Item 2. Management’s Discussion and Analysis
ITEM 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition, continued:
Company-Wide
For the second quarter of 2021, we recognized net income of $337,141 on sales of $2,275,562 and other income of $569,331, after depreciation and amortization of $219,944. We reported a net loss of $274,283 in the second quarter of 2020 on sales of $1,585,191, after depreciation and amortization of $223,367.
For the first six months of 2021, we recognized net income of $1,653 on sales of $3,528,849 and other income of $575,569, after depreciation and amortization of $442,408. We reported a net loss of $583,165 for the first six months of 2020 on sales of $3,328,182, after depreciation and amortization of $449,648.
For the three and six months ended June 30, 2021, EBITDA was a positive $557,085 and $444,061 compared to a negative $50,916 and $133,517 for the same periods in 2020.
Non-cash items included in net income was a net gain of $299,568 and a net gain of $442,208 for the three and six months ended June 30, 2021.
Non-cash expense items totaled $258,707 and $223,367 for the three and six months ended June 30, 2020.
For the three and six months ended June 30, 2021, general and administrative expenses were $290,111 and $460,161 compared to $117,959 and $319,922 for the same periods of 2020.
Antimony
For the three and six month periods ended June 30, 2021, we sold 339,117 and 521,086 of antimony compared to 233,698 and 529,151 pounds for the three and six month periods ended June 30, 2020. The raw material received from our North American supplier increased by approximately 117,053 and 174,118 for the three and six month periods ended June 30, 2021, compared to the same periods for 2020. We had a decrease in raw material from Mexico of approximately 63,002 for the three month period and an increase of 34,975 for the six month period ended June 30, 2021, compared to the same periods for 2020.
The average sales price of antimony during the three an six month periods ended June 30, 2021 was $4.21 and $4.00 per pound compared to $3.90 and $3.84 during the same periods in 2020.
Precious Metals
The caustic leach of flotation concentrates from Los Juarez has been successful. The Company is delaying the processing of the ore from Los Juarez pending its survey. The impact of Covid-19 has forced a delay in the geological, geophysical, and geochemical study of the Los Juarez property, however the Company has sent data to a junior mining company with expertise in exploration. The Company is awaiting their review of this material as a potential exists for a partnership wherein another company would conduct the geological evaluation of the Los Juarez property.
For the three and six month periods ended June 30, 2021, income for precious metals from North American sources was $130,195 and $206,428 compared to $61,992 and $124,198 for the same periods of 2020.
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Current and prior periods’ revenue from precious metals is as follows:
Precious Metal Sales
Silver/Gold
For the three months ended June 30,
For the six months ended June 30,
Montana
2021
2020
2021
2020
Ounces Gold Shipped (Au)
14.14
9.80
21.52
24.71
Ounces Silver Shipped (Ag)
6,220.79
3,983.46
9,607.98
9,031.12
Total Revenues
$ 130,195
$ 61,992
$ 206,428
$ 124,198
Bear River Zeolite (BRZ)
For the three and six month periods ended June 30, 2021, BRZ sold 3,305 and 5,778 tons of zeolite compared to 3,045 and 5,854 tons in the same periods of 2020.
For the three and six month periods ended June 30, 2021, BRZ realized net income of $140,746 and $207,231 after depreciation of $38,826 and $80,843 compared to a net income of $113,038 and $248,176 after depreciation of $49,189 and $98,379 for the same period of 2020.
The Company has halted sales of low-volume product as its associated packaging and shipping costs did not justify them. It is concentrating on larger-volume sales and has received many orders recently from new clients. With the addition of improved management, the addition of an excellent sales person, the installation of a new hammermill, the addition of an on-site manager and an on-demand mechanic for its rolling stock, improvement in its crushing and sorting circuits, and the improvement in its dust-collection systems, the Company anticipates substantial growth in zeolite sales.
BRZ realized an EBITDA for the three and six month periods ended June 30, 2021 of $179,572 and $288,074 compared to $162,227 and $346,555 for the same periods in 2020.
Financial Position
Financial Condition and Liquidity
June 30,
2021
December 31,
2020
Current assets
$ 23,576,661
$ 1,808,161
Current liabilities
(1,942,297 )
(4,477,543 )
Net Working Capital
$ 21,634,364
$ (2,669,382 )
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For the Three Months Ended
June 30, 2021
June 30, 2020
Cash provided (used) by operations
$ (2,236,609 )
$ (279,322 )
Cash provided by collection of note receivable
Cash provided (used) by investing:
Cash used for capital outlay
(115,127 )
(200,166 )
Proceeds from redemption of certificates of deposit
210,184
-
Cash provided (used) by financing:
Payments on notes payable to bank
(100,000 )
(31,135 )
Payments on Hillgrove advances payable
(1,020,799 )
-
Proceeds from common stock issued, net
23,342,180
-
Proceeds from exercise of warrants
1,790,703
-
Principal paid on long-term debt
(27,926 )
(21,238 )
Payments on advances from related party
(56,416 )
(46,160 )
Proceeds from note payable-SBA
-
443,400
Change in checks issued and payable
(86,685 )
142,530
Net change in cash, cash equivalents and restricted cash
$ 21,699,505
$ 7,909
Our net working capital increased by $24,303,746 from December 31, 2020 to June 30, 2021. Our cash and cash equivalents increased by $21,699,505 during the same period. We spent $115,127 for capital items, our debt decreased by $1,672,347 including $1,020,799 paid to Hillgrove, and our accrued liabilities decreased by $1,943,665 including $1,120,730 paid to eliminate our export tax assessment payable. During the first six months of 2021, we raised approximately $23.3 million from sale of shares of common stock and approximately $1.8 million for the exercise of warrants.
We have estimated commitments and improvements of less than $100,000 to finish building and installing the precious metals leach circuits. However, this funding will be implemented after its geological study of the Los Juarez property. The Company plans to conduct a proper study of the Los Juarez property and its tailings at its flotation plant and pending the results of these studies decide how to proceed regarding a drill program and/or mining of the property. The study may involve a partnership with a junior mining Company in order to assist US Antimony in the proper characterization of the deposit. Should the deposit be of great value, the Company will likely move the flotation plant closer to the mine. We believe that with our current cash balance, along with the future cash flow from operations and operating agreements, we have adequate liquid assets to meet these commitments and service our debt for the next twelve months.
At June 30, 2021, the Company’s consolidated financial statements show working capital of approximately $21.6 million and an accumulated deficit of approximately $32.7 million. The Company continues to search for areas to reduce production costs, and expects improvement in cash flow for the remainder of the year from the sale of antimony and zeolite along with the increased price of antimony as the price of antimony has been increasing during the past 6 months.
In the first half of 2021, the Company raised net proceeds of approximately $23.3 million from sale of shares of its common stock and approximately $1.8 million from the exercise of stock purchase warrants. These funds have been and will continue to be used for general corporate purposes, working capital, hiring of additional labor, leverage for reducing legacy contracts, a geochemical, geological, and geophysical study of the Los Juarez property, additional managerial staff at USAC and BRZ headquarters, a revised website including measures aimed at increased visibility for advertising, more labor at its Mexican smelter, repair and improved infrastructure at the Mexican smelter, potential securement of additional antimony mine reserves in Mexico, and improvement of furnaces in Montana. 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 these consolidated financial statements.
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ITEM 3.
None
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.