What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-11-15 compared with 2021-08-16 · 99 added, 36 removed, 37 unchanged (78% of the section changed)

Management’s Discussion and Analysis of Results of Operations and Financial Condition, continued:

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.

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.

Antimony - Combined USA and Mexico

September 30,

Lbs of Antimony Metal USA

Lbs of Antimony Metal Mexico:

Total Lbs of Antimony Metal Sold

Average Sales Price/Lb Metal

Net loss/Lb Metal

Gross antimony revenue - net of discount

Cost of sales - domestic

Cost of sales - Mexico

Operating expenses

Non-operating income (expenses)

Loss on abandonment of mineral properties

Net loss - antimony

Depreciation,& amortization

EBITDA - antimony

$ (1,566,976 )

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.

Gross precious metals revenue

Cost of sales

Net income - precious metals

EBITDA - precious metals

Average Sales Price/Ton

Net income (Loss)/Ton

Gross zeolite revenue

Cost of sales

Operating expenses

Non-operating expenses

Net income (loss) - zeolite

EBITDA - zeolite

Gross revenue

Production costs

Operating expenses

Non-operating income (expenses)

Loss on abandonment of mineral properties

Depreciation,& amortization

Certain amounts shown in this table may not add exactly to total amounts due to rounding differences

PART I - FINANCIAL INFORMATION, CONTINUED:

Management’s Discussion and Analysis of Results of Operations and Financial Condition, continued:

For the third quarter of 2021, we recognized a net loss of $99,232 on sales of $2,051,713 and other income and expense of $12,730 after depreciation and amortization of $223,196.

We reported a net loss of $993,240 in the third quarter of 2020 on sales of $1,007,231, after depreciation and amortization of $217,650.

For the first nine months of 2021, we recognized a net loss of $97,579 on sales of $5,580,562 and other income and expense of $588,299, after depreciation and amortization of $665,604.

We reported a net loss of $1,576,405 for the first nine months of 2020 on sales of $4,335,413, after depreciation and amortization of $667,298.

For the three and nine months ended September 30, 2021, EBITDA was a positive $123,964 and $568,025 compared to a negative $775,590 and $909,107 for the same periods in 2020.

For the three and nine months ended September 30, 2021, general and administrative expenses were $112,744 and $572,905 compared to $110,051 and $429,973 for the same periods of 2020.

Antimony has been the focus of the Company since its inception.

China, historically the sole supplier of lump antimony trisulfide and the dominate supplier of antimony in general, has held back the export of all antimony products leading to a marked increase in price in 2021.

The Madero crew continued to produce crude antimony oxide and some of this production was simultaneously diverted to crude metal.

While the price is high the Company has decided to convert some of its crude oxide to finished metal.

This move will eliminate shipping charges for the finished metal as the product will be shipped directly to the customer.

Two new furnaces in Thompson Falls are fully operational and started producing test batches of antimony trisulphide in early October.

Throughput nameplate capacity of antimony trisulphide will increase from 100 lbs per day to approximately 1100 lbs per day.

A second sample of antimony trisulfide lump has been prepared and sent for grinding and laboratory analysis.

If the quality meets specifications, the second sample will be sent to the Picatinny Arsenal of the U.

Department of Defense.

The Company continues to track developments at Ambri, Inc.

which has purchased the Company’s antimony metal during the year and may be a significant customer in the future.

For the three and nine month periods ended September 30, 2021, we sold 306,045 pounds and 827,131 pounds of antimony compared to 146,842 and 675,993 pounds for the three and nine month periods ended September 30, 2020.

The raw material received from our North American supplier increased by approximately 64,077 and 238,195 pounds for the three and nine month periods ended September 30, 2021, compared to the same periods for 2020.

We had an increase in raw material from Mexico of approximately 87,223 pounds for the three month period and a decrease of 86 pounds for the nine month period ended September 30, 2021, compared to the same periods for 2020.

PART I - FINANCIAL INFORMATION, CONTINUED:

Management’s Discussion and Analysis of Results of Operations and Financial Condition, continued:

The average sales price of antimony during the three and nine month periods ended September 30, 2021 was $4.20 and $4.08 per pound compared to $3.25 and $3.71 during the same periods in 2020.

Precious Metals

Discussions have been initiated with Canadian and American gold and silver exploration companies, presently operating in Mexico, with a view towards a joint venture option agreement.

A potential joint venture would ideally have existing personnel with experience in exploration for gold and silver in Mexico and would initially fund and manage the initial exploration programs as part of their earn-in requirement.

Traditionally summer is a slow time for junior exploration companies and progress on negotiations has been slower than expected.

For the three and nine month periods ended September 30, 2021, revenue for precious metals from North American sources was $73,736 and $280,164 compared to $48,832 and $173,029 for the same periods of 2020.

Current and prior periods’ revenue from precious metals is as follows:

Precious Metal Sales

For the three months ended June 30,

For the six months ended June 30,

For the three months ended

September 30,

For the nine months ended

September 30,

Ounces Gold Shipped (Au)

2 unchanged sentences

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.

On August 12, 2021 the bearings went out on the primary jaw crusher, essentially shutting down production.

The Company was able to source and purchase a refurbished jaw crusher, which shortened the down time that would have been required for repairs and dovetailed with the continuing program to upgrade the efficiency and reliability of the zeolite plant.

Installation of the new jaw crusher was completed and online by September 3, 2021.

Pit production test work utilizing a D-9 dozer to rip the in-situ zeolite instead of drilling and blasting continues.

New uses and increased awareness of several of the recognized uses of zeolite are becoming known to the public.

This is especially apparent in the advanced treatment requirements for mine discharge water and in the removal of naturally occurring radioactive isotopes in otherwise potable drinking water sources.

For the three and nine month periods ended September 30, 2021, BRZ sold 3,045 and 8,823 tons of zeolite compared to 2,500 and 8,354 tons in the same periods of 2020.

For the three and nine month periods ended September 30, 2021, BRZ realized a net loss of $12,867 and income of $194,364 after depreciation of $41,776 and $122,619 compared to a net income of $95,969 and $344,145 after depreciation of $42,015 and $140,395 for the same period of 2020.

BRZ realized an EBITDA for the three and nine month periods ended September 30, 2021 of $28,909 and $316,983 compared to $137,984 and $484,540 for the same periods in 2020.

PART I - FINANCIAL INFORMATION, CONTINUED:

Management’s Discussion and Analysis of Results of Operations and Financial Condition, continued:

Financial Position

Financial Condition and Liquidity

September 30,

Current assets

2 unchanged sentences

$ (2,669,382 )

For the Three Months Ended

June 30, 2021

June 30, 2020

Cash provided (used) by operations

For the Nine Months Ended

September 30,

Cash used by operations

$ (2,477,864 )

Cash provided by collection of note receivable

Cash provided (used) by investing:

2 unchanged sentences

Cash provided (used) by financing:

Net payments (to) from factor

Payments on notes payable to bank

7 unchanged sentences

Net change in cash, cash equivalents and restricted cash

Our net working capital increased by $24,303,746 from December 31, 2020 to June 30, 2021.

Our net working capital increased by $23,909,538 from December 31, 2020 to September 30, 2021.

Our cash and cash equivalents increased by $20,898,398 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 spent $616,479 for capital items, our debt decreased by $1,901,479 including $1,020,799 paid to Hillgrove, and our accounts payable and other accrued liabilities decreased by $1,895,860 including $1,120,730 paid for an export tax assessment.

During the first nine 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.

4 unchanged sentences

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.

PART I - FINANCIAL INFORMATION, CONTINUED:

Management’s Discussion and Analysis of Results of Operations and Financial Condition, continued:

At September 30, 2021, the Company’s condensed consolidated financial statements show working capital of approximately $21.2 million and an accumulated deficit of approximately $32.7 million.

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.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis