UAMY

UNITED STATES ANTIMONY CORP (UAMY) - 10-Q Summary

Business Context and Reporting Period

This report covers the quarterly period ended June 30, 2026. United States Antimony Corporation (USAC) operates two primary segments: Antimony (mining and processing in Montana and Mexico) and Zeolite (mining and processing in Idaho). The company is vertically integrated, producing antimony oxide, metal ingots, trisulfide, and precious metals (gold/silver), alongside zeolite for industrial and agricultural applications. USAC recently expanded its footprint with new mining claims in Alaska, Montana, and Canada, and entered a joint venture for a hydrometallurgical facility.

Key Financial Metrics (Six Months Ended June 30, 2026)

Material Changes vs. Prior Period

• Revenue Decline: Total revenue decreased 16% year-over-year (from $17.53M to $14.71M). Antimony revenue dropped 27% due to a 27% decline in average sales price per pound, partially offset by stable sales volume. Zeolite revenue increased 45% driven by a 49% increase in tons sold.
• Operating Loss Expansion: The company reported an operating loss of $14.50 million compared to an operating income of $0.38 million in the prior year. This was driven by a 235% increase in operating expenses, primarily due to a surge in share-based compensation ($7.74M vs $0.83M) and increased salaries/benefits.
• Non-Operating Gains: Despite the operating loss, the company reported a net loss of $11.18 million, significantly mitigated by a $2.72 million unrealized gain on its investment in Larvotto Resources Limited (equity securities).
• Inventory Build-up: Inventories increased by $9.08 million to $21.61 million, reflecting a strategic build-up of antimony inventory.
• Capital Expenditures: Capital spending increased to $22.81 million (vs $7.39M prior year), largely funded by a $12.8 million government grant received for facility expansion.

Guidance, Outlook, and Risks

• Government Grant: USAC was awarded a $27.0 million grant under the Defense Production Act. $12.8 million was recognized in Q1 2026 as a reduction of PP&E. The remaining $14.2 million is contingent on future milestones and government authorization.
• DLA Contract: The company secured a sole-source contract with the U.S. Defense Logistics Agency (DLA) for antimony metal ingots. The first shipments ($2.6M revenue) were accepted in July 2026 and will be recognized in Q3 2026.
• Joint Venture: USAC holds a 49% interest in a new hydrometallurgical processing JV with Americas Gold and Silver. The JV is in the development phase and recorded a loss of $72,640 for the six-month period.
• Internal Controls: Management concluded that disclosure controls and procedures were not effective as of June 30, 2026, due to a material weakness regarding insufficient qualified accounting personnel. Remediation efforts are ongoing.
• Risks: Key risks include the failure to meet grant milestones, credit risk associated with a $4.0 million convertible note to a supplier, and potential inventory write-downs if antimony prices decline further.

Investor Verification Checklist

• Grant Milestones: Verify the specific milestones required to unlock the remaining $14.2 million of the Department of War grant and the timeline for achievement.
• DLA Revenue Recognition: Confirm the timing and volume of future shipments under the DLA contract to assess Q3 and full-year revenue impact.
• Inventory Valuation: Review the net realizable value (NRV) of the $21.6 million inventory, particularly given the 27% drop in average antimony sales prices.
• Internal Control Remediation: Assess the progress of hiring qualified accounting personnel and implementing new software to address the material weakness in internal controls.
• Supplier Credit Risk: Evaluate the financial health of the international supplier holding the $4.0 million convertible note and the likelihood of repayment or conversion.