Item 1. Business
Item 1. Business.
History
United States Antimony Corporation was incorporated in Montana in January 1970 to mine and produce antimony products. In December 1983, the Company suspended its antimony mining operations in the U.S. but continued to produce antimony products using foreign sources of antimony ore. In April 1998, the Company formed US Antimony de Mexico, S.A. de C.V. (“USAMSA”) to smelt antimony in Mexico, and, in August 2005, the Company formed Antimonio de Mexico, S.A. de C.V. (“ADM”) to explore and develop antimony and precious metal deposits in Mexico. The Company formed Bear River Zeolite Company (“BRZ”) in 2000 for the purpose of mining and producing zeolite in Idaho. Our principal business is the production and sale of antimony, precious metals, primarily gold and silver, and zeolite products. In May 2012, our shares of common stock started trading on the NYSE MKT (now NYSE AMERICAN) under the symbol UAMY.
Although we extract minerals from the Bear River Zeolite property in Idaho that we later process and sell, we have not prepared a technical report summary for the Bear River Zeolite property making a determination on the property’s mineral resources or mineral reserves.
Recent Developments
The Company has two subsidiaries in Mexico, US Antimony de Mexico, S.A. de C.V. (“USAMSA”) and Antimonio de Mexico, S.A. de C.V. (“ADM”). On March 11, 2024, the Company shut down the operations of USAMSA, terminated a majority of USAMSA employees, the cost of which related to this employee termination was approximately $40,000, and announced its plans to sell, lease, or dispose of its USAMSA subsidiary, operations, or assets. The USAMSA subsidiary primarily includes the Company’s Madero antimony and precious metals plant in Parras de la Fuente Coahuila, Mexico and its Puerto Blanco antimony and precious metals plant in San Luis de la Paz Guanajuato, Mexico. The Company intends to sell or lease its USAMSA subsidiary, operations, or assets over the next year and has initiated an active search for buyers or leasing opportunities of its operations and/or existing assets. The Company will maintain its existing Los Juarez mining claims and concessions in Cadereyta de Montes Queretaro, Mexico, which are included in our ADM subsidiary. There are presently no active operations at Los Juarez. See Note 14 of the Notes to Consolidated Financial Statements in this Annual Report for further information.
In March 2024, the Company received a favorable ruling with no assessment due related to the audit of USAMSA’s 2013 income tax return by the Mexican tax authority (“SAT”) that began in 2015 and that had been under appeal since 2022. See Note 9 and Note 14 of the Notes to Consolidated Financial Statements in this Annual Report for further information.
Products, Markets, and Segments
Our products consist primarily of the following:
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Antimony: includes antimony oxide, antimony metal, and antimony trisulfide;
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Zeolite: includes coarse and fine zeolite crushed in various sizes; and
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Precious metals: includes unrefined and refined gold and silver.
All sales of antimony, zeolite, and precious metals products are to customers in the United States and Canada.
The Company is organized and managed by the following four segments, which represent our operating units: United States antimony segment, Mexico antimony segment, zeolite segment, and precious metals segment.
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United States Antimony Segment
Our United States antimony segment consists of an antimony plant in the Burns Mining District of Sanders County in Montana, which primarily produces antimony oxide, antimony metal, antimony trisulfide, and precious metals. Antimony oxide is a fine, white powder. Our antimony oxide is used in conjunction with a halogen to form a synergistic flame-retardant system for plastics, rubber, fiberglass, textile goods, paints, coatings, and paper. Our antimony oxide is also used as a color fastener in paint and as a phosphorescent agent in fluorescent light bulbs. Our antimony metal is used in bearings, storage batteries and ordnance. Our antimony trisulfide is used as a primer in ammunition. The precious metals processed at this plant in Montana are included in our Precious Metals Segment.
We closed our antimony mine and mill in Montana in December 1983 because antimony ore could be purchased more economically from foreign sources. Our mine and mill are approximately 1 mile from our current antimony smelter plant in Montana. We hold one patented claim at the mine. The environmental permitting process currently precludes mining at our mine in Montana.
As a result of the mine and mill closure, we have relied on sources outside the U.S. for antimony ore since 1983, and there are risks of interruption in procurement from these sources and volatile changes in world market prices for these materials that are not controllable by us. We anticipate continuing to receive antimony ore primarily from a supplier in Canada but will continue to explore Mexico and Central America for suppliers of antimony ore, assuming economics are profitable. The acquisition of antimony ore is technically complex and a function of the country’s laws and regulations. Our purchasing consequently requires flexibility regarding supply agreements and is tailored accordingly to specific suppliers.
We estimate (but have not independently confirmed) that our present share of the domestic and international markets for antimony oxide products is approximately 4% and less than 1%, respectively. We are the only significant U.S. producer of antimony products. We believe we are competitive both domestically and world-wide due to the following:
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We are the only U.S. domestic producer of antimony products.
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We can ship on short notice to domestic customers.
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We have a reputation for quality products delivered on a timely basis.
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We have the only operating, permitted antimony smelter in the U.S.
Mexico Antimony Segment
The Company has two subsidiaries in Mexico, USAMSA and ADM. As described in the “ Recent Developments ” section in this Annual Report, we shut down the operational activities of USAMSA on March 11, 2024, which primarily includes the following two antimony and precious metals processing plants in Mexico: (1) the Madero smelter in Coahuila, and (2) the Puerto Blanco flotation mill, oxide circuit, and cyanide leach circuit in Guanajuato. Our Madero smelter processes antimony ore primarily into antimony metal and an intermediate stage of antimony. Our Puerto Blanco plant includes crushing equipment, a flotation mill, and an oxide circuit to process and produce an intermediate stage of antimony and a cyanide leach circuit and settling pond that recovers precious metals after the ore goes through the crushing and flotation cycles. The intermediate stage of antimony produced at Madero and Puerto Blanco is shipped to our plant in Montana for further processing to produce antimony oxide and metal. The precious metals processed at Madero and Puerto Blanco, which were shut down as well, are included in our Precious Metals Segment. The Company intends to sell or lease its USAMSA subsidiary, operations, or assets over the next year and has initiated an active search for buyers or leasing opportunities of its operations and/or existing assets.
We will maintain our existing Los Juarez mining claims and concessions in Cadereyta de Montes Queretaro, Mexico, which are included in our ADM subsidiary. There are presently no active operations at Los Juarez.
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Combined United States and Mexico Antimony Segments
Combined Antimony Sales : Following is a schedule of our antimony sales for the years ended December 31, 2023 and 2022:
Year
Antimony Sales ($)
Antimony Pounds Sold
Average Sales Price/Pound Sold
2023
$ 5,904,480
1,269,131
$ 4.65
2022
$ 7,631,670
1,394,036
$ 5.47
Antimony Price Fluctuations: We report our average antimony sales price per pound using the total antimony sales from all our antimony products, which primarily include metal, oxide, and trisulfide. However, our operating results from all our antimony products have been, and will continue to be, related to the Rotterdam antimony metal market price, which has fluctuated widely over the past several years. The Rotterdam average antimony metal market price per pound, as reported by Argus Metals, was $5.50 in 2023 and $5.99 in 2022.
The market price of antimony metal is determined by several variables out of our control. These variables include the availability and price of imported antimony metal, the quantity of new antimony metal supply, and industrial demand for antimony metal. If antimony metal prices decline and remain depressed, our revenues and profitability may be adversely affected.
Zeolite Segment
Our zeolite segment consists of a mine and mill in Preston, Idaho, Bear River Zeolite, Inc. (“BRZ”), which produces zeolite. Our zeolite is used for various purposes including soil amendment and fertilizer, water filtration, sewage treatment, nuclear waste and other environmental cleanup, odor control, gas separation, animal nutrition, and other miscellaneous applications.
BRZ has a lease with Zeolite, LLC that entitles BRZ to surface mine and process zeolite on property in Preston, Idaho, in exchange for a royalty payment. The annual royalty payment is the greater of: (1) the minimum annual royalty of $60,000, adjusted annually for the Consumer Price Index for all Urban Consumers, or (2) $11.00 per ton for the first ten thousand tons, $9.90 per ton for tons in excess of ten thousand up to twenty thousand, and $8.80 per ton for tons in excess of twenty thousand. This Zeolite LLC lease also requires BRZ to pay $10,000 to the lessor on March 1 of each year during the term of the lease, which ends March 1, 2025. BRZ also pays two other royalties on the sale of zeolite products. On a combined basis, BRZ pays royalties ranging from 8% to 13% on the sale of zeolite products. In addition, BRZ can surface mine and process zeolite on property owned by the U.S. Bureau of Land Management that is adjacent to the Company’s Preston, Idaho property after obtaining required permits.
“Zeolite” refers to a group of industrial minerals that consist of hydrated aluminosilicates that hold cations such as calcium, sodium, ammonium, various heavy metals, and potassium in their crystal lattice. Water is loosely held in cavities in the lattice. BRZ zeolite is regarded as one of the best zeolites in the world due to its high cation exchange capacity (CEC) of approximately 180-220 meq/100 gr. (which predicts plant nutrient availability and retention in soil), its hardness and high clinoptilolite content (which is an effective barrier to prevent problematic radionuclide movement), its absence of clay minerals, and its low sodium content. Our zeolite is used in:
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Soil Amendment and Fertilizer : Zeolite has been successfully used to fertilize golf courses, sports fields, parks and common areas, and high value agricultural crops.
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Water Filtration : Zeolite is used for particulate, heavy metal and ammonium removal in swimming pools, municipal water systems, fisheries, fish farms, and aquariums.
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Sewage Treatment : Zeolite is used in sewage treatment plants to remove nitrogen and as a carrier for microorganisms.
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Nuclear Waste and Other Environmental Cleanup : Zeolite has shown a strong ability to selectively remove strontium, cesium, radium, uranium, and various other radioactive isotopes from solutions. 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.
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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.
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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 fishponds 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.
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Animal Nutrition : According to certain third-party research, feeding up to 2% zeolite increases growth rates, decreases conversion rates, and prevents scours. Many cattle are currently being fed zeolite in feed lots located in the United States.
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Miscellaneous Uses : Other uses include catalysts, petroleum refining, concrete, solar energy and heat exchange, desiccants, pellet binding, horse and kitty litter, floor cleaner, traction control, ammonia removal from mining waste, and carriers for insecticides, pesticides and herbicides.
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Precious Metals Segment
Our precious metals segment consists of three precious metals recovery plants, one that is operated in conjunction with the antimony processing plant in Montana and two that were shut down on March 11, 2024 that were operated in conjunction with the antimony processing plants at our Madero and Puerto Blanco operations in Mexico. Precious metals are recovered in the leach circuit and settling pond after the ore goes through the crushing and flotation cycles. When precious metals are contained in antimony source, the metallurgical techniques employed for the recovery of antimony are altered to also recover the precious metals. In 2023, the principal source of antimony concentrates bearing precious metals came from our Canadian supplier, who also purchases precious metals from the Company.
Concentration of Sales
During the years ended December 31, 2023 and 2022, the Company sold 10% or more of its product to the following customers:
For the year ended
December 31,
2023
2022
Customer A revenue
$ 1,548,283
$ 1,882,667
Customer B revenue
1,451,950
1,863,958
Customer C revenue
1,037,307
n/a
Total customer revenue
$ 4,037,540
$ 3,746,625
Customer revenue as a % of total revenues
46 %
34 %
Regulatory Matters
We are subject to the requirements of the Federal Mining Safety and Health Act of 1977, the Occupational Safety and Health Administration’s regulations, the states of Montana and Idaho, federal and state health and safety statutes and Sanders County, Montana and Franklin County, Idaho health ordinances. We also must obtain and maintain various licenses and permits from various governmental agencies to operate our mines and plants and to conduct exploration. The following is a summary of governmental regulation compliance areas which we believe are significant to our business and may have a material effect on our consolidated financial statements, earnings and/or competitive position, although other regulations could be issued and/or become more material to our business and have a material effect on our consolidated financial statements, earnings and/or competitive position.
Health and Safety
We are subject to the regulations of the Mine Safety and Health Administration (“MSHA”) in the United States and the Mexico Ministry of Economy and Mining in Mexico, and work with these agencies to address issues outlined in any investigations and inspections and continue to evaluate our safety practices. We strive to achieve excellent mine safety and health performance, and attempt to implement reasonable best practices with respect to mine safety and emergency preparedness. Achieving and maintaining compliance with regulations will be challenging and may increase our operating costs.
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Licenses, Permits and Claims/Concessions
We are required to obtain various licenses and permits to operate our mines and conduct exploration and reclamation activities. Targets at our Los Juarez exploration project in Mexico can only be developed if we are successful in obtaining the necessary permits. In addition, our operations and exploration activities in Mexico are conducted pursuant to claims or concessions granted by the host government, and otherwise are subject to claims renewal and minimum work commitment requirements, which are subject to certain political risks associated with foreign operations.
Environmental
Our operations are subject to various environmental laws and regulations at the federal and state level. Compliance with environmental regulations, and litigation based on environmental laws and regulations, involves significant costs and can threaten existing operations or constrain expansion opportunities. Mine closure and reclamation regulations impose substantial costs on our operations and include requirements that we provide financial assurance supporting those obligations. We have about $55,000 of financial assurances, primarily in the form of surety bonds, for reclamation company-wide.
Our exploration, development and production programs conducted in the United States are subject to local, state and federal regulations regarding environmental protection. Some of our production and mining activities are conducted on public lands. We believe that our current discharge of waste materials from our processing facilities is in material compliance with environmental regulations and health and safety standards. The U.S. Forest Service extensively regulates mining operations conducted in National Forests. Department of Interior regulations cover mining operations carried out on most other public lands. All operations by us involving the exploration for or the production of minerals are subject to existing laws and regulations relating to exploration procedures, safety precautions, employee health and safety, air quality standards, pollution of water sources, waste materials, odor, noise, dust and other environmental protection requirements adopted by federal, state and local governmental authorities. We may be required to prepare and present data to these regulatory authorities pertaining to the effect or impact that any proposed exploration for, or production of, minerals may have upon the environment. Any changes to our reclamation and remediation plans, which may be required due to changes in state or federal regulations, could have an adverse effect on our operations. The range of reasonably possible loss in excess of the amounts accrued, by site, cannot be reasonably estimated at this time.
We accrue environmental liabilities when the occurrence of such liabilities is probable, and the costs are reasonably estimable. The initial accruals for all our sites are based on comprehensive remediation plans approved by the various regulatory agencies in connection with permitting or bonding requirements. Our accruals are further based on presently enacted regulatory requirements and adjusted only when changes in requirements occur or when we revise our estimate of costs to comply with existing requirements. When remediation activity physically commences, we can refine and revise our estimates of costs required to fulfill future environmental tasks based on contemporaneous cost information, operating experience, and changes in regulatory requirements. In instances where the costs required to complete our remaining environmental obligations are clearly determined to be in excess of the existing accrual, we have adjusted the accrual accordingly. When regulatory agencies require additional tasks to be performed in connection with our environmental responsibilities, we evaluate the costs required to perform those tasks and adjust our accrual accordingly, as the information becomes available. In all cases, however, our accrual at year-end is based on the best information available at that time to develop estimates of environmental liabilities.
Retirement and Reclamation Obligations related to our US and Mexico Antimony and Precious Metals Segments
We have retirement and reclamation obligations at our closed antimony mine and mill (“the Stibnite Hill Mine Site”) and at our active smelter and precious metals plant, all of which are in the Burns Mining District of Sanders County, Montana, and have accrued $395,811 at December 31, 2023 related to these obligations. We are under the regulatory jurisdiction of the U.S. Forest Service and subject to the operating permit requirements of the Montana Department of Environmental Quality. Some reclamation activities have been performed under the supervision of the U.S. Forest Service and Montana Department of Environmental Quality.
We have retirement and reclamation obligations in Mexico and have accrued $571,330 at December 31, 2023 related to these obligations. These obligations are under The Secretary of Environment and Natural Resources (“SEMARNAT”) and The Federal Attorney for Environmental Protection (“PROFEPA”) based on the Program for Environmental Vigilance (“PVA”).
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Retirement and Reclamation Obligation related to our Zeolite Segment
We have a retirement and reclamation obligation accrual for BRZ of $670,886 at December 31, 2023 based on the retirement and reclamation requirements of BRZ’s lease with Zeolite LLC and the regulatory authorities.
General Environmental Remediation
We believe we have accrued adequate reserves to fulfill our environmental remediation responsibilities as of December 31, 2023. We have posted cash performance bonds with a bank and the U.S. Forest Service in connection with our reclamation activities. We have made significant reclamation and remediation progress on all our properties over thirty years and have complied with regulatory requirements in our environmental remediation efforts.
Competition
We compete with other mineral resource exploration and development companies for financing and for the acquisition of new mineral properties and for equipment and labor related to exploration and development of mineral properties. Many of the mineral resource exploration and development companies with whom we compete have greater financial and technical resources. Accordingly, competitors may be able to spend greater amounts on acquisitions of mineral properties of merit, on exploration of their mineral properties and on development of their mineral properties. In addition, they may be able to afford greater geological expertise in the targeting and exploration of mineral properties. This competition could result in competitors having mineral properties of greater quality and interest to prospective investors who may finance additional exploration and development. This competition could adversely impact our ability to finance further exploration and to achieve the financing necessary to develop its mineral properties.
We provide no assurance we will be able to effectively compete in any of our business areas with current or future competitors or that the competitive pressures faced by us will not have a material adverse effect on the business, financial condition and operating results.
Employees
As of December 31, 2023, we employed 83 full-time employees, 16 in Montana, 23 in Idaho, 3 in Missouri, and 41 in Mexico. The number of full-time employees may vary seasonally. None of our employees are covered by any collective bargaining agreement.
Intellectual Property
We hold no material patents, licenses, franchises or concessions. However, we consider our antimony processing plants proprietary in nature.
Available Information
We file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the internet at the SEC’s website at http://www.sec.gov. Our SEC filings are also available free of charge on the Investors portion of our website at https://www.usantimony.com as soon as reasonably practicable after they are filed with or furnished to the SEC. Our website and the information contained on or through that site are not incorporated into this report. All website addresses in this report are intended to be inactive textual references only.
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