10-K 1 uamy_10k.htm ANNUAL REPORT Blueprint
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-K
 
(Mark One)
[X] 
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the fiscal year ended December 31, 2017
 
[ ] 
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
  For the transition period __________ to __________
 
 
Commission file number 001-08675
UNITED STATES ANTIMONY CORPORATION
(Exact name of registrant as specified in its charter)
 
Montana
 
81-0305822
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
 
P.O. Box 643, Thompson Falls, Montana
59873
(Address of principal executive offices)
(Zip Code)
 
Registrant's telephone number, including area code: (406) 827-3523
 
Securities registered pursuant to Section 12(b) of the Act: None
 
Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $.01 per share
 
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☑ No ☐
 
Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K contained in this form and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☑
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “small reporting company” in Rule 12b-2 of the Exchange Act.
 
 Large Accelerated Filer
 ☐
 Accelerated Filer
 ☐
 Non-Accelerated Filer 
 ☐
 Smaller reporting company
 ☑
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)
Yes ☐ No ☑
 
The aggregate market value of the voting stock held by non-affiliates of the registrant, based on the average bid price of such stock, was $18,797,116 as of June 30, 2017.
 
At April 2, 2018, the registrant had 67,488,153 outstanding shares of par value $0.01 common stock.

 
 
 
UNITED STATES ANTIMONY CORPORATION
2017 ANNUAL REPORT
 
TABLE OF CONTENTS
 
PART I
 
 
 
 
ITEM 1.
DESCRIPTION OF BUSINESS
 
1
 
 
 
 
ITEM 1A.
RISK FACTORS
 
5
 
 
 
 
ITEM 1B.
UNRESOLVED STAFF COMMENTS
 
6
 
 
 
 
ITEM 2.
DESCRIPTION OF PROPERTIES
 
6
 
 
 
 
ITEM 3.
LEGAL PROCEEDINGS
 
15
 
 
 
 
ITEM 4.
MINE SAFETY DISCLOSURES
 
15
 
 
 
 
PART II
 
 
 
 
ITEM 5.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
 
15
 
 
 
 
ITEM 6.
SELECTED FINANCIAL DATA
 
16
 
 
 
 
ITEM 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
 
16
 
 
 
 
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
 
22
 
 
 
 
ITEM 7B.
CRITICAL ACCOUNTING ESTIMATES
 
22
 
 
 
 
ITEM 8.
FINANCIAL STATEMENTS
 
22
 
 
 
 
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
 
22
 
 
 
 
ITEM 9A.
CONTROLS AND PROCEDURES
 
22
 
 
 
 
PART III
 
 
 
 
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS AND COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
 
23
 
 
 
 
ITEM 11.
EXECUTIVE COMPENSATION
 
26
 
 
 
 
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
27
 
 
 
 
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
29
 
 
 
 
ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICE
 
29
 
 
 
 
PART IV
 
 
 
 
ITEM 15.
EXHIBITS AND REPORTS ON FORM 8-K
 
30
 
 
 
 
SIGNATURES
 
33
 
 
 
CERTIFICATIONS
 

 
 
 
FINANCIAL STATEMENTS
 
F-1-F-22
 
 
 
 
PART I
 
General
 
Item 1. Description of Business
 
General
 
 
 
 
 
Explanatory Note: As used in this report, the terms "we," "us" and "our" are used to refer to United States Antimony Corporation and, as the context requires, its management.
 
 
 
 
 
Some of the information in this Form 10-K contains forward-looking statements that involve substantial risks and uncertainties. You can identify these statements by forward-looking words as "may," "will," "expect," "anticipate," "believe," "estimate" and "continue," or similar words. You should read statements that contain these words carefully because they:
 
● 
discuss our future expectations;
 
● 
contain projections of our future results of operations or of our financial condition; and
 
● 
state other "forward-looking" information.
 
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. Environmental restrictions preclude mining at this site.
 
Mining was suspended in December 1983, because antimony could be purchased more economically from foreign sources.
 
For 2017, 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 developed sources of antimony in Mexico but we are still depending on foreign companies for raw material in the future. We expect more raw materials from our own properties for 2018 and later years. We continue working with suppliers in North America, Central America, Europe, Australia, 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 (AM) which owns the San Miguel concession of the Los Juarez property. USAMSA has three divisions (1) the Madero smelter in Coahuila, (2) the Puerto Blanco flotation mill and oxide circuit in Guanajuato that is ramping up for 2018, and (3) mining properties that include the Los Juarez mineral deposit with concessions in Queretaro, the Wadley mining concession in San Luis Potosi, the Soyatal deposits in Queretaro, and the Guadalupe properties in Zacatecas.
 
 
1
 
 
In our existing operations in Montana, we produce antimony oxide, sodium antimonate, 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. Sodium antimonate is primarily used as a fining agent (degasser) for glass in cathode ray tubes and as a flame retardant. We also sell antimony metal for use in bearings, storage batteries and ordnance.
 
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 two of the three operating antimony smelters in North and Central America.
We are the sole 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.
As a vertically integrated company, we will have more control over our raw material costs.
 
Following is a five year schedule of our antimony sales:
 
 
Schedule of Antimony Sales
 
 
 
Lbs Metal
 
 
 
 
 
Average
 
 
Year
 
 
Contained
 
 
$
 
 
Price/Lb
 
2017
  1,891,439 
 $7,588,470 
 $4.01 
2016
  2,936,880 
 $8,744,170 
 $2.98 
2015
  2,487,321 
 $9,863,933 
 $3.97 
2014
  1,727,804 
 $8,132,410 
 $4.71 
2013
  1,579,182 
 $8,375,158 
 $5.30 
 
Concentration of Sales:
 
During the two years ended December 31, 2017, the following sales were made to our three largest customers:
 
Sales to
 
For the Year Ended
 
Largest Customers
 
December 31, 2017
 
 
December 31, 2016
 
Mexichem Specialty Compounds Inc.
 $3,335,046 
 $2,108,998 
East Penn Manufacturing Inc
  512,621 
  1,147,854 
Kohler Corporation
  1,928,962 
  1,474,854 
 
 $5,776,629 
 $4,731,706 
% of Total Revenues
  56.50%
  39.80%
 
 
While the loss of one of our three largest customers would be a problem in the short term, we have numerous requests from potential buyers that we cannot fill, and we could quickly, in the present market conditions, be able to replace the lost sales. Loss of all three of our largest customers would be more serious and may affect our profitability.
 
Marketing: We employ full-time marketing personnel and have negotiated various commission-based sales agreements with other chemical distribution companies.
 
Antimony Price Fluctuations: Our operating results have been, and will continue to be, related to the market prices of antimony metal, which have fluctuated widely in recent years. The volatility of prices is illustrated by the following table, which sets forth the average prices of antimony metal per pound, as reported by sources deemed reliable by us.
 
 
2
 
 
A five year price range of prices for antimony oxide and antimony metal, per pound, was as follows:
 
 
 
USAC SALES
 
 
 
 
 
 
 
 
 
Oxide
 
 
Metal
 
 
Combined
 
 
USA
 
 
Rotterdam
 
 
  
 
 
 
 
(Metal Contained Price)
 
 
 
Average
 
 
Average
 
 
Average
 
 
Average
 
 
Average
 
Year
 
Price/Lb
 
 
Price/Lb
 
 
Price/Lb
 
 
 Price/Lb
 
 
 Price/Lb
 
2017
 $3.40 
 $3.41 
 $4.01 
 $3.77 
 $3.78 
2016
 $3.11 
 $2.62 
 $2.98 
 $2.99 
 $2.94 
2015
 $3.34 
 $3.71 
 $3.97 
 $3.41 
 $3.32 
2014
 $4.00 
 $4.18 
 $4.71 
 $4.40 
 $4.31 
2013
 $4.41 
 $4.69 
 $5.30 
 $4.73 
 $4.78 
 
Antimony metal prices are determined by a number of variables over which we have no control. These include the availability and price of imported metals, the quantity of new metal supply, and industrial demand. If metal prices decline and remain depressed, our revenues and profitability may be adversely affected.
 
We use various antimony raw materials to produce our products. We currently obtain antimony raw material from sources in Canada and Mexico.
 
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. A company controlled by the estate of Al Dugan, a significant stockholder and, as such, an affiliate of USAC, receives a payment equal to 3% of net sales on 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%. BRZ has constructed a processing plant on the property and it has improved its productive capacity. In addition to a large amount of fully depreciated equipment that has been transferred from the USAC division, we have spent approximately $3,945,000 to purchase and construct the processing plant as of December 31, 2017.
 
We have no "proven reserves" or "probable reserves" of zeolite, as these terms are defined by the Securities and Exchange Commission.
 
"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.
 
 
 
3
 
 
● 
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 and animal waste treatment facilities.
 
● 
Animal Nutrition. Feeding up to 2% zeolite increases growth rates, decreases conversion rates, prevents scours, and increases longevity.
 
● 
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.
 
Environmental Matters
 
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. As remediation activity has physically commenced, we have been able to 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 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.
 
Antimony Processing Site
 
We have environmental remediation obligations at our antimony processing site near Thompson Falls, Montana ("the Stibnite Hill Mine Site"). 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. At December 31, 2017 and 2016, we have accrued $100,000 to fulfill our environmental responsibilities.
 
BRZ
 
During 2001, we recorded a reclamation accrual for our BRZ subsidiary, based on an analysis performed by us and reviewed and approved by regulatory authorities for environmental bonding purposes. The accrual of $7,500 represents our estimated costs of reclaiming, in accordance with regulatory requirements, the acreage disturbed by our zeolite operations, and remains unchanged at December 31, 2017.
 
 
4
 
 
General
 
Reclamation activities at the Thompson Falls Antimony Plant have proceeded under supervision of the U.S. Forest Service and Montana Department of Environmental Quality. We have complied with regulators' requirements and do not expect the imposition of substantial additional requirements.
 
We have posted cash performance bonds with a bank and the U.S. Forest Service in connection with our reclamation activities.
 
We believe we have accrued adequate reserves to fulfill our environmental remediation responsibilities as of December 31, 2017. 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.
 
Employees
 
As of December 31, 2017, we employed 27 full-time employees in Montana. In addition, we employed 16 people at our zeolite plant in Idaho, and more than 60 employees at our mining, milling and smelting operation in Mexico. The number of full-time employees may vary seasonally. None of our employees are covered by any collective bargaining agreement.
 
Other
 
We hold no material patents, licenses, franchises or concessions. However, we consider our antimony processing plants proprietary in nature.
 
We are subject to the requirements of the Federal Mining Safety and Health Act of 1977, the Occupational Safety and Health Administration's regulations, requirements of the state of Montana and the state of Idaho, federal and state health and safety statutes and Sanders County, Montana and Franklin County, Idaho health ordinances.
 
Item 1A Risk Factors
 
There may be events in the future that we are not able to accurately predict or over which we have no control. The risk factors listed below, as well as any cautionary language in this report, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements.
 
If we were liquidated, our common stockholders could lose part, or all, of their investment.
 
In the event of our dissolution, the proceeds, if any, realized from the liquidation of our assets will be distributed to our stockholders only after the satisfaction of the claims of our creditors and preferred stockholders. The ability of a purchaser of shares to recover all, or any portion, of the purchase price for the shares, in that event, will depend on the amount of funds realized and the claims to be satisfied by those funds.
 
We may have un-asserted liabilities for environmental reclamation.
 
Our research, development, manufacturing and production processes involve the controlled use of hazardous materials, and we are subject to various environmental and occupational safety laws and regulations governing the use, manufacture, storage, handling, and disposal of hazardous materials and some waste products. The risk of accidental contamination or injury from hazardous materials cannot be completely eliminated. In the event of an accident, we could be held liable for any damages that result and any liability could exceed our financial resources. We also have one ongoing environmental reclamation and remediation projects at our current production facility in Montana. Adequate financial resources may not be available to ultimately finish the reclamation activities if changes in environmental laws and regulations occur, and these changes could adversely affect our cash flow and profitability. We do not have environmental liability insurance now, and we do not expect to be able to obtain insurance at a reasonable cost. If we incur liability for environmental damages while we are uninsured, it could have a harmful effect on our financial condition and results of operations. The range of reasonably possible losses from our exposure to environmental liabilities in excess of amounts accrued to date cannot be reasonably estimated at this time.
 
We have accruals for asset retirement obligations and environmental obligations.
 
We have accruals totaling $271,572 on our balance sheet at December 31, 2017, for our environmental reclamation responsibilities and estimated asset retirement obligations. If we are not able to adequately perform these activities on a timely basis, we could be subject to fines and penalties from regulatory agencies.
 
 
5
 
 
Item 1B Unresolved Staff Comments
 
Not Applicable
 
Item 2 Description of Properties
 
ANTIMONY DIVISION
 
Our antimony smelter and precious metals plant is located in the Burns Mining District, Sanders County, Montana, approximately 14 miles west of Thompson Falls on Montana Highway 471. This highway is asphalt, and the property is accessed by cars and trucks. The property includes two five-acre patented mill sites that are owned in fee-simple by us. The claims are U. S. Antimony Mill Site No. 1 (Mineral Survey 10953) and U. S. Antimony Mill Site No. 2 (Mineral Survey 10953).
 
The U. S. Antimony Mill Sites were used to run a flotation mill and processing plant for antimony that we mined on adjacent claims that have been sold. Presently, we run a smelter that includes furnaces of a proprietary design to produce antimony metal, antimony oxide, and various other products. We also run a precious metals plant. The facility includes 6 buildings and our main office. There are no plans to resume mining on the claims that have been sold or abandoned, although the mineral rights have been retained on many of the patented mining claims. The U. S. Forest Service and Montana Department of Environmental Quality have told us that the resumption of mining would require an Environmental Impact Statement, massive cash bonding, and would be followed by years of law suits. The mill site is serviced with three-phase electricity from Northwest Power, and water is pumped from a well.
 
We claim no reserves on any of these properties.
 
 
 
6
 
 
 
Antimony mining and milling operations in the U.S. were curtailed during 1983 due to continued declines in the price of antimony. We are currently purchasing foreign raw antimony materials and producing our own raw materials from our properties in Mexico. We continue to produce antimony metal, oxide, sodium antimonite, and precious metals from our processing facility near Thompson Falls, Montana.
 
ANTIMONY MINERAL PROPERTIES
 
Los Juarez Group
 
We hold properties that are collectively called the “Los Juarez” property, in Queretaro, as follows:
 
1.  
San Miguel I and II were purchased by a USAC subsidiary, Antimonio de Mexico, S. A. de C. V (AM), for $1,480,500. As of December 31, 2017, we have paid for the property, and have incurred significant permitting costs. The property consists of 40 hectares.
2.  
San Juan I and II are concessions owned by AM and include 466 hectares.
3.  
San Juan III is held by a lease agreement by AM in which we will pay a 10% royalty, based on the net smelter returns from another USAC Mexican subsidiary, named United States Antimony Mexico, S. A. de C. V. or USAMSA. It consists of 214 hectares.
 
The concessions collectively constitute 720 hectares. The claims are accessed by roads that lead to highways.
 
 
 
7
 
 
 
 
8
 
 
Part of the USAC Mexican property, including San Miguel I, II and part of San Juan III, was originally drilled by the Penoles Company in 1970, when antimony metal prices were high. They did not proceed with the property, due to the complex metallurgy of antimony. Subsequently, the Mexican Government did additional work and reported a deposit of mineralized material of 1,000,000 metric tons (mt) grading 1.8% antimony and 8.1 ounces of silver per metric ton (opmt) in Consejo de Recursos  Minerales (Publicacion M-4e). Such a report does not qualify as a comprehensive evaluation, such as a final or bankable feasibility study that concludes legal and technical viability, and economic feasibility. The Securities and Exchange Commission does not recognize this report, and we claim no reserves.
 
The mineralized zone is a classic jasperoid-type deposit in the Cretaceous El Doctor Limestone. The mineralization is confined to silicified jasperiod pipes intruded upwards into limestone. The zone strikes north 70 degrees west. The dimension of the deposit is still conjectural. However, the strike length of the jasperoid is more than 3,500 meters. 
 
The mineralization is typically very fine-grained stibnite with silver and gold.  It is primarily sulfide in nature due to its encapsulation in silica. The mining for many years will be by open pit methods. Eventually it will be by underground methods. At the present time, mining has included hauling dump rock and rock from mine faces.
 
 
9
 
 
Soyatal Mining District, Pinal De Amoles, Queretaro, Mexico
 
Soyatal
 
Reportedly, the Soyatal District was the third largest producer of antimony in Mexico. U. S. Geological Survey Bulletin 960-B, 1948, Donald E. White, Antimony Deposits of Soyatal District, State of Queretaro, Mexico records the production from 1905-1943 at 25,600 tons of antimony metal content. In 1942, the mines produced ore containing 1,737 tons of metal, and in 1943, they produced ore containing 1,864 tons of metal. This mining was performed primarily all by hand labor, with no compressors or trammers, and the ore was transported by mules, in sacks, to the railroad. Recoveries were less than 40% of the values. Mining continued throughout World War II.
 
Mr. White remarks p. 84 and 85, “In the Soyatal Mines, as in practically all antimony mines, it is difficult to estimate the reserves, for the following reasons:
 
The individual deposits are so extremely irregular in size, shape, and grade that the amount of ore in any one of them is unknown until the ore has been mined.
As only the relatively high grade shipping ore is recovered, the ore bodies are not systematically sampled and assayed…The total reserves are thus unknown and cannot be estimated accurately, but they probably would suffice to maintain a moderate degree of activity in the district for at least 10 years. The mines may even contain enough ore (mineralized deposit) to equal the total past production.”
 
Minimal ore, primarily through hand mining and sorting methods, has continued at the Soyatal properties since 1943. We do not claim any reserves at Soyatal as defined by the SEC.
 
USAMSA Puerto Blanco Flotation Mill, Guanajuato, Mexico
 
The flotation plant has a capacity of 140 metric tons per day. It includes a 30” x 42” jaw crusher, a 4’x 8’ double-deck screen, a 36” cone crusher, an 8’x 36” Harding type ball mill, and eight No. 24 Denver sub A type flotation machines, an 8’ disc filter, front end loaders, tools and other equipment. The flotation circuit is used for the processing of rock from Los Juarez, Guadalupe, and other properties. We are in the process of installing a 400 metric ton per day flotation mill that will be dedicated to processing ore from our Los Juarez property. The crushing equipment currently in place is adequate for both flotation mills. An oxide circuit was added to the plant in 2013 and 2014 to mill oxide ores from Soyatal and other properties. It includes a vertical shaft impactor, 3 ore bins, 8 conveyors, a 4’ x 6’ high frequency screen, jig, 8 standard concentrating tables, 5 pumps, sand screw and two buildings. The capacity of the oxide circuit is 50 tons per day. We are presently installing a cyanide leach circuit and settling pond that will be used to recover precious metals from our Los Juarez mine. During 2017 and 2016, less than 10% of the mill’s capacity was utilized.
 
USAMSA Madero Smelter, Estacion Madero, Parras De La Fuente, Coahuila, Mexico
 
USAC, through its wholly owned subsidiary, USAMSA, owns and operates a smelting facility at Estacion Madero, in the Municipio of Parras de la Fuente, Coahuila, Mexico. The property includes 13.48 hectares. Seventeen small rotating furnaces (SRF’s) and one large rotating furnace (LRF) with an associated stack and scrubber were permitted and installed by the end of 2015. Other equipment includes cooling ducting, dust collectors, scrubber, laboratory, warehouse, slag vault, stack, jaw crusher, screen, hammer mill, and a 3.5’ x 8’ rod mill. The plant has a feed capacity of five to six metric tons of direct shipping ore or concentrates per day, depending on the quality of the feedstock. If the feedstock is in the mid-range of 45% antimony, the smelter could produce approximately 1.8 MM pounds of contained antimony annually. Concentrates from our flotation plant, and hand-sorted ore from Mexico sources and other areas, are being processed. During 2017, we completed the installation of a leach circuit to process concentrates from the Puerto Blanco cyanide leach plant containing precious metals from our Los Juarez Mining property. The Madero production is either sold or shipped to our Montana plant to produce finished Antimony products and precious metals. Access to the plant is by road and railroad. Set forth below are location maps:
 
 
10
 
 
 
ZEOLITE DIVISION
 
Location
 
This property is located in the southeast corner of Idaho, approximately seven miles east of Preston, Idaho, 34 miles north of Logan, Utah, 79 miles south of Pocatello, Idaho, and 100 miles north of Salt Lake City, Utah.
 
The mine is located in the N ½ of section 10 and the W ½ of section 2, section 3, and the E ½ section 4, Township 15, Range 40 East of the Boise Meridian, Franklin County, Idaho. The plant and the initial pit are located on the Webster Farm, L.L.C., which is private land.
 
Transportation
 
The property is accessed by seven miles of paved road and about l mile of gravel road from Preston, Idaho. Preston is near the major north-south Interstate Highway 15 to Salt Lake City or Pocatello.
 
Several Union Pacific rail sidings may be available to the mine. Bonida is approximately 25 miles west of the mine and includes acreage out of town where bulk rock could be stored, possibly in existing silos or on the ground. Three-phase power is installed at this abandoned site.  Finished goods can also be shipped from the Franklin County Grain Growers feed mill in the town of Preston on the Union Pacific Railroad.
 
The Burlington Northern Railroad can be accessed at Logan, Utah.
 
 
11
 
 
 Location Map 
 
 
 
 
 
12
 
 
Property and Ownership
 
BRZ leases 320 acres from the Webster Farm, L.L.C. The term of the lease is 15 years and it began on March 1, 2010. This includes the mill site and zeolite in the area of the open pit. The property is the NW ¼ and W ½ of the SW ¼ of section 3 and the N ½ of the W ¼ of section 10, Township 15 South, Range 40 East of the Boise Meridian, Franklin County, Idaho. The lease requires a payment of $10.00 per ton plus an additional annual payment of $10,000 on March 1st of each year. In addition, there are two other royalty holders. Nick Raymond and the estate of George Desborough each have a graduated royalty of $1.00 per ton to $5.00 per ton, depending on the sale price.
 
The balance of the property is on Bureau of Land Management property and includes 480 acres held by 24, 20-acre Placer claims. Should we drop our lease with Webster Farms LLC., we will retain these placer claims as follows:
 
BRZ 1        IMC 185308
BRZ 2        IMC 185309
BRZ 3        IMC 185310
BRZ 4        IMC 185311
BRZ 5        IMC 185312
BRZ 6        IMC 185313
BRZ 7        IMC 185314
BRZ 8        IMC 185315
BRZ 9        IMC 185316
BRZ 10      IMC 185317
BRZ 11      IMC 185318
BRZ 12      IMC 185319
BRZ 20      IMC 186183
BRZ 21      IMC 186184
BRZ 22      IMC 186185
BRZ 23      IMC 186186
BRZ 24      IMC 186187
BRZ 25      IMC 186188
BRZ 26      IMC 186189
BRZ 27      IMC 186190
BRZ 28      IMC 186191
BRZ 29      IMC 186192
BRZ 30      IMC 186193
BRZ 31      IMC 186194
 
 
 
13
 
 
Geology
 
The deposit is a very thick, sedimentary deposit of zeolitized volcanic ash of Tertiary age known as the Salt Lake Formation. The sedimentary interval in which the clinoptilolite occurs is more than 1000 feet thick in the area. Thick intervals of the zeolite are separated by thin limestone and sandstone beds deposited in the freshwater lake where the volcanic ash accumulated.
 
The deposit includes an 800- foot mountain. Zeolite can be sampled over a vertical extent of 800 feet and on more than 700 acres. The current pit covers more than 3 acres.  Despite the apparent size of the deposit, we claim no reserves.
 
Exploration, Development, and Mining
 
Exploration has been limited to the examination and sampling of surface outcrops and mine faces.
 
Mining Methods
 
Depending on the location, the zeolite is overlain by 1 to 12 feet of zeolite-rich soil. On the ridges, the cover is very little, and in the draws the soil is thicker. The overburden is stripped using a tractor dozer, currently a Caterpillar D-8K. It is moved to the toe of the pit, and will eventually be dozed back over the pit for reclamation.
 
Although near-surface rock is easily ripped, it is more economical to drill and blast it. Breakage is generally good. Initial benches were 20 to 30 foot, and each bench is accessed by a road.
 
Haulage is over approximately 4,000 feet of road on an uphill grade of 2.5% to the mill. On higher benches, the grade will eventually be downhill. Caterpillar 769 B rock trucks are being used. They haul 18 to 20 tons per load, and the cycle time is about 30 minutes.
 
With the trucks and the other existing equipment, the mine is capable of producing 80 tons per hour. 
 
MILLING
 
Primary Crusher
 
The primary crushing circuit is a conventional closed circuit, utilizing a Stephens-Adamson 42” x 12’ apron feeder, Pioneer 30” x 42” jaw crusher, Nordberg standard 3’ cone crusher, a 5’ by 12’  double deck Kohlberg screen, and has a self-cleaning dust collector. The rock is crushed to minus 1 inch and the circuit has a rated capacity of more than 50 tons per hour.
 
Dryer
 
There are two dryer circuits, one for lines one and two, and one for the Raymond mill. The dryer circuits include one 50 ton feed bin, and each dryer has a conveyor bypass around each dryer, a bucket elevator, and a dry rock bin. The dryers are 25 feet long, 5 feet in diameter and are fired with propane burners rated at 750,000 BTUs. One self-cleaning bag house services both dryers. Depending on the wetness of the feed rock, the capacity is in the range of 10 tons per hour per dryer. During most of the year, the dryers are not run.
 
Coarse Products Circuit
 
There are two lines to produce coarse products:
 
 Line 1 is a closed circuit with a 100 HP vertical shaft impactor and a 5 deck Midwestern multivibe screen.
 
Line 2 includes a Jeffries 30” by 24” 60 HP hammer mill in a closed circuit with two 5’ x 12’ triple deck Midwestern Multi Vibe high frequency screens. The circuits also include bucket elevators, (3) 125 ton capacity product silos, a 6 ton capacity Crust Buster blender, augers, Sweco screens, and dust collectors.
 
Fine Products Circuit
 
The fine products circuit is in one building and it includes (2) 3.5’ x 10.5’ Derrick 2 deck high frequency (3450 RPM) screens and various bucket elevators, augers, bins, and Sweco screens for handling product. Depending on the screening sizes, the plants can generate approximately 150 tons of granules and 125 tons of fines per 24-hour day.
 
 
14
 
 
Raymond Mill Circuit
 
The Raymond mill circuit includes a 6058 high-side Raymond mill with a double whizzer, dust collector, two 100 ton product silos, feed bin, conveyors, air slide, bucket elevators, and control booth. The Raymond mill has a rated capacity of more than 10 tons per hour.
 
Item 3 Legal Proceedings
 
No director, officer or affiliate of USAC and no owner of record or beneficial owner of more than 5.0% of our securities or any associate of any such director, officer or security holder is a party adverse to USAC or has a material interest adverse to USAC in reference to pending litigation.
 
Item 4 Mine Safety Disclosures
 
The information concerning mine safety violations or other regulatory matters required by section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 to this Annual Report.
 
PART II
 
Item 5 Market for Common Equity and Related Stockholder Matters
 
Currently, our common stock is traded on the NYSE-AMERICAN under the symbol UAMY. The following table sets forth the range of high and low bid prices as reported for the periods indicated. The quotations were taken from a website available to the public, and generally believed to be accurate. The quoted prices may not necessarily represent actual transactions.
 
2017
 
High
 
 
Low
 
First Quarter
 $0.52 
 $0.34 
Second Quarter
  0.43 
  0.31 
Third Quarter
  0.29 
  0.21 
Fourth Quarter
  0.36 
  0.31 
 
    
    
 
2016
 
High
 
 
Low
 
First Quarter
 $0.33 
 $0.17 
Second Quarter
  0.31 
  0.20 
Third Quarter
  0.60 
  0.20 
Fourth Quarter
  0.47 
  0.22 
 
The approximate number of holders of record of our common stock at April 2, 2018, is 2,500.
 
We have not declared or paid any dividends to our stockholders during the last five years and do not anticipate paying dividends on our common stock in the foreseeable future. Instead, we expect to retain earnings for the operation and expansion of our business.
 
In March of 2016 the Company issued the Board members 550,000 shares of the Company’s common stock for services provided during 2015 with a value of $137,500.
 
In December of 2016, the Company issued Daniel Parks, the Company’s Chief Financial Officer, 200,000 shares of the Company’s common stock valued at $54,000 to retain his services for a two year period. As part of the agreement, Mr. Parks’ hours worked and normal compensation was reduced.
 
During 2016, the Company awarded, but did not issue, common stock with a value at December 31, 2016, of $168,750 to its Board of Directors as compensation for their services as directors. In connection with the issuances, the Company recorded $168,750 in director compensation expense. In March of 2017, at a price of $0.40 per share, the directors were issued 421,875 shares for 2016.
 
 
15
 
 
During 2017, the Company awarded, but did not issue, common stock with a value at December 31, 2017, of $175,000 to its Board of Directors as compensation for their services as directors. In connection with the issuances, the Company recorded $175,000 in director compensation expense. As of April 2, 2018, the shares had not been issued to the directors.
 
Item 6
Selected Financial Data
 
Not Applicable.
 
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.
 
Overview
 
Company-wide
 
For the year ended December 31, 2017, we incurred a loss of $1,134,394 for 2017 after depreciation and amortization of $968,888, compared to a loss of $1,309,200 for 2016 after depreciation and amortization of $999,737, and an income tax provision of $298,138 for our Mexican operations. Our company-wide EBITDA was a negative $165,506 for 2017, compared to a negative $11,325 for 2016.
 
Net non-cash expense items totaled $1,275,000 for 2017 and included $968,888 for depreciation and amortization, $93,450 for amortization of debt discount, $175,000 for director compensation and $37,662 for other items.
 
Net non-cash expense items totaled $1,176,608 for 2016 and included $999,737 for depreciation and amortization, $70,590 for amortization of debt discount, $54,000 for stock-based compensation, $168,750 for director compensation and ($116,469) for other items.
 
Antimony Sales
 
During 2017, we saw our average sale price increase by $1.03 per pound to $4.01 per pound from an average price of $2.98 per pound for 2016. Due to the loss of our supply of antimony concentrates from Australia, the volume of antimony sold (metal contained) decreased from a record of 2,936,880 pounds sold in 2016 to 1,891,439 pounds sold in 2017, a decrease of 1,045,441pounds. During 2017 our production and sales from Mexican sources was approximately 530,000 pounds from our mines, and approximately 35,000 pounds from Australian concentrates. During 2017, the loss of raw material from Australia saw our gross sales of antimony decrease by $1,155,700 (13%). The antimony division had a negative EBIDTA of $1,094,579 for 2017, compared to a negative EBITDA of $1,131,971 for 2016. Our loss from antimony decreased from a loss of $2,171,611 in 2016 to a loss of $1,776,239 in 2017.
 
In November of 2017, we renegotiated our sodium antimonite supply agreement to recognize that antimony prices were in a world-wide slump, and that our general and administrative costs were a larger percent of our revenues than they were under the previous agreement. The new price agreement was implemented in December of 2017, and will result in lower antimony production costs and an improved cash flow for 2018 and the following years.
 
Zeolite Sales
 
Our sales volume of zeolite in 2017 was 766 tons less than we sold in 2016, a decrease of 6%. Our average sales price decreased by approximately $5 per ton, from $188 per ton in 2016 per ton to $183 per ton in 2017 (3%). During 2017, total sales of zeolite decreased by $206,458 from 2016. The zeolite division had EBIDTA of $554,201 for 2017, compared to EBITDA of $447,775 for 2016. Net income increased from $233,907 in 2016 to $331,472 in 2017, approximately $98,000.
 
 
 
16
 
Precious Metals Sales
 
Precious Metals Sales
 
 
 
 
 
 
 
 
 
 
 
 
Silver/Gold
 
 
 
 
 
 
 
 
 
 
 
 
Montana
 
2014
 
 
2015
 
 
2016
 
 
2017
 
Ounces Gold Shipped (Au)
  64.77 
  89.12 
  108.10 
  107.00 
Ounces Silver Shipped (Ag)
  29,480 
  30,421 
  38,123 
  32,021 
Revenues
 $461,083 
 $491,426 
 $556,650 
 $480,985 
Australian - Hillgrove
    
    
    
    
Ounces Gold Shipped (Au)
    
    
  496.65 
  90.94 
Revenues - Gross
    
    
 $597,309 
 $96,471 
Revenues to Hillgrove
    
    
  (481,088)
  (202,584)
Revenues to USAC
    
    
 $116,221 
 $(106,113)
 Total Revenues
 $461,083 
 $491,426 
 $672,871 
 $374,872 
 
Results of operations by division at December 31, 2017 and 2016 are as follows:
 
Results of Operations by Division
 
 
 
 
 
 
 
 
2017
 
 
2016
 
Antimony Division - United States:
 
 
 
 
 
 
Revenues - Antimony (net of discount)
 $7,588,470 
 $8,744,170 
Domestic cost of sales:
    
    
Production costs
  3,898,097 
  3,274,100 
Depreciation
  57,761 
  62,863 
Freight and delivery
  321,282 
  419,256 
Indirect production costs
  328,411 
  272,161 
Direct sales expense
  65,652 
  65,652 
       Total domestic antimony cost of sales
  4,671,203 
  4,094,032 
 
    
    
Cost of sales - Mexico
    
    
Production costs
  2,223,663 
  3,480,252 
Depreciation and amortization
  623,899 
  678,639 
Freight and delivery
  45,461 
  113,412 
Land lease expense
  190,116 
  261,154 
Indirect production costs
  281,922 
  363,160 
General and administrative
  109,582 
  178,048 
       Total Mexico antimony cost of sales
  3,474,643 
  5,074,665 
 
    
    
     Total revenues - antimony
  7,588,470 
  8,744,170 
     Total cost of sales - antimony
  8,145,846 
  9,168,697 
     Total gross profit (loss) - antimony
  (557,376)
  (424,527)
 
    
    
Precious Metals Division:
    
    
Revenues
  374,872 
  672,871 
Cost of sales:
    
    
Depreciation
  64,499 
  44,367 
       Total cost of sales
  64,499 
  44,367 
           Gross profit - precious metals
  310,373 
  628,504 
 
    
    
Zeolite Division:
    
    
Revenues
  2,266,636 
  2,473,094 
Cost of sales:
    
    
Production costs
  919,876 
  1,210,832 
Depreciation
  222,729 
  213,868 
Freight and delivery
  175,303 
  226,258 
Indirect production costs
  176,566 
  178,881 
Royalties
  235,021 
  258,206 
Direct sales expense
  128,738 
  52,375 
       Total cost of sales
  1,858,233 
  2,140,420 
           Gross profit - zeolite
  408,403 
  332,674 
 
    
    
Total revenues - combined
  10,229,978 
  11,890,135 
Total cost of sales - combined
  10,068,578 
  11,353,484 
Total gross profit - combined
 $161,400 
 $536,651 
 
17
 
 
Results of Operations by Division
 
 
 
 
 
 
Antimony - Combined USA
 
 
 
 
 
 
   and Mexico
 
2017
 
 
2016
 
Lbs of Antimony Metal USA
  1,326,659 
  1,422,957 
Lbs of Antimony Metal Mexico:
  564,780 
  1,513,923 
   Total Lbs of Antimony Metal Sold
  1,891,439 
  2,936,880 
Average Sales Price/Lb Metal
 $4.01 
 $2.98 
Net loss/Lb Metal
 $(0.94)
 $(0.74)
 
    
    
Gross antimony revenue - net of discount
 $7,588,470 
 $8,744,170 
 
    
    
Cost of sales - domestic
  (4,671,202)
  (4,094,032)
Cost of sales - Mexico
  (3,474,643)
  (5,074,665)
Operating expenses
  (1,056,862)
  (1,265,518)
Non-operating expenses
  (162,002)
  (183,428)
Income tax provision
  - 
  (298,138)
 
  (9,364,709)
  (10,915,781)
 
    
    
Net loss - antimony
  (1,776,239)
  (2,171,611)
Depreciation,& amortization
  681,660 
  741,502 
Income taxes
  - 
  298,138 
   EBITDA - antimony
 $(1,094,579)
 $(1,131,971)
 
    
    
Precious Metals
    
    
Ounces sold
    
    
  Gold
  107 
  108 
  Silver
  32,021 
  38,123 
 
    
    
Gross precious metals revenue
 $374,872 
 $672,871 
Production costs, royalties, and shipping costs
  (64,499)
  (44,367)
Net income - precious metals
  310,373 
  628,504 
Depreciation
  64,499 
  44,367 
   EBITDA - precious metals
 $374,872 
 $672,871 
 
    
    
Zeolite
    
    
Tons sold
  12,377 
  13,143 
Average Sales Price/Ton
 $183.13 
 $188.17 
Net income (Loss)/Ton
 $26.78 
 $17.80 
 
    
    
Gross zeolite revenue
 $2,266,636 
 $2,473,094 
Cost of sales
  (1,858,234)
  (2,140,420)
Operating expenses
  (64,237)
  (87,655)
Non-operating expenses
  (12,693)
  (11,112)
Net income - zeolite
  331,472 
  233,907 
Depreciation
  222,729 
  213,868 
   EBITDA - zeolite
 $554,201 
 $447,775 
 
    
    
Company-wide
    
    
Gross revenue
 $10,229,978 
 $11,890,135 
Production costs
  (10,068,578)
  (11,353,484)
Operating expenses
  (1,121,099)
  (1,353,173)
Non-operating expenses
  (174,695)
  (194,540)
Income tax provision
  - 
  (298,138)
Net income (loss)
  (1,134,394)
  (1,309,200)
Depreciation,& amortization
  968,888 
  999,737 
Income taxes
  - 
  298,138 
   EBITDA
 $(165,506)
 $(11,325)
 
 
18
 
 
During the two year period ended December 31, 2017, the most significant events affecting our financial performance were the fluctuation of antimony prices and the decrease in our sources of antimony raw material. During the first half of 2016, the price for antimony hit a seven year low, but recovered to approximately $4.00 per pound by the end of 2017. By the end of 2016, we stopped the processing of antimony concentrate for Hillgrove Mines, Ltd., of Australia and started production from our own mines in Mexico. There was no production from our own mines in Mexico, during 2016 due to the processing of concentrates from Hillgrove. We produced approximately 530,000 pounds from our Mexican properties in 2017. The Puerto Blanco mill circuits were utilized less than 10% of their capacity. Going forward, the increased supply of raw material from Mexico and the metal prices for both antimony and precious metals will be the most significant factors influencing our operations. Included in antimony cost of sales-Mexico are costs of approximately $276,000 and $358,000 for 2017 and 2016, respectively, relating to maintaining our mineral properties which were idle for 2016 and for a portion of 2017.  
 
The following are highlights of the significant changes during 2017 and the two year period then ended:
 
Antimony:
 
The sale of antimony during 2017 was 1,891,439 pounds compared to 2,936,880 pounds in 2016, a decrease of 1,045,441 pounds (36%).
The average sales price of antimony during 2016 was $2.98 per pound compared to $4.01 during 2017, an increase of $1.03 per pound (35%). During the beginning of 2018, the Rotterdam price of antimony is approximately $3.75 per pound.
The metallurgical problem with the Los Juarez concentrates has been solved with cyanide and caustic leach plants, and pilot mining, milling, and smelting will resume. This will put the Puerto Blanco mill in operation during 2018. During 2017 and 2016, the Puerto Blanco mill was operating at less than 10% of capacity.
The net loss per pound of antimony was $0.94 in 2017 even though the price increased $1.03 per pound from 2016. The net loss per pound in 2016 was $0.74 per pound.
Our cost of goods sold for antimony decreased from $9,168,697 in 2016 to $8,145,846 in 2017. This was primarily due to the decrease in raw material from Australia. For the years ended December 31, 2017 and 2016, costs of goods sold include operating and non-operating production costs from Mexico operations.
Our cost of production for the years ended December 31, 2017 and 2016 included metallurgical testing at Puerto Blanco and Madero, Mexico, and to a lesser degree, our plant in Thompson Falls, Montana.
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 from concentrates from Australia in 2016. Production from Madero during 2017 was primarily from our own Mexican properties, and we purchased a significant portion of the raw materials for our smelter in Montana.
 We are proceeding with the testing of the Los Juarez ore in the 100 ton per day mill at Puerto Blanco. A 400 ton per day flotation mill is permitted and is partially installed. This mill will be dedicated to processing rock from the Los Juarez mining property. We have adequate crushing capacity in place to feed the 450 ton per day mill and the existing mill.
Our principal smelter, precious metals recovery operation, and our Company headquarters remain in Montana.
 
Zeolite:
 
During 2017, BRZ sold 12,377 tons compared to 13,143 tons in 2016, down 766 tons (6%). BRZ realized a net income of $331,472 in 2017 after depreciation of $222,729 compared to a net income of $233,907 in 2016 after depreciation of $213,868. Production efficiency at the plant in Preston, Idaho, increased in 2017 due to repairs and new equipment. Sales activity in the early part of 2018 includes a number of new customers.
General and administrative costs, as reported in our statement of operations, include fees paid to directors through stock based compensation, office expenses, and fees to the NYSE AMERICAN, and other non-operating costs. The combined general and administrative costs were 5.2%, and 5.7%, of sales for 2017 and 2016, respectively.
 
 
19
 
 
The decrease in professional fees for 2017 (approximately $91,000) was primarily due to attorney fees of approximately $72,000 paid in 2016 related to our former Investor Relations representative. Our accounting fees for 2017 related to our annual audit and our quarterly SEC filings decreased by approximately $15,000 from the prior year.
 
Factoring costs increased in 2017 from approximately $35,000 in 2016 to approximately $36,000 in 2017.
 
The discounts we gave for early payments were approximately $110,000 for both 2017and 2016.
 
Subsidiaries
 
The Company has a 100% investment in two subsidiaries in Mexico, USAMSA and AM, whose mineral property carrying values were assessed at December 31, 2017 and 2016 for impairment. Management’s assessment of the subsidiaries’ fair value was based on their future benefit to us.
 
Financial Condition and Liquidity
 
 
 
2017
 
 
2016
 
Current assets
 $1,562,270 
 $1,692,555 
Current liabilities
  (3,934,726)
  (3,382,123)
   Net Working Capital
 $(2,372,456)
 $(1,689,568)
 
    
    
Cash provided by operations
 $716,705 
 $425,837 
Cash used for capital outlay
  (365,541)
  (583,029)
Cash provided (used) by financing:
    
    
   Net payments (to) from factor
  (139,519)
  136,617 
   Proceeds from notes payable to bank
  25,248 
  36,645 
   Principal paid on long-term debt
  (211,529)
  (175,238)
   Checks issued and payable
  (7,434)
  35,682 
      Net change in cash
 $17,930 
 $(123,486)
 
Our net working capital decreased for the year ended December 31, 2017, from a negative amount of $1,689,568 at the beginning of the year to a negative amount of $2,372,456 at the end of 2017. Our current assets decreased primarily due to a decrease in our accounts receivable, which was partially offset by an increase in our inventories. Our current liabilities increased by approximately $550,000 primarily due to an increase in our accounts payable and the current portion of long-term debt, which were partially offset by the decrease in our liability for factored accounts receivable. Capital improvements were paid for with cash and debt.
 
For the year ending December 31, 2018, we are planning to finance our improvements with operating cash flow. Our 2018 improvements are expected to include improvements related to completing the cyanide leach circuit at Puerto Blanco.
 
The current portion of our long term debt is serviceable from the cash generated by operations.
 
Going Concern Consideration
 
At December 31, 2017, the Company’s financial statements show negative working capital of approximately $2.4 million and an accumulated deficit of approximately $26.5 million.  In addition, the Company has incurred losses for the prior three years.  These factors indicate that there may be doubt regarding the ability to continue as a going concern for the next twelve months. 
 
The continuing losses are principally a result of the Company’s antimony operations and in particular to the production costs incurred in Mexico. The other two operating divisions, precious metals and zeolite, had gross profits of $310,373 and $408,403, respectively, in 2017.
 
 
20
 
 
Regarding the antimony division, in 2016 the Company endured some of the lowest prices for antimony in the past seven years, with an average sales price of only $2.98 per pound of metal contained.  Prices improved during 2017 with an average sale price of $4.01. Through March 2018, our average sale price for antimony is approximately $4.10 per pound. Additionally, in November 2017, the Company renegotiated its domestic sodium antimonite supply agreement resulting in a lower cost for antimony per pound of approximately $0.44. With the new supply agreement in place, most of the market increase in antimony prices will result in increased Company cash flow in 2018 from its antimony division.
 
In 2017, the Company reduced costs for labor at the Mexico locations which has resulted in a lower overall production costs in Mexico which will continue through 2018. The reduction was due to a large reduction in the work force at the Madero smelter because of the decrease in antimony concentrates from Hillgrove (see Note 10). In the fourth quarter 2017, the Company also adjusted operating approaches at Madero that will likely result in a decrease in operating costs for fuel, natural gas, electricity, and reagents. Although total production activity in Mexico decreased in 2017 due to the lack of Hillgrove concentrates, the Company’s 2018 plan involves ramping up production at its own antimony properties in Mexico. In addition, a new leach circuit expected to come on line during 2018 in Mexico will result in more extraction of precious metals.
 
In 2017, management implemented wage and other cost reductions at the corporate level that will keep administrative costs stable in 2018. The Company expects to continue paying a low cost for propane in Montana, which in years past has been a major operating cost.
 
Over the past several years, the Company has been able to make required principal payments on its debt from cash generated from operations without the need for additional borrowings or selling shares of its common stock. The Company plans to continue keeping current on its debt payments in 2018 through cash flows from operations.
 
Management believes that the current circumstances and cost reduction actions taken will enable the Company to be actively operating for the next twelve months.
 
Critical Accounting Estimates
 
We have, besides our estimates of the amount of depreciation on our assets, two critical accounting estimates. The value of our unprocessed ore in inventory is assessed on assays taken at the time the ore is delivered, and may vary when the ore is processed and final settlement is made. Also, the asset recovery obligation on our balance sheet is based on an estimate of the future cost to recover and remediate our properties as required by our permits upon cessation of our operations, and may differ when we cease operations.
 
The value of unprocessed ore in our inventory at the Wadley mining concession and Puerto Blanco mill is based on assays taken at the time the ore is delivered, and may vary when the ore is processed and final settlement is made. We assay the ore to estimate the amount of antimony contained per metric ton, and then make a payment based on the Rotterdam price of antimony and the % of antimony contained. Our payment scale incorporates a penalty for ore with a low percentage of antimony. It is reasonably likely that the initial assay will differ from the amount of metal recovered from a given lot. If the initial assay of a lot of ore on hand at the end of a reporting period were different, it would cause a change in our reported inventory and accounts payable amounts, but would not change our reported cost of goods sold or net income amounts. At December 31, 2017, if we had overestimated the per cent of antimony in our total inventory of purchased ore by 2.5%, (a 10% correction to the amount of antimony metal contained if we assayed 25.0% antimony per metric ton), the amount of our inventory and accounts payable would be smaller by approximately $1,500. Our net income would not be affected. 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.
 
 
21
 
 
The asset retirement obligation and asset on our balance sheet is based on an estimate of the future cost to recover and remediate our properties as required by our permits upon cessation of our operations, and may differ when we cease operations. At December 31, 2011, we made an estimate that the cost of the machine and man hours probable to be needed to put our properties in the condition required by our permits once we cease operations would be $134,000. For purposes of the estimate, we used a probable life of 20 years and costs that, initially, are comparable to rates that we would incur at the present. We are adding to (an accretion of 6%) the liability each year, and amortizing the asset over 20 years ($6,700 annually), which decreases our net income in total each year (by $13,490 for 2017 and $12,155 for 2016). We make periodic reviews of the remaining life of the mine and other operations, and the estimated remediation costs upon closure, and adjust our account balances accordingly. 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
 
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
 
None
 
Item 9A Controls and Procedures
 
Evaluation of disclosure controls and procedures
 
At the end of the period covered by this Annual Report on Form 10-K, an evaluation was carried out under the supervision of and with the participation of our management, including the Principal Executive Officer and the Principal Financial Officer of the effectiveness of the design and operations of our disclosure controls and procedures (as defined in Rule 13a – 15(e) and Rule 15d – 15(e) under the Exchange Act) as of the end of the period covered by this report.  Based on that evaluation, the Principal Executive Officer and the Principal Financial Officer have concluded that our disclosure controls and procedures were not effective in ensuring that: (i) information required to be disclosed by the Company in reports that it files or submits to the Securities and Exchange Commission under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in applicable rules and forms and (ii) material information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow for accurate and timely decisions regarding required disclosure.  
 
Disclosure controls and procedures were not effective due primarily to material weaknesses in the Company’s internal control of financial reporting as discussed below.
 
Internal control over financial reporting
 
Management's annual report on internal control over financial reporting
 
The management of USAC is responsible for establishing and maintaining adequate internal control over financial reporting. This internal control system has been designed to provide reasonable assurance to our management and Board of Directors regarding the preparation and fair presentation of our published financial statements.
 
All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
 
 
22
 
 
The management of USAC has assessed the effectiveness of our internal control over financial reporting as of December 31, 2017. To make this assessment, we used the criteria for effective internal control over financial reporting described in Internal Control-Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
 
As a result of our assessment, we concluded that we have material weaknesses in our internal control over financial reporting as of December 31, 2017. These weaknesses are as follows:
 
Inadequate design of internal control over the preparation of the financial statements and financial reporting processes;
 
Inadequate monitoring of internal controls over significant accounts and processes including controls associated with domestic and Mexican subsidiary operations and the period-end financial reporting process; and
 
The absence of proper segregation of duties within significant processes and ineffective controls over management oversight, including antifraud programs and controls.
 
We are aware of these material weaknesses and will develop procedures to ensure that independent review of material transactions is performed. The chief financial officer will develop internal control measures to mitigate the lack of inadequate documentation of controls and the monitoring of internal controls over significant accounts and processes including controls associated with the period-ending reporting processes, and to mitigate the segregation of duties within significant accounts and processes and the absence of controls over management oversight, including antifraud programs and controls.
 
We plan to consult with independent experts when complex transactions are entered into.
 
Because these material weaknesses exist, management has concluded that our internal control over financial reporting as of December 31, 2017, is ineffective.
 
Changes in internal control over financial reporting
 
There were no changes in internal control over financial reporting for the quarter ended December 31, 2017.
 
PART III
 
Item 10 
Directors, Executive Officers, Promoters and Control Persons, Compliance with
Section 16(a) of the Exchange Act

Identification of directors and executive officers at December 31, 2017, is as follows:
 
Name
 
Age
 
Affiliation
 
Expiration of Term
 
 
 
 
 
 
 
John C. Lawrence
 
79
 
Chairman, President,
 
Annual meeting
 
 
 
 
Director
 
 
John C. Gustavsen
 
69
 
First Vice-President
 
Annual meeting
 
 
 
 
 
 
 
Russell C. Lawrence
 
49
 
Second Vice-President
 
Annual meeting
 
 
 
 
and Director
 
 
 
 
 
 
 
 
 
Matthew Keane
 
62
 
Third Vice-President
 
Annual meeting
 
 
 
 
 
 
 
Daniel L. Parks
 
69
 
Chief Financial Officer
 
Annual meeting
 
 
 
 
 
 
 
Alicia Hill
 
36
 
Secretary, Controller,
 
Annual meeting
 
 
 
 
and Treasurer
 
 
 
 
 
 
 
 
 
Gary D. Babbitt
 
72
 
Director
 
Annual meeting
 
 
 
 
 
 
 
Whitney Ferer
 
59
 
Director
 
Annual meeting
 
 
 
 
 
 
 
Hart W. Baitis
 
68
 
Director
 
Annual meeting
 
 
 
 
 
 
 
Jeffrey Wright
 
48
 
Director
 
Annual meeting
 
 
 
 
 
 
 
Craig Thomas
 
43
 
Director
 
Annual meeting
 
 
23
 
 
Business Experience of Directors and Executive Officers
 
John C. Lawrence. Mr. Lawrence has been the president and a director since our inception in 1969. Mr. Lawrence was the president and a director of AGAU Mines, Inc., our corporate predecessor. He is a member of the Society of Mining Engineers and a recipient of the Uuno Sahinen Silver Medallion Award presented by Butte Tech, University of Montana. He has a vast background in mining, milling, smelting, chemical processing and oil and gas.
 
Gary D. Babbitt. Mr. Babbitt has experience in the mining industry with approximately 30 years dealing with joint ventures, purchases, royalty leases and contracts. He has a working knowledge of Spanish and has negotiated supply and mining agreements in Mexico. Mr. Babbitt has a B.A. from the Albertson College of Idaho, and earned his J.D. from the University of Chicago.
 
Russell C. Lawrence. Mr. Lawrence has experience in applied physics, mining, refining, excavation, electricity, electronics, and building contracting. He graduated from the University of Idaho in 1994 with a degree in physics, and worked for the Physics Department at the University of Idaho for a period of 10 years. He has also worked as a building contractor and for USAC at the smelter and laboratory at Thompson Falls, for USAMSA in the construction and operation of the USAMSA smelter in Mexico, and for Antimonio de Mexico, S. A. de C. V. at the San Miguel Mine in Mexico.
 
Hart W. Baitis. Mr. Baitis graduated from the University of Oregon in 1971 with a B.S. in Geology, and was awarded a Ph. D. in Geology in 1976. He has 35 years of experience as an exploration geologist in the United States, Canada, Central America, and Mexico. Mr. Baitis is experienced in numerous geologic environments and terrains, and has been involved in all phases of exploration, ranging from field geologist, consultant, management, and acquisition team director.
 
Whitney Ferer.  Mr. Ferer was nominated to the board of USAC in February 2012. He worked for 34 years for Aaron Ferer & Sons Co. headquartered in Omaha, Nebraska, where he was the Vice President of Operations and Senior Trader, as well  Vice Chairman of the Board of AF&S Co..  He has been involved in the patenting of various processes for the breakdown of plastics and metal recovery, and was Vice President of the Lead & Zinc Division of AF&S.  In addition, Mr. Ferer has been active in the trading of all metals, and facilitated the opening of eight offices in the Far East and China for AF&S.  Mr. Ferer has recently opened his own company W.H. Ferer Co., LLC.   He is one of the largest traders of antimony metal and oxides in the United States and, additionally, he handles approximately 20-30 elements in various forms and grades.
 
Jeffrey D. Wright. Mr. Wright graduated from North Carolina University in 1991, and from the University of Southern California, Marshall School of Business (MBA) in 2004. Mr. Wright was a naval officer from 1991 through 1996, serving aboard the aircraft carrier USS Carl Vinson and the destroyer USS John Young. After duty in the military, Mr. Wright held successively more responsible positions in the securities and finance industry. From 2011 through 2013 he was the managing director metals and mining research for Global Hunter Securities, and he held the same position for H.C. Wainwright for 2013 through 2015.
 
Craig W. Thomas. Mr. Thomas is a professional investor with fifteen years of investing experience.  He is currently the co-founder of Shareholder Advocates for Value Enhancement and the managing member of various investment partnerships.   Mr. Thomas is currently a director of Full House Resorts, Inc.  Mr. Thomas earned a B.A. from Stanford University and an M.B.A. from the Graduate School of Business at Stanford University.
 
Alicia Hill. Ms. Hill was hired by the Company in 2006 as an accounting assistant, and was eventually promoted to chief accountant responsible for the recording of transactions for three companies. In 2011, she was appointed Company Controller, Secretary, and Treasurer. Ms. Hill has guided the Company through the listing on the NYSE-MKT, in the addition of a new division in Mexico, and has been the liaison with the Company’s auditors through a progressively complicated reporting process.
 
Daniel L. Parks. Mr. Parks graduated from the University of Idaho in 1974 with a B.S. in Accounting, and was licensed as a certified public accountant in 1976. He worked as an auditor for Coopers & Lybrand for three years, as controller for a lumber manufacturing company for one year, and owned his own accounting practice for thirty years. Mr. Parks was extensively involved in auditing and financial statement preparation during this time.
 
 
24
 
 
John C. Gustaven. Mr. Gustaven graduated from Rutgers University in 1970 with a BS in chemistry and started work for Harshaw Chemical (purchased by Amspec Chemical Corporation), a major producer of antimony trioxide. Mr. Gustaven took engineering courses from 1976 through 1980, and became president and treasurer of the company in 1983. He was promoted CEO in 1990. Mr. Gustaven designed a new type of production furnace for antimony trioxide that eventually produced 20 million pounds of antimony trioxide per year. Mr. Gustaven is conversant in Spanish, Chinese, and other languages, and travelled to many countries as part of his duties as president of Amspec Chemical Corporation. Mr. Gustaven came to work at United States Antimony Corporation in November of 2011.
 
Matt Keane. Mr. Keane graduated from Mankato State University in 1978 with degrees in geography and environmental studies. Mr. Keane was owner of a construction business and a retail building supply business before becoming the director of sales for United States Antimony Corporation in 2000. Mr. Keane has developed the Company’s growing zeolite sales through Bear River Zeolite and the increase in the Company’s share of the domestic market for antimony products.
 
We are not aware of any involvement by our directors or executive officers during the past five years in legal proceedings that are material to an evaluation of the ability or integrity of any director or executive officer.
 
Board Meetings and Committees Our Board of Directors held four (4) regular meetings during the 2017 calendar year. Each incumbent director attended all of the meetings held during the 2017 calendar year, in the aggregate, by the Board and each committee of the Board of which he was a member.
 
Our Board of Directors established an Audit Committee on December 10, 2011. It consists of four members, Gary Babbitt (Chairman), Whitney Ferer, Jeffrey Wright, and Craig Thomas. None of the Audit Committee members are involved in our day-to-day financial management. Jeffrey Wright and Craig Thomas are considered financial experts.
 
During 2011, the Board also established a Compensation Committee and a Nominating Committee.
 
Board Member Compensation Following is a summary of fees, cash payments, stock awards, and other reimbursements to Directors during the year ended December 31, 2017:
 
Directors Compensation
 
Name and Principal Position
 
Fees Earned or paid in Cash
 
 
Stock Awards
 
 
Total Fees, Awards, and Other Compensation
 
John C. Lawrence, Chairman
 
 $25,000 
 $25,000 
Gary D. Babbitt, Director
 $18,000 
 $25,000 
 $43,000 
Russell Lawrence, Director
 
 $25,000 
 $25,000 
Hartmut Baitis, Director
 
 $25,000 
 $25,000 
Whitney Ferer, Director
 
 $25,000 
 $25,000 
Jeffrey Wright, Director
 
 $25,000 
 $25,000 
Craig Thomas, Director
    
 $25,000 
 $25,000 
   Totals
 $18,000 
 $175,000 
 $193,000 
 
Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers and the holders of 10% or more of our common stock to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and stockholders holding more than 10% of our common stock are required by the regulation to furnish us with copies of all Section 16(a) forms they have filed. Based solely on our review of copies of Forms 3, 4 and 5 furnished to us, Mr. Baitis, Mr. Babbitt, Mr. Ferer, and Mr. Russell Lawrence did not file timely Forms 3, 4 or Form 5 reports during 2017 and 2016.
 
 
25
 
 
Code of Ethics
The Company has adopted a Code of Ethics that applies to the Company's executive officers and its directors. The Company will provide, without charge, a copy of the Code of Ethics on the written request of any person addressed to the Company at: United States Antimony Corporation, P.O. Box 643, Thompson Falls, MT 59873.
 
Item 11 Executive Compensation
 
Summary Compensation Table
The Securities and Exchange Commission requires the following table setting forth the compensation paid by USAC to its principal executive officer for fiscal years ended December 31, 2017 and 2016.
 
Name and Principal Position
 
 
Year
 
 
Salary
 
 
Bonus
 
 
Stock Awards (2)
 
 
Total
 
John C. Lawrence,
 
2017
 $141,000
 
  N/A 
 $25,000
 
 $166,000
 
  President and Chief Executive Officer
 
2016
 $141,000 
    
 $25,000 
 $166,000 
 
 
    
    
    
    
John C. Gustaven,
 
2017
 $100,000
 
  N/A 
    
 $100,000
 
  Executive Vice President
 
2016
 $100,000 
    
    
 $100,000 
 
 
    
    
    
    
Russell Lawrence,
 
2017
 $110,000
 
  N/A 
 $25,000
 
 $135,000
 
  Vice President for Latin America
 
2016
 $110,000 
    
 $25,000 
 $135,000 
 
 (2) 
These figures represent the fair value, as of the date of issuance, the annual director's fees for John C. Lawrence and Russell Lawrence payable in shares of USAC's common stock.
 
Compensation for all executive officers, except for the President/CEO position, is recommended to the compensation committee of the Board of Directors by the President/CEO. The compensation committee makes the recommendation for the compensation of the President/CEO. The compensation committee has identified a peer group of mining companies to aid in reviewing the President’s compensation recommendations for executives, and for reviewing the compensation of the President/CEO. The full Board approves the compensation amounts recommended by the compensation committee. Currently, the executive managements’ compensation only includes base salary and health insurance. The Company does not have annual performance based salary increases, long term performance based cash incentives, deferred compensation, retirement benefits, or disability benefits.
 
Two executive officers, the President/CEO and the Vice-President for the Latin American operations, receive restricted stock awards for their services as Board members.
 
The following table sets forth information concerning the outstanding equity awards at December 31, 2017, held by our principal executive officer. There were not any other outstanding equity awards or plan based awards to officers or directors as of December 31, 2017.
 
 
26
 
 
 
 
Outstanding Equity Awards
at Fiscal Year End
Awards
 
 
 
  
 
 

 
 

 


 
   Number of Securities UnderlyingUnexercised Options
 
 
Equity Incentive Plan Awards:

 
 


 
 
Exercisable
 
 
Unexercisable
 
 
Number of Securities Underlying Unexercised
 
 
 Exercise
 
 Expiration
Name
 
#
 
 
#
 
 
 Unearned
 
 
 Price
 
 
                     Date
 
John C. Lawrence
  250,000 
  0 
  0 
 $0.25 
None
(Chairman of the Board of Directors and Chief Executive Officer)
    
    
    
    
 
 
Item 12 Security Ownership of Certain Beneficial Owners and Management
 
The following table sets forth information regarding beneficial ownership of our common stock as of April 2, 2018, by (i) each person who is known by us to beneficially own more than 5% of our Series B, C, and D preferred stock or common stock; (ii) each of our executive officers and directors; and (iii) all of our executive officers and directors as a group. Unless otherwise stated, each person's address is c/o United States Antimony Corporation, P.O. Box 643, 47 Cox Gulch, Thompson Falls, Montana 59873.
 
 
27
 
 
Title of Class
 
Name and Address of Beneficial Owner (1)
 
Amount and Nature of Beneficial Ownership
 
 
Percent of Class (1)
 
 
Percent of all Voting Stock
 
Common Stock
 
Reed Family Limited Partnership
328 Adams Street
Milton, MA 02186
  4,018,335 
  5.95%
  5.80%
Common Stock
 
The Dugan Family
c/o A.W. Dugan
1415 Louisana Street, Suite 3100
Houston, TX 77002
  6,362,927(3)
  9.43%
  9.19%
Series B Preferred
 
Excel Mineral Company
P.O. Box 3800
Santa Barbara, CA 93130
  750,000(5)
  100.00%
  N/A 
Series C Preferred
 
Richard A. Woods
59 Penn Circle West
Penn Plaza Apts.
Pittsburgh, PA 15206
  48,305(4)
  27.10%
  * 
Series C Preferred
 
Dr. Warren A. Evans
69 Ponfret Landing Road
Brooklyn, CT 06234
  32,203(4)
  18.10%
  * 
Series C Preferred
 
Edward Robinson
1007 Spruce Street, 1st floor
Philadelphia, PA 19107
  32,203(4)
  18.10%
  * 
Series C Preferred
 
All Series C Preferred Shareholders as a Group
  177,904(4)
  100.00%
  * 

 
John C. Lawrence
  4,343,607(2)
  68.59%
  6.27%
 
 
Russell Lawrence
  343,145 
  5.42%
  * 
 
 
Hart Baitis
  233,680 
  3.69%
  * 
 
 
Garry Babbitt
  271,486 
  4.29%
  * 
Common Stock
 
Whitney Ferer
  162,500 
  2.57%
  * 
 
 
Jeffrey Wright
  130,320 
  2.06%
  * 
 
 
Mathew Keane
  10,300 
  0.16%
  * 
 
 
Daniel Parks
  264,500 
  4.18%
  * 
 
 
Craig Thomas
  572,711 
  9.04%
  * 
Common Stock
 
All Directors and Executive Officers as a Group
  6,332,249 
  100.00%
  9.16%

 
John C. Lawrence
  1,590,672(4)
  90.80%
  2.29%
Series D Preferred
 
Leo Jackson
  102,000 
  5.80%
  * 
 
 
Garry Babbitt
  58,333 
  3.40%
  * 
Series D Preferred
 
All Series D Preferred Shareholders as a Group
  1,751,005(4)
  100.00%
  2.52%

 
All Directors and Executive Officers as a Group
  6,332,249(2)
  78.38%
  9.16%
Common Stock and Preferred Stock w/ voting rights
 
 
  - 
  - 
  - 
 
 
All preferred Shareholders that are officers or directors
  1,751,005(4)
  21.62%
  2.52%
Common and Preferred Voting Stock
 
All Directors and Executive Officers as a Group
  8,083,254
  100.00%
  11.69%
 
(1)Beneficial Ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock subject to options or warrants currently exercisable or convertible, or exercisable or convertible within 60 days of April 2, 2018, are deemed outstanding for computing the percentage of the person holding options or warrants but are not deemed outstanding for computing the percentage of any other person. Percentages are based on a total of 67,488,153 shares of common stock, 750,000 shares of Series B Preferred Stock, 177,904 shares of Series C Preferred Stock, and 1,751,005 shares of Series D Preferred Stock outstanding on April 2, 2018. Total voting stock of 69,417,062 shares is a total of all the common stock issued, and all of the Series C and Series D Preferred Stock outstanding at April 2, 2018.
 
 
28
 
 
(2) 
Includes 4,031,107 shares of common stock and 250,000 stock purchase warrants. Excludes 183,324 shares owned by the estate of Mr. Lawrence's sister, as to which Mr. Lawrence disclaims beneficial ownership.
 
(3) 
Includes shares owned by the estate of Al W. Dugan and shares owned by companies owned and controlled by the estate of Al W. Dugan. Excludes 183,333 shares owned by Lydia Dugan as to which the estate of Mr. Dugan disclaims beneficial ownership.
 
(4) 
The outstanding Series C and Series D preferred shares carry voting rights equal to the same number of shares of common stock.
 
(5) 
 The outstanding Series B preferred shares carry voting rights only if the Company is in default in the payment of declared dividends. The Board of Directors has not declared any dividends as due and payable for the Series B preferred stock.
 
Item 13
Certain Relationships and Related Transactions
 
Described below are transactions during the last two years to which we are a party and in which any director, executive officer or beneficial owner of five percent (5%) or more of any class of our voting securities or relatives of our directors, executive officers or five percent (5%) beneficial owners has a direct or indirect material interest.
 
In March of 2016 the Company issued the Board members 550,000 shares of the Company’s common stock at $0.25 per share for services performed in 2015 with a value of $137,500.
 
In December of 2016, the Company issued Daniel Parks, the Company’s Chief Financial Officer, 200,000 shares of the Company’s common stock valued at $54,000 to retain his services for a two year period. As part of the agreement, Mr. Parks’ hours worked and normal compensation was reduced.
 
During 2016, the Company awarded, but did not issue, common stock with a value at December 31, 2016, of $168,750 to its Board of Directors as compensation for their services as directors. In connection with the issuances, the Company recorded $168,750 in director compensation expense. In March of 2017, at a price of $0.40 per share, the directors were issued 421,875 shares for 2016.
 
On December 31, 2017, the Company awarded shares of unregistered common stock to be paid to its directors for services during 2017, having a fair value of $175,000, based on the stock price at the date declared. The stock has not been issued as of April 2, 2018.
 
The Company’s President and Chairman, John Lawrence, rents equipment and an aircraft to the Company and charges the Company for lodging and meals provided to consultants, customers and other parties by an entity that Mr. Lawrence owns. The amount due to Mr. Lawrence as of December 31, 2017 and 2016 was $22,668 and $14,525, respectively. Expenses paid to Mr. Lawrence for the years ended December 31, 2017 and 2016 were $13,603 and $16,791, respectively.
 
Item 14     Principal Accountant Fees and Services
 
The Company's Board of Directors and audit committee reviews and approves audit and permissible non-audit services performed by DeCoria, Maichel & Teague P.S., as well as the fees charged by DeCoria, Maichel & Teague P.S. for such services. In its review of non-audit service fees and its appointment of DeCoria, Maichel & Teague P.S. as the Company's independent accountants, the Board of Directors considered whether the provision of such services is compatible with maintaining DeCoria, Maichel & Teague P.S. independence. All of the services provided and fees charged by DeCoria, Maichel & Teague P.S. in 2017 were pre-approved by the Board of Directors and its audit committee.
 
Audit Fees
The aggregate fees billed by DeCoria, Maichel & Teague P.S. for professional services for the audit of the annual financial statements of the Company and the reviews of the financial statements included in the Company's quarterly reports on Form 10-Q for 2017 and 2016 were $119,985 and $134,985, respectively, net of expenses.
 
 
29
 
 
Audit-Related Fees
There were no other fees billed by DeCoria, Maichel & Teague P.S. during the last three fiscal years for assurance and related services that were reasonably related to the performance of the audit or review of the Company's financial statements and not reported under "Audit Fees" above.
 
Tax Fees
The aggregate fees billed by DeCoria, Maichel & Teague P.S. during the last two fiscal years for professional services rendered by DeCoria, Maichel & Teague P.S. for tax compliance for 2017 and 2016 were $8,985 and $12,695, respectively.
 
All Other Fees
There were no other fees billed by DeCoria, Maichel & Teague P.S. during the last two fiscal years for products and services provided by DeCoria, Maichel & Teague P.S
 
Item 15. Exhibits and Reports on Form 8-K
 
Exhibit Number 
Description
 
3.01
Articles of Incorporation of USAC, filed as an exhibit to USAC's Form 10-KSB for the fiscal year ended December 31, 1995 (File No.001-08675), are incorporated herein by this reference.
 
Amended and Restated Bylaws of USAC, filed as an exhibit to amendment No. 2 to USAC's Form SB-2 Registration Statement (Reg. No. 333-45508) are incorporated herein by this reference.
 
3.03
Articles of Correction of Restated Articles of Incorporation of USAC.
 
Articles of Amendment to the Articles of Incorporation of United States Antimony Corporation, filed as an exhibit to USAC's Form 10-QSB for the quarter ended September 30, 2002 (File No. 001-08675), are incorporated herein by this reference.
 
Key Employees 2000 Stock Plan, filed as an exhibit to USAC's Form S-8 Registration Statement filed on March 10, 2000 (File No. 333-32216) is incorporated herein by this reference.
 
Documents filed with USAC's Annual Report on Form 10-KSB for the year ended December 31, 1995 (File No. 001-08675), are incorporated herein by this reference:
 
10.10
Yellow Jacket Venture Agreement
 
10.11
Agreement Between Excel-Mineral USAC and Bobby C. Hamilton
 
10.12
Letter Agreement
 
10.13
Columbia-Continental Lease Agreement Revision
 
10.14
Settlement Agreement with Excel Mineral Company
 
10.15
Memorandum Agreement
 
10.16
Termination Agreement
 
10.17
Amendment to Assignment of Lease (Geosearch)
 
10.18
Series B Stock Certificate to Excel-Mineral Company, Inc.
 
10.19
Division Order and Purchase and Sale Agreement
 
 
30
 
 
10.20
Inventory and Sales Agreement
 
10.21
Processing Agreement
 
10.22
Release and settlement agreement between Bobby C. Hamilton and United States Antimony Corporation
 
10.23
Columbia-Continental Lease Agreement
 
10.24
Release of Judgment
 
10.25
Covenant Not to Execute
 
10.26
Warrant Agreements filed as an exhibit to USAC's Annual Report on Form 10-KSB for the year ended December 31, 1996 (File No. 001-08675), are incorporated herein by this reference
 
Letter from EPA, Region 10 filed as an exhibit to USAC's Quarterly Report on Form 10-QSB for the quarter ended September 30, 1997 (File No. 001-08675) is incorporated herein by this reference
 
Warrant Agreements filed as an exhibit to USAC's Annual Report on Form 10-KSB for the year ended December 31, 1997 (File No. 001-08675) are incorporated herein by this reference
 
Answer, Counterclaim and Third-Party Complaint filed as an exhibit to USAC's Quarterly Report on Forms 10-QSB for the quarter ended September 30, 1998 (File No. 001-08675) is incorporated herein by this reference
 
Documents filed with USAC's Annual Report on Form 10-KSB for the year ended December 31, 1998 (File No. 001-08675), are incorporated herein by this reference:
 
Warrant Issue-Al W. Dugan
 
Amendment Agreement
 
Documents filed with USAC's Quarterly Report on Form 10-QSB for the quarter ended March 31, 1999 (File No. 001-08675) is incorporated herein by this reference:
 
10.33
Warrant Issue-John C. Lawrence
 
10.34
PVS Termination Agreement
 
Documents filed as an exhibit to USAC's Form 10-KSB for the year ended December 31, 1999 (File No. 001-08675) are incorporated herein by this reference:
 
Maguire Settlement Agreement
 
Warrant Issue-Carlos Tejada
 
Warrant Issue-Al W. Dugan
 
Memorandum of Understanding with Geosearch Inc.
  
  Factoring Agreement-Systran Financial Services Company
 
Mortgage to John C. Lawrence
   
Warrant Issue-Al W. Dugan filed as an exhibit to USAC's Quarterly Report on Form 10-QSB for the quarter ended March 31, 2000 (File No. 001-08675) is incorporated herein by this reference
 
 
31
 
 
Agreement between United States Antimony Corporation and Thomson Kernaghan & Co., Ltd. filed as an exhibit to USAC form 10-QSB for the quarter ended June 30, 2000 (File No. 001-08675) are incorporated herein by this reference
 
Settlement agreement and release of all claims between the Estate of Bobby C. Hamilton and United States Antimony Corporation filed as an exhibit to USAC form 10-QSB for the quarter ended June 30, 2000 (File No. 001-08675) are incorporated herein by this reference.
 
Supply Contracts with Fortune America Trading Ltd. filed as an exhibit to USAC form 10-QSB for the quarter ended June 30, 2000 (File No. 001-08675) are incorporated herein by this reference
 
Amended and Restated Agreements with Thomson Kernaghan & Co., Ltd, filed as an exhibit to amendment No. 3 to USAC's Form SB-2 Registration Statement (Reg. No. 333-45508), are incorporated herein by this reference
 
Purchase Order from Kohler Company, filed as an exhibit to amendment No. 4 to USAC's Form SB-2 Registration Statement (Reg. No. 333-45508) are incorporated herein by this reference
 
Documents filed as an exhibit to USAC's Form 10-QSB for the quarter ended June 30, 2002 (File No. 001-08675) are incorporated herein by this reference:
 
Bear River Zeolite Company Royalty Agreement, dated May 29, 2002
 
Grant of Production Royalty, dated June 1, 2002
 
Assignment of Common Stock of Bear River Zeolite Company, dated May 29, 2002
 
Agreement to Issue Warrants of USA, dated May 29, 2002
 
Secured convertible note payable - Delaware Royalty Company dated December 22, 2003*
 
Convertible note payable - John C. Lawrence dated December 22, 2003*
 
Pledge, Assignment and Security Agreement dated December 22, 2003*
 
Note Purchase Agreement dated December 22, 2003*
 
Code of Ethics*
 
Rule 13a-14(a)/15d-14(a) Certifications Certification of John C. Lawrence*
 
Section 1350 Certifications Certification of John C. Lawrence*
 
CERCLA Letter from U.S. Forest Service filed as an exhibit to USAC form 10-QSB for the quarter ended June 30, 2000 (File No. 001-08675) are incorporated herein by this reference and filed as an exhibit to USAC's Form 10-KSB for the year ended December 31, 1995 (File No. 1-8675) is incorporated herein by this reference
______________________
* Filed herewith.
 
Reports on Form 8-K

Item 5. Other Events - October 10, 2003.
 
 
32
 
 
SIGNATURES
 
Pursuant to the requirements of Section 13 or 15(b) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
UNITED STATES ANTIMONY CORPORATION
 
 
(Registrant)
 
 
 
 
 
Date: April 2, 2018
By:  
/s/ John C. Lawrence
 
 
 
John C. Lawrence
 
 
 
President, Director, and Principal Executive Officer
 
 
 
   
 
Date: April 2, 2018
By:
/s/ Daniel L. Parks
 
 
 
Daniel L. Parks
 
 
 
Chief Financial Officer
 
 
 
   
 
Date: April 2, 2018
By:
/s/ Alicia Hill
 
 
 
Alicia Hill
 
 
 
Controller
 
 
 
   
 
 
 
   
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
 
Date: April 2, 2018
By:  
/s/ John C. Lawrence
 
 
 
John C. Lawrence
 
 
 
Director and President (Principal Executive)
 
 
 
   
 
Date: April 2, 2018
By:
/s/ Whitney Ferer
 
 
 
Whitney Ferer
 
 
 
Director
 
 
 
   
 
Date: April 2, 2018
By:
/s/ Gary Babbitt
 
 
 
 Gary Babbitt
 
 
 
 Director
 
 
 
 
 
Date: April 2, 2018
By:
/s/ Hart Baitis
 
 
 
Hart Baitis
 
 
 
Director
 
 
 
   
 
Date: April 2, 2018
By:
/s/ Russell Lawrence
 
 
 
Russell Lawrence
 
 
 
Director
 
 
 
   
 
Date: April 2, 2018
By:
/s/ Jeffrey Wright
 
 
 
Jeffrey Wright
 
 
 
Director
 
 
 
   
 
Date: April 2, 2018
By:
/s/ Craig Thomas
 
 
 
Craig Thomas
 
 
 
Director
 
 
 
33
 
 
 
 
Report of Independent Registered Public Accounting Firm
 
To the shareholders and the board of directors of United States Antimony Corporation
 
Opinion on the Financial Statements
 
We have audited the accompanying consolidated balance sheets of United States Antimony Corporation and Subsidiaries (the "Company") as of December 31, 2017 and 2016, the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
 
Basis for Opinion
 
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
 
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, anaudit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
 
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
 
DeCoria, Maichel & Teague, P.S.
 
We have served as the Company's independent auditor since 1998.
Spokane, Washington
April 2, 2018
 
F-1
 
 
United States Antimony Corporation and Subsidiaries
 
 
 
 
 
 
Consolidated Balance Sheets
 
 
 
 
 
 
December 31, 2017 and 2016
 
 
 
 
 
 
ASSETS
 
 
 
 
 
 
 
 
2017
 
 
2016
 
Current assets:
 
 
 
 
 
 
Cash and cash equivalents
 $27,987 
 $10,057 
Certificates of deposit
  252,298 
  251,641 
Accounts receivable, net of allowance
  362,579 
  552,119 
Inventories
  914,709 
  855,637 
Other current assets
  4,697 
  23,101 
Total current assets
  1,562,270 
  1,692,555 
 
    
    
Properties, plants and equipment, net
  15,132,897 
  15,695,966 
Restricted cash for reclamation bonds
  63,345 
  63,274 
IVA receivable and other assets
  372,742 
  314,203 
Total assets
 $17,131,254 
 $17,765,998 
 
    
    
LIABILITIES AND STOCKHOLDERS' EQUITY
    
    
Current liabilities:
    
    
    Checks issued and payable
 $28,248 
 $35,682 
Accounts payable
  2,276,357 
  1,797,251 
Due to factor
  10,880 
  150,399 
Accrued payroll, taxes and interest
  185,283 
  213,695 
Other accrued liabilities
  168,578 
  122,968 
Payables to related party
  22,668 
  14,525 
Deferred revenue
  60,049 
  78,730 
Notes payable to bank
  192,565 
  167,317 
Income taxes payable (Note 13)
  443,110 
  410,510 
Long-term debt, current portion, net of discount
  546,988 
  391,046 
Total current liabilities
  3,934,726 
  3,382,123 
 
    
    
Long-term debt, net of discount and current portion
  1,239,126 
  1,472,869 
Hillgrove advances payable (Note 10)
  1,134,221 
  1,134,221 
Stock payable to directors for services
  175,000 
  168,750 
Asset retirement obligations and accrued reclamation costs
  271,572 
  265,782 
Total liabilities
  6,754,645 
  6,423,745 
Commitments and contingencies (Note 4, 10 and 15)
    
    
 
    
    
Stockholders' equity:
    
    
Preferred stock $0.01 par value, 10,000,000 shares authorized:
    
    
Series A: -0- shares issued and outstanding
  - 
  - 
Series B: 750,000 shares issued and outstanding
    
    
(liquidation preference $922,500 and $915,000
    
    
 respectively)
  7,500 
  7,500 
Series C: 177,904 shares issued and outstanding
    
    
(liquidation preference $97,847 both years)
  1,779 
  1,779 
Series D: 1,751,005 shares issued and outstanding
    
    
(liquidation preference $4,961,324 and $4,920,178
    
    
 respectively)
  17,509 
  17,509 
Common stock, $0.01 par value, 90,000,000 shares authorized;
    
    
67,488,153 and 67,066,278 shares issued and outstanding, respectively
  674,881 
  670,662 
Additional paid-in capital
  36,239,264 
  36,074,733 
Accumulated deficit
  (26,564,324)
  (25,429,930)
Total stockholders' equity
  10,376,609 
  11,342,253 
Total liabilities and stockholders' equity
 $17,131,254 
 $17,765,998 
 
The accompanying notes are an integral part of these consolidated financial statements. 
 
 
F-2
 
 
United States Antimony Corporation and Subsidiaries
 
 
 
Consolidated Statements of Operations
 
 
 
 
 
 
For the years ended December 31, 2017 and 2016
 
 
 
 
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
REVENUES
 $10,229,978 
 $11,890,135 
 
    
    
COST OF REVENUES
  10,068,578 
  11,353,484 
 
    
    
GROSS PROFIT
  161,400 
  536,651 
 
    
    
OPERATING EXPENSES:
    
    
   General and administrative
  533,506 
  681,487 
   Salaries and benefits
  371,162 
  483,937 
   Hillgrove advance - earned credit (Note 10)
  - 
  (120,329)
   Professional fees
  216,431 
  308,078 
       TOTAL OPERATING EXPENSES
  1,121,099 
  1,353,173 
 
    
    
INCOME (LOSS) FROM OPERATIONS
  (959,699)
  (816,522)
 
    
    
OTHER INCOME (EXPENSE):
    
    
Interest income
  873 
  1,437 
Interest expense
  (106,975)
  (160,795)
Factoring expense
  (35,993)
  (35,182)
Foreign exchange loss
  (32,600)
  - 
       TOTAL OTHER INCOME (EXPENSE)
  (174,695)
  (194,540)
 
    
    
INCOME (LOSS) BEFORE INCOME TAXES
  (1,134,394)
  (1,011,062)
 
    
    
INCOME TAX PROVISION
  - 
  (298,138)
 
    
    
NET INCOME (LOSS)
  (1,134,394)
  (1,309,200)
 
    
    
 Preferred dividends
  (48,649)
  (48,649)
 Net income (loss) available to
    
    
   common stockholders
 $(1,183,043)
 $(1,357,849)
 
    
    
Net income (loss) per share of
    
    
      common stock:
    
    
Basic and diluted
 $(0.02)
 $(0.02)
 
    
    
Weighted average shares outstanding:
    
    
Basic and diluted
  67,413,025 
  66,781,757 
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
F-3
 
 
United States Antimony Corporation and Subsidiaries
Consolidated Statement of Changes in Stockholders' Equity
For the years ended December 31, 2017 and 2016
 
 
 
Total Preferred Stock
 
 
Common Stock
 
 
Additional
 
 

 
 
 
Shares
 
 
Amount
 
 
Shares
 
 
Amount
 
 
Paid
In Capital
 
 
Accumulated
Deficit
 
 
Total