UNITED STATES ANTIMONY CORP 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION . CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This quarterly report and the exhibits attached hereto contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements concern the Company’s anticipated results and developments in the Company’s operations in future periods, planned exploration and development of its properties, plans related to its business and other matters that may occur in the future. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Any statement that expresses or involves discussions 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 “expects” or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “estimates”, or “intends”, or states 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 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; · Risks related to the mineral operations being subject to government regulation; · Risks related to environmental concerns; · Risks related to the Company’s ability to obtain additional capital to develop the Company’s resources, if any; · Risks related to mineral exploration and development activities; · Risks related to mineral estimates; · Risks related to the Company’s insurance coverage for operating risks; · Risks related to the fluctuation of prices for precious and base metals, such as gold, silver and copper; · Risks related to the competitive industry of mineral exploration; · Risks related to the title and rights in the Company’s mineral properties; · Risks related to the possible dilution of the Company’s common stock from additional financing activities; · Risks related to potential conflicts of interest with the Company’s management; · Risks related to the Company’s shares of common stock; 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. Should 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. United States Antimony Corporation qualifies all forward-looking statements contained in this Quarterly Report by the foregoing cautionary statement. Certain statements contained in this Quarterly Report on Form 10-Q constitute “forward-looking statements.” These statements, identified by words such as “plan,” “anticipate,” “believe,” “estimate,” “should,” “expect,” and similar expressions include the Company’s expectations and objectives regarding its future financial position, operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause actual results, performance or achievements, or industry results, to be materially different from those described in the forward-looking statements. Such risks and uncertainties include those set forth under the caption “Management’s Discussion and Analysis or Plan of Operation” and elsewhere in this Quarterly Report. Page 18 of 33 Table of Contents As used in this Quarterly Report, the terms “we,” “us,” “our,” “United State Antimony Corporation,”, “US Antinomy “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 condensed 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, 2021. The following statements may be forward-looking in nature and actual results may differ materially. Reports to Security Holders The Registrant does not issue annual or quarterly reports to security holders other than the annual Form 10-K and quarterly Forms 10-Q as electronically filed with the SEC. Electronically filed reports may be accessed at www.sec.gov DESCRIPTION OF BUSINESS History United States Antimony Corporation, or USAC, was incorporated in Montana in January 1970 to mine and produce antimony products. In December 1983, we suspended antimony mining operations but continued to produce antimony products from domestic and foreign sources. In April 1998, we formed United States Antimony SA de CV or USAMSA, to mine and smelt antimony in Mexico. Bear River Zeolite Company, or BRZ, was incorporated in 2000, and it is mining and producing zeolite in southeastern Idaho. On August 19, 2005, USAC formed Antimonio de Mexico, S. A. de C. V. to explore and develop antimony and silver deposits in Mexico. Our principal business is the production and sale of antimony, silver, gold, and zeolite products. On May 16, 2012, we started trading on the NYSE MKT (now NYSE AMERICAN) under the symbol UAMY. Antimony Division Our antimony smelter and precious metals plant is located in the Burns Mining District of Sanders County, Montana, approximately 15 miles west of Thompson Falls, MT. We hold 2 patented mill sites where the plant is located. We have no “proven reserves” or “probable reserves” of antimony, as these terms are defined by the Securities and Exchange Commission’s Regulation S-K Subpart 1300. Environmental restrictions preclude mining at this site. Mining was suspended in December 1983, because antimony could be purchased more economically from foreign sources. For 2021, and since 1983, we relied on foreign sources for raw materials, and there are risks of interruption in procurement from these sources and/or volatile changes in world market prices for these materials that are not controllable by us. We have sources of antimony in Mexico but we are still depending on foreign companies for raw material in the future. We expect to receive raw materials from our owned and leased properties for 2022 and later years. We continue working with suppliers in North America, Central America, and South America. We currently own 100% of the common stock, equipment, and the leases on real property of United States Antimony, Mexico S.A. de C.V. or “USAMSA”, which was formed in April 1998. We currently own 100% of the stock in Antimony de Mexico SA de CV (ADM) which owns the San Miguel concession of the Los Juarez property. USAMSA has two divisions, (1) the Madero smelter in Coahuila, (2) the Puerto Blanco flotation mill and oxide circuit in Guanajuato. ADM possesses the Los Juarez mineral deposit. In our existing operations in Montana, we produce antimony oxide, antimony metal, and precious metals. Antimony oxide is a fine, white powder that is used primarily in conjunction with a halogen to form a synergistic flame-retardant system for plastics, rubber, fiberglass, textile goods, paints, coatings and paper. Antimony oxide is also used as a color fastener in paint, as a catalyst for production of polyester resins for fibers and film, as a catalyst for production of polyethylene pthalate in plastic bottles, as a phosphorescent agent in fluorescent light bulbs, and as an opacifier for porcelains. We also sell antimony metal for use in bearings, storage batteries and ordnance. Page 19 of 33 Table of Contents We estimate (but have not independently confirmed) that our present share of the domestic market and international market for antimony oxide products is approximately 4% and less than 1%, respectively. We are the only significant U.S. producer of antimony products, while China supplies 92% of the world antimony demand. We believe we are competitive both domestically and world-wide due to the following: · We have a reputation for quality products delivered on a timely basis. · We have the only two operating, permitted, antimony smelters in North and Central America. · We are the only domestic producer of antimony products. · We can ship on short notice to domestic customers. · We are vertically integrated, with raw materials from our own mines, mills, and smelter in Mexico, along with the raw materials from exclusive supply agreements we have with numerous ore and raw material suppliers. · Our smelter in Coahuila is the largest operating antimony smelter in Mexico or the United States with a current maximum capacity of about 32,600 pounds of feed per day and permitting for 50% to 70% expansion. Zeolite Division We own 100% of Bear River Zeolite Company, (BRZ, an Idaho corporation) that was incorporated on June 1, 2000. BRZ has a lease with Webster Farm, L.L.C. that entitles BRZ to surface mine and process zeolite on property located near Preston, Idaho, in exchange for a royalty payment. In 2010 the royalty was adjusted to $10 per ton sold. The current minimum annual royalty is $60,000. In addition, BRZ has more zeolite on U.S. Bureau of Land Management land. The Company pays various royalties on the sale of zeolite products. William Raymond and Nancy Couse are paid a royalty that varies from $1 to $5 per ton. On a combined basis, royalties vary from 8%-13% of sales. Shortly after inception BRZ constructed a processing plant on the property which improved its productive capacity. Ground-breaking for an additional warehouse to store additional inventory and a shop to service equipment started in 2021 and the warehouse and shop was completed in the three months ended September 30, 2022. A vertical-shaft-impactor crusher was replaced by a hammer mill for crushing line number 1 in 2021 for increased production rate. A replacement jaw crusher was installed and put into service in 2021. The new jaw crusher was further improved with a variable-speed apron feeder in late 2021 and subsequent and substantial improvements have been made to the jaw crusher in 2022. In 2021, the Company purchased a house in Preston Idaho for the express purpose of housing workers for its zeolite operation. We have no reserves nor resources of zeolite, as these terms are defined by the Securities and Exchange Commission’s Regulation S-K Subpart 1300. “Zeolite” refers to a group of industrial minerals that consist of hydrated aluminosilicates that hold cations such as calcium, sodium, ammonium, various heavy metals, and potassium in their crystal lattice. Water is loosely held in cavities in the lattice. BRZ zeolite is regarded as one of the best zeolites in the world due to its high CEC of approximately 180-220 meq/100 gr., its hardness and high clinoptilolite content, its absence of clay minerals, and its low sodium content. BRZ’s zeolite deposits’ characteristics which make the mineral useful for a variety of purposes including: ☐ Soil Amendment and Fertilizer . Zeolite has been successfully used to fertilize golf courses, sports fields, parks and common areas, and high value agricultural crops ☐ Water Filtration . Zeolite is used for particulate, heavy metal and ammonium removal in swimming pools, municipal water systems, fisheries, fish farms, and aquariums. ☐ Sewage Treatment . Zeolite is used in sewage treatment plants to remove nitrogen and as a carrier for microorganisms. ☐ Nuclear Waste and Other Environmental Cleanup . Zeolite has shown a strong ability to selectively remove strontium, cesium, radium, uranium, and various other radioactive isotopes from solution. Zeolite can also be used for the cleanup of soluble metals such as mercury, chromium, copper, lead, zinc, arsenic, molybdenum, nickel, cobalt, antimony, calcium, silver and uranium. ☐ Odor Control . A major cause of odor around cattle, hog, and poultry feed lots is the generation of the ammonium in urea and manure. The ability of zeolite to absorb ammonium prevents the formation of ammonia gas, which disperses the odor. ☐ Gas Separation . Zeolite has been used for some time to separate gases, to re-oxygenate downstream water from sewage plants, smelters, pulp and paper plants, and fish ponds and tanks, and to remove carbon dioxide, sulfur dioxide and hydrogen sulfide from methane generators as organic waste, sanitary landfills, municipal sewage systems, animal waste treatment facilities, and is excellent in pressure swing apparatuses. ☐ Animal Nutrition . According to other research, feeding up to 2% zeolite increases growth rates, decreases conversion rates, and prevents scours. BRZ does not make these claims. ☐ Miscellaneous Uses . Other uses include catalysts, petroleum refining, concrete, solar energy and heat exchange, desiccants, pellet binding, horse and kitty litter, floor cleaner and carriers for insecticides, pesticides and herbicides . Page 20 of 33 Table of Contents SELECTED FINANCIAL DATA. Statement of Operations Information: For the three months ended September 30, For the nine months ended September 30, 2022 2021 2022 2021 Revenues $ 2,463,984 $ 2,051,713 $ 9,624,611 $ 5,580,562 Costs of revenues 2,033,066 1,950,504 7,339,499 5,070,798 Gross profit 430.918 101,209 2,285,112 509,764 Total operating expenses 370,432 213,171 1,085,715 1,195,642 Income (loss) from operations 60,486 (111,962 ) 1,199,397 (685,878 ) Other income (expense) (10,084 ) 12,730 (9,124 ) 588,299 NET INCOME (LOSS) $ 50,402 $ (99,232 ) $ 1,190,273 $ (97,579 ) Weighted average shares of common stock (basic) 106,293,842 106,117,844 106,258,384 101,642,048 Weighted average shares of common stock (diluted) 106,293,842 106,117,844 106,258,384 101,642,048 Balance Sheet Information: September 30, 2022 December 31, 2021 Working capital $ 22,078,132 $ 21,548,137 Total assets 35,471,993 35,002,727 Accumulated deficit (31,520,990 ) (32,711,263 ) Stockholders’ equity 33,621,577 32,368,803 Page 21 of 33 Table of Contents Operational and financial performance Antimony Financial and operational metrics of antimony for the three months ended September 30, 2022 and 2021 are as follows: Three months ended September 30, Antimony - Combined USA and Mexico 2022 2021 $ Change Pct Change Total revenue – sales of antimony $ 1,671,301 $ 1,284,969 $ 386,332 30.1 % Gross profit - antimony 329,233 44,714 284,519 636.3 % Total lbs of antimony metal sold 176,872 306,045 (129,173 ) (42.2 %) Average sales price/lb metal 9.45 4.20 5.25 125.1 % Average cost/lb metal 7.59 4.05 3.54 87.2 % Average gross profit/lb metal 1.86 0.15 1.72 1,174.0 % Financial and operational metrics of antimony for the nine months ended September 30, 2022 and 2021 was as follows: Nine months ended September 30, Antimony - Combined USA and Mexico 2022 2021 $ Change Pct Change Total revenue -antimony $ 6,972,312 $ 3,371,015 $ 3,601,297 106.8 % Gross profit - antimony 1,875,569 69,959 1,805,610 2,581.0 % Total lbs of antimony metal sold 973,350 827,131 146,219 17.7 % Average sales price/lb metal 7.16 4.08 3.09 75.8 % Average cost/lb metal 5.24 3.99 1.25 31.2 % Average gross profit/lb metal 1.93 0.08 1.84 2,178.2 % During the three months ended September 30, 2022, the average sales price for antimony increased $5.25 per pound compared to the three months ended September 30, 2021. Gross profit per pound increased $1.72 per pound over the three months ended September 30, 2021. The Company experienced a decrease in production in Q3 due to a temporary decrease in feed for two reasons. First, there was a scheduled shut-down by our North American supplier that was followed by equipment failure at their facility. In addition to this, the supplier reported having difficulties with labor supply in Q3. Second, the decrease in supply corresponded with less sourcing in Mexico during the negotiation phase regarding our purchase option agreement. The same thing that led to a meeting with the owners of the Wadley mine culminating in a purchase option agreement resulted in a bottleneck during this period, namely, the insistence that all purchased ore was done without invoicing and paid for in cash-an arrangement unacceptable to US Antimony. Both of these problems have been corrected and we now have a record number of tons of ore at our smelter in Madero and are receiving the predicted number of tons of feed from our North American supplier. However, there is a delay between the purchase of raw material and the processing and sale product and this delay has affected Q3 and will affect Q4. The Company has recently received a ton of material for testing to produce antimony metal or oxide. Preliminary results of this test-work are very encouraging. This supplier has about 100 short tons of this material and our processing of it could result in a mutually beneficial arrangement. During the decrease of supply the Company supplemented its feed in Montana from material processed at its smelter in Mexico. During the nine months ended September 30, 2022, the average sales price for antimony increased $3.09 per pound compared to the nine months ended September 30, 2021. Gross profit per pound increased $1.93 per pound over the three months ended September 30, 2021. Page 22 of 33 Table of Contents Zeolite Financial and operational performance of zeolite for the three months ended September 30, 2022 and 2021 was as follows: Three months ended September 30, Zeolite 2022 2021 $ Change Pct Change Total revenue - zeolite $ 792,683 $ 693,008 99,675 14.4 % Gross profit - zeolite 129,358 11,120 118,238 1,063.3 % Tons of zeolite sold 3,264 3,045 219 7.2 % Average sales price/ton 242.86 227.59 15.27 6.7 % Average cost/ton 203.22 223.94 (20.71 ) (9.2 )% Average gross profit/ton 39.63 3.65 35.98 985.2 % Financial and operational performance of zeolite for the nine months ended September 30, 2022 and 2021 was as follows: Nine months ended September 30, Zeolite 2022 2021 $ Change Pct Change Total revenue - zeolite $ 2,487,116 $ 1,929,383 557,733 28.9 % Gross profit - zeolite 327,227 243,832 83,395 34.2 % Tons of zeolite sold 10,336 8,823 1,513 17.1 % Average sales price/ton 240.63 218.68 21.95 10.0 % Average cost/ton 208.97 191.04 17.93 9.4 % Average gross profit/ton 31.66 27.64 4.02 14.6 % Sales volume of zeolite for the three months ended September 30, 2022 increased 219 tons over the three months ended September 30, 2021. Average sales price per ton increased $15.27 for the same comparable period. Sales volume of zeolite for the nine months ended September 30, 2022 increased 1,513 tons over the nine months ended September 30, 2021. Average sales price per ton increased $21.95 for the nine months ended September 30, 2022 over the comparable nine month period ending September 30, 2021. The Company continues making significant improvements to its infrastructure at the Preston Facility. We have purchased a newer dozer with dual ripper attachment (Caterpiller D8K) to aid in the mining as it is clear that our best method of mining is to rip and use blasting to supplement and not vice-versa. Our old D8 is shot and was costing more to repair than it was worth. We have hired a new supervisor and mechanic, Richard Lyon, who is a certified MSHA person and has been doing a spectacular job at the plant and in locating quality rolling stock to replace our aging fleet of equipment for both the mine and the mill. We have purchased a 2,000-gallon water truck for road dust control in the summer months. The shop building is finally complete along with a new 50’ x 100’ warehouse . A new method of dust control is being implemented for testing first in our crusher room based on the pressurization of the room. Depending on its success, the Company plans to implement the same system around all dust-sensitive areas. The Company has located and is in the process of purchasing an excavator for the purpose of loading and removal of ripped or blasted rock and for general use at the mine. A new road serving a new level was completed by our chief miner in q3, Allan Boot. The Company placed a down-payment on a salt-shed for the storage of ore above the jaw crusher and plans to purchase and have built many more to increase our tonnage during the fall and winter months via the elimination of the use of tarps for keeping our stockpiles dry. Page 23 of 33 Table of Contents Precious Metals Financial and operational performance of precious metals for the three months ended September 30, 2022 and 2021 was as follows: Three months ended September 30, Precious metals 2022 2021 $ Change Pct Change Total revenue - precious metals $ - $ 73,736 $ (73,736 ) (100.0%) Gross profit precious metals (27,673 ) 45,375 (73,048 ) (161.0%) Ounces sold - gold - 12.00 (12.0 ) (100.0%) Ounces sold - silver - 5,638 (5,638 ) (100.0%) Financial and operational performance of precious metals for the three months ended September 30, 2022 and 2021 was as follows: Nine months ended September 30, Precious metals 2022 2021 $ Change Pct Change Total revenue - precious metals 165,183 280,164 (114,981 ) (41.0%) Gross profit precious metals 82,316 195,973 (113,657 ) (58.0%) Ounces sold - gold 21.35 34.00 (12.65 ) (37.2%) Ounces sold - silver 8,175 15,246 (7,071 ) (46.4%) EARNINGS BEFORE INTEREST TAX DEPRECIATION AND AMORTIZATION The Company utilizes Earnings Before Interest Taxes Depreciation and Amortization (“EBITDA”), a non-GAAP financial measurement which approximates free cash flow. Our company-wide Earnings Before Interest Taxes Depreciation Amortization (“EBITDA”) was $297,392 for the three months ended September 30, 2022, compared to EBITDA of $123,964 for the three months ended September 30, 2021. The primary driver of the September 30, 2021 EBITDA was a one-time non-recurring gain on forgiveness of CARES Act funds on a loan received in 2020 during the global pandemic and subsequent federal government economic stimulus program. Income from operations improved from a company-wide loss of $111,962 for the three months ended September 30, 2021 to income from operations of $60,486 for the three months ended September 30, 2022. Primary drivers include continued strong market prices for antimony and zeolite. Our company-wide Earnings Before Interest Taxes Depreciation Amortization (“EBITDA”) was $1,894,533 for the nine months ended September 30, 2022, compared to EBITDA of $571,160 for the nine months ended September 30, 2021. Increase in gross revenue of $4,044,049 and increased gross profit of 1,775,348 were the primary drivers behind the EBITDA results in 2022. Income from operations improved from a company-wide loss of $111,962 for the three months ended September 30, 2021 to income from operations of $60,486 for the three months ended September 30, 2022. Primary drivers include continued strong market prices for antimony and zeolite. Page 24 of 33 Table of Contents EBIDTA schedules by business segment for the three months ended September 30, 2022 and September 30, 2021 is presented as follows. Antimony – Combined USA and Mexico Three months ended September 30, 2022 Three months ended September 30, 2021 $ Change % Change Gross antimony revenue $ 1,671,301 $ 1,284,969 $ 386,332 30.1 % Cost of sales (1,342,068 ) (1,240,255 ) (101,813 ) 8.2 % Gross profit – antimony 329,233 44,714 284,519 636.3 % Operating expenses (344,162 ) (189,703 ) (154,459 ) 81.4 % Income from operations (14,929 ) (144,989 ) 130,060 (89.7 %) Non-operating expenses (7,058 ) 13,249 (20,307 ) (153.3 %) Net income (loss) – antimony (21,987 ) (131,740 ) 109,753 (83.3 %) Interest expense 1,181 - 1,181 N/A Depreciation and amortization 164,500 153,059 11,441 7.5 % EBITDA – antimony $ 143,694 $ 21,319 $ 122,375 574.0 % Zeolite Three months ended September 30, 2022 Three months ended September 30, 2021 $ Change % Change Gross zeolite revenue $ 792,683 $ 693,008 $ 99,675 14.4 % Cost of sales (663,325 ) (681,888 ) 18,563 (2.7 %) Gross profit – zeolite 129,358 11,120 118,238 1,063.3 % Operating expenses (26,270 ) (23,468 ) (2,802 ) 11.9 % Income from operations 103,088 (12,348 ) 115,436 (934.9 %) Non-operating expenses (3,026 ) (519 ) (2,507 ) 483.0 % Net income – zeolite 100,062 (12,867 ) 112,929 (877.7 %) Interest expense 3,026 - 3,026 N/A Depreciation and amortization 50,610 41,776 8,834 21.1 % EBITDA – zeolite $ 153,698 $ 28,909 $ 124,789 431.7 % Page 25 of 33 Table of Contents Precious Metals Three months ended September 30, 2022 Three months ended September 30, 2021 $ Change % Change Gross revenue precious metals $ - $ 73,736 $ (73,736 ) (100.0%) Cost of sales (27,673 ) (28,361 ) 688 (2.4%) Gross profit – precious metals (27,673 ) 45,375 (73,048 ) (161.0%) Operating expenses - - - N/A Income from operations (27,673 ) 45,375 (73,048 ) (161.0%) Non-operating expenses - - - N/A Net income – precious metals (27,673 ) 45,375 (73,048 ) (161.0%) Interest expense - - - N/A Depreciation and amortization 27,673 28,361 (688 ) (2.4%) EBITDA – precious metals $ - $ 73,736 $ (73,736 ) (100.0%) Company-wide Three months ended September 30, 2022 Three months ended September 30, 2021 $ Change % Change Gross revenue $ 2,463,984 $ 2,051,713 $ 412,271 20.1 % Cost of sales (2,033,066 ) (1,950,504 ) (82,562 ) 4.2 % Gross profit – precious metals 430,918 101,209 329,709 325.8 % Operating expenses (370,432 ) (213,171 ) (157,261 ) 73.8 % Income from operations 60,486 (111,962 ) 172,448 (154.0 %) Non-operating income (expense) (10,084 ) 12,730 (22,814 ) (179.2 %) Net income (loss) 50,402 (99,232 ) 149,634 (150.8 %) Interest expense 4,207 - 4,207 N/A Depreciation and amortization 242,783 223,196 19,587 8.8 % EBITDA – Company-wide $ 297,392 $ 123,964 $ 173,428 139.9 % Page 26 of 33 Table of Contents EBIDTA schedules by business segment for the nine months ended September 30, 2022 and September 30, 2021 is presented as follows. Antimony – Combined USA and Mexico Nine months ended September 30, 2022 Nine months ended September 30, 2021 $ Change % Change Gross antimony revenue $ 6,972,312 $ 3,371,015 $ 3,601,297 106.8 % Cost of sales (5,096,743 ) (3,301,056 ) (1,795,687 ) 54.4 % Gross profit – antimony 1,875,569 69,959 1,805,610 2,581.0 % Operating expenses (1,037,991 ) (1,147,906 ) 109,915 (9.6 %) Income from operations 837,578 (1,077,947 ) 1,915,525 (177.7 %) Non-operating expenses (3,723 ) 590,031 (593,754 ) (100.6 %) Net income (loss) – antimony 833,855 (487,916 ) 1,321,771 (270.9 %) Interest expense 4,869 1,565 3,304 211.1 % Depreciation and amortization 467,263 458,794 8,469 1.8 % EBITDA – antimony $ 1,305,987 $ (27,557 ) $ 1,333,544 (4,839.2%) Zeolite Nine months ended September 30, 2022 Nine months ended September 30, 2021 $ Change % Change Gross zeolite revenue $ 2,487,116 $ 1,929,383 $ 557,733 28.9 % Cost of sales (2,159,889 ) (1,685,551 ) (474,338 ) 28.1 % Gross profit – zeolite 327,227 243,832 83,395 34.2 % Operating expenses (47,724 ) (47,736 ) 12 (0.0 %) Income from operations 279,503 196,096 83,407 42.5 % Non-operating expenses (5,401 ) (1,732 ) (3,669 ) 211.8 % Net income – zeolite 274,102 194,364 79,738 41.0 % Interest expense 5,401 1,570 3,831 244.0 % Depreciation and amortization 143,860 122,619 21,241 17.3 % EBITDA – zeolite $ 423,363 $ 318,553 $ 104,810 32.9 % Precious Metals Nine months ended September 30, 2022 Nine months ended September 30, 2021 $ Change % Change Gross revenue precious metals $ 165,183 $ 280,164 $ (114,981 ) (41.0%) Cost of sales (82,867 ) (84,191 ) 1,324 (1.6%) Gross profit – precious metals 82,316 195,973 (113,657 ) (58.0%) Operating expenses - - - N/A Income from operations 82,316 195,973 (113,657 ) (58.0%) Non-operating expenses - - - N/A Net income – precious metals 82,316 195,973 (113,657 ) (58.0%) Interest expense - - - N/A Depreciation and amortization 82,867 84,191 (1,324 ) (1.6%) EBITDA – precious metals $ 165,183 $ 280,164 $ (114,981 ) (41.0%) Page 27 of 33 Table of Contents Company-wide Nine months ended September 30, 2022 Nine months ended September 30, 2021 $ Change % Change Gross revenue $ 9,624,611 $ 5,580,562 $ 4,044,049 72.5 % Cost of sales (7,339,499 ) (5,070,798 ) (2,268,701 ) 44.7 % Gross profit – precious metals 2,285,112 509,764 1,775,348 348.3 % Operating expenses (1,085,715 ) (1,195,642 ) 109,927 (9.2 %) Income from operations 1,199,397 (685,878 ) 1,885,275 (274.9 %) Non-operating income (expense) (9,124 ) 588,299 (597,423 ) (101.6 %) Net income (loss) 1,190,273 (97,579 ) 1,287,852 (1,319.8 %) Interest expense 10,270 3,135 7,135 227.6 % Depreciation and amortization 693,990 665,604 28,386 4.3 % EBITDA – Company-wide $ 1,894,533 $ 571,160 $ 1,323,373 231.7 % Page 28 of 33 Table of Contents LIQUIDITY AND FINANCIAL CONDITION WORKING CAPITAL September 30, 2022 December 31, 2021 Current assets $ 23,357,782 $ 23,568,992 Current liabilities (1,279,650 ) (2,020,855 ) Working capital $ 22,078,132 $ 21,548,137 For the nine months ended CASH FLOWS September 30, 2022 September 30, 2021 Cash flow provided (used) by operating activities $ 22,916 $ (2,477,864 ) Cash flow used by investing activities (13,685,072 ) (406,295 ) Cash flow provided (used) by financing activities (42,080 ) 23,782,557 Net change in cash during period $ (13,704,236 ) $ 20,898,398 As of September 30, 2022, the Company had cash and cash equivalents of hand of $7,716,093 which consisted of $7,658,810 in money market funds and deposit accounts along with $57,283 of restricted cash. Net cash provided by operating activities was $22,916 for the nine-month period ending September 30, 2022, compared with cash used by operating activities of $2,477,864 during the nine-month period ended September 30, 2021. The $2,500,780 change in cash from operating activities is attributable to ongoing strong revenue from antinomy sales which have more than doubled in the current year. Net cash used by investing activities of $13,685,072 included the purchase of a caterpillar for the Bear River Zeolite operation and ongoing construction of a new warehouse in Preston, ID. The Company also invested $13,500,000 in a bond fund due, seeking to improve its return on investment versus maintaining deposits in a low-interest bearing money market account. The fund invests in primarily US Treasury Bonds and other fixed income funds. Cash flow used by financing activities for the nine months ended September 30, 2022 was $42,080 compared to a cash flow provided by financing activities of $23,782,557 for the nine months ended September 30, 2021. In 2021, the Company raised $23,342,180 from the issuance of common stock and warrants and $1,790,703 from the exercise of warrants by existing shareholders. This capital raise and warrant exercise was not recurring during the nine months ended September 30, 2022. For the year ending December 31, 2022, we are planning to use funds acquired from the two stock offerings raised in 2021 to make significant improvements to our operations at Madero, Puerto Blanco, Bear River Zeolite, and Thompson Falls facilities with the goal of increasing production and decreasing costs. OFF-BALANCE SHEET ARRANGEMENTS The Company has no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to its stockholders. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company does not hold any derivative instruments and does not engage in any hedging activities.