U.S. Antimony is all-in in Mexico

During the Second World War, Mexico dominated the antimony market, producing more than 30 million lb. per year. But the country lost its edge in subsequent decades, primarily due to inadequate smelting and milling facilities, and today China controls more than 90% of the world’s antimony supply, followed by Bolivia. 

John Lawrence, founder and chief executive officer of U.S. Antimony (NYSE-MKT: UAMY), wants to restore a little of Mexico’s former glory by developing his company into a major supplier of the metal. 

Seven Mexican properties supply direct-shipping ore, or mill feed, to the Montana-headquartered company’s Mexican operations, which include a smelter and three mills.  

In the second quarter, the company’s antimony production in Mexico jumped 186% year-on-year to 201,463 lb., up from the 70,259 lb. the company produced in the second quarter of 2012. Other highlights of the quarter include the initial sale of silver and gold from its Los Juarez silver-antimony-gold deposit in Queretaro, Mexico, and the partial transportation of a 500-tonne-per-day mill from Montana to the company’s Puerto Blanco mill in Guanajuato.

On April 30, U.S. Antimony started up an antimony oxide mineral circuit at the Puerto Blanco flotation mill, which increased its milling capacity from 150 tons per day to 225 tons per day (136 tonnes per day to 204 tonnes per day). With the exception of its Los Juarez property, the company says most antimony properties in Mexico contain oxide or mixed oxide-sulphide minerals. The sulphide minerals are recovered by flotation, while the oxide minerals must be recovered by gravimetric methods.

U.S. Antimony’s natural gas pipeline to its Madero smelter in Coahuila, Mexico, was also put in place during the second quarter, and, as of Aug. 8, was ready to be hooked up to Pemex’s main line. The fuel cost is second only to the cost of raw materials, the company says, and forecasts that its substitution of natural gas for propane is expected to cut costs by 75%.

“After many years of preparation and expense, our Mexican strategy to position U.S. Antimony as a major free-world antimony supplier is now in place,” Lawrence said in a press release. “Raw material sources include the company’s Los Juarez antimony-silver-gold property and most of Mexico’s historically important antimony producers, including Wadley, Soyatal, Guadalupe and Guadalupana.”

The Guadalupe, Guadalupana and Soyatal properties contain large tonnages of oxidized dump material that are fed to the oxide circuit at Puerto Blanco. The company has an option to buy Guadalupe and is exercising its option to buy Soyatal, the third-largest producer of antimony in Mexico during the Second World War.

In June, the vertically integrated antimony producer announced that it signed a renewable one-year lease on the San Jose antimony mine — also known as Wadley — in San Luis Potosi, Mexico. The lease includes the mining concessions, mining equipment, mill and infrastructure; which includes a camp, assay lab, hospital, administrative office, railroad siding and warehouses. During the first six months, which started June 20, U.S. Antimony pays a US$25,000-per-month rental fee, which rises to US$30,000 per month after its first six months.  

U.S. Antimony has bought and smelted 481,028 lb. antimony from Wadley, and plans to permit the mine, mill its lower-grade mineralization and direct-ship the higher-grade antimony to its Mexican smelter.

A 500-ton-per-day (450-tonne-per-day) plant was installed at Wadley in the late 1990s, but U.S. Antimony says the plant recovered only 20–25% of the values and made a low-grade concentrate. Last year, on a trial basis, U.S. Antimony modified the plant and produced a 40–50% antimony concentrate, with up to a 55% recovery on a reduced-tonnage basis.

The mineralized zone at Wadley is 2 km long and 1 km wide, and has been developed by 500 km of underground workings.

The company’s antimony smelter and precious metals plant in the U.S. is located in the Burns mining district of Sanders County, Mo., 24 km west of Thompson Falls.

Antimony prices at the end of June were US$4.22 per lb., down 34% from the US$6.46 per lb. at the end of June 2012. At press time, U.S. Antimony was trading at US$1.14 per share within a 52-week range of US90¢ to US$3.09.