Company Overview and History
United States Antimony Corporation (UAMY) is a diversified mining and processing company with a focus on antimony, precious metals, and zeolite. Headquartered in Thompson Falls, Montana, UAMY has a rich history spanning over 50 years, during which it has evolved to become a prominent player in the critical minerals and zeolite industries.
UAMY’s origins date back to 1970 when the company was incorporated to mine and produce antimony products. In 1983, the company suspended its antimony mining operations in the U.S. but continued to produce antimony products using foreign sources of antimony ore. In the late 1990s, UAMY expanded its operations by establishing subsidiaries in Mexico to smelt antimony and explore for antimony and precious metal deposits. In 2000, the company further diversified its business by forming Bear River Zeolite Company (BRZ) to mine and produce zeolite in Idaho.
Business Segments and Operations
Today, UAMY operates through four business segments: United States Antimony, Mexico Antimony, Zeolite, and Precious Metals. The company’s antimony operations involve processing antimony ore into various products, including antimony oxide, antimony metal, and antimony trisulfide, which are used in a wide range of applications such as flame retardants, batteries, and ammunition primers. UAMY’s zeolite operations focus on mining and processing zeolite, a versatile industrial mineral used in water filtration, soil amendment, and various other applications. The company’s precious metals segment recovers gold and silver from the antimony concentrates processed at its facilities.
The United States antimony segment consists of an antimony plant in Montana that processes antimony ore primarily into antimony oxide, antimony metal, and antimony trisulfide. Antimony oxide is a fine, white powder used in flame-retardant systems for plastics, rubber, fiberglass, textile goods, paints, coatings, and paper. It is also used as a color fastener in paint and as a phosphorescent agent in fluorescent light bulbs. Antimony metal is used in bearings, storage batteries, and ordnance, while antimony trisulfide is used as a primer in ammunition.
The zeolite segment, operated by Bear River Zeolite, Inc. (BRZ), produces and sells zeolite from a mine and processing plant located in Preston, Idaho. Zeolite is used for purposes such as soil amendment and fertilizer, water filtration, sewage treatment, nuclear waste cleanup, odor control, gas separation, and animal nutrition.
The precious metals segment consists of a recovery plant that operates in conjunction with the antimony processing plant in Montana. Precious metals, primarily gold and silver, are recovered from antimony concentrates in the leach circuit and settling pond after the ore goes through the crushing and flotation cycles.
In May 2012, UAMY’s shares of common stock began trading on the NYSE MKT (now NYSE AMERICAN) under the symbol UAMY, marking an important milestone in the company’s history. Throughout its operations, UAMY has faced various challenges, including the need to purchase antimony ore from foreign sources due to economic considerations. This shift has exposed the company to risks of procurement interruptions and volatile changes in world market prices.
The company’s zeolite segment, Bear River Zeolite, Inc. (BRZ), operates under a lease agreement with Zeolite, LLC, which allows BRZ to surface mine and process zeolite on property in Preston, Idaho in exchange for royalty payments. BRZ is also subject to two additional royalties on the sale of zeolite products, with combined royalties ranging from 8% to 13% on zeolite product sales.
Recent Developments
In a significant development in 2024, UAMY shut down the operations of its USAMSA subsidiary in Mexico, which was part of the antimony segment, and announced its intent to sell the subsidiary due to cumulative losses since its inception. Despite this closure, the company maintains its existing Los Juarez mining claims and concessions in Mexico through its ADM subsidiary, although there are currently no active operations at Los Juarez.
Financials
UAMY’s financial performance has been mixed in recent years. For the nine months ended September 30, 2024, the company reported revenues of $8.07 million, a 23% increase compared to the same period in 2023. This growth was driven by increased demand and volume for antimony oxide and metal products, as well as higher sales volumes of gold and silver ounces. Gross profit increased by 107% to $2.16 million, while operating expenses rose by 116% to $3.28 million. The company’s net income from continuing operations for the nine-month period was $652,700.
Breaking down the performance by segment, the antimony segment generated $5.38 million in revenue, up 23.5% from the prior year period, with a gross profit of $2.22 million, a 119.9% increase. The precious metals segment saw a 66.7% increase in revenue to $404.05 million, with a gross profit of $386.49 million, a 71.9% improvement. The zeolite segment generated $2.28 million in revenue, a 17.5% increase year-over-year, but had a gross profit loss of $450,560, a 130.5% decline due to increased maintenance and equipment-related costs.
For the most recent quarter (Q3 2024), UAMY reported revenue of $2.42 million, representing a 17.3% year-over-year growth. The net loss for the quarter was $727,509. Operating cash flow (OCF) was positive at $448,369, while free cash flow (FCF) stood at $376,032.
Looking at the most recent fiscal year (2023), UAMY reported revenue of $8.69 million, a net loss of $6.35 million, negative OCF of $4.75 million, and negative FCF of $6.28 million. The company’s focus on improving operational efficiencies and cash flow management has been a priority, as demonstrated by the 189.7% year-over-year decrease in consolidated EBITDA loss to $306,850 for the nine-month period ending September 30, 2024.
In terms of geographic markets, UAMY sells its products primarily in the United States and Canada, with foreign revenues accounting for 21.6% of total revenues in 2023.
Liquidity
UAMY’s balance sheet remains relatively strong, with cash and cash equivalents of $12.97 million as of September 30, 2024, up from $11.90 million at the end of 2023. The company’s working capital stood at $12.67 million, with a current ratio of 6.24 and a quick ratio of 5.84, indicating a solid ability to meet short-term obligations. The debt-to-equity ratio is low at 0.014, and the company has not disclosed any available credit lines.
Challenges and Strategic Initiatives
UAMY’s operations have faced several challenges in recent years, including the ongoing COVID-19 pandemic, which impacted production and supply chains, and the shutdown of its Mexico-based subsidiary, USAMSA, in March 2024. The company has also navigated the volatile global antimony market, which has seen significant price fluctuations due to supply chain disruptions and geopolitical tensions.
A key challenge for UAMY has been securing antimony ore supply due to China’s tightening grip on the global antimony market. To address this, the company has been actively searching for new antimony sources, including exploring mining opportunities in Alaska and Ontario, Canada. The company is also actively seeking to secure additional antimony feedstock from new sources globally, as their current supplier had a plant shutdown that impacted Q3 2024 results.
To address these challenges, UAMY has implemented several strategic initiatives, including efforts to diversify its antimony supply sources, expand its zeolite operations, and explore new opportunities in the critical minerals space. The company has been actively pursuing the acquisition of mining claims in Alaska and Ontario, Canada, targeting deposits of antimony, cobalt, nickel, and other critical minerals.
Furthermore, UAMY has taken steps to improve its operational efficiency and cost structure, including investments in its zeolite facility to enhance production processes, safety, and equipment. These initiatives have led to higher product throughput, improved customer delivery timing, and increased production reliability at the BRZ facility. The company is also working to expand sales for its zeolite business, including entering new markets and potentially acquiring a competitor.
In addition, UAMY is pursuing government funding opportunities, including meeting with the Department of Defense, to potentially secure grants or other financial support for its critical minerals initiatives.
Future Outlook
Looking ahead, UAMY faces both opportunities and risks. The global demand for critical minerals, including antimony and the company’s other product offerings, is expected to remain strong, driven by factors such as the transition to clean energy technologies and the need for secure domestic supply chains. However, the company will need to navigate ongoing supply chain challenges, geopolitical tensions, and regulatory hurdles to capitalize on these market trends.
While UAMY has not provided specific quantitative guidance, the company’s management believes that the strategic initiatives underway position them for future growth and to potentially become a “billion-dollar company”. The success of these initiatives, including securing new antimony sources, expanding the zeolite business, and developing new mining claims, will be crucial to UAMY’s long-term growth and profitability.
Conclusion
Overall, United States Antimony Corporation (UAMY) is a well-established player in the critical minerals and zeolite industries, with a strong track record and a clear strategic vision for the future. As the company navigates the dynamic market environment, its ability to diversify its supply sources, optimize its operations, and capitalize on emerging opportunities in the critical minerals space will be key to its continued success. The company’s recent financial improvements and strategic initiatives provide a foundation for potential growth, but UAMY will need to successfully execute its plans and overcome ongoing challenges to achieve its ambitious goals in the critical minerals market.
Disclaimer: This article is for informational purposes only. It does not constitute financial, legal, or other types of advice. While every effort has been made to ensure the accuracy of the information presented here, the author and the publisher do not make any guarantees about the completeness, reliability, and accuracy of this information.