10-K: United States Antimony Corporation Details Share Structure and Recent Operational Changes in Annual Filing

United States Antimony Corporation's annual 10-K filing outlines its share structure, recent shutdown of Mexican operations, and financial performance for 2023.

Summary

• United States Antimony Corporation's 10-K filing details the company's authorized and outstanding shares of common and preferred stock as of March 18, 2024.
• The company has 150,000,000 authorized common shares with 107,647,317 outstanding, and 10,000,000 authorized preferred shares with 750,000 Series B and 177,904 Series C shares outstanding.
• The document notes that the company experienced net losses in the last fiscal year, making dividend payments unlikely in the next year.
• The company shut down its USAMSA operations in Mexico on March 11, 2024, terminating most employees and planning to sell or lease the subsidiary's assets.
• The company's operations are divided into four segments: United States antimony, Mexico antimony, zeolite, and precious metals.
• Antimony sales decreased from $7,631,670 in 2022 to $5,904,480 in 2023, with average sales price per pound decreasing from $5.47 to $4.65.
• The zeolite segment also saw a decrease in sales, with 10,145 tons sold in 2023 compared to 13,047 tons in 2022.
• The company reported a net loss of $6,348,287 for 2023, compared to a net income of $428,661 in 2022.
• The company's working capital decreased from $19,397,489 in 2022 to $12,642,282 in 2023.

Sentiment

Score: 3

Explanation: The document presents a concerning financial picture with significant losses, decreased sales, and operational challenges. The shutdown of Mexican operations and the need for potential capital raises further contribute to a negative outlook. While there are some positives, such as the favorable tax ruling and the potential of the zeolite business, the overall sentiment is weak.

Positives

• The company received a favorable ruling with no assessment due related to the audit of USAMSAs 2013 income tax return by the Mexican tax authority.
• The company is the only significant U.S. producer of antimony products.
• The company has a reputation for quality products delivered on a timely basis.
• The company has made significant reclamation and remediation progress on all its properties over thirty years and has complied with regulatory requirements in its environmental remediation efforts.

Negatives

• The company experienced a significant net loss of $6,348,287 in 2023.
• Antimony sales decreased by 22.6% from 2022 to 2023.
• Zeolite sales decreased by 21.9% from 2022 to 2023.
• The company shut down its USAMSA operations in Mexico, incurring termination costs of approximately $40,000.
• The company's working capital decreased by $6.8 million during 2023.
• The company's internal control over financial reporting was deemed ineffective as of December 31, 2023 due to material weaknesses in the segregation of duties.

Risks

• The company has experienced losses in recent years and may continue to incur losses.
• Metal prices are volatile and a substantial decline would have a material adverse effect on the company.
• The company may seek or require additional financing, which may not be available on acceptable terms.
• The company is substantially dependent on a few significant customers.
• Mining accidents or other adverse events could decrease production or otherwise adversely affect operations.
• The company may not be able to maintain the infrastructure necessary to conduct mining activities.
• Certain operations are in Mexico and may be subject to geo-political risk.
• The company may be unable to comply with NYSE American continued listing standards.
• The company faces substantial governmental regulations, including the Mine Safety and Health Act, various environmental laws and regulations and the 1872 Mining Law.
• The company cannot guarantee title to all of its properties.
• There is uncertainty as to the termination and renewal of the company's mining concessions.
• Not realizing the value of the company's USAMSA assets in Mexico upon sale, lease, or disposal may adversely affect results of operations and financial condition.

Future Outlook

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. The company will maintain its existing Los Juarez mining claims and concessions in Mexico.

Management Comments

• The company is focused on generating positive cash flow.
• The company is focused on improving customer service based on the needs of its customers.
• A cornerstone of the company's strategy is the well-being of its employees.
• The company's mission is to service its employees, customers, and vendors well and grow its business profitably both organically as well as through strategic acquisitions to increase shareholder value.

Industry Context

The document highlights the challenges faced by mining companies, including volatile metal prices, regulatory hurdles, and operational risks. The shutdown of the Mexican operations reflects a strategic shift in response to financial losses and operational difficulties. The company's focus on its U.S. operations and zeolite business suggests a move towards more stable and profitable ventures.

Comparison to Industry Standards

• The company's financial performance in 2023, with a significant net loss and decreased sales, is worse than many of its peers in the mining industry, particularly those with more diversified operations and stronger balance sheets.
• The company's reliance on a few key customers and its exposure to volatile antimony prices are common challenges in the mining sector, but the company's lack of diversification makes it more vulnerable.
• The company's decision to shut down its Mexican operations is a significant strategic shift, which is not uncommon in the mining industry when operations become unprofitable or too risky.
• The company's zeolite business, while smaller, has the potential to provide a more stable revenue stream due to its diverse applications and the company's claim of having one of the best zeolites in the world.
• Compared to larger, more established mining companies, United States Antimony Corporation faces greater challenges in accessing capital and managing operational risks due to its smaller size and limited resources.

Management Changes

Corporate Governance

Legal Proceedings

• The company is not a party to any pending material legal proceedings.
• In 2023, Bear River Zeolite Company (BRZ) received fourteen significant and substantial citations and three orders from MSHA, all of which have been rectified by BRZ prior to the filing of this Annual Report.

Related Party Transactions

• The company incurred costs of $12,884 during the year ended December 31, 2023 from an entity owned by Russell Lawrence for lodging and meals provided to employees, board members, consultants and customers of the Company.

Stakeholder Impact

• Shareholders face increased risk due to the company's financial losses and operational challenges.
• Employees in Mexico were impacted by the shutdown of USAMSA operations and the termination of most employees.
• Customers may experience disruptions in supply due to the changes in operations.
• Creditors face increased risk due to the company's financial instability.

Next Steps

• The company intends to sell or lease its USAMSA subsidiary, operations, or assets over the next year.
• The company will maintain its existing Los Juarez mining claims and concessions in Mexico.
• The company plans to continue reviewing the operations and financial results of each segment to make informed decisions.
• The company intends to continue to invest in people, customers, infrastructure, and operations with the goals of increasing production, decreasing costs, and growing revenue profitably.

Key Dates

Keywords

antimony, zeolite, precious metals, mining, operations, financial results, Mexico, USAMSA, mineral resources, NYSE American