What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-07-18 compared with 2022-03-31 · 203 added, 125 removed, 72 unchanged (82% of the section changed)

Item 7 Management’s Discussion and Analysis or Plan of Operations

Certain matters discussed are forward-looking statements that involve risks and uncertainties, including the impact of antimony prices and production volatility, changing market conditions and the regulatory environment and other risks.

Actual results may differ materially from those projected.

These forward-looking statements represent our judgment as of the date of this filing.

We disclaim, however, any intent or obligation to update these forward-looking statements.

For the year ended December 31, 2021, we reported net loss of $60,469 after depreciation and amortization of $880,880, compared to a net loss of $3,286,804 for 2020 after depreciation and amortization of $885,843.

Management’s Discussion and Analysis and Results of Operations

The following discussion should be read in conjunction with our financial statements and related notes thereto as filed with this report.

SELECTED FINANCIAL DATA.

Statement of Operations Information:

For the year ended

Costs of revenues

Total operating expenses

Income (loss) from operations

Other income (expense)

Income tax expense

NET INCOME (LOSS)

Weighted average shares of common stock (basic)

Weighted average shares of common stock (diluted)

Balance Sheet Information:

Working capital

Accumulated deficit

(33,070,332 )

(32,711,263 )

Stockholders’ equity

For the year ended December 31, 2022, the Company reported net income of $428,661 after depreciation and amortization of $909,220, compared to a net loss of $60,469 for 2021 after depreciation and amortization of $880,880.

During the year ending December 31, 2022, the most significant factors affecting our financial performance were as follows:

Two private placements of stock during the first quarter of 2021.

A significant, steady, and pronounced increase of the London Metals Bulletin price of antimony.

The efforts in sales of zeolite of our zeolite sales director, Gretchen Lawrence.

The addition of an antimony sales director, Mitzi Hart.

The complete restructuring of office and plant personnel and procedures at the Montana and BRZ facilities.

A significant increase in the amount of sales of antimony, up 53% from the prior year.

A purchase option agreement for the Wadley mines signed in June 2022 along with an 8-month mining and due diligence period providing exclusive rights to extracted mineral.

Until June 2022, the Wadley mine had halted USAC’s ability to purchase ore.

The purchase option agreement due diligence period has been extended to October 15, 2023.

The continued efforts in mechanical improvements associated with sales of zeolite from Bear River Zeolite.

Mitzi Hart’s replacement of Marilyn Sink as Plant Manager at U.S.

The hiring of Richard Lyon as Plant Supervisor at Bear River Zeolite along with the continued efforts in trucking coordination and sales management of Gretchen Lawrence

Increased trucking prices and decreasing trucking availability.

Difficulties in sourcing labor due to the Covid pandemic and the relief funding to curtail the incentive to work.

The renegotiation of various supply, treatment, royalty, and tolling agreements.

The retirement of several outstanding, old, and significant debts.

During the year ended December 31, 2021, the most significant event affecting our financial performance was the addition of over $23 million to our working capital via two capital raises of common stock.

These funds allowed the Company to retire much of its outstanding debt.

It also allowed the Company leverage to re-negotiate existing contracts and pursue previously prohibitive ventures.

The fact that the Company could pay its bills on time resulted in a serious amount of restructuring and the ability to offer more to attract and retain labor.

Difficulties in sourcing labor in the US and Mexico due to the Covid pandemic and government incentives resulting in a significantly smaller labor pool.

The completion of payment and disposal for the removal of legacy slags at the smelters in Mexico and the United States.

The sale of finished antimony ingots directly to customers from our Madero Smelting facility.

The purchase of several large salt sheds for storage of ore at Bear River Zeolite in order to eliminate interruptions in production during winter and the wet seasons.

The purchase of several key pieces of rolling stock equipment at Bear River Zeolite including:

A Cat 235 excavator, a Cat 12H road grader, a Cat 740 articulated haul truck, a Cat D8T dozer with dual rippers.

The purchase of a new modern 2.5-foot cone crusher to replace our older cone crusher at Bear River Zeolite.

The construction of a 100’ by 50’ warehouse at Bear River Zeolite.

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Our plan for 2023 is as follows:

Continue processing tons of mined rock from the Los Juarez property at our Puerto Blanco facility.

Continue to process ores and concentrates at our Madero facility.

Finish the removal of all the legacy slag at Madero (should be completed early Q2 of 2022).

Begin substantial improvements at the Madero facility including the initiation of the construction of a large set of buildings to house the furnaces, filter bags, and cooling towers in order for ability to produce finished antimony oxide.

The purchase of new forklifts and scales at Madero facility.

The relining of many of the small rotary furnaces at Madero facility.

Continue processing the 2,000 tons of mined and shipped rock from the Los Juarez property at our Puerto Blanco flotation facility.

Continue to process ores and concentrates at our Madero smelter facility.

The purchase of new forklifts and scales at Madero smelter facility.

The relining of several short rotary furnaces along with the repair of equipment at the Madero smelter facility

The installation of two new electric furnaces at the Montana facility for increase production of antimony trisulfide.

The completion of the geological, geochemical, and geophysical study at the Los Juarez property (currently underway) in order to ascertain more information about the mineralization.

This study is being done on an area approximately 3km in length by about 0.8 km in width to cover the entire region extending from the western limits of our mining concessions all the way to the ejido of Los Juarez.

The continued effort to source antimony from Honduras and Nicaragua and other sources in Mexico and the United States.

Continued talks with Perpetua Resources detailing a tolling or treatment charge agreement in keeping with our existing collaboration agreement.

Finalization of several negotiations with land and concession owners in Mexico regarding additional sources of antimony.

Continuation of the mining of the Soyatal claims with a particular experiment of the processing of 40 tons of hand-sorted sulfide rock for flotation in the hopes of an auxiliary source of concentrates for the production of antimony trisulfide.

Continuation of the supply of sized antimony metal to Ambri in accordance with our letter of intent of 2020.

The Company also intends to formalize its collaboration agreement with Perpetua Resources in the event that the demand of antimony from Ambri follows predicted trajectory.

In addition to the processing goals stated above, the Company intends to continue to improve its production capacity and sales of zeolite at its subsidiary Bear River Zeolite.

These goals will be aided by the additional 100’ by 50’ warehouse for the storage and stockpile of product and also its 60’ x 40’ shop building, both of which should be completed in the first half of 2022.

Also, the purchase of a Caterpillar 740 haul truck is underway to replace the defunct haul truck we had.

The Company plans to purchase a replacement front-end loader for the mine to replace its 988-B Caterpillar that is on its last legs.

The Company plans to then update the rippers on both Cat D-8 and D-9 supplement mining.

A secondary, winter-storage platform located between the mine and the mill is planned.

Additional mapping and additional geological studies at the Los Juarez property in order to ascertain more information about the mineralization indicated in our preliminary geophysical and geochemical work.

The continued effort to source additional antimony from Honduras, Nicaragua, and especially Guatemala as well as sources in the United States, Canada, Alaska, and Mexico.

Continuation of the mining of the Soyatal claims for the production of antimony trisulfide given that preliminary testing of the concentrates resulted in acceptable grade and acceptably low contaminants to achieve military specification.

Continuation of the supply of sized antimony metal to Ambri in accordance with our letter of intent of 2020 and continued communication regarding potential of further cooperation.

Continuation of the processing of Soyatal ore to produce concentrates with the goal of testing antimony grade and contaminant content for the potential of an auxiliary source of antimony trisulfide while the Sierra Guadalupe property is started into production as the primary source.

If the Soyatal concentrates pass testing, the decision to retain the Soyatal claims will be made.

In addition to the processing goals stated above, the Company intends to focus on and significantly increase its production, capacity, and sales of zeolite at its subsidiary Bear River Zeolite.

The addition of two more winter-storage buildings (one located between the mine and the mill and the other located near the mine) is planned.

Salt sheds for these ore storage locations are planned to eliminate the necessity of the use of tarps for keeping the zeolite dry during the winter and rainy seasons.

The building near the mine also allows a location for the regular service maintenance of the mine equipment in winter and rainy months.

The crushing rate is anticipated to increase 2-3 times with the addition of our new cone crusher and a host of improvements to the crushing equipment and parts downstream.

This includes the updating of nearly all of our screens, along with likely the replacement of one of our hammermills with a crusher better suited for a more efficient production of our main product.

These decisions will be aided by several sieve and aggregate flow studies.

The Company plans to increase its efficiency and volume of crushed ore by means of the use of the new mining equipment purchased in 2022 along with improved blasting techniques and determination of the best balance between blasting and ripping.

The enhancement of the dust collection and dust control also is planned and should enhance our ultra-fine production.

The following are highlights of the significant changes during 2022:

The sale of antimony during 2021 was 911,079 lbs.

compared to 815,310 pounds in 2020, an increase of 11.7%.

The sale of antimony during 2022 was 1,394,036 pounds compared to 911,079 pounds in 2021, an increase of 53.0%.

The average sales price of antimony during 2022 was $5.47/lb.

4 unchanged sentences

We are producing and buying raw materials, which will allow us to ensure a steady flow of products for sale.

Our smelter at Madero, Mexico, was producing primarily ores from the Wadley mines in 2021.

Our smelter at Madero, Mexico, was processing primarily ores from the Wadley mines in 2022 under a clause that accompanies a purchase option agreement.

Our smelter in Montana was producing material from both Mexico and our North American sources in 2022.

Raw materials from our North American supplier was reduced in 2021 due to the effects of Covid and shipping difficulties.

We produced ingots of antimony metal in 2021 to be shipped directly to customers from our Madero smelter starting in 2022.

We intend to increase this for 2022 and beyond.

This will significantly reduce our production and shipping costs.

We are proceeding with the processing of Los Juarez ore in the 100 ton per day mill at Puerto Blanco.

Due to the hardness of the jasperoid rock at Los Juarez, it has been determined that the actual through-put is more like 80 tons per day.

During 2021, the Company sold 11,747 tons compared to 10,661 tons in 2020, an increase of 1,086 tons (10.1%).

Bear River Zeolite (“BRZ”) realized a gross profit of $340,806 (13.1% of sales) in 2021 compared to a gross profit of $323,780 (15.3% of sales) in 2020.

Raw materials from our North American supplier were reduced in 2022 due to plant maintenance, an unexpected equipment failure, the effects of Covid, labor supply shortages, and shipping difficulties across the border due to political reasons.

We produced and sold three truckloads of ingots of antimony metal, each containing 20 metric tons, in the first half of 2022 that were shipped directly to customers in the United States from our Madero smelter.

This will significantly reduce our production and shipping costs compared to finishing the ingots in Montana.

We are proceeding with further mapping and geological work to augment our initial geophysical, geochemical, and geological survey of the Los Juarez property to better understand its potential value.

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During 2022, the Company sold 13,047 tons of zeolite compared to 11,747 tons in 2021, an increase of 1,300 tons (11.1%).

Bear River Zeolite (“BRZ”) realized a gross profit of $339,907 (10.8% of zeolite sales) in 2022 compared to a gross profit of $340,806 (13.1% of sales) in 2021.

Net income for the BRZ segment was $141,496 for the year ended December 31, 2022 compared to $193,674 for the year ended December 31, 2021.

The increase in production but decrease in profit were attributable to outpacing of costs to increase in pricing.

As an example, the price of packaging materials, diesel, labor, electricity, oil, etc.

all increased substantially in 2022.

To address this, the Company plans to increase its price per ton of offered zeolite and concentrate its efforts more on bulk orders that minimize the focus of labor on packaging.

Additionally, the Company plans to increase production volumes at Bear River Zeolite in 2023 to address growing customer demands.

Corporate-wide

During the year ending December 31, 2021, the following transactions had a material impact on the Company’s net loss:

On April 20, 2020, the Company received a loan of $443,400 pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020.

During the year ended December 31, 2021, the Company received notification that the loan had been forgiven.

The amount of the loan, $443,400, was recognized as gain on forgiveness of the CARES Act loan.

On November 7, 2014, the Company entered into an advance and concentrate processing agreement with Hillgrove Mines Pty Ltd of Australia (Hillgrove) in which the Company was advanced funds from Hillgrove to build facilities to process Hillgrove antimony concentrate.

The Company has not processed Hillgrove concentrate for more than two years.

The balance of the advance liability due was $1,134,221 at December 31, 2020.

In April 2021, the Company successfully negotiated a settlement with Red River for an agreed upon amount of $1,020,799 which was paid on paid on April 8, 2021.

The Company recognized a gain on settlement of the advance in the amount of $113,422 during the year ended December 31, 2021 (Note 8)

Starting in August of 2021, US Antimony negotiated with our Canadian feed source for a more favorable treatment charge contract to replace the previous one.

This contract became effective in December of 2021 and represents an improvement from the previous treatment charge contract.

Throughout 2021, the price of antimony increased steadily.

Throughout 2021, the price of trucking, lumber (for pallets), fuel, and labor increased.

The Company raised its starting wages twice at the facility in Montana and once at Bear River Zeolite.

During the year ending December 31, 2022, the following transactions had a material impact on the Company’s financial performance:

The signing of a purchase option agreement for the exclusive rights to all extracted mineral from the Wadley mines for an 8-month period allowing the Company to acquire antimony ore and ascertain grade and tonnages in advance of a decision to purchase affording the Company to accumulate more lots of antimony at its smelting facility in Madero than have ever been accumulated.

The hiring of Richard Lyon as Plant Supervisor at Bear River Zeolite providing far better and more consistent oversight of personnel and operations with guidance from management in conjunction with the use of funds to substantially update and improve plant infrastructure.

The sustained and favorable increased price of antimony.

The purchase of a new and modern cone crusher and a host of new equipment at Bear River Zeolite to improve production and performance.

The re-initiation of payments towards the acquisition of the Sierra Guadalupe property.

The appointment of 3 new members to the Company’s Board of Directors, Tim Hasara, John C.

Gustavsen, and Gary C.

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Results of Operations

Operational and financial performance

Antimony Sales

Our sales volume of antimony for the year ended December 31, 2021 was as follows:

Financial and operational metrics of antimony for the year ended December 31, 2022 and 2021 was as follows:

Year ended December 31,

Antimony - Combined USA and Mexico

Total revenue -antimony

Total Lbs of Antimony Metal Sold

Average Sales Price/Lb Metal

Average cost per Lb Metal

Average gross profit per Lb Metal

During 2021, we saw our average sale price for antimony increase by $1.68/lb from an average of $3.61/lb in 2020 to $5.29/lb in 2021.

In the 4 th quarter 2021, the Company renegotiated a treatment-charge contract with its North American supplier of sodium antimonate.

This contract renegotiation became effective in December 2021 and will result in a more favorable price of purchased antimony contained that had previously existed.

During 2020, we saw our average sale price increase by $0.13 per pound from an average of $3.48 per pound for 2019 to an average of $3.61 per pound for 2020.

Following the change in management in June and the suppressed price of antimony, the Company temporarily suspended sale of antimony oxide.

This decision was made principally in order to minimize the loss per pound in sales at a time for which our production acquisition contracts were being renegotiated.

As consequence of these decisions, the Company was, as of the first quarter of 2021, obtaining its raw materials from its Mexican sources at a substantial savings as compared to the previous year.

These savings were due to the withdrawal of overhead from the staff it had at the Wadley mine.

Additionally, the Company is now processing antimony products at its Madero facility at a substantial savings compared with all previous years.

These savings were due to the renegotiating of its natural gas contract for the Madero smelter which was completed in early 2021.

Furthermore, the Company has been able to produce finished antimony ingots and will sell them directly from its Madero facility starting in 2022.

This saves at least $0.29/lb in shipping to and the finishing costs at Montana.

Zeolite Sales

Our sales volume of zeolite for the year ended December 31, 2021 was as follows:

Revenue - processing

Total revenue – antimony segment

Gross profit - antimony

of antimony metal sold

Average sales price/lb.

Average cost/lb.

Average gross profit/lb.

During the year ended December 31, 2022, the average sales price for antimony increased $0.18 per pound compared to the year ended December 31, 2021.

Gross profit per pound increased $0.78 per pound over the year ended December 31, 2021.

Due to its antimony production and sales along with a favorable antimony price, the Company enjoyed its first profitable year since 2018.

We cut costs by selling finished ingots directly to customers in the United States from our Mexican smelter eliminating additional shipping and processing costs at our Montana facility.

The first two quarters of 2022 each recognized more net profit than any previous year in the Company’s history.

The Company experienced a decrease in production in the third quarter 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.

Second, the decrease in supply corresponded with less sourcing in Mexico during the negotiation phase regarding our purchase option agreement for the Wadley property.

The delay between the reception of ore at the Mexican Smelter combined with the aforementioned delay carried over into fourth quarter of the year.

The Company processed and sold 37,485 lbs.

of antimony trisulfide as part of a tolling agreement.

During this period, the Company worked on and solved several problems that it was having with its processing of antimony concentrate from Mexico into antimony trisulfide crystal for sale to the munitions market and the Defense Logistics Agency (“DLA”).

In addition, two more furnaces were purchased to give the Company back-up in anticipation of planned maintenance.

Mitzi Hart, who assumed the role of Plant Manager and also assistant Sales Director for antimony, has extensive previous experience in sourcing trucking.

This resulted in decreasing our trucking costs considerably.

Also, the Company was able to offer a discount for clients willing to source their own trucking which resulted in several clients who now provide their own freight.

Financial and operational performance of zeolite for the year ended December 31, 2022 and 2021 was as follows:

Year ended December 31,

Total revenue - zeolite

Gross profit - zeolite

Tons of zeolite sold

Average sales price/ton

Average cost per ton

Average gross profit per ton

Our sales volume of zeolite in 2021 was 1,086 tons more than we sold in 2020, an increase of 10%.

Our average sales price for the year ended December 31, 2021 increased by $22.03 per ton (11.1%) from $198.75 per ton in 2020.

For the year ended December 31, 2021, total sales of zeolite increased by $474,818.

The zeolite division had an EBITDA of $357,927 for the year ended December 31, 2021.

Our sales volume of zeolite in 2020 was 3,019 tons less than we sold in 2019, a decrease of 22%.

Our average sales price increased by approximately $6 per ton, from $192 per ton in 2019 to $199 per ton in 2020 (3.6%).

During 2020, total sales of zeolite decreased by $504,294 from 2019.

The zeolite division had an EBIDTA of $445,481 for 2020, compared to an EBITDA of $683,936 for 2019.

Net income decreased from $497,470 in 2019 to $262,861 in 2020 ($234,609).

Precious Metals Sales

Average cost/ton

Average gross profit/ton

Sales volume of zeolite for the year ended December 31, 2022 increased 1,300 tons over the year ended December 31, 2021.

Average sales price per ton increased $20.77 for the year ended December 31, 2022 over the comparable period ending December 31, 2021.

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At Bear River Zeolite, between 2021 and 2022, despite an increase in sold tons, gross profit decreased slightly.

This was due to the increase in costs combined with a delay in raising our prices in order to retain particular clients that had pre-existing price agreements.

The strategy going forward will be to increase our sales price while significantly increasing production and sales.

The overall strategy for increasing production started with the mine and mining techniques and utilizing the newly purchased rolling stock (mining and trucking equipment).

The Company experimented with ripping versus blasting and concluded at first that ripping was superior.

However, due to the distribution of rock size from ripping, it was concluded by the end of 2022 that ripping caused more delay in processing owing to the necessity to drill and break or blast oversized rock that would not fit in the jaw crusher.

Consequently, the primary technique that yields the fastest production from the mine through the mill is blasting.

Improvements to the blasting technique are scheduled for 2023.

The second phase of production improvements relate to the selection of the discharge size from the new cone crusher purchased in December.

Once the optimal size has been determined that corresponds to the most efficient rate of production and efficiency in product size, the plan is to work our way downstream through the secondary crushing circuit and then the screening.

Finally, the efficiency and production capacity of our packaging plant vs.

available labor for this plant will be addressed to match the increased zeolite production.

Precious Metals

Financial and operational performance of precious metals for the three months ended December 31, 2022 and 2021 was as follows:

Year ended December 31,

Precious metals

Total revenue - precious metals

Gross profit precious metals

Ounces sold - gold

2 unchanged sentences

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 a $825,950 for 2021, compared to a negative EBITDA of $2,382,970 for 2020.

EBIDTA schedules by business segment is presented as follows.

Our company-wide Earnings Before Interest Taxes Depreciation Amortization (“EBITDA”) was $1,369,095 for the year ended December 31, 2022, compared to EBITDA of $825,950 for the year ended December 31, 2021, a 65.8% increase.

Increase in gross revenue of $3,297,201 and increased gross profit of $1,157,585 were the primary drivers behind the EBITDA results in 2022.

Income from operations improved from a company-wide loss of $660,257 for the year ended December 31, 2021 to income from operations of $348,205 for the year ended December 31, 2022.

Primary drivers were increased antimony sales and, to a lesser extent, continued strong market prices for antimony and zeolite.

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EBIDTA schedules by business segment for the year ended December 31, 2022 and December 31, 2021 is presented as follows.

Antimony – Combined USA and Mexico

December 31, 2022

December 31, 2021

Gross antimony revenue

Cost of sales

Gross profit – antimony

Operating expenses

Income (loss) from operations

Non-operating income

Loss on mineral properties

Net loss - antimony

Provision for income tax

Net income (loss) – antimony

Interest expense

Depreciation,& amortization

Provision for income tax

Depreciation and amortization

EBITDA – antimony

$ (3,211,726 )

December 31, 2022

December 31, 2021

Gross zeolite revenue

2 unchanged sentences

Operating expenses

Non-operating expenses

Income from operations

Non-operating income (expense)

Net income – zeolite

2 unchanged sentences

EBITDA – zeolite

Page 51 of 91

Year ended December 31,

Precious Metals

Gross precious metals revenue

Production costs

Gross revenue precious metals

Cost of sales

Gross profit – precious metals

Operating expenses

Income from operations

Non-operating expenses

Net income – precious metals

3 unchanged sentences

Gross revenue

Production costs

Cost of sales

Operating expenses

Non-operating expenses

Loss on mineral properties

Income (loss) from operations

Non-operating income

Provision for income tax

Net income (loss)

Interest expense

Provision for income tax

Depreciation and amortization

$ (2,382,970 )

Financial Condition and Liquidity

EBITDA – Company-wide

Page 52 of 91

LIQUIDITY AND FINANCIAL CONDITION

WORKING CAPITAL

Current assets

Current liabilities

Net Working Capital

$ (2,669,382 )

Cash provided (used) by operations

Working capital

For the year ended

Cash flow used by operating activities

$ (2,431,477 )

Cash flow used by investing activities

Cash flow provided (used) by financing activities

Net change in cash during period

$ (2,302,663 )

Cash used by investing:

Cash provided by financing:

Net change in cash and restricted cash

Our net working capital increased $24,217,520 for the year ended December 31, 2021 from a negative amount of $2,669,382 at the beginning of the year to $21,548,138 at the end of the year.

Current assets increased due to an increase in cash and cash equivalents.

Our current liabilities decreased by $2,456,690 which included a decrease of approximately $662,140 in accounts payables and payables to related parties, a decrease of $1,120,730 due to Mexican export tax liability.

Capital improvements were paid for with cash.

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.

As of December 31, 2022, the Company had cash and cash equivalents of hand of $19,117,666 which consisted of $19,060,378 in money market funds and deposit accounts along with $57,288 of restricted cash.

Net cash used by operating activities was $249,277 for the year ending December 31, 2022, compared with cash used by operating activities of $2,431,477 during the year ended December 31, 2021.

The $2,182,200 change in cash from operating activities is attributable to ongoing strong gross profit from antinomy sales.

Net cash used by investing activities of $1,785,661 included the purchase of a caterpillar for the Bear River Zeolite operation and ongoing construction of a new warehouse in Preston, ID.

Cash flow used by financing activities for the year ended December 31, 2022 was $267,725 compared to a cash flow provided by financing activities of $23,782,555 for the year ended December 31, 2021.

In 2021, the Company raised $23,342,178 from the issuance of common stock and warrants and $1,790,705 from the exercise of warrants by existing shareholders.

This capital raise and warrant exercise was not recurring during the year ended December 31, 2022.

For the year ending December 31, 2023, we are planning to use funds for

Continue with substantial upgrades to the Bear River Zeolite plant, including modernizing equipment in our crushing plant to include new screens, sorting, conveying, dust-control, and crushing equipment with increased number of safety mechanisms to avoid shut-downs and insure uninterrupted production.

Additionally, we plan to use funds to expand and update our packaging capacity both on-site and possibly the creation of an off-site packaging plant where we can source more labor.

All use of funds for Bear River Zeolite are for the express purpose of substantially increasing production and sales of zeolite.

Some of the use of funds at Bear River Zeolite will doubtlessly be applied to increasing labor costs and an increase in the number of workers.

The continuation of payment towards the completion of the purchase of the Sierra Guadalupe mining claims and surface rights.

Also, the payment towards the purchase of ore and assistance for establishing the extraction of mineral at this property for the purpose of both the synthesis of antimony trisulfide, antimony metal, and antimony trioxide.

The payment of the remainder of the amount due for the purchase of the Soyatal mining claims and purchase of ores from those claims for the synthesis of antimony trisulfide and antimony metal.

For the addition of a gravity separation circuit at the Madero Smelter for the upgrading of low-grade oxide ores.

The updating of equipment that has either rusted, or otherwise failed due to normal wear and tear including, but not limited to, the regular re-lining of furnaces.

At some point in the future, we intend to use funds to update the facility in such a way that it will be able to produce finished antimony oxide for sale directly to customers.

This will require a very large building to enclose our furnaces to shield them from rain, wind, and the weather.

Also, we will need to purchase some quality-control equipment for this purpose.

In Montana, to install two more electric furnaces;

to reline two more smelting furnaces, and to continue to source and pay for labor at a competitive rate and pay our limited crew what they are worth.

At Puerto Blanco, to continue to process ore into concentrate for synthesis into antimony trisulfide product.

For the regular purchase of consumables and reagents necessary to operate the flotation facility and lab.

To hire a certified geologist to do additional mapping and geologic work at the Los Juarez property to complete the geophysical, geochemical, and previous geological work that was done in order to help ascertain the value of the property.

To pay for taxes on all mining concessions.

To pay for all regular permitting fees associated with our holdings in Mexico and the United States.

To pay for new sources of potential antimony ore and continue to investigate new or alternative sources of antimony ore.

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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.

Critical Accounting Estimates

9 unchanged sentences

Direct shipping ore (DSO) purchased at our Madero smelter is paid for at a fixed amount at the time of delivery and assaying, and is not subject to accounting estimates.

The amount of the accounting estimate for purchased ore at our Puerto Blanco mill is in a constant state of change because the amount of purchased ore and the per cent of metal contained are constantly changing.

Due to the amount of ore on hand at the end of a reporting period, as compared to the amount of total assets, liabilities, equity, and the ore processed during a reporting period, any change in the amount of estimated metal contained would likely not result in a material change to our financial condition.

2 unchanged sentences

At this time, we think that an adjustment in our asset recovery obligation is not required, and an adjustment in future periods would not have a material impact in the year of adjustment, but would change the amount of the annual accretion and amortization costs charged to our expenses by an undetermined amount.

Item 7A Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

Item 8 Financial Statements

The consolidated financial statements of the registrant are included herein on pages F1-F22.

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

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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-K

Item 7. Management’s Discussion and Analysis