China is the biggest competitor of US based mining companies, producing up to 90% of the world’s antimony. Because of this increasingly stiff competition and low prices of metals, US miners have struggled for the last 10 years. United States Antimony (UAMY) is one of the companies that has benefitted from the pandemic. Since production in China has suffered while global demand has gone up, UAMY stocks have seen a substantial (albeit not consistent) increase in price. Sitting at USD$0.50 around the end of 2019, it saw its highest ever prices in February of 2021, surpassing the USD$2.00 mark. Currently, it sits at USD$1.23
Why is the Government Helping UAMY?
Given that there is a risk of China restricting exports of strategic and precious metal to the US, UAMY was given a USD$510,528.00 grant by the government to stockpile antimony, which is used as a main component of ammunition as well as in fire-resistant materials. While not a monumental grant, it likely instilled confidence in investors that one of the few domestic producers of antimony would be scaffolded by the government because of how crucial the supply of antimony is.
Where does UAMY Stand at the Moment?
Having raised USD$14.3 million through direct offerings of its common stock (which is close to 10 times the amount of money UAMY had available to invest at the end of their last quarter), UAMY is primed to invest that capital and usher in further growth. It plans to put that money towards improving infrastructures at their antimony set up in Mexico and Montana, as well as of their zeolite project in Idaho. This capital will also be used to fund their drill program in Los Juarez, as well as cover general corporate expenses and reduce debt.
What Explains UAMY’s Current Position?
Despite these developments, UAMYs recent track record is quite confounding. While revenue has been consistently declining at a rate of nearly 13% per annum, the share price has been rising by a compounded 23% every year. This could potentially be attributed to the rise of newer retail traders and investors who are less risk-averse than experienced traders who have experienced significant long-term corrections and crashes. To illustrate, Google shows a sharp increase in the search for the UAMY ticker over the past few months, but not the company itself.