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The investment thesis from my original article on United States Antimony Corp. (NYSE:UAMY) – that demand for antimony, a critical metal for defense and energy transition applications – continues to grow stronger as evidenced by this recent article highlighting the expanding list of technological applications of antimony and this one from ZeroHedge highlighting U.S. military plans to increase production of artillery shells by 500% over the next two years.
However, the lackadaisical approach the Board has shown historically with respect to driving business development and unlocking the potential of the share price has always been the real issue with this share.
The first definitive sign that this may be changing appeared in an 8-K filed by the Company December 1, 2022 announcing the appointment of Mr. Gary Evans to the Board of Directors.
Upon appointment Mr. Evans stated:
“I am very pleased to accept this nomination to the Board of Directors of US Antimony. We have been having these discussions regarding a board position for several months now and the time is right for all parties. Having started and run four separate publicly traded companies over the past 35 years, predominantly in the energy sector, three of which were on the NYSE and became multibillion enterprise value entities, I hope to be able to add some value to a company I deem is currently trading significantly below its intrinsic value. The common goal of our board and management team is to figure out ways to bridge this value gap for the ultimate benefit of all our shareholders, both new and old.”
More exciting for shareholders is that Mr. Evans has “put his money where his mouth is” accumulating 956,849 shares as of January 20, 2023 with near daily Form 4 filings (Statement of Changes in Beneficial Ownership, required for insider purchases) in the month of January.
Mr. Evans enthusiasm may be paying off as another director, Lloyd Bardswich, added 10,000 shares to his position on January 19, 2023.
According to Bert Denton, a noted shareholder activist, that I interviewed previously regarding the Company:
UAMY is undergoing a thorough revamping as the Lawrence family’s control for 53 years has been successfully challenged by the Board’s professional members, both operating and investment types:
Gary Evans: started and CEO’d 4 public companies.
Joe Bardswich: antimony mining background.
Tim Hasara: nano-cap investment professional.
Key Risks
The primary risks include: track record of persistent losses and lack of bold and decisive leadership by the Board of directors, continued monopolistic practices by Chinese miners and the impact this could have on global antimony pricing. These risks are mitigated, in my view, by the appointment of Mr. Evans to the Board, strong balance sheet, modest premium to book value and heightened awareness of industrial and government users of antimony to both ongoing supply chain issues and risks of geopolitical disruption of supply.
Recommendation
No question that the shares of UAMY have been a consistent disappointment throughout the Company’s history as noted in my original article and this recent article by another Seeking Alpha author. An investment in UAMY has to be based on conviction that long-term prices will remain strong due to the combination of higher defense and energy transition related demand combined with signs that China’s multi-century dominance of the supply of antimony is showing signs of exhaustion. Strong market fundamentals, combined with the drive that I believe the new directors bring to the Company should make UAMY a share to watch in 2023.
Editor’s Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.
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