UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(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, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period to
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Commission file number 33-00215
UNITED STATES ANTIMONY CORPORATION
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(Name of small business issuer in its charter)
Montana
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(State or other jurisdictuion
of incorporation or organization)
81-0305822
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P.O. Box 643, Thompson Falls,
Montana 59873
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(Address of principal
executive offices)
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 X No
--- ---
<PAGE>
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form and no
disclosure will 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-KSB or any amendment to this
Form 10-KSB. [ ]
The registrant's revenues for its most recent fiscal year were
$5,010,913.
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
$2,690,348 as of March 31, 1997.
At March 31, 1997, the registrant had outstanding 13,003,434 shares of
par value $.01 common stock.
<PAGE>
TABLE OF CONTENTS
PART I
ITEM 1. DESCRIPTION OF BUSINESS
Summary
Antimony Division
Gold Division
Environmental Matters
Marketing
Mining Industry and Metal Prices
Other
ITEM 2. DESCRIPTION OF PROPERTIES
Antimony Division
Gold Division
ITEM 3. LEGAL PROCEEDINGS
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
ITEM 7. FINANCIAL STATEMENTS
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
ITEM 10. EXECUTIVE COMPENSATION
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES
<PAGE>
PART I
Item 1. Description of Business
--------------------------------
SUMMARY
--------
AGAU Mines, Inc., predecessor of United States Antimony Corporation,
was incorporated in June 1968 as a Delaware Corporation to explore,
develop and mine gold and silver properties. United States Antimony
Corporation ("USAC," "the Company" or "the Registrant") was
incorporated in Montana in January 1970 to mine and produce antimony
products. In June 1973, AGAU Mines, Inc. was merged with and into
USAC, with USAC the surviving corporation in the merger. In December
1983, the Company suspended its antimony mining operations when it
became possible to purchase antimony raw materials more economically
from foreign sources. The principal business of the Company has been
the production of antimony products and the mining and milling of
gold.
In October 1989 and in April 1990, the Company had judicial financial
settlements against it totaling $1,243,316 plus interest and
litigation costs. The judgments consumed all available cash, shut down
the Company's gold mining operation and placed the Company in a near
bankruptcy posture. In December 1990, a fire destroyed the Company's
corporate headquarters and many of its financial and administrative
records.
In years prior to the fire, the Company had been a reporting entity
subject to the requirements of Section 13 of the Securities Exchange
Act of 1934 (the "Exchange Act"). The Company had timely filed all
reports required by the Exchange Act through September 30, 1990, when
it filed its Form 10-Q for that quarter. Subsequent to that time, due
to the destruction of records in December 1990 and the poor financial
condition of the Company, no other required filings were made until
filing of the Company's Form 10-KSB for the year ended December 31,
1995 and the subsequent Form 10-QSBs for the year ended December 31,
1996.
The Company has been able to avoid bankruptcy and a termination of
operations through borrowings from stockholders and directors, lack of
creditor action and net income produced from operations in 1994 and
1995. There can be no assurance, however, that the Company will be
able to continue to meet its obligations and continue in existence as
a going concern (see Note 1 to the consolidated financial statements).
Antimony Division
-----------------
The Company's antimony properties, mill and metallurgical plant are
located in the Burns Mining District of Sanders County, Montana,
approximately 15 miles west of Thompson Falls. The Company holds 12
patented lode claims, some of which are contiguous and 2 patented mill
sites.
<PAGE>
Prior to 1984, the Company mined antimony ore underground by driving
drifts and using slushers in room and pillar type stopes. Mining was
suspended in December 1983, because antimony could be purchased more
economically from foreign sources. The Company's underground antimony
operations may be reopened in the future should raw material prices
warrant so. The Company, through a joint relationship, obtains the
majority of its antimony from China and, to a lesser degree, Canada.
The Company currently is pursuing the acquisition of a 50% interest in
United States Antimony, Mexico S.A. de C.V. ("USAMSA") to mine, mill
and produce antimony metal and other raw materials from the Mexican
states of Zacatecas, Coahuila, Sonora, Queretaro and Oaxaca to be sent
to Thompson Falls, Montana for processing.
From refined antimony metal, the Company produces three antimony oxide
products of different particle size using proprietary furnace
technology and several grades of sodium antimonate using
hydrometallurgical techniques. 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. Sodium antimonate is
primarily used as a fining agent for glass in cathode ray tubes used
in computers and televisions and as a flame retardant. On September 1,
1991, the Company entered into an agreement with HoltraChem, Inc.
("HoltraChem") whereby the Company would process raw material
purchased by HoltraChem into finished antimony products. The Company
would then deliver the finished products to HoltraChem for sale, and
share in the profits or losses from sales with HoltraChem on a 50/50
basis.
On July 1, 1995, the Company and HoltraChem terminated the 1991
agreement and entered into an Inventory and Sales Agreement and a
Processing Agreement. These agreements gave rise to the creation of a
wholly owned subsidiary, United States Antimony Corporation-Montana
("USAM"), that participates with HoltraChem and its subsidiary,
HoltraChem-Montana, Inc. ("HCMI"), in the processing and sale of
antimony products. While the agreements still provide for the sharing
of profits or losses from sales, after deduction of certain costs, on
a 50/50 basis, they also require the Company to fund and own 50% of
the antimony inventory up to $750,000. The Company funded the
acquisition of 50% of the antimony inventory through the contribution
of 50% of the Company's share of profits. At December 31, 1996, the
Company had fully funded 50% of the total antimony inventory. USAM
also receives a processing fee from HoltraChem for the finished
antimony inventory. In consideration of the Company's financial
participation in carrying raw material and antimony inventory,
HoltraChem agreed to provide additional marketing efforts in an
attempt to increase product sales to 10 million pounds of antimony
products per year. The agreements expire on December 31, 1999.
<PAGE>
For the year ended December 31, 1996, the Company, through its
relationship with HCMI, sold 2,333,321 pounds of antimony products
generating approximately $4.2 million in revenues. During 1995, the
Company, through its relationship with HCMI, sold 1,966,395 pounds of
antimony products, which generated approximately $4.9 million in
revenues. The Company's products are sold to various customers
throughout the United States. During 1996 and 1995, 22% and 21% of the
Company's antimony sales were made to one customer.
Gold Division
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YANKEE FORK MINING DISTRICT
Until 1989, the Company mined, milled and leached gold and silver in
the Yankee Fork Mining District in Custer County, Idaho. The metals
were recovered by a 150-ton per day gravity and flotation mill, and
the concentrates were leached with cyanide to produce a bullion
product at the Preachers Cove mill, which is located six miles north
of Sunbeam, Idaho on the Yankee Fork of the Salmon River. The
Preachers Cove mill has been dismantled and the site is undergoing
environmental remediation pursuant to a Idaho Department of
Environmental Quality consent decree request. See "Environmental
Matters."
The Company owns two patented lode mining claims on Estes Mountain in
the Yankee Fork District, which are now idle.
YELLOW JACKET MINING DISTRICT
The Company holds a mining lease on the Yellow Jacket Mine located in
the Yellow Jacket Mining District of Lemhi County, Idaho,
approximately 70 miles southwest of Salmon, Idaho. On July 8, 1987,
the Company and Geosearch, Inc. ("Geosearch"), an Idaho corporation,
entered into a mining lease agreement with Yellow Jacket Mines, Inc.
of Palo Alto, California for the lease of the Yellow Jacket mine. Also
on that date, the Company and Geosearch entered into an operating
agreement for the exploration, development and mining of the Yellow
Jacket property. Under the terms of the operating agreement, Geosearch
and the Company would divide equally the net operating proceeds
realized from the Yellow Jacket mine.
On February 19, 1988, the Company obtained an assignment from
Geosearch of all of its rights, title and interest in and to the lease
agreement dated July 8, 1987 by and between Yellow Jacket Mines, Inc.,
the Company and Geosearch. In consideration of the assignment of the
lease, the Company agreed to conduct certain exploration activities
and to provide a preliminary mining plan which, if justified, would
result in applications for permitting and bonding for a mine and mill
with the state of Idaho, the U.S. Forest Service and other agencies.
<PAGE>
The Company also agreed to pay Geosearch a 12.5% net operating profits
interest until the Company has recovered its full investment in the
property, and thereafter, Geosearch would receive a 15% net operating
profits interest. USAC currently pays Geosearch a minimum monthly
payment of $1,000 during the months of January through April of each
year, if operations are closed due to weather, and $2,000 per month
for the months of May through December of each year. After the mill
was built at the Yellow Jacket mine in 1990, the Company paid
Geosearch $25,000 per year in staggered installments, with all
payments accumulated and credited against the net operating profits
due Geosearch. Net operating profits and guaranteed minimum payments
paid to Geosearch apply to a $600,000 purchase price after which the
Company will not be obligated to make any further payments to
Geosearch.
In March 1994, Geosearch filed an action in the Seventh Judicial
District Court, Custer County, Idaho, alleging breach of the 1988
assignment of lease. The lawsuit requested recovery of $94,013 in past
royalties and accrued interest thereon. On September 9, 1994, the
Company settled the litigation by agreeing to an amendment to the
assignment of lease. The amendment calls for the payment of past
royalties and accrued interest through the assignment of 5% of gross
receipts from gold production at the Yellow Jacket mine. In addition,
in 1995 the Company issued 50,000 shares of its unregistered common
stock and 100,000 common stock purchase warrants exercisable at $.35
per share to Geosearch. The Company also paid $4,000 in legal fees
incurred by Geosearch.
The underlying lease with Yellow Jacket Mines, Inc. requires a minimum
payment of a net smelter royalty of 5% with a minimum annual royalty
of $27,500.
On July 7, 1990, the Company entered into a mining venture agreement
with BumbleBee, Inc. ("BumbleBee"), a company controlled by Bobby C.
Hamilton ("Hamilton"), a stockholder and creditor of the Company, to
explore, develop and operate the Yellow Jacket property. Pursuant to
the agreement, the Company became the venture manager and had a 60%
net profits interest. The Company contributed the lease on the mining
property and the use of its mine and mill equipment. BumbleBee made an
initial contribution of $500,000 for its 40% net profits interest. The
operation began the production of gold bullion by trucking the
concentrate to the Preachers Cove cyanide leach plant. Later in 1993,
gold concentrates were shipped to a smelter in British Columbia,
Canada, operated by Cominco Metals, a division of Cominco, Ltd.
("Cominco"). The operation never reached operating capacity due to the
problems of storing tailings and the lack of adequate operating
capital. After several years of continuing losses, the Yellow Jacket
mine was put on a care-and-maintenance status in 1996.
<PAGE>
Due to disappointing operating results and low metal prices, the
Company has determined that without sufficient operating capital, the
Yellow Jacket reserves are not economical to mine. Therefore, during
the fourth quarter of 1996, the Company's remaining carrying value of
the property of $463,057 was written off. Also, property with a
carrying value of $85,735 was written off. The Company is continuing
an exploration program to identify additional underground reserves.
If ongoing exploration efforts are unsuccessful and a decision is made
to permanently close the property, an accrual for closure costs will
be necessary.
During the year ended December 31, 1996, the Company sold 2,190 ounces
of gold and 1,317 ounces of silver which generated $850,518 of
revenues. During 1995, revenues of $1,026,741 were generated from the
sale of 2,636 ounces of gold and 1,213 ounces of silver.
Subsequent to the curtailment of production at Yellow Jacket, the
Company began an underground exploration program and proceeded in
reopening an abandoned tunnel on the property (the No. 3 Tunnel). In
1953, the Idaho Bureau of Mines reported gold values of 0.2 ounces per
ton, 7% to 10% lead and 2% to 3% copper in the No. 3 tunnel located
below the main Yellow Jacket pit. These values are in a fault offset
from the open pit mineralized zone and are sulfides. The existence of
this mineralized resource could increase the average recovered value
to the $100 to $140 per ton range as processed by the existing mill
and could increase mineable reserves. With these values, production
could resume immediately, at a reduced throughput initially. However,
there is no assurance that 1) the tunnel can be successfully reopened,
2) that an economical ore reserve exists, and 3) that the sulfide
material can be profitably milled due to regulatory restrictions or
economic factors.
Environmental Matters
---------------------
The exploration, development and production programs conducted by the
Company in the United States are subject to local, state and federal
regulations regarding environmental protection. Certain of the
Company's mining and production activities are conducted on public
lands. The USDA 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 the Company 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. The Company may be required to prepare and present to
such authorities data pertaining to the effect or impact that any
proposed exploration for or production of minerals may have upon the
environment. Any changes to the Company's reclamation and remediation
plans which may be required due to changes in federal regulations
could have an adverse effect on the Company's operations.
<PAGE>
In 1994, the U.S. Forest Service, under the provisions of the
Comprehensive Environmental Response Liability Act of 1980 (CERCLA)
designated the Company's cyanide leach plant at the Preachers Cove
mill, which is located six miles north of Sunbeam, Idaho on the Yankee
Fork of the Salmon River, as a contaminated site requiring cleanup of
the cyanide solution. The Company has been reclaiming the property
and, as of December 31, 1996 the cyanide solution discharge was
complete and the mill has been removed. The Company anticipates having
the cyanide leach residue containment completely finished by 1998. In
1996, the Idaho Department of Environmental Quality requested the
Company sign a consent decree related to completing the reclamation
and remediation at the Preachers Cove mill, which the Company signed
in December 1996.
On November 15, 1996, the Bureau of Land Management (BLM) notified the
Company that it may be a responsible party as defined under CERCLA for
hazardous substances released from uncontained mining tailings at a
mining site near the Pine Creek Mining District in Idaho. The Company
was one of 13 companies that had received a similar notice.
In response to the notification, the Company informed the BLM that it
is neither a current or former owner of a site, has never been an
operator, nor has it shipped hazardous substances or arranged for the
disposal or treatment of hazardous substances in the Pine Creek area.
Accordingly, the Company does not consider itself a potentially
responsible party under CERCLA for the Pine Creek site. Although no
additional notification has been received from the BLM, the Company
believes it does not have a material liability relating to this site.
Marketing
---------
Gold and silver concentrates from the Yellow Jacket mine are marketed
directly to a smelter at Trail, British Columbia operated by Cominco.
There are several other smelters that could process and purchase the
concentrates. If the Company was unable to sell its concentrate to its
present vendor, the Company believes the loss of this vendor would not
have a material adverse impact on the Company's operations.
In 1995, the Company entered into two agreements with HoltraChem to
market its antimony products (see "Description of Business - Antimony
Division"). The Company receives a processing or toll fee for
producing antimony products, and HoltraChem and the Company sell the
products to the customers. After HoltraChem deducts sales costs, the
cost of raw materials, freight, warehousing and administrative costs,
the remaining profit or loss is shared on a 50/50 basis between the
Company and HoltraChem. In addition, USAC also receives 50% of any
profits on HoltraChem's sale of foreign produced antimony product.
<PAGE>
Mining Industry and Metals Prices
---------------------------------
The operating results of the Company have been and will continue to be
directly related to the market prices of antimony and gold, which have
fluctuated widely in recent years. The volatility of such prices is
illustrated by the following table which sets forth certain high, low
and average prices of antimony per pound and gold per troy ounce as
reported by sources deemed reliable by the Company. Antimony prices
reflect New York dealer quotes, while gold prices are Handy & Harmon
quotes as reported in METALS WEEK for the periods indicated.
Year Average
---- -------
Antimony 1996 $ 1.60
1995 2.28
1994 1.78
1993 0.77
1992 0.79
1991 0.83
Year High Low Average
---- ------- ------- -------
Gold 1996 $415.00 $367.00 $387.70
1995 395.40 371.20 384.00
1994 396.25 369.65 382.95
1993 405.60 326.10 365.85
1992 359.60 330.35 344.98
1991 403.00 344.25 373.63
The range of sales prices for antimony oxide (per pound) was as
follows for the periods indicated:
Year High Low Average
---- ------- ------- -------
1996 $ 4.50 $ 1.53 $ 1.86
1995 3.12 0.89 2.56
1994 2.75 0.98 1.83
1993 1.11 1.02 1.04
1992 1.20 2.09 1.09
1991 1.05 1.19 1.13
Metals prices are determined by a number of variables over which the
Company has no control. These include the availability and price of
imported metals; the quantity of new metal supply, industrial,
commercial and investor demand; the level of, and expectations
regarding, interest rates and the rate of inflation; political
considerations; prices of other commodities; and speculation. If metal
prices decline and continue to remain depressed, the Company's
operations would be adversely affected.
<PAGE>
Other
-----
The Company holds no material patents, licenses, franchises or
concessions, but it considers its antimony processing plant as
proprietary in nature. The Company uses the tradename "Montana Brand
Antimony Oxide" for the marketing of its antimony products.
The Company is subject to the requirements of the Federal Mining
Safety and Health Act of 1977, requirements of the state of Montana
and the state of Idaho mining inspection, Health and Safety statutes
and Sanders County, Lemhi County and Custer County health ordinances.
Management of the Company believes that its current discharge of waste
materials from its milling, mining and processing facilities is in
material compliance with environmental regulations and health and
safety standards. See "Environmental Matters."
EMPLOYEES
As of March 31, 1997, the Company and its wholly owned subsidiary
employed 29 people, which number may adjust seasonally. None of the
Company's employees are covered by collective bargaining agreements.
Item 2. Description of Properties
----------------------------------
Antimony Division
-----------------
The Registrant's principal plant and mine are located in the Burns
Mining District, Sanders County, Montana, approximately 15 miles west
of Thompson Falls, Montana. The Registrant holds 2 patented mill sites
and 12 patented lode mining claims. The lode claims are contiguous
within two groups.
Antimony mining and milling operations were curtailed during 1983 due
to continued declines in the price of antimony. Through its
arrangement with HoltraChem, the Company is currently purchasing raw
antimony materials and continues to produce antimony metal, oxide and
sodium antimonate from its antimony processing facility in Thompson
Falls, Montana.
Gold Division
-------------
YANKEE FORK MINING DISTRICT
ESTES MOUNTAIN
--------------
The Estes Mountain properties consist of 2 patented lode mining claims
in the Yankee Fork Mining District of Custer County, Idaho. These
claims are located approximately 12 miles from the Company's former
Preachers Cove Mill.
<PAGE>
PREACHERS COVE MILLSITE
-----------------------
The Company had a 150-ton per day gravity and flotation mill located
approximately 50 miles west of Challis, Idaho and 19 miles northeast
of Stanley, Idaho on the Yankee Fork of the Salmon River at Preachers
Cove. The mill also had a cyanide leach plant for the processing of
concentrates into dore bullion. The plant has been dismantled and the
property is being reclaimed.
YELLOW JACKET MINING DISTRICT
-----------------------------
The Yellow Jacket properties consist of 12 patented and 60 unpatented
lode mining claims located in the Yellow Jacket Mining District of
Lemhi County, Idaho, approximately 70 miles southwest of Salmon,
Idaho. The gold mineralization is in quartz breccia zones that extend
for more than 10,000 feet. The Company has produced 13,420 ounces of
gold through December 31, 1996 from the property and is currently
exploring underground for additional reserves.
The Company's mineral resource at the Yellow Jacket mine as determined
by Western Gold Exploration and Mining Company in July 1989 was as
follows:
Contained
Diluted Tonnage Diluted Grade Gold Ounces
--------------- ------------- -----------
Drill indicated 238,898 0.1406 33,589
Geologically probable 73,379 0.1048 7,690
------- ------
312,277 41,279
======= ======
In 1996, Company personnel determined that the existing mineral
resource was not economical to mine without additional operating
capital and at current metals prices. Accordingly, production
operations at the Yellow Jacket mine were suspended and the mine
placed on a care and maintenance status. In connection with the
suspension of operations, the Company wrote off $463,057 of the
unamortized net profits interest purchased in 1995. Additionally,
property with a carrying value of $85,735 was written off.
The Company is currently reopening a tunnel to establish a
continuation of the mineralization below the main Yellow Jacket pit
("Fault Offset"). The Company renewed its lease on the Continental-
Columbia property in October of 1996 and has identified several
mineralized targets for future exploration. The Continental-Columbia
property is contiguous to the Yellow Jacket mine.
<PAGE>
Item 3. Legal Proceedings
--------------------------
Excel-Minerals Co., Inc.
------------------------
In June 1987, Lucky Custer Gold, Inc. ("Lucky Custer") filed an action
in the United States District Court for the District of Idaho against
Excel-Minerals Co., Inc. ("Excel") and the Company, in a case entitled
LUCKY CUSTER GOLD, INC. VS. EXCEL-MINERALS CO., INC. AND UNITED STATES
ANTIMONY CORPORATION, CIVIL NO. C87-1129.
In August, 1988, Excel filed an action in the Seventh Judicial
District Court of the State of Idaho entitled EXCEL-MINERALS CO., INC.
VS. UNITED STATES ANTIMONY CORPORATION, CASE NO. 3081. The action
claimed, among other things, that the Company breached a certain
sublease contract between the Company and Excel due to the Company's
nonpayment of royalties due Excel and that the Company did not return
all of the metal recovered from ore being processed for Excel.
On April 24, 1989, the cases described above went to trial. In October
1989, a judgment was rendered against Lucky Custer for any claims
against the Company and Excel; against the Company for any
counterclaims against Lucky Custer and Excel; and in favor of Excel
against the Company. The judgment against the Company ordered that
Excel recover $1,128,461 in damages and interest accrued thereon,
including litigation costs of $80,695. In April 1990, an additional
judgment was declared against the Company for nonpayment of royalties
due Excel. The judgment against the Company ordered that Excel recover
$114,855 in unpaid royalties plus litigation costs to be determined by
the court.
On June 26, 1990, the Company and Excel entered into a Covenant not to
Execute ("Covenant") the above-described judgments. Pursuant to the
Covenant, the $1,128,461 judgment and related attorneys fees' were
payable in entirety in quarterly installments of $63,850 including
interest at 10.5% through December 15, 1994, at which time the entire
unpaid judgment amount was payable. In addition, an additional $51,188
was payable on March 15, 1991, representing interest for the period
from April 1, 1990 to December 31, 1990.
Royalty payments equal to 10% of net smelter returns, subject to
certain net profit limitations, for all ore mined from the Estes
Mountain property were to be applied monthly to the judgments payable,
including accrued interest above and beyond the terms described
previously, until paid in full. The Company subsequently defaulted on
the payment terms of the Covenant, and Excel terminated the agreement.
On August 29, 1991, the Company transferred its rights and interests
in certain Estes Mountain patented and unpatented mining claims to
Lucky Custer in exchange for Lucky Custer's 55% interest in the Excel
judgment, which had previously been assigned to Lucky Custer in
settlement of litigation between Excel and Lucky Custer. Concurrently,
the Company entered into an agreement with Bobby C. Hamilton
<PAGE>
("Hamilton"), a stockholder, whereby Hamilton would acquire a security
interest in the 55% judgment claim in return for the release of
Hamilton's security interest in the Estes Mountain claims which were
transferred to Lucky Custer. In July 1993, the Company, Excel,
Hamilton and BumbleBee entered into an agreement to settle the Excel
judgment.
The settlement agreement provided for the issuance of 1,666,667 shares
of Series B preferred stock to Excel and Hamilton in amounts
proportionate to their respective interests in the judgment.
Accordingly, Excel received 750,000 shares of Series B preferred stock
and Hamilton received 916,667 shares to be held as collateral for
indebtedness due him. The preferred stock was convertible into common
stock at 1:1 on or before December 31, 1995 and earns an annual
dividend of $.01 per share. None of the preferred stock was converted
prior to December 31, 1995.
In addition, the settlement agreement provided for the transfer of two
patented mining claims, the Gold Star and First Southwest Extension,
to Excel and Hamilton in accordance to their respective interests in
the judgment claims and 100% of the Charles Dickens patented claim to
Excel. During 1995, Excel quit-claimed any interest in the Gold Star,
First Southwest Extension and Charles Dickens mining claims back to
the Company.
On August 1, 1995, the Company filed a complaint in the United States
District Court of Idaho against Hamilton and BumbleBee. The complaint
sought declaratory and injunctive relief from a judicial determination
by the court of the amounts due and owing Hamilton and BumbleBee and
of the effect of various debt and repayment agreements between the
Company and Hamilton.
On November 15, 1995, the action was settled, and Hamilton's
obligation was determined to be $1,800,000, which included $500,000
for the purchase of Hamilton's 40% net profits interest in the Yellow
Jacket mine. The unsecured debt accrues interest at 7.5%, is payable
from 10% of the Company's gross sales from all operations and requires
a minimum payment of $150,000 annually, including interest. The
settlement agreement released all security interests Hamilton had in
the Company's real and personal properties, recovered 916,667 shares
of Series B preferred stock and two patented mining claims held by him
as security and terminated the Yellow Jacket venture agreement with
BumbleBee. The settlement agreement also extinguished all previous
stock price guarantees to Hamilton and caused his surrender of 150,000
shares of the Company's common stock back to the Company. In
connection with the settlement, the Company canceled warrants granted
to Hamilton to purchase 500,000 shares of common stock at $.25 per
share and issued Hamilton 500,000 shares of the Company's unregistered
common stock in connection with the purchase of his 40% net profits
interest in the Yellow Jacket property.
<PAGE>
Geosearch, Inc.
---------------
On February 19, 1988, the Company obtained an assignment from
Geosearch of all of its rights, title and interest in and to the lease
agreement dated July 8, 1987 by and between Yellow Jacket Mines, Inc.,
the Company and Geosearch. In consideration of the assignment of the
lease, the Company agreed to perform certain exploration and to
provide a preliminary mining plan. The Company also agreed to pay
Geosearch a 12.5% net operating profits interest from the Yellow
Jacket mine until the Company has recovered its full investment in the
property, and thereafter, Geosearch would receive a 15% net operating
profits interest. Net operating profits and guaranteed minimum
payments paid to Geosearch apply to a $600,000 purchase price after
which the Company will not be obligated to make any further payments
to Geosearch.
In March 1994, Geosearch filed an action in the Seventh Judicial
District Court, Custer County, Idaho, alleging breach of the 1988
assignment of lease. The lawsuit requested recovery of $94,013 in past
royalties and accrued interest thereon. On September 9, 1994, the
Company settled the litigation by agreeing to an amendment to the
assignment of lease. The amendment calls for the payment of past
royalties and accrued interest through the assignment of 5% of gross
receipts from gold production at the Yellow Jacket mine. The unpaid
balance accrues interest at 10% per annum until paid in full. In
addition, in 1995 the Company issued 50,000 shares of its unregistered
common stock and 100,000 common stock purchase warrants exercisable at
$.35 to Geosearch. The Company also agreed to pay $4,000 in legal fees
incurred by Geosearch.
Item 4. Submission of Matters to a Vote of Security Holders
------------------------------------------------------------
The Company has not had a meeting of security holders since prior to
1990, nor have any matters been submitted to a vote of security
holders.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters
-----------------------------------------------------------------
The following table sets forth the range of high and low bid prices as
reported by NASD trading and market securities for the periods
indicated. The quotations reflect inter-dealer prices without retail
mark-up, mark-down or commission, and may not necessarily represent
actual transactions. Currently, the stock is traded on the NASD
electronic bulletin board under the symbol "UAMY." Prior to 1997, the
Company's stock was traded over-the-counter on the pink sheets and has
had minimal trading activity since 1990. Therefore, the following
prices do not reflect an active market.
<PAGE>
High Low
------- --------
1996
First Quarter $0.625 $0.25
Second Quarter 0.50 0.125
Third Quarter 0.25 0.0625
Fourth Quarter 0.50 0.25
1995
First Quarter $0.0625 $0.0625
Second Quarter 0.0625 0.0625
Third Quarter 0.125 0.125
Fourth Quarter 0.125 0.125
The approximate number of record holders of the Registrant's common
stock at December 31, 1996 is 2,799.
No dividends have been paid or declared by the Registrant during the
last five years.
Item 6. 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 gold and 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 the Company's judgment as of the date of this filing. The
Company disclaims, however, any intent or obligation to update these
forward-looking statements.
Results of Operations
---------------------
The Company's operations resulted in a net loss of $1,014,995 or $0.08
per share in 1996 compared to a net income of $441,593 or $0.04 per
share in 1995. The reduction in net income is primarily due to lower
gross profits from the antimony division, write down of the Yellow
Jacket property and equipment and accrual of related reclamation
costs, increased general and administrative expenses and increased
interest expense.
Total revenues during 1996 were $5,010,913 compared to $5,915,611 in
1995. The decrease of $904,698 is primarily attributable to decreased
sales of gold and lower antimony prices. Sales of antimony products in
1996 were $4,160,395 consisting of 2,333,321 pounds at an average
sales price of $1.78 per pound. Sales of antimony products in 1995
were $4,888,870, consisting of 1,966,395 pounds at an average sales
price of $2.49 per pound. Gross profit from antimony product sales was
$503,903 in 1996, or 12% of sales, compared to $1,204,816 in 1995, or
25% of sales. The decrease in gross profit is primarily due to the
decrease in antimony prices and the Company's inability to recover its
processing costs from HoltraChem.
<PAGE>
The Company began 1996 building its antimony inventory in anticipation
of meeting increased sales projections. When sales failed to
materialize at the end of the first quarter of 1996, the Company all
but ceased antimony oxide production in an effort to reduce its
inventory. As a result, fixed costs without production increased the
overall cost of antimony inventory. During the fourth quarter of 1996,
HoltraChem reimbursed the Company $50,515 of production costs it had
incurred during the first three quarters of 1996 that had not
previously been included in antimony products inventory. The Company
expects to be reimbursed for additional costs of production for the
fourth quarter of 1996 as that information becomes available. Due to
the uncertainty of the amount or its eventual payment, the Company has
not adjusted its 1996 cost of antimony production for the unreimbursed
costs.
The Company reports 50% of total antimony sales made by HoltraChem and
the Company. Accordingly, total sales of antimony products by both
companies was $8,320,790 or 4,666,642 pounds in 1996 and $9,777,740 or
3,932,790 pounds in 1995. In both years, almost all of the antimony
products sold were produced at the Company's plant in Thompson Falls,
Montana.
Currently, the price of antimony metal has been relatively stable at
approximately $2,100-$2,400 per metric ton. The Company believes that
the gross profit from anticipated sales of antimony products at
current antimony metal prices will enable the Company to operate its
antimony division profitably in 1997.
Sales of gold and silver totaled $850,518 and consisted of 2,190
ounces of gold and 1,317 ounces of silver in 1996. Sales of gold and
silver totaled $1,026,741 in 1995 and consisted of 2,636 ounces of
gold and 1,213 ounces of silver. The Company realized $383 per ounce
of gold sold in 1996 and $386 in 1995. The Yellow Jacket mine
continued to operate at a loss due to low production volumes, high
costs of operations and insufficient capital for mine and mill
processing improvements. The operating loss, excluding the allocation
of any general and administrative expenses, was $325,190 and $292,373
during 1996 and 1995, respectively. Continuing annual costs while on a
care-and-maintenance status are estimated to be approximately
$136,000, excluding any revenues from residual gold recoveries.
During 1996, the Company wrote down $548,792 of property and equipment
due to the uncertainty of recovering the unamortized balance of the
mineral property and certain equipment at the Yellow Jacket mine. In
connection therewith, the Company also accrued estimated costs of
$82,326 for reclamation at the site. The Company's exploration efforts
are continuing at the site. If these efforts are unsuccessful and the
Company determines that a permanent shutdown of the property is
appropriate, an additional accrual for closure costs will be
necessary.
<PAGE>
General and administrative expenses increased from $251,139 in 1995 to
$333,303 in 1996, an increase of $82,164 or approximately 33%. The
increase was principally due to increased salaries and professional
fees related to the Company's efforts to regain compliance with
Securities and Exchange Commission ("SEC") reporting regulations.
In 1996 and 1995, the Company recognized a gain on the disposal of
fully depreciated assets of $45,000 and $17,500, respectively.
Interest and other expense increased from $272,815 in 1995 to $284,927
in 1996. Interest income was $10,680 in 1996 and $7,478 in 1995 and
was exclusively generated by the Company's restricted cash balances.
Financial Condition and Liquidity
---------------------------------
At December 31, 1996, Company assets totaled $1,451,298, and there was
a stockholders' deficit of $3,689,829. The stockholders' deficit
increased $873,895 from the prior year, primarily due to the net loss
recognized from the Company's operations which was somewhat offset by
the sale of common stock. In order to continue as a going concern, the
Company is dependent upon (1) the planned conversion of certain debt
and accrued interest to equity (see Note 9 to the consolidated
financial statements), (2) profitable operations from the antimony
division, (3) additional equity financing, and (4) continued
availability of bank financing. Without such debt conversions and
additional financing, the Company may not be able to meet its
obligations, fund operations and continue in existence. There can be
no assurance that management will be successful in its plans to
improve the financial condition of the Company.
Cash generated from operations in 1995 was $490,895 compared to cash
used in operations of $211,487 in 1996, which is due primarily to the
net loss in 1996. Investing activities used $84,576 of cash in 1996
compared with $237,079 in 1995. Cash used in investing activities
related exclusively to purchases of property, plant and equipment,
primarily for the antimony division. Financing activities used
$288,683 in 1995 and generated $290,263 in 1996. The change in cash
from financing activities relates principally to decreased note
payments and increases in cash received from common stock sales and
bank financing.
During 1996, the Company borrowed $238,297 pursuant to a five-year
note payable and renewed two line-of-credit agreements totaling
$125,000, with a bank, which are guaranteed by John C. Lawrence, the
Company's president. The borrowings paid certain current obligations
of the Company and funded operating activities. In addition, during
1996, the Company decreased its operating losses at the Yellow Jacket
mine by placing the property on a care-and-maintenance basis. During
the first three quarters of 1996, a limited amount of gold production
partially offset the care-and-maintenance costs and helped finance the
Company's environmental obligation costs at the Preacher's Cove
Millsite. During the fourth quarter of 1996, the Company completely
<PAGE>
ceased gold production and wrote off its investment in its net profits
interest in the Yellow Jacket mine. Additionally, the Yankee Fork
mill, with a carrying value of $85,735, was written off during the
fourth quarter.
At September 30, 1996, the Company completed its investment in its 50%
share of antimony inventory. Correspondingly, the Company began
receiving a greater percentage of cash flow from antimony sales with
HoltraChem. These resources will be available to meet the Company's
obligations and fund operations.
Significant financial commitments for future periods will include:
- Providing $5,000 per month for a "sinking fund" to pay defaulted
debentures, related accrued interest and accrued interest payable
to related parties, which are not ultimately converted (see Note
9 to the consolidated financial statements). Assuming only 70% of
the accrued interest is converted, the total remaining accrued
interest to be paid will be approximately $243,000.
- Servicing borrowings from the bank (see Note 8 to the
consolidated financial statements).
- Servicing the Hamilton note payable at a minimum of $150,000
annually (see Note 10 to the consolidated financial statements).
- Keeping current on payroll tax liabilities and accounts payable.
- Fulfilling reclamation responsibilities with regulatory agencies.
- Annual care and maintenance costs of approximately $136,000 at
the Yellow Jacket mine.
- Minimum annual royalty payments of $52,500 to Geosearch and
Yellow Jacket.
- Providing antimony profits to fund the Company's antimony
inventory when the Company's share of antimony inventory amounts
to $750,000 or more or when its share of inventory is less than
50% of total inventory.
The Company plans to address these and other financial requirements by
enhancing the value of its gold properties through an exploration
program begun in 1996. The Company hopes to develop additional
reserves from exploration and generate funds from the sale, joint
venture or eventual production from the property.
During 1995 and 1996, the Company began assembling and later filed
reports required by SEC regulations. It is the Company's intention
that as these reports are available and as the Company regains
compliance with SEC regulations to seek additional financing to expand
its business operations and satisfy its obligations. In 1996, $127,500
<PAGE>
was generated through sales of 460,000 shares of unregistered common
stock to existing stockholders and others to help finance the
preparation of financial information and fund operations. In 1997,
376,000 additional unregistered common and common stock purchase
warrants were sold for $188,000.
Upon re-establishing a market for its common stock, the Company plans
to issue additional shares to investors to help finance the
finalization of its investment in USAMSA and fund production from the
Mexican properties.
Item 7. Financial Statements
----------------------------
The consolidated financial statements of the registrant are included
herein.
Item 8. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
--------------------------------------------------------------------
None.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons,
Compliance with Section 16(a) of the Exchange Act
----------------------------------------------------------------------
Identification of Directors and Executive Officers are as follows:
Affiliation Expiration
Name Age with Registrant of Term
------------------------- --- ------------------- ---------------
John C. Lawrence 59 President, Director Annual meeting
Robert A. Rice 72 Director Annual meeting
Walter L. Maguire, Sr. 75 Director Annual meeting
During the year ended December 31, 1996, Walter L. Maguire, Jr.
resigned as a director of the Company. Walter L. Maguire, Sr. is the
father of Walter L. Maguire, Jr.
The Company is not aware of any involvement in certain legal
proceedings by its directors or executive officers during the past
five years that are material to an evaluation of the ability or
integrity of such director or executive officer.
Business Experience of Directors and Executive Officers:
JOHN C. LAWRENCE. Mr. Lawrence has been the President and a
Director of the Company since its inception. Mr. Lawrence was the
President and a Director of AGAU Mines, Inc., the predecessor of the
Company, since the inception of AGAU Mines, Inc., in 1968.
<PAGE>
ROBERT A. RICE. Mr. Rice is a metallurgist, having been employed by
the Bunker Hill Company, a wholly owned subsidiary of Gulf Resources
and Chemical Corporation at Kellogg, Idaho, as Senior Metallurgist
and Mill Superintendent until his retirement in 1965. Mr. Rice has
been affiliated as a Director of the Registrant since 1975.
WALTER L. MAGUIRE, SR. Mr. Maguire is a resident of Keller,
Virginia. He is a 1943 graduate of Yale University and a 1948
graduate of Columbia School of Business with an MBA degree. His past
business experience includes natural resource exploration and
development, securities and underwriting, real estate development
and plastics research. He is the president of the Maguire
Foundation, a private educational foundation and has been a Director
of the Company since February 1989.
The Registrant does not have standing audit, nominating or
compensation committees of the Board of Directors or committees
performing similar functions, but does, however, have a financial
committee to monitor the Company's financial activities.
Compliance with Section 16(a) of the Exchange Act
-------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 requires that the
Company's officers and directors and persons who own more than 10% of
a registered class of the Company's equity securities, to file reports
of ownership and changes in ownership with the Securities and Exchange
Commission. Officers, directors and stockholders holding more than 10%
of the Company's common stock are required by the regulation to
furnish the Company with copies of all Section 16(a) forms they have
filed.
Based on information received by the Company, Messrs. Lawrence, Rice,
Maguire, Sr., and Maguire, Jr., did not timely file a Form 4 upon
receipt of annual stock compensation as directors of the Company.
<PAGE>
Item 10. Executive Compensation
--------------------------------
Summary compensation for the Company's principal executive officer
is as follows:
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
--------------------------------- ------------------------------------------------
Awards Payouts
---------- -----------------------------------
Securities
Other Restricted Underlying
Name and Annual Stock Options/ LTIP All Other
Principal Position Year Salary Bonus Compensation(1) Awards SARs Payouts Compensation
------------------- ---- ------- ----- --------------- ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John C. Lawrence, 1996 $72,000 $ 4,154 None None None None
President 1995 53,402 3,080
1994 48,000 2,769
</TABLE>
(1) Represents earned but unused vacation.
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and Management.
-------------------------------------------------------------------------
(a) Security Ownership of Certain Beneficial Owners:
As of the close of business on March 31, 1997, the following persons
own beneficially more than 5% of the outstanding voting securities of
the Company:
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership Class(1)
------------------------------ --------------------------------- -------------------- --------
<S> <C> <C> <C>
Common stock The Maguire Family and related
entities as a group 1,853,917(2) 14%
c/o Walter L. Maguire, Sr.
P.O. Box 129
Keller, VA 23401
Common stock John C. Lawrence and related 1,135,461 9
family members
P.O. Box 643
Thompson Falls, MT 59873
Common stock The Dugan Family 1,735,942(3) 13
c/o A. W. Dugan
1415 Louisiana Street, Suite 3100
Houston, TX 77002
Preferred Series A stock A. Gordon Clark, Jr. 4,500(4) 100
2 Musket Trait
Simsbury, CT 06070
</TABLE>
(1) Percent of ownership is based upon 13,604,434 shares of common
stock and exercisable warrants and 4,500 shares of Series A
preferred stock outstanding at March 31, 1997.
(2) Includes 206,000 warrants to purchase common stock.
(3) Includes 200,000 warrants to purchase common stock.
(4) The outstanding preferred shares carry voting rights for the
election of directors.
<PAGE>
(b) Security Ownership of Management:
<TABLE>
<CAPTION>
Amount of Percent of
Title of Class Name of Beneficial Owner Beneficial Ownership Class(1)
------------------------------ ---------------------------------- --------------------- ----------
<S> <C> <C> <C>
Common stock Walter L. Maguire, Sr. 1,634,362(5) 12%
Common stock John C. Lawrence 1,060,461(6) 8
Common stock Robert A. Rice 92,200 1
</TABLE>
(5) Does not include 219,555 shares owned by Walter L. Maguire, Jr.,
son of Walter L. Maguire, Sr.
(6) Does not include 75,000 shares owned by family members of John C.
Lawrence.
Item 12. Certain Relationships and Related Transactions
--------------------------------------------------------
See Notes 7, 9, 10, 11, 12 and 14 to the consolidated financial
statements included herein.
<PAGE>
Item 13. Exhibits and Reports on Form 8-K
------------------------------------------
Documents filed with this report:
Exhibit No. Item Dated
----------- ----------------------------------- -------------------
10.26 Warrant Agreements Various
21 List of subsidiaries N/A
27 Financial Data Schedule N/A
Documents filed with the Company's Annual Report on Form 10-KSB for
the year ended December 31, 1995:
Exhibit No. Item Dated
----------- ----------------------------------- -------------------
3.1 Articles of Incorporation - United
States Antimony Corporation-
Montana August 18, 1995
10.10 Yellow Jacket Venture Agreement July 7, 1990
10.11 Agreement Between Excel-Mineral
Company and Bobby C. Hamilton August 29, 1991
10.12 Letter Agreement September 1, 1991
10.13 Columbia-Continental Lease
Agreement Revision April 3, 1993
10.14 Settlement Agreement with Excel
Mineral Company July 1993
10.15 Memorandum Agreement July 1993
10.16 Termination Agreement September 12, 1993
10.17 Amendment to Assignment of Lease
(Geosearch) September 9, 1994
10.18 Series B Stock Certificate to
Excel-Mineral Company, Inc. December 25, 1993
10.19 Division Order and Purchase and
Sale Agreement March 27, 1995
10.20 Inventory and Sales Agreement January 1, 1995
10.21 Processing Agreement July 1, 1995
10.22 Release and settlement agreement
between Bobby C. Hamilton and
United States Antimony
Corporation November 15, 1995
10.23 Columbia-Continental Lease
Agreement September 27, 1996
10.24 Release of Judgment February 28, 1996
10.25 Covenant Not to Execute July 30, 1990
99.1 CERCLA Letter from U.S. Forest
Service February 11, 1994
There were no reports on Form 8-K filed during the quarter ended
December 31, 1996.
<PAGE>
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)
By: /s/ John C. Lawrence
----------------------------------
John C. Lawrence, President,
Director and Principal
Executive Officer
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.
By: /s/ John C. Lawrence Date: April 15, 1997
--------------------------------------
John C. Lawrence, Director and
President (Principal Executive,
Financial and Accounting Officer)
By: /s/ Walter L. Maguire, Sr. Date: April 15, 1997
--------------------------------------
Walter L. Maguire, Sr., Director
By: /s/ Robert A. Rice Date: April 15, 1997
--------------------------------------
Robert A. Rice, Director
<PAGE>
Supplemental Information to be Furnished with Reports Filed Pursuant
to Section 15(d) of the Exchange Act by Non-Reporting Issuers.
The Company has not sent either an annual report or proxy material to
its security holders.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
The Board of Directors and Stockholders of
United States Antimony Corporation
We have audited the consolidated balance sheets of United States
Antimony Corporation and subsidiary as of December 31, 1996 and 1995
and the related consolidated statements of operations, changes in
stockholders' deficit and cash flows for the years then ended. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position
of United States Antimony Corporation and subsidiary as of
December 31, 1996 and 1995, and the consolidated results of their
operations and their cash flows for the years then ended, in
conformity with generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As
discussed in Note 1 to the financial statements, the Company has
negative working capital, an accumulated deficit and total
stockholders' deficit that raise substantial doubt about its ability
to continue as a going concern. Management's plans in regard to these
matters are also described in Note 1. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
As discussed in Note 3 to the consolidated financial statements, the
Company changed its method of accounting for environmental remediation
liabilities in 1996.
/s/COOPERS & LYBRAND L.L.P.
Spokane, Washington
April 14, 1997
<PAGE>
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
December 31, 1996 and 1995
1996 1995
------------ ------------
ASSETS
Current assets:
Cash $ 5,800
Restricted cash, payroll taxes 4,598
Accounts receivable $ 33,837 110,920
Inventories 556,249 450,501
Prepaid expenses 21,085 10,040
------------ ------------
Total current assets 611,171 581,859
Properties, plants and equipment, net 670,081 1,281,742
Restricted cash, reclamation bonds 170,046 170,046
------------ ------------
Total assets $ 1,451,298 $ 2,033,647
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Checks issued and payable $ 29,491
Accounts payable 306,636 $ 299,446
Accrued payroll and property taxes 93,454 71,772
Accrued payroll and other 39,823 47,285
Judgments payable 131,764 147,865
Accrued interest payable 792,240 672,130
Payable to related parties 644,752 646,347
Notes payable to bank 125,397 114,824
Note payable to Bobby C. Hamilton,
current 20,494 15,771
Debentures payable 650,000 650,000
Accrued reclamation costs, current 100,000 80,000
------------ ------------
Total current liabilities 2,934,051 2,745,440
Note payable to bank, noncurrent 185,607
Note payable to Bobby C. Hamilton,
noncurrent 1,706,257 1,773,948
Accrued reclamation costs, noncurrent 315,212 330,193
------------ ------------
Total liabilities 5,141,127 4,849,581
------------ ------------
Commitments and contingencies (Notes 1,
5 and 15)
<PAGE>
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS, CONTINUED
December 31, 1996 and 1995
1996 1995
------------ ------------
Stockholders' deficit:
Preferred stock, $.01 par value,
10,000,000 shares authorized:
Series A: 4,500 shares issued and
outstanding (liquidation pre-
ference $92,250 and $87,750) $ 45 $ 45
Series B: 750,000 shares issued
and outstanding (liquidation
preference $772,500 and
$765,000) 7,500 7,500
Common stock, $.01 par value,
20,000,000 shares authorized;
12,627,434 and 12,113,434 shares
issued and outstanding 126,274 121,134
Additional paid-in capital 13,326,464 13,190,544
Accumulated deficit (17,150,112) (16,135,157)
------------ ------------
Total stockholders' deficit (3,689,829) (2,815,934)
------------ ------------
Total liabilities and stock-
holders' deficit $ 1,451,298 $ 2,033,647
============ ============
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
for the years ended December 31, 1996 and 1995
1996 1995
------------- -------------
Revenues:
Sales of antimony products and other $ 4,160,395 $ 4,888,870
Sales of gold and silver 850,518 1,026,741
------------ ------------
5,010,913 5,915,611
------------ ------------
Cost of production:
Cost of antimony production and other 3,656,492 3,684,054
Cost of gold and silver production 1,175,708 1,319,114
------------ ------------
4,832,200 5,003,168
------------ ------------
Gross profit 178,713 912,443
------------ ------------
Other operating expenses:
Write down of mineral property and
equipment 548,792
Provision for Yellow Jacket
reclamation 82,326
General and administrative 333,303 251,139
------------ ------------
964,421 251,139
------------ ------------
Other (income) expense:
Gain on disposal of asset (45,000) (17,500)
Interest expense 284,927 272,815
Interest income and other (10,680) (7,478)
------------ ------------
229,247 247,837
------------ ------------
Income (loss) before extraordinary item (1,014,955) 413,467
Extraordinary gain on settlement of
notes payable to Bobby C. Hamilton 28,126
------------ ------------
Net income (loss) $ (1,014,955) $ 441,593
============ ============
Net income (loss) per common share
before extraordinary item $ (0.08) $ 0.04
Extraordinary item nil
------------ ------------
$ (0.08) $ 0.04
============ ============
Weighted average number of common
shares outstanding 12,299,418 11,735,166
============ ============
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
for the years ended December 31, 1996 and 1995
<TABLE>
<CAPTION>
Preferred Stock
-----------------------------------
Series A Series B Common Stock Additional Accumu-
--------------- ------------------ -------------------- Paid-In lated
Shares Amount Shares Amount Shares Amount Capital Deficit Total
------ ------- --------- ------- ---------- -------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balances, December 31,
1994 4,500 $ 45 1,666,667 $16,667 11,671,434 $116,714 $13,120,526 $(16,576,750) $(3,322,798)
Issuance of stock
for services 10,000 100 369 469
Issuance of stock
in settlement of
litigation 50,000 500 1,844 2,344
Issuance of stock in
settlement of
litigation 500,000 5,000 88,750 93,750
Retirement of stock
in settlement of
litigation (916,667) (9,167) (150,000) (1,500) (26,625) (37,292)
Issuance of stock to
directors for
compensation 32,000 320 5,680 6,000
Net income 441,593 441,593
----- -------- --------- ------- ---------- -------- ----------- ------------ -----------
Balances, December 31,
1995 4,500 45 750,000 7,500 12,113,434 121,134 13,190,544 (16,135,157) (2,815,934)
Issuance of stock
for cash 460,000 4,600 92,960 97,560
Value attributed to
issuance of
warrants 30,000 30,000
Issuance of stock to
employee for
ompensation 5,000 50 1,200 1,250
Issuance of stock for
mining lease 25,000 250 6,000 6,250
Issuance of stock to
directors for
compensation 24,000 240 5,760 6,000
Net loss (1,014,955) (1,014,955)
----- -------- --------- ------- ---------- -------- ----------- ------------ -----------
Balances, December 31,
1996 4,500 $ 45 750,000 $ 7,500 12,627,434 $126,274 $13,326,464 $(17,150,112) $(3,689,829)
===== ======== ========= ======= ========== ======== =========== ============ ===========
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the years ended December 31, 1996 and 1995
1996 1995
------------ ------------
Cash flows from operating activities:
Net income (loss) $ (1,014,955) $ 441,593
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operations:
Depreciation and amortization 192,445 132,575
Accrued interest converted to
principal 84,584
Write down of mineral property
and equipment 548,792
Provision for Yellow Jacket
reclamation 82,326
Gain on disposal of assets (45,000) (17,500)
Extraordinary gain on settlement
of notes payable to Bobby C.
Hamilton (28,126)
Issuance of common stock to
directors as compensation 6,000 6,000
Issuance of common stock in
settlement of litigation 2,344
Issuance of common stock for
services or compensation 1,250 469
Issuance of common stock for
mineral lease 6,250
Change in:
Restricted cash 4,598 (4,461)
Accounts receivable 77,083 (42,436)
Inventories (105,748) (7,359)
Prepaid expenses (11,045) (10,040)
Accounts payable 7,190 53,548
Accrued payroll and property
taxes 21,682 24,929
Accrued payroll and other (7,462) (9,341)
Judgments payable (16,101) (59,284)
Accrued interest payable 120,110 118,099
Payable to related parties (1,595) (55,149)
Notes payable - mineral property
leases (16,094)
Accrued reclamation costs (77,307) (123,456)
------------ ------------
Net cash provided by
(used in) operating
activities (211,487) 490,895
------------ ------------
<PAGE>
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
for the years ended December 31, 1996 and 1995
1996 1995
------------ ------------
Cash flows from investing activities:
Proceeds from disposal of assets 45,000
Purchase of properties, plant and
equipment (129,576) (237,079)
------------ ------------
Net cash used in investing
activities (84,576) (237,079)
------------ ------------
Cash flows from financing activities:
Proceeds from issuance of common
stock and warrants 127,560
Proceeds from notes payable to bank 238,297
Payments on notes payable to bank (42,117) (83,017)
Increase in checks issued and payable 29,491
Payments on note payable to Bobby C.
Hamilton (62,968) (205,666)
------------ ------------
Net cash provided by (used
in) financing activities 290,263 (288,683)
------------ ------------
Net decrease in cash (5,800) (34,867)
Cash, beginning of year 5,800 40,667
------------ ------------
Cash, end of year $ 0 $ 5,800
============ ============
Supplemental disclosures:
Cash paid during the year for
interest $ 164,817 $ 70,136
============ ============
Noncash operating, investing and
financing activities:
Acquisition of net profits
interest in Yellow Jacket mine
through issuance of note
payable $ 500,000
Payables to related parties to
finance equipment purchases 27,000
Note payable to finance equipment
purchases 125,000
Common stock issued in settlement
of litigation 56,458
Accrued interest converted to
principal on Bobby C. Hamilton
note payable 354,223
Exchange of fully depreciated
equipment in satisfaction of
payable to related party 17,500
Acquisition of inventory in
exchange for accounts receivable 443,142
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
UNITED STATES ANTIMONY CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BACKGROUND OF COMPANY AND BASIS OF PRESENTATION:
AGAU Mines, Inc., predecessor of United States Antimony
Corporation ("USAC" or "the Company"), was incorporated in June
1968 as a Delaware Corporation to mine gold and silver. USAC was
incorporated in Montana in January 1970 to mine and produce
antimony products. In June 1973, AGAU Mines, Inc. was merged
into USAC. In December 1983, the Company suspended its antimony
mining operations when it became possible to purchase antimony
raw materials more economically from foreign sources.
On September 1, 1991, the Company entered into an agreement with
HoltraChem, Inc. ("HoltraChem") whereby the Company would process
raw material purchased by HoltraChem into finished antimony
products. The Company would then deliver the finished products to
HoltraChem for sale, and share in the profits or losses from
sales with HoltraChem on a 50/50 basis. On July 1, 1995, the
Company and HoltraChem terminated the 1991 agreement and entered
into an Inventory and Sales Agreement and a Processing Agreement.
The agreements gave rise to the creation of a wholly owned
subsidiary, United States Antimony Corporation-Montana ("USAM"),
that participates with HoltraChem and its subsidiary, HoltraChem-
Montana, Inc. ("HCMI"), in the processing and sale of antimony
products. While the agreements still provide for the sharing of
profits or losses from sales, after deduction of certain costs,
on a 50/50 basis, they also require the Company to fund and own
50% of the antimony inventory up to $750,000. The Company funds
the acquisition of 50% of the antimony inventory through the
Company's contribution of 50% of its share of profits. At
December 31, 1996, the Company had fully funded 50% of the total
antimony inventory, but could be obligated to acquire $193,751 of
additional antimony inventory through the payment of future
profits under the agreement if total inventory of $1,500,000 is
acquired. USAM also receives a processing fee from HoltraChem for
the finished antimony inventory, which is included in sales of
antimony products. All intercompany profits in the inventory are
eliminated in consolidation. In consideration of the Company's
financial participation in carrying antimony inventory,
HoltraChem agreed to provide additional marketing efforts to
increase product sales to 10 million pounds of antimony products
per year. The agreements expire on December 31, 1999.
The principal business of the Company has been the production of
antimony products through USAM in Montana and the mining and
milling of gold at the Yellow Jacket mine in Idaho. The
consolidated financial statements of the Company include the
accounts of USAM, a wholly owned subsidiary, and its
proportionate share of the joint activities of the Company and
HoltraChem. All intercompany balances and transactions have been
eliminated.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
1. BACKGROUND OF COMPANY AND BASIS OF PRESENTATION, CONTINUED:
The financial statements have been prepared on a going concern
basis which assumes realization of assets and liquidation of
liabilities in the normal course of business. At December 31,
1996, the Company has negative working capital of approximately
$2.3 million, an accumulated deficit of approximately $17.2
million and a total stockholders' deficit of approximately
$3.6 million. These factors, among others, indicate that there is
substantial doubt that the Company will be able to meet its
obligations and continue in existence as a going concern. The
financial statements do not include any adjustments that may be
necessary should the Company be unable to continue as a going
concern.
To improve the Company's financial condition, the following
actions have been initiated or taken by management:
- The Company submitted a proposal to the holders of defaulted
debentures and certain other creditors to convert their
principal and some or all of their accrued interest to Series
C preferred stock.
- In August 1996, the Company placed the Yellow Jacket mine on a
care-and-maintenance basis in order to reduce operating losses
and conserve cash flow.
- In 1996 and 1995, the Company assembled and prepared financial
information necessary to regain compliance with the reporting
requirements of the Securities and Exchange Commission to
enhance the marketability of its stock. During 1996, $127,560
was generated through sales of 460,000 shares of unregistered
common stock to existing stockholders and others. During the
first quarter of 1997, the Company generated $188,000 through
sales of 376,000 shares of unregistered common stock and
warrants to existing shareholders. Of these proceeds, $100,000
has been designated for investment in the Company's Mexican
project. The Company plans to raise additional equity funding
through additional stock sales. However, there can be no
assurance that the Company will be able to successfully raise
additional capital through the sale of its stock.
- During 1997, the Company obtained listing on the over-the-
counter electronic bulletin board and obtained Empire
Securities of Spokane as a registered trader of its stock.
This process will enhance shareholder liquidity and increase
the Company's ability to obtain additional equity financing.
- Sales of antimony products increased from 1,282,187 pounds
during the first quarter of 1996 to 1,487,413 pounds during
the first quarter of 1997. This increase in sales trend, if it
continues, will provide the Company with increased gross
profit from its antimony business.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
1. BACKGROUND OF COMPANY AND BASIS OF PRESENTATION, CONTINUED:
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
2. CONCENTRATION OF RISK:
The Company, through its arrangements with HoltraChem, purchases
the majority of its antimony used in the production of finished
antimony products from Chinese producers through metal brokers.
All antimony product sales are made through an arrangement with
HCMI (see Note 1). During the years ended December 31, 1996 and
1995, 22% and 21% of the Company's revenues from antimony
products were from one customer. These antimony sales represented
19% and 17% of total revenues for the years ended December 31,
1996 and 1995, respectively. If the sales agreement with HCMI
were terminated, management believes that other chemical
distribution companies would be available to fulfill the
Company's needs. However, if the supply of antimony from China is
reduced, it is possible that the Company's antimony product
operations could be adversely affected.
Many of the Company's competitors in the antimony industry have
substantially more capital resources and market share than the
Company. Therefore, the Company's ability to maintain its market
share can be significantly affected by factors outside of the
Company's control.
The Company's revenues from gold and antimony sales are strongly
influenced by world prices for such commodities, which fluctuate
and are affected by numerous factors beyond the Company's
control, including inflation and worldwide forces of supply and
demand. The aggregate effect of these factors is not possible to
accurately predict.
The Company sells all of its gold concentrates to one smelter in
Canada, which is subject to extensive regulations including
environmental protection laws. The Company has no control over
the smelter's operations or its compliance with environmental
laws and regulations. If the smelting capacity available to the
Company was significantly reduced, management believes that other
smelters would be available to fulfill the Company's needs. Sales
to this customer represented 19% and 17% of total revenues for
the years ended December 31, 1996 and 1995, respectively.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Restricted Cash
---------------
Restricted cash consists of cash held for payment of payroll
taxes and reclamation performance bonds.
Inventories
-----------
Inventories consist of an undivided tenant in common interest
with HCMI in antimony metal, metal in process and finished
goods that are stated at the lower of first-in, first-out cost
or estimated net realizable value. Since the Company's
inventory is a commodity with a sales value that is subject to
world prices for antimony that are beyond the Company's
control, a significant change in the world market price of
antimony could have a significant effect on the Company's
operations.
Properties, Plants and Equipment
--------------------------------
The Company's gold-producing property rights are recorded at
the lower of cost or estimated net realizable value. The
property rights are depleted using the units-of-production
method. Production facilities and equipment are stated at the
lower of cost or estimated net realizable value and are
depreciated using the straight-line method over their estimated
useful lives. Vehicles and office equipment are stated at cost
and are depreciated using the straight-line method over
estimated useful lives of three to five years. Maintenance and
repairs are charged to operations as incurred. Betterments of a
major nature are capitalized. When assets are retired or sold,
the costs and related allowances for depreciation and
amortization are eliminated from the accounts and any resulting
gain or loss is reflected in operations. Management's
calculations of proven and probable ore reserves are based on
engineering and geological estimates including minerals prices
and operating costs. Changes in the geological and engineering
interpretation of various ore bodies, mineral prices and
operating costs may change the Company's estimates of proven
and probable reserves. It is reasonably possible that certain
of the Company's estimates of proven and probable reserves will
change in the near term, resulting in a change in amortization
and liability accrual rates in future reporting periods.
Management of the Company periodically reviews the net carrying
value of all of its properties on a property-by-property basis.
These reviews consider the net realizable value of each
property to determine whether a permanent impairment in value
has occurred and the need for any asset write-down. The Company
considers current metal prices, cost of production, proven and
probable reserves and salvage value of the property and
equipment in its valuation.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:
Properties, Plants and Equipment, Continued
--------------------------------------------
Management's estimates of metal prices, recoverable proven and
probable ore reserves and operating, capital and reclamation
costs are subject to risks and uncertainties of change
affecting the recoverability of the Company's investment in its
properties, plants and equipment. Although management has made
its best estimate of these factors based on current conditions,
it is reasonably possible that changes could occur in the near
term which could adversely affect management's estimate of net
cash flows expected to be generated from its properties and the
need for asset impairment write-downs.
The Company has adopted the provisions of Statement of
Financial Accounting Standards No. 121 ("SFAS No. 121"),
"Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of." SFAS No. 121 requires
that an impairment loss be recognized when the estimated future
cash flows (undiscounted and without interest) expected to
result from the use of an asset are less than the carrying
amount of the asset. Measurement of an impairment loss is based
on the estimated fair value of the asset if the asset is
expected to be held and used. Assets related to the Yellow
Jacket mine were written off prior to January 1, 1993 due to
recurring operating losses and the uncertain recoverability of
these assets. During 1995, the Company acquired the remaining
40% net profits interest in the Yellow Jacket mine for $500,000
(see Note 10). During the fourth quarter of 1996, the Company
reviewed the economic recoverability of the remaining
unamortized carrying value of the net profits interest and
related equipment and wrote off the remaining $463,057
carrying value. If ongoing exploration efforts are unsuccessful
and a decision is made to permanently close the property, an
accrual for closure costs will be necessary. Also, other
property with a carrying value of $85,735 was written off.
Some of the Company's gold revenues are generated from
unpatented mining claims. Any adverse changes to the United
States government regulations regarding the availability or
cost of mining on government owned properties could
significantly affect the Company's operations.
Reclamation and Remediation
---------------------------
The Company's operations are subject to reclamation and closure
requirements. Minimum standards for mine reclamation have been
established by various governmental agencies. Costs are
estimated based primarily upon environmental and regulatory
requirements and are accrued and charged to expense over the
expected economic life of the operation using the units-of-
production method. The liability for reclamation is classified
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:
Reclamation and Remediation, Continued
--------------------------------------
as current or noncurrent based on the expected timing of
expenditures. Closure costs are not accrued for mines on a
care-and-maintenance basis until, if and when, a decision to
close the mine is made.
The Company accrues costs associated with environmental
remediation obligations when it is probable that such costs
will be incurred and they are reasonably estimatable. Costs of
future expenditures for environmental remediation are not
discounted to their present value. Such costs are based on
management's current estimate of amounts that are expected to
be incurred when the remediation work is performed within
current laws and regulations. The Company has restricted cash
balances that have been provided to ensure performance of its
reclamation obligations.
In October 1996, the American Institute of Certified Public
Accountants issued Statement of Position 96-1, "Environmental
Remediation Liabilities" ("SOP 96-1"). SOP 96-1 provides
authoritative guidance with respect to specific accounting
issues that are present in the recognition, measurement,
display and disclosure of environmental remediation
liabilities. The provisions of SOP 96-1 are effective for
fiscal years beginning after December 15, 1996. The Company
adopted the provisions of the SOP 96-1 during 1996. The
adoption of the provisions of SOP 96-1 had no material effect
on the results of operations or financial condition of the
Company.
It is reasonably possible that, due to uncertainties associated
with defining the nature and extent of environmental
contamination, application of laws and regulations by
regulatory authorities, and changes in remediation technology,
the ultimate cost of remediation and reclamation could change
in the future. The Company continually reviews its accrued
liabilities for such remediation and reclamation costs as
evidence becomes available indicating that its remediation and
reclamation liability has changed.
Income Taxes
------------
The Company records deferred income tax liabilities and assets
for the expected future income tax consequences of events that
have been recognized in its financial statements. Deferred
income tax liabilities and assets are determined based on the
temporary differences between the financial statement carrying
amounts and the tax bases of assets and liabilities using
enacted tax rates in effect in the years in which the temporary
differences are expected to reverse.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:
Revenue Recognition
-------------------
Sales of gold concentrates are recorded when received by the
smelter, at estimated metal prices based on estimated contained
metal in concentrates. Recorded values are adjusted
periodically and upon final settlement. Sales of antimony
products are recorded upon shipment to the customer.
Income (Loss) Per Common Share
------------------------------
Income (loss) per common share is based upon the weighted
average number of shares of common stock and common stock
equivalents (stock warrants and convertible securities)
outstanding during the reporting periods, except when they are
anti-dilutive. Due to the stock warrants and conversion prices
and the market price per share of common stock during 1995 and
the net loss in 1996, the common stock equivalents were anti-
dilutive.
4. PROPERTIES, PLANTS AND EQUIPMENT:
The major components of the Company's properties, plants and
equipment at December 31, 1996 and 1995 were as follows:
1996 1995
----------- -----------
Gold mill and equipment(1) $ 37,890 $ 1,250,546
Gold mining equipment(1) 1,262,891 1,522,507
Net profits interest in Yellow
Jacket mine(2) 500,000
Antimony mining buildings and
equipment(3) 168,746 168,746
Antimony mill and equipment(3) 518,190 516,526
Chemical processing buildings 210,116 171,025
Chemical processing equipment 800,518 746,103
Other 47,123 12,718
----------- -----------
3,045,474 4,888,171
Less accumulated depreciation
and depletion (2,375,393) (3,606,429)
----------- -----------
$ 670,081 $ 1,281,742
=========== ===========
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
4. PROPERTIES, PLANTS AND EQUIPMENT, EQUIPMENT, CONTINUED:
(1) During 1996, the Company removed the mill at Yankee Fork and
some of the mining and milling equipmentas part of the
reclamation process. Substantially all of the remaining
assets are fully depreciated.
(2) In the fourth quarter of 1996, the Company determined that
an adjustment was required to write off the unamortized
portion of the net profits interest in the Yellow Jacket
mine. The write off of $463,057 was based upon the Company's
determination that the existing ore reserve was not
economical to mine at current metals prices and without
sufficient operating capital.
(3) At December 31, 1996, substantially all of these assets are
fully depreciated and the antimony mining buildings and
equipment are idle.
5. MINERAL PROPERTY LEASES:
Yellow Jacket Mine
------------------
On February 19, 1988, the Company obtained an assignment from
Geosearch, Inc. ("Geosearch") of all of its rights, title and
interest in and to the lease agreement dated July 8, 1987 by
and between Yellow Jacket Mines, Inc., the Company and
Geosearch. In consideration of the assignment of the lease, the
Company agreed to conduct certain exploration and to provide a
preliminary mining plan which, if justified, would result in
applications for permitting and bonding purposes with the state
of Idaho, the U.S. Forest Service and other agencies to mine
and mill gold. The Company also agreed to pay Geosearch a 12.5%
net operating profits interest until the Company has recovered
its full investment in the property, and thereafter, Geosearch
would receive a 15% net operating profits interest. The Company
pays Geosearch a minimum monthly payment of $1,000 during the
months of January through April, if operations are closed due
to weather, and $2,000 per month for the months of May through
December of each year. After the mill was built at the Yellow
Jacket mine in 1990, the Company paid Geosearch $25,000 per
year in staggered installments, with all payments accumulated
and credited against the net operating profits due Geosearch.
Net operating profits and guaranteed minimum payments paid to
Geosearch apply to a $600,000 maximum amount.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
5. MINERAL PROPERTY LEASES, CONTINUED:
Yellow Jacket Mine, Continued
-----------------------------
In March 1994, Geosearch filed an action in the Seventh
Judicial District Court, Custer County, Idaho, alleging breach
of the 1988 assignment of lease. The lawsuit requested recovery
of $94,013 in past royalties and accrued interest thereon. On
September 9, 1994, the Company settled the litigation by
agreeing to an amendment to the assignment of lease. The
amendment calls for the payment of past royalties and accrued
interest through the assignment of 5% of gross receipts from
gold production at the Yellow Jacket mine. The unpaid balance
accrues interest at 10% per annum until paid in full and is
included in judgments payable (see Note 6). In 1995, pursuant
to the settlement agreement, the Company issued 50,000 shares
of its unregistered common stock and 100,000 common stock
purchase warrants exercisable at $.35 to Geosearch (see Note
12). The Company also paid $4,000 in legal fees incurred by
Geosearch.
The underlying lease with Yellow Jacket Mines, Inc. requires
the payment of a net smelter royalty of 5% with a minimum
annual royalty of $27,500. During the years ended December 31,
1996 and 1995, the Company incurred $41,635 and $73,001,
respectively, in royalties related to these agreements.
Continental-Columbia Claims
---------------------------
On March 15, 1989, the Company entered into a lease agreement
with Yellow Jacket Mines, Inc. to lease a group of patented and
unpatented mining claims (the Continental-Columbia claims) in
Lemhi County, Idaho. The Continental-Columbia claims are
contiguous to the Company's Yellow Jacket claims. The initial
term of the lease was for 5 years with a right to renew for an
additional 5-year period. In consideration for the lease, the
Company agreed to pay Yellow Jacket Mines, Inc. a production
royalty and minimum royalty payments during the term of the
agreement. On April 1, 1993, the lease agreement was revised to
waive the minimum guaranteed royalty due March 1, 1993 of
$15,000 in lieu of a commitment from the Company to expend at
least $10,000 in exploration and development work on the
Continental-Columbia claims. The revision also provided for the
renewal of the lease on an annual basis and granted the Company
a first right of refusal should the Company terminate the lease
and another party express interest in the property.
The Company did not renew the lease until October 1996, at
which time a new agreement was consummated. Under the new
agreement, the Company issued 25,000 shares of its restricted
common stock for the first fiscal year of the lease. For the
second and ensuing years, the Company will pay 1% of net
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
5. MINERAL PROPERTY LEASES, CONTINUED:
Continental-Columbia Claims, Continued
--------------------------------------
smelter royalties from the Yellow Jacket mine with a guaranteed
minimum of $10,000 annually. Also, if the Continental-Columbia
claims are brought into production, the Company will pay 5% of
the net smelter royalties with a guaranteed $10,000 annual
minimum and the 1% net smelter royalty from the Yellow Jacket
production will cease. The Company has the right to renew or
cancel the lease on an annual basis.
6. JUDGMENTS PAYABLE:
At December 31, 1996 and 1995, the Company owed the following
judgments payable:
1996 1995
-------- --------
Payable to:
Trustee for former legal counsel's
bankruptcy estate $ 60,772(1) $ 66,978
Former legal counsel for unpaid fees 727
Geosearch, Inc. (see Note 5) 70,992(2) 80,160
-------- --------
$131,764 $147,865
======== ========
(1) Includes interest at the Federal Judgment Rate, which
approximated 6% during 1996 and 1995. The amount is
collateralized by certain equipment.
(2) Includes interest at 10% per annum.
7. PAYABLE TO RELATED PARTIES:
Amounts payable to related parties at December 31, 1996 and 1995
were as follows (see Note 14):
1996 1995
-------- --------
John C. Lawrence, president and
director $553,954 $560,479
Walter L. Maguire, Sr., director 27,000 27,000
Walter L. Maguire, Jr., director 29,344 27,555
Robert Rice, director 34,454 31,313
-------- --------
$644,752 $646,347
======== ========
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
7. PAYABLE TO RELATED PARTIES, CONTINUED:
Transactions affecting the payable to Mr. Lawrence during 1996
and 1995 were as follows:
1996 1995
-------- --------
Balance, beginning of year $560,479 $605,916
Equipment rental charges 44,715 56,482
Salary and vacation expense 54,000 52,850
Other advances 4,843 32,948
Payments (110,083) (187,717)
-------- --------
Balance, end of year $553,954 $560,479
======== ========
Interest is payable on these liabilities, except for Mr. Maguire,
Sr., at 10% per annum and is included in the above amounts for
Messrs. Maguire, Jr. and Rice. The payable to Mr. Maguire, Sr. is
non-interest bearing.
As described in Note 9, these payables may be converted to Series
C preferred stock.
8. NOTES PAYABLE TO BANK:
Notes payable to First State Bank of Thompson Falls, Montana
("First State Bank") at December 31, 1996 were as follows:
Five-year term note payable bearing interest
at 2.5% over the bank's daily Adjustable Rate
Mortgage ("ARM"), which was 10.75% at
December 31, 1996. The note is payable monthly
from 5% of receipts from all Company sales up
to $5,155 per month. The note is collateralized
by certain equipment and patented and unpatented
mining claims in Sanders County, Montana. The
note is personally guaranteed by John C.
Lawrence. The note is due on August 1, 2001. $222,035
Note payable under a revolving line-of-credit
agreement bearing interest at 2.5% over the
bank's daily ARM rate, which was 10.75% at
December 31, 1996. The note is collateralized
by certain equipment and patented and unpatented
mining claims in Sanders County, Montana. The
maximum borrowing under the line of credit is
$50,000. Principal and accrued interest is due
at maturity on August 1, 1997 and is personally
guaranteed by John C. Lawrence. 19,391
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
8. NOTES PAYABLE TO BANK, CONTINUED:
Note payable under a revolving line-of-credit
agreement bearing interest at 2.5% over the
bank's daily ARM rate, which was 10.75% at
December 31, 1996. The note is collateralized
by certain equipment and patented and unpatented
mining claims in Sanders County, Montana. The
maximum borrowing under the line of credit is
$75,000. Principal and accrued interest is due
at maturity on September 1, 1997 and is
personally guaranteed by John C. Lawrence. $ 69,578
--------
311,004
Less current portion 125,397
--------
Noncurrent portion $185,607
========
Based on the interest rates in effect at December 31, 1996,
principal payments on the notes payable are due as follows:
Year Ending
December 31,
------------
1997 $125,397
1998 44,035
1999 49,009
2000 54,545
2001 38,018
--------
$311,004
========
The note agreements require the Company to maintain certain
minimum insurance coverages. At December 31, 1996, the Company
was in compliance with these requirements.
9. DEBENTURES PAYABLE:
On April 15, 1985 and May 2, 1988, the Company issued $300,000 of
convertible debentures and $350,000 of subordinated convertible
debentures, respectively. Both debenture issues were unsecured,
convertible into common stock of the Company at any time prior to
their maturity date and required semiannual interest payments of
10%. At December 31, 1996 and 1995, the Company had amounts due
the Walter L. Maguire 1935 Trust, an entity whose beneficiaries
include Walter L. Maguire, Sr., and Walter L. Maguire, Jr.,
stockholders of the Company, totaling $335,000 in the form of
subordinated convertible debentures of $135,000 and $200,000 in
convertible debentures. Walter L. Maguire, Sr., is also a
director of the Company. The Company also had $215,000 of
subordinated convertible debentures outstanding to other
stockholders and individuals at December 31, 1996 and 1995.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
9. DEBENTURES PAYABLE, CONTINUED:
The convertible and subordinated convertible debentures were
scheduled to mature on April 14, 1991 and April 14, 1993,
respectively. No interest or principal payments have been made on
either debenture issue since 1989, and the debentures are in
default. The debenture agreements provided that in the event of
default, the principal could be declared due by not less than 51%
of the debenture holders.
On February 21, 1996, a proposal was submitted to the holders of
defaulted convertible and subordinated convertible debentures and
holders of related-party debt offering an opportunity to convert
their debenture principal and accrued interest into common stock
of the Company. On August 8, 1996, the proposal was revised to
offer debenture and other debt holders conversion rights into a
Series C preferred stock that would be convertible into common
stock of the Company. The proposal offered to issue one share of
convertible Series C preferred stock for every $.55 of defaulted
principal and accrued interest to December 31, 1996 associated
with both classes of debentures. The preferred stock would have
the same voting rights as common stock and contain the following
features:
(i) One-to-one conversion into common stock of the
Company for a period of 18 months.
(ii) A liquidation preference subject to the preferences
of the Company's outstanding Series A and B preferred
stocks.
(iii) 20% of the underlying common stock shall have
registration rights when, and if, the Company files a
registration statement.
The proposal also gave each debt holder agreeing to convert
the principal balance of his or her debt and at least 70% of
the accrued interest on or before January 1, 1997 the option
of:
(i) receiving the remaining unconverted portion of
accrued interest in the form of quarterly cash
payments in proportion to the holder's relative
amount of accrued interest with respect to total
converted accrued interest from a "sinking fund" of
$5,000 per month contributed from an irrevocable
assignment of gross revenues that would be
administered by the First State Bank, or
(ii) receiving one warrant to purchase common stock of the
Company for every $.55 of accrued interest converted
to the preferred stock in excess of 70% of the
accrued interest converted on each debenture. Said
warrant would be exercisable at $.70 per share for a
period of three years.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
9. DEBENTURES PAYABLE, CONTINUED:
The proposal is contingent upon its ratification by the Company's
stockholders at their annual meeting in 1997 and each debenture
holder's review of the Company's audited financial statements.
In connection with the proposal made to debenture holders,
proposals with identical terms were offered to each
creditor/director of the Company by the other unrelated directors
to convert their debts and accrued interest thereon (described in
Notes 7 and 11) into Series C preferred stock. All of the
proposals to convert debt and accrued interest were accompanied
by an acknowledgment indicating the debt holder's intent to
convert or not convert their debts contingent upon review of the
Company's audited financial statements and ratification of the
proposal by the Company's stockholders.
As of December 31, 1996, the following acknowledgments had been
received by the Company:
Balance Outstanding
as of December 31, 1996
--------------------------------
Accrued
Principal Interest Total
---------- ---------- --------
John C. Lawrence,
Director $ 553,954 $ 285,652 $ 839,606
Robert A. Rice,
Director 28,768 5,686 34,454
Walter L. Maguire,
Sr., Director 27,000 27,000
Convertible debentures 100,000 67,124 167,124
Subordinated convertible
debentures 190,000 146,535 336,535
---------- ---------- ----------
$ 899,722 $ 504,997 $1,404,719
========== ========== ==========
10. NOTE PAYABLE TO BOBBY C. HAMILTON:
On July 7, 1990, the Company entered into a mining venture
agreement with BumbleBee Inc. ("BumbleBee"), a company controlled
by Bobby C. Hamilton ("Hamilton"), a stockholder and creditor of
the Company, to explore, develop and operate the Company's Yellow
Jacket property. Pursuant to the agreement, the Company
contributed its leasehold interest in the Yellow Jacket property
and the use of certain mining and milling equipment to the
venture. Hamilton contributed $500,000 cash, and in exchange
received a 40% net profits interest in gold production from the
mine when it was developed.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
10. NOTE PAYABLE TO BOBBY C. HAMILTON, CONTINUED:
The venture developed a mine and mill at the property and began
gold production in 1991. The mine did not operate profitably and
Hamilton continued to advance cash to the Company to maintain
operations. In December 1994, the Company attempted to quantify
and clarify amounts due Hamilton as a result of his advances to
the Company and from previous debt and stock price guarantees
without success.
On August 1, 1995, the Company filed a complaint in the United
States District Court of Idaho against Hamilton and BumbleBee.
The complaint sought declaratory and injunctive relief from a
judicial determination by the court of the amounts due and owing
Hamilton and BumbleBee and of the effect of various debt and
repayment agreements between the Company and Hamilton.
On November 15, 1995, the action was settled and Hamilton's
obligation was determined to be $1,800,000, which included
$500,000 for the purchase of Hamilton's 40% net profits interest
in the Yellow Jacket mine. The unsecured debt accrues interest at
7.5%, is payable from 10% of the Company's gross sales from all
operations and requires a minimum payment of $150,000 annually,
including interest. The settlement agreement released all
security interests Hamilton had in the Company's real and
personal properties, recovered 916,667 shares of Series B
preferred stock and two patented mining claims held by him as
security and terminated the Yellow Jacket venture agreement with
BumbleBee. The settlement agreement also extinguished all
previous stock price guarantees to Hamilton and required his
surrender of 150,000 shares of the Company's common stock to the
Company. In connection with the settlement, the Company canceled
warrants granted to Hamilton to purchase 500,000 shares of common
stock at $.25 per share and issued Hamilton 500,000 shares of the
Company's unregistered common stock in connection with the
purchase of his 40% net profits interest in the Yellow Jacket
property. The Company recorded the net 350,000 unregistered
shares of common stock at 75% of the current market value of the
stock for a total value of $65,625. Since there is no market for
the Series B preferred stock, the Company recorded the return of
the 916,667 shares at par value of $9,167, which is the same
value assigned to the shares when they were originally issued.
The settlement of the debt resulted in an extraordinary gain of
$28,126 in 1995.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
10. NOTE PAYABLE TO BOBBY C. HAMILTON, CONTINUED:
Based on the minimum annual payment requirement, principal
payments on the Hamilton note payable are due as follows:
Year Ending
December 31,
------------
1997 $ 20,494
1998 22,031
1999 23,683
2000 25,459
2001 27,369
Thereafter 1,607,715
----------
$1,726,751
==========
11. ACCRUED INTEREST PAYABLE:
Accrued interest payable at December 31, 1996 and 1995 was as
follows:
1996 1995
-------- --------
John C. Lawrence(1) $285,652 $229,930
Debentures payable(2) 506,588 441,588
Bobby C. Hamilton(3) 612
-------- --------
$792,240 $672,130
======== ========
(1) John C. Lawrence is a director and president of the Company.
(2) Includes accrued interest of $263,648 and $230,148 for 1996
and 1995, respectively, on debentures owned by the Walter L.
Maguire 1935 Trust, of which Walter L. Maguire, Sr. and
Walter L. Maguire, Jr., are beneficiaries. Walter L. Maguire,
Sr., is a director of the Company.
(3) Bobby C. Hamilton is a stockholder of the Company.
Interest expense incurred during 1996 and 1995 for related-party
debenture holders and Messrs. Lawrence and Hamilton was $187,901
and $218,176, respectively.
As described in Note 9, some of the above interest payable may be
converted to Series C preferred stock.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
12. STOCKHOLDERS' DEFICIT:
Stock Warrants
--------------
The Company's Board of Directors has the authority to issue
incentive stock warrants for the purchase of common stock to
directors and employees of the Company. The Company has also
issued warrants in exchange for services rendered the Company
and in settlement of certain litigation.
Transactions in stock warrants are as follows:
Number of Expiration
Warrants Option Prices Date
--------- ------------- ----------
Balance, December 31,
1994 500,000 $0.25 (A)
Warrants issued for
services 190,000 $0.25 (B)
Geosearch
(see Note 5) 100,000 $0.35 (B)
Returned by Mr.
Hamilton (500,000) $0.25 (A)
--------
Balance, December 31,
1995 290,000 $0.25-$0.35 (B)
Warrants issued to
employees 25,000 $0.50 (C)
Warrants issued in
connection with
stock sale 200,000 $0.70 (D)
Warrants expired (290,000) $0.25-$0.35 (B)
--------
Balance, December 31,
1996 225,000 $0.50-$0.70
========
(A) Warrants expire when the related debt is retired. Due to the
settlement in 1995 (see Note 10), all warrants were returned
to the Company.
(B) Warrants were exercisable at December 31, 1995, but expired
before being exercised during 1996.
(C) Warrants are exercisable on or before January 1, 1999.
(D) Warrants are exercisable on or before April 28, 1999.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
12. STOCKHOLDERS' DEFICIT, CONTINUED:
Stock Warrants, Continued
-------------------------
Due to the low volume of trading in the Company's common stock
and the financial condition of the Company, the Company has
estimated that the warrants issued to employees during 1996
have minimal value. Accordingly, the pro forma effect on net
loss and net loss per share for the year ended
December 31, 1996 would be immaterial if the Company accounted
for stock warrants in accordance with SFAS No. 123, "Accounting
for Stock-Based Compensation."
Issuance of Common Stock for Cash
---------------------------------
During 1996, the Company sold 460,000 shares of its
unregistered common stock for $127,560. The sales were as
follows:
<TABLE>
<CAPTION>
Share Sale Price
Purchaser Shares Price Total
------------------------------ ------- ------------ ----------
<S> <C> <C> <C>
Houston Resources(1) 150,000 $0.20 $ 30,000
Judith and Philip Knoff(2) 75,000 $0.20 15,000
The Maguire Foundation(4) 75,000 $0.20 15,000
Robert A. Rice(3) 25,000 $0.20 5,000
Delaware Royalty Co.(1) 100,000 $0.55 55,000
Yellow Jacket Mines Inc. 10,000 $0.25 2,500
Other 25,000 $0.2024 5,060
------- ----------- ---------
Total 460,000 $0.20-$0.55 $ 127,560
======= =========== =========
</TABLE>
(1) Companies owned or controlled by Al Dugan, an existing
shareholder.
(2) Sister and brother-in-law of John C. Lawrence, director
and president of the Company.
(3) Director of the Company.
(4) A foundation related to Walter L. Maguire, Sr., a
shareholder and director.
Issuance of Common Stock in Exchange for Services
-------------------------------------------------
During 1996, the Company issued 5,000 shares of its
unregistered common stock to a key employee as compensation.
The stock was valued at $1,250 based on the estimated fair
value of the stock.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
12. STOCKHOLDERS' DEFICIT, CONTINUED:
Issuance of Common Stock in Exchange for Services, Continued
------------------------------------------------------------
During 1995, the Company issued 10,000 shares of its restricted
common stock to an individual for services performed on the
Company's behalf. For the years ended December 31, 1996 and
1995, the Company issued shares of its unregistered common
stock to directors of the Company as compensation for their
attendance at Board of Director meetings (see Note 14). The
above shares were valued at 75% of the market value of the
stock at the time they were issued.
Issuance of Common Stock in Settlement of Litigation
----------------------------------------------------
During 1995, the Company issued 50,000 shares of its restricted
common stock to Geosearch in settlement of an action brought
against the Company to collect past due royalties and lease
payments (see Note 5). The common stock was valued at $2,344
based on 75% of the market value of the stock at the date of
issuance. During 1995, the Company issued 500,000 shares of its
restricted common stock to Bobby C. Hamilton in settlement of
an action brought against him (see Note 10). In addition, the
Company received and retired 150,000 shares of common stock
held by Bobby C. Hamilton in settlement of the action brought
against him.
Preferred Stock
---------------
The Company's Articles of Incorporation authorize 10,000,000
shares of $.01 par value preferred stock. Subject to amounts of
outstanding preferred stock, additional shares of preferred
stock can be issued with such rights and preferences, including
voting rights, as the Board of Directors shall determine.
During 1986, Series A restricted preferred stock was
established by the Board of Directors. These shares are
nonconvertible, nonredeemable and are entitled to a $1.00 per
share per year cumulative dividend. Series A preferred
stockholders have voting rights for directors only and
liquidation preference equal to $45,000 plus dividends in
arrears. At December 31, 1996, cumulative dividends in arrears
amounted to $47,250 or $10.50 per share.
During 1993, Series B restricted preferred stock was
established by the Board of Directors and 1,666,667 shares were
issued in connection with the final settlement of litigation
related to the nonpayment of royalties under a sublease
contract. The Series B preferred stock is in preference to the
Company's common stock and Series A preferred stock, has no
voting rights and is entitled to cumulative dividends of $.01
per share when and if declared by the Board of Directors. In
the event of dissolution or liquidation of the Company, the
preferential amount payable to Series B restricted preferred
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
12. STOCKHOLDERS' DEFICIT, CONTINUED:
Preferred Stock
---------------
stockholders is $1.00 per share plus all dividends in
arrears. The Series B preferred stock was convertible into
common stock of the Company prior to December 31, 1995. No
dividends have been declared or paid to the Series B
shareholders. In 1995, 916,667 shares of Series B stock were
surrendered to the Company in connection with the settlement of
litigation against Bobby C. Hamilton (see Note 10). At December
31, 1996, no Series B shares had been converted into common
stock of the Company. Cumulative dividends in arrears were
$22,500 at December 31, 1996.
13. INCOME TAXES:
The components of the deferred tax assets and liabilities at
December 31, 1996 and 1995 are as follows:
1996 1995
------------ ------------
Net operating losses $ 2,315,343 $ 2,156,848
Properties, plants and equipment 185,937 (652)
------------ ------------
Total deferred tax assets 2,501,280 2,156,196
Less valuation allowance (2,501,280) (2,156,196)
------------ ------------
$ 0 $ 0
============ ============
Statement of Financial Standards No. 109, "Accounting for Income
Taxes," requires that a valuation allowance be provided if it is
more likely than not that some portion or all of a deferred tax
asset will not be realized. Although the Company has significant
deferred tax assets, principally in the form of net operating loss
carryforwards, its ability to generate future taxable income to
realize the benefit of these assets will depend primarily on
curtailing losses at the Yellow Jacket mine and operating its
antimony division profitably. The market, capital and
environmental uncertainties associated with this requirement are
considerable and uncertain. Therefore, management believes that a
full valuation allowance of the net deferred tax assets is
appropriate at December 31, 1996 and 1995. However, if estimates
of future taxable income change, the valuation allowance could
change in the future.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
13. INCOME TAXES, CONTINUED:
The change in the valuation allowance for the years ended
December 31, 1996 and 1995 is as follows:
Balance, December 31, 1994 $ 2,332,607
Decrease due to utilization
of net operating loss
carryforwards (176,411)
------------
Balance, December 31, 1995 2,156,196
Increase due to nonutilization
of net operating loss
carryforwards 345,084
------------
Balance, December 31, 1996 $ 2,501,280
============
During the year ended December 31, 1995, the Company utilized
approximately $516,000 of net operating losses for federal income
tax purposes.
At December 31, 1996, the Company had the following regular tax
basis net operating losses:
Expiring in
2000 $1,894,002
2001 916,998
2002 715,731
2003 866,362
2004 568,416
2005 715,049
2006 512,877
2007 154,235
2011 466,163
----------
$6,809,833
==========
At December 31, 1996, the Company has net operating loss
carryforwards for alternative minimum tax purposes of
approximately $6,900,000.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
14. RELATED-PARTY TRANSACTIONS:
In addition to transactions described in Notes 7, 9, 10, 11 and
12, during 1996 and 1995, the Company had the following
transactions with related parties:
- In 1995, Walter L. Maguire, Sr., a stockholder and director,
sold the Company $30,000 of laboratory and mining equipment.
In connection with the sale, the Company paid Mr. Maguire
$3,000 and recorded a note payable for the unpaid balance of
$27,000 (see Note 7).
- During 1996, the Company issued 24,000 shares of its common
stock to each member of the Board of Directors for their
attendance at Board of Director meetings since 1990. The
issuance was pursuant to a decision by the Board to forego
the award of stock warrants to directors for the years 1990-
1995. The issuance, which totaled 192,000 shares, represented
an award of 8,000 shares per year per director. The issuances
have been recorded in the consolidated financial statements
as if they were issued in the year they were earned. The
restricted stock awards were recorded as compensation expense
based upon their estimated value at the date of issuance.
- At December 31, 1995, the Company owed Walter L. Maguire,
Jr., a stockholder and former director, $27,555 for amounts
advanced to the Company by Mr. Maguire. Annual interest
expense related to these notes of $1,790 was incurred in each
of 1996 and 1995. In 1996, a company controlled by Walter L.
Maguire, Jr., a stockholder and former director, sold the
Company packaging materials for $32,066. At December 31,
1996, the Company owed Mr. Maguire's company $9,747,
representing the unpaid balance including late payment
charges of $1,445.
- During 1995, Robert A. Rice, a stockholder and director,
exchanged $17,500 of the amount due him for certain fully
depreciated mining equipment. Accordingly, the Company
recognized a $17,500 gain on the disposal of the equipment.
Annual interest expense related to balances payable to Mr.
Rice was $3,223 and $2,555 in 1996 and 1995, respectively.
- After the Company's office building was destroyed by fire in
1990, the Company's president provided office space to the
Company at no charge through 1996.
- During 1995, the Company acquired equipment from Mr. Hamilton
through the issuance of a $125,000 note payable. The note
bore interest at 10% and was paid in full prior to
December 31, 1995.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
15. COMMITMENTS AND CONTINGENCIES:
Until 1989, the Company mined, milled and leached gold and silver
in the Yankee Fork Mining District in Custer County, Idaho. The
metals were recovered by a 150-ton per day gravity and flotation
mill, and the concentrates were leached with cyanide to produce a
bullion product at the Preachers Cove mill, which was located six
miles north of Sunbeam, Idaho on the Yankee Fork of the Salmon
River. In 1994, the U.S. Forest Service, under the provisions of
the Comprehensive Environmental Response Liability Act of 1980
(CERCLA), designated the cyanide leach plant as a contaminated
site requiring cleanup of the cyanide solution. The Company has
been reclaiming the property and as of December 31, 1996, the
cyanide solution discharge was complete and the mill has been
removed. The Company anticipates having the cyanide leach residue
containment completely finished by 1998. In 1996, the Idaho
Department of Environmental Quality requested the Company sign a
consent decree related to completing the reclamation and
remediation at the Preachers Cove mill, which the Company signed
in December 1996. Estimated costs to reclaim this property have
been accrued at December 31, 1996 and 1995. At December 31, 1996,
the liability for the remaining estimated costs to complete
remediation at the site was $135,198.
On November 15, 1996, the Bureau of Land Management (BLM)
notified the Company that it may be a responsible party as
defined under CERCLA for hazardous substances released from
uncontained mining tailings at a mining site near Pine Creek,
Idaho. The Company was one of 13 companies that had received a
similar notice.
In response to the notification, the Company informed the BLM
that it is neither a current or former owner of the site, has
never been an operator, nor has it shipped hazardous substances
or arranged for the disposal or treatment of hazardous substances
in the Pine Creek area. Accordingly, the Company does not
consider itself a potentially responsible party under CERCLA for
the Pine Creek site. Although no additional notification has been
received from the BLM, the Company believes it does not have a
material liability relating to this site.
16. FAIR VALUE OF FINANCIAL INSTRUMENTS:
The following disclosure of the estimated fair value of financial
instruments is made in accordance with the requirements of SFAS
No. 107, "Disclosures about Fair Value of Financial Instruments."
The estimated fair value amounts have been determined using
available market information and appropriate valuation
methodologies. However, considerable judgment is required to
interpret market data and to develop the estimates of fair value.
Accordingly, the estimates presented herein are not necessarily
indicative of the amounts the Company could realize in a current
market exchange.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
16. FAIR VALUE OF FINANCIAL INSTRUMENTS, CONTINUED:
The carrying amounts for cash, restricted cash, accounts
receivable, accounts payable and accrued expenses are a
reasonable estimate of their fair values. The fair value of
amounts payable to related parties and judgments payable
approximate their carrying values of $644,752 and $131,764,
respectively, at December 31, 1996 and $646,347 and $147,865,
respectively, at December 31, 1995, based upon the contractual
cash flow requirements.
It is not practicable to estimate the fair value of the $1.7
million note payable to Hamilton. The payments are based upon
future revenues, which are uncertain. There are no similar
financial instruments in the market to which the value can be
compared. It is also not practicable to estimate the fair value
of the $650,000 debentures which are in default. However,
management believes that the fair value of these debentures is
signficantly lower than their carrying value.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 34
<ALLOWANCES> 0
<INVENTORY> 556
<CURRENT-ASSETS> 21
<PP&E> 3045
<DEPRECIATION> (2375)
<TOTAL-ASSETS> 1451
<CURRENT-LIABILITIES> 2934
<BONDS> 1892
0
7
<COMMON> 126
<OTHER-SE> (3824)
<TOTAL-LIABILITY-AND-EQUITY> 1451
<SALES> 5011
<TOTAL-REVENUES> 5011
<CGS> 4832
<TOTAL-COSTS> 5796
<OTHER-EXPENSES> (55)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 285
<INCOME-PRETAX> (1015)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1015)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1015)
<EPS-PRIMARY> (.08)
<EPS-DILUTED> (.08)
</TABLE>
EXHIBIT 21
----------
Subsidiary of United States Antimony Corporation:
1. United States Antimony Corporation - Montana
<PAGE>
EXHIBIT 10.26
-------------
Warrant No. 96-1 Warrant to Purchase
2,500 Common Shares
STOCK PURCHASE WARRANT
(For the Purchase of Shares of a Par Value of $.01 Per Share)
UNITED STATES ANTIMONY CORPORATION
(Incorporated under the laws of the State of Montana)
VOID AFTER 9:00 A.M. ON 02 January 1999
This is to certify that, for the value received, LEE MARTIN is
entitled, subject to the terms and conditions hereinafter set forth,
at or before 9:00 A.M., Mountain Daylight Time, on 02 January 1999 ,
but not thereafter, to purchase the number of Unregistered Common
Shares as set forth above, with a par value of $.01 per share,
hereinafter called Unregistered Common Shares, of United States
Antimony Corporation, hereinafter called the Company, at an exercise
price of $.50 per share, and to receive a certificate or certificates
for the Unregistered Common Shares so purchased, upon presentation and
surrender to the Company, with the form of subscription duly executed,
and accompanied by the payment of the purchase price of each share
purchased either in cash or by certified or bank cashier's check
payable to the order of the Company.
The Company covenants and agrees that all shares which may be
delivered upon the exercise of this Warrant will, upon delivery, be
free from all taxes, liens and charges, will be fully paid and non-
assessable, and the Company further covenants and agrees that it will
from time-to-time take all such action as may be requisite to assure
that the par value per share of the Common Shares is at all time to
equal to or less than the current Warrant purchase price per share of
the Unregistered Common Shares issuable pursuant to this Warrant.
The purchase rights represented by this Warrant are exercisable at the
option of the registered owner hereof in whole at any time, or in part
from time-to-time, within the period above stated, provided, however,
that such purchase rights shall not be exercisable with respect to a
fraction of a share of Common Shares.
In case of the purchase of less than all shares purchasable under this
warrant, the Company shall cancel this Warrant upon the surrender
hereof and shall execute and deliver a new Warrant of like tenor and
date for the balance of the shares purchasable hereunder.
The Company agrees at all times to reserve and hold available a
sufficient number of Unregistered Common Shares to cover the number of
shares issuable upon the exercise of this and all other similar
Warrants then outstanding.
This Warrant shall not entitle the holder hereof to any voting rights
or other rights as a shareholder of the Corporation, or do any other
rights whatsoever, except the rights herein expressed and such as are
set forth, and no dividends shall be payable or accrue in respect of
<PAGE>
the Warrant or the interest represented hereby or the shares
purchasable hereunder until or unless, and except to the extent that,
this Warrant shall be exercised.
This Warrant and the rights represented hereby may not be transferred
by the registered owner hereof.
In any of the following events, occurring hereafter and until the
expiration of the Warrant by the passage of time or the full exercise
hereof, appropriate adjustments shall be made in the number of shares
deliverable upon the exercise of this Warrant or the price per share
to be paid so as to maintain the proportion of interest of each
Warrant holder: (a) If the Company at any time prior to the
expiration of the Warrants and prior to the exercise thereof declares
a dividend on the Common Stock of the Company, payable in Common Stock
or securities convertible into Common Stock, or divides, consolidates
or reclassifies the Common Stock, whether upon a recapitalization or
otherwise, or merges or consolidates with or into another Corporation
(unless the Company is the continuing Corporation and there is no
reclassification or change of outstanding shares of Common Stock) the
number of Common Shares issuable upon exercise of this Warrant shall
thereafter (until further adjusted), consist of the kind and amount of
securities or property which would have been issuable had the Warrants
been exercised immediately prior to the record date for the event in
question. The Company shall not affect any such merger or
consolidation unless, at or prior to the consumption thereof, the
surviving Corporation shall assume by written agreement the obligation
to deliver these securities which, and accordance with the foregoing,
the Warrant holder is entitled to purchase. The above provisions
relative to dilution shall not apply to any issuance or sale by the
Company of any of its securities, or any securities convertible into
Common Stock, which issuance and sale was for valid consideration as
determined by the Board of Directors of the Company and the Company
shall be free to offer and sell during the term of this Warrant such
of its securities as it may deem advisable and appropriate.
Upon receipt by the Company of evidence satisfactory to it (in the
exercise of its reasonable discretion) of the ownership of and the
loss, theft, destruction or mutilation of this Warrant and (in the
case of loss, theft, or destruction) of indemnity satisfactory to it,
and (in the case of mutilation) upon surrendering this Warrant for
cancellation, the Company will execute and deliver, in lieu thereof, a
new Warrant for like tenor.
The Warrants represented by this certificate and the shares underlying
issuable upon exercise hereof, have not been registered under the
Securities Act of 1933. The Warrants have been purchased for
investment and not with a view to distribution or resale, they may not
be made subject to security interest, pledged, hypothecated or
otherwise transferred. Shares issuable upon exercise of this warrant
will have been purchased by the holder thereof for investment and not
with a view to distribution or resale, or otherwise transferred
without an effective registration statement pursuant to the Securities
Act of 1933, or an opinion of counsel acceptable to counsel for the
Company that registration is not required under such Act. Any shares
issued upon the exercise of this Warrant shall bear a restrictive
legend in substantially the following form:
<PAGE>
"No sale offer to sell or transfer of the shares represented
by this certificate shall be made unless a registration
statement under the Securities Act of 1933, as amends,
with respect to such shares is then in effect or an
exemption from the registration requirements of such Act
is then in fact applicable to such shares."
All notices and other communications from the Company to the holder of
this Warrant shall be mailed by first class mail, postage prepaid, to
the address furnished to the Company in writing by the holder of this
Warrant.
Dated: 02 January 1996
UNITED STATES ANTIMONY CORPORATION
By
-----------------------------------
John C. Lawrence, President
ATTEST:
-----------------------------
Lee Martin
<PAGE>
Warrant No. 96-2 Warrant to Purchase
2,500 Common Shares
STOCK PURCHASE WARRANT
(For the Purchase of Shares of a Par Value of $.01 Per Share)
UNITED STATES ANTIMONY CORPORATION
(Incorporated under the laws of the State of Montana)
VOID AFTER 9:00 A.M. ON 02 January 1999
This is to certify that, for the value received, ROXANNE MURPHY is
entitled, subject to the terms and conditions hereinafter set forth,
at or before 9:00 A.M., Mountain Daylight Time, on 02 January 1999 ,
but not thereafter, to purchase the number of Unregistered Common
Shares as set forth above, with a par value of $.01 per share,
hereinafter called Unregistered Common Shares, of United States
Antimony Corporation, hereinafter called the Company, at an exercise
price of $.50 per share, and to receive a certificate or certificates
for the Unregistered Common Shares so purchased, upon presentation and
surrender to the Company, with the form of subscription duly executed,
and accompanied by the payment of the purchase price of each share
purchased either in cash or by certified or bank cashier's check
payable to the order of the Company.
The Company covenants and agrees that all shares which may be
delivered upon the exercise of this Warrant will, upon delivery, be
free from all taxes, liens and charges, will be fully paid and non-
assessable, and the Company further covenants and agrees that it will
from time-to-time take all such action as may be requisite to assure
that the par value per share of the Common Shares is at all time to
equal to or less than the current Warrant purchase price per share of
the Unregistered Common Shares issuable pursuant to this Warrant.
The purchase rights represented by this Warrant are exercisable at the
option of the registered owner hereof in whole at any time, or in part
from time-to-time, within the period above stated, provided, however,
that such purchase rights shall not be exercisable with respect to a
fraction of a share of Common Shares.
In case of the purchase of less than all shares purchasable under this
warrant, the Company shall cancel this Warrant upon the surrender
hereof and shall execute and deliver a new Warrant of like tenor and
date for the balance of the shares purchasable hereunder.
The Company agrees at all times to reserve and hold available a
sufficient number of Unregistered Common Shares to cover the number of
shares issuable upon the exercise of this and all other similar
Warrants then outstanding.
This Warrant shall not entitle the holder hereof to any voting rights
or other rights as a shareholder of the Corporation, or do any other
rights whatsoever, except the rights herein expressed and such as are
set forth, and no dividends shall be payable or accrue in respect of
the Warrant or the interest represented hereby or the shares
purchasable hereunder until or unless, and except to the extent that,
this Warrant shall be exercised.
<PAGE>
This Warrant and the rights represented hereby may not be transferred
by the registered owner hereof.
In any of the following events, occurring hereafter and until the
expiration of the Warrant by the passage of time or the full exercise
hereof, appropriate adjustments shall be made in the number of shares
deliverable upon the exercise of this Warrant or the price per share
to be paid so as to maintain the proportion of interest of each
Warrant holder: (a) If the Company at any time prior to the
expiration of the Warrants and prior to the exercise thereof declares
a dividend on the Common Stock of the Company, payable in Common Stock
or securities convertible into Common Stock, or divides, consolidates
or reclassifies the Common Stock, whether upon a recapitalization or
otherwise, or merges or consolidates with or into another Corporation
(unless the Company is the continuing Corporation and there is no
reclassification or change of outstanding shares of Common Stock) the
number of Common Shares issuable upon exercise of this Warrant shall
thereafter (until further adjusted), consist of the kind and amount of
securities or property which would have been issuable had the Warrants
been exercised immediately prior to the record date for the event in
question. The Company shall not affect any such merger or
consolidation unless, at or prior to the consumption thereof, the
surviving Corporation shall assume by written agreement the obligation
to deliver these securities which, and accordance with the foregoing,
the Warrant holder is entitled to purchase. The above provisions
relative to dilution shall not apply to any issuance or sale by the
Company of any of its securities, or any securities convertible into
Common Stock, which issuance and sale was for valid consideration as
determined by the Board of Directors of the Company and the Company
shall be free to offer and sell during the term of this Warrant such
of its securities as it may deem advisable and appropriate.
Upon receipt by the Company of evidence satisfactory to it (in the
exercise of its reasonable discretion) of the ownership of and the
loss, theft, destruction or mutilation of this Warrant and (in the
case of loss, theft, or destruction) of indemnity satisfactory to it,
and (in the case of mutilation) upon surrendering this Warrant for
cancellation, the Company will execute and deliver, in lieu thereof, a
new Warrant for like tenor.
The Warrants represented by this certificate and the shares underlying
issuable upon exercise hereof, have not been registered under the
Securities Act of 1933. The Warrants have been purchased for
investment and not with a view to distribution or resale, they may not
be made subject to security interest, pledged, hypothecated or
otherwise transferred. Shares issuable upon exercise of this warrant
will have been purchased by the holder thereof for investment and not
with a view to distribution or resale, or otherwise transferred
without an effective registration statement pursuant to the Securities
Act of 1933, or an opinion of counsel acceptable to counsel for the
Company that registration is not required under such Act. Any shares
issued upon the exercise of this Warrant shall bear a restrictive
legend in substantially the following form:
<PAGE>
"No sale offer to sell or transfer of the shares represented
by this certificate shall be made unless a registration
statement under the Securities Act of 1933, as amends,
with respect to such shares is then in effect or an
exemption from the registration requirements of such Act
is then in fact applicable to such shares."
All notices and other communications from the Company to the holder of
this Warrant shall be mailed by first class mail, postage prepaid, to
the address furnished to the Company in writing by the holder of this
Warrant.
Dated: 02 January 1996
UNITED STATES ANTIMONY CORPORATION
By
-----------------------------------
John C. Lawrence, President
ATTEST:
-----------------------------
Lee Martin
<PAGE>
Warrant No. 96-3 Warrant to Purchase
2,500 Common Shares
STOCK PURCHASE WARRANT
(For the Purchase of Shares of a Par Value of $.01 Per Share)
UNITED STATES ANTIMONY CORPORATION
(Incorporated under the laws of the State of Montana)
VOID AFTER 9:00 A.M. ON 02 January 1999
This is to certify that, for the value received, MARESA DAMASKOS is
entitled, subject to the terms and conditions hereinafter set forth,
at or before 9:00 A.M., Mountain Daylight Time, on 02 January 1999 ,
but not thereafter, to purchase the number of Unregistered Common
Shares as set forth above, with a par value of $.01 per share,
hereinafter called Unregistered Common Shares, of United States
Antimony Corporation, hereinafter called the Company, at an exercise
price of $.50 per share, and to receive a certificate or certificates
for the Unregistered Common Shares so purchased, upon presentation and
surrender to the Company, with the form of subscription duly executed,
and accompanied by the payment of the purchase price of each share
purchased either in cash or by certified or bank cashier's check
payable to the order of the Company.
The Company covenants and agrees that all shares which may be
delivered upon the exercise of this Warrant will, upon delivery, be
free from all taxes, liens and charges, will be fully paid and non-
assessable, and the Company further covenants and agrees that it will
from time-to-time take all such action as may be requisite to assure
that the par value per share of the Common Shares is at all time to
equal to or less than the current Warrant purchase price per share of
the Unregistered Common Shares issuable pursuant to this Warrant.
The purchase rights represented by this Warrant are exercisable at the
option of the registered owner hereof in whole at any time, or in part
from time-to-time, within the period above stated, provided, however,
that such purchase rights shall not be exercisable with respect to a
fraction of a share of Common Shares.
In case of the purchase of less than all shares purchasable under this
warrant, the Company shall cancel this Warrant upon the surrender
hereof and shall execute and deliver a new Warrant of like tenor and
date for the balance of the shares purchasable hereunder.
The Company agrees at all times to reserve and hold available a
sufficient number of Unregistered Common Shares to cover the number of
shares issuable upon the exercise of this and all other similar
Warrants then outstanding.
This Warrant shall not entitle the holder hereof to any voting rights
or other rights as a shareholder of the Corporation, or do any other
rights whatsoever, except the rights herein expressed and such as are
set forth, and no dividends shall be payable or accrue in respect of
the Warrant or the interest represented hereby or the shares
purchasable hereunder until or unless, and except to the extent that,
this Warrant shall be exercised.
<PAGE>
This Warrant and the rights represented hereby may not be transferred
by the registered owner hereof.
In any of the following events, occurring hereafter and until the
expiration of the Warrant by the passage of time or the full exercise
hereof, appropriate adjustments shall be made in the number of shares
deliverable upon the exercise of this Warrant or the price per share
to be paid so as to maintain the proportion of interest of each
Warrant holder: (a) If the Company at any time prior to the
expiration of the Warrants and prior to the exercise thereof declares
a dividend on the Common Stock of the Company, payable in Common Stock
or securities convertible into Common Stock, or divides, consolidates
or reclassifies the Common Stock, whether upon a recapitalization or
otherwise, or merges or consolidates with or into another Corporation
(unless the Company is the continuing Corporation and there is no
reclassification or change of outstanding shares of Common Stock) the
number of Common Shares issuable upon exercise of this Warrant shall
thereafter (until further adjusted), consist of the kind and amount of
securities or property which would have been issuable had the Warrants
been exercised immediately prior to the record date for the event in
question. The Company shall not affect any such merger or
consolidation unless, at or prior to the consumption thereof, the
surviving Corporation shall assume by written agreement the obligation
to deliver these securities which, and accordance with the foregoing,
the Warrant holder is entitled to purchase. The above provisions
relative to dilution shall not apply to any issuance or sale by the
Company of any of its securities, or any securities convertible into
Common Stock, which issuance and sale was for valid consideration as
determined by the Board of Directors of the Company and the Company
shall be free to offer and sell during the term of this Warrant such
of its securities as it may deem advisable and appropriate.
Upon receipt by the Company of evidence satisfactory to it (in the
exercise of its reasonable discretion) of the ownership of and the
loss, theft, destruction or mutilation of this Warrant and (in the
case of loss, theft, or destruction) of indemnity satisfactory to it,
and (in the case of mutilation) upon surrendering this Warrant for
cancellation, the Company will execute and deliver, in lieu thereof, a
new Warrant for like tenor.
The Warrants represented by this certificate and the shares underlying
issuable upon exercise hereof, have not been registered under the
Securities Act of 1933. The Warrants have been purchased for
investment and not with a view to distribution or resale, they may not
be made subject to security interest, pledged, hypothecated or
otherwise transferred. Shares issuable upon exercise of this warrant
will have been purchased by the holder thereof for investment and not
with a view to distribution or resale, or otherwise transferred
without an effective registration statement pursuant to the Securities
Act of 1933, or an opinion of counsel acceptable to counsel for the
Company that registration is not required under such Act. Any shares
issued upon the exercise of this Warrant shall bear a restrictive
legend in substantially the following form:
<PAGE>
"No sale offer to sell or transfer of the shares represented
by this certificate shall be made unless a registration
statement under the Securities Act of 1933, as amends,
with respect to such shares is then in effect or an
exemption from the registration requirements of such Act
is then in fact applicable to such shares."
All notices and other communications from the Company to the holder of
this Warrant shall be mailed by first class mail, postage prepaid, to
the address furnished to the Company in writing by the holder of this
Warrant.
Dated: 02 January 1996
UNITED STATES ANTIMONY CORPORATION
By
-----------------------------------
John C. Lawrence, President
ATTEST:
-----------------------------
Lee Martin
<PAGE>
Warrant No. 96-4 Warrant to Purchase
2,500 Common Shares
STOCK PURCHASE WARRANT
(For the Purchase of Shares of a Par Value of $.01 Per Share)
UNITED STATES ANTIMONY CORPORATION
(Incorporated under the laws of the State of Montana)
VOID AFTER 9:00 A.M. ON 02 January 1999
This is to certify that, for the value received, JAMES K. ROBINSON is
entitled, subject to the terms and conditions hereinafter set forth,
at or before 9:00 A.M., Mountain Daylight Time, on 02 January 1999 ,
but not thereafter, to purchase the number of Unregistered Common
Shares as set forth above, with a par value of $.01 per share,
hereinafter called Unregistered Common Shares, of United States
Antimony Corporation, hereinafter called the Company, at an exercise
price of $.50 per share, and to receive a certificate or certificates
for the Unregistered Common Shares so purchased, upon presentation and
surrender to the Company, with the form of subscription duly executed,
and accompanied by the payment of the purchase price of each share
purchased either in cash or by certified or bank cashier's check
payable to the order of the Company.
The Company covenants and agrees that all shares which may be
delivered upon the exercise of this Warrant will, upon delivery, be
free from all taxes, liens and charges, will be fully paid and non-
assessable, and the Company further covenants and agrees that it will
from time-to-time take all such action as may be requisite to assure
that the par value per share of the Common Shares is at all time to
equal to or less than the current Warrant purchase price per share of
the Unregistered Common Shares issuable pursuant to this Warrant.
The purchase rights represented by this Warrant are exercisable at the
option of the registered owner hereof in whole at any time, or in part
from time-to-time, within the period above stated, provided, however,
that such purchase rights shall not be exercisable with respect to a
fraction of a share of Common Shares.
In case of the purchase of less than all shares purchasable under this
warrant, the Company shall cancel this Warrant upon the surrender
hereof and shall execute and deliver a new Warrant of like tenor and
date for the balance of the shares purchasable hereunder.
The Company agrees at all times to reserve and hold available a
sufficient number of Unregistered Common Shares to cover the number of
shares issuable upon the exercise of this and all other similar
Warrants then outstanding.
This Warrant shall not entitle the holder hereof to any voting rights
or other rights as a shareholder of the Corporation, or do any other
rights whatsoever, except the rights herein expressed and such as are
set forth, and no dividends shall be payable or accrue in respect of
the Warrant or the interest represented hereby or the shares
purchasable hereunder until or unless, and except to the extent that,
this Warrant shall be exercised.
<PAGE>
This Warrant and the rights represented hereby may not be transferred
by the registered owner hereof.
In any of the following events, occurring hereafter and until the
expiration of the Warrant by the passage of time or the full exercise
hereof, appropriate adjustments shall be made in the number of shares
deliverable upon the exercise of this Warrant or the price per share
to be paid so as to maintain the proportion of interest of each
Warrant holder: (a) If the Company at any time prior to the
expiration of the Warrants and prior to the exercise thereof declares
a dividend on the Common Stock of the Company, payable in Common Stock
or securities convertible into Common Stock, or divides, consolidates
or reclassifies the Common Stock, whether upon a recapitalization or
otherwise, or merges or consolidates with or into another Corporation
(unless the Company is the continuing Corporation and there is no
reclassification or change of outstanding shares of Common Stock) the
number of Common Shares issuable upon exercise of this Warrant shall
thereafter (until further adjusted), consist of the kind and amount of
securities or property which would have been issuable had the Warrants
been exercised immediately prior to the record date for the event in
question. The Company shall not affect any such merger or
consolidation unless, at or prior to the consumption thereof, the
surviving Corporation shall assume by written agreement the obligation
to deliver these securities which, and accordance with the foregoing,
the Warrant holder is entitled to purchase. The above provisions
relative to dilution shall not apply to any issuance or sale by the
Company of any of its securities, or any securities convertible into
Common Stock, which issuance and sale was for valid consideration as
determined by the Board of Directors of the Company and the Company
shall be free to offer and sell during the term of this Warrant such
of its securities as it may deem advisable and appropriate.
Upon receipt by the Company of evidence satisfactory to it (in the
exercise of its reasonable discretion) of the ownership of and the
loss, theft, destruction or mutilation of this Warrant and (in the
case of loss, theft, or destruction) of indemnity satisfactory to it,
and (in the case of mutilation) upon surrendering this Warrant for
cancellation, the Company will execute and deliver, in lieu thereof, a
new Warrant for like tenor.
The Warrants represented by this certificate and the shares underlying
issuable upon exercise hereof, have not been registered under the
Securities Act of 1933. The Warrants have been purchased for
investment and not with a view to distribution or resale, they may not
be made subject to security interest, pledged, hypothecated or
otherwise transferred. Shares issuable upon exercise of this warrant
will have been purchased by the holder thereof for investment and not
with a view to distribution or resale, or otherwise transferred
without an effective registration statement pursuant to the Securities
Act of 1933, or an opinion of counsel acceptable to counsel for the
Company that registration is not required under such Act. Any shares
issued upon the exercise of this Warrant shall bear a restrictive
legend in substantially the following form:
<PAGE>
"No sale offer to sell or transfer of the shares represented
by this certificate shall be made unless a registration
statement under the Securities Act of 1933, as amends,
with respect to such shares is then in effect or an
exemption from the registration requirements of such Act
is then in fact applicable to such shares."
All notices and other communications from the Company to the holder of
this Warrant shall be mailed by first class mail, postage prepaid, to
the address furnished to the Company in writing by the holder of this
Warrant.
Dated: 02 January 1996
UNITED STATES ANTIMONY CORPORATION
By
-----------------------------------
John C. Lawrence, President
ATTEST:
-----------------------------
Lee Martin
<PAGE>
Warrant No. 96-5 Warrant to Purchase
2,500 Common Shares
STOCK PURCHASE WARRANT
(For the Purchase of Shares of a Par Value of $.01 Per Share)
UNITED STATES ANTIMONY CORPORATION
(Incorporated under the laws of the State of Montana)
VOID AFTER 9:00 A.M. ON 02 January 1999
This is to certify that, for the value received, TONY LYGHT is
entitled, subject to the terms and conditions hereinafter set forth,
at or before 9:00 A.M., Mountain Daylight Time, on 02 January 1999 ,
but not thereafter, to purchase the number of Unregistered Common
Shares as set forth above, with a par value of $.01 per share,
hereinafter called Unregistered Common Shares, of United States
Antimony Corporation, hereinafter called the Company, at an exercise
price of $.50 per share, and to receive a certificate or certificates
for the Unregistered Common Shares so purchased, upon presentation and
surrender to the Company, with the form of subscription duly executed,
and accompanied by the payment of the purchase price of each share
purchased either in cash or by certified or bank cashier's check
payable to the order of the Company.
The Company covenants and agrees that all shares which may be
delivered upon the exercise of this Warrant will, upon delivery, be
free from all taxes, liens and charges, will be fully paid and non-
assessable, and the Company further covenants and agrees that it will
from time-to-time take all such action as may be requisite to assure
that the par value per share of the Common Shares is at all time to
equal to or less than the current Warrant purchase price per share of
the Unregistered Common Shares issuable pursuant to this Warrant.
The purchase rights represented by this Warrant are exercisable at the
option of the registered owner hereof in whole at any time, or in part
from time-to-time, within the period above stated, provided, however,
that such purchase rights shall not be exercisable with respect to a
fraction of a share of Common Shares.
In case of the purchase of less than all shares purchasable under this
warrant, the Company shall cancel this Warrant upon the surrender
hereof and shall execute and deliver a new Warrant of like tenor and
date for the balance of the shares purchasable hereunder.
The Company agrees at all times to reserve and hold available a
sufficient number of Unregistered Common Shares to cover the number of
shares issuable upon the exercise of this and all other similar
Warrants then outstanding.
This Warrant shall not entitle the holder hereof to any voting rights
or other rights as a shareholder of the Corporation, or do any other
rights whatsoever, except the rights herein expressed and such as are
set forth, and no dividends shall be payable or accrue in respect of
the Warrant or the interest represented hereby or the shares
purchasable hereunder until or unless, and except to the extent that,
this Warrant shall be exercised.
<PAGE>
This Warrant and the rights represented hereby may not be transferred
by the registered owner hereof.
In any of the following events, occurring hereafter and until the
expiration of the Warrant by the passage of time or the full exercise
hereof, appropriate adjustments shall be made in the number of shares
deliverable upon the exercise of this Warrant or the price per share
to be paid so as to maintain the proportion of interest of each
Warrant holder: (a) If the Company at any time prior to the
expiration of the Warrants and prior to the exercise thereof declares
a dividend on the Common Stock of the Company, payable in Common Stock
or securities convertible into Common Stock, or divides, consolidates
or reclassifies the Common Stock, whether upon a recapitalization or
otherwise, or merges or consolidates with or into another Corporation
(unless the Company is the continuing Corporation and there is no
reclassification or change of outstanding shares of Common Stock) the
number of Common Shares issuable upon exercise of this Warrant shall
thereafter (until further adjusted), consist of the kind and amount of
securities or property which would have been issuable had the Warrants
been exercised immediately prior to the record date for the event in
question. The Company shall not affect any such merger or
consolidation unless, at or prior to the consumption thereof, the
surviving Corporation shall assume by written agreement the obligation
to deliver these securities which, and accordance with the foregoing,
the Warrant holder is entitled to purchase. The above provisions
relative to dilution shall not apply to any issuance or sale by the
Company of any of its securities, or any securities convertible into
Common Stock, which issuance and sale was for valid consideration as
determined by the Board of Directors of the Company and the Company
shall be free to offer and sell during the term of this Warrant such
of its securities as it may deem advisable and appropriate.
Upon receipt by the Company of evidence satisfactory to it (in the
exercise of its reasonable discretion) of the ownership of and the
loss, theft, destruction or mutilation of this Warrant and (in the
case of loss, theft, or destruction) of indemnity satisfactory to it,
and (in the case of mutilation) upon surrendering this Warrant for
cancellation, the Company will execute and deliver, in lieu thereof, a
new Warrant for like tenor.
The Warrants represented by this certificate and the shares underlying
issuable upon exercise hereof, have not been registered under the
Securities Act of 1933. The Warrants have been purchased for
investment and not with a view to distribution or resale, they may not
be made subject to security interest, pledged, hypothecated or
otherwise transferred. Shares issuable upon exercise of this warrant
will have been purchased by the holder thereof for investment and not
with a view to distribution or resale, or otherwise transferred
without an effective registration statement pursuant to the Securities
Act of 1933, or an opinion of counsel acceptable to counsel for the
Company that registration is not required under such Act. Any shares
issued upon the exercise of this Warrant shall bear a restrictive
legend in substantially the following form:
<PAGE>
"No sale offer to sell or transfer of the shares represented
by this certificate shall be made unless a registration
statement under the Securities Act of 1933, as amends,
with respect to such shares is then in effect or an
exemption from the registration requirements of such Act
is then in fact applicable to such shares."
All notices and other communications from the Company to the holder of
this Warrant shall be mailed by first class mail, postage prepaid, to
the address furnished to the Company in writing by the holder of this
Warrant.
Dated: 02 January 1996
UNITED STATES ANTIMONY CORPORATION
By
-----------------------------------
John C. Lawrence, President
ATTEST:
-----------------------------
Lee Martin
<PAGE>
Warrant No. 96-6 Warrant to Purchase
2,500 Common Shares
STOCK PURCHASE WARRANT
(For the Purchase of Shares of a Par Value of $.01 Per Share)
UNITED STATES ANTIMONY CORPORATION
(Incorporated under the laws of the State of Montana)
VOID AFTER 9:00 A.M. ON 02 January 1999
This is to certify that, for the value received, EMIL FATTU is
entitled, subject to the terms and conditions hereinafter set forth,
at or before 9:00 A.M., Mountain Daylight Time, on 02 January 1999 ,
but not thereafter, to purchase the number of Unregistered Common
Shares as set forth above, with a par value of $.01 per share,
hereinafter called Unregistered Common Shares, of United States
Antimony Corporation, hereinafter called the Company, at an exercise
price of $.50 per share, and to receive a certificate or certificates
for the Unregistered Common Shares so purchased, upon presentation and
surrender to the Company, with the form of subscription duly executed,
and accompanied by the payment of the purchase price of each share
purchased either in cash or by certified or bank cashier's check
payable to the order of the Company.
The Company covenants and agrees that all shares which may be
delivered upon the exercise of this Warrant will, upon delivery, be
free from all taxes, liens and charges, will be fully paid and non-
assessable, and the Company further covenants and agrees that it will
from time-to-time take all such action as may be requisite to assure
that the par value per share of the Common Shares is at all time to
equal to or less than the current Warrant purchase price per share of
the Unregistered Common Shares issuable pursuant to this Warrant.
The purchase rights represented by this Warrant are exercisable at the
option of the registered owner hereof in whole at any time, or in part
from time-to-time, within the period above stated, provided, however,
that such purchase rights shall not be exercisable with respect to a
fraction of a share of Common Shares.
In case of the purchase of less than all shares purchasable under this
warrant, the Company shall cancel this Warrant upon the surrender
hereof and shall execute and deliver a new Warrant of like tenor and
date for the balance of the shares purchasable hereunder.
The Company agrees at all times to reserve and hold available a
sufficient number of Unregistered Common Shares to cover the number of
shares issuable upon the exercise of this and all other similar
Warrants then outstanding.
This Warrant shall not entitle the holder hereof to any voting rights
or other rights as a shareholder of the Corporation, or do any other
rights whatsoever, except the rights herein expressed and such as are
set forth, and no dividends shall be payable or accrue in respect of
the Warrant or the interest represented hereby or the shares
purchasable hereunder until or unless, and except to the extent that,
this Warrant shall be exercised.
<PAGE>
This Warrant and the rights represented hereby may not be transferred
by the registered owner hereof.
In any of the following events, occurring hereafter and until the
expiration of the Warrant by the passage of time or the full exercise
hereof, appropriate adjustments shall be made in the number of shares
deliverable upon the exercise of this Warrant or the price per share
to be paid so as to maintain the proportion of interest of each
Warrant holder: (a) If the Company at any time prior to the
expiration of the Warrants and prior to the exercise thereof declares
a dividend on the Common Stock of the Company, payable in Common Stock
or securities convertible into Common Stock, or divides, consolidates
or reclassifies the Common Stock, whether upon a recapitalization or
otherwise, or merges or consolidates with or into another Corporation
(unless the Company is the continuing Corporation and there is no
reclassification or change of outstanding shares of Common Stock) the
number of Common Shares issuable upon exercise of this Warrant shall
thereafter (until further adjusted), consist of the kind and amount of
securities or property which would have been issuable had the Warrants
been exercised immediately prior to the record date for the event in
question. The Company shall not affect any such merger or
consolidation unless, at or prior to the consumption thereof, the
surviving Corporation shall assume by written agreement the obligation
to deliver these securities which, and accordance with the foregoing,
the Warrant holder is entitled to purchase. The above provisions
relative to dilution shall not apply to any issuance or sale by the
Company of any of its securities, or any securities convertible into
Common Stock, which issuance and sale was for valid consideration as
determined by the Board of Directors of the Company and the Company
shall be free to offer and sell during the term of this Warrant such
of its securities as it may deem advisable and appropriate.
Upon receipt by the Company of evidence satisfactory to it (in the
exercise of its reasonable discretion) of the ownership of and the
loss, theft, destruction or mutilation of this Warrant and (in the
case of loss, theft, or destruction) of indemnity satisfactory to it,
and (in the case of mutilation) upon surrendering this Warrant for
cancellation, the Company will execute and deliver, in lieu thereof, a
new Warrant for like tenor.
The Warrants represented by this certificate and the shares underlying
issuable upon exercise hereof, have not been registered under the
Securities Act of 1933. The Warrants have been purchased for
investment and not with a view to distribution or resale, they may not
be made subject to security interest, pledged, hypothecated or
otherwise transferred. Shares issuable upon exercise of this warrant
will have been purchased by the holder thereof for investment and not
with a view to distribution or resale, or otherwise transferred
without an effective registration statement pursuant to the Securities
Act of 1933, or an opinion of counsel acceptable to counsel for the
Company that registration is not required under such Act. Any shares
issued upon the exercise of this Warrant shall bear a restrictive
legend in substantially the following form:
<PAGE>
"No sale offer to sell or transfer of the shares represented
by this certificate shall be made unless a registration
statement under the Securities Act of 1933, as amends,
with respect to such shares is then in effect or an
exemption from the registration requirements of such Act
is then in fact applicable to such shares."
All notices and other communications from the Company to the holder of
this Warrant shall be mailed by first class mail, postage prepaid, to
the address furnished to the Company in writing by the holder of this
Warrant.
Dated: 02 January 1996
UNITED STATES ANTIMONY CORPORATION
By
-----------------------------------
John C. Lawrence, President
ATTEST:
-----------------------------
Lee Martin
<PAGE>
Warrant No. 96-7 Warrant to Purchase
2,000 Common Shares
STOCK PURCHASE WARRANT
(For the Purchase of Shares of a Par Value of $.01 Per Share)
UNITED STATES ANTIMONY CORPORATION
(Incorporated under the laws of the State of Montana)
VOID AFTER 9:00 A.M. ON 02 January 1999
This is to certify that, for the value received, ED IVIE is entitled,
subject to the terms and conditions hereinafter set forth, at or
before 9:00 A.M., Mountain Daylight Time, on 02 January 1999 , but not
thereafter, to purchase the number of Unregistered Common Shares as
set forth above, with a par value of $.01 per share, hereinafter
called Unregistered Common Shares, of United States Antimony
Corporation, hereinafter called the Company, at an exercise price of
$.50 per share, and to receive a certificate or certificates for the
Unregistered Common Shares so purchased, upon presentation and
surrender to the Company, with the form of subscription duly executed,
and accompanied by the payment of the purchase price of each share
purchased either in cash or by certified or bank cashier's check
payable to the order of the Company.
The Company covenants and agrees that all shares which may be
delivered upon the exercise of this Warrant will, upon delivery, be
free from all taxes, liens and charges, will be fully paid and non-
assessable, and the Company further covenants and agrees that it will
from time-to-time take all such action as may be requisite to assure
that the par value per share of the Common Shares is at all time to
equal to or less than the current Warrant purchase price per share of
the Unregistered Common Shares issuable pursuant to this Warrant.
The purchase rights represented by this Warrant are exercisable at the
option of the registered owner hereof in whole at any time, or in part
from time-to-time, within the period above stated, provided, however,
that such purchase rights shall not be exercisable with respect to a
fraction of a share of Common Shares.
In case of the purchase of less than all shares purchasable under this
warrant, the Company shall cancel this Warrant upon the surrender
hereof and shall execute and deliver a new Warrant of like tenor and
date for the balance of the shares purchasable hereunder.
The Company agrees at all times to reserve and hold available a
sufficient number of Unregistered Common Shares to cover the number of
shares issuable upon the exercise of this and all other similar
Warrants then outstanding.
This Warrant shall not entitle the holder hereof to any voting rights
or other rights as a shareholder of the Corporation, or do any other
rights whatsoever, except the rights herein expressed and such as are
set forth, and no dividends shall be payable or accrue in respect of
the Warrant or the interest represented hereby or the shares
purchasable hereunder until or unless, and except to the extent that,
this Warrant shall be exercised.
<PAGE>
This Warrant and the rights represented hereby may not be transferred
by the registered owner hereof.
In any of the following events, occurring hereafter and until the
expiration of the Warrant by the passage of time or the full exercise
hereof, appropriate adjustments shall be made in the number of shares
deliverable upon the exercise of this Warrant or the price per share
to be paid so as to maintain the proportion of interest of each
Warrant holder: (a) If the Company at any time prior to the
expiration of the Warrants and prior to the exercise thereof declares
a dividend on the Common Stock of the Company, payable in Common Stock
or securities convertible into Common Stock, or divides, consolidates
or reclassifies the Common Stock, whether upon a recapitalization or
otherwise, or merges or consolidates with or into another Corporation
(unless the Company is the continuing Corporation and there is no
reclassification or change of outstanding shares of Common Stock) the
number of Common Shares issuable upon exercise of this Warrant shall
thereafter (until further adjusted), consist of the kind and amount of
securities or property which would have been issuable had the Warrants
been exercised immediately prior to the record date for the event in
question. The Company shall not affect any such merger or
consolidation unless, at or prior to the consumption thereof, the
surviving Corporation shall assume by written agreement the obligation
to deliver these securities which, and accordance with the foregoing,
the Warrant holder is entitled to purchase. The above provisions
relative to dilution shall not apply to any issuance or sale by the
Company of any of its securities, or any securities convertible into
Common Stock, which issuance and sale was for valid consideration as
determined by the Board of Directors of the Company and the Company
shall be free to offer and sell during the term of this Warrant such
of its securities as it may deem advisable and appropriate.
Upon receipt by the Company of evidence satisfactory to it (in the
exercise of its reasonable discretion) of the ownership of and the
loss, theft, destruction or mutilation of this Warrant and (in the
case of loss, theft, or destruction) of indemnity satisfactory to it,
and (in the case of mutilation) upon surrendering this Warrant for
cancellation, the Company will execute and deliver, in lieu thereof, a
new Warrant for like tenor.
The Warrants represented by this certificate and the shares underlying
issuable upon exercise hereof, have not been registered under the
Securities Act of 1933. The Warrants have been purchased for
investment and not with a view to distribution or resale, they may not
be made subject to security interest, pledged, hypothecated or
otherwise transferred. Shares issuable upon exercise of this warrant
will have been purchased by the holder thereof for investment and not
with a view to distribution or resale, or otherwise transferred
without an effective registration statement pursuant to the Securities
Act of 1933, or an opinion of counsel acceptable to counsel for the
Company that registration is not required under such Act. Any shares
issued upon the exercise of this Warrant shall bear a restrictive
legend in substantially the following form:
<PAGE>
"No sale offer to sell or transfer of the shares represented
by this certificate shall be made unless a registration
statement under the Securities Act of 1933, as amends,
with respect to such shares is then in effect or an
exemption from the registration requirements of such Act
is then in fact applicable to such shares."
All notices and other communications from the Company to the holder of
this Warrant shall be mailed by first class mail, postage prepaid, to
the address furnished to the Company in writing by the holder of this
Warrant.
Dated: 02 January 1996
UNITED STATES ANTIMONY CORPORATION
By
-----------------------------------
John C. Lawrence, President
ATTEST:
-----------------------------
Lee Martin
<PAGE>
Warrant No. 96-8 Warrant to Purchase
2,000 Common Shares
STOCK PURCHASE WARRANT
(For the Purchase of Shares of a Par Value of $.01 Per Share)
UNITED STATES ANTIMONY CORPORATION
(Incorporated under the laws of the State of Montana)
VOID AFTER 9:00 A.M. ON 02 January 1999
This is to certify that, for the value received, GARY PECK is
entitled, subject to the terms and conditions hereinafter set forth,
at or before 9:00 A.M., Mountain Daylight Time, on 02 January 1999 ,
but not thereafter, to purchase the number of Unregistered Common
Shares as set forth above, with a par value of $.01 per share,
hereinafter called Unregistered Common Shares, of United States
Antimony Corporation, hereinafter called the Company, at an exercise
price of $.50 per share, and to receive a certificate or certificates
for the Unregistered Common Shares so purchased, upon presentation and
surrender to the Company, with the form of subscription duly executed,
and accompanied by the payment of the purchase price of each share
purchased either in cash or by certified or bank cashier's check
payable to the order of the Company.
The Company covenants and agrees that all shares which may be
delivered upon the exercise of this Warrant will, upon delivery, be
free from all taxes, liens and charges, will be fully paid and non-
assessable, and the Company further covenants and agrees that it will
from time-to-time take all such action as may be requisite to assure
that the par value per share of the Common Shares is at all time to
equal to or less than the current Warrant purchase price per share of
the Unregistered Common Shares issuable pursuant to this Warrant.
The purchase rights represented by this Warrant are exercisable at the
option of the registered owner hereof in whole at any time, or in part
from time-to-time, within the period above stated, provided, however,
that such purchase rights shall not be exercisable with respect to a
fraction of a share of Common Shares.
In case of the purchase of less than all shares purchasable under this
warrant, the Company shall cancel this Warrant upon the surrender
hereof and shall execute and deliver a new Warrant of like tenor and
date for the balance of the shares purchasable hereunder.
The Company agrees at all times to reserve and hold available a
sufficient number of Unregistered Common Shares to cover the number of
shares issuable upon the exercise of this and all other similar
Warrants then outstanding.
This Warrant shall not entitle the holder hereof to any voting rights
or other rights as a shareholder of the Corporation, or do any other
rights whatsoever, except the rights herein expressed and such as are
set forth, and no dividends shall be payable or accrue in respect of
the Warrant or the interest represented hereby or the shares
purchasable hereunder until or unless, and except to the extent that,
this Warrant shall be exercised.
<PAGE>
This Warrant and the rights represented hereby may not be transferred
by the registered owner hereof.
In any of the following events, occurring hereafter and until the
expiration of the Warrant by the passage of time or the full exercise
hereof, appropriate adjustments shall be made in the number of shares
deliverable upon the exercise of this Warrant or the price per share
to be paid so as to maintain the proportion of interest of each
Warrant holder: (a) If the Company at any time prior to the
expiration of the Warrants and prior to the exercise thereof declares
a dividend on the Common Stock of the Company, payable in Common Stock
or securities convertible into Common Stock, or divides, consolidates
or reclassifies the Common Stock, whether upon a recapitalization or
otherwise, or merges or consolidates with or into another Corporation
(unless the Company is the continuing Corporation and there is no
reclassification or change of outstanding shares of Common Stock) the
number of Common Shares issuable upon exercise of this Warrant shall
thereafter (until further adjusted), consist of the kind and amount of
securities or property which would have been issuable had the Warrants
been exercised immediately prior to the record date for the event in
question. The Company shall not affect any such merger or
consolidation unless, at or prior to the consumption thereof, the
surviving Corporation shall assume by written agreement the obligation
to deliver these securities which, and accordance with the foregoing,
the Warrant holder is entitled to purchase. The above provisions
relative to dilution shall not apply to any issuance or sale by the
Company of any of its securities, or any securities convertible into
Common Stock, which issuance and sale was for valid consideration as
determined by the Board of Directors of the Company and the Company
shall be free to offer and sell during the term of this Warrant such
of its securities as it may deem advisable and appropriate.
Upon receipt by the Company of evidence satisfactory to it (in the
exercise of its reasonable discretion) of the ownership of and the
loss, theft, destruction or mutilation of this Warrant and (in the
case of loss, theft, or destruction) of indemnity satisfactory to it,
and (in the case of mutilation) upon surrendering this Warrant for
cancellation, the Company will execute and deliver, in lieu thereof, a
new Warrant for like tenor.
The Warrants represented by this certificate and the shares underlying
issuable upon exercise hereof, have not been registered under the
Securities Act of 1933. The Warrants have been purchased for
investment and not with a view to distribution or resale, they may not
be made subject to security interest, pledged, hypothecated or
otherwise transferred. Shares issuable upon exercise of this warrant
will have been purchased by the holder thereof for investment and not
with a view to distribution or resale, or otherwise transferred
without an effective registration statement pursuant to the Securities
Act of 1933, or an opinion of counsel acceptable to counsel for the
Company that registration is not required under such Act. Any shares
issued upon the exercise of this Warrant shall bear a restrictive
legend in substantially the following form:
<PAGE>
"No sale offer to sell or transfer of the shares represented
by this certificate shall be made unless a registration
statement under the Securities Act of 1933, as amends,
with respect to such shares is then in effect or an
exemption from the registration requirements of such Act
is then in fact applicable to such shares."
All notices and other communications from the Company to the holder of
this Warrant shall be mailed by first class mail, postage prepaid, to
the address furnished to the Company in writing by the holder of this
Warrant.
Dated: 02 January 1996
UNITED STATES ANTIMONY CORPORATION
By
-----------------------------------
John C. Lawrence, President
ATTEST:
-----------------------------
Lee Martin
<PAGE>
Warrant No. 96-9 Warrant to Purchase
2,000 Common Shares
STOCK PURCHASE WARRANT
(For the Purchase of Shares of a Par Value of $.01 Per Share)
UNITED STATES ANTIMONY CORPORATION
(Incorporated under the laws of the State of Montana)
VOID AFTER 9:00 A.M. ON 02 January 1999
This is to certify that, for the value received, RON FISHER is
entitled, subject to the terms and conditions hereinafter set forth,
at or before 9:00 A.M., Mountain Daylight Time, on 02 January 1999 ,
but not thereafter, to purchase the number of Unregistered Common
Shares as set forth above, with a par value of $.01 per share,
hereinafter called Unregistered Common Shares, of United States
Antimony Corporation, hereinafter called the Company, at an exercise
price of $.50 per share, and to receive a certificate or certificates
for the Unregistered Common Shares so purchased, upon presentation and
surrender to the Company, with the form of subscription duly executed,
and accompanied by the payment of the purchase price of each share
purchased either in cash or by certified or bank cashier's check
payable to the order of the Company.
The Company covenants and agrees that all shares which may be
delivered upon the exercise of this Warrant will, upon delivery, be
free from all taxes, liens and charges, will be fully paid and non-
assessable, and the Company further covenants and agrees that it will
from time-to-time take all such action as may be requisite to assure
that the par value per share of the Common Shares is at all time to
equal to or less than the current Warrant purchase price per share of
the Unregistered Common Shares issuable pursuant to this Warrant.
The purchase rights represented by this Warrant are exercisable at the
option of the registered owner hereof in whole at any time, or in part
from time-to-time, within the period above stated, provided, however,
that such purchase rights shall not be exercisable with respect to a
fraction of a share of Common Shares.
In case of the purchase of less than all shares purchasable under this
warrant, the Company shall cancel this Warrant upon the surrender
hereof and shall execute and deliver a new Warrant of like tenor and
date for the balance of the shares purchasable hereunder.
The Company agrees at all times to reserve and hold available a
sufficient number of Unregistered Common Shares to cover the number of
shares issuable upon the exercise of this and all other similar
Warrants then outstanding.
This Warrant shall not entitle the holder hereof to any voting rights
or other rights as a shareholder of the Corporation, or do any other
rights whatsoever, except the rights herein expressed and such as are
set forth, and no dividends shall be payable or accrue in respect of
the Warrant or the interest represented hereby or the shares
purchasable hereunder until or unless, and except to the extent that,
this Warrant shall be exercised.
<PAGE>
This Warrant and the rights represented hereby may not be transferred
by the registered owner hereof.
In any of the following events, occurring hereafter and until the
expiration of the Warrant by the passage of time or the full exercise
hereof, appropriate adjustments shall be made in the number of shares
deliverable upon the exercise of this Warrant or the price per share
to be paid so as to maintain the proportion of interest of each
Warrant holder: (a) If the Company at any time prior to the
expiration of the Warrants and prior to the exercise thereof declares
a dividend on the Common Stock of the Company, payable in Common Stock
or securities convertible into Common Stock, or divides, consolidates
or reclassifies the Common Stock, whether upon a recapitalization or
otherwise, or merges or consolidates with or into another Corporation
(unless the Company is the continuing Corporation and there is no
reclassification or change of outstanding shares of Common Stock) the
number of Common Shares issuable upon exercise of this Warrant shall
thereafter (until further adjusted), consist of the kind and amount of
securities or property which would have been issuable had the Warrants
been exercised immediately prior to the record date for the event in
question. The Company shall not affect any such merger or
consolidation unless, at or prior to the consumption thereof, the
surviving Corporation shall assume by written agreement the obligation
to deliver these securities which, and accordance with the foregoing,
the Warrant holder is entitled to purchase. The above provisions
relative to dilution shall not apply to any issuance or sale by the
Company of any of its securities, or any securities convertible into
Common Stock, which issuance and sale was for valid consideration as
determined by the Board of Directors of the Company and the Company
shall be free to offer and sell during the term of this Warrant such
of its securities as it may deem advisable and appropriate.
Upon receipt by the Company of evidence satisfactory to it (in the
exercise of its reasonable discretion) of the ownership of and the
loss, theft, destruction or mutilation of this Warrant and (in the
case of loss, theft, or destruction) of indemnity satisfactory to it,
and (in the case of mutilation) upon surrendering this Warrant for
cancellation, the Company will execute and deliver, in lieu thereof, a
new Warrant for like tenor.
The Warrants represented by this certificate and the shares underlying
issuable upon exercise hereof, have not been registered under the
Securities Act of 1933. The Warrants have been purchased for
investment and not with a view to distribution or resale, they may not
be made subject to security interest, pledged, hypothecated or
otherwise transferred. Shares issuable upon exercise of this warrant
will have been purchased by the holder thereof for investment and not
with a view to distribution or resale, or otherwise transferred
without an effective registration statement pursuant to the Securities
Act of 1933, or an opinion of counsel acceptable to counsel for the
Company that registration is not required under such Act. Any shares
issued upon the exercise of this Warrant shall bear a restrictive
legend in substantially the following form:
<PAGE>
"No sale offer to sell or transfer of the shares represented
by this certificate shall be made unless a registration
statement under the Securities Act of 1933, as amends,
with respect to such shares is then in effect or an
exemption from the registration requirements of such Act
is then in fact applicable to such shares."
All notices and other communications from the Company to the holder of
this Warrant shall be mailed by first class mail, postage prepaid, to
the address furnished to the Company in writing by the holder of this
Warrant.
Dated: 02 January 1996
UNITED STATES ANTIMONY CORPORATION
By
-----------------------------------
John C. Lawrence, President
ATTEST:
-----------------------------
Lee Martin
<PAGE>
Warrant No. 96-10 Warrant to Purchase
2,000 Common Shares
STOCK PURCHASE WARRANT
(For the Purchase of Shares of a Par Value of $.01 Per Share)
UNITED STATES ANTIMONY CORPORATION
(Incorporated under the laws of the State of Montana)
VOID AFTER 9:00 A.M. ON 02 January 1999
This is to certify that, for the value received, DENNIS SIGO
is entitled, subject to the terms and conditions hereinafter set
forth, at or before 9:00 A.M., Mountain Daylight Time, on 02 January
1999 , but not thereafter, to purchase the number of Unregistered
Common Shares as set forth above, with a par value of $.01 per share,
hereinafter called Unregistered Common Shares, of United States
Antimony Corporation, hereinafter called the Company, at an exercise
price of $.50 per share, and to receive a certificate or certificates
for the Unregistered Common Shares so purchased, upon presentation and
surrender to the Company, with the form of subscription duly executed,
and accompanied by the payment of the purchase price of each share
purchased either in cash or by certified or bank cashier's check
payable to the order of the Company.
The Company covenants and agrees that all shares which may be
delivered upon the exercise of this Warrant will, upon delivery, be
free from all taxes, liens and charges, will be fully paid and non-
assessable, and the Company further covenants and agrees that it will
from time-to-time take all such action as may be requisite to assure
that the par value per share of the Common Shares is at all time to
equal to or less than the current Warrant purchase price per share of
the Unregistered Common Shares issuable pursuant to this Warrant.
The purchase rights represented by this Warrant are exercisable at the
option of the registered owner hereof in whole at any time, or in part
from time-to-time, within the period above stated, provided, however,
that such purchase rights shall not be exercisable with respect to a
fraction of a share of Common Shares.
In case of the purchase of less than all shares purchasable under this
warrant, the Company shall cancel this Warrant upon the surrender
hereof and shall execute and deliver a new Warrant of like tenor and
date for the balance of the shares purchasable hereunder.
The Company agrees at all times to reserve and hold available a
sufficient number of Unregistered Common Shares to cover the number of
shares issuable upon the exercise of this and all other similar
Warrants then outstanding.
This Warrant shall not entitle the holder hereof to any voting rights
or other rights as a shareholder of the Corporation, or do any other
rights whatsoever, except the rights herein expressed and such as are
set forth, and no dividends shall be payable or accrue in respect of
the Warrant or the interest represented hereby or the shares
purchasable hereunder until or unless, and except to the extent that,
this Warrant shall be exercised.
<PAGE>
This Warrant and the rights represented hereby may not be transferred
by the registered owner hereof.
In any of the following events, occurring hereafter and until the
expiration of the Warrant by the passage of time or the full exercise
hereof, appropriate adjustments shall be made in the number of shares
deliverable upon the exercise of this Warrant or the price per share
to be paid so as to maintain the proportion of interest of each
Warrant holder: (a) If the Company at any time prior to the
expiration of the Warrants and prior to the exercise thereof declares
a dividend on the Common Stock of the Company, payable in Common Stock
or securities convertible into Common Stock, or divides, consolidates
or reclassifies the Common Stock, whether upon a recapitalization or
otherwise, or merges or consolidates with or into another Corporation
(unless the Company is the continuing Corporation and there is no
reclassification or change of outstanding shares of Common Stock) the
number of Common Shares issuable upon exercise of this Warrant shall
thereafter (until further adjusted), consist of the kind and amount of
securities or property which would have been issuable had the Warrants
been exercised immediately prior to the record date for the event in
question. The Company shall not affect any such merger or
consolidation unless, at or prior to the consumption thereof, the
surviving Corporation shall assume by written agreement the obligation
to deliver these securities which, and accordance with the foregoing,
the Warrant holder is entitled to purchase. The above provisions
relative to dilution shall not apply to any issuance or sale by the
Company of any of its securities, or any securities convertible into
Common Stock, which issuance and sale was for valid consideration as
determined by the Board of Directors of the Company and the Company
shall be free to offer and sell during the term of this Warrant such
of its securities as it may deem advisable and appropriate.
Upon receipt by the Company of evidence satisfactory to it (in the
exercise of its reasonable discretion) of the ownership of and the
loss, theft, destruction or mutilation of this Warrant and (in the
case of loss, theft, or destruction) of indemnity satisfactory to it,
and (in the case of mutilation) upon surrendering this Warrant for
cancellation, the Company will execute and deliver, in lieu thereof, a
new Warrant for like tenor.
The Warrants represented by this certificate and the shares underlying
issuable upon exercise hereof, have not been registered under the
Securities Act of 1933. The Warrants have been purchased for
investment and not with a view to distribution or resale, they may not
be made subject to security interest, pledged, hypothecated or
otherwise transferred. Shares issuable upon exercise of this warrant
will have been purchased by the holder thereof for investment and not
with a view to distribution or resale, or otherwise transferred
without an effective registration statement pursuant to the Securities
Act of 1933, or an opinion of counsel acceptable to counsel for the
Company that registration is not required under such Act. Any shares
issued upon the exercise of this Warrant shall bear a restrictive
legend in substantially the following form:
<PAGE>
"No sale offer to sell or transfer of the shares represented
by this certificate shall be made unless a registration
statement under the Securities Act of 1933, as amends,
with respect to such shares is then in effect or an
exemption from the registration requirements of such Act
is then in fact applicable to such shares."
All notices and other communications from the Company to the holder of
this Warrant shall be mailed by first class mail, postage prepaid, to
the address furnished to the Company in writing by the holder of this
Warrant.
Dated: 02 January 1996
UNITED STATES ANTIMONY CORPORATION
By
-----------------------------------
John C. Lawrence, President
ATTEST:
-----------------------------
Lee Martin
<PAGE>
Warrant No. 96-11 Warrant to Purchase
2,000 Common Shares
STOCK PURCHASE WARRANT
(For the Purchase of Shares of a Par Value of $.01 Per Share)
UNITED STATES ANTIMONY CORPORATION
(Incorporated under the laws of the State of Montana)
VOID AFTER 9:00 A.M. ON 02 January 1999
This is to certify that, for the value received, STEVE CLAY
is entitled, subject to the terms and conditions hereinafter set
forth, at or before 9:00 A.M., Mountain Daylight Time, on 02 January
1999 , but not thereafter, to purchase the number of Unregistered
Common Shares as set forth above, with a par value of $.01 per share,
hereinafter called Unregistered Common Shares, of United States
Antimony Corporation, hereinafter called the Company, at an exercise
price of $.50 per share, and to receive a certificate or certificates
for the Unregistered Common Shares so purchased, upon presentation and
surrender to the Company, with the form of subscription duly executed,
and accompanied by the payment of the purchase price of each share
purchased either in cash or by certified or bank cashier's check
payable to the order of the Company.
The Company covenants and agrees that all shares which may be
delivered upon the exercise of this Warrant will, upon delivery, be
free from all taxes, liens and charges, will be fully paid and non-
assessable, and the Company further covenants and agrees that it will
from time-to-time take all such action as may be requisite to assure
that the par value per share of the Common Shares is at all time to
equal to or less than the current Warrant purchase price per share of
the Unregistered Common Shares issuable pursuant to this Warrant.
The purchase rights represented by this Warrant are exercisable at the
option of the registered owner hereof in whole at any time, or in part
from time-to-time, within the period above stated, provided, however,
that such purchase rights shall not be exercisable with respect to a
fraction of a share of Common Shares.
In case of the purchase of less than all shares purchasable under this
warrant, the Company shall cancel this Warrant upon the surrender
hereof and shall execute and deliver a new Warrant of like tenor and
date for the balance of the shares purchasable hereunder.
The Company agrees at all times to reserve and hold available a
sufficient number of Unregistered Common Shares to cover the number of
shares issuable upon the exercise of this and all other similar
Warrants then outstanding.
This Warrant shall not entitle the holder hereof to any voting rights
or other rights as a shareholder of the Corporation, or do any other
rights whatsoever, except the rights herein expressed and such as are
set forth, and no dividends shall be payable or accrue in respect of
the Warrant or the interest represented hereby or the shares
purchasable hereunder until or unless, and except to the extent that,
this Warrant shall be exercised.
This Warrant and the rights represented hereby may not be transferred
by the registered owner hereof.
In any of the following events, occurring hereafter and until the
expiration of the Warrant by the passage of time or the full exercise
hereof, appropriate adjustments shall be made in the number of shares
deliverable upon the exercise of this Warrant or the price per share
to be paid so as to maintain the proportion of interest of each
Warrant holder: (a) If the Company at any time prior to the
expiration of the Warrants and prior to the exercise thereof declares
a dividend on the Common Stock of the Company, payable in Common Stock
or securities convertible into Common Stock, or divides, consolidates
or reclassifies the Common Stock, whether upon a recapitalization or
otherwise, or merges or consolidates with or into another Corporation
(unless the Company is the continuing Corporation and there is no
reclassification or change of outstanding shares of Common Stock) the
number of Common Shares issuable upon exercise of this Warrant shall
thereafter (until further adjusted), consist of the kind and amount of
securities or property which would have been issuable had the Warrants
been exercised immediately prior to the record date for the event in
question. The Company shall not affect any such merger or
consolidation unless, at or prior to the consumption thereof, the
surviving Corporation shall assume by written agreement the obligation
to deliver these securities which, and accordance with the foregoing,
the Warrant holder is entitled to purchase. The above provisions
relative to dilution shall not apply to any issuance or sale by the
Company of any of its securities, or any securities convertible into
Common Stock, which issuance and sale was for valid consideration as
determined by the Board of Directors of the Company and the Company
shall be free to offer and sell during the term of this Warrant such
of its securities as it may deem advisable and appropriate.
Upon receipt by the Company of evidence satisfactory to it (in the
exercise of its reasonable discretion) of the ownership of and the
loss, theft, destruction or mutilation of this Warrant and (in the
case of loss, theft, or destruction) of indemnity satisfactory to it,
and (in the case of mutilation) upon surrendering this Warrant for
cancellation, the Company will execute and deliver, in lieu thereof, a
new Warrant for like tenor.
The Warrants represented by this certificate and the shares underlying
issuable upon exercise hereof, have not been registered under the
Securities Act of 1933. The Warrants have been purchased for
investment and not with a view to distribution or resale, they may not
be made subject to security interest, pledged, hypothecated or
otherwise transferred. Shares issuable upon exercise of this warrant
will have been purchased by the holder thereof for investment and not
with a view to distribution or resale, or otherwise transferred
without an effective registration statement pursuant to the Securities
Act of 1933, or an opinion of counsel acceptable to counsel for the
Company that registration is not required under such Act. Any shares
issued upon the exercise of this Warrant shall bear a restrictive
legend in substantially the following form:
<PAGE>
"No sale offer to sell or transfer of the shares represented
by this certificate shall be made unless a registration
statement under the Securities Act of 1933, as amends,
with respect to such shares is then in effect or an
exemption from the registration requirements of such Act
is then in fact applicable to such shares."
All notices and other communications from the Company to the holder of
this Warrant shall be mailed by first class mail, postage prepaid, to
the address furnished to the Company in writing by the holder of this
Warrant.
Dated: 02 January 1996
UNITED STATES ANTIMONY CORPORATION
By
-----------------------------------
John C. Lawrence, President
ATTEST:
-----------------------------
Lee Martin
<PAGE>
Warrant No. 96-12 Warrant to Purchase
200,000 Common Shares
STOCK PURCHASE WARRANT
(For the Purchase of Shares of a Par Value of $.01 Per Share)
UNITED STATES ANTIMONY CORPORATION
(Incorporated under the laws of the State of Montana)
VOID AFTER 9:00 A.M. ON 29 April 1999
This is to certify that, for the value received, Delaware Royalty Co.,
of 1415 Louisiana Suite 3100, Houston, Texas/in care of AL W. DUGAN is
entitled, subject to the terms and conditions hereinafter set forth,
at or before 9:00 A.M., Mountain Daylight Time, on 29 April 1999 , but
not thereafter, to purchase the number of Unregistered Common Shares
as set forth above, with a par value of $.01 per share, hereinafter
called Unregistered Common Shares, of United States Antimony
Corporation, hereinafter called the Company, at an exercise price of
$.70 per share, and to receive a certificate or certificates for the
Unregistered Common Shares so purchased, upon presentation and
surrender to the Company, with the form of subscription duly executed,
and accompanied by the payment of the purchase price of each share
purchased either in cash or by certified or bank cashier's check
payable to the order of the Company.
The Company covenants and agrees that all shares which may be
delivered upon the exercise of this Warrant will, upon delivery, be
free from all taxes, liens and charges, will be fully paid and non-
assessable, and the Company further covenants and agrees that it will
from time-to-time take all such action as may be requisite to assure
that the par value per share of the Common Shares is at all time to
equal to or less than the current Warrant purchase price per share of
the Unregistered Common Shares issuable pursuant to this Warrant.
The purchase rights represented by this Warrant are exercisable at the
option of the registered owner hereof in whole at any time, or in part
from time-to-time, within the period above stated, provided, however,
that such purchase rights shall not be exercisable with respect to a
fraction of a share of Common Shares.
In case of the purchase of less than all shares purchasable under this
warrant, the Company shall cancel this Warrant upon the surrender
hereof and shall execute and deliver a new Warrant of like tenor and
date for the balance of the shares purchasable hereunder.
The Company agrees at all times to reserve and hold available a
sufficient number of Unregistered Common Shares to cover the number of
shares issuable upon the exercise of this and all other similar
Warrants then outstanding.
This Warrant shall not entitle the holder hereof to any voting rights
or other rights as a shareholder of the Corporation, or do any other
rights whatsoever, except the rights herein expressed and such as are
set forth, and no dividends shall be payable or accrue in respect of
the Warrant or the interest represented hereby or the shares
purchasable hereunder until or unless, and except to the extent that,
this Warrant shall be exercised.
<PAGE>
This Warrant and the rights represented hereby may not be transferred
by the registered owner hereof.
In any of the following events, occurring hereafter and until the
expiration of the Warrant by the passage of time or the full exercise
hereof, appropriate adjustments shall be made in the number of shares
deliverable upon the exercise of this Warrant or the price per share
to be paid so as to maintain the proportion of interest of each
Warrant holder: (a) If the Company at any time prior to the
expiration of the Warrants and prior to the exercise thereof declares
a dividend on the Common Stock of the Company, payable in Common Stock
or securities convertible into Common Stock, or divides, consolidates
or reclassifies the Common Stock, whether upon a recapitalization or
otherwise, or merges or consolidates with or into another Corporation
(unless the Company is the continuing Corporation and there is no
reclassification or change of outstanding shares of Common Stock) the
number of Common Shares issuable upon exercise of this Warrant shall
thereafter (until further adjusted), consist of the kind and amount of
securities or property which would have been issuable had the Warrants
been exercised immediately prior to the record date for the event in
question. The Company shall not affect any such merger or
consolidation unless, at or prior to the consumption thereof, the
surviving Corporation shall assume by written agreement the obligation
to deliver these securities which, and accordance with the foregoing,
the Warrant holder is entitled to purchase. The above provisions
relative to dilution shall not apply to any issuance or sale by the
Company of any of its securities, or any securities convertible into
Common Stock, which issuance and sale was for valid consideration as
determined by the Board of Directors of the Company and the Company
shall be free to offer and sell during the term of this Warrant such
of its securities as it may deem advisable and appropriate.
Upon receipt by the Company of evidence satisfactory to it (in the
exercise of its reasonable discretion) of the ownership of and the
loss, theft, destruction or mutilation of this Warrant and (in the
case of loss, theft, or destruction) of indemnity satisfactory to it,
and (in the case of mutilation) upon surrendering this Warrant for
cancellation, the Company will execute and deliver, in lieu thereof, a
new Warrant for like tenor.
The Warrants represented by this certificate and the shares underlying
issuable upon exercise hereof, have not been registered under the
Securities Act of 1933. The Warrants have been purchased for
investment and not with a view to distribution or resale, they may not
be made subject to security interest, pledged, hypothecated or
otherwise transferred. Shares issuable upon exercise of this warrant
will have been purchased by the holder thereof for investment and not
with a view to distribution or resale, or otherwise transferred
without an effective registration statement pursuant to the Securities
Act of 1933, or an opinion of counsel acceptable to counsel for the
Company that registration is not required under such Act. Any shares
issued upon the exercise of this Warrant shall bear a restrictive
legend in substantially the following form:
<PAGE>
"No sale offer to sell or transfer of the shares represented
by this certificate shall be made unless a registration
statement under the Securities Act of 1933, as amends,
with respect to such shares is then in effect or an
exemption from the registration requirements of such Act
is then in fact applicable to such shares."
All notices and other communications from the Company to the holder of
this Warrant shall be mailed by first class mail, postage prepaid, to
the address furnished to the Company in writing by the holder of this
Warrant.
Dated: 29 April 1996
UNITED STATES ANTIMONY CORPORATION
By
-----------------------------------
John C. Lawrence, President
ATTEST:
-----------------------------
Lee Martin
<PAGE>
Warrant No. 97-01 Warrant to Purchase
206,000 Common Shares
STOCK PURCHASE WARRANT
(For the Purchase of Shares of a Par Value of $.01 Per Share)
UNITED STATES ANTIMONY CORPORATION
(Incorporated under the laws of the State of Montana)
VOID AFTER 9:00 A.M. ON 18 March 2000
This is to certify that, for the value received, WALTER L. MAGUIRE SR.
is entitled, subject to the terms and conditions hereinafter set
forth, at or before 9:00 A.M., Mountain Daylight Time, on 18 March
2000 , but not thereafter, to purchase the number of Unregistered
Common Shares as set forth above, with a par value of $.01 per share,
hereinafter called Unregistered Common Shares, of United States
Antimony Corporation, hereinafter called the Company, at an exercise
price of $.80 per share, and to receive a certificate or certificates
for the Unregistered Common Shares so purchased, upon presentation and
surrender to the Company, with the form of subscription duly executed,
and accompanied by the payment of the purchase price of each share
purchased either in cash or by certified or bank cashier's check
payable to the order of the Company.
The Company covenants and agrees that all shares which may be
delivered upon the exercise of this Warrant will, upon delivery, be
free from all taxes, liens and charges, will be fully paid and non-
assessable, and the Company further covenants and agrees that it will
from time-to-time take all such action as may be requisite to assure
that the par value per share of the Common Shares is at all time to
equal to or less than the current Warrant purchase price per share of
the Unregistered Common Shares issuable pursuant to this Warrant.
The purchase rights represented by this Warrant are exercisable at the
option of the registered owner hereof in whole at any time, or in part
from time-to-time, within the period above stated, provided, however,
that such purchase rights shall not be exercisable with respect to a
fraction of a share of Common Shares.
In case of the purchase of less than all shares purchasable under this
warrant, the Company shall cancel this Warrant upon the surrender
hereof and shall execute and deliver a new Warrant of like tenor and
date for the balance of the shares purchasable hereunder.
The Company agrees at all times to reserve and hold available a
sufficient number of Unregistered Common Shares to cover the number of
shares issuable upon the exercise of this and all other similar
Warrants then outstanding.
This Warrant shall not entitle the holder hereof to any voting rights
or other rights as a shareholder of the Corporation, or do any other
rights whatsoever, except the rights herein expressed and such as are
set forth, and no dividends shall be payable or accrue in respect of
the Warrant or the interest represented hereby or the shares
purchasable hereunder until or unless, and except to the extent that,
this Warrant shall be exercised.
<PAGE>
This Warrant and the rights represented hereby may not be transferred
by the registered owner hereof.
In any of the following events, occurring hereafter and until the
expiration of the Warrant by the passage of time or the full exercise
hereof, appropriate adjustments shall be made in the number of shares
deliverable upon the exercise of this Warrant or the price per share
to be paid so as to maintain the proportion of interest of each
Warrant holder. If the Company at any time prior to the expiration of
the Warrants and prior to the exercise thereof declares a dividend on
the Common Stock of the Company, payable in Common Stock or securities
convertible into Common Stock, or divides, consolidates or
reclassifies the Common Stock, whether upon a recapitalization or
otherwise, or merges or consolidates with or into another Corporation
(unless the Company is the continuing Corporation and there is no
reclassification or change of outstanding shares of Common Stock) the
number of Common Shares issuable upon exercise of this Warrant shall
thereafter (until further adjusted), consist of the kind and amount of
securities or property which would have been issuable had the Warrants
been exercised immediately prior to the record date for the event in
question. The Company shall not affect any such merger or
consolidation unless, at or prior to the consumption thereof, the
surviving Corporation shall assume by written agreement the obligation
to deliver these securities which, and accordance with the foregoing,
the Warrant holder is entitled to purchase. The above provisions
relative to dilution shall not apply to any issuance or sale by the
Company of any of its securities, or any securities convertible into
Common Stock, which issuance and sale was for valid consideration as
determined by the Board of Directors of the Company and the Company
shall be free to offer and sell during the term of this Warrant such
of its securities as it may deem advisable and appropriate.
Upon receipt by the Company of evidence satisfactory to it (in the
exercise of its reasonable discretion) of the ownership of and the
loss, theft, destruction or mutilation of this Warrant and (in the
case of loss, theft, or destruction) of indemnity satisfactory to it,
and (in the case of mutilation) upon surrendering this Warrant for
cancellation, the Company will execute and deliver, in lieu thereof, a
new Warrant for like tenor.
The Warrants represented by this certificate and the shares underlying
issuable upon exercise hereof, have not been registered under the
Securities Act of 1933. The Warrants have been purchased for
investment and not with a view to distribution or resale, they may not
be made subject to security interest, pledged, hypothecated. The
warrant may not be transferred except by way of gift to family members
and family entities, such as trusts or foundations. Shares issuable
upon exercise of this warrant will have been purchased by the holder
thereof for investment and not with a view to distribution or resale,
or otherwise transferred without an effective registration statement
pursuant to the Securities Act of 1933, or an opinion of counsel
acceptable to counsel for the Company that registration is not
required under such Act. Any shares issued upon the exercise of this
Warrant shall bear a restrictive legend in substantially the following
form:
<PAGE>
"No sale offer to sell or transfer of the shares represented
by this certificate shall be made unless a registration
statement under the Securities Act of 1933, as amends,
with respect to such shares is then in effect or an
exemption from the registration requirements of such Act
is then in fact applicable to such shares."
All notices and other communications from the Company to the holder of
this Warrant shall be mailed by first class mail, postage prepaid, to
the address furnished to the Company in writing by the holder of this
Warrant.
Dated: 18 March 1997
UNITED STATES ANTIMONY CORPORATION
By
-----------------------------------
John C. Lawrence, President
ATTEST:
-----------------------------
Lee Martin
<PAGE>
