Founder and CEO Interview: United States Antimony Corporation (UAMY) - John C. Lawrence
April 18, 2011 - The Wall Street Transcript has just published Metals and Mining Report offering a timely review of the sector. This Special Report contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. Please find an excerpt below.
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John C. Lawrence is the Founder and CEO of United States Antimony Corporation. He holds a B.A. in geology and mineralogy from Hamilton College with credits from the University of Wyoming. Mr. Lawrence completed all coursework for a Ph.D., but he never defended his thesis that was published and sponsored by the Utah Geological Survey.
TWST: Please begin with a background summary of United States Antimony Corporation.
Mr. Lawrence: We are actually in the metal business, primarily antimony. Our byproducts at this point are silver and gold. As we get our Mexican mining property up to speed, silver and gold will become a primary product also. The other side of the business is an industrial mineral called zeolite. That refers to a class of many minerals. The one that we are mining is clinoptilolite. So we see at this juncture a major shortage of antimony worldwide. China controls 92% of all of the production and the raw material. Our smelter here in Montana is the last smelter that produces antimony in the United States. So we're seeing a terrific growth in production, price and demand. The price has gone to new record highs of more than $8 per pound.
The domestic user is very scared about the source right now being China, so we see this as a major opportunity.To be a viable supplier of antimony, you must be vertically integrated with your own raw material supply, mill, smelter and marketing capability. To do this we have acquired two mines in Mexico, built an additional smelter, and we are now completing a flotation mill. This will create a very significant increase in the supply of our raw material and represents the future of our company. Turning to the industrial mineral, the subsidiary is called Bear River Zeolite, "BRZ," and it's a wholly owned subsidiary of United States Antimony (UAMY). The mine and processing plant are located about six miles east of Preston, Idaho, which is in the southeast corner of Idaho.
TWST: You mentioned China controls 92% of the world's supply of antimony, a position previously dominated by Mexico. How important is Mexico to the world antimony supply?
Mr. Lawrence: We chose Mexico for quite a few reasons. One is that we have had previous mining experience of antimony in Mexico back in the 1980s. One of the individuals that got us started in antimony was in fact running the national lead-antimony operation, a guy by the name of Jack Archibald, dead at this point. But Archibald had inherited a group of properties in Mexico. In fact, in the 1980s and various times prior to that, the biggest producer in the world was Bolivia, and Mexico was number two, China being number three. More recently, of course, China has dominated the market. But at one point, Mexico - this was during World War II - was producing approximately 30 million pounds of antimony metal content per year. Since about the end of the 1980s, the Mexican production went primarily quiescent. It was a result of no adequate smelting facilities and no up-to-date milling facilities. We think that the Mexican reserves could rival Bolivia and possibly China. We look at the opportunity as huge.
TWST: Does your gold and silver exploration get funded by the revenue streams of antimony?
Mr. Lawrence: Twenty years ago people were mining antimony. On the furnace recovery, for instance, if you got an 85% recovery, that was deemed good. If you got an 80% recovery, that was okay, but prices of antimony oxide were in the $0.50, $0.60, $0.70 range. So the additional cost of making a better recovery was not economically justified. Similarly in the past, with lower precious metal prices, no one recovered silver and gold. So coming back to your question, we produce silver and gold out of the antimony that we process. And per se, our current silver/gold production, we've spent no money in terms of current production. However, one of our two properties in Mexico, Los Juarez, has as much value in silver and gold as it does antimony. Just to cover my skirts, we are claiming no mine reserves by definition of the SEC.
TWST: Besides your potential for growth, what are some of your advantages in this sector? What are your advantages over a newcomer to this industry?
Mr. Lawrence: Our biggest advantage is that we are a vertically integrated producer of antimony with our own raw material supply. We mine, mill, smelt, have product acceptance by most customers in the United States and we market. First, we have mined antimony and other metals for years, both underground and in open pits. Secondly, we're intimately familiar with flotation and gravity milling. In the milling process we take a 1.5% to 12% antimony ore and upgrade it to a 50% to 65% antimony concentrate. Then thirdly, we're intimately familiar with and we are currently operating two smelters to make both antimony oxide, antimony metal and various other antimony products. Fourth, we are approved by most antimony customers in the United States and many in foreign countries. Product approval can take up to a year and $1 million at the expense of each customer. Typically, the newcomer is looking at developing a mine and has no vertical integration expertise. The expertise takes years to develop. Without the experience of vertical integration, it is impossible to asses the economics of a deposit.
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