Edgar Filing: UNITED STATES ANTIMONY CORP

As filed with the Securities and Exchange Commission on February 13, 2002.

Registration No. 333-45508
_____________________________________________________________________________

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________

POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM SB-2
REGISTRATION STATEMENT
Under
The Securities Act of 1933
__________________________________

UNITED STATES ANTIMONY CORPORATION
(Name of small business issuer in its charter)

Montana 3339 81-0305822
(State of jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or Classification Code Number) Identification
organization) Number)

P.O. Box 643
1250 Prospect Creek Road
Thompson Falls, Montana 59873
Telephone: (406) 827-3523
(Address and telephone number of principal executive offices)
__________________________________

John C. Lawrence
President and Chairman
United States Antimony Corporation
P.O. Box 643
1250 Prospect Creek Road
Thompson Falls, Montana 59873
Telephone (406) 827-3523
(Name, address, and telephone
number of agent for service)
__________________________________

COPY TO

Richard A. Riley, Esq.
Hawley Troxell Ennis & Hawley LLP
877 Main Street, Suite 1000
P.O. Box 1617
Boise, Idaho 83701-1617
(208) 344-6000
(208) 342-3829 (fax)
__________________________________

APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: From time to time after the
November 13, 2001 effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: [x]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] _______________

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ___________________________________

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ___________________________________

If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
_____________________________________________________________________________

CALCULATION OF REGISTRATION FEE

Proposed Maximum Proposed Maximum Amount of
Title of Each Class of Amount to be Offering Price Per Aggregate Registration
Securities to be Registered(1) Registered Share(2) Offering Price(2) Fee

Common Stock, par value $.01 per share 1,000,000 $ 0.29125 $ 291,250.00 $ 76.89
(as filed in the initial Form SB-2)

Common Stock, par value $.01 per share 5,348,604 $ 0.39000 $1,680,525.00 $443.66
(as filed in Amendment No. 1)

Common Stock, par value $.01 per share 5,744,641 $ 0.21000 $1,206,394.00 $301.59
(as filed in Amendment No. 2)

Common Stock, par value $.01 per share 6,268,065 $14.00000 $ 877,529.10 $219.38
(as filed in Amendment No. 3)

_____________________________________________________________________________

(1) This Registration Statement relates to the registration of 6,268,065
shares of common stock, $.01 par value, which we are obligated to register on
behalf of Selling Shareholders. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Financial Condition and
Liquidity" and "Selling Shareholders."

(2) This Registration Statement covers (i) 2,317,597 shares of common
stock issuable upon conversion of debentures at $0.29125 per share, and
1,682,403 additional shares issuable upon conversion if the market price is
less than $.29125 per share which we are required to register pursuant to a
financing agreement with purchasers of our convertible debentures; (ii)
1,394,050 shares issuable upon exercise of related warrants at $0.39 per
share; (iii) 150,000 shares of common stock held by a Selling Shareholder;
(iv) 240,343 shares issuable to the holders of debentures as penalties; and
(v) 483,672 shares held by former holders of Series C preferred stock.
Pursuant to Rule 457(c) under the Securities Act of 1933, the aggregate
offering price of the common shares underlying the debentures and the
warrants is computed on the basis of the average of the bid and asked price
for our common stock in the over-the-counter market on November 5, 2001.
_____________________________________________________________________________

The registrant hereby amends this registration statement on the date or dates
as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933 or until the registration statement shall
become effective on the date the Commission, acting pursuant to said Section
8(a), may determine.
_____________________________________________________________________________

PROSPECTUS (Revised) January 30, 2002

UNITED STATES ANTIMONY CORPORATION

6,268,065 Shares

Common Stock

We have registered the following shares for resale by Selling Shareholders.
See "Selling Shareholders":

* 4,000,000 shares of common stock issuable at a price per share equal to
the lower of $.29125 or 75% of the market price upon conversion of our 10%
convertible debentures issued and issuable to 5 of the selling
shareholders;

* 240,343 liquidated damage shares of common stock issuable ratably to the
holders of our 10% convertible debentures.

* 432,692 shares of common stock issuable at $.39 per share upon exercise of
warrants held by 5 of the selling shareholders;

* 961,358 shares of common stock issuable at $.39 per share upon exercise of
agent's warrants held by 3 of the selling shareholders;

* 150,000 shares of common stock held by 1 of the selling shareholders; and

* 483,672 shares of common stock held by 13 of the selling shareholders who
converted their shares of our Series C Preferred Stock.

We will pay the expenses of registering these shares.

We will receive no part of the proceeds from any sale of the shares by the
selling shareholders. See "Selling Shareholders."

The selling shareholders will receive the price per share available in the
Over-The-Counter market. See "Determination of Offering Price."
___________________________

INVESTING IN THESE SHARES INVOLVES SIGNIFICANT RISKS.

SEE "RISK FACTORS" SECTION OF THIS PROSPECTUS BEGINNING ON PAGE 3.
____________________________

Our common stock is registered under Section 12(g) of the Securities Exchange
Act of 1934 and trades are reported on the Over-The-Counter Electronic
Bulletin Board (OTCBB) under the symbol "UAMY." The last reported sale price
per share of our common stock by the OTCBB on January 28, 2002 was $.25 per
share.

THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS
HAVE NOT APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED
IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

The date of this prospectus is January 30, 2002

_____________________________________________________________________________

TABLE OF CONTENTS

Caption Page

PROSPECTUS SUMMARY..........................................................1
RISK FACTORS................................................................3
USE OF PROCEEDS............................................................10
DETERMINATION OF OFFERING PRICE............................................10
DILUTION...................................................................11
SELLING SHAREHOLDERS.......................................................11
PLAN OF DISTRIBUTION.......................................................15
DESCRIPTION OF SECURITIES..................................................16
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS...................19
DESCRIPTION OF BUSINESS....................................................20
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS...............................................31
DESCRIPTION OF PROPERTY....................................................37
DIRECTORS AND EXECUTIVE OFFICERS...........................................38
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.............39
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.............................40
EXECUTIVE COMPENSATION.....................................................43
LEGAL PROCEEDINGS..........................................................43
LEGAL MATTERS..............................................................43
EXPERTS....................................................................43
WHERE YOU CAN FIND MORE INFORMATION........................................44
INDEX TO FINANCIAL STATEMENTS.............................................F-1
_____________________________________________________________________________

PROSPECTUS SUMMARY

The following summary highlights material information contained in this
prospectus. This summary does not contain all the information you should
consider before investing in the securities. Before making an investment
decision, you should read the entire prospectus carefully, including the
"Risk Factors" section, the financial statements and the notes to the
financial statements. Some of the statements made in this prospectus discuss
future events and developments, including our future business strategy and
our ability to generate revenue, income and cash flow. These forward-looking
statements involve risks and uncertainties which could cause results to
differ materially from those contemplated in these forward-looking
statements.

THE COMPANY

Our principal business is the production of antimony products including
antimony metal, antimony oxides and sodium antimonate. In the year ended
December 31, 1999 and December 31, 2000, antimony product sales generated
revenues of approximately $4.7 million and $5 million, respectively.

Our antimony mining properties, mill and metallurgical plant are located in
Montana. Mining of antimony was suspended in 1983 because antimony can be
purchased more economically from foreign sources. We acquired a 50% interest
in United States Antimony, Mexico S.A. de C.V. ("USAMSA"), upon its
incorporation in Mexico in April 1998. USAMSA intends to produce antimony
metal and other products to be delivered to our Montana mill for processing.
This Mexican company has not commenced operations and is expected to remain
in developmental stages in the foreseeable future.

We have entered into a joint venture to mine, process and sell zeolite. This
venture is in the developmental stage but is not expected to contribute
materially to our operating revenue in the near future.

Our mailing address is P.O. Box 643 and our physical address is 1250 Prospect
Creek Road, Thompson Falls, Montana 59873. Our telephone number is (406)
827-3523.

THE OFFERING

Common Stock Offered
For Resale: 6,268,065 shares, issuable to Selling Shareholders
upon conversion of our 10% convertible debentures,
exercise of related warrants; and, common stock held
by 14 selling shareholders

Shares Outstanding
Before the Offering(1) 19,329,564

Shares Outstanding
After the Offering(2) 25,597,629

Recent Price: As of January 28, 2002, the closing price of our
common stock reported on the Electronic Bulletin
Board was $.25.

Use of Proceeds: Working capital and general corporate purposes.(3)

Over-The-Counter
Electronic Bulletin
Board Symbol: UAMY
_________________

(1) As of September 30, 2001.
(2) Assumes all shares registered in this prospectus are sold. In such
event, the registered shares will represent 24.49% of the total shares
outstanding after the offering.

(3) We will receive no proceeds from the issuance of shares of common
stock upon the conversion of the 10% convertible debentures. If exercised,
we will receive proceeds from the sale of shares issuable upon the exercise
of warrants by the Selling Shareholders. We will not receive proceeds from
resale of our common stock by the Selling Shareholders.

RISK FACTORS

You should carefully consider the following risks and all of the other
information set forth in this prospectus. Some of the following risks relate
principally to our business. Other risks relate to our financial condition,
the securities markets and ownership of our stock. The risks and
uncertainties described below are not the only ones facing our company.
Additional risks and uncertainties not presently known to us or that we
currently believe to be immaterial may also adversely affect our business.

If any of the following risks and uncertainties develop into actual events,
our business, financial condition or results of operations could be harmed
and the price of our stock could go down. This means you could lose all or
part of your investment.

There are risks associated with forward-looking statements made by us and
actual results may differ.

Some of the information in this Form SB-2 contains forward-looking statements
that involve substantial risks and uncertainties. You can identify these
statements by forward-looking words as "may," "will," "expect," "anticipate,"
"believe," "estimate" and "continue," or similar words. You should read
statements that contain these words carefully because they:

* discuss our future expectations;

* contain projections of our future results of operations or of our
financial condition; and

* state other "forward-looking" information.

We believe it is important to communicate our expectations. However, there
may be events in the future that we are not able to accurately predict or
over which we have no control. The risk factors listed in this section, as
well as any cautionary language in this prospectus, provide examples of
risks, uncertainties and events that may cause our actual results to differ
materially from the expectations we describe in our forward-looking
statements. You should be aware that the occurrence of the events described
in these risk factors could have an adverse effect on our business, results
of operations and financial condition.

RISKS RELATED TO THIS OFFERING

OUR SHARE PRICE MAY DECLINE BECAUSE OF THE ABILITY OF THE SELLING
SHAREHOLDERS TO SELL SHARES OF OUR COMMON STOCK, RESULTING IN A LOSS OF VALUE
TO OUR OTHER SHAREHOLDERS.

This prospectus covers 6,268,065 shares for sale by the Selling Shareholders.
Sales of substantial amounts of our common stock by the Selling Shareholders,
or the possibility of sales of up to one-third of the presently outstanding
shares, could adversely affect the prevailing market price of our common
stock and impede our ability to raise capital through the issuance of equity
securities. Subject to applicable federal and state securities laws and
contractual limitations, after converting their debentures and/or exercising
their warrants to purchase shares of our common stock, the Selling
Shareholders may sell any and all of the Shares. Trading volume in our stock
on the OTC Bulletin Board has historically been light; and sale of blocks of
common stock could depress the market price of our stock.

BY SHORT-SELLING OUR STOCK, THE SELLING SHAREHOLDERS COULD DEPRESS THE MARKET
PRICE OF OUR SHARES, ENABLING THE SELLING SHAREHOLDERS TO ACQUIRE MORE SHARES
UPON EXERCISE OF DEBENTURE CONVERSION RIGHTS AND THEREBY INCREASING THE
DILUTION OF THE OTHER SHAREHOLDERS' EQUITY IN THE COMPANY AND RESULTING IN A
LOSS OF VALUE TO OUR OTHER SHAREHOLDERS.

A short-sale is the sale of a security that the seller does not own or that
the seller owns but does not deliver. In order to deliver the security to
the purchaser, the short-seller will borrow the security, typically from a
broker-dealer or an institutional investor. The short-seller later closes
out the position by returning the security to the lender, typically by
purchasing equivalent securities on the open market. In general, short-
selling is utilized to profit

from an expected downward price movement, or to hedge the risk of a long
position in the same security or in a related security.

Although short-selling serves useful market purposes, it also may be used as
a tool for manipulation. One example is the "bear raid" where an equity
security is sold short in an effort to drive down the price of the security
by creating an imbalance of sell-side interest. Short-selling at
successively lower prices may drive the market down and may accelerate a
declining market by exhausting all remaining bids at one price level, causing
successively lower prices to be established by long sellers. Further, short-
selling can increase stock price volatility.

The Securities and Exchange Commission has adopted rules which regulate
short-selling of securities listed on national securities exchanges. The
National Association of Securities Dealers similarly regulates Nasdaq
National Market Systems (NMS) securities. These rules do not apply to short
sales of securities, like our common stock, which are traded in the over-the-
counter market and quoted on the Electronic Bulletin Board.

Our debenture conversion price formula has no floor. Twenty percent (20%) of
our presently outstanding shares and two-thirds of the shares registered by
this prospectus are available to the Selling Shareholders at 75% of the
market price. The lower the market price for our common stock, the greater
the number of shares the Selling Shareholders can acquire upon conversion of
the debentures into common stock. The Selling Shareholders could use a
short-selling strategy to drive down the market price of our common stock and
then exercise conversion rights to acquire more shares and dilute the other
shareholders' interests in us.

OUR COMMON STOCK IS A "PENNY STOCK," AND COMPLIANCE WITH REQUIREMENTS FOR
DEALING IN PENNY STOCKS MAY MAKE IT DIFFICULT FOR HOLDERS OF OUR COMMON STOCK
TO RESELL THEIR SHARES.

The limited public market for our common stock, is in what is known as the
over-the-counter market and, trading of our stock is quoted under the symbol
"UAMY" on the Electronic Bulletin Board operated for the NASD. At least for
the foreseeable future, our common stock will be deemed to be a "penny stock"
as that term is defined in Rule 3a51-1 under the Securities Exchange Act of
1934. Rule 15g-2 under the Exchange Act requires broker/dealers dealing in
penny stocks to provide potential investors with a document disclosing the
risks of penny stocks and to obtain from these inventors a manually signed
and dated written acknowledgement of receipt of the document before effecting
a transaction in a penny stock for the investor's account. Compliance with
these requirements may make it more difficult for holders of our common stock
to resell their shares to third parties or otherwise, which could have a
material adverse effect on the liquidity and market price of our common stock
(see "Description of Securities - Penny Stock Rules").

Penny stocks are stocks:

* with a price of less than $5.00 per share unless traded on NASDAQ or a
national securities exchange;

Penny stock are also stocks which are issued by companies with:

* net tangible assets of less than:

** $2.0 million (if the issuer has been in continuous operation for at
least three years); or

** $5.0 million (if in continuous operation for less than three years);
or

* average revenue of less than $6.0 million for the last three years.

IT IS MORE DIFFICULT FOR OUR SHAREHOLDERS TO SELL THEIR SHARES BECAUSE WE ARE
NOT, AND MAY NEVER BE, ELIGIBLE FOR NASDAQ OR ANY NATIONAL STOCK EXCHANGE.

We are not presently, and it is likely that for the foreseeable future we
will not be, eligible for inclusion in NASDAQ or for listing on any United
States national stock exchange. To be eligible to be included in NASDAQ, a

company is required to have not less than $4,000,000 in net tangible assets,
a public float with a market value of not less than $5,000,000, and a minimum
bid of price of $4.00 per share. At the present time, we are unable to state
when, if ever, we will meet the Nasdaq application standards. Unless we are
able to increase our net worth and market valuation substantially, either
through the accumulation of surplus out of earned income or successful
capital raising financing activities, we will never be able to meet the
eligibility requirements of NASDAQ. As a result, it will more difficult for
holders of our common stock to resell their shares to third parties or
otherwise, which could have a material adverse effect on the liquidity and
market price of our common stock.

THE CONVERSION OF CONVERTIBLE DEBENTURES AND WARRANTS WHICH COULD BE ISSUED
IN THE FUTURE UNDER THE TERMS OF THE FINANCING AGREEMENT WOULD RESULT IN
SUBSTANTIAL DILUTION OF OUR STOCK.

We entered into a financing agreement with Thomson Kernaghan & Co. Limited,
as agent for some of the Selling Shareholders. As part of the agreement we
issued and could issue additional 10% convertible debentures and warrants.

* SUBSTANTIAL DILUTION. Substantial dilution of our stock will occur upon
the conversion of the debentures and warrants which could be issued in the
future under the terms of the agreement.

* NO FLOOR ON THE CONVERSION PRICE. The conversion price of the
debentures is the lower of the initial conversion price of $.29125 per share
or 75% of the average of the three lowest closing bid prices of our common
stock during the twenty trading days preceding the conversion date; and there
is no maximum number of shares issuable upon conversion of the debentures.

* SELLING SHAREHOLDER MAY DEPRESS THE TRADING PRICE OF OUR STOCK. A
debenture holder could partially convert to common stock, sell that stock in
a manner which depresses the trading price, and then further convert a
portion or all of the debenture at the lowered stock price, thereby
increasing the number of common shares issuable upon conversion of each
dollar of debenture and increasing the dilution of the outstanding shares of
our common stock.

* WE MAY BE REQUIRED TO ISSUE MORE SHARES THAN WE HAVE AUTHORIZED. If the
price of our common stock declines below approximately $0.075, we will have
insufficient shares of authorized common stock available to enable conversion
of all debentures which could be issued under the financing agreement. In
that event, we would be in breach of our obligations to one or more debenture
holders, who would then have the right to require immediate repayment of the
unpaid principal balance of the debenture and accrued interest and could
subject us to exposure to a claim for damages.

* LIMITATION ON FUTURE TRANSACTIONS. The potential and/or actual dilution
and agreement terms which prevent the following future transactions may harm
our stock price and our ability to obtain additional financing, if needed.

The debenture agreement requires that so long as any of the principal of or
interest on the debentures remain unpaid or unconverted, the Company shall
not:

* merge or consolidate with any other entity;

* sell or otherwise dispose of a material portion of its assets (other
than in the ordinary course of business);

* pay any dividend on its shares (including any dividend payable in common
stock or other property);

* subdivide, split or otherwise increase the number of shares of common
stock; or

* issue any common stock or other equity securities, or any other stock,
option, warrant, right or other instrument that is convertible into or
exercisable or exchangeable for common stock or other equity securities,
except for (a) securities of a subsidiary that are issued to the
Company; and (b) securities sold and options granted to directors,
officers and employees of the Company pursuant to bona fide employee
benefit plans.

To date, we have issued Thomson Kernaghan & Co. Limited $675,000 principal
amount of debentures. The financing agreement requires Thomson Kernaghan &
Co. Limited to purchase up to $825,000 principal amount of additional
debentures upon our request prior to the June 30, 2002 Maturity Date if
specified conditions precedent are satisfied, including the condition that
the closing bid price of the Company's stock must exceed $0.50 per share. We
have no plans to issue additional debentures to Thomson Kernaghan & Co.
Limited.

RIGHTS TO ACQUIRE SHARES OF COMMON STOCK WILL RESULT IN DILUTION AND POSSIBLE
LOSS OF VALUE TO OTHER HOLDERS OF COMMON STOCK.

Outstanding warrants could adversely affect the terms on which we can obtain
additional financing, and the holders of these warrants can be expected to
exercise these securities at a time when, in all likelihood, we would be able
to obtain additional capital by offering shares of common stock on terms more
favorable to us than those provided by the exercise of these warrants.
Holders of the warrants will have the opportunity to profit from an increase
in the market price of our common stock, with resulting dilution in the
interests of the holders of our common stock. As of September 30, 2001,
there were issued and outstanding the following warrants:

-- warrants held by our directors, officers, employees and affiliates to
purchase an aggregate of 454,963 shares of common stock with an
exercise price ranging from $.25 to $.41 per share.

-- warrants held by unaffiliated third parties to purchase an aggregate
of 2,626,751 shares of common stock with an exercise price ranging
from $.25 to $.55 per share.

During the fourth quarter of 2001, we issued additional warrants to
unaffiliated third parties entitling them to purchase an aggregate of 825,000
shares of common stock at $0.29 or $0.30 per share.

IN THE EVENT OF A LIQUIDATION OF OUR BUSINESS, ANY RETURN OF YOUR INVESTMENT
IN OUR SHARES WILL BE REDUCED BECAUSE IT IS JUNIOR AND SUBORDINATE TO OUR
PRESENT AND FUTURE DEBT FINANCING.

Our corporate charter and bylaws do not contain any limitation on the amount
of indebtedness, funded or otherwise, we might incur. Accordingly, we could
become more highly leveraged, resulting in an increase in debt service that
will harm our ability to pay dividends to our stockholders and result in an
increased risk of default on our obligations. We expect to use indebtedness
and leveraging to finance operations and future development of our business
which increases the risk of any distribution to our stockholders.

UNEXPECTED FLUCTUATIONS IN OUR QUARTERLY OPERATING RESULTS MAY CAUSE OUR
STOCK PRICE TO DECLINE AND RESULTING A LOSS IN THE VALUE OF YOUR INVESTMENT.

A large proportion of our costs, including our selling, general and
administrative expenses, environmental reclamation costs, research and
development costs, and production costs, do not vary directly in relation to
sales. Thus, declines in revenue, even if small, could disproportionately
affect our quarterly operating results, could cause the results to differ
materially from expectations and could cause our stock price to decline.

BECAUSE WE DO NOT ANTICIPATE PAYING DIVIDENDS ON OUR COMMON STOCK IN THE
FORESEEABLE FUTURE THE ONLY WAY YOU CAN REALIZE A RETURN ON AN INVESTMENT IN
OUR STOCK IS FOR THE STOCK PRICE TO INCREASE.

Rather, we plan to retain earnings, if any, for the operation and expansion
of business. Investment in our common stock is unsuitable for an investor
seeking income.

OUR LIABILITIES SUBSTANTIALLY EXCEED OUR ASSETS. IF WE WERE LIQUIDATED
BEFORE OUR STOCKHOLDERS' DEFICIT IS ELIMINATED, OUR COMMON SHAREHOLDERS WOULD
LOSE PART OR ALL OF THEIR INVESTMENT.

In the event of our dissolution, the proceeds (if any) realized from the
liquidation of our assets will be distributed to our shareholders only after
satisfaction of claims of our creditors and preferred shareholders. The
ability of a purchaser of shares to recover all or any portion of the
purchase price for the shares in that event will depend on the amount of
funds realized and the claims to be satisfied those funds.

WE MAY BE SUBJECT TO CIVIL LIABILITIES, INCLUDING FINES AND OTHER PENALTIES
IMPOSED BY FEDERAL AND STATE SECURITY AGENCIES, FOR ISSUING SHARES OF STOCK
WITHOUT A RESTRICTIVE LEGEND OR FOR SELLING UNREGISTERED SECURITIES WITHOUT
AN AVAILABLE EXEMPTION.

During the first quarter of 2000, the Company issued 150,000 shares of common
stock to Bluewater Partners, Inc. as compensation for fiscal advisory and
consulting services. The stock certificate was issued without a restrictive
legend. Management was subsequently informed by legal counsel that the
certificate should have born a restrictive legend. We undertook to retrieve
the share certificate from Bluewater Partners, Inc.; however, we have been
unsuccessful.

In addition, we have sold stock in transactions which may not qualify for
exemption from the Securities Act registration requirements. The proceeds of
these sales aggregate not more than $66,800. As a result, we may be subject
to civil liabilities, including liability to the purchasers to rescind the
stock sales, as well as fines and penalties imposed by federal and state
securities agencies. The likelihood of a claim and the ultimate outcome if a
claim is asserted cannot be determined at this time. A rescission claim may
be brought by a purchaser up to three years after the stock sale. In the
event a claim is made, and the Company is unable to pay it may not be able to
fund its present level of operations which may result in a reduction in the
stock price and result in an adverse effect on new shareholders. The Company
does not presently have cash available to rescind these stock sales.

RISKS RELATED TO OUR FINANCIAL CONDITION

WE HAVE A NEGATIVE NET WORTH, HAVE INCURRED SIGNIFICANT LOSSES, AND EXPECT TO
INCUR LOSSES IN THE FUTURE. THIS COULD DRIVE DOWN THE PRICE OF OUR STOCK.

We have not generated an operating profit for several years. Instead we have
been able to continue operations by gross profit from our antimony
operations, sales of common stock and borrowings from banks and others. As
of September 30, 2001, we had stockholders' deficit of $2,235,146 and we
anticipate that we will continue to incur net losses for the foreseeable
future unless and until we are able to establish profitable business
operations. As of September 30, 2001, we had total current assets of $219,707
and total current liabilities of $1,619,143 or negative working capital of
approximately $1,399,436. If we fail to establish profitable operations and
continue to incur losses, the price of our common stock could be expected to
fall.

WE RECEIVED AN OPINION FROM OUR AUDITORS AS OF MARCH 22, 2001 WHICH RAISES
DOUBT ABOUT OUR ABILITY TO CONTINUE AFTER THAT DATE AS A GOING CONCERN.

Our audited financial statements for the year ended December 31, 2000, which
are included in this prospectus, indicate that there was substantial doubt as
of March 22, 2001 about our ability to continue as a going concern due to our
need to generate cash from operations and obtain additional financing. In
addition to the very real risk to our ability to successfully operate our
business profitably, which our auditors have thus expressed, this type of
"going concern" qualification in our auditor's report can have a negative
effect on the price of our stock. If we fail to manage our growth in a
manner that minimizes these strains on our resources it could disrupt our
operations and ultimately prevent us from generating the revenues we expect.

WE ARE DELINQUENT OR IN ARREARS ON SIGNIFICANT CURRENT LIABILITIES; AND
COLLECTION EFFORTS BY CREDITORS COULD JEOPARDIZE OUR VIABILITY AS A GOING
CONCERN AND CLOSE DOWN OUR OPERATIONS.

As of September 30, 2001, we are delinquent on the payment of several current
liabilities including payroll and property taxes in the amount of $192,802,
accounts payable in the amount of approximately $441,000, judgments payable
in the amount of $45,763 and accrued interest payable in the amount of
$14,640. In the absence of payment arrangements, creditors for could
individually or collectively demand immediate payment and jeopardize our
ability to fund operations and correspondingly damage our business and
adversely affect the investments of potential new shareholders. Creditors
who are owed taxes have the power to seize our assets for payment of amounts
past due and close down our operations, which would also damage our business
and adversely affect the investments of potential new shareholders.

A MAJOR PORTION OF OUR BANK DEBT CONSISTS OF VARIABLE-RATE SHORT-TERM
OBLIGATIONS, WHICH SUBJECTS US TO INTEREST RATE AND REFINANCING RISKS.

We currently obtain working capital through a factoring arrangement secured
by accounts receivable and other collateral and through a line-of-credit and
other short-term loans secured by plant, property and equipment.

Our working capital line-of-credit and short-term loans are variable-rate,
short-term obligations, which expose us to interest rate and refinancing
risks. Changes in interest rates could adversely affect our results of
operations by increasing our borrowing costs and decreasing cash available to
fund operations; and there is no assurance that we will be able to refinance
our debt when it matures.

CAPITAL TO MEET OUR FUTURE NEEDS MAY BE UNAVAILABLE ON ACCEPTABLE TERMS,
WHICH WOULD IMPAIR OUR PLANS TO REDUCE DEPENDENCE ON FOREIGN SOURCES OF
ANTIMONY BY DEVELOPING ADDITIONAL METAL SUPPLIES, DEVELOP AND EXPAND OUR
PRESENT OPERATIONS) AND TO EXPAND OUR PRODUCT LINES TO INCLUDE INDUSTRIAL
MINERALS.

To fund future needs, we may seek to obtain additional capital from public or
private financing transactions, as well as borrowing and other resources.
However, we have virtually no authorized but unissued or unreserved shares of
common stock available for issuance; and we therefore cannot meet our capital
needs with equity funding unless and until our shareholders authorize
additional common stock. If additional shares are authorized in the future,
the issuance of equity or equity-related securities to raise additional cash
could result in dilution to our stockholders. Further, additional debt
funding may not be available on favorable terms, if at all.

OUR EXISTING DEBT IS SECURED BY PLEDGE OF SUBSTANTIALLY ALL OF OUR ASSETS.
THEREFORE, A DEFAULT IN THE PAYMENT OF THE SECURED DEBT COULD RESULT IN A
LOSS OF THE RELATED ASSET AND OUR ABILITY TO CONTINUE OPERATIONS.

As of September 30, 2001, our bank debt in the amount of $437,759 is secured
by a collateral pledge of substantially all of our mining equipment as well
as our patented and unpatented mining claims in Sanders County, Montana. In
the event we are unable to pay the bank debt as it matures, there is a risk
the bank may foreclose its security interest and we would lose all or a
portion of our equipment as well as our patented and unpatented mining
claims.

TERMS OF 10% CONVERTIBLE DEBENTURES WHICH COULD BE ISSUED IN THE FUTURE WOULD
IMPOSE RESTRICTIONS ON OUR FUTURE ACTIVITIES THAT MAY REQUIRE US TO DECLINE
AN ADVANTAGEOUS FINANCING OR BUSINESS OPPORTUNITY.

The debenture agreement requires that so long as any of the principal of or
interest on the debentures remain unpaid or unconverted, the Company shall
not (i) merge or consolidate with any other entity; (ii) sell or otherwise
dispose of a material portion of its assets (other than in the ordinary
course of business); (iii) pay any dividend on its shares (including any
dividend payable in common stock or other property); (iv) subdivide, split or
otherwise increase the number of shares of common stock; or (v) issue any
common stock or other equity securities, or any other stock, option, warrant,
right or other instrument that is convertible into or exercisable or
exchangeable for common stock or other equity securities, except for (a)
securities of a subsidiary that are issued to the Company; and (b) securities
sold and options granted to directors, officers and employees of the Company
pursuant to bona fide employee benefit plans; provided, however, that the
Company may issue such securities enumerated in (v) above, with the prior
written consent of the holders, which consent the holder agrees not to
unreasonably withhold.

RISKS RELATED TO OUR BUSINESS

DEATH OR DISABILITY OF JOHN C. LAWRENCE COULD ADVERSELY AFFECT THE MANAGEMENT
OF OUR BUSINESS AND COULD RESULT IN ACCELERATION OF GUARANTEED INDEBTEDNESS.

Mr. Lawrence is our principal executive officer and is directly involved, on
a day-to-day basis, in our marketing, production, research and development,
and environmental reclamation activities. His death or incapacity could
adversely affect our operations and future prospects. In addition, Mr.
Lawrence personally guarantees our long-term bank debt and short-term lines-
of-credit; and the death, incapacity or insolvency of Mr. Lawrence
constitutes an event of default, which would entitle the lender to accelerate
maturity of the debt.

WE ARE DEPENDENT ON FOREIGN SOURCES FOR RAW MATERIALS; AND THERE ARE RISKS OF
INTERRUPTION IN PROCUREMENT FROM THESE SOURCES, VOLATILE CHANGES IN WORLD
MARKET PRICES FOR THESE MATERIALS AS WELL AS CURRENCY FLUCTUATIONS THAT ARE
NOT CONTROLLABLE BY US. UNAVAILABILITY OF ADEQUATE RAW MATERIAL OR INCREASE
IN MATERIAL PRICES COULD IMPAIR OUR PRODUCTION, SALES OR MARGINS.

We obtain antimony metal, the raw material for our antimony products,
primarily from China. Changes in antimony metal export policy by the Chinese
government could impair availability of antimony metal and/or could increase
antimony metal prices, which could result in curtailed production, decreased
profits, operating result fluctuations or breach of contractual obligations
to provide antimony products to our customers. In mid-2000, our principal
supplier of Chinese antimony metal was unwilling to supply antimony metal at
contract prices which were lower than rapidly rising world prices; and the
supplier has indicated it may be unable to meet contractual volume
commitments to supply antimony at any price. We have agreed to pay higher
prices to assure a continued supply of metal which, absent agreement of our
principal customers to accept corresponding price increases for our antimony
products, could adversely affect sales and gross margins.

ANY PRODUCT RECALL OR PRODUCT RETURN COULD HARM OUR CUSTOMER RELATIONS, SALES
AND PROFITABILITY.

Our antimony products are typically manufactured to meet individual customer
specifications, including maximum tolerance levels for impurities, whiteness,
color index, packaging requirements and bar coding. Failure to meet those
specifications may result in product returns or recalls. Product recalls or
returns may occur due to disputed labeling claims, manufacturing issues,
quality defects or other reasons.

UNINSURED LOSS, ACTS OF GOD COULD IMPAIR OUR PLANT, PROPERTY AND EQUIPMENT,
AND OUR ABILITY TO PRODUCE AND SELL OUR PRINCIPAL PRODUCTS.

Our Thompson Falls, Montana processing facility is not insured against fire
or catastrophic loss. In the event of a major earthquake, for example, our
production plant could be rendered inoperable for protracted periods of time,
which would adversely affect our earning and financial condition. Should an
uninsured loss occur, we could lose significant revenues and financial
opportunities in amounts which would not be compensated by insurance
proceeds.

IF WE ARE UNABLE TO COMPETE EFFECTIVELY WITH THE LARGER PRODUCERS WE WILL NOT
BE ABLE TO GENERATE PROFITS.

Some of our competitors in the antimony industry have substantially more
financial resources, marketing and development capabilities than we do.
Unlike our larger competitors, we lack the capital to stock substantial
amounts of raw material inventory and may be unable to supply product to our
customers if raw material availability declines or prices increase
substantially.

COMPLIANCE WITH GOVERNMENT REGULATIONS IS COSTLY AND WILL DEPRESS OUR
EARNINGS.

We are subject to many and varied forms of government regulations, including
environmental, occupational health and safety, and mine safety laws and
regulations. For the year ended December 31, 2000, we have expended
approximately $113,000 to comply with environmental reclamation requirements
imposed by federal and state regulators. Our cash flow and profitability
will be reduced by the cost of complying with current and future laws, rules,
regulations, and policies, and by liabilities arising out of any of our past
and future conduct. See "Description of Business - Environmental Matters."

OUR CURRENT AND FORMER OPERATIONS EXPOSE US TO RISKS OF ENVIRONMENTAL
LIABILITIES.

Our research, development, manufacturing and production processes may involve
the controlled use of hazardous materials, and we may be subject to various
environmental and occupational safety laws and regulations governing the use,
manufacture, storage, handling, and disposal of hazardous materials and some
waste products. The risk of accidental contamination or injury from
hazardous materials cannot be completely eliminated. In the event of an
accident, we could be held liable for any damages that result and any
liability could exceed our financial resources. We also have three ongoing
environmental reclamation and remediation projects, one at our current
production facility in Montana and two at discontinued mining operations in
Idaho. Adequate financial resources may not be available to ultimately
finish the reclamation activities if changes in environmental laws and
regulations occur; and these changes could adversely affect our cash flow and
profitability. We do not have environmental liability insurance now; and we
do not expect to be able to obtain insurance at a reasonable cost. If we
incur liability for environmental damages while we are uninsured, it could
have a harmful effect on us and our financial condition. The range of
reasonably possible losses from our exposure to environmental liabilities in
excess of amounts accrued to date can not be reasonably estimated at this
time.

USE OF PROCEEDS

We will not receive any of the proceeds from the sale of the shares of our
common stock offered by the Selling Shareholders. The proceeds of sale of
the debentures were used to discharge indebtedness in the approximate amount
of $1,500,000 and to purchase raw materials. The debt was owed to the Estate
of Bobby C. Hamilton, and required minimum annual payments of principal and
interest which totaled $200,000 and consumed 4% of our gross revenues from
sales. See "Management Discussion and Analysis - Financial Condition and
Liquidity." The Series C preferred stock was issued in 1997 in payment of
defaulted debentures previously issued from time to time for working capital
purposes.

DETERMINATION OF OFFERING PRICE

The shares issued upon conversion of debentures will be issued at the
conversion price which is the lower of $0.29125 per share or 75% of the
average of the three lowest closing bid prices per share of the common stock
as reported by Bloomberg L.P. in the 20 trading days preceding the conversion
date. Shares will also be issued upon exercise of related warrants at $0.39
per share. The conversion price and warrant exercise price were determined
in arms-length negotiations between us and the purchaser of our debentures.

All of the outstanding debentures totaling $675,000 in aggregate principal
amount were converted to common stock in December 2001 at $0.20 per share;
and a total of 3,375,000 shares of our common stock were issued upon
conversion of the principal amount of the debentures. In addition, the
accrued interest on those debentures in the aggregate amount of $91,849 was
converted at $0.20 per share into 459,245 shares of our common stock. These
shares, however, are not registered for resale under this Prospectus.

Upon resale of the shares by the Selling Shareholders, the price per share
will be the market price available in the over-the-counter market of such
other amount as may be negotiated between the Selling Stockholder and the
purchaser.

DILUTION

At the close of business on September 30, 2001, there were 19,329,564
outstanding shares of our $0.01 par value common stock. The number of
outstanding shares of common stock:

(i) includes 35,124 shares which holders of Series C preferred stock
were entitled to receive upon conversion of their preferred stock into
common stock. These shares were not issued at the time of conversion
because our calculation of the number of conversion shares inadvertently
omitted to account for the impact of anti-dilution provisions of the
Series C preferred stock, which were triggered by our issuance of common
stock for less than the Series C conversion price. These 35,132 shares
are being issued to the pertinent stockholders retroactively to the date
of conversion of their Series C preferred stock.

(ii) excludes approximately 67,000 shares of common stock representing
an unreconciled discrepancy between our stock ledger and the transfer
agent's records.

The Registration Rights Agreement with the purchasers of our outstanding
convertible debentures and related warrants required us to register the
3,375,000 shares of our common stock issued upon conversion of the debentures
plus 1,394,050 shares of our common stock issuable upon exercise of related
warrants which are currently issued and outstanding and held by Selling
Shareholders. The number of conversion shares we were required to register
plus the number of warrant shares we will be required to issue, if all
related warrants are exercised, is 4,769,050. We have also registered
483,672 shares held by the Series C Holders, 240,343 shares issued to the
debenture holders as liquidated damages for the late registration, and
150,000 shares of common stock issued to one of the Seller Shareholders.

The following table sets forth the net tangible book value per share at
September 30, 2001, and the net tangible book value per share assuming that
3,375,000 shares were issued at September 30, 2001 upon conversion of
debentures at $0.20 per share and 1,394,050 shares were issued upon exercise
of the related warrants at $0.39 per Share. Net tangible book value per
share as of September 30, 2001 is calculated by dividing total tangible
assets less total liabilities, or ($2,235,146), by the number of shares
outstanding, 19,329,564.

After giving effect to the issuance of 3,375,000 shares upon conversion of
debentures and 1,394,050 shares upon exercise of the related warrants, our
pro forma net tangible book value will increase to $(1,016,466), or $(0.042)
per share, representing an immediate increase in pro forma net tangible book
value of $0.074 per share for existing shareholders.

Net tangible book value at September 30, 2001 $(.116) per share

Net tangible book value after giving effect
to issuance of 3,375,000 shares at
$0.20 per share and 1,394,050 shares
at $0.39 per Share $(.042) per share

Per share dilution to Selling Shareholders $(.074) per share

Percent dilution to Selling Shareholders 63.79%

SELLING SHAREHOLDERS

The following table sets forth information with respect to the Selling
Shareholders as of September 30, 2001, updated to reflect conversion of
convertible debentures into our common stock in December 2001 at $0.20 per
share. John C. Lawrence is our Chairman of the Board of Directors and Robert
A. Rice is one of our directors. The

other Selling Shareholders are not currently our affiliates, and have not had
a material relationship with us during the past three years, other than as a
holder of our securities and the negotiation of the financing agreement. The
Selling Shareholders are not and have not been affiliated with a registered
broker-dealer. However, Thomson Kernaghan & Co. Limited is licensed by the
Province of Ontario, Canada as an investment dealer and broker. CALP II LP
and Striker Capital, Ltd. are affiliates of Thomson Kernaghan & Co. Limited.
Ian McKinnon is the father of Michelle McKinnon, both of whom were employees
of Thomson Kernaghan & Co. Limited.

The table assumes:

* all debentures were converted at $0.20 per share and all warrants are
exercised at $0.39 per share.

* all of the shares that may be offered by the Selling Shareholders
actually are sold;

* the Selling Shareholders do not acquire beneficial ownership of any
other shares or dispose of any shares other than in this offering; and

* we do not issue or cancel any other shares.

NUMBER OF SHARES PERCENT OF NUMBER OF NUMBER OF SHARES PERCENT OF
NAME OF BENEFICIALLY OWNED CLASS BEFORE SHARES THAT BENEFICIALLY OWNED CLASS AFTER
BENEFICIAL OWNER(1) BEFORE THE OFFERING OFFERING(1) MAY BE OFFERED AFTER THE OFFERING OFFERING(1)

Abuck Investments Ltd.(2)(7) 1,847,104 9.46 1,847,104 0 0
Archer Foundation 32,684 .17 6,536 26,148 0.14
Caliber Resources Ltd.(3)(7) 1,397,322 7.17 1,397,322 0 0
Claude H.C. Archer 163,423 .85 32,684 130,739 0.68
CALP II LP and Striker Capital Ltd.(4) 141,025 0.73 141,025 0 0
Delta Funds(10) 81,712 .42 16,342 65,370 0.34
H.R. Gurtsmith 49,026 .25 9,805 39,221 0.20
Barbara Howley 284,153 1.47 56,830 227,323 1.18
George W. Moffitt Jr.(10) 49,027 .25 9,805 39,222 0.20
Ian McKinnon(5) 384,543 1.95 384,543 0 0
Ian McKinnon Family Trust(11) 59,972 .31 59,972 0 0
Michelle McKinnon(6) 192,272 0.98 192,272 0 0
Nancy Ann Moffitt 98,053 0.51 19,610 78,443 0.41
Nancy J. Moffitt 65,369 0.34 13,073 52,296 0.27
Sanders County Ledger 28,510 0.15 5,702 22,808 0.12
John C. Lawrence 3,537,827 17.93 266,354 3,271,473 16.58
JCL/Ham Pass Thru 138,398 0.72 27,679 110,719 0.57
Robert A. Rice 217,762 1.13 12,715 205,047 1.06
Sulico 32,684 0.17 6,536 26,148 0.14
Rebecca McKinnon(9) 119,941 0.62 119,941 0 0
Thomson Kernaghan & Co. Limited(4)(7) 150,000 0.78 150,000 0 0
Ursa Capital/Holdings Ltd.(7)(8) 623,698 3.21 623,698 0 0
---------- --------- ---------
Total 9,694,505 5,399,548 4,294,957

1. Shares of common stock subject to options or warrants currently
exercisable or convertible, or exercisable or convertible within 60 days
of September 30, 2001 are deemed outstanding for computing the percentage
of the person holding such option or warrant but are not deemed
outstanding for computing the percentage of any other person. Percentages
are based on a total of 19,329,564 shares of common stock outstanding
before the offering and 25,597,629 shares outstanding after the offering.

2. Rebecca McKinnon has authority to vote and dispose of the shares
beneficially owned by Abuck Investments, Ltd. Mrs. McKinnon is the wife
of Ian McKinnon and mother of Michelle McKinnon, each of whom disclaims
any beneficial interest. Under the financing agreement, Abuck
Investments Ltd. agreed not to have the right to convert any debenture or
exercise any warrant if, after having given effect to the conversion or
exercise, it would be deemed to beneficially own more than 9.9% of the
then outstanding common stock. Includes 1,540,000 shares of common stock
issued upon conversion of debentures, 197,436 shares of common stock
issuable upon exercise of warrants, and 109,668 shares of common stock
issued as liquidated damages for failure to have registration statement
declared effective.

3. Philip W. Johnston has authority to vote and dispose of the shares
beneficially owned by Caliber Resources Ltd. Under the financing
agreement, Caliber Resources Ltd. agreed not to have the right to convert
any debenture or exercise any warrant if, after giving effect to the
conversion or exercise, it would be deemed to beneficially own more than
9.9% of the then outstanding common stock. Includes 1,165,000 shares of
common stock issued upon exercise of debentures, 149,359 shares of common
stock issuable upon exercise of warrants, and 82,963 shares of common
stock issued as liquidated damages for failure to have registration
statement declared effective.

4. CALP II LP, Striker Capital Ltd. and Thomson Kernaghan & Co. Limited are
under the common control of Mark Valentine, the Chief Executive Officer
of Thomson Kernaghan & Co. Limited, who has authority to vote and dispose
of the shares beneficially owned by any of them. Accordingly, Thomson
Kernaghan, CALP II and Striker Capital Ltd. may be considered a group
which beneficially owns all of the shares beneficially owned by any of
them. Under the financing agreement, CALP II and Striker Capital Ltd.
agreed not to have the right to convert any debenture or exercise any
warrant if, after having given effect the conversion or exercise, both of
them considered as a group would be deemed to beneficially own more than
9.9% of the then outstanding common stock. Includes 141,025 shares of
common stock issuable upon exercise of warrants.

5. Includes 384,543 shares of common stock issuable upon exercise of
warrants. Selling Shareholder is a former officer and director of
Thomson Kernaghan and disclaims being an affiliate.

6. Includes 192,272 shares of common stock issuable upon exercise of
warrants. Selling Shareholder was a non-management employee and
disclaims being an affiliate of Thomson Kernaghan.

7. By Agreement effective July 11, 2000 ("financing agreement"), Thomson
Kernaghan & Co., Limited purchased, as agent for other investors,
$675,000 principal amount of convertible debentures, an agent's warrant
to purchase 961,358 shares of Company's common stock at $.39 per share
and a purchaser's warrant to purchase 432,692 shares of Company's common
stock at $.39 per share. The debentures were converted into 520,000
shares of common stock at $0.20 per share in December 2001. Thomson
Kernaghan & Co., Limited is the beneficial owner of 150,000 shares of
Company's common stock and disclaims beneficial ownership of the
debentures, warrants and shares issuable upon conversion or exercise.
Further, Thomson Kernaghan has advised the Company that, except as
indicated in note (5), it is not a member of a group, as defined in
Section 13(d) of the Securities and Exchange Act of 1934, which owns 5%
or more of Company's common stock.

8. Michelle McKinnon has authority to vote and dispose of the shares
beneficially owned by Ursa Capital/Holdings Ltd. Ms. McKinnon was a non-
management employee and disclaims being an affiliate of Thomson
Kernaghan. Under the financing agreement, Ursa Capital/Holdings Ltd.
agreed not to have the right to convert any debenture or exercise any
warrant if, after giving effect to the conversion or exercise, it would
be deemed to beneficially own more than 9.9% of the then outstanding
common stock. Includes 520,000 shares of common stock issued upon
conversion of debentures, 66,667 shares of common stock issuable upon
exercise of warrants, and 37,031 shares of common stock issued as
liquidated damages for failure to have registration statement declared
effective.

9. Includes 100,000 shares of common stock issued upon conversion of
debentures, 12,820 shares of common stock issuable upon exercise of
warrants, and 7,121 shares of common stock issued as liquidated damages
for failure to have registration statement declared effective.

10. George Moffitt has authority to vote and dispose of the shares
beneficially owned by Delta Funds.

11. Includes 50,000 shares issued upon conversion of debentures, 6,411 shares
of common stock issuable upon exercise of warrants, and 3,561 shares of
common stock issued as liquidated damages for failure to have
registration statement declared effective.

SECURITIES PURCHASE AGREEMENT

The following is a summary description of the debenture purchase agreement
and does not contain all of the provisions of the agreement and other
supporting documents that are filed as exhibits to our registration statement
of which this prospectus is a part.

Effective July 11, 2000, we entered into a financing agreement to issue up to
$1,500,000 of 10% convertible debentures. The first tranche of $600,000
principal amount of debentures was issued effective July 11, 2000. Proceeds
of that debenture were applied to the settlement of an approximately $1.5
million debt owed to a creditor, resulting in an approximately $839,000
reduction of our stockholders' deficit and an improvement in our cash flow.
We agreed to issue a second tranche of $75,000 principal amount of debentures
on August 31, 2000. Proceeds of this debenture were used to purchase raw
materials.

The debentures are convertible into our common stock at a price per share
equal to 75% of the average of the three lowest closing bid prices per share
of our common stock as reported by Bloomberg L.P. in the 20 trading days
immediately preceding the closing date of the debenture sale or the
conversion date, whichever is lower, but in any event not greater than $0.90
per share. For the first two debentures totaling $675,000, the conversion
price is the lower of $0.29125 per share or 75% of the average of the three
lowest closing bid prices per share of our common stock as reported by
Bloomberg L.P. in the 20 trading days immediately preceding the conversion
date. The exercise price of the related warrants is the closing bid price as
reported by Bloomberg L.P. on the trading day immediately preceding the July
11, 2000 effective date of the financing agreement, or $0.39 per share.

The $675,000 debentures issued to date were converted into 3,375,000 shares
of our common stock at the conversion price of $0.20 per share. In addition,
we issued warrants to or on behalf of the debenture purchasers for an
aggregate of 1,394,050 shares of our common stock exercisable for $0.39 per
share. The closing price of our common stock reported on the Over-the-
Counter Bulletin Board on January 28, 2001 was $.25 per share.

REGISTRATION RIGHTS. In the registration rights agreement with the debenture
purchasers, we agreed to register the Selling Shareholders' resale of the
shares of common stock to be issued upon conversion of the debentures and
upon exercise of the related warrants. For the $675,000 debentures issued to
date, the registration rights agreement required that we register 150% of the
conversion shares and 100% of the warrant shares, or a total of 4,870,626
shares of our common stock. With the concurrence of the holders of the
$675,000 of debentures we registered the resale of a total of 4,000,000
shares of common stock issuable upon conversion of the debentures. If we
issue the remaining $825,000 principal amount of debentures, we will be
required by the registration rights agreement to register an additional
4,777,773 shares of common stock (representing 150% of the shares issuable
upon conversion of the additional debentures assuming a conversion price of
$0.29125 per share plus 100% of the shares issuable upon exercise of related
warrants). In addition, we are liable for late filing liquidated damages
which during April 2001 was agreed to be $70,000 payable by issuing 240,343
shares of common stock, and have agreed to register 150,000 shares issued to
Thomson Kernaghan & Co. Limited for payment of consulting fees. We were also
obligated to register the resale of 483,672 shares of our common stock held
by former holders of Series C Preferred Stock who converted that preferred
stock into common stock.

All outstanding debentures were converted to common stock at the conversion
price of $0.20 per share; and if all of the outstanding related warrants were
exercised as of September 30, 2001, the debenture and warrant holders would
own, and would be able to sell pursuant to this Prospectus, 4,769,050 shares
of common stock representing 19.79% of the then outstanding shares of our
common stock.

PLAN OF DISTRIBUTION

The Selling Shareholders and any of their pledges, assignees and successors-
in-interest, may, from time to time, sell any or all of their shares of
common stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The Selling Shareholders may use any one or more of the
following methods when selling shares:

* ordinary brokerage transactions and transactions in which the broker-
dealer solicits the purchaser;

* block trades in which the broker-dealer will attempt to sell the shares
as agent but may position and resell a portion of the block as principal
to facilitate the transaction;

* purchases by a broker-dealer as principal and resale by the broker-
dealer for its account;

* an exchange distribution in accordance with the rules of the applicable
exchange;

* privately-negotiated transactions;

* broker-dealers may agree with the Selling Shareholders to sell a
specified number of shares at a stipulated price per share;

* a combination of any of the methods of sale; and

* any other method permitted pursuant to applicable law.

The Selling Shareholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.

The Selling Shareholders may also engage in short sales against the box, puts
and calls and other transactions in our securities or derivatives of our
securities and may sell or deliver shares in connection with these trades.
The Selling Shareholders may pledge their shares of common stock to their
brokers under the margin provisions of customer agreements. If a Selling
Shareholder defaults on a margin loan, the broker may, from time to time, off
and sell the pledged shares.

Broker-dealers engaged by the Selling Shareholders may arrange for other
broker-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the Selling Shareholders (or, if any broker-
dealer acts as agent for the purchase of shares, from the purchaser) in
amounts to be negotiated. The Selling Shareholders do not expect these
commissions and discounts to exceed what is customary in the types of
transactions involved.

We are required to pay all fees and expenses incident to the registration of
the shares, including fees and disbursements of counsel to the Selling
Shareholders, but excluding brokerage commissions or underwriter discounts.
We and the Selling Shareholders have agreed to indemnify each other against
named losses, claims, damages and liabilities, including liabilities under
the Securities Act.

Thomson Kernaghan is, and any other Selling Shareholders participating in the
distributions of our common stock may be, deemed to be an "underwriter"
within the meaning of Section 2(11) of the Securities Act of 1933; and any
profit on the sale of our common stock by Thomson Kernaghan or other Selling
Shareholder, and any commissions or discounts given to any broker dealer, may
be deemed to be underwriting commissions or discounts pursuant to the
Securities Act of 1933. In offering common stock for resale in the United
States or to persons who are citizens or residents of the United States,
Thomson Kernaghan will offer and sell common stock only to registered broker-
dealers.

Pursuant to the Securities Exchange Act of 1934, any person engaged in a
distribution of the common stock offered by this prospectus may not
simultaneously engage in market making activities for our common stock during

the applicable "cooling off" periods prior to the commencement of the
distribution. In addition, the Selling Shareholders will be required to
comply with all the requirements of the Securities Exchange Act of 1934.

We have advised Thomson Kernaghan for itself and as agent for the Selling
Shareholders that, during the time as they may be engaged in a distribution
of any of the shares we are registering by the Registration Statement, they
are required to comply with Regulation M promulgated under the Securities
Exchange Act of 1934. In general, Regulation M precludes any Selling
Shareholder, any affiliated purchasers and any broker-dealer or other person
who participates in the distribution from bidding for or purchasing, or
attempting to induce any person to bid for or purchase, any security which is
the subject of the distribution until the entire distribution is complete.
Regulation M defines a "distribution" as an offering of securities that is
distinguished from ordinary trading activities by the magnitude of the
offering and the presence of special selling efforts and selling methods.
Regulation M also defines a "distribution participant" as an underwriter,
prospective underwriter, broker, dealer, or other person who has agreed to
participate or who is participating in a distribution.

Regulation M prohibits any bids or purchases made in order to stabilize the
price of a security in connection with the distribution of that security,
except as specifically permitted by Rule 104 of Regulation M. These
stabilizing transactions may cause the price of the common stock to be higher
than it would otherwise be in the absence of these transactions. We have
advised the Selling Shareholders that stabilizing transactions permitted by
Regulation M allow bids to purchase our common stock so long as the
stabilizing bids do not exceed a specified maximum, and that Regulation M
specifically prohibits stabilizing that is the result of fraudulent,
manipulative, or deceptive practices. The Selling Shareholders and
distribution participants will be required to consult with their own legal
counsel to ensure compliance with Regulation M.

DESCRIPTION OF SECURITIES

COMMON STOCK

We are authorized to issue 30,000,000 shares of common stock, $0.01 par
value, each share of common stock having equal rights and preferences,
including voting privileges. There were 19,329,564 shares of common stock
outstanding at the close of business on September 30, 2001. During the
fourth quarter of 2001, we issued 750,000 shares of common stock. In
December 2001, we issued an additional 6,012,850 shares of our common stock
upon conversion of principal of and interest on all of our outstanding
convertible debentures and in payment of penalties for late filing of our
registration statement with the SEC. In addition, 3,081,714 shares of common
stock were reserved on September 30, 2001 for issuance upon exercise of
outstanding warrants to purchase our common stock. Warrants to purchase
825,000 shares of common stock were issued during the fourth quarter of 2001.
The total number of authorized but unissued and unreserved shares of our
common stock at December 31, 2001 is 872.

The shares of our common stock constitute equity interests in us entitling
each shareholder to a pro rata share of cash distributions made to common
shareholders, including dividend payments. We had significant losses in our
last fiscal year. Therefore, it is unlikely that we will pay dividends on
our common stock in the next year. We currently intend to retain our future
earnings, if any, for use in our business. Any dividends declared in the
future will be at the discretion of our Board of Directors and subject to any
restrictions that may be imposed by our lenders.

The holders of our common stock are entitled to one vote for each share of
record. Shareholders are entitled to vote cumulatively with respect to the
election of our directors. Directors are elected by a plurality of the votes
cast by the voting stock entitled to vote at a meeting if a quorum is
present. With respect to matters other than the election of directors, a
matter is approved by the affirmative vote of the majority of the votes cast
at a meeting at which a quorum is present. In the event of our liquidation,
dissolution or winding up, the holders of common stock are entitled to share
ratably in all assets remaining available for distribution to them after
payment of our liabilities and after provision has been made for each class
of stock having preference in relation to our common stock. Holders of our
common stock have no conversion, preemptive or other subscription rights; and
there are no redemption provisions applicable to our common stock. All of
the outstanding shares of our common stock are duly authorized, validly
issued, fully paid and non-assessable.

PREFERRED STOCK

Our 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 rights and
preferences, including voting rights, as the Board of Directors shall
determine.

During 1986, Series A preferred stock, consisting of 4,500 shares, was
established by the Board of Directors. These shares are nonconvertible, non-
redeemable and are entitled to a $1.00 per share per year cumulative
dividend. Series A preferred stockholders have voting rights for directors
only and a total liquidation preference equal to $45,000 plus dividends in
arrears. At September 30, 2001, 4,500 shares of Series A preferred stock were
outstanding; and cumulative dividends in arrears amounted to $68,625, or
$15.25 per share.

During 1993, Series B preferred stock consisting of 1,666,667 shares, was
established by the Board of Directors and 1,666,667 shares were issued in
connection with the final settlement of litigation. The Series B preferred
stock has preference over the Company's common stock and Series A preferred
stock, has no voting rights (absent default in payment of declared dividends)
and is entitled to cumulative dividends of $.01 per share per year payable if
and when 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 stockholders is $1.00 per share plus dividends in
arrears. No dividends have been declared or paid with respect to the Series B
preferred stock. In 1995, 916,667 shares of Series B preferred stock were
surrendered to the Company and cancelled in connection with the settlement of
litigation against Bobby C. Hamilton. At September 30, 2001, cumulative
dividends in arrears on the 750,000 outstanding Series B shares were $58,125,
or $0.0775 per share.

During 1997, we issued 2,560,762 shares of Series C preferred stock in
connection with the conversion of debts we owed. The rights, preferences,
privileges and limitations of the Series C preferred shares issued upon
conversion of debt are set forth below:

DESIGNATION. The class of Convertible Preferred Stock, Series C, $0.01
par value per share, consists of up to 3.8 million of our shares.

OPTIONAL CONVERSION. A holder of Series C preferred shares had the right
to convert the Series C shares, at the option of the holder, at any time
within 18 months following issuance, into shares of common stock at the
ratio of 1:1, subject to adjustment as provided below. During 1999,
holders of 2,354,766 shares of Series C stock converted their shares into
our common stock.

VOTING RIGHTS. The holders of Series C preferred shares shall have the
right to that number of votes equal to the number of shares of common
stock issuable upon conversion of such Series C preferred shares.

LIQUIDATION PREFERENCE. In the event of our liquidation or winding up,
the holders of Series C preferred shares shall be entitled to receive as a
preference over the holders of common stock an amount per share equal to
$0.55, subject to the preferences of the holders of our outstanding Series
A and Series B preferred stock.

REGISTRATION RIGHTS. Twenty percent (20%) of the underlying common stock
issued on conversion of the Series C preferred shares is entitled to
"piggyback" registration rights when, and if, we file a registration
statement for our securities or the securities of any other stockholder.
These shares are included in this prospectus.

REDEMPTION. The Series C preferred shares are not redeemable by us.

ANTI-DILUTION PROVISIONS. The conversion price of the Series C shares was
subject to adjustment to prevent dilution in the event we issued
additional shares at a purchase price less than the applicable conversion
price (other than shares issued to employees, consultants and directors
pursuant to plans and arrangements approved by the Board of Directors, and
securities issued to lending or leasing institutions approved by the Board
of Directors). Accordingly, the conversion price was adjusted according
to a weighted-average

formula, resulting in the issuance, during the year 2000, of an additional
35,542 shares of common stock to Series C holders who exercised their
conversion rights in 1999. The initial conversion price for the Series C
shares was $0.55 and was adjusted to $0.54 per share based on the anti-
dilution formula.

PROTECTIVE PROVISIONS. The consent of a majority interest of the holders
of Series C preferred shares is required for any action which (i) alters
or changes the rights, preferences or privileges of the Series C shares
materially and adversely; or (ii) creates any new class of shares having
preference over or being on a parity with the Series C shares.

During the year 2000, we converted 28,092 of shares of Series C preferred
stock into an equal number of common shares for a Series C preferred
stockholder that had timely noticed us of its desire to convert its Series C
shares during 1999. At September 30, 2001, 177,904 shares of Series C
preferred stock remained outstanding and unconverted.

DEBENTURES

We issued $675,000 of 10% convertible debentures due June 30, 2002 and
related warrants to purchase our common stock. The debentures were due June
30, 2002 and accrued interest at 10% to be paid annually on each anniversary
date of the issue. The debentures were convertible into shares of our common
stock at a conversion price equal to the lower of (i) $0.29125 per share or
(ii) 75% of the average three lowest closing bid prices for our common stock
as quoted by Bloomberg L.P. in the 20 trading days immediately preceding the
conversion date of the debentures. The related warrants are exercisable for
five years for $0.39 per share. The $675,000 principal amount of the
outstanding debentures was converted into 3,375,000 shares of our common
stock at $0.20 per share in December 2001. We also issued 459,245 shares of
restricted stock, not subject to resale pursuant to the Prospectus, in
payment of accrued interest on the debenture in the aggregate amount of
$91,849.

We issued 10% convertible debentures to John C. Lawrence, our director and
president, in the principal amount of $147,992 (due December 31, 2003) and
$100,000 (due December 12, 2003) and to A.W. Dugan, a shareholder of the
company, in the principal amounts of $50,000 (due November 22, 2003) and
$50,000 (due December 2003). These debentures accrued interest at 10% to be
paid annually on each anniversary date of the issue. The debentures were
convertible into shares of our common stock at a conversion price equal to
the lower of (i) $0.31 per share or (ii) 75% of the average of the three
lowest closing bid prices for our common stock as quoted by Bloomberg LP in
the 20 trading days immediately preceding the conversion date. The exercise
price for the related warrants (aggregating 151,213 shares for Mr. Lawrence
and 60,974 shares for Mr. Dugan) is $0.41 per share. The $347,992 principal
amount of the debentures plus $39,660 of accrued interest thereon were
converted at $0.20 per share into 1,938,261 shares of restricted common stock
of the Company in December 2001. These shares are not subject to resale
under the Prospectus. Mr. Lawrence and Mr. Dugan do not have registration
rights in connection with the common stock issued upon conversion of the
debentures or issuable upon exercise of the related warrants.

PENNY STOCK RULES

At the present time our common stock is traded in the over-the-counter market
and that trading activity is reported on the OTC Electronic Bulletin Board.

The United States Securities and Exchange Commission "Securities Enforcement
and Penny Stock Reform Act of 1990" requires special disclosure relating to
the trading of any stock defined as a "penny stock." Commission regulations
generally define a penny stock to be an equity security that has a market
price of less than $5.00 per share and is not listed on The Nasdaq Small Cap
Stock Market or a major stock exchange. These regulations subject all
broker-dealer transactions involving our securities to special "Penny Stock
Rules." Following the completion of this offering the commencement of trading
of our common stock, and the foreseeable future thereafter, the market price
of our common stock is expected to be substantially less than $5 per share.
Accordingly, should anyone wish to sell any of our shares through a broker-
dealer, the sale will be subject to the Penny Stock Rules. These Rules will
affect the ability of broker-dealers to sell our shares (and will therefore
also affect the ability of purchasers in this offering to re-sell their
shares in the secondary market, if a market should ever develop.)

The Penny Stock Rules impose special sales practice requirements on broker-
dealers who sell shares defined as a "penny stock" to persons other than
their established customers or "Accredited Investors." Among other things,
the Penny Stock Rules require that a broker-dealer make a special suitability
determination respecting the purchaser and receive the purchaser's written
agreement to the transaction prior to the sale. In addition, the Penny Stock
Rules require that a broker-dealer deliver, prior to any transaction, a
disclosure schedule prepared in accordance with the requirements of the
Commission relating to the penny stock market. Disclosure also has to be
made about commissions payable to both the broker-dealer and the registered
representative and the current quotations for the securities. Finally,
monthly statements have to be sent to any holder of penny stocks disclosing
recent price information for the penny stock held in the account and
information on the limited market in penny stocks. Consequently, the rule may
affect the ability of broker-dealers to sell our shares and may affect the
ability of holders to sell our shares in the secondary market. Accordingly,
for so long as the Penny Stock Rules are applicable to our common stock, it
may be difficult to trade our stock because compliance with the Penny Stock
Rules can delay or preclude some trading transactions. This could have an
adverse effect on the liquidity and price of our common stock.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The following table sets forth the range of high and low bid prices as
reported by the National Association of Securities Dealer's Over-the-Counter
Bulletin Board ("OTCBB") 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 OTCBB under the symbol "UAMY."

2001 High Low
-------------- ------- -------
First Quarter $0.41 $0.17
Second Quarter 0.53 0.24
Third Quarter 0.32 0.17
Fourth Quarter 0.31 0.16

2000 High Low
-------------- ------- -------
First Quarter $0.95 $0.22
Second Quarter 0.88 0.20
Third Quarter 0.78 0.32
Fourth Quarter 0.41 0.13

1999 High Low
-------------- ------- -------
First Quarter $0.16 $0.20
Second Quarter 0.17 0.17
Third Quarter 0.31 0.38
Fourth Quarter 0.16 0.16

1998 High Low
-------------- ------- -------
First Quarter $0.20 $0.16
Second Quarter 0.28 0.16
Third Quarter 0.37 0.16
Fourth Quarter 0.28 0.13

The approximate number of record holders of our common stock at September 30,
2001 is 3,750.

No dividends have been paid or declared by us during the last five years; and
we do not anticipate paying dividends on our common stock in the foreseeable
future. Instead, we expect to retain our earnings for the operation and
expansion of our business.

DESCRIPTION OF BUSINESS

OVERVIEW

AGAU Mines, Inc., our corporate predecessor, was incorporated in June 1968 as
a Delaware corporation to explore, develop and mine gold and silver
properties. United States Antimony Corporation was incorporated in Montana in
January 1970 to mine and produce antimony products. In June 1973, AGAU
Mines, Inc. was merged with and into us, with us being the surviving
corporation in the merger. In December 1983, we suspended antimony mining
operations when it became possible to purchase antimony raw materials more
economically from foreign sources. Our principal business has been the
production of antimony products and the mining and milling of gold.

We have been able to sustain our operations through gross profit produced
from our antimony operations, common stock sales, and financing from banks
and other sources. There can be no assurance, however, that we will be able
to continue to meet our obligations and continue in existence as a going
concern (see Note 1 to the Financial Statements).

ANTIMONY DIVISION

Our antimony mining properties, mill and metallurgical plant are located in
the Burns Mining District of Sanders County, Montana, approximately 15 miles
west of Thompson Falls. We hold 12 patented lode claims, some of which are
contiguous, and 2 patented mill sites. We have no "proven reserves" or
"probable reserves" of antimony, as these terms are defined by the Securities
and Exchange Commission.

Prior to 1984, we 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. Our underground antimony mining operations may be reopened in the
future should raw material prices warrant doing so. We now purchase the
majority of our raw antimony from China (approximately 70%) and, to a lesser
degree, Canada (approximately 15%). Antimony metal from Chinese sources has
been obtained primarily through a broker. Significant increases in world
antimony metal prices have necessitated renegotiation of our supply contract
with the broker in order to assure continued availability of metal, resulting
in higher raw material costs. However, the increase in world prices has
enabled us to increase the prices of our antimony products and to increase
our gross profits. In addition, we are covering our customer supply contract
requirements by obtaining antimony metal from other foreign and domestic
sources.

We are dependent on foreign sources for raw materials; and there are risks of
interruption in procurement from these sources and/or volatile changes in
world market prices for these materials that are not controllable by us. We
obtain antimony metal, the raw material for our antimony products, primarily
(70%) from China. Changes in antimony metal export policy by the Chinese
government could impair availability of antimony metal and/or could increase
antimony metal prices, which could result in curtailed production, decreased
profits, operating result fluctuations or breach of contractual obligations
to provide antimony products to our customers. During mid 2000, our
principal supplier of Chinese antimony metal was unwilling to supply antimony
metal at contract prices which are lower than rapidly rising world prices;
and the supplier indicated it might be unable to meet contractual volume
commitments to supply antimony at any price. We have agreed to pay higher
prices to assure a continued supply of metal which, absent agreement of our
principal customers to accept corresponding price increases for our antimony
products, could adversely affect sales and gross margins.

We currently own 50% of the common stock of United States Antimony, Mexico
S.A. de C.V. ("USAMSA"), which was formed in April 1998. During 1998 and
1999, we invested capital and surplus equipment from our Thompson Falls
antimony operation in USAMSA, which is being used for the construction of an
antimony processing plant in Mexico. To date, two antimony processing
furnaces and a warehouse building have been built and limited antimony
processing has taken place. USAMSA is pursuing the assignment of mining
concessions in the Mexican states of Zacatecas, Coahuila, Sonora, Queretaro
and Oaxaca. USAMSA is expected in future years to produce antimony metal and
other products, utilizing our processing facilities as processing
opportunities become available and as antimony prices dictate. These
products would then be sent to our plant near Thompson Falls, Montana for
further processing.

From refined antimony metal, we produce four antimony oxide products of
different particle size using proprietary furnace technology, several grades
of sodium antimonate using hydro metallurgical techniques, and specialty
antimony compounds. Antimony oxide is a fine, white powder that is used
primarily in conjunction with a halogen to form a synergistic flame retardant
system for plastics, rubber, fiberglass, textile goods, paints, coatings and
paper. Antimony oxide is also used as a color fastener in paint, as a
catalyst for production of polyester resins for fibers and film, as a
phosphorescent agent in fluorescent light bulbs and as a stabilizer for fluid
lubricants. Sodium antimonate is primarily used as a fining agent (degasser)
for glass in cathode ray tubes used in computer monitors and color television
bulbs and as a flame retardant. We also sell antimony metal for use in
bearings, storage batteries and ordnance.

We estimate (but have not independently confirmed) that our present share of
the domestic market for antimony oxide products is approximately 10% to 12%.
We have had three principal domestic competitors. The other two domestic
competitors have collectively accounted for about 25% of domestic sales. The
balance of domestic sales are foreign imports (primarily from Chinese and
Belgian suppliers).

We employed two full time sales managers in 1999 and implemented
administrative systems needed to manage sales accounting and shipping
logistics. In connection with these efforts, we negotiated various
commission-based sales agreements with other chemical distribution companies,
developed our own web-site ("usantimony.com") and made substantial
improvements to our analytical and chemical research capabilities. Since
March 1998, we have employed a Chief Chemist who has devoted approximately
30% of his working time to research and development activities. Accordingly,
approximately $15,000 in salary and benefits have been related to research
and development activities during the past two fiscal years. Additionally,
during the past two fiscal years, we have invested approximately $20,000 per
year in lab equipment and facilities used in research and development of new
antimony products and applications. (None of our research and development
costs have been borne by customers of us.) These efforts have resulted in
advances in our preparation, packaging and quality of our antimony products.
We believe that our ability to meet customer product specifications gives us
a competitive advantage. We believe that we will be able to stay competitive
in the antimony business and generate increasing profits because of these
advances.

For the year ended December 31, 2000, we sold 5,039,327 pounds of antimony
products generating approximately $5 million in revenues. During 1999, we
sold 5,517,443 pounds of antimony products generating approximately $4.7
million in revenues. During 1998, through our relationships with HoltraChem,
Inc. and BCS, we sold 2,834,186 pounds of antimony products, which generated
approximately $3.1 million in revenues. During 1998, 1999 and 2000,
approximately 20% of our antimony sales were made to one customer. However,
we have a stable and expanding customer base. Loss of any one customer could
have short-term impact on our revenues but would not materially adversely
affect our long-term prospects.

GOLD DIVISION

YANKEE FORK MINING DISTRICT. Until 1989, we mined and milled gold and
silver in the Yankee Fork Mining District in Custer County, Idaho. The
metals were recovered by gravity and flotation mill, and the concentrates
were leached with cyanide to produce a bullion product at the Preachers Cove
mill, which is located on the Yankee Fork of the Salmon River. The Preachers
Cove mill has been dismantled and the site is undergoing environmental
remediation pursuant to an Idaho Department of Environmental Quality consent
decree. See "Environmental Matters." We own two patented lode mining claims
in the Yankee Fork District, which are now idle.

YELLOW JACKET MINING DISTRICT. In 1990, we entered into a mining venture
agreement to mine and mill gold and silver ores at the Yellow Jacket Mine
located in the Yellow Jacket Mining District of Lemhi County, Idaho,
approximately 70 miles southwest of Salmon, Idaho. During the years from
1991 to 1996 we mined, milled and sold gold bullion produced from the mine.
In 1996, production at the Yellow Jacket was suspended due to recurring
operating losses and declines in precious metal prices. The Yellow Jacket
property was put on a care and maintenance status. In 1999, we abandoned our
leasehold interests and began environmental remediation activity at the
Yellow Jacket (see "Environmental Matters") and began reclamation of the
Yellow Jacket tailings ponds and pit area.

We have no "proven reserves" or "probable reserves" of gold, as these terms
are defined by the Securities and Exchange Commission.

ZEOLITE DIVISION

We own 75% of Bear River Zeolite Company ("BRZ"), an Idaho corporation
incorporated on June 1, 2000. BRZ has entered into a ten-year mining lease
with Webster Farm, L.L.C. The lease entitles BRZ to surface mine and process
zeolites on property located in Preston, Idaho in exchange for a royalty
payment. The royalty is a percentage of the unprocessed ore sale price which
varies between 5%-7%. The minimum annual royalty during the first five years
is $1,000. The royalty is also payable on zeolites mined on adjacent BLM
ground on which BRZ has located additional claims, if BRZ accesses those
claims across the leased property. BRZ is currently constructing a
processing plant on the property. Mining and processing equipment will be
leased to BRZ by us; and we will advance development and start-up costs.
Production and sale of zeolites is not expected to contribute materially to
our operating revenues in the near future.

We have no "proven reserves" or "probable reserves" of zeolite, as these
terms are defined by the Securities and Exchange Commission.

"Zeolite" refers to a group of minerals that consist of hydrated
aluminosilicates that loosely hold cations such as calcium, sodium, ammonium
and potassium. Water is held in cavities in the lattice. The ability of
zeolites to exchange one cation for another is known as their "cation-
exchange capacity." Zeolites are used for separating cations and are often
referred to as "molecular sieves." BRZ's zeolite deposits have
characteristics which make the mineral useful for a variety of purposes
including:

* SOIL AMENDMENT AND FERTILIZER. We plan to produce a fertilizer called
"Zeo-Phos," which will combine ammoniumated zeolite with phosphate
mill shale available from the nearby Fort Hall Indian Reservation.
(Ammonium contains nitrogen, a plant nutrient.) Zeolites have been
successfully used to fertilize golf courses, sports fields, parks and
common areas, and high value crops, including corn, potatoes,
soybeans, red beets, acorn squash, green beans, sorghum sudangrass,
Brussels sprouts, cabbage, carrots, tomatoes, cauliflower, radishes,
strawberries, wheat, lettuce and broccoli.

* WATER FILTRATION. Zeolite is used for particulate removal in swimming
pools and municipal water systems, and for the removal of ammonium in
fisheries, fish farms, and aquariums.

* SEWAGE TREATMENT. Zeolite is used in sewage treatment plants to
remove nitrogen from waste streams and to deodorize methane gas.

* NUCLEAR WASTE AND OTHER ENVIRONMENTAL CLEANUP. Zeolites have shown a
strong ability to selectively remove strontium, cesium and various
other radioactive isotopes from solution. Zeolites can also be used
for the cleanup of soluble metals such as mercury, chromium, lead,
zinc, arsenic, molybdenum, nickel, cobalt, antimony, calcium, silver
and uranium.

* ODOR CONTROL. A major cause of odor around cattle, hog, and poultry
feed lots is the generation of the ammonium in urea and fecal
material. The ability of zeolites to absorb ammonium prevents the
formation of ammonia gas which generates the odor.

* GAS SEPARATION. Zeolites have been used for some time in the
separation of some gases, as re-oxygenation of downstream water from
sewage plants, smelters, pulp and paper plants, and fish ponds and
tanks, and removal of carbon dioxide, sulfur dioxide, and hydrogen
sulfide from methane generators as organic waste, sanitary landfills,
municipal sewage systems and animal waste treatment facilities.

* MISCELLANEOUS USES. Other uses include catalysts and petroleum
refining, building applications, solar energy and heat exchange,
carriers for insecticides, pesticides and herbicides, and desiccants.

ENVIRONMENTAL MATTERS

The exploration, development and production programs conducted in the United
States are subject to local, state and federal regulations regarding
environmental protection. Some of our production and mining activities are
conducted on public lands. We believe that our current discharge of waste
materials from our processing facilities is in material compliance with
environmental regulations and health and safety standards. The 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 us involving the
exploration for or the production of minerals are subject to existing laws
and regulations relating to exploration procedures, safety precautions,
employee health and safety, air quality standards, pollution of water
sources, waste materials, odor, noise, dust and other environmental
protection requirements adopted by federal, state and local governmental
authorities. We may be required to prepare and present to the 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 our
reclamation and remediation plans which may be required due to changes in
state or federal regulations could have an adverse effect on our operations,
the range of reasonably possible loss in excess of the amounts accrued, by
site, cannot be reasonably estimated at this time.

We account for our accrual of environmental liabilities when the costs of
such are probable and reasonably estimable. The initial accruals for all our
sites are based on comprehensive remediation plans approved by the various
regulatory agencies in connection with permitting or bonding requirements.
Our accruals are further based on presently enacted regulatory requirements
and adjusted only when changes in requirements occur or when management
revises its estimate of costs required to comply with existing requirements.
As remediation activity has physically commenced, management has been able to
refine and revise its estimates of costs required to fulfill future
environmental tasks based on contemporaneous cost information, operating
experience, and changes in regulatory requirements. In instances where costs
required to complete our remaining environmental obligations are clearly
determined to be in excess of the existing accrual, we have adjusted the
accrual accordingly. When regulatory agencies require additional tasks to be
performed in connection with our environmental responsibilities we evaluate
the costs required to perform those tasks and adjust our accrual accordingly,
as the information becomes available. In all cases, however, our accrual at
year end is based on the best information available at that time to develop
estimates of environmental liabilities.

In 1994, the U.S. Forest Service, under the provisions of the Comprehensive
Environmental Response Liability Act of 1980, designated our 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 cyanide solution. In 1996, we signed a consent decree
related to the reclamation and remediation at the Preachers Cove mill in
Idaho as required by the Idaho Department of Environmental Quality, and
continued substantial reclamation activities as required by the decree.
During 1999, we updated and presented a Phase II reclamation plan to the U.S.
Forest Service detailing plans for the final reclamation of the Yankee Fork
Mill site. Based upon our analysis of costs required to implement the
specific tasks in the Phase II plan, we reduced the Yankee Fork reclamation
accrual by $70,000, to reflect our current estimate of costs required to
complete reclamation tasks.

As of September 30, 2001, the cyanide solution discharge was complete, the
mill removed, and most of the cyanide leach residue disposed of. Only earth
moving, monitoring activities and containment of the remaining leach residue
remain to complete the activities prescribed by the consent decree. Upon
completion of reclamation activities at the Preachers Cove mill site pursuant
to the consent decree, the site will be closed and the U.S. Forest Service
will terminate the consent decree.

Reclamation activities are currently at a standstill due to weather
conditions at the site and the completion of a biological assessment to be
submitted to the National Marine Fisheries Service and the U.S. Fish and
Wildlife Service. Upon receiving clearance from the U.S. Forest Service to
commence the Phase II reclamation work, we anticipate substantial completion
of reclamation in a six to twelve month period.

We have environmental remediation obligations at our antimony processing site
near Thompson Falls, Montana ("the Stibnite Hill Mine Site"). Under the
regulatory jurisdiction of the U.S. Forest Service and subject to the
operating permit requirements of the Montana Department of Environmental
Quality, we have performed substantial environmental reclamation activities
during 1999 and 2000. These activities included installation of a

PVC liner and a geotextile layer on two of the tailings ponds and the removal
of approximately 25,000 yards of tailings material from a third pond. We
made adjustments increasing our reclamation accruals by $51,150 and $25,615
in fiscal years 1999 and 2000, respectively, based upon management's revised
estimates of costs to comply with regulatory requirements in effect during
the respective years. We plan to line a storm water pond and construct a
water treatment facility, thus fulfilling the majority of our environmental
responsibilities at the Stibnite Hill Mine site.

During the second quarter of 1999, we began final reclamation and closure at
the Yellow Jacket property. Upon Yellow Jacket's closure, we estimated the
required costs and time to perform closure activities, and adjusted the
Yellow Jacket reclamation liability on a quarterly basis, re-instating the
accrual as costs were incurred (a total of $73,893), to reflect our estimate
reclamation and closure costs left to incur.

During the third and fourth quarters of 1999 we began disassembly of the mill
and mill buildings and removed tailings waste from the tailings ponds. In
2000, we evaluated progress on Yellow Jacket's closure and reclamation and
continued to adjust the reclamation liability for costs as incurred (a total
of $86,960) based upon labor and equipment cost experience in 1999 and our
estimate of costs related to specific tasks yet-to-complete at year end.

The reclamation activity is being overseen by the U.S. Forest Service and the
Idaho Department of Environmental Quality. Reclamation work is commencing on
the clean-up of non-cyanide tailings material at the property; and we believe
this project will be substantially completed by the end of 2001. In 2000,
the U.S. Forest Service began releasing environmental bonding funds to us
that had been deposited for remediation of the Yellow Jacket Mine.

During 2001, we recorded a reclamation accrual for our Bear River Zeolite
subsidiary based on an analysis performed by management, and as reviewed and
approved by regulatory authorities for environmental bonding purposes. The
accrual of $7,500, represents the Company's estimated costs of reclaiming the
acreage disturbed by our zeolite operations in accordance with regulatory
requirements.

Reclamation activities at the Yellow Jacket Mine and the Stibnite Hill Mine
Site have proceeded informally under supervision of the U.S. Forest Service
and state departments of environmental quality. We have complied with
regulators' requirements and do not expect the imposition of substantial
additional requirements.

We have posted cash performance bonds with a bank and the U.S. Forest Service
in connection with our reclamation activities. Upon completion of
reclamation activities, the bonds will be terminated and the applicable
regulatory authorities may release up to $123,250.

We believe we have accrued adequate reserves to fulfill our environmental
remediation responsibilities as of September 30, 2001. We have made
significant reclamation and remediation progress on all our properties over
the past three years and have complied with regulatory agencies in our
environmental remediation efforts. The change in amounts accrued for
environmental remediation activities in 1998, 1999 and as of September 30,
2001 is as follows:

Yankee Fork Thompson Falls Yellow Jacket Bear River
Mill Site Antimony Plant Mine Zeolite Totals

Balance December 31, 1997 $171,500 $ 270,000 $115,044 $556,544
Less: Reclamation work (55,472) (55,472)
Adjustment of Accrued Remediation Costs 2,200 2,200
Balance December 31, 1998 $116,028 $ 272,200 $115,044 $503,272
Less: Reclamation work (169,736) (73,893) (243,629)
Adjustment of Accrued Remediation Costs (70,000) 51,150 73,893 55,043
Balance December 31, 1999 $ 46,028 $ 153,614 $115,044 $314,686
Less: Reclamation work 0 (60,913) (86,960) (147,873)
Adjustment of Accrued Remediation Costs 0 25,615 86,960 112,575
Balance December 31, 2000 $ 46,028 $ 118,316 $115,044 $279,388
Less: Reclamation work (2,806) (46,357) (49,163)
Adjustment of Accrued Remediation Costs $7,500 7,500
Balance September 30, 2001 $ 46,028 $ 115,510 $ 68,687 $7,500 $237,725

MARKETING. During the first quarter of 1999, and in prior years dating back
to 1991, we marketed our antimony products with HoltraChem, Inc. and later
our successor, BCS, in a 50/50 profit sharing arrangement. In March 1999, we
notified BCS that we were terminating the agreements that HoltraChem had
assigned BCS, and that we were going to market and distribute antimony
products independently. As a result we took steps to market our products to
existing and prospective customers, and have been able to do so successfully.
We employ full time marketing personnel and have negotiated various
commission based sales agreements with other chemical distribution companies.

ANTIMONY PRICE FLUCTUATIONS. The operating results of us have been and will
continue to be directly related to the market prices of antimony metal, which
have fluctuated widely in recent years. The volatility of prices is
illustrated by the following table which sets forth the average prices of
antimony metal per pound as reported by sources deemed reliable by us.

Year Average Price
---- -------------
2001 $0.58
2000 0.67
1999 0.58
1998 0.63
1997 0.93
1996 1.60
1995 2.28

The range of sales prices for antimony oxide per pound was as follows for the
periods indicated:

Year High Low Average Price
---- ----- ----- -------------
2001 $5.99 $0.66 $0.93
2000 5.88 0.65 0.99
1999 5.52 0.65 0.85
1998 5.57 0.83 1.13
1997 5.75 0.98 1.41
1996 4.50 1.53 1.86
1995 3.12 0.89 2.56

Antimony metal prices are determined by a number of variables over which we
have no control. These include the availability and price of imported
metals, the quantity of new metal supply, and industrial and

commercial demand. If metal prices decline and remain depressed, our
revenues and profitability may be adversely affected.

We use antimony metal as a raw material for our products. We obtain antimony
metal from sources in China (70%), Canada (15%) and the U.S. (15%).
Purchases from Canadian and U.S. sources have been made at world market
prices, as established by the London Metals Bulletin from time to time.
Antimony metal from Chinese sources has been supplied by Fortune America
Trading Ltd., a New Jersey-based dealer, pursuant to a long-term supply
contract to supply antimony metal at a fixed price.

Until recently, antimony prices have been at a 35 year low. Beginning in
late June 2000, prices have risen dramatically, primarily as a result of
restrictions by the Chinese government on exports of antimony metal from
China, one of the principal suppliers of antimony. The fixed price set by
the supply contract with the dealer in Chinese-sourced metal was below
current market price. The dealer has refused to supply metal at the
contracted price, forcing us to purchase antimony metal from this dealer and
other sources at current world market prices. However, we have been able to
raise our antimony product prices to our customers and to increase our gross
profits. Our USAMSA venture is intended eventually to reduce our dependence
on foreign sources but is not expected to provide sufficient raw material for
several years.

OTHER. We hold no material patents, licenses, franchises or concessions, but
we consider our antimony processing plant proprietary in nature. We use the
trade name "Montana Brand Antimony Oxide" for the marketing of our antimony
products.

We are 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,
Federal and State Health and Safety statutes and Sanders County, Lemhi County
and Custer County health ordinances.

EMPLOYEES. As of September 30, 2001, we employed 20 full-time employees.
The number of full-time employees may vary seasonally. None of our employees
is covered by any collective bargaining agreement.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

This prospectus includes forward-looking statements that involve risks and
uncertainties.

"Forward looking statements" can be identified by the use of forward-looking
terminology such as "believes," "could," "possibly," "anticipates,"
"estimates," "projects," "expects," "may," "will," or "should." The
statements are subject to some risks, uncertainties and assumptions. No
assurances can be given that the future results anticipated by forward-
looking statements will be achieved. Our actual results may differ
materially from these forward-looking statements. You should not place undue
reliance on these forward-looking statements, which apply only as of the date
of this prospectus.

Some of the matters discussed are forward-looking statements that involve
risks and uncertainties, including the impact of antimony prices and
production volatility, changing market conditions and the regulatory
environment and other risks. Actual results may differ materially from those
projected. These forward-looking statements represent our judgment as of the
date of this filing. We disclaim, however, any intent or obligation to
update these forward-looking statements.

RESULTS OF OPERATIONS FOR THE PERIOD ENDED DECEMBER 31, 2000

The Company reported a net loss of $67,699 during 2000 compared to net loss
of $230,086 in 1999. The net loss in 2000 is primarily attributable to a
$985,425 loss from operating activities in 2000, offset by an extraordinary
gain recognized on the conversion of certain debts to common stock of
$917,726. The net loss in 1999 is primarily due to a net loss from operations
of 307,677 offset by an extraordinary gain of $77,591 recognized on the
conversion of certain debts to common stock.

Total revenues from antimony product sales during 2000 were $5,016,661
compared to $4,710,278 in 1999. The increase in sales during 2000 was
partially due to the Company's sharing of 50% of antimony product sales with
an affiliated sales company during the first quarter of 1999 compared to
selling all of its antimony products independently during 2000. Sales of
antimony products during 2000 were 5,039,327 pounds at an average sale price
of $1.00 per pound; during 1999 5,517,443 pounds of antimony products were
sold at an average sales price of $0.85 per pound. Gross profit from
antimony product sales was $472,890 in 2000, or 9% of sales, compared to
$876,178 in 1999, or 18.6% of sales. The decrease in gross profit during
2000 was due to rapidly escalating antimony metal prices during the year that
were quickly reflected in higher production costs and, correspondingly,
higher cost of sales. Antimony product sale prices in the market reacted
slower to the increase in metal prices however, as competitors with greater
quantities of finished goods inventory on hand were able to continue selling
products at prices that were in effect prior to the increase in metal prices.
During the last quarter of 2000 and the first quarter of 2001, antimony
product sales prices increased; and as a result, the Company anticipates the
return to a higher level of gross profit.

Combined care, maintenance and reclamation costs and exploration and
evaluation costs at the Yellow Jacket property totaled $241,244 during 2000
compared to $200,867 in 1999. The increase during 2000 was due to the
Company's increased reclamation activities during 2000 compared to 1999.

During 1999, we updated and presented a Phase II reclamation plan to the U.S.
Forest Service detailing plans for the final reclamation of the Yankee Fork
Mill site. Based upon our analysis of costs required to implement the
specific tasks in the Phase II plan, we reduced the Yankee Fork reclamation
accrual by $70,000, to reflect our current estimate of costs required to
complete reclamation tasks.

During 2000, reclamation activities were at a standstill pending the
completion of a biological assessment to be submitted to the National Marine
Fisheries Service and the U.S. Fish and Wildlife Service.

Under the regulatory jurisdiction of the U.S. Forest Service and subject to
the operating permit requirements of the Montana Department of Environmental
Quality, we have performed substantial environmental reclamation activities
during 1999 and 2000 at our antimony processing site near Thompson Falls,
Montana. These activities included installation of a PVC liner and a
geotextile layer on two of the tailings ponds and the removal of

approximately 25,000 yards of tailings material from a third pond. We made
adjustments increasing our reclamation accruals by $51,150 and $25,615 in
fiscal years 1999 and 2000, respectively, based upon management's revised
estimates of costs to comply with regulatory requirements in effect during
the respective years. We plan to line a storm water pond and construct a
water treatment facility during 2001, thus fulfilling the majority of our
environmental responsibilities at the Stibnite Hill Mine site.

General and administrative expenses increased from $400,432 in 1999, to
$631,869, an increase of $231,437 or approximately 58%. The increase in 2000
compared to 1999 was principally due to consulting expenses compensated with
shares of the Company's common stock totaling approximately $150,000 and
legal and accounting costs of approximately $64,000, associated with the
filing of a registration statement with the Securities and Exchange
Commission.

Antimony sales expenses were $339,267 during 2000 and comparable to sales
expenses of $337,309 during 1999. Management expects sales expenses to
decrease in future periods based on restructuring efforts made to its sales
staff during 2000.

Interest expense of $157,145 in 2000 decreased compared to interest expense
of $185,985 in 1999 primarily due to the conversion of certain debts to
common stock in 2000. Interest and other income was $8,459 in 2000 and
$12,190 in 1999. The decrease in interest and other income during 2000 was
primarily due to decreased interest earnings on reclamation bonds, when bonds
were released to the Company during 2000 as the Yellow Jacket property
reclamation progressed.

In 2000, the Company settled and extinguished a debt owed the Estate of Bobby
C. Hamilton of approximately $1.5 million (see Financial Condition and
Liquidity) through payment of $500,000 cash and issuance of 250,000 shares of
the Company's restricted common stock. In connection with the settlement the
Company recorded an extraordinary gain of $917,726. In 1999, the Company
converted $682,397 of defaulted debenture principal and interest and $144,339
of principal and interest related to certain mining lease royalties
(Judgments payable) into common stock of the Company. In connection with
these conversions the Company recorded an extraordinary gain of $77,591, and
an addition to paid-in-capital of 534,101.

FINANCIAL CONDITION AND LIQUIDITY AT DECEMBER 31, 2000

At December 31, 2000, Company assets totaled $893,920, and there was a
stockholders' deficit of $1,708,085. The stockholders' deficit decreased
$475,110 from the prior year, primarily due to the conversion of debts to
common stock. In order to continue as a going concern, the Company is
dependent upon (1) profitable operations from the antimony division, (2)
additional equity financing, and (3) continued availability of bank
financing. Without financing and profitable operations, 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 used by operations during 2000 was $791,089 compared to net cash
provided by operations during 1999 of $59,986, a change of approximately
$851,000. The change in cash used by operations in 2000 compared to cash
provided by operations in 1999 was primarily due to the operating loss
(before extraordinary item) of $985,425 in 2000 compared to the similar
operating loss of $307,677 during 1999.

Investing activities used $38,499 during 2000 compared to $76,417 used in
1999. Cash used in investing activities during both years related exclusively
to purchases and construction of antimony plant and equipment.

Financing activities provided $829,588 during 2000 compared to $16,431 of
cash in 1999. Cash from financing activities in 2000 related principally to
cash received from the sale of convertible debentures (and related warrants)
and common stock sales. Cash provided during 1999 related primarily to cash
received from bank financing.

Other significant financial commitments for future periods will include:

* Servicing notes payable to bank.

* Servicing convertible debenture interest and principal payments.

* Completion and maintenance of an evergreen registration statement for
common shares held by certain shareholders.

* Keeping current on property, payroll, and income tax liabilities and
accounts payable.

* Fulfilling responsibilities with environmental, labor safety and
securities regulatory agencies.

In an effort to improve USAC's financial condition, USAC's management, during
the second quarter of 2000, negotiated the settlement of a debt of
approximately $1.5 million owed the Estate of Bobby C. Hamilton (the
"Estate"). USAC entered into a Settlement and Release of All Claims
Agreement (the "Settlement Agreement") with the Estate on June 23, 2000. The
Settlement Agreement extinguished the note payable to the Estate in exchange
for a cash payment of $500,000 and the issuance of 250,000 shares of USAC's
common stock.

The cash payment to the Estate was financed by the issuance of $600,000 of
Debentures pursuant to a financing agreement with Thomson Kernaghan & Co.,
Ltd., a Canadian investment banker. The financing agreement with Thomson
Kernaghan provided, among other things, for the sale of up to $1,500,000 of
USAC's convertible debentures to the investment banker and its affiliates.
The debentures are convertible into common stock at a price per share equal
to 75% of the average of the three lowest closing bid prices per share of
USAC's common stock as reported by Bloomberg L.P. in the 20 trading days
immediately preceding the closing date of the debenture sale or the
conversion date, whichever is lower, but in any event not greater than $0.90
per share. The debentures are due two years from their issue date and accrue
interest at 10% to be paid annually on each anniversary date of the issue.
During 2000, USAC issued $675,000 of convertible debentures pursuant to the
financing agreement. The maximum conversion price is $0.29125 per share. In
connection with the debenture sale, USAC issued warrants to purchase
1,394,230 shares of common stock at $0.39 per share.

The financing agreement required that USAC execute a registration rights
agreement, binding USAC to prepare and file a registration statement with the
Securities and Exchange Commission registering the resale of shares of common
stock issuable upon conversion of the debentures and upon exercise of the
related warrants, and to increase the number of its authorized but
outstanding shares of common stock to accommodate the exercise of the
warrants and conversion of the debentures. During 2000, USAC expended
substantial resources in preparation of the registration statement; but as of
the date of this report, the registration statement has not yet become
effective. The registration rights agreement that USAC executed provides for
certain liquidated damages to be payable to the debenture holders for the
delay of the effectiveness of the registration statement. The liquidated
damages are calculated as two percent (2%) per month of the aggregate value
of the principal amount of the debentures outstanding combined with the
aggregate exercise prices of the outstanding purchasers' and agent's warrants
issued in connection with the convertible debentures, accrued on a daily
basis subsequent to the registration deadline. Accordingly, the filing of an
effective registration statement for the convertible debentures continues to
be a significant priority of the Company.

During 2000, the Company issued $247,922 of 10% convertible debentures (due
December 2003) to John C. Lawrence, the Company's president and a director.
The debentures were issued in exchange for various cash advances the Company
had received for working capital purposes from Mr. Lawrence during the year.
Also in December 2000, USAC issued two $50,000 10% convertible debentures
(one $50,000 debenture being due November 22, 2003 and the second debenture
being due December 12, 2003) to Al Dugan, a USAC shareholder and accredited
investor, in exchange for $100,000 cash paid by Mr. Dugan and used for
working capital purposes. The debentures issued to Mr. Lawrence and Mr.
Dugan are convertible into USAC's common stock at a conversion price which is
the lower of $0.31 per share or 75% of the average of the three lowest
closing bid prices for USAC's common stock as quoted by Bloomberg L.P. in the
20 trading days immediately preceding the conversion date. In connection
with the issuance of these debentures USAC issued warrants to Mr. Lawrence
and Mr. Dugan to purchase 151,213 and 60,974 shares of common stock,
respectively, at $0.41 per share.

In 2000, the Company sold 782,511 shares of its common stock for $255,000,
with 100,000 shares sold pursuant to the exercise of stock purchase warrants.
Proceeds from stock sales were used to fund the Company's operations.

RESULTS OF OPERATIONS FOR THE PERIOD ENDED SEPTEMBER 30, 2001

During the third quarter of 2001 the Company's sales of antimony products
continued to be depressed due to a general slowdown of economic conditions
being experienced by a majority of the Company's customers. During the first
nine months of 2001, approximately 34% of the Company's sales of antimony
products were made to one customer and approximately 13% of sales of antimony
products were to a second customer, compared with approximately 21% of the
Company's sales of antimony products to one customer and 12% of sales of
antimony products to a second individual customer during the nine-month
period ended September 30, 2000. During the second and third quarters of
2001, the Company's 75% owned subsidiary, Bear River Zeolite Company ("BRZ"),
delivered its first sales of crushed zeolite material. To date, significant
interest in BRZ's zeolite products has been expressed by several potential
users. During the third quarter of 2001, the Company continued pursuing the
preparation and filing of a registration statement to register shares of
common stock and warrants for resale by selling security holders pursuant to
a financing arrangement entered into with Thomson Kernaghan & Co., Ltd.
during 2000. During the second and third quarters of 2001, reclamation work
at the Company's Yellow Jacket mine site commenced and substantial progress
was made in reclamation of the property. As a result of the reclamation work
performed, the Company received funds from the release of reclamation bonds
held by regulating agencies during the third quarter of 2001.

FOR THE THREE-MONTH PERIOD ENDED SEPTEMBER 30, 2001 COMPARED TO THE THREE-
MONTH PERIOD ENDED SEPTEMBER 30, 2000

The Company's operations resulted in a net loss of $214,472, or $0.01 per
basic weighted average share outstanding, for the three-month period ended
September 30, 2001 compared with net income of $603,705 or $0.03 per basic
weighted average share outstanding for the three-month period ended September
30, 2000. The increase in loss for the third quarter of 2001 compared to the
third quarter of 2000 is primarily due to decreased antimony product sales
during the third quarter of 2001 and the absence of any extraordinary gain on
the conversion of debts that were recorded during the third quarter of 2000.

Total revenues from antimony product sales for the third quarter of 2001 were
$778,533 compared with $1,094,721 for the comparable quarter of 2000, a
decrease of $316,188. Sales of antimony products during the third quarter
of 2001 consisted of 904,048 pounds at an average sale price of $0.86 per
pound. During the third quarter of 2000 sales of antimony products consisted
of 1,086,618 pounds at an average sale price of $1.01 per pound. Costs of
antimony production and costs of freight and delivery were $573,661 and
$85,517, or $0.63 and $0.09 per pound sold, respectively, for the three-month
period ended September 30, 2001 as compared to costs of antimony production
and costs of freight and delivery of $989,111 and $93,718, or $0.91 and $0.09
per pound sold, respectively, for the three-month period ended September 30,
2000. The decrease in cost of antimony production per pound during the third
quarter of 2001 as compared to the third quarter of 2000 resulted from more
efficient raw material purchasing during the third quarter of 2001.

During the third quarter of 2001, the Company incurred expenses totaling
$87,915 associated with its newly formed 75% owned subsidiary, Bear River
Zeolite Company ("Bear River Zeolite" or "BRZ"). Sales of zeolite products
totaled $4,080 during the third quarter of 2001. No such costs or sales were
incurred during the third quarter of 2000, as the subsidiary did not yet
exist.

Care, maintenance, and reclamation costs at the Company's Yellow Jacket
property decreased from $80,018 during the third quarter of 2000 to $1,813
during the third quarter of 2001. The decrease was primarily due to the
decrease of accrued reclamation cost adjustments during the third quarter of
2001, and the property nearing its final reclamation.

General and administrative expenses were $153,768 during the third quarter of
2001, compared to $130,042 during the third quarter of 2000. The increase in
general and administrative costs during the third quarter of 2001 compared to
the same quarter of 2000 was principally due to a product warranty expense of
$45,175 incurred during the third quarter of 2001 that was not incurred
during 2000 and costs associated with the preparation and filing of a
registration statement.

Sales expenses were $33,367 during the third quarter of 2001 compared with
$58,931 in the third quarter of 2000. The decrease was due to management's
restructuring of its sales staff with less costly and fewer employees.

Interest expense was $37,999 during the third quarter of 2001, and was
comparable to interest expense of $36,725 incurred during the third quarter
of 2000. Included in interest expense during the third quarter of 2001 was
$25,575 accrued on debentures payable and amortization of debenture discounts
totaling $3,161.

Accounts receivable factoring expense was $24,312 during the third quarter of
2001 and was comparable to $22,077 of factoring expense incurred during the
third quarter of 2000. Interest income decreased from $1,880 during the third
quarter of 2000 to $1,267 during the third quarter of 2001 due to a
corresponding decrease in reclamation bonds held during 2001.

FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2001 COMPARED TO THE NINE-MONTH
PERIOD ENDED SEPTEMBER 30, 2000

The Company's operations resulted in a net loss of $717,861, or $0.04 per
basic weighted average share outstanding, for the nine-month period ended
September 30, 2001 compared with net income of $136,816 or $0.01 per basic
weighted average share outstanding for the nine-month period ended September
30, 2000. The increase in loss for the third quarter of 2001 compared to the
similar quarter of 2000 is primarily due to decreased antimony product sales
and the absence of any extraordinary gain on the conversion of debts during
the third quarter of 2001.

Total revenues from antimony product sales for the nine-month period ended
September 30, 2001 were $2,816,573 compared with $3,458,184 for the
comparable period of 2000, a decrease of $641,611. The major factor in the
decrease in sales of antimony products during the nine-month period ended
September 30, 2001, compared to the same period of 2000, is decreased sales
volume experienced in 2001. Sales of antimony products during the nine-
month period ended September 30, 2001, consisted of 3,033,482 pounds at an
average sale price of $0.93 per pound. During the nine-month period ended
September 30, 2000, sales of antimony products consisted of 3,646,579 pounds
at an average sale price of $0.95 per pound. Costs of antimony production
and costs of freight and delivery were $2,197,430 and $308,052, or $0.72 and
$0.10 per pound sold, respectively, for the nine-month period ended September
30, 2001, as compared to costs of antimony production and costs of freight
and delivery of $2,833,154 and $337,695, or $0.78 and $0.09 per pound sold,
respectively, for the nine-month period ended September 30, 2000. The
decrease in cost of antimony production per pound during the nine months
ended September 30, 2001, is due to more efficient raw material purchasing
during 2001.

During the nine-month period ended September 30, 2001, the Company incurred
expenses totaling $253,583 associated with Bear River Zeolite. Sales of
zeolite products totaled $6,735 during the second and third quarters of 2001.
No such costs or sales were incurred during the third quarter of 2000, as the
subsidiary did not yet exist.

Care, maintenance, and reclamation costs at the Company's Yellow Jacket
property decreased from $157,924 during the nine-month period ended September
30, 2000 to $4,673 during the nine-month period ended September 30, 2001. The
decrease was primarily due to the decrease of accrued reclamation cost
adjustments during the nine-month period ended September 30, 2001, and the
property nearing its final reclamation.

General and administrative expenses were $484,376 during the nine-month
period ended September 30, 2001, and were comparable to $474,237 during the
nine-month period ended September 30, 2000. Included in general and
administrative expenses during the nine-month period ended September 30,
2000, were $153,000 of expenses relating to financial consulting services
provided the Company during the first quarter of 2000. General and
administrative expenses during the nine-month period ended September 30,
2001, included legal costs relating primarily to the preparation of a
registration statement of approximately $94,000. Also included in general
and administrative costs during the nine-month period ended September 30,
2001 was $70,000 related to the accrual of late filing penalties associated
with the registration statement and $45,175 related to a product warranty
settlement.

Sales expenses were $106,205 during the nine-month period ended September 30,
2001, compared with $253,282 during the nine-month period ended September 30,
2000. The decrease was due to management's restructuring of its sales staff,
with less costly and fewer employees.

Interest expense was $119,599 during the nine-month period ended September
30, 2001, and was comparable to interest expense of $117,964 incurred during
the nine-month period ended September 30, 2000. Included in interest expense
during the nine-month period ended September 30, 2001 was $76,725 accrued on
debentures payable and amortization of debenture discounts totaling $9,483.

Accounts receivable factoring expense was $71,487 during the nine-month
period ended September 30, 2001 and was comparable to $71,365 of factoring
expense incurred during the nine-month period ended September 30, 2000.
Interest income decreased from $6,527 during the nine-month period ended
September 30, 2000 to $4,236 during the same period of 2001 due to a
corresponding decrease in reclamation bonds held during 2001.

FINANCIAL CONDITION AND LIQUIDITY AT SEPTEMBER 30, 2001

At September 30, 2001, Company assets totaled $730,263, and there was a
stockholders' deficit of $2,235,146. The stockholders' deficit increased
$527,061 from December 31, 2000, primarily due to the net loss incurred
during 2001. At September 30, 2001, the Company's total current liabilities
exceeded its total current assets by $1,399,436. Due to the Company's
operating losses, negative working capital, and stockholders' deficit, the
Company's independent accountants included a paragraph in the 2000 financial
statements relating to a going concern uncertainty. To continue as a going
concern the Company must generate profits from its antimony and zeolite sales
and acquire additional capital resources through the sale of its securities
or from short and long-term debt financing. Without financing and profitable
operations, the Company may not be able to meet its obligations, fund
operations and continue in existence. While management is optimistic, there
can be no assurance that the Company will be able to sustain profitable
operations and meet its financial obligations.

Cash used by operating activities during the first nine months of 2001 was
$217,770, and resulted primarily from the nine-month loss of $717,861 as
adjusted by decreasing inventories, increasing accounts payable, the non-cash
effects of depreciation and amortization, and changes in other current assets
and liabilities.

During the second and third quarters of 2001 the Company performed
substantial reclamation activities at its Yellow Jacket property. As a
result $46,357 was used in connection with Yellow Jacket reclamation and
adjusted against the Yellow Jacket reclamation accrual. Management is
confident that Yellow Jacket is in the final stages of its reclamation, and
future cash outflows related to these reclamation activities will soon cease.

Cash used in investing activities during the first nine months of 2001 was
$107,592, of which $87,083 related to construction of capital assets to be
used at the Bear River Zeolite facility. The majority of the remaining
expenditures related to improving the Company's propane fuel storage
facilities.

The Company was able to fund its operating loss and its acquisition of plant
and equipment for the nine-month period ended September 30, 2001, from net
cash provided from financing activities of $325,362. During the nine-month
period ended September 30, 2001, $188,300 was generated from sales of 941,500
shares of unregistered common stock and warrants (See Note 3). Net
borrowings from a bank provided $81,757 of cash during the first nine months
of 2001. John C. Lawrence, the Company's president and a director, advanced
the Company a net amount of $94,895 during the nine-month period ended
September 30, 2001.

We anticipate funding our operations through additional sales of common stock
and debt financing in 2001. We believe that we will have additional
financial resources from increasing gross profits from our antimony business
and sales of zeolite from our newly formed Bear River Zeolite Company
subsidiary.

A dispute with Thomson Kernaghan & Co. Limited concerning a possible claim
for late registration penalties under the financing agreement has been
settled by our June 19, 2001 agreement to issue ratably to our debenture
holders and to register for resale an additional 240,343 shares of common
stock.

DESCRIPTION OF PROPERTY

ANTIMONY DIVISION

Our principal plant and mine are located in the Burns Mining District,
Sanders County, Montana, approximately 15 miles west of Thompson Falls,
Montana. We hold 2 patented mill sites and 12 patented lode mining claims
covering 192 acres. 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. We are currently purchasing
foreign raw antimony materials and continues to produce antimony metal, oxide
and sodium antimonate from our antimony processing facility near 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 our former
Preachers Cove Mill.

PREACHERS COVE MILLSITE. We 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 nearing final reclamation.

YELLOW JACKET MINING DISTRICT

The Yellow Jacket property consisted of 12 patented and various
unpatented lode mining claims located in the Yellow Jacket Mining District
of Lemhi County, Idaho, approximately 70 miles southwest of Salmon, Idaho.
In 1996, our personnel determined that the existing mineral resource was
not economical to mine without additional operating capital and an
increase in current metals prices. Accordingly, production operations at
the Yellow Jacket property were suspended and the mine placed on a care-
and-maintenance status. Subsequent to 1996, we engaged in underground
exploration activities at the property. During the second quarter of
1999, due to depressed precious metal prices and the absence of a
discovery of mineralized material that could be economically mined, we
abandoned our leasehold interests in the Yellow Jacket property and began
final reclamation and closure activities. (See "Description of Business-
Environmental Matters.")

ZEOLITE DIVISION

We own 75% of Bear River Zeolite Company ("BRZ"), an Idaho corporation
incorporated on June 1, 2000. BRZ has entered into a ten-year mining lease
with Webster Farm, L.L.C. The lease entitles BRZ to surface mine and process
zeolite on property located in Preston, Idaho in exchange for a royalty
payment. The royalty is a percentage of the unprocessed ore sale price which
varies between 5%-7%. The minimum annual royalty during the first five years
is $1,000. The royalty is also payable on zeolite mined on adjacent Bureau
of Land Management ("BLM"), ground on which BRZ has located five additional
BLM claims, if BRZ accesses those claims across the leased property. BRZ is
currently constructing a processing plant on the property. Mining and
processing equipment will be leased to BRZ by us; and we will advance
development and start-up costs. Production and sale of zeolite is not
expected to contribute materially to our operating revenues in the near
future.

DIRECTORS AND EXECUTIVE OFFICERS

Affiliation
Name Age with us Expiration of Term
---------------- --- --------------- ------------------
John C. Lawrence 62 Chairman, President, Secretary, Annual meeting
and Treasurer; Director

Robert A. Rice 76 Director Annual meeting

Leo Jackson 59 Director Annual meeting

BUSINESS EXPERIENCE OF DIRECTORS AND EXECUTIVE OFFICERS

JOHN C. LAWRENCE. Mr. Lawrence has been the President and a Director since
our inception. Mr. Lawrence was the President and a Director of AGAU Mines,
Inc., our corporate predecessor, since the inception of AGAU Mines, Inc., in
1968. He is a member of the Society of Mining Engineers and a recipient of
the Uuno Sahinen Silver Medallion Award presented by Butte Tech, University
of Montana.

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 a Director since 1975.

LEO JACKSON. Mr. Jackson is a resident of El Paso, Texas. For the past 15
years, he has been a principal owner and the President of Production
Minerals, Inc., a company which has an indirect 25% interest in the stock of
USAMSA. Mr. Jackson is the principal owner of Minera de Roja, S.A. de C.V.,
and has been involved in the production and marketing of industrial minerals
such as fluorspar and celestite in the United States and Mexico for 25 years.
Mr. Jackson speaks fluent Spanish and has a BBA degree from the Sul Ross
State University in Texas. Mr. Jackson has been a Director since February
1999.

We are not aware of any involvement by our directors or executive officers
during the past five years in legal proceedings that are material to an
evaluation of the ability or integrity of any director or executive officer.

BOARD MEETINGS AND COMMITTEES. Our Board of Directors held twelve (12)
regular meetings during the 2000 calendar year. Each incumbent director
attended at least 75% of the meetings held during the 2000 calendar year, in
the aggregate, by the Board and each committee of the Board of which he was a
member. Our Board of Directors does not have a Compensation Committee, or a
Nominating Committee.

In June of 2001, our Board of Directors established an Audit Committee.

BOARD MEMBER COMPENSATION. We pay directors' fees in the form of 6,000
shares of our common stock per year per director. Directors are also
reimbursed reasonable out-of-pocket expenses in connection with attending
meetings.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. Section 16(a) of
the Securities Exchange Act of 1934 requires that our directors and executive
officers and the holders of 10% or more of our common stock, to file reports
of ownership and changes in ownership with the Securities and Exchange
Commission. Officers, directors and stockholders holding more than 10% of our
common stock are required by the regulation to furnish us with copies of all
Section 16(a) forms they have filed.

Based solely on our review of copies of Forms 3, 4, and 5 furnished to us,
Mr. Lawrence timely filed Form 4 reports during 2000 and timely filed a Form
5 annual report with covering the 2000 fiscal year. Mr. Babbitt was late
filing a Form 5 report for the 2000 fiscal year. We do not know if Mr. Rice
and Mr. Jackson timely filed, during 2000, Form 4 reports reporting receipt
of annual stock compensation or Form 5 annual reports for the 2000 fiscal
year. We do not know if A.W. Dugan, a shareholder who became a 10%
beneficial owner during 2000, timely filed Form 3 or Form 4 reports during
2000, or timely filed a Form 5 report for the 2000 fiscal year.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding beneficial ownership of
our common stock as of December 31, 2001, updated to reflect the conversion
of convertible debentures into our common stock in December 2001 at $0.20 per
share (i) by each person who is known by us to beneficially own more than 5%
of our common stock; (ii) by each of our officers and directors; and (iii) by
all of our officers and directors as a group. Unless otherwise stated, each
person's address is c/o United States Antimony Corporation, P.O. Box 643,
1250 Prospect Creek Road, Thompson Falls, Montana 59873.

Name and Address of Amount and Nature of Percent of
Title of Class Beneficial Owner(1) Beneficial Ownership Class
-------------- ------------------- -------------------- ---------
Common stock The Maguire Family and 1,401,898(2) 5.4(1)
related entities as a group
c/o Walter L. Maguire, Sr.
P.O. Box 129
Keller, VA 23401

Common stock The Dugan Family 4,027,591(4) 14.86(1)
c/o A. W. Dugan
1415 Louisiana Street, Suite 3100
Houston, TX 77002

Common stock Thomson Kernaghan & Co Limited(6) 291,025(5) 1.1(1)
365 Bay Street
Toronto, Ontario M5H 2V2
CANADA

Preferred Series A A. Gordon Clark, Jr. 4,500(7) 100.0
stock 2 Musket Trail
Simsbury, CT 06070

Preferred Series C Walter L. Maguire, Sr. 49,091(7) 27.6
stock P.O. Box 129
Keller, VA 23401

Preferred Series C Richard A. Woods 48,305(7) 27.2
stock 59 Penn Circle West
Penn Plaza Apts.
Pittsburgh, PA 15206

Preferred Series C Dr. Warren A. Evans 48,305(7) 27.2
stock 69 Ponfret Landing Road
Brooklyn, CT 06234

Preferred Series C Edward Robinson 32,203(7) 18.1
stock 1007 Spruce Street 1st Floor
Philadelphia, PA 19107
Common stock John C. Lawrence 4,173,136(3) 15.75

Common stock Robert A. Rice 217,762 Nil
Common stock Leo Jackson 60,700 Nil
Common stock Gary D. Babbitt 73,467 Nil
-----------------------------------------------------------------------------
Common stock All Directors and executive
officers as a group
(4 persons) 4,525,065 17.06

(1) Beneficial Ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of common stock
subject to options or warrants currently exercisable or convertible, or
exercisable or convertible within 60 days of December 31, 2001 are deemed
outstanding for computing the percentage of the person holding options or
warrants but are not deemed outstanding for computing the percentage of
any other person. Percentages are based on a total of 26,092,414 shares
of common stock, 4,500 shares of Series A Preferred Stock and 177,904
shares of Series C Preferred Stock outstanding on December 31, 2001, and
the shares issuable upon the exercise of options and warrants exercisable
on or within 60 days of December 31, 2001, as described below.

(2) Includes 1,007,843 shares owned by the Maguire Foundation; 129,000 shares
owned by Walter L. Maguire, Sr.; 45,500 shares owned by Walter L.
Maguire, Trustee; and 219,555 shares owned by Walter L. Maguire, Jr.
Excludes 1,003,409 shares owned by the 1934 Maguire Trust.

(3) Includes 3,771,923 shares of common stock and warrants to purchase
401,213 shares of common stock. Excludes 75,000 shares owned by Mr.
Lawrence's sister, as to which Mr. Lawrence disclaims beneficial
ownership.

(4) Includes 1,273,767 shares owned by A.W. Dugan; 183,333 shares owned by
Lydia Dugan; 1,561,440 shares, in the aggregate, owned by companies owned
and controlled by A.W. Dugan; and warrants issued to Mr. Dugan to
purchase 1,009,051 shares of common stock.

(5) Includes 141,025 warrants each to purchase one share of common stock at
$.39 per share beneficially owned by CALP II LP and Striker Capital, Ltd.
and 150,000 shares owned beneficially, and of record, by Thomson
Kernaghan & Co. Limited. CALP II LP, Striker Capital, Ltd. and Thomson
Kernaghan & Co. Limited are under the common control of Mark Valentine,
Chief Executive Officer of Thomson Kernaghan & Co., Limited, who has
authority to vote and dispose of the shares beneficially owned by each of
them. Does not include 384,543 shares issuable upon exercise of warrants
at $.39 per share and 192,272 shares issuable upon exercise of warrants
at $.39 per share owned by Ian McKinnon and Michelle McKinnon
respectively. Ian McKinnon is the father of Michelle McKinnon both of
whom were employees of Thomson Kernaghan & Co. Limited and have
represented that they are not controlled by, controlling, or under common
control of Thomson Kernaghan & Co. Limited.

(6) By Agreement effective July 11, 2000, Thomson Kernaghan & Co., Limited
purchased, as agent for other investors, $675,000 principal amount of
convertible debentures, an agent's warrant to purchase 961,358 shares of
Company's common stock at $.39 per share and a purchaser's warrant to
purchase 432,692 shares of Company's common stock at $.39 per share. The
debentures were converted into shares of our common stock at $0.20 per
share in December 2001. Thomson Kernaghan & Co., Limited is the
beneficial owner of 150,000 shares of Company's common stock and
disclaims beneficial ownership of the warrants and shares issuable upon
exercise of the warrants. Further, Thomson Kernaghan has advised the
Company that, except as indicated in note (5), it is not a member of a
group, as defined in Section 13(d) of the Securities and Exchange Act of
1934, which owns 5% or more of Company's common stock.

(7) The outstanding Series A and Series C preferred shares carry voting
rights.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Described below are transactions during the last two years to which we are a
party and in which any of our directors or executive officer or any
beneficial owner of five percent (5%) or more of any class of our voting

securities or relatives of our directors, executive officers or five percent
(5%) beneficial owners has a direct or indirect material interest. See also
transactions described in notes 4, 7, 9, 12, 14 and 17 to our Financial
Statements as of December 31, 2000.

* Leo Jackson, a director, is a principal owner and president of
Production Minerals, Inc., a company which indirectly owns 25% of the stock
of USAMSA. We own 50% of the stock of USAMSA.

* We reimburse John C. Lawrence, a director and Chief Executive Officer,
for operational and maintenance expenses incurred in connection with our
use of equipment owned by Mr. Lawrence, including welding trucks, backhoes,
and an aircraft. Amounts for 2000 totaled $29,709. See note 9 to our 2000
Financial Statements. During the six months ended September 30, 2001, we
reimbursed Mr. Lawrence $35,351 for these expenses.

* At December 31, 2001, we owed legal fees in the amount of $128,961 to
our outside firm in which Gary D. Babbitt, then a director, is a partner.

* On December 26, 2001, we sold A.W. Dugan, a shareholder and an
accredited investor, 125,000 shares of our common stock and issued warrants
to purchase 125,000 shares of common stock, for $0.20 per share or $25,000.
The warrants are exercisable at $0.29 per share and expire on December 26,
2004.

* In late December 2001, we issued 1,938,261 shares of our common stock
to John C. Lawrence (a director, Chief Executive Officer and a shareholder)
and A.W. Dugan, a shareholder and an accredited investor, upon conversion
of $347,992 principal amount of debentures and $39,660 accrued interest
thereon at $0.20 per share.

* On December 11, 2001, we sold A.W. Dugan, a shareholder and an
accredited investor, 275,000 shares of our common stock and issued warrants
to purchase 150,000 shares of common stock, for $0.20 per share or $55,000.
The warrants are exercisable at $0.29 per share and expire December 11,
2004.

* Effective December 12, 2000, we issued our 10% convertible debenture
in the principal amount of $100,000 due December 12, 2003 to John C.
Lawrence, a director, president and shareholder. During the fourth quarter
of 2000, we issued our 10% convertible debenture in the principal amount of
$50,000 due December 2003 to A.W. Dugan, a shareholder of the company and
an accredited investor. On December 5, 2000 we issued our 10% convertible
debenture due December 31, 2003 to John C. Lawrence, a director, president
and shareholder of the company, in the principal amount of $147,992. We
also issued related warrants to Mr. Lawrence and Mr. Dugan for 151,213
shares and 60,974 shares, respectively, of our common stock exercisable for
five years at $0.41 per share. In December 2001, the debentures including
both principal and accrued interest thereon were converted into 1,938,261
shares of our common stock at $0.20 per share.

* On July 11, 2001, we sold Gary D. Babbitt, then a director, 45,000
shares of our common stock and issued warrants to purchase 22,500 shares of
common stock, for $0.20 per share or $9,000. The warrants are exercisable
at $0.35 per share and expire July 11, 2004.

* On June 27, 2001, we sold Delaware Royalty, which is an affiliate of
A.W. Dugan, a stockholder and an accredited investor, 100,000 shares of our
common stock and issued warrants to purchase 100,000 shares of common
stock, for $0.20 per share or $20,000. The warrants are exercisable at
$0.35 per share and expire June 26, 2004.

* On May 25, 2001, we sold Delaware Royalty, which is an affiliate of
A.W. Dugan, a stockholder and an accredited investor, 200,000 shares of our
common stock and issued warrants to purchase 100,000 shares of common
stock, for $0.20 per share or $40,000. The warrants are exercisable at
$0.35 per share and expire May 25, 2004.

* On August 28, 2000, we authorized the issuance of 21,611 shares of
common stock to John C. Lawrence, a director and Chief Executive Officer,
and 934 shares of common stock to Robert A. Rice, a director. Mr. Lawrence
and Mr. Rice were entitled to receive these shares upon conversion of
Series C Preferred Stock in 1999. These shares were not issued at the time
of conversion because our calculation of the number of conversion shares
inadvertently failed to account for the impact of the anti-dilution
provisions of the Series C preferred stock, which were triggered by our
issuance of common stock for less than the Series C conversion price.
These shares are being issued retroactively to the date of conversion of
the Series C Preferred Stock, August 5, 1999. The adjusted conversion
price was $0.5419 per share.

* On August 25, 2000, we sold 257,511 shares of our common stock to A.W.
Dugan, a stockholder and accredited investor, for $0.29125 per share or
$75,000 and issued to Mr. Dugan warrants exercisable at $0.39 per share to
purchase 48,077 shares of common stock. The warrants expire August 25,
2002.

* On July 12, 2000, we sold 100,000 shares of our common stock to Nortex
Corporation, a company controlled by A.W. Dugan, a stockholder and
accredited investor, for cash totaling $25,000, or $0.25 per share.

* On July 11, 2000, we issued our 10% Convertible debentures due June
30, 2002 to Thomson Kernaghan & Co. Limited in the principal amount of
600,000, together with a Purchaser's Warrant for 384,615 shares and an
Agent's Warrant for 961,358 shares of our common stock exercisable for five
years at $0.39 per share. We subsequently agreed to issue an additional
$75,000 principal amount of these 10% convertible debentures, together with
an additional Purchaser's Warrant for 48,077 shares of our common stock.
The debenture conversion price is based on market prices at the time of
conversion but not greater than $0.29125 per share.

* John C. Lawrence, a director and Chief Executive Officer, advanced us
$141,243, in the aggregate, for working capital in April and July 2000. In
December 2000, the principal and accrued interest on this obligation were
exchanged for a 10% convertible debenture in the principal amount of
$147,992. During the first nine months of 2001, Mr. Lawrence advanced the
Company a net amount of $94,895 for working capital purposes, which was
outstanding at September 30, 2001.

* On March 17, 2000, we issued to Thomson Kernaghan & Co. Limited, which
subsequently and for a period of time became the beneficial owner of more
than five percent of our common stock, 150,000 shares of common stock
pursuant to our 2000 Stock Plan, in consideration of financial consulting
services including the preparation and analysis of our financial condition
and financing options.

* On March 16, 2000, we issued 100,000 shares of our common stock to
A.W. Dugan, a stockholder and accredited investor, for cash totaling
$25,000, upon exercise of previously granted warrants to purchase common
stock for $0.25 per share.

* On February 2, 2000, we sold 125,000 shares of our common stock to
Delaware Royalty Company, Inc., a company controlled by A.W. Dugan, a
stockholder and accredited investor, for cash totaling $50,000 or $0.40 per
share.

* On January 3, 2000, we agreed to issue to A.W. Dugan, a principal
shareholder, warrants to purchase 300,000 shares of our common stock in
consideration of financial consulting services rendered by Mr. Dugan and
valued at $10,000. The warrants are exercisable at $0.25 per share and
expire January 25, 2003.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The Securities and Exchange Commission requires the following table setting
forth for fiscal years ending December 31, 2000, 1999 and 1998, the
compensation paid by us to our principal executive officer.

Annual Compensation Long-Term Compensation
---------------------------- ----------------------------------------------------------------
Awards Payouts
---------------------------------------- ----------------------
Other Annual Restricted Options/ Securities All Other All Other
Name and Principal Position Year Salary Bonus Compensation(1) Awards(3) Underlying LTIP SARs Payouts Compensation
--------------------------- ---- ------- ----- --------------- ------------------- -------------------- --------- ------------

John C. Lawrence, President 2000 $81,000 N/A $4,154 $3,250 None None None
John C. Lawrence, President 1999 $72,000 N/A $4,154 $720 None None None
John C. Lawrence, President 1998 $72,000 N/A $4,154 $844 None None None

(1) Represents earned but unused vacation.
(2) Increased to $96,000 beginning August 1, 2000.
(3) These figures represent the fair values, as of the date of issuance, of
the annual Director's fee payable to Mr. Lawrence in the form of shares
of our restricted common stock.

LEGAL PROCEEDINGS

Except as discussed in "Description of Business - Environmental Matters",
there are no material legal proceedings to which we are currently a party or
to which our property is subject.

LEGAL MATTERS

The validity of the issuance of our securities offered by this prospectus has
been passed upon for us by Sonfield & Sonfield, Houston, Texas.

EXPERTS

The consolidated balance sheets of United States Antimony Corporation as of
December 31, 1999 and December 31, 2000 and the related consolidated
statements of operations for the years then ended included in this prospectus
s have been audited by Decoria, Maichel & Teague P.S., independent auditors,
as stated in their report, which is included in this prospectus in reliance
upon the report of the firm given upon their authority as experts in
accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We file annual reports, quarterly reports and current reports, proxy
statements and other information with the U.S. Securities and Exchange
Commission (SEC). In addition, we have filed with the SEC a Registration
Statement on Form SB-2 under the Securities Act of 1933 with respect to our
common stock offered in this prospectus. This prospectus does not contain
all of the information set forth in the registration statement and the
exhibits and schedules to that registration statement. For further
information with respect to us and our common stock, we refer you to the
registration statement and its exhibits and schedules. With respect to
statements contained in this prospectus as to the contents of any contract or
other document, reference is made to the copy of that contract or document
filed as an exhibit to the registration statement .

You may read and copy materials that we have filed with the SEC, including
the registration statement, at the following SEC Public Reference Room:

450 Fifth Street, N.W.
Room 1024
Washington, D.C. 20549

You can call the SEC at 1-800-SEC-0330 for more information about the
operation of the Public Reference Room. Copies of our filings with the SEC
are also available to the public through the SEC's Internet website at
http:\\www.sec.gov.

INDEX TO FINANCIAL STATEMENTS

FINANCIAL STATEMENTS AS OF DECEMBER 31, 2000 AND 1999 (AUDITED)
Independent Auditor's Report................................................2
Consolidated Balance Sheets.................................................3
Consolidated Statements of Operations.......................................4
Consolidated Statements of Changes in Stockholders' Deficit.................5
Consolidated Statements of Cash Flows.......................................6
Notes to Consolidated Financial Statements...............................8-23

FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2001 (UNAUDITED)
Consolidated Balance Sheets................................................24
Consolidated Statements of Operations......................................25
Consolidated Statements of Cash Flows......................................26
Notes to Consolidated Financial Statements..............................26-28

F-1

INDEPENDENT AUDITOR'S REPORT

The Board of Directors and Stockholders of
United States Antimony Corporation

We have audited the accompanying consolidated balance sheets of United States
Antimony Corporation and its subsidiaries as of December 31, 2000 and 1999,
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 its subsidiaries as of December 31, 2000 and 1999,
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 20. to the consolidated financial statements, the
Company has restated certain amounts in its previously reported consolidated
financial statements for the year ended December 31, 1999.

Spokane, Washington
March 22, 2001, except for Note 20.
which is as of October 19, 2001

F-2

United States Antimony Corporation and Subsidiaries
Consolidated Balance Sheets
December 31, 2000 and 1999

2000 1999
(as restated)

ASSETS

Current assets:
Restricted cash $ 8,518 $ 227
Inventories 221,457 276,599
Accounts receivable, less allowance
for doubtful accounts of $30,000 and $50,000 119,568 60,205
---------- ----------
Total current assets 349,543 337,031

Investment in USAMSA 111,088 111,088
Properties, plants and equipment, net 246,250 341,417
Restricted cash for reclamation bonds 123,250 178,986
Deferred financing charges, net 63,789
---------- ----------
Total assets $ 893,920 $ 968,522
========== ==========

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
Checks issued and payable $ 107,133 $ 45,544
Accounts payable 429,654 467,596
Accrued payroll and property taxes 241,588 263,667
Accrued payroll and other 89,680 132,464
Judgment payable 43,480 40,645
Accrued interest payable 47,324 14,640
Due to related parties 10,307 8,128
Notes payable to bank, current 150,625 160,395
Note payable to Bobby C. Hamilton, current 87,596
Accrued reclamation costs, current 80,000 256,000
---------- ----------
Total current liabilities 1,199,791 1,476,675

Debentures payable, net of discount 997,449
Notes payable to bank, noncurrent 205,377 165,570
Note payable to Bobby C. Hamilton, noncurrent 1,450,785
Accrued reclamations costs, noncurrent 199,388 58,687
---------- ----------
Total liabilities 2,602,005 3,151,717
---------- ----------

Commitments and contingencies (Notes 1 and 18)
Stockholders' deficit:
Preferred stock, $.01 par value, 10,000,000
shares authorized:
Series A: 4,500 shares issued and outstanding
(liquidation preference $110,250) 45 45
Series B: 750,000 shares issued and outstanding
(liquidation preference $802,500) 7,500 7,500
Series C: 177,904 and 205,996 shares issued and
outstanding (liquidation preference $97,847) 1,779 2,060
Common stock, $.01 par value, 30,000,000 and
20,000,000 shares authorized; 18,375,564 and
16,900,252 shares issued and outstanding 183,755 169,003
Additional paid-in capital 15,352,386 14,824,048
Accumulated deficit (17,253,550) (17,185,851)
---------- ----------
Total stockholders' deficit (1,708,085) (2,183,195)
---------- ----------
Total liabilities and stockholders' deficit $ 893,920 $ 968,522
========== ==========

The accompanying notes are an integral part of these financial statements.
F-3

United States Antimony Corporation and Subsidiaries
Consolidated Statements of Operations
For the years ended December 31, 2000 and 1999

2000 1999
(as restated)

Revenues:
Sales of antimony products and other $ 5,016,661 $ 4,710,278

Cost of antimony production 4,037,289 3,511,097
Freight and delivery 506,482 323,003
----------- -----------
Gross profit 472,890 876,178
----------- -----------

Other operating expenses:
Exploration and evaluations 53,985
Reclamation-antimony 25,615 51,150
Care, maintenance, and reclamation-Yellow Jacket 241,244 146,882
General and administrative 631,869 400,432
Sales expenses 339,267 337,309
----------- -----------
1,237,995 989,758
----------- -----------

Other (income) expense:
Gain from accrued reclamation costs adjustment (70,000)
Gain from accounts payable adjustment (29,322) (16,440)
Interest expense 157,145 185,985
Factoring expense 100,956 106,742
Interest income and other (8,459) (12,190)
----------- -----------
220,320 194,097
----------- -----------

Loss before extraordinary item (985,425) (307,677)
Extraordinary gain on conversion of debts
to common stock 917,726 77,591
----------- -----------
Net loss $ (67,699) $ (230,086)
=========== ===========

Basic net loss per share of common stock
Before extraordinary item $ (0.06) $ (0.02)
Extraordinary item 0.05 Nil
----------- -----------
Net loss $ (0.01) $ (0.02)
----------- -----------

Basic weighted average shares outstanding 17,772,693 14,597,917
=========== ===========

Diluted net loss per share of common stock
Before extraordinary item $ (0.06) $ (0.02)
Extraordinary item 0.05 Nil
----------- -----------
Net loss $ (0.01) $ (0.02)
----------- -----------

Diluted weighted average shares outstanding 17,772,693 14,839,455
=========== ===========

The accompanying notes are an integral part of these financial statements.
F-4

United States Antimony Corporation and Subsidiaries
Consolidated Statements of Changes in Stockholders' Deficit
for the years ended December 31, 2000 and 1999

Preferred Stock
----------------------------------------------------------
Series A Series B Series C
---------------- ---------------- -------------------
Shares Amount Shares Amount Shares Amount
------ ------ ------- ------ --------- --------

Balances December 31, 1998 13,425,925 $134,259 $14,079,260 $(16,955,765) $(2,709,093)

Issuance of common stock for
cash purchased by employees 4,800 48 1,152 1,200

Issuance of common stock in
exchange for services 40,000 400 9,600 10,000

Issuance of common stock for
conversion of debts 1,036,761 10,368 729,656 740,024

Issuance of common stock to
employees for compensation 20,000 200 2,400 2,600

Issuance of common stock to
directors for compensation 18,000 180 1,980 2,160

Conversion of series C preferred
stock to common stock 2,354,766 23,548

Net loss (230,086) (230,086)
---------- -------- ----------- ------------ -----------
Balances December 31, 1999 16,900,252 $169,003 $14,824,048 $(17,185,851) $(2,183,195)
(as restated) ========== ======== =========== ============= ===========

Issuance of common stock for cash 682,511 6,825 223,175 230,000

Exercise of stock warrants 100,000 1,000 24,000 25,000

Issuance of common stock for services 300,000 3,000 150,000 153,000

Issuance of common stock as
settlement of debt 250,000 2,500 78,125 80,625

Conversion of series C preferred
stock to common stock 28,092 281

Issuance of common stock to former
Series C preferred stockholders 35,542 355 3,910 4,265

Warrants issued for consulting services 10,000 10,000

Warrants issued in connection
with convertible debentures 29,628 29,628

Common stock issued to directors
for compensation 79,167 791 9,500 10,291
Net loss (67,699) (67,699)
---------- -------- ----------- ------------ -----------
Balances, December 31, 2000 18,375,564 $183,755 $15,352,386 $(17,253,550) $(1,708,085)
========== ======== =========== ============ ===========

The accompanying notes are an integral part of these financial statements.
F-5

United States Antimony Corporation and Subsidiaries
Consolidated Statements of Cash Flows
for the years ended December 31, 2000 and 1999

2000 1999
(as restated)
---------- ---------
Cash flows from operating activities:
Net loss $ (67,699) $(230,086)
Adjustments to reconcile net income (loss) to
net cash provided by operations:
Depreciation 133,666 130,714
Amortization of deferred financing charges 18,711
Write off of capitalized start-up costs 8,590
Extraordinary gain on conversion of debts
to common stock (917,726) (77,591)
Gain from accrued reclamation costs adjustment (70,000)
Gain from accounts payable adjustment (29,322) (16,440)
Provision for doubtful accounts (20,000) 50,000
Issuance of common stock to directors as
compensation 10,291 2,160
Issuance of common stock to employees as
compensation 2,600
Issuance of common stock and warrants for services 163,000 10,000
Issuance of common stock to former Series C holders 4,265
Change In:
Restricted cash (8,291) (6)
Accounts receivable (39,363) (110,205)
Inventories 55,142 88,799
Restricted cash for reclamation bond 55,736
Deferred financing charges (82,500)
Accounts payable (8,620) 228,863
Accrued payroll and property taxes (22,079) 95,185
Accrued payroll and other (42,784) 35,752
Judgments payable 2,835 11,780
Accrued debenture interest payable 36,769 13,250
Payable to related parties 2,179 5,206
Accrued reclamation costs (35,299) (118,585)
---------- ---------
Net cash provided by operating activities (791,089) 59,986
========== =========

Cash flows from investing activities:
Purchase of properties, plants and equipment (38,499) (76,417)
---------- ---------
Net cash used in investing activities (38,499) (76,417)
========== =========

Cash flows from financing activities:
Proceeds from issuance of common stock and warrants 230,000
Exercise of warrants 25,000
Proceeds from bank term note payable 250,000 259,484
Payments on notes payable to bank (219,963) (200,330)
Change in checks issued and payable 61,589 14,455
Proceeds from issuance of convertible debentures 1,022,992
Payments on note payable to Bobby C. Hamilton (540,030) (57,178)
---------- ---------
Net cash provided by financing activities 829,588 16,431
========== =========

Net decrease in cash 0 0
Cash, beginning of year 0 0
---------- ---------
Cash, end of year $ 0 $ 0
========== =========

The accompanying notes are an integral part of these financial statements.
F-6

United States Antimony Corporation and Subsidiaries
Consolidated Statements of Cash Flows, Continued:
for the years ended December 31, 2000 and 1999

2000 1999
-------- --------
Supplemental disclosures:
Cash paid during the year for interest $119,866 $157,239
======== ========
Noncash financing activities:
Discount on debentures payable for detachable warrants 29,682
Judgment payable converted to common stock 144,339
Debentures payable converted to common stock 335,000
Accrued debenture interest payable converted
to common stock 347,397
Series C preferred stock converted to common
stock 281 23,548
Note payable to Bobby C. Hamilton converted to
common stock 958,321

The accompanying notes are an integral part of these financial statements.
F-7

United States Antimony Corporation and Subsidiaries
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.

The principal business of the Company has been the production and sale of
antimony products. Up until the first quarter of 1999 the Company sold
its products pursuant to a profit sharing agreement with affiliated
chemical sales companies. On March 31, 1999, the company terminated the
agreement and started selling its products independently.

In September of 2000, the Company finalized its purchase of a 50%
interest in United States Antimony, Mexico S.A. de C.V. ("USAMSA") to
mine, mill and produce antimony metal and other related products from
certain states in Mexico. During 2000, the Company formed a 75% owned
subsidiary, Bear River Zeolite Company, to mine and market zeolite and
zeolite products from a mineral deposit in south-eastern Idaho.

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, 2000, the Company had negative
working capital of approximately $850,000, an accumulated deficit of
approximately $17.2 million and a total stockholders' deficit of
approximately $1.7 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:

* In 2000 and 1999, the Company devoted substantial efforts to the
research and development of new antimony products and applications.
These efforts have resulted in advances in the Company's
preparation, packaging, and quality of the antimony products it
delivers to customers. The Company believes that it will be able to
stay competitive in the antimony business and generate increasing
profits because of these advances.

* In 2000 and 1999, the Company converted debts totaling $958,321 and
$826,736, respectively, of principal and accrued interest into
common stock of the Company.

* During 2000, the Company negotiated a financing arrangement with a
Canadian investment banking firm, that provides borrowings of up to
$1.5 million in convertible debentures and related warrants.
Pursuant to this arrangement, the Company borrowed $675,000 in 2000.

* In 2000, the Company generated $255,000 through sales of 682,511
shares of its unregistered common stock and warrants to existing
shareholders and the exercise of 100,000 stock purchase warrants.
The Company plans to raise equity funding through additional stock
sales in 2001. However, there can be no assurance that the Company
will be able to successfully raise additional capital through the
sale of its stock.

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.

F-8

2. CONCENTRATION OF RISK:

The Company purchases the majority of its raw antimony used in the
production of finished antimony products from Chinese producers through
metal brokers. If the supply of antimony from China is reduced, it is
possible that the Company's antimony product operations could be
adversely affected. During the years ended December 31, 2000 and 1999,
25% and 20%, respectively, of the Company's revenues were generated by
antimony product sales to one customer. In addition, during 2000, 11% of
the Company's revenues were generated by antimony product sales to a
second individual customer.

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 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.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

PRINCIPLES OF CONSOLIDATION

The Company's consolidated financial statements also include the accounts
of Bear River Zeolite Company, a 75% owned subsidiary. Intercompany
balances and transactions are eliminated in consolidation. The Company
accounts for its investment interest in its 50% owned foreign entity,
USAMSA, by the equity method.

RESTRICTED CASH

Restricted cash consists of cash held for investment in USAMSA, payment
of delinquent payroll taxes and reclamation performance bonds.

INVENTORIES

Inventories at December 31, 2000 and 1999, consisted of ownership of
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 net realizable value of inventories.

DEFERRED FINANCING CHARGES

Deferred financing charges related to convertible debenture sales are
amortized on a straight-line basis over the term of the debentures.

PROPERTIES, PLANTS AND EQUIPMENT

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 (five to fifteen years).
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 accumulated depreciation are
eliminated from the accounts and any resulting gain or loss is reflected
in operations.

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

F-9

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.

Management's estimates of metal prices, operating capital requirements
and reclamation costs are subject to risks and uncertainties of changes
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 necessitate 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.

RECLAMATION AND REMEDIATION

All of the Company's mining 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 as current or noncurrent based on the expected timing of
expenditures.

The Company accrues costs associated with environmental remediation
obligations when it is probable that such costs will be incurred and they
are reasonably estimable. 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.

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.

REVENUE RECOGNITION

Sales of antimony products are recorded upon shipment to the customer.

INCOME (LOSS) PER COMMON SHARE

F-10

Basic earnings per share is arrived at by dividing net income (loss)
available to common stockholders by the weighted average number of common
shares outstanding, and does not include the impact of any potentially
dilutive common stock equivalents. Common stock equivalents, including
warrants to purchase the Company's common stock and common stock issuable
upon the conversion of debentures are excluded from the calculations when
their effect is antidilutive.

STOCK-BASED COMPENSATION

Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" ("SFAS No. 123"), requires companies to
recognize stock-based expense based on the estimated fair value of
employee stock options. Alternatively, SFAS No. 123 allows companies to
retain the current approach set forth in APB Opinion 25, "Accounting for
Stock Issued to Employees," provided that expanded footnote disclosure is
presented. The Company has not adopted the fair value method of
accounting for stock-based compensation under SFAS No. 123, but provides
the pro forma disclosure required when appropriate.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," as amended, which defines
derivatives, requires that all derivatives be carried at fair value, and
provides for hedge accounting when certain conditions are met. This
statement is effective for the first fiscal quarter of fiscal years
beginning after June 15, 2000. Adoption of this statement will not have a
material impact on the Company's consolidated financial position, results
of operations or cash flows.

In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial
Statements" ("SAB 101"). SAB 101 provides guidance on the recognition,
presentation and disclosure of revenue in financial statements. All
registrants are expected to apply the accounting and disclosures
described in SAB 101. The Company is required to adopt SAB 101 in the
fourth quarter of fiscal 2001, retroactive to the beginning of the year.
Adoption of SAB 101 will not have a material impact on the Company's
consolidated financial position, results of operations or cash flows.

In March 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44, "Accounting for Certain Transactions Involving
Stock Compensation an Interpretation of APB Opinion No. 25" ("FIN 44").
FIN 44 clarifies the application of APB Opinion No. 25 and, among other
issues, clarifies the following: the definition of an employee for
purposes of applying APB Opinion No. 25; the criteria for determining
whether a plan qualifies as a noncompensatory plan; the accounting
consequence of various modifications to the terms of the previously fixed
stock options or awards; and the accounting for an exchange of stock
compensation awards in a business combination. FIN 44 is effective July
1, 2000, and has been adopted by the Company.

In April 1998, Statement of Position 98-5, "Reporting on the Costs of
Start-up Activities" ("SOP 98-5") was issued. SOP 98-5 provides guidance
on the financial reporting of start-up costs and organizational costs. It
requires costs of start-up activities and organizational costs to be
expensed as incurred. During 1999, the Company expensed $8,590 of
organizational costs that had previously been capitalized relating to its
investment in USAMSA. No cumulative effect of a change in accounting
principle was recognized, however, due to the immateriality of the
amount. If a cumulative effect had been recognized, accumulated deficit
at December 31, 1998 would have been increased by $8,590.

4. SALES OF ACCOUNTS RECEIVABLE:

The Company sells the majority of its accounts receivable to a financing
company pursuant to the terms of a factoring agreement entered into on
March 30, 1999. According to the terms of the agreement, the receivables
are sold with full recourse and the Company assumes all risks of
collectibility. Accordingly, the Company maintains an allowance for
doubtful accounts receivable based upon the expected collectibility of
all trade receivables. The performance of all obligations and payments
to the factoring company is personally guaranteed by John C. Lawrence,
the Company's president and director. As consideration for Mr.
Lawrence's guarantee, the Company granted a mortgaged security interest
to Mr. Lawrence collateralized by

F-11

the Company's real and personal property. In addition, Mr. Lawrence was
granted 250,000 warrants to purchase common stock of the Company
exercisable at $0.25 per share (see Note 14).

The factoring agreement requires that the Company pay 4% of the face
amount of the receivables sold up to $1,200,000, and 2% of the face
amount of receivables sold thereafter as a financing fee. Financing fees
paid by the Company during the year ended December 31, 2000 and 1999
totaled $100,956 and $106,742, respectively. At December 31, 2000 and
1999, net accounts receivable of $4,867,093 and $3,909,774, respectively,
had been sold under the agreement. Proceeds from the sales were used to
fund inventory purchases and operating expenses. The agreement is for a
term of one year with automatic renewal for additional one-year terms.
The Company's sales of accounts receivable qualify as sales under the
provisions of Statement of Financial Accounting Standards No. 125,
"Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities."

5. INVENTORIES:

The major components of the Company's inventories at December 31, 2000
and 1999, were as follows:

2000 1999
-------- --------
Antimony Metal $ 32,187 $ 58,365
Antimony Oxide 118,728 206,316
Sodium Antimonate 70,542 11,918
-------- --------
$221,457 $276,599
======== ========

At December 31, 2000 and 1999, antimony metal consisted primarily of lots
purchased from foreign suppliers; antimony oxide inventory consisted of
finished product oxide held at the Company's plant or in outside
warehouses throughout the United States; sodium antimonite inventory
consisted of dry finished product and wet raw materials, the majority of
which were stored at the Company's antimony plant near Thompson Falls,
Montana.

6. PROPERTIES, PLANTS AND EQUIPMENT:

The major components of the Company's properties, plants and equipment at
December 31, 2000 and 1999 were as follows:

2000 1999
---------- ----------
Gold mill and equipment(1) $ 37,890 $ 37,890
Gold mining equipment (1) 1,265,392 1,265,392
Antimony mining buildings and equipment (2) 168,746 168,746
Antimony mill and equipment(2) 518,190 518,190
Chemical processing and office buildings 256,067 255,447
Chemical processing equipment 887,467 852,811
Other 80,178 76,955
---------- ----------
3,213,930 3,175,431
Less accumulated depreciation 2,967,680 2,834,014
---------- ----------
$ 246,250 $ 341,417
========== ==========

(1) The Company has removed the mill at Yankee Fork and most of the mining
and milling equipment as part of the reclamation process.
Substantially all of the remaining assets are fully depreciated.

(2) At December 31, 2000 and 1999, substantially all of these assets are
fully depreciated and the antimony milling buildings and equipment
are idle.

F-12

7. INVESTMENT IN USAMSA:

In September of 2000, the Company finalized its 50% investment is United
States Antimony, Mexico S.A. de C.V. ("USAMSA").

The company translates the foreign currency financial statements of its
Mexican subsidiary in accordance with the requirements of SFAS No. 52,
"Foreign Currency Translation." Assets and liabilities are translated at
current exchange rates, and related revenues and expenses are translated
at average exchange rates in effect during the period. Unaudited
condensed financial information for USAMSA during 2000 is as follows:

December 31,
2000
------------
ASSETS
Current assets $ 48,908
Noncurrent assets 78,973
--------
Total assets $127,881
========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 69,359
Stockholders' equity 58,522
--------
Total liabilities and stockholders' equity $127,881
========

Revenues:
Income from antimony processing $ 16,145
Processing costs (42,995)
--------
Gross loss $(26,850)
========

Other income and (expense):
Administrative and other costs $ (1,051)
Other income 3,023
--------
Net loss $(24,878)
========

8. JUDGMENT PAYABLE:

At December 31, 2000 and 1999, the Company owed $43,480 and $40,645,
respectively, to the Internal Revenue Service, in connection with a
default judgment in a bankruptcy proceeding.

The default judgment was originally entered against the Company by the
United States Bankruptcy Court in 1992 in favor of the bankruptcy estate
of a former legal counsel of the Company. In 1998, the Trustee of the
estate assigned the interest in the judgment to the Internal Revenue
Service. The judgment accrues interest at the Federal Judgment Interest
Rate, which has approximated 6-7%, and is due in monthly installments of
$3,000. During 1999 and 2000, the Company made no payments on this
judgment payable.

9. DUE TO RELATED PARTIES:

Amounts due to (from) related parties at December 31, 2000 and 1999 were
as follows (see also Note 17):

2000 1999
-------- ------
Entity owned by John C. Lawrence,
president and director $ (503) $ 788
John C. Lawrence, president and director 10,810 7,340
-------- ------
$ 10,307 $8,128
======== ======

F-13

Transactions affecting the payable to Mr. Lawrence during 2000 and 1999
were as follows:

2000 1999
-------- --------
Balance, beginning of year $ 7,340 $ 2,485
Equipment rental charges 29,709 30,616
Payments (26,239) (25,761)
-------- --------
Balance, end of year $ 10,810 $ 7,340
======== ========

10. NOTES PAYABLE TO BANK:

Notes payable to First State Bank of Thompson Falls, Montana ("First
State Bank") at December 31, 2000 were as follows:

Ten-year term note bearing interest at 10.5%; dated
May 5, 2000 payable in monthly installments of $3,384;
collateralized by certain equipment and patented and
unpatented mining claims in Sanders County, Montana;
personally guaranteed by John C. Lawrence (president
and director). $ 223,385

Note payable under a $95,000 revolving line-of-credit
agreement; dated December 18, 2000; bearing interest
at 11.5%; collateralized by certain equipment and
patented and unpatented mining claims in Sanders County,
Montana; principal and accrued interest due at maturity
on December 15, 2001; personally guaranteed by John C.
Lawrence. 88,257

Note payable under a $60,000 revolving line-of-credit
dated December 26, 2000; bearing interest at 11.5%;
collateralized by certain equipment and patented and
unpatented mining claims in Sanders County, Montana;
principal and accrued interest due at maturity on
March 26, 2001; personally guaranteed by John C. Lawrence. 36,305

Note payable under a $50,000 revolving line-of-credit
dated April 2, 2000; bearing interest at 10.5%;
collateralized by certain equipment and patented and
unpatented mining claims in Sanders County, Montana;
principal and accrued interest due at maturity on
April 2, 2001; personally guaranteed by John C. Lawrence. 8,055
---------
Total 356,002
Less current portion (150,625)
---------
Noncurrent portion $ 205,377
=========

At December 31, 2000, principal payments on the notes payable to bank
are due as follows:

Year Ending
December 31,
------------
2001 $150,625
2002 19,993
2003 22,197
2004 24,642
2005 27,358
Thereafter 111,187
--------
$356,002
========

F-14

11. NOTE PAYABLE TO BOBBY C. HAMILTON:

At December 31, 1999, the Company owed Bobby C. Hamilton ("Hamilton"), an
unsecured note payable of $1,538,381, arising from the settlement of
litigation brought against Hamilton by the Company in 1995. The terms
for repayment of the note included the payment of principal and interest
(at 7.5% per annum) equal to 4% of the gross sales of the Company's
operations, with a minimum total annual payment of principal and interest
of $200,000. During 1999, Mr. Hamilton died and the note went into his
personal estate (the "Estate"). In an effort to improve the Company's
financial condition, the Company's management began negotiations during
the second quarter of 2000 to extinguish and settle the debt owed the
Estate. As a result of management's negotiations, the Company entered
into a Settlement and Release of All Claims Agreement (the "Settlement
Agreement") with the Estate on June 23, 2000. The Settlement Agreement
extinguished the note payable to the Estate in exchange for a cash
payment of $500,000 and the issuance of 250,000 shares of the Company's
unregistered common stock. The cash payment was financed by the issuance
of $600,000 of convertible debentures (see Note 12) pursuant to a
financing agreement with Thomson Kernaghan & Co., Ltd., a Canadian
investment banker. The Settlement Agreement mutually released both
parties from any and all obligations between them, and included the
Company's indemnification of the Estate against any liabilities and
claims that may result from environmental remediation responsibilities on
the Company's Idaho gold properties.

12. Debentures Payable

THOMSON KERNAGHAN & CO., LTD.

In connection with the Settlement Agreement between the Company and the
Estate of Bobby C. Hamilton (see Note 11), the Company entered into a
financing agreement (the "Financing Agreement") with Thomson Kernaghan &
Co., Ltd. ("TK") on July 11, 2000. The financing agreement provided,
among other things, for the sale of up to $1,500,000 of the Company's
convertible debentures. In July of 2000, the Company sold an initial
tranche of $600,000 of convertible debentures and in August sold a second
tranche of $75,000 pursuant to the agreement with TK. In connection with
the debenture sales and terms of the Financing Agreement, the Company
issued stock purchase warrants totaling 961,538 to the debenture
purchasers' agent (TK) and 432,692 stock purchase warrants to the
debenture purchasers. The exercise price of the agent and purchaser
warrants is the closing bid price as reported by Bloomberg L.P. on the
trading day immediately preceding the July 11, 2000 (The effective date
of the Financing Agreement), or $0.39 per share. The warrants expire in
July and August of 2005.

The Financing Agreement also contained a registration rights agreement in
which Company agreed to register the debenture purchasers' resale of the
shares of common stock issued upon conversion of the debentures and upon
exercise of the related purchasers and agents warrants. For the $675,000
of debentures issued as of December 31, 2000, the registration rights
agreement requires that the Company register 150% of the conversion
shares and 100% of the underlying agent and purchaser warrant shares.
The registration rights agreement also provides for liquidated damages to
be due if the Company fails to have an effective registration statement
filed by the registration deadline (see Note 18).

The debentures are convertible into common stock at $0.29125 per share or
75% of the average of the three lowest closing bid prices per share of
the Company's common stock as reported by Bloomberg L.P. in the 20
trading days immediately preceding the conversion date, whichever is
lower. The converting debenture holder may not, however, own more than
9.9% of the then outstanding common stock of the Company after the
conversion.

The debentures are payable in full at their maturity date on June 30,
2002, with interest payable at 10% per annum and due annually.

The debentures are transferable, subject to the rules and regulation of
the Securities Act of 1933, and exchangeable for an equal amount of
aggregate principal in different denominations. The debenture agreement
requires that so long as any of the principal of or interest on the
debentures remain unpaid or unconverted, the Company shall not (i) merge
or consolidate with any other entity; (ii) sell or otherwise dispose

F-15

of a material portion of its assets (other than in the ordinary course of
business); (iii) pay any dividend on its shares (including any dividend
payable in common stock or other property); (iv) subdivide, split or
otherwise increase the number of shares of common stock; or (v) issue any
common stock or other equity securities, or any other stock, option,
warrant, right or other instrument that is convertible into or
exercisable or exchangeable for common stock or other equity securities,
except for (a) securities of a subsidiary that are issued to the Company;
and (b) securities sold and options granted to directors, officers and
employees of the Company pursuant to bona fide employee benefit plans;
provided, however, that the Company may issue such securities enumerated
in (v) above, with the prior written consent of the holders, which
consent the holder agrees not to unreasonably withhold.

RELATED PARTIES

During the fourth quarter of 2000, the Company sold $100,000 of
convertible debentures to Al Dugan, a significant shareholder, and
$247,992 of convertible debentures to John C. Lawrence, the Company's
president and a director. The debentures mature three years from the date
of issuance and accrue interest at 10%, payable upon each issuance
anniversary date. The debentures are convertible into common stock at
$0.31 per share or 75% of the average of the three lowest closing bid
prices per share of the Company's common stock as reported by Bloomberg
L.P. in the 20 trading days immediately preceding the conversion date,
whichever is lower.

The debentures are transferable, exchangeable for an equal amount of
aggregate principal in different denominations, and subject to the same
covenants regarding mergers, dispositions, dividend payments, and stock
sales as the convertible debentures sold pursuant to the financing
agreement with Thomas Kernaghan & Co., Ltd. (above).

In connection with the issuance, Mr. Dugan and Mr. Lawrence, were issued
60,974 and 151,213, respectively, stock purchase warrants. The warrants
expire five years from their date of issue and are exercisable for shares
of the Company's unregistered common stock at $0.41 per share.

The Company accounted for the detachable warrants issued in connection
with the debentures in accordance with Accounting Principles Board
Opinion No. 14, and calculated the fair value attributable to the
detachable warrants based upon the present value of the interest costs of
the debentures as compared to interest costs of the Company's alternative
financing sources. The resulting value was recorded as a discount against
the carrying value of the debentures, and amortized by the straight-line
method as interest expense over the terms of the debentures. During the
year ended December 31, 2000, $4,085 of the debentures payable discount
was amortized to interest expense.

At December 31, 2000, debentures payable are as follows:

Amount Maturing
---------- --------
$ 600,000 June, 2002
75,000 August, 2002
50,000 November, 2003
297,992 December, 2003
----------
1,022,992
(25,543) Less amortized discount
----------
$ 997,449
==========

13. 2000 STOCK PLAN

In January of 2000, the Company's Board of Directors resolved to create
the United States Antimony Corporation 2000 Stock Plan ("the Plan"). The
purpose of the Plan is to attract and retain the best available personnel
for positions of substantial responsibility and to provide additional
incentive to employees, directors and consultants of the Company to
promote the success of the Company's business. The maximum number of
shares of common stock or options to purchase common stock that may be
issued pursuant to the Plan is 500,000. In connection with the Plan, the
Company filed a Form S-8 registration statement with the Securities and
Exchange Commission in March of 2000, registering the Plan's shares
pursuant to Rule 416-c

F-16

of the Securities Act of 1933. At December 31, 2000, 300,000 shares of
the Company's common stock had been issued under the Plan (see Notes 14
and 18).

14. STOCKHOLDERS' DEFICIT:

INCREASE IN AUTHORIZED CAPITAL

On August 28, 2000, the Company's board of directors resolved to seek
shareholder approval of an amendment of the Company's Articles of
Incorporation to increase the aggregate number of shares of common stock
the Company shall have the authority to issue from 20,000,000 to
30,000,000. The increase in authorized shares was approved by the
Company's shareholders at the annual meeting of the shareholders on
October 31, 2000.

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, personal guarantees of
financial obligations and the issuance of debentures.

Transactions in stock warrants are as follows:

Number of Exercise Expiration
Warrants Prices Date
--------- ---------- --------
Balance, December 31, 1998 1,094,356 $0.25-0.80

Warrants issued to John C. Lawrence,
president and director, in connection
with his personal guarantee of a
financing arrangement 250,000 $0.25 (A)

Warrants issued to a stockholder and
consultant as compensation for services 100,000 $0.55 (B)

Warrants expired (225,000) $0.50-0.70
---------
Balance, December 31, 1999 1,219,356 $0.25-0.80
=========
Warrants issued as compensation
for consulting services 300,000 $0.25 (C)

Warrants exercised (100,000) $0.25

Warrants issued in connection
with issuance of debentures 1,606,417 $0.39-0.41 (D)

Warrants issued in connection
with stock sale 48,077 $0.39 (E)

Warrants expired (669,356) $0.70-0.80
---------
Balance December 31, 2000 2,404,494
=========

(A) Warrants are exercisable for as long as Mr. Lawrence personally
guarantees certain company financing arrangements.
(B) Warrants are exercisable on or before August of 2002.

F-17

(C) Warrants are exercisable on or before January of 2003.
(D) 1,394,230 warrants are exercisable on or before July-August of 2005;
212,187 warrants are exercisable on or before November-December of 2005.
(E) Warrants are exercisable on or before August of 2005.

ISSUANCE OF COMMON STOCK TO EMPLOYEES

During 1999, the Company issued 20,000 shares of its unregistered common
stock to employees in recognition of their service to the Company. In
connection with the issue the Company recognized compensation expense of
$2,600 based upon the fair value of the unregistered shares issued.

ISSUANCE OF COMMON STOCK IN CONNECTION WITH CONVERSION OF DEBTS

In June of 2000, the Company issued 250,000 shares of its unregistered
common stock to the Estate of Bobby C. Hamilton (see Note 11) in exchange
for the settlement and extinguishment of the balance of a note payable
due the Estate after the Company's payment of $500,000. In connection
with the extinguishment of the remaining balance due of $958,321, the
Company recorded an extraordinary gain of $917,726 based on the value of
the restricted shares issued at the time.

In November 1999, the Company entered into a Settlement Agreement and
Release of all Claims ("the Agreement") with Ronald Michael Meneo,
Trustee of the Walter L. Maguire 1935-1 Trust ("the Trust") and Walter L.
Maguire Sr., beneficiary of the Trust and stockholder and former director
of the Company. The Agreement settled litigations brought by the Trust
against the Company for default on certain debentures of the Company held
by the Trust and the resulting counterclaim against the Trust and Mr.
Maguire by the Company. The Agreement called for the issuance of 790,909
shares of the Company's unregistered common stock to the Trust in
exchange for the extinguishment of all indebtedness claimed owing to the
Trust or Mr. Maguire. In connection with the issuance, the Company
extinguished $335,000 of debenture principal and $347,397 of related
accrued interest thereon. The Company recorded an addition to paid-in-
capital (see Note 20.) of $534,101 on the extinguishment based upon the
value of the restricted shares issued at the time.

In October 1999, the Company extinguished a debt due Geosearch, Inc., a
former lessor of a mining interest to the Company, by issuing 245,852
shares of its unregistered common stock. The debt extinguished totaled
$144,339 of principal and accrued interest. The Company recorded an
extraordinary gain of $77,591 on the extinguishment based upon the value
of the restricted shares issued at the time.

ISSUANCE OF COMMON STOCK FOR CASH

During 2000, the Company sold an aggregate of 582,511 shares of its
unregistered common stock and warrants to purchase 48,077 shares of
common stock exercisable at $0.39 per share to Al Dugan and entities
affiliated with him, for cash in the amount of $175,000. Of the shares
issued to Mr. Dugan, 100,000 were issued pursuant to the exercise of
stock purchase warrants previously granted him. Mr. Dugan is a
significant shareholder of the Company.

In addition, during 2000, the Company sold 200,000 shares of its
unregistered common stock to an existing shareholder for cash in the
amount of $80,000.

ISSUANCE OF COMMON STOCK IN EXCHANGE FOR SERVICES

In March 2000, the Company issued an aggregate of 300,000 shares of its
common stock pursuant to its 2000 Stock Plan (see Notes 13 and 18) to two
companies in exchange for financial consulting services provided the
Company. In connection with the issue, the Company recorded $153,000 of
compensation expense based on the Company's estimate of the value of the
stock issued and the services received.

During 1999, the Company issued 40,000 shares of its unregistered common
stock and 100,000 warrants to purchase shares of common stock at $0.55
per share, exercisable until August 2002, to a consultant in exchange for
professional services rendered to the Company. The shares and related
warrants were recorded

F-18

based on the value of services rendered.

ISSUANCE OF COMMON STOCK PURSUANT TO ANTIDILUTION PROVISIONS

During 2000, the Company issued 35,542 shares of its restricted common
stock to the former holders of Series C preferred stock pursuant to the
antidilution provisions of the Series C preferred shares. In connection
with the issue, the Company recorded an expense of $4,265 based upon
management's estimate of the fair value of the Company's restricted
common stock shares when the Series C holders converted to common stock
in 1999. The Company made no adjustments to its 1999 net loss or
accumulated deficit as previously stated, based on the immateriality of
the transaction.

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 preferred stock, consisting of 4,500 shares, 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 a total liquidation preference equal to $45,000 plus
dividends in arrears. At December 31, 2000, 4,500 shares of Series A
preferred stock were outstanding; and cumulative dividends in arrears
amounted to $65,250, or $14.50 per share.

During 1993, Series B preferred stock consisting of 1,666,667 shares, was
established by the Board of Directors and 1,666,667 shares were issued in
connection with the final settlement of litigation. The Series B
preferred stock has preference over the Company's common stock and Series
A preferred stock, has no voting rights (absent default in payment of
declared dividends) and is entitled to cumulative dividends of $.01 per
share per year payable if and when 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 stockholders
is $1.00 per share plus dividends in arrears. No dividends have been
declared or paid with respect to the Series B preferred stock. In 1995,
916,667 shares of Series B preferred stock were surrendered to the
Company and cancelled in connection with the settlement of litigation
against Bobby C. Hamilton. At December 31, 2000, cumulative dividends in
arrears on the 750,000 outstanding Series B shares were $52,500, or $0.07
per share.

During 1997, the Company issued 2,560,762 shares of Series C preferred
stock in connection with the conversion of certain debts owed by the
Company. The rights, preferences, privileges and limitations of the
Series C preferred shares issued upon conversion of debt are set forth
below:

DESIGNATION. The class of Convertible Preferred Stock, Series C,
$0.01 par value per share, consists of up to 3.8 million shares of
the Company.

OPTIONAL CONVERSION. A holder of Series C preferred shares had the
right to convert the Series C shares, at the option of the holder, at
any time within 18 months following issuance, into shares of common
stock at the ratio of 1:1, subject to adjustment as provided below.
During 1999, holders of 2,354,766 shares of Series C stock converted
their shares into common stock of the Company.

VOTING RIGHTS. The holders of Series C preferred shares shall have
the right to that number of votes equal to the number of shares of
common stock issuable upon conversion of such Series C preferred
shares.

LIQUIDATION PREFERENCE. In the event of any liquidation or winding
up of the Company, the holders of Series C preferred shares shall be
entitled to receive as a preference over the holders of common stock
an amount per share equal to $0.55, subject to the preferences of the
holders of the Company's outstanding Series A and Series B preferred
stock.

F-19

REGISTRATION RIGHTS. Twenty percent (20%) of the underlying common
stock issued upon conversion of the Series C preferred shares shall
be entitled to "piggyback" registration rights when, and if, the
Company files a registration statement for its securities or the
securities of any other stockholder. These shares are included in a
registration statement currently being filed with the Securities and
Exchange Commission.

REDEMPTION. The Series C preferred shares are not redeemable by the
Company.

ANTIDILUTION PROVISIONS. The conversion price of the Series C shares
was subject to adjustment to prevent dilution in the event that the
Company issued additional shares at a purchase price less than the
applicable conversion price (other than shares issued to employees,
consultants and directors pursuant to plans and arrangements approved
by the Board of Directors, and securities issued to lending or
leasing institutions approved by the Board of Directors).
Accordingly, the conversion price was adjusted according to a
weighted-average formula, resulting in the issuance (in 2000) of an
additional 35,542 shares of common stock to Series C holders who
exercised their conversion rights in 1999. The initial conversion
price for the Series C shares was $0.55 and was subsequently adjusted
to $0.54 per share based on the antidilution formula.

PROTECTIVE PROVISIONS. The consent of a majority interest of the
holders of Series C preferred shares shall be required for any action
which (i) alters or changes the rights, preferences or privileges of
the Series C shares materially and adversely; or (ii) creates any new
class of shares having preference over or being on a parity with the
Series C shares.

During 2000, the Company converted 28,092 of shares of Series C
preferred stock into an equal number of common shares for a Series C
preferred stockholder that had timely noticed the Company of its
desire to convert its Series C shares during 1999. At December 31,
2000, 177,904 shares of Series C preferred stock remained outstanding
and unconverted.

15. INCOME TAXES:

At December 31, 2000 and 1999, the Company had net deferred tax assets of
approximately $1,900,000 and $2,700,000, respectively. The deferred tax
assets principally arise from net operating loss carryforwards for income
tax purposes. As management of the Company cannot determine if it is
more likely than not that the Company will realize the benefit of its
deferred tax assets, a valuation allowance equal to the net deferred tax
assets at both December 31, 2000 and 1999 has been established.

At December 31, 2000, the Company had regular tax net operating loss
carryforwards of approximately $5,300,000, which expire in the years 2001
through 2020, with the majority of the carryforwards expiring in 2001
through 2003. At December 31, 2000, the Company had net operating loss
carryforwards for alternative minimum tax purposes of approximately
$4,900,000.

16. LOSS PER COMMON SHARE:

The following table presents a reconciliation of the numerators and
denominators of the basic and diluted earnings per share ("EPS")
computations for the year ended December 31, 1999:

Per Share
Loss Shares Amounts
Basic EPS: ---------- ---------- -------
Net loss before extraordinary item $(307,677) 14,597,927 $ (0.02)
Common stock warrants (1)
Series C preferred stock (2) 241,528 Nil
Diluted EPS: ---------- ---------- -------
Net loss before extraordinary item $(307,677) 14,839,455 $ (0.02)
========== ========== =======

F-20

(1) Common stock warrants totaling 1,219,356 outstanding during 1999 were
not included in the computation of diluted EPS at December 31, 1999,
because the various exercise prices of the warrants were greater than
the average market price of the Company's common stock.

(2) Series C preferred stock was convertible into common stock of the
Company on a share-for-share basis. The effect on the computation of
diluted weighted average shares outstanding is based upon the potential
conversion of the shares into common stock for the period of time the
preferred shares were outstanding and the effect of Series C preferred
stock antidilution provisions.

17. RELATED-PARTY TRANSACTIONS:

In addition to transactions described in Notes 4, 7, 9, 10, 12, and 14
during 2000 and 1999, the Company had the following transactions with
related parties:

* During 2000 and 1999, the Company issued 79,167 and 18,000,
respectively, shares of its unregistered common stock to members of
the Board of Directors for their duties as directors. The issuances
have been recorded in the consolidated financial statements as if they
were issued in the year they were earned. The stock awards were
recorded as compensation expense (director's fees) based upon the
estimated value of the stock at the date of issuance.

* In February 1999, the Board of Directors nominated Leo Jackson to
serve as a director. Mr. Jackson is a stockholder of the Company and
owns 31.4% of Production Minerals Inc., which has an indirect interest
of 25% in the stock of USAMSA (see Note 7).

18. COMMITMENTS AND CONTINGENCIES:

Until 1989, the Company mined, milled and leached gold and silver in the
Yankee Fork Mining District in Custer County, Idaho. 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,
2000, the cyanide solution cleanup was complete, the mill removed, and a
majority of the cyanide leach residue disposed of. In 1996, the Idaho
Department of Environmental Quality requested that 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. The
Company also has environmental remediation obligations at its antimony
production facility near Thompson Falls, Montana and its former gold
mining property (Yellow Jacket) in Lemhi County, Idaho.

The Company's management believes that USAC is currently in substantial
compliance with environmental regulatory agencies and that its accrued
environmental reclamation costs are representative of management's
estimate of costs required to fulfill its reclamation obligations. The
Company recognizes, however, that in some cases future environmental
expenditures cannot be reliably determined due to the uncertainty of
specific remediation methods, conflicts between regulating agencies
relating to remediation methods and environmental law interpretations,
and changes in environmental laws and regulations. Such costs are
accrued at the time the expenditure becomes probable and the costs can
reasonably be estimated.

During the first quarter of 2000, the Company issued 150,000 shares of
its common stock to Thomson Kernaghan & Co., Ltd., and 150,000 shares of
its common stock to Blue Water Partners, Inc. as compensation for fiscal
advisory and consulting services to be provided the Company. The shares
were issued pursuant to the Company's 2000 Stock Plan (see Note 13), and
were believed by the Company to be registered under a Form S-8
registration statement filed in connection with the 2000 Stock Plan. The
stock certificates issued to the two companies therefore did not bear a
restrictive legend. Subsequent to the issuance of the shares, management
was informed by its legal counsel that Form S-8 cannot be used to
register stock issued to consultants whose services involve promotion of
the Company's stock. In response to this information, management
immediately contacted both companies and requested that the unlegended
shares of common stock be returned to the Company in exchange for a
certificate bearing a restrictive legend. In March of 2001, Thomson
Kernaghan & Co., Ltd. returned 150,000 shares to the Company in exchange
for

F-21

150,000 restricted shares. No response has been received from Blue
Water Partners, Inc. As a result of the issuance, the Company may be
subject to civil liabilities, including fines and other penalties imposed
by federal and state securities agencies. At December 31, 2000, the
Company had not recorded any liability associated with the issuance of
these shares, as management believes the likelihood of a claim and the
ultimate outcome if a claim is asserted cannot be ascertained at this
time.

In July of 2000, the Company entered into a financing agreement with
Thomson Kernaghan & Co., Ltd. (see Note 12). The financing agreement
provided, among other things, for the sale of up to $1,500,000 of the
Company's convertible debentures. The Financing Agreement also contained
a registration rights agreement in which Company agreed to register the
debenture purchasers' resale of the shares of common stock issued upon
conversion of the debentures and upon exercise of the related purchasers
and agents warrants. The registration rights agreement also provides for
liquidated damages to be due if the Company fails to have an effective
registration statement filed by the registration deadline. The liquidated
damages are calculated as two percent (2%) per month of the aggregate
value of the principal amount of the debentures outstanding combined with
the aggregate exercise prices of the outstanding purchasers' and agent's
warrants issued in connection with the convertible debentures, accrued on
a daily basis subsequent to the registration deadline. At December 31,
2000, the Company did not have a registration statement yet effective,
and the registration deadline had past. The Company has not accrued any
liability associated with liquidated damages that may be due (of
approximately $38,000 for the period from the registration deadline to
December 31, 2000) as of December 31, 2000, as the Company's management
and its legal counsel believes that while it is reasonably possible that
Thomson Kernaghan & Co., Ltd. will assert a liquidated damages claim
against the Company, it is most likely not probable, based upon the
circumstances surrounding the late registration filing and other factors.

19. FAIR VALUE OF FINANCIAL INSTRUMENTS:

The following disclosure of the estimated fair value of financial
instruments is made in accordance with the requirements of Statement of
Financial Accounting Standards 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.

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 due to related parties approximate
their carrying values of $10,307 and $8,128, respectively, at December
31, 2000 and December 31, 1999, based upon the contractual cash flow
requirements.

Judgments payable of $43,480 and $40,645, at December 31, 2000 and 1999,
respectively, approximate their carrying value based upon the judgment's
repayment requirements. The fair value of the Company's convertible
debentures and accrued interest of $997,449 and $47,324, respectively, at
December 31, 2000, approximate their carrying value based on management's
estimate the fair values of comparable debt instruments.

20. RESTATEMENT:

As discussed in Note 14, in 1999 the Company settled litigations brought
by a trust associated with a former director of the Company. As a result
of the settlement, the Company issued 790,909 shares of its unregistered
common stock to the trust in exchange for the extinguishment of $682,397
of indebtedness claimed owing to the trust. The Company recorded the
transaction by recognizing an extraordinary gain of $534,101 on the
extinguishment based upon the value of the restricted shares issued at
the time.

In connection with the filing of a registration statement with the
Securities and Exchange Commission ("the Commission") begun in 2000, the
Commission commented that if the trust was a related party to the
Company, the transaction may in essence be a capital transaction and
should be classified as a credit to additional paid-in capital versus an
extraordinary item. Although the Company believes the trust was not a

F-22

related party as defined by generally accepted accounting principles, the
Company agreed to restate the 1999 financial statements to reflect the
extinguishment as an addition to additional paid-in-capital in an effort
to facilitate the effectiveness of the registration statement.

The restatement has no effect on total stockholders' deficit or net loss
from operations as previously reported, the effects on accumulated
deficit, additional paid-in-capital, extraordinary gain on conversion of
debt to common stock, and net loss are illustrated as follows:

As previously
reported As restated
------------- -----------
Additional paid-in capital $ 14,289,947 $14,824,048
Accumulated deficit (16,651,750) (17,185,851)
------------- -----------
Total stockholders' deficit (2,183,195) (2,183,195)
------------- -----------
Total liabilities and stockholders'
deficit $ 968,522 $ 968,522
============= ===========

Loss before extraordinary item (307,677) (307,677)
Extraordinary gain on conversion of debts
to common stock 611,692 77,591
------------- -----------
Net income (loss) $ 304,015 $ (230,086)
============= ===========

Basic and diluted net income (loss)
per share of common stock
Before extraordinary item $ (0.02) $ (0.02)
Extraordinary item 0.04 Nil
------------- -----------
Net income (loss) 0.02 (0.02)
============= ===========

F-23

United States Antimony Corporation and Subsidiaries
Consolidated Balance Sheets

(Unaudited)
September 30, December 31,
2001 2000
------------- ------------
ASSETS
Current assets:
Restricted cash $ 11,224 $ 8,518
Inventories 133,409 221,457
Accounts receivable, less allowance
for doubtful accounts of $30,000 75,074 119,568
------------- ------------
Total current assets $ 219,707 $ 349,543
------------- ------------

Investment in USAMSA, net $ 90,814 $ 111,088
Properties, plants and equipment, net 284,342 246,250
Restricted cash for reclamation bonds 102,550 123,250
Deferred financing charges, net 32,850 63,789
------------- ------------
Total assets $ 730,263 $ 893,920
============= ============

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Checks issued and payable $ 67,543 $ 107,133
Accounts payable 611,562 429,654
Accrued payroll and property taxes 192,902 241,588
Accrued payroll and other liabilities 156,090 89,680
Judgment payable 45,763 43,480
Accrued debenture interest payable 124,049 47,324
Due to related parties 85,084 10,307
Notes payable to bank, current 256,150 150,625
Accrued reclamation costs, current 80,000 80,000
------------- ------------
Total current liabilities $ 1,619,143 $ 1,199,791
------------- ------------

Debentures payable, net of discount $ 1,006,932 $ 997,449
Notes payable to bank, noncurrent 181,609 205,377
Accrued reclamation costs, noncurrent 157,725 199,388
------------- ------------
Total liabilities $ 2,965,409 $ 2,602,005
============= ============

Commitments and contingencies

Stockholders' deficit:
Preferred stock, $.01 par value, 10,000,000
shares authorized:
Series A: 4,500 shares issued and outstanding $ 45 $ 45
Series B: 750,000 shares issued and outstanding 7,500 7,500
Series C: 177,904 shares issued and outstanding 1,779 1,779
Common stock, $.01 par value, 30,000,000 shares
authorized; 19,329,564 and 18,375,564 shares
issued and outstanding 193,295 183,755
Additional paid-in capital 15,533,646 15,352,386
Accumulated deficit (17,971,411) (17,253,550)
------------- ------------
Total stockholders' deficit $ (2,235,146) $(1,708,085)
------------- ------------

Total liabilities and stockholders'
deficit $ 730,263 $ 893,920
============= ============

The accompanying notes are an integral part of these financial statements.
F-24

United States Antimony Corporation and Subsidiaries
Consolidated Statements of Operations (Unaudited)

Three Months Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
--------- ---------- ---------- ----------
Revenues:
Sales of antimony products
and other $ 778,533 $1,094,721 $2,816,573 $3,458,184
Sales of zeolite products 4,080 6,735
--------- ---------- ---------- ----------
782,613 1,094,721 2,823,308 3,458,184

Cost of antimony production 573,661 989,111 2,197,430 2,833,154
Freight and delivery 85,517 93,718 308,052 337,695
--------- ---------- ---------- ----------
659,178 1,082,829 2,505,482 3,170,849

Gross profit 123,435 11,892 317,826 287,335
--------- ---------- ---------- ----------

Other operating expenses:
Bear River Zeolite 87,915 253,583
Care, maintenance, and
reclamation-Yellow Jacket 1,813 80,018 4,673 157,924
General and administrative 153,768 130,042 484,376 474,237
Sales expenses 33,367 58,931 106,205 253,282
--------- ---------- ---------- ----------
276,863 268,991 848,837 885,443
--------- ---------- ---------- ----------

Other (income) expense:
Interest expense 37,999 36,725 119,599 117,964
Factoring expense 24,312 22,077 71,487 71,365
Interest income and other (1,267) (1,880) (4,236) (6,527)
--------- ---------- ---------- ----------
61,044 56,922 186,850 182,802
--------- ---------- ---------- ----------

Net loss before
extraordinary item (214,472) (314,021) (717,861) (780,910)

Extraordinary gain on
conversion of debts 917,726 917,726
--------- ---------- ---------- ----------

Net income (loss) $(214,472) $ 603,705 $ (717,861) $ 136,816
========= ========== ========== ==========

Basic net income (loss)
per share of common stock $ (0.01) $ 0.03 $ (0.04) $ 0.01
========= ========== ========== ==========

Basic weighted average
shares outstanding 19,259,510 18,289,263 18,827,720 17,600,199
========= ========== ========== ==========

The accompanying notes are an integral part of these financial statements.
F-25

United States Antimony Corporation and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)

For the nine months ended
September 30, September 30,
2001 2000
-------- --------
Cash flows from operating activities:
Net income (loss) $(717,861) $ 136,816
Adjustments to reconcile net income
(loss) to net cash used by operations:
Depreciation and amortization 132,696 108,375
Accrued reclamation costs 7,500
Extraordinary gain on conversion of
debts to common stock (917,726)
Provision for doubtful accounts (20,000)
Issuance of common stock for consulting services 153,000
Change in:
Restricted cash (2,706) (4)
Accounts receivable 44,494 (1,302)
Inventories 88,048 53,827
Restricted cash for reclamation bonds 20,700 24,828
Deferred financing charges (82,500)
Prepaid expenses (437)
Accounts payable 181,908 (5,352)
Accrued payroll and property taxes (48,686) 49,565
Accrued payroll and other liabilities 66,410 (42,966)
Judgment payable 2,283 2,133
Accrued debenture interest payable 76,725 13,767
Payable to related parties (20,118) 7,755
Accrued reclamation costs (49,163) (35,298)
--------- ---------
Net cash used by operating activities (217,770) (555,519)
--------- ---------

Cash flows from investing activities:
Purchase of properties, plants and equipment (107,592) (37,396)
--------- ---------
Net cash used in investing activities (107,592) (37,396)
--------- ---------

Cash flows from financing activities:
Proceeds from issuance of common stock and warrants 188,300 255,000
Proceeds from the sale of convertible debentures 675,000
Proceeds from related party advances 94,895 141,243
Proceeds from notes payable to bank, net 81,757 45,615
Change in checks issued and payable (39,590) 16,087
Payments on note payable to Bobby C. Hamilton (540,030)
--------- ---------
Net cash provided by financing activities 325,362 592,915
--------- ---------

Net change in cash 0 0
Cash, beginning of period 0 0
--------- ---------
Cash, end of period $ 0 $ 0
========= =========

Supplemental disclosures:
Cash paid during the period for interest $ 25,809 $ 97,721
========= =========

Non-cash investing activities:
Common stock and warrants issued for plant
construction $ 2,500
=========

Non-cash financing activities:
Common stock issued as settlement of debt $ 80,625
=========

The accompanying notes are an integral part of these financial statements.
F-26

United States Antimony Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)

1. Basis of Presentation:

The unaudited consolidated financial statements have been prepared by the
Company in accordance with generally accepted accounting principles for
interim financial information, as well as the instructions to Form 10?QSB.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of the Company's management, all adjustments
(consisting of only normal recurring accruals) considered necessary for a
fair presentation of the interim financial statements have been included.
Operating results for the nine and three-month period ended September 30,
2001 are not necessarily indicative of the results that may be expected for
the full year ending December 31, 2001. Certain consolidated financial
statement amounts for the nine and three-month period ended September 30,
2000, have been reclassified to conform to the 2001 presentation. These
reclassifications had no effect on the net income or accumulated deficit as
previously reported.

For further information refer to the financial statements and footnotes
thereto in the Company's Annual Report on Form 10-KSB for the year ended
December 31, 2000.

2. Income (Loss) Per Common Share:

The Company accounts for its income (loss) per common share according to the
Statement of Financial Accounting Standards No. 128 "Earnings Per Share"
("SFAS No. 128"). Under the provisions of SFAS No. 128, primary and fully
diluted earnings per share are replaced with basic and diluted earnings per
share. Basic earnings per share is arrived at by dividing net income (loss)
available to common stockholders by the weighted average number of common
shares outstanding, and does not include the impact of any potentially
dilutive common stock equivalents. Common stock equivalents, including
warrants to purchase the Company's common stock and common stock issuable
upon the conversion of debentures are excluded from the calculations when
their effect is antidilutive.

3. 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 is located nine 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. In 1996, the Company signed a
consent decree with the Idaho Department of Environmental Quality relating to
completing the reclamation and remediation at the Preachers Cove mill.

The Company's management believes that USAC is currently in substantial
compliance with environmental regulatory agencies and that its accrued
environmental reclamation costs are representative of management's estimate
of costs required to fulfill its reclamation obligations. The Company
recognizes, however, that in some cases future environmental expenditures
cannot be reliably determined due to the uncertainty of specific remediation
methods, conflicts between regulating agencies relating to remediation
methods and environmental law interpretations, and changes in environmental
laws and regulations. Such costs are accrued at the time the expenditure
becomes probable and the costs can reasonably be estimated.

During 2000, the Company issued 150,000 shares of its common stock to Thomson
Kernaghan & Co., Ltd., and 150,000 shares of its common stock to Blue Water
Partners, Inc. as compensation for fiscal advisory and consulting services to
be provided the Company. The shares were issued pursuant to the Company's
2000 Stock Plan, and were believed by the Company to be registered under a
Form S-8 registration statement filed in connection with the 2000 Stock Plan.
The stock certificates issued to the two companies therefore did not bear a
restrictive legend. Subsequent to the issuance of the shares, management was
informed by its legal counsel that Form S-8 cannot be used to register stock
issued to consultants whose services involve promotion of the Company's
stock. In response to this information, management immediately contacted
both companies and requested that the unlegended shares of

F-27

common stock be returned to the Company in exchange for a certificate bearing
a restrictive legend. In March of 2001, Thomson Kernaghan & Co., Ltd.
returned 150,000 shares to the Company in exchange for 150,000 restricted
shares, that the Company agreed to register in conjunction with a Form SB-2
registration statement it is preparing. No response has been received from
Blue Water Partners, Inc. As a result of the issuance, the Company may be
subject to civil liabilities, including fines and other penalties imposed by
federal and state securities agencies. The Company has also issued a number
of shares in transactions that may not qualify for exemption from the
Securities Act registration requirements and may be in violation of Section 5
of the Securities Act of 1933. As a result the Company may be subject to
liabilities associated with the rescission rights of the purchasers of these
shares and fines and penalties from securities regulators.

At September 30, 2001, the Company had not recorded any liability associated
with the issuance of these shares, as management believes the likelihood of a
claim and the ultimate outcome if a claim is asserted cannot be ascertained
at this time.

F-28

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Article X of our Bylaws ("Bylaws") essentially adopts and incorporates the
mandatory and permissive indemnification provisions of the Montana Business
Corporation Act, specifically Montana Code Annotated Sections 35-1-451
through 458. The following discussion of the Bylaws and Sections 35-1-451
through 35-1-458 is only a summary of the Bylaws and the Montana statutes.

We are required to provide mandatory indemnification of reasonable expenses
of a director or officer who is "wholly successful" in the defense of any
proceeding to which he was a party because he is or was a director or
officer. In addition, we are authorized to indemnify, to the fullest extent
permitted by law, and (subject to receipt of the undertaking described below)
to advance expenses to any person who is or was a director or officer of the
company, or was serving at the request of a director, officer, employee or
fiduciary of the company, against liabilities which may be incurred by such
person by reason of (or arising in part from) such capacity. In the case of
third-party claims, we are authorized to indemnify directors and officers
against liability incurred by reason of being a director or officer and
(subject to receipt of the undertaking described below) against expenses
reasonably incurred in connection with any action, suit or proceeding seeking
to establish such liability, if the director or officer acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interest of the corporation. Similarly, in the case of actions by or in the
right of the corporation, indemnification of reasonable expenses only is
(subject to receipt of the undertaking described below) authorized if the
director or officer acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interest of the corporation.
Indemnification is authorized with respect to any criminal action or
proceeding where, in addition to satisfying the foregoing good faith and
reasonable belief standards, the director or officer has no reasonable cause
to believe that his conduct was unlawful. A director or officer is entitled
to apply for court-ordered indemnification in view of all the relevant
circumstances even if the director or officer did not meet the statutory
standards of conduct or has been adjudged liable to us or to have improperly
received a personal benefit.

Our authorization to advance an officer's or director's litigation expenses
is conditioned on the officer or director furnishing an undertaking to repay
the advance in the event we determine that the acts of the officer or
director were unauthorized or improper. We are permitted to procure
liability insurance on behalf of an officer, director or employee.

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

We will pay all expenses in connection with the registration of the Shares of
our common stock which may be resold by the Selling Shareholders (including
fees and disbursements of one legal counsel for the Selling Shareholders).
We will not pay any selling commissions or discounts allocable to sales of
those Shares by any Selling Shareholder or any fees and disbursements of
counsel and other representatives of the Series C Holders. The estimated
expenses of registration of the Shares are set forth below.

Registration Fees $ 219.38
Legal Fees (estimate) $200,000.00
Accounting Fees (estimate) $ 15,000.00

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES

Below is a summary of sales of unregistered securities to our directors,
investors, employees and consultants. We believe that with a few possible
exceptions involving purchasers who do not meet the "accredited investor"
standard of Rule 501(a), each transaction is exempt from registration
pursuant to Sections 4(2), 4(6) and/or Rule 506 of the Securities Act of 1933
because (1) the transaction did not involve a public offering; (2) no
commissions were paid; (3) no underwriters were involved; and (4) (except for
the certificates issued on March 17,

II-1

2000 to Thomson Kernaghan & Co. Limited and Blue Water Partners, Inc.) a
restrictive legend was placed on each certificate evidencing the security.

During 2001, we sold $66,800 of common stock and related warrants, in
possible violation of the securities regulation requirements of Section 5 of
the Securities Act of 1933, to investors who may be unaccredited (334,000
shares at $0.20 per share and warrants to purchase 167,000 shares exercisable
for three years at $0.35 per share). We may be liable for rescission of
these transactions under Section 12(a)(1) of the Securities Act of 1933 for
up to three years after the respective transaction dates.

In instances where warrants were issued, the underlying shares of common
stock are restricted as stated in the warrant contract.

On December 26, 2001, we sold Fector Detwiler, an investment banking firm,
100,000 shares of our common stock and issued warrants to purchase 100,000
shares of common stock, for $0.20 per share or $20,000. The warrants are
exercisable at $0.30 per share and expire December 26, 2004.

On December 26, 2001, we sold Wayne Hodges, an affiliate of investment
banking firm Fector Detwiler and an accredited investor, 150,000 shares of
our common stock and issued warrants to purchase 150,000 shares of common
stock, for $0.20 per share or $30,000. The warrants are exercisable at $0.30
per share and expire on December 26, 2004.

On December 26, 2001, we sold A. W. Dugan, a shareholder and an accredited
investor, 125,000 shares of our common stock and issued warrants to purchase
125,000 shares of common stock, for $0.20 per share or $25,000. The warrants
are exercisable at $0.29 per share and expire on December 26, 2004.

In late December 2001, we issued 240,343 shares of our common stock at
$0.29125 per share to certain debenture holders in payment of $70,000
liquidated damages for late registration of the shares issuable upon
conversion of the debentures. These shares were issued pursuant to
settlement in July 2000 of a disputed claim as set forth in Amended and
Restated Agreements with Thompson Kernaghan & Co., Ltd filed with the
registration statement as Exhibit 10.45.

In late December 2001, we issued 1,938,261 shares of our common stock to John
C. Lawrence (a director, Chief Executive Officer and a shareholder) and A. W.
Dugan, a shareholder and an accredited investor, upon conversion of $347,992
principal amount of debentures and $39,660 accrued interest thereon at $0.20
per share.

On December 11, 2001, we sold A. W. Dugan, a shareholder and an accredited
investor, 275,000 shares of our common stock and issued warrants to purchase
150,000 shares of common stock, for $0.20 per share or $55,000. The warrants
are exercisable at $0.29 per share and expire December 11, 2004.

On November 14, 2001, we sold Ceclie Hartigan, a shareholder and an
accredited investor, 100,000 shares of our common stock and issued warrants
to purchase 300,000 shares of common stock, for $0.20 per share or $20,000.
The warrants are exercisable at $0.30 per share and expire November 14, 2004.

On August 17, 2001, we sold Ceclie Hartigan, an accredited investor, 100,000
shares of our common stock and issued warrants to purchase 300,000 shares of
our common stock, for $0.20 per share or $20,000. The warrants are
exercisable at $0.30 per share and expire August 17, 2004.

On July 25, 2001, we sold common stock and issued warrants to purchase common
stock to the following purchasers for $0.20 per share:

Livesey All Freight 20,000 shares ($4,000), and warrants for 10,000 shares
Michael & Julie Wyse 10,000 shares ($2,000), and warrants for 5,000 shares
Lon & Julie Ockler 10,000 shares ($2,000), and warrants for 5,000 shares
Mark & Karen Tomell 10,000 shares ($2,000), and warrants for 5,000 shares

The warrants are exercisable at $0.35 per share and expire July 25, 2004.

II-2

On July 11, 2001, we sold Gary Babbitt, then a director, 45,000 shares of our
common stock and issued warrants to purchase 22,500 shares of common stock,
for $0.20 per share or $9,000. The warrants are exercisable at $0.35 per
share and expire July 11, 2004.

On June 28, 2001, we sold Frank Chema, 15,000 shares of our common stock and
issued warrants to purchase 7,500 shares of common stock, for $0.20 per share
or $3,000. The warrants are exercisable at $0.35 per share and expire June
28, 2004.

On June 28, 2001, we sold Thomas Stewart, 25,000 shares of our common stock
and issued warrants to purchase 12,500 shares of common stock, for $0.20 per
share or $5,000. The warrants are exercisable at $0.35 per share and expire
June 28, 2004.

On June 28, 2001, we sold an employee, Matt Keane, 15,000 shares of our
common stock and issued warrants to purchase 7,500 shares of common stock,
for $0.20 per share or $3,000. The warrants are exercisable at $0.35 per
share and expire June 28, 2004.

On June 27, 2001, we issued 12,500 shares of our common stock, valued at
$0.20 per share, to Bernie Stender and issued warrants to purchase 6,250
shares of common stock exercisable at $0.35 per share and expiring June 27,
2004, as compensation for consulting services with an estimated value of
$2,500.

On June 26, 2001, we sold Charles Baxter, 10,000 shares of our common stock
and issued warrants to purchase 5,000 shares of common stock, for $0.20 per
share or $2,000. The warrants are exercisable at $0.35 per share and expire
June 26, 2004.

On June 27, 2001, we sold Delaware Royalty, a stockholder, 100,000 shares of
our common stock and issued warrants to purchase 100,000 shares of common
stock, for $0.20 per share or $20,000. The warrants are exercisable at $0.35
per share and expire June 26, 2004.

On June 20, 2001, we sold H Bar N, a vendor, 20,000 shares of our common
stock and issued warrants to purchase 10,000 shares of common stock, for
$0.20 per share or $4,000. The warrants are exercisable at $0.35 per share
and expire June 20, 2004.

On June 20, 2001, we sold Harlon Ockler, the owner of H Bar N, 30,000 shares
of our common stock and issued warrants to purchase 15,000 shares of common
stock, for $0.20 per share or $6,000. The warrants are exercisable at $0.35
per share and expire June 20, 2004.

On May 31, 2001, we sold Noel Keane Van Tol, a relative of an employee 10,000
shares of our common stock and issued warrants to purchase 5,000 shares of
common stock, for $0.20 per share or $2,000. The warrants are exercisable at
$0.35 per share and expire May 31, 2004.

On May 25, 2001, we sold Delaware Royalty, a stockholder 200,000 shares of
our common stock and issued warrants to purchase 100,000 shares of common
stock, for $0.20 per share or $40,000. The warrants are exercisable at $0.35
per share and expire May 25, 2004.

On May 24, 2001, we sold Lee Fransdahl, 50,000 shares of our common stock and
issued warrants to purchase 25,000 shares of common stock, for $0.20 per
share or $10,000. The warrants are exercisable at $0.35 per share and expire
May 24, 2004.

On April 30, 2001, we sold Stephen Nelson, 25,000 shares of our common stock
and issued warrants to purchase 12,500 shares of common stock, for $0.20 per
share or $5,000. The warrants are exercisable at $0.35 per share and expire
April 30, 2004.

On April 30, 2001, we sold Stephen Holman, 24,000 shares of our common stock
and issued warrants to purchase 12,000 shares of common stock, for $0.20 per
share or $4,800. The warrants are exercisable at $0.35 per share and expire
April 30, 2004.

II-3

On April 11, 2001, we sold an employee, Michael Floersch, 12,500 shares of
our common stock and issued warrants to purchase 6,250 shares of common
stock, for $0.20 per share or $2,500. The warrants are exercisable at $0.35
per share and expire in April of 2004.

On March 16, 2001, we sold Tom McInsh, an existing shareholder and an
accredited investor, 25,000 shares of our common stock and issued warrants
to purchase 12,500 shares of common stock, for $0.20 per share or $5,000.
The warrants are exercisable at $0.35 per share and expire in March of 2004.

On February 26, 2001, we sold CDLM Investments, LP, an accredited investor,
125,000 shares of our common stock and issued warrants to purchase 62,500
shares of common stock, for $0.20 per share or $25,000. The warrants are
exercisable at $0.35 per share and expire in February of 2004.

On February 12, 2001, we sold Tom McInsh, an existing shareholder and an
accredited investor, 25,000 shares of our common stock and issued warrants
to purchase 12,500 shares of common stock, for $0.20 per share or $5,000.
The warrants are exercisable at $0.35 per share and expire in February of
2004.

On January 22, 2001, we sold an employee, Matt Keane, 35,000 shares of our
common stock and issued warrants to purchase 17,500 shares of common stock,
for $0.20 per share or $7,000. The warrants are exercisable at $0.35 per
share and expire in January of 2004.

Effective December 31, 2000, we issued 35,542 shares of our own common stock
to former holders of Series C Preferred Stock pursuant to the anti-dilution
provisions of the Series C Preferred Stock. The shares were valued at $4.265
based upon management's estimate of the value of our common stock at the time
the Series C holders converted.

Effective December 31, 2000, we issued 79,167 shares of our common stock to
four directors of the company for their services. The shares were valued at
$10.291 based on management's estimate of the value of the company's common
stock at the date of issue.

Effective December 31, 2000 we issued 28,092 shares of our common stock to a
Series C Preferred Stock holder in exchange for an equal number of Series C
Preferred shares. During 1999, we issued 2,354,766 shares of common stock in
exchange for the same number of Series C Preferred shares.

Effective December 12, 2000, we issued our 10% convertible debenture due
December 12, 2003 to John C. Lawrence, a director and President, in the
principal amount of $100,000, together with warrants for 60,974 shares of our
common stock exercisable for five years at $0.41 per share. This debenture
and warrant were issued in consideration of cash advances in the amount of
$96,591 to meet working capital needs plus accrued interest payable to Mr.
Lawrence in the amount of $4,685. The debenture conversion price is based on
market prices at the time of conversion but not greater than $0.31 per share.

On December 5, 2000, we issued our 10% convertible debentures due December 5,
2003 to A.W. Dugan, a shareholder and accredited investor, in the principal
amount of $50,000, together with related warrants for 30,487 shares of our
common stock exercisable for five years at $0.41 per share. The debenture
conversion price is based on market prices at the time of conversion but not
greater than $0.31 per share.

On December 5, 2000, we issued our 10% convertible debenture due November 22,
2003 to A.W. Dugan, a shareholder and accredited investor, in the principal
amount of $50,000, together with related warrants for 30,487 shares of our
common stock exercisable for five years at $0.41 per share. The debenture
conversion price is based on market prices at the time of conversion but not
greater than $0.31 per share.

On December 5, 2000, we issued our 10% convertible debenture due December 31,
2003 to John C. Lawrence, a director and President, in the principal amount
of $147,992, together with related warrants for 90,239 shares of our common
stock exercisable for five years at $0.41 per share. This debenture and the
related covenants were issued in consideration of $141,243 previously
advanced to us to meet working capital needs, together with

II-4

interest accrued from the advance dates through December 31, 2000. The
debenture conversion price is based on market prices at the time of
conversion but not greater than $0.31 per share.

On August 25, 2000, we sold 257,511 shares of our common stock and issued
warrants to purchase 48,077 shares of common stock to A.W. Dugan, a
stockholder and accredited investor, for $0.29125 per share or $75,000. The
warrants are exercisable at $0.39 per share and expire August 25, 2002.

On July 12, 2000, we sold 100,000 shares of our common stock to Nortex
Corporation, a company controlled by A.W. Dugan, a stockholder and accredited
investor, for cash totaling $25,000, or $0.25 per share.

On July 11, 2000, we issued our 10% convertible debenture due June 30, 2002
to Thomson Kernaghan & Co. Limited in the principal amount of 600,000,
together with a Purchaser's Warrant for 384,615 shares and an Agent's Warrant
for 961,358 shares of our common stock exercisable for five years at $0.39
per share. We subsequently agreed to issue an additional $75,000 principal
amount of 10% convertible debenture, together with an additional Purchaser's
Warrant for 48,077 shares of our common stock. The debenture conversion
price is based on market prices at the time of conversion but not greater
than $0.29125 per share. These debentures and warrants were issued in
reliance on the exemption contained in Regulation S of the Securities Act of
1933 because Thomson Kernaghan & Co. Limited and each of the debenture
purchasers warranted in the debenture purchase agreement that it is not a
"U.S. Person," as such term is defined in Rule 902(o) of Regulation S, that
the securities have not been offered to it in the United States and that
offers of securities of the Company shall not be made to United States
persons for a period of one year from the date of closing of all debentures
offered pursuant to the agreement.

On June 23, 2000, we agreed to issue 250,000 shares of our common stock to
the City of Moscow, Idaho (the sole beneficiary of the Estate of Bobby C.
Hamilton) as partial consideration for discharge of a debt due the Estate in
the approximate amount of $1,500,000. See "Management's Division and
Analysis of Financial Condition and Results of Operations - Financial
Condition and Liquidity."

On March 30, 2000, we sold 200,000 shares of our common stock to Thomas H.
McInish, an accredited investor, for $80,000 cash, or $0.40 per share.

On March 17, 2000, we issued to Thomson Kernaghan & Co. Limited 150,000
shares of common stock pursuant to our 2000 Stock Plan, in consideration of
financial consulting services including the preparation and analysis of our
financial condition and financing options. The certificate for these shares
was issued without a restrictive legend based on our erroneous belief that
these shares were registered under its Form S-8 Registration Statement filed
on March 10, 2000 (File No. 333-32216).

On March 17, 2000, we issued to Blue Water Partners, Inc., in payment of fees
for financial consulting services, 150,000 shares of common stock pursuant to
our 2000 Stock Plan. The certificate for these shares was issued without a
restrictive legend based on our erroneous belief that these shares were
registered under its Form S-8 Registration Statement filed March 10, 2000
(File No. 333-32216).

On March 16, 2000, we issued 100,000 shares of our common stock to A.W.
Dugan, a stockholder and accredited investor, for cash totaling $25,000, upon
exercise of previously granted warrants to purchase common stock for $0.25
per share.

On February 2, 2000, we sold 125,000 shares of our common stock to Delaware
Royalty Company, Inc., a company controlled by A.W. Dugan, a stockholder and
accredited investor, for cash totaling $50,000 or $0.40 per share.

On January 3, 2000, we agreed to issue warrants to purchase 300,000 shares of
unregistered common stock at $0.25 per share to A.W. Dugan. The warrants
expire January 25, 2003 and were issued in exchange for consulting services
valued at $10,000 provided to us.

Effective December 31, 1999, we issued 6,000 shares of common stock to each
of our three directors for services provided. These shares were valued at
$2,160 or $.12 per share.

II-5

On November 9, 1999, we issued 790,909 shares of common stock to the Walter
L. Maguire 1935-1 Trust, a trust related to a stockholder and our former
director, in connection with the settlement of litigation brought by the
Trust. The settlement resulted in discharge of our obligations to the Trust
under subordinated convertible debentures and convertible debentures totaling
$682,397, including principal and interest.

On October 4, 1999, we issued 245,852 shares of common stock in Geosearch
Inc., our creditor, in satisfaction of a debt due Geosearch Inc. totaling
$144,339, including principal and accrued interest.

On August 8, 1999, we issued 40,000 shares of common stock and warrants to
purchase 100,000 shares at $0.55 per share to Carlos Tejada, our consultant,
for services valued at $10,000.

On March 29, 1999, we issued stock bonuses aggregating 20,000 shares of
common stock to our employees. The shares were valued at $2,600 or $0.13 per
share.

On March 29, 1999, we sold 4,800 shares of common stock to an employee for
cash of $1,200, or $0.25 per share.

Effective December 31, 1998, we issued 25,000 shares of common stock to
Robert A. Rice, our director, in exchange for a $5,000 note receivable from
Mr. Rice. The note was satisfied in 1999 when Mr. Rice transferred to us
equipment having a fair market value equal to the amount of the note.

Effective December 31, 1998, we issued 6,000 shares of common stock to each
of our two directors for services provided. The shares were valued at $1,687
or $0.14 per share.

Effective December 31, 1998, we sold 23,491 shares of our common stock to
Mike Rice, a relative of a director, Robert L. Rice, for services provided to
us with a fair value of $3,289.

On July 22, 1998, we sold 100,000 shares of our common stock and 100,000
warrants to purchase our common stock to A.W. Dugan, a stockholder and
accredited investor, for cash totaling $25,000. The warrants are exercisable
at $0.50 per share and expire July 28, 2001.

On February 17, 1998, we sold 40,000 shares of our common stock and 20,000
warrants to purchase our common stock to the Walter L. Maguire 1953 Trust, a
trust related to Walter S. Maguire, Sr., who was a director until December
31, 1998, for cash of $10,000. The warrants are exercisable at $0.50 per
share and expire February 17, 2001.

On February 17, 1998, we sold 160,000 shares of our common stock and 80,000
warrants to purchase our common stock to Walter L. Maguire, Sr., a former
director, for cash of $40,000. The warrants are exercisable at $0.50 per
share and expire February 17, 2001. Mr. Maguire was an accredited investor.

ITEM 27. EXHIBITS

The exhibits included as part of this Registration Statement are listed on
the Exhibit Index of this Registration Statement.

ITEM 28. UNDERTAKINGS (pursuant to Regulation S-B Item 512(a), (e))

(a) The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made
by the Selling Shareholder, a post-effective amendment to this Registration
Statement:

(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;

II-6

(ii) To reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the information
set forth in this Registration Statement; and

(iii) To include any additional or changed material information on
the plan of distribution.

(2) For determining liability under the Securities Act, to treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time shall be deemed to
be the initial bona fide offering.

(3) To file a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.

(e) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 ("Act") may be permitted to directors, officers and controlling
persons of the company pursuant to the foregoing provisions, or otherwise, we
have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment of expenses
incurred or paid by a director, officer or controlling person of the company
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, we will, unless in the opinion of our counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

II-7

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form SB-2 and has duly caused this
Post-Effective Amendment No. 1 to Registration Statement No. 333-45508 to be
signed on its behalf by the undersigned, in Thompson Falls, State of Montana,
as of January 30, 2002.

UNITED STATES ANTIMONY CORPORATION

By /s/ John C. Lawrence
--------------------------------
John C. Lawrence
President and Chairman

In accordance with the requirements of the Securities Act of 1933, this Post-
Effective Amendment No. 1 to Registration Statement No. 333-45008 has been
signed by the following persons in the capacities and on the dates indicated.

Signature Capacity Date
--------- -------- ----
/s/ John C. Lawrence President and Chairman of the Board February 11, 2002
--------------------- (Principal Executive and Chief
John C. Lawrence Financial Officer and Director)

/s/ Robert A. Rice Director February 7, 2002
---------------------
Robert A. Rice

/s/ Leo Jackson Director January 30, 2002
---------------------
Leo Jackson

EXHIBIT INDEX
TO
REGISTRATION STATEMENT ON FORM SB-2

Exhibit Number Description
-------------- -----------
3.01 Articles of Incorporation of USAC, Filed as an exhibit to
USAC's Form 10-KSB for the fiscal year ended December 31,
1995 (File No. 1-8675) are incorporated herein by this
reference.
3.02 Amended and Restated Bylaws of USAC.**
3.03 Articles of Correction of Restated Articles of
Incorporation of USAC. **
4.01 Key Employees 2000 Stock Plan, filed as an exhibit to
USAC's Form S-8 Registration Statement filed on March 10,
2000 (File No. 333-32216) is incorporated herein by this
reference.
5.01 Opinion of Sonfield & Sonfield**
10.0 Purchase Order from Kohler Company**

Documents filed with USAC's Annual Report on Form 10-KSB for the year ended
December 31, 1995 (File No. 1-8675), are incorporated herein by this
reference:

10.10 Yellow Jacket Venture Agreement
10.11 Agreement Between Excel-Mineral USAC and Bobby C. Hamilton
10.12 Letter Agreement
10.13 Columbia-Continental Lease Agreement Revision
10.14 Settlement Agreement with Excel Mineral Company
10.15 Memorandum Agreement
10.16 Termination Agreement
10.17 Amendment to Assignment of Lease (Geosearch)
10.18 Series B Stock Certificate to Excel-Mineral Company, Inc.
10.19 Division Order and Purchase and Sale Agreement
10.20 Inventory and Sales Agreement
10.21 Processing Agreement
10.22 Release and settlement agreement between Bobby C. Hamilton
and United States Antimony Corporation
10.23 Columbia-Continental Lease Agreement

10.24 Release of Judgment
10.25 Covenant Not to Execute
10.26 Warrant Agreements filed as an exhibit to USAC's Annual
Report on Form 10-KSB for the year ended December 31, 1996
(File No. 1-8675), are incorporated herein by this
reference
10.27 Letter from EPA, Region 10 filed as an exhibit to USAC's
Quarterly Report on Form 10-QSB for the quarter ended
September 30, 1997 (File No. 001-08675) is incorporated
herein by this reference
10.28 Warrant Agreements filed as an exhibit to USAC's Annual
Report on Form 10-KSB for the year ended December 31, 1997
(File No. 001-08675) are incorporated herein by this
reference
10.30 Answer, Counterclaim and Third-Party Complaint filed as an
exhibit to USAC's Quarterly Report on Forms 10-QSB for the
quarter ended September 30, 1998 (File No. 001-08675) is
incorporated herein by this reference

Documents filed with USAC's Annual Report on Form 10-KSB for the year ended
December 31, 1998 (File No. 001-08675), are incorporated herein by this
reference:

10.31 Warrant Issue-A.W. Dugan
10.32 Amendment Agreement

Documents filed with USAC's Quarterly Report on Form 10-QSB for the quarter
ended March 31, 1999 (File No. 001-08675) are incorporated herein by this
reference:

10.33 Warrant Issue-John C. Lawrence
10.34 PVS Termination Agreement

Documents filed as an exhibit to USAC's Form 10-KSB for the year ended
December 31, 1999 (File No. 001-08675) are incorporated herein by this
reference:

10.35 Maguire Settlement Agreement
10.36 Warrant Issue-Carols Tejada
10.37 Warrant Issue-Al W. Dugan
10.38 Memorandum of Understanding with Geosearch Inc.
10.39 Factoring Agreement-Systran Financial Services Company
10.40 Mortgage to John C. Lawrence
10.41 Warrant Issue-Al W. Dugan filed as an exhibit to USAC's
Quarterly Report on Form 10-QSB for the quarter ended
March 31, 2000 (File No. 001-08675) is incorporated herein
by this reference

10.42 Agreement between United States Antimony Corporation and
Thomson Kernaghan & Co., Ltd. filed as an exhibit to USAC
form 10-QSB for the quarter ended June 30, 2000 (File No.
001-08675) are incorporated herein by this reference.
10.43 Settlement agreement and release of all claims between the
Estate of Bobby C. Hamilton and United States Antimony
Corporation filed as an exhibit to USAC form 10-QSB for
the quarter ended June 30, 2000 (File No. 001-08675) are
incorporated herein by this reference.
10.44 Supply Contracts with Fortune America Trading Ltd. filed
as an exhibit to USAC form 10-QSB for the quarter ended
June 30, 2000 (File No. 001-08675) are incorporated herein
by this reference.
10.45 Amended and Restated Agreements with Thomson Kernaghan &
Co., Ltd. **
21.01 Subsidiary of USAC**
23.01 Consent of Sonfield & Sonfield (included in Exhibit 5.01)**
23.02 Consent of DeCoria, Maichel & Teague P.S. *
44.1 CERCLA Letter from U.S. Forest Service filed as an exhibit
to USAC form 10-QSB for the quarter ended June 30, 2000
(File No. 001-08675) are incorporated herein by this
reference and filed as an exhibit to USAC's Form 10-KSB
for the year ended December 31, 1995 (File No. 1-8675) is
incorporated herein by this reference.

______________________
* Filed herewith.
** Previously filed.