For the three months ended

 

 

 

June 30, 2024

 

 

June 30, 2023

 

Antimony product revenue

 

$1,814,778

 

 

$1,351,705

 

Zeolite product revenue

 

 

994,386

 

 

 

787,091

 

Precious metals product revenue

 

 

4,616

 

 

 

126,321

 

TOTAL REVENUES

 

$2,813,780

 

 

$2,265,117

 

 

Sales of products for the six months ended June 30, 2024 and 2023 were as follows:

 

 

 

For the six months ended

 

 

 

June 30, 2024

 

 

June 30, 2023

 

Antimony product revenue

 

$4,043,163

 

 

$2,964,344

 

Zeolite product revenue

 

 

1,597,391

 

 

 

1,269,184

 

Precious metals product revenue

 

 

4,616

 

 

 

242,433

 

TOTAL REVENUES

 

$5,645,170

 

 

$4,475,961

 

 

Domestic and foreign revenues for the three months ended June 30, 2024 and 2023 were as follows:

 

 

 

For the three months ended

 

 

 

June 30, 2024

 

 

June 30, 2023

 

Domestic revenues

 

$2,168,823

 

 

$1,814,987

 

Foreign revenues

 

 

644,957

 

 

 

450,130

 

TOTAL REVENUES

 

$2,813,780

 

 

$2,265,117

 

 

Domestic and foreign revenues for the six months ended June 30, 2024 and 2023 were as follows:

 

 

 

For the six months ended

 

 

 

June 30, 2024

 

 

June 30, 2023

 

Domestic revenues

 

$4,449,597

 

 

$3,584,434

 

Foreign revenues

 

 

1,195,573

 

 

 

891,527

 

TOTAL REVENUES

 

$5,645,170

 

 

$4,475,961

 

 

 
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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2024

 

The Company’s trade accounts receivable balance related to contracts with customers was $1,393,760 at June 30, 2024 and $625,256 at December 31, 2023, net of an allowance for doubtful accounts related to trade accounts receivables of $256,955 and $271,212 at June 30, 2024 and December 31, 2023, respectively. The Company’s products do not involve any warranty agreements and product returns are not typical.

 

NOTE 5– INVENTORIES

 

Inventories at June 30, 2024 and December 31, 2023 consisted primarily of finished antimony metal and antimony oxide products, antimony ore and concentrates, and finished zeolite products. Inventories are stated at the lower of first-in, first-out cost or estimated net realizable value. Finished antimony products and finished zeolite products costs primarily include direct materials, direct labor, overhead, depreciation, and freight. Inventories at June 30, 2024 and December 31, 2023 were as follows:

 

 

 

June 30, 2024

 

 

December 31, 2023

 

Antimony oxide inventory

 

$47,166

 

 

$252,927

 

Antimony metal inventory

 

 

12,361

 

 

 

237,429

 

Antimony ore and concentrates inventory

 

 

25,899

 

 

 

23,752

 

Total antimony inventory

 

 

85,426

 

 

 

514,108

 

Zeolite inventory

 

 

376,928

 

 

 

505,046

 

TOTAL INVENTORIES

 

$462,354

 

 

$1,019,154

 

 

At June 30, 2024 and December 31, 2023, inventories were valued at cost, except for the portion of inventory related to zeolite at June 30, 2024, which was valued at net realizable value because costs were greater than the amount the Company expected to receive on the sale of zeolite inventory. The adjustment to value inventory at net realizable value was $10,501 and $nil at June 30, 2024 and 2023, respectively.

 

Antimony oxide and metal inventory consisted of finished products held by the Company’s plant in Montana. Antimony ore and concentrates were held primarily at its plants in Montana and Mexico. The Company’s zeolite inventory consisted primarily of saleable zeolite material at the Company’s plant in Idaho.

 

 
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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2024

 

NOTE 6 – PROPERTIES, PLANTS AND EQUIPMENT

 

The major components of the Company’s properties, plants and equipment (“PP&E”) by segment at June 30, 2024 and December 31, 2023 were as follows:

 

June 30, 2024

 

Antimony Segment

 

 

Zeolite Segment

 

 

Precious Metals

 

 

 

 

 

 

USAC

 

 

Mexico

 

 

BRZ

 

 

Segment

 

 

TOTAL

 

Plant and equipment

 

$1,675,444

 

 

$79,001

 

 

$5,888,536

 

 

$234,174

 

 

$7,877,155

 

Buildings

 

 

243,248

 

 

 

11,970

 

 

 

1,705,893

 

 

 

-

 

 

 

1,961,111

 

Land and other

 

 

2,727,198

 

 

 

1,329,987

 

 

 

687,639

 

 

 

-

 

 

 

4,744,824

 

Construction in progress

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

PP&E, gross

 

$4,645,890

 

 

$1,420,958

 

 

$8,282,068

 

 

$234,174

 

 

$14,583,090

 

Accumulated depreciation

 

 

(2,689,707)

 

 

(243,072)

 

 

(3,666,464)

 

 

(185,253)

 

 

(6,784,496)

PP&E, net

 

$1,956,183

 

 

$1,177,886

 

 

$4,615,604

 

 

$48,921

 

 

$7,798,594

 

 

December 31, 2023

 

Antimony Segment

 

 

Zeolite Segment

 

 

Precious Metals

 

 

 

 

 

 

USAC

 

 

Mexico

 

 

BRZ

 

 

Segment

 

 

TOTAL

 

Plant and equipment

 

$1,675,444

 

 

$79,001

 

 

$5,336,808

 

 

$234,174

 

 

$7,325,427

 

Buildings

 

 

243,248

 

 

 

11,970

 

 

 

2,025,043

 

 

 

-

 

 

 

2,280,261

 

Land and other

 

 

2,727,198

 

 

 

1,329,987

 

 

 

687,639

 

 

 

-

 

 

 

4,744,824

 

Construction in progress

 

 

-

 

 

 

-

 

 

 

8,951

 

 

 

-

 

 

 

8,951

 

PP&E, gross

 

$4,645,890

 

 

$1,420,958

 

 

$8,058,441

 

 

$234,174

 

 

$14,359,463

 

Accumulated depreciation

 

 

(2,661,719)

 

 

(235,024)

 

 

(3,524,130)

 

 

(173,545)

 

 

(6,594,418)

PP&E, net

 

$1,984,171

 

 

$1,185,934

 

 

$4,534,311

 

 

$60,629

 

 

$7,765,045

 

 

NOTE 7 – LONG-TERM DEBT

 

Long-term debt at June 30, 2024 and December 31, 2023 was as follows:

 

 

 

June 30, 2024

 

 

December 31, 2023

 

Installment contract payable to Komatsu, bearing interest at 3.49%, payable in 36 monthly installments of $11,799 maturing May 2027; collateralized by the Komatsu Wheel Loader

 

$392,094

 

 

$-

 

Installment contract payable to Caterpillar Financial Services, bearing interest at 6.65%, payable in 24 monthly installments of $7,210 maturing April 28, 2024; collateralized by 2007 Caterpillar 740 articulated truck

 

 

-

 

 

 

28,443

 

Total debt

 

 

392,094

 

 

 

28,443

 

Less current portion of debt

 

 

(129,967)

 

 

(28,443)

Long term portion of debt

 

$262,127

 

 

$-

 

 

 
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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2024

 

At June 30, 2024, principal payments on debt were due as follows:

 

Twelve months ending June 30,

 

Principal Payment

 

2025

 

$129,967

 

2026

 

 

134,577

 

2027

 

 

127,550

 

 

 

$392,094

 

 

NOTE 8 – COMMITMENTS AND CONTINGENCIES

 

The Company follows U.S. GAAP guidance in determining its accruals and disclosures with respect to loss contingencies and evaluates such accruals and contingencies for each reporting period. Accordingly, 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 loss 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.

 

Historically, 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 June 30, 2024 and December 31, 2023, the Company had no accrued liabilities relating to such assessments. However, during the six months ended June 30, 2024, Bear River Zeolite Company (“BRZ”), a wholly owned subsidiary of the Company, received four significant and substantial citations from MSHA, all of which have been rectified by BRZ.

 

On a combined basis, BRZ pays royalties ranging from 8% to 13% on the sale of zeolite products. At June 30, 2024 and December 31, 2023, the Company had accrued royalties payable of $113,917 and $153,429, respectively.

 

NOTE 9 – STOCKHOLDERS’ EQUITY

 

On January 25, 2023, the holders of 1,692,672 shares of Series D Preferred stock converted the preferred shares and the Company issued 1,692,672 shares of common stock.  The Company also paid the holders $787,730 for cumulative dividends payable as declared on November 28, 2022. 1,590,672 shares of the 1,692,672 shares of Series D Preferred stock that were converted and $740,261 of the $787,730 of dividends paid related to the estate of John Lawrence, who was a prior President and Chairman of the Company.

 

On January 26, 2023, in conjunction with its share repurchase plan, the Company returned to treasury and cancelled 418,696 of its common shares which were repurchased prior to December 31, 2022 for $202,980.

 

 
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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2024

 

Share-based compensation

 

The Company had no equity awards outstanding during fiscal year 2023. During the six months ended June 30, 2024, stock option and RSU awards were granted in accordance with our 2023 Equity Incentive Plan, which was approved by the Company’s shareholders. The Company recognized $94,922 and $nil during the three months ended June 30, 2024 and 2023, respectively, and $300,847 and $nil during the six months ended June 30, 2024 and 2023, respectively, of share-based compensation expense arising from stock option and RSU grants as follows:

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Share-based compensation expense:

 

 

 

 

 

 

 

 

 

 

 

 

Stock options

 

$47,558

 

 

$-

 

 

$63,469

 

 

$-

 

RSUs

 

 

47,364

 

 

 

-

 

 

 

237,378

 

 

 

-

 

Total share-based compensation expense

 

$94,922

 

 

$-

 

 

$300,847

 

 

$-

 

 

Stock options:

 

Stock options granted have either a 3-year or 10-year contractual term and are subject to either service or performance-based vesting conditions. The following table shows the annual weighted-average assumptions used to value options granted during the six months ended June 30, 2024:

 

 

 

Six Months Ended

 

Grant-Date Weighted-Average Assumptions

 

June 30, 2024

 

Expected term (in years)

 

 

3.9

 

Risk-free interest rate

 

 

4.3%

Expected dividend yield

 

 

0.0%

Expected volatility

 

 

140.4%

Fair value per share of options granted

 

$0.17

 

 

Expected term – The expected term represents the period of time that options are expected to be outstanding. As the Company does not have sufficient historical exercise behavior, it uses the contractual term of the option for the expected term assumption.

 

Risk-free interest rate – The risk-free interest rate is based on the U.S. Treasury rate in effect at the time of the grant with an equivalent term approximating the expected term of the options.

 

Expected dividend yield—The Company bases the expected dividend yield assumption on the fact that it has never paid cash dividends and has no present intention to pay cash dividends.

 

Expected volatility – The expected volatility is based on the historical volatility of our stock price over the expected term of the stock option.

 

 
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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2024

 

Activity with respect to stock options is summarized as follows:

 

 

 

 

 

 

 

 

 

Weighted-Average

 

 

 

 

 

 

 

 

 

Weighted-

 

 

Remaining

 

 

Aggregate

 

 

 

 

 

 

Average

 

 

Contractual

 

 

Intrinsic

 

 

 

Shares

 

 

Exercise Price

 

 

Term (in years)

 

 

Value

 

Options outstanding, December 31, 2023

 

 

-

 

 

 

n/a

 

 

 

n/a

 

 

 

n/a

 

Granted

 

 

3,900,000

 

 

$0.22

 

 

 

n/a

 

 

 

n/a

 

Exercised

 

 

-

 

 

 

n/a

 

 

 

n/a

 

 

 

n/a

 

Forfeited

 

 

-

 

 

 

n/a

 

 

 

n/a

 

 

 

n/a

 

Expired

 

 

-

 

 

 

n/a

 

 

 

n/a

 

 

 

n/a

 

Options outstanding, June 30, 2024

 

 

3,900,000

 

 

$0.22

 

 

 

3.6

 

 

$450,000

 

Nonvested options, June 30, 2024

 

 

3,900,000

 

 

$0.22

 

 

 

3.6

 

 

$450,000

 

Vested and exercisable options, June 30, 2024

 

 

-

 

 

 

n/a

 

 

 

n/a

 

 

 

n/a

 

 

At June 30, 2024, total unrecognized share-based compensation expense related to stock options was $606,531, which is expected to be recognized over a weighted-average remaining period of 4.0 years.

 

Restricted stock units:

 

Activity with respect to RSUs is summarized as follows:

 

 

 

 

 

Weighted-Average

 

 

 

 

 

 

Grant-Date

 

 

 

Shares

 

 

Fair Value

 

Nonvested shares at December 31, 2023

 

 

-

 

 

 

n/a

 

Granted

 

 

2,670,000

 

 

$0.22

 

Vested

 

 

(791,667)

 

$0.22

 

Forfeited

 

 

-

 

 

 

n/a

 

Nonvested shares at June 30, 2024

 

 

1,878,333

 

 

$0.23

 

 

At June 30, 2024, total unrecognized share-based compensation expense related to RSUs was $363,172, which is expected to be recognized over a weighted-average remaining period of 1.9 years.

 

 
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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2024

 

Common stock warrants

 

No warrants were issued, expired, or exercised during the six months ended June 30, 2024 and 2023.

 

The composition of the Company’s warrants outstanding at June 30, 2024 and 2023 was as follows:

 

Number of warrants

 

 

Exercise Price

 

 

Expiration Date

 

Remaining life (years)

 

 

2,285,715

 

 

$

0.46

 

 

7/31/2025

 

 

1.08

 

 

804,000

 

 

$

0.46

 

 

1/27/2026

 

 

1.58

 

 

7,650,000

 

 

$

0.85

 

 

8/3/2026

 

 

2.09

 

 

1,606,500

 

 

$

0.85

 

 

2/1/2026

 

 

1.59

 

 

12,346,215

 

 

 

 

 

 

 

 

 

 

 

 

NOTE 10 – BUSINESS SEGMENTS

 

The Company is organized and managed with four business segments, which represent our operating units: United States antimony operations, Mexico antimony operations, precious metals recovery and United States zeolite operations. See Note 11 for the Mexico discontinued operations that are excluded from business segments.

 

Total assets by segment at June 30, 2024 and December 31, 2023 were as follows: 

 

Total Assets, Excluding Discontinued Operations

 

June 30, 2024

 

 

December 31, 2023

 

Antimony segment:

 

 

 

 

 

 

United States total assets

 

$15,568,968

 

 

$14,769,408

 

Mexico total assets

 

 

1,259,154

 

 

 

1,211,319

 

Subtotal antimony segment

 

$16,828,122

 

 

$15,980,727

 

Precious metals segment:

 

 

 

 

 

 

 

 

United States total assets

 

$48,921

 

 

$92,718

 

Mexico total assets

 

 

-

 

 

 

-

 

Subtotal precious metals segment

 

$48,921

 

 

$92,718

 

Zeolite segment

 

 

5,557,818

 

 

 

5,474,010

 

Total assets, excluding discontinued operations

 

$22,434,861

 

 

$21,547,455

 

 

 
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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2024

 

Total capital expenditures by segment for the three and six months ended June 30, 2024 and 2023 were as follows: 

 

Capital expenditures, Excluding Discontinued Operations

 

For the three months ended

 

 

For the six months ended

 

 

 

June 30, 2024

 

 

June 30, 2023

 

 

June 30, 2024

 

 

June 30, 2023

 

Antimony segment:

 

 

 

 

 

 

 

 

 

 

 

 

United States capital expenditures

 

$-

 

 

$58,299

 

 

$-

 

 

$61,849

 

Mexico capital expenditures

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Subtotal antimony segment

 

$-

 

 

$58,299

 

 

$-

 

 

$61,849

 

Precious metals segment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Zeolite segment

 

 

98,008

 

 

 

636,033

 

 

 

150,721

 

 

$1,133,685

 

Total capital expenditures, excluding discontinued operations

 

$98,008

 

 

$694,332

 

 

$150,721

 

 

$1,195,534

 

 

The zeolite segment’s capital expenditures for the three and six months ended June 30, 2024 excludes $402,722 related to a wheel loader purchased with a note payable.

 

Selected segment operational information for the three and six months ended June 30, 2024 and 2023 were as follows:

 

Segment Operations, Excluding Discontinued Operations

 

Antimony

 

 

Antimony

 

 

Total

 

 

Precious

 

 

 

 

 

 

 

For the three months ended June 30, 2024

 

USA

 

 

Mexico

 

 

Antimony

 

 

Metals

 

 

Zeolite

 

 

Total

 

Total revenues

 

$1,814,778

 

 

$0

 

 

$1,814,778

 

 

$4,616

 

 

$994,386

 

 

$2,813,780

 

Depreciation and amortization

 

 

14,047

 

 

 

4,024

 

 

 

18,071

 

 

 

5,855

 

 

 

90,560

 

 

 

114,486

 

Income (loss) from operations

 

$(37,909)

 

$(26,196)

 

$(64,105)

 

$(1,239)

 

$(148,260)

 

$(213,604)

Other income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

157,900

 

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

Loss from continuing operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$(55,704)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Operations, Excluding Discontinued Operations

 

Antimony

 

 

Antimony

 

 

Total

 

 

Precious

 

 

 

 

 

 

 

 

 

For the three months ended June 30, 2023

 

USA

 

 

Mexico

 

 

Antimony

 

 

Metals

 

 

Zeolite

 

 

Total

 

Total revenues

 

$1,351,705

 

 

$0

 

 

$1,351,705

 

 

$126,321

 

 

$787,091

 

 

$2,265,117

 

Depreciation and amortization

 

 

10,361

 

 

 

4,015

 

 

 

14,376

 

 

 

5,855

 

 

 

64,895

 

 

 

85,126

 

Income (loss) from operations

 

$(317,513)

 

$(24,140)

 

$(341,653)

 

$120,466

 

 

$23,852

 

 

$(197,335)

Other income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

174,303

 

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

Loss from continuing operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$(23,032)

 

 
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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2024

 

Segment Operations, Excluding Discontinued Operations

 

Antimony

 

 

Antimony

 

 

Total

 

 

Precious

 

 

 

 

 

 

 

For the six months ended June 30, 2024

 

USA

 

 

Mexico

 

 

Antimony

 

 

Metals

 

 

Zeolite

 

 

Total

 

Total revenues

 

$4,043,163

 

 

$-

 

 

$4,043,163

 

 

$4,616

 

 

$1,597,391

 

 

$5,645,170

 

Depreciation and amortization

 

 

27,988

 

 

 

8,048

 

 

 

36,036

 

 

 

11,709

 

 

 

172,888

 

 

 

220,633

 

Income (loss) from operations

 

$356,897

 

 

$(52,393)

 

$304,504

 

 

$(7,093)

 

$(579,761)

 

$(282,350)

Other income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$312,747

 

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

Income from continuing operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$30,397

 

 

Segment Operations, Excluding Discontinued Operations

 

Antimony

 

 

Antimony

 

 

Total

 

 

Precious

 

 

 

 

 

For the six months ended June 30, 2023

 

USA

 

 

Mexico

 

 

Antimony

 

 

Metals

 

 

Zeolite

 

 

Total

 

Total revenues

 

$2,964,344

 

 

$-

 

 

$2,964,344

 

 

$242,433

 

 

$1,269,184

 

 

$4,475,961

 

Depreciation and amortization

 

 

18,641

 

 

 

8,039

 

 

 

26,680

 

 

 

11,709

 

 

 

116,069

 

 

 

154,458

 

Income (loss) from operations

 

$(255,441)

 

$(51,989)

 

$(307,430)

 

$230,724

 

 

$(40,753)

 

$(117,459)

Other income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

387,808

 

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

Income from continuing operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$270,349

 

 

NOTE 11 – DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE

 

As described in Note 1, on March 11, 2024, the Company shut down the operations of USAMSA, which was part of the antimony segment, and announced its plans to sell its USAMSA subsidiary over the next year. The accounting requirements for reporting USAMSA as a discontinued operation were met in the first quarter of 2024. Accordingly, our Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations, and Condensed Consolidated Statements of Cash Flows report discontinued operations separate from continuing operations for all periods presented. Our Condensed Consolidated Statements of Equity combine the results of continuing and discontinued operations. In addition, the Notes to Condensed Consolidated Financial Statements exclude discontinued operation for all periods presented.

 

Also as described in Note 1, in May 2024, the Company made the decision to sell the personal residence it owns in Idaho that was previously used for management located near its BRZ operation (“BRZ Home”), which is part of the zeolite segment. The Company also signed an agreement with a realtor in May 2024 to assist with the sale of its BRZ Home. An active search for a buyer began after signing the agreement with the realtor and the Company expects the BRZ Home to be sold sometime over the next year. This sale of the BRZ Home did not meet the accounting requirements to report the BRZ Home as a discontinued operation but did meet the criteria to be reported as an asset held for sale in the second quarter of 2024. Accordingly, our Condensed Consolidated Balance Sheets report the $297,873 net book value of the BRZ Home in “Noncurrent assets held for sale” at June 30, 2024, while the prior period in our Condensed Consolidated Balance Sheets does not reflect this reclassification of the BRZ Home to “Noncurrent assets held for sale” at December 31, 2023. There were no other significant assets or liabilities related to the BRZ Home at June 30, 2024. In addition, the BRZ Home continues to be reported with continuing operation in our Condensed Consolidated Statements of Operations, Condensed Consolidated Statements of Cash Flows, and Condensed Consolidated Statements of Equity. However, there were no significant amounts in the Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows related to the BRZ Home. Also, no gain or loss has been recorded related to the BRZ Home since the decision was made to sell it.

 

 
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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2024

 

The key components of the income (loss) from discontinued operations for the three and six months ended June 30, 2024 and 2023 were as follows:

 

 

 

For the three months ended

 

 

For the six months ended

 

 

 

June 30, 2024

 

 

June 30, 2023

 

 

June 30, 2024

 

 

June 30, 2023

 

REVENUES

 

$849,197

 

 

$238,456

 

 

$1,089,874

 

 

$238,456

 

COST OF REVENUES

 

 

507,615

 

 

 

329,119

 

 

 

981,711

 

 

 

1,259,381

 

GROSS PROFIT (LOSS)

 

 

341,582

 

 

 

(90,663)

 

 

108,163

 

 

 

(1,020,925)

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

25,508

 

 

 

23,946

 

 

 

70,400

 

 

 

38,269

 

Professional fees

 

 

19,179

 

 

 

62,142

 

 

 

54,330

 

 

 

100,944

 

Other operating expenses

 

 

27,283

 

 

 

136,003

 

 

 

115,529

 

 

 

244,348

 

TOTAL OPERATING EXPENSES

 

 

71,970

 

 

 

222,091

 

 

 

240,259

 

 

 

383,561

 

INCOME (LOSS) FROM OPERATIONS

 

 

269,612

 

 

 

(312,754)

 

 

(132,096)

 

 

(1,404,486)

OTHER EXPENSE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other miscellaneous expense

 

 

(11,116)

 

 

(679)

 

 

(18,277)

 

 

(9,312)

TOTAL OTHER EXPENSE

 

 

(11,116)

 

 

(679)

 

 

(18,277)

 

 

(9,312)

INCOME (LOSS) FROM DISCONTINUED OPERATIONS, BEFORE TAX

 

 

258,496

 

 

 

(313,433)

 

 

(150,373)

 

 

(1,413,798)

Income tax expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX

 

$258,496

 

 

$(313,433)

 

$(150,373)

 

$(1,413,798)

 

Depreciation and amortization expense of USAMSA totaled $nil for the three and six months ended June 30, 2024, and $155,974 and $310,883 for the three and six months ended June 30, 2023, respectively.

 

 
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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2024

 

Capital expenditures of USAMSA were $nil for the three and six months ended June 30, 2024, and $38,754 and $152,322 for the three and six months ended June 30, 2023, respectively.

 

The carrying amounts of major classes of assets and liabilities of USAMSA and BRZ Home included in assets and liabilities of discontinued operations were as follows:

 

 

 

June 30, 2024

 

 

 

USAMSA

 

 

BRZ Home

 

 

Total

 

ASSETS

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

 

 

Accounts receivable

 

$45,936

 

 

$-

 

 

$45,936

 

Inventories, net

 

 

-

 

 

 

-

 

 

 

-

 

Prepaid expenses

 

 

4,862

 

 

 

-

 

 

$4,862

 

Total current assets, discontinued operations

 

 

50,798

 

 

 

-

 

 

 

50,798

 

Properties, plants and equipment, net

 

 

5,689,446

 

 

 

297,873

 

 

 

5,987,319

 

IVA receivable and other assets, net

 

 

456,262

 

 

 

-

 

 

 

456,262

 

Total assets, discontinued operations

 

 

6,196,506

 

 

 

297,873

 

 

 

6,494,379

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$130,807

 

 

$-

 

 

$130,807

 

Accrued liabilities

 

 

15,123

 

 

 

-

 

 

 

15,123

 

Total current liabilities, discontinued operations

 

 

145,930

 

 

 

-

 

 

 

145,930

 

Asset retirement obligations

 

 

536,466

 

 

 

-

 

 

 

536,466

 

Total liabilities, discontinued operations

 

$682,396

 

 

$-

 

 

$682,396

 

 

 

 

December 31, 2023

 

 

 

USAMSA

 

 

BRZ Home

 

 

Total

 

ASSETS

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

 

 

Inventories, net

 

$366,955

 

 

$-

 

 

$366,955

 

Total current assets, discontinued operations

 

 

366,955

 

 

 

-

 

 

 

366,955

 

Properties, plants and equipment, net

 

 

5,689,446

 

 

 

-

 

 

 

5,689,446

 

IVA receivable and other assets, net

 

 

491,139

 

 

 

-

 

 

 

491,139

 

Total assets, discontinued operations

 

$6,547,540

 

 

$-

 

 

$6,547,540

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$126,788

 

 

$-

 

 

$126,788

 

Accrued liabilities

 

 

24,500

 

 

 

-

 

 

 

24,500

 

Total current liabilities, discontinued operations

 

 

151,288

 

 

 

-

 

 

 

151,288

 

Asset retirement obligations

 

 

536,466

 

 

 

-

 

 

 

536,466

 

Total liabilities, discontinued operations

 

$687,754

 

 

$-

 

 

$687,754

 

 

 
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UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2024

 

Mexico 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. The assessment was settled in 2018 with no assessment due from the Company.

 

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 $795,000 USD as of December 31, 2021.

 

Management reviewed the 2019 assessment notice from SAT and, similar to the earlier assessment, believes the findings have no merit. 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. In August 2020, the Company filed a lawsuit against SAT for resolution of the process and, in December 2020, filed closing arguments.  In 2022, the Mexican court ruled against the Company in the above matter. The Company subsequently appealed the ruling.

 

As of December 31, 2023, the updated SAT assessment was approximately $22.4 million pesos, or approximately $1,320,000 USD, which includes $352,000 of unpaid income taxes and $968,000 of interest and penalties. Management, along with its legal counsel, assessed the possible outcomes for this tax audit and believes, based on discussions with its attorneys located 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, 2023 or December 31, 2022 relating to this potential tax liability.

 

In March 2024, Mexico’s appellate court ruled in favor of the Company with no assessment due related to this audit of USAMSA’s 2013 income tax return by SAT and instructed the lower court to issue a new ruling. In May 2024, Mexico’s lower court issued a final ruling on this matter in favor of the Company releasing any requirement for a guarantee on this matter from the Company but left open the possibility for the SAT to re-open their audit. These rulings support the Company’s position on this tax matter and had no impact on the Company’s financial statements at June 30, 2024.

 

Mexico Value Added Tax

 

USAMSA records a receivable for the Value Added Tax (“VAT” or “IVA”) it pays on certain goods and services representing amounts to be reimbursed from the Mexican government. This receivable balance of $1,053,966 and $1,122,628 at June 30, 2024 and December 31, 2023, respectively, is recorded in “IVA receivable and other assets, net” in USAMSA’s assets held for sale in discontinued operations net of a reserve of $653,749 and $687,534 at June 30, 2024 and December 31, 2023, respectively.

 

 
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION.

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

Readers should note that, in addition to the historical information contained herein, this Quarterly Report and the exhibits attached hereto contain “forward-looking statements” within the meaning of, and intended to be covered by, the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based upon current expectations and beliefs concerning future developments and their potential effects on the Company including matters related to the Company's operations, pending contracts and future revenues, financial performance, profitability, ability to execute on its increased production and installation schedules for planned capital expenditures, and the size of forecasted deposits. Although the Company believes that the expectations reflected in the forward-looking statements and the assumptions upon which they are based are reasonable, it can give no assurance that such expectations and assumptions will prove to have been correct. The reader is cautioned not to put undue reliance on these forward-looking statements, as these statements are subject to numerous factors and uncertainties. In addition, other factors that could cause actual results to differ materially are described in the Company's most recent filings, including Form 10-K, Form 10-Q, and Form 8-K with the Securities and Exchange Commission.

 

Any statement that expresses or involves discussions or descriptions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance, often, but not always using words or phrases such as “believes”, “expects” or “does not expect”, “is expected”, “outlook”, “anticipates” or “does not anticipate”, “plans”, “estimates”, “forecast”, “project”, “pro forma”, or “intends”, or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken, occur or be achieved, are not statements of historical fact and may be forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak or describe only as of the date they are made and are subject to assumptions and uncertainties. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation, risks related to:

 

 

·

The Company’s properties being in the exploration stage;

 

·

Macroeconomic factors;

 

·

Continued operational losses;

 

·

The mineral operations being subject to government regulation;

 

·

The Company’s ability to obtain additional capital to develop the Company’s resources, if any;

 

·

Concentration of customers;

 

·

Increase in energy costs;

 

·

Mineral exploration and development activities;

 

·

Mineral estimates;

 

·

The Company’s insurance coverage for operating risks;

 

·

The fluctuation of prices for antimony and precious metals, such as gold and silver;

 

·

The competitive industry of mineral exploration;

 

·

The title and rights in the Company’s mineral properties;

 

·

Environmental hazards;

 

·

The possible dilution of the Company’s common stock from additional financing activities;

 

·

Metallurgical and other processing problems;

 

·

Unexpected geological formations;

 

·

Global economic and political conditions;

 

·

Staffing in remote locations;

 

·

Changes in product costing;

 

·

Inflation on operational costs and profitability;

 

·

Competitive technology positions and operating interruptions (including, but not limited to, labor disputes, leaks, fires, flooding, landslides, power outages, explosions, unscheduled downtime, transportation interruptions, war and terrorist activities);

 

·

Global pandemics or civil unrest;

 

·

Mexican labor and cartel issues regarding safety and organized control over our properties;

 

·

The positions and associated outcomes of Mexican and other taxing authorities;

 

·

Cybersecurity and business disruptions;

 

·

Potential conflicts of interest with the Company’s management;

 

·

Not realizing the value of its USAMSA assets in Mexico or personal residence in Idaho upon sale or disposal; and,

 

·

The Company’s common stock.

 

 
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Table of Contents

 

This list is not exhaustive of the factors that may affect the Company’s forward-looking statements. Some of the important risks and uncertainties that could affect forward-looking statements are described further under the sections titled “Risk Factors”, “Description of Business” and “Management’s Discussion and Analysis and Plan of Operation” of this Quarterly Report and in the Company’s filings, including Form 10-K, Form 10-Q, and Form 8-K, with the Securities and Exchange Commission. If one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, believed, estimated or expected. The Company cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. United States Antimony Corporation disclaims any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events, except as required by law. The Company advises readers to carefully review the reports and documents filed from time to time with the Securities and Exchange Commission (the “SEC”), particularly the Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

 

You should read this report with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect and from our historical results.

 

This report contains estimates, projections and other information concerning our industry, our business and the markets for our products. We obtained the industry, market and similar data set forth in this report from our own internal estimates and research and from industry research, publications, surveys and studies conducted by third parties, including governmental agencies. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties, and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. While we believe that the data we use from third parties is reliable, we have not separately verified this data. You are cautioned not to give undue weight to any such information, projections and estimates.

 

As used in this Quarterly Report, the terms “we,” “us,” “our,” “United State Antimony Corporation,”, “US Antimony,” “USAC,” and the “Company”, mean United States Antimony Corporation, unless otherwise indicated. All dollar amounts in this Quarterly Report are expressed in U.S. dollars, unless otherwise indicated.

 

Management’s Discussion and Analysis is intended to be read in conjunction with the Company’s consolidated financial statements and the integral notes (“Notes”) thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ending December 31, 2023. The following statements may be forward-looking in nature and actual results may differ materially.

 

 
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Table of Contents

 

DESCRIPTION OF BUSINESS

 

History

 

United States Antimony Corporation was incorporated in Montana in January 1970 to mine and produce antimony products. In December 1983, the Company suspended its antimony mining operations in the U.S. but continued to produce antimony products using foreign sources of antimony ore. In April 1998, the Company formed US Antimony de Mexico, S.A. de C.V. (“USAMSA”) to smelt antimony in Mexico, and, in August 2005, the Company formed Antimonio de Mexico, S.A. de C.V. (“ADM”) to explore and develop antimony and precious metal deposits in Mexico. The Company formed Bear River Zeolite Company (“BRZ”) in 2000 for the purpose of mining and producing zeolite in Idaho. Our principal business is the production and sale of antimony, precious metals, and zeolite products. In May 2012, our shares of common stock started trading on the NYSE MKT (now NYSE AMERICAN) under the symbol UAMY.

 

On March 11, 2024, the Company shut down the operations of USAMSA and announced its plans to sell its USAMSA subsidiary. See Note 1 and Note 11 of the Notes to Condensed Consolidated Financial Statements in this Quarterly Report for further information. The accounting requirements for reporting USAMSA as a discontinued operation were met in the first quarter of 2024. Accordingly, the condensed consolidated financial statements, Notes to Condensed Consolidated Financial Statements, and Management’s Discussion & Analysis and Plan of Operation reflect the results of USAMSA as a discontinued operation and are excluded from continuing operations and segment results for all periods presented.

 

In May 2024, the Company made the decision to sell the personal residence it owns in Idaho that was previously used for management located near its BRZ operation (“BRZ Home”). The Company also signed an agreement with a realtor in May 2024 to assist with the sale of its BRZ Home. An active search for a buyer began after signing the agreement with the realtor and the Company expects the home to be sold sometime over the next year. See Note 1 and Note 11 of the Notes to Condensed Consolidated Financial Statements in this Quarterly Report for further information.

 

Although we extract minerals from the Bear River Zeolite property in Idaho that we later process and sell, we have not yet prepared a technical report summary for the Bear River Zeolite property making a determination on the property’s mineral resources or mineral reserves. However, the Company has completed test hole drilling and is in the process of preparing a technical reserve report for the Bear River Zeolite property. We strive to achieve excellence in mine safety and health performance and work with government agencies to ensure compliance with environmental regulations and health and safety standards.

 

The Company is organized and managed by the following four segments, which represent our operating units: United States antimony segment, Mexico antimony segment, zeolite segment, and precious metals segment. See Note 11 of the Notes to Condensed Consolidated Financial Statements in this Quarterly Report for the Mexico discontinued operations that are excluded from continuing operations and segment results for all periods presented.

 

United States Antimony Segment

 

Our United States antimony segment consists of an antimony plant in the Burns Mining District of Sanders County in Montana, which primarily produces antimony oxide, antimony metal, antimony trisulfide, and precious metals. Antimony oxide is a fine, white powder. Our antimony oxide is used in conjunction with a halogen to form a synergistic flame-retardant system for plastics, rubber, fiberglass, textile goods, paints, coatings, and paper. Our antimony oxide is also used as a color fastener in paint and as a phosphorescent agent in fluorescent light bulbs. Our antimony metal is used in bearings, storage batteries and ordnance. Our antimony trisulfide is used as a primer in ammunition. The precious metals processed at this plant in Montana are included in our precious metals segment.

 

We closed our antimony mine and mill in Montana in December 1983 because antimony ore could be purchased more economically from foreign sources. Our mine and mill are less than one mile from our current antimony smelter plant in Montana. We hold one patented claim at the mine.

 

 
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As a result of the mine and mill closure, we have relied on sources outside the U.S. for antimony ore since 1983, and there are risks of interruption in procurement from these sources and volatile changes in world market prices for these materials that are not controllable by us. We anticipate continuing to receive antimony ore primarily from a supplier in Canada but will also continue to research other domestic and non-domestic sources for antimony ore that are economically profitable. The acquisition of antimony ore is technically complex and a function of the country’s laws and regulations. Our purchasing consequently requires flexibility regarding supply agreements and is tailored accordingly to specific suppliers.

 

We estimate (but have not independently confirmed) that our present share of the domestic and international markets for antimony oxide products is approximately 4% and less than 1%, respectively. We are the only significant U.S. producer of antimony products. We believe we are competitive both domestically and world-wide due to the following:

 

 

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We are the only U.S. domestic producer of antimony products.

 

 

 

 

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We can ship on short notice to domestic customers.

 

 

 

 

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We have a reputation for quality products delivered on a timely basis.

 

 

 

 

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We have the only operating, permitted antimony smelter located in the U.S.

 

Mexico Antimony Segment

 

The Company has two subsidiaries in Mexico, USAMSA and ADM. On March 11, 2024, we shut down the operational activities of USAMSA, which primarily includes the following two antimony and precious metals processing plants in Mexico: (1) the Madero smelter in Coahuila, and (2) the Puerto Blanco flotation mill, oxide circuit, and cyanide leach circuit in Guanajuato. The Company intends to sell its USAMSA subsidiary over the next year and has initiated an active search for buyers of its operations and/or assets.

 

We will maintain our existing Los Juarez mining claims and concessions in Cadereyta de Montes Queretaro, Mexico, which are included in our ADM subsidiary. There are presently no active operations at Los Juarez.

 

Zeolite Segment

 

Our zeolite segment consists of a mine and processing plant in Preston, Idaho, Bear River Zeolite, Inc. (“BRZ”), which produces zeolite. Our zeolite is used for various purposes including soil amendment and fertilizer, water filtration, sewage treatment, nuclear waste and other environmental cleanup, odor control, gas separation, animal nutrition, and other miscellaneous applications.

 

BRZ has a lease with Zeolite, LLC that entitles BRZ to surface mine and process zeolite on property in Preston, Idaho, in exchange for a royalty payment. The annual royalty payment is the greater of: (1) the minimum annual royalty of $60,000, adjusted annually for the Consumer Price Index for all Urban Consumers, or (2) $11.00 per ton for the first ten thousand tons, $9.90 per ton for tons in excess of ten thousand up to twenty thousand, and $8.80 per ton for tons in excess of twenty thousand. This Zeolite LLC lease also requires BRZ to pay $10,000 to the lessor on March 1 of each year during the term of the lease, which ends March 1, 2025. BRZ also pays two other royalties on the sale of zeolite products. On a combined basis, BRZ pays royalties ranging from 8% to 13% on the sale of zeolite products. In addition, BRZ can surface mine and process zeolite on property owned by the U.S. Bureau of Land Management that is adjacent to the Company’s Preston, Idaho property after obtaining required permits.

 

 
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“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 cation exchange capacity (CEC) of approximately 180-220 meq/100 gr. (which predicts plant nutrient availability and retention in soil), its hardness and high clinoptilolite content (which is an effective barrier to prevent problematic radionuclide movement), its absence of clay minerals, and its low sodium content. Our zeolite is used in:

 

 

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Soil Amendment and Fertilizer. Zeolite has been successfully used to fertilize golf courses, sports fields, parks and common areas, and high value agricultural crops.

 

 

 

 

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Water Filtration. Zeolite is used for particulate, heavy metal and ammonium removal in swimming pools, municipal water systems, industrial water discharge streams, fisheries, fish farms, and aquariums.

 

 

 

 

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Sewage Treatment. Zeolite is used in sewage treatment plants to remove nitrogen and as a carrier for microorganisms.

 

 

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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.