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<SEC-DOCUMENT>0001059016-01-500047.txt : 20010911
<SEC-HEADER>0001059016-01-500047.hdr.sgml : 20010911
ACCESSION NUMBER:		0001059016-01-500047
CONFORMED SUBMISSION TYPE:	SB-2/A
PUBLIC DOCUMENT COUNT:		4
REFERENCES 429:			gov.sec.edgar.dataobjects.object.PDSubFN429Data@831a81eb
FILED AS OF DATE:		20010910

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			UNITED STATES ANTIMONY CORP
		CENTRAL INDEX KEY:			0000101538
		STANDARD INDUSTRIAL CLASSIFICATION:	PRIMARY SMELTING & REFINING OF NONFERROUS METALS [3330]
		IRS NUMBER:				810305822
		STATE OF INCORPORATION:			MT
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		SB-2/A
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-45508
		FILM NUMBER:		1734849

	BUSINESS ADDRESS:	
		STREET 1:		P O BOX 643
		CITY:			THOMPSON FALLS
		STATE:			MT
		ZIP:			59873
		BUSINESS PHONE:		4068273523

	MAIL ADDRESS:	
		STREET 1:		PO BOX 643
		CITY:			THOMPSON FALLS
		STATE:			MT
		ZIP:			59873-0643

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	AGAU MINES INC
		DATE OF NAME CHANGE:	19740728
</SEC-HEADER>
<DOCUMENT>
<TYPE>SB-2/A
<SEQUENCE>1
<FILENAME>amend3.txt
<DESCRIPTION>UAMY SB-2/A
<TEXT>
  As filed with the Securities and Exchange Commission on September 10, 2001
                                                      Registration No. 333-45508



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

                       ----------------------------------

                                 AMENDMENT NO. 3
                                       TO
                                    FORM SB-2
                             REGISTRATION STATEMENT
                                      Under
                           The Securities Act of 1933

                       ----------------------------------


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

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

                           Robert L. Sonfield, Jr., Esq.
                               Sonfield and Sonfield
                             770 South Post Oak Lane
                              Houston, Texas 77056
                                 (713) 877-8333
                              (713) 877-1547 (fax)
                         ------------------------------

Approximate date of proposed sale to the public: From time to time after the
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. [ ]
<TABLE>
=================================================================================================================

                                        CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------------
<S>                                       <C>                <C>                 <C>                 <C>
Title of Each Class of                      Amount to be      Proposed Maximum    Proposed Maximum    Amount of
Securities to be Registered (1)              Registered        Offering Price        Aggregate       Registration
                                                               Per Share (2)     Offering Price (2)      Fee
- ----------------------------------------- ------------------ ------------------- ------------------- ------------

Common Stock, par value $.01 per share        6,268,065             $14             $877,529.10        $219.38
- ----------------------------------------- ------------------ ------------------- ------------------- ------------
</TABLE>
     (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 September 10, 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.








PRELIMINARY PROSPECTUS          Subject To Completion, Dated SEPTEMBER ___, 2001

                   The information in this prospectus is not
                          complete and may be changed.



                       UNITED STATES ANTIMONY CORPORATION

                                6,268,065 Shares

                                  Common Stock



    We are registering the following shares for resale by Selling Shareholders.
See "Selling Shareholders":

    o    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;

    o    240,343 liquidated damage shares of common stock issuable ratably to
         the holders of our 10% convertible debentures. o 432,692 shares of
         common stock issuable at $.39 per share upon exercise of warrants held
         by 5 of the selling shareholders; o 961,358 shares of common stock
         issuable at $.39 per share upon exercise of agent's warrants held by 3
         of the selling shareholders;

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

    o    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 2.

                     ----------------------------

Our common stock is registered under Section 12(b) 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 September 10, 2001 was $0.14 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 ________, 2001


                                TABLE OF CONTENTS
                                                                            Page

PROSPECTUS SUMMARY................................... .........................1

RISK FACTORS...................................................................2

USE OF PROCEEDS................................................................8

DETERMINATION OF OFFERING PRICE................................................8

DILUTION.......................................................................9

SELLING SHAREHOLDERS...........................................................9

PLAN OF DISTRIBUTION..........................................................12

DESCRIPTION OF SECURITIES.....................................................14

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS......................16

DESCRIPTION OF BUSINESS.......................................................17

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS....................................................................28

DESCRIPTION OF PROPERTY.......................................................30

DIRECTORS AND EXECUTIVE OFFICERS..............................................31

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT................32

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................................34

EXECUTIVE COMPENSATION........................................................37

LEGAL PROCEEDINGS.............................................................37

LEGAL MATTERS.................................................................37

EXPERTS.......................................................................37

WHERE YOU CAN FIND MORE INFORMATION...........................................37

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)     19,134,564

         Shares Outstanding
         After the Offering(2)      25,402,629

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

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

- -----------------
(1)  As of June 30, 2001.
(2)  Assumes all shares registered in this prospectus are sold.
(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 received 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: o discuss our
future expectations; o contain projections of our future results of operations
or of our financial condition; and o 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:

o        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:

o        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

o        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 terms of the 10% Convertible Debenture financing transaction may result in
substantial dilution of our stock upon the conversion of the debentures and
warrants which have been issued and which may be issued in the future under the
terms of the financing agreement.

         We entered into a financing agreement with Thomson Kernaghan and 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
         have been issued and which may be issued in the future under the terms
         of the agreement.

                  * No floor on the conversion price. The conversion price
         of our outstanding 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 outstanding
         debentures. 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.

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 June 30, 2001, there were issued and
outstanding the following warrants:

         --warrants held by our directors, officers, employees and affiliates to
         purchase an aggregate of 582,463 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 2,201,531 shares of common stock with an exercise price ranging from
         $.25 to $.55 per share.

Our Board of Directors Can Issue Additional Shares Of Our Common Stock Without
The Consent Of Any Of Our Shareholders; Substantial Future Stock Issuances Could
Result In The Dilution Of Your Voting Power And Of Earnings Per Share Which
Could Decrease The Value Of Your Shares

         Our Certificate of Incorporation authorizes the issuance of 30,000,000
shares of common stock. Upon the sale of all of the shares of common stock
offered hereby approximately 5,120,813 of our authorized common shares will
remain unissued. Our board of directors has the power to issue any or all of the
remaining 5,120,813 authorized common shares for general corporate purposes,
without shareholder approval. Potential investors should be aware that any stock
issuances may result in a reduction of the book value or market price of the
outstanding common shares. If we issue any additional common shares, any
issuance will reduce the proportionate ownership and voting power of each other
common shareholder. See "Description of Securities."

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 small amounts of stock in transactions
which may not qualify for exemption from the Securities Act registration
requirements. As a result, we may be subject to civil liabilities, including
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.

                    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
June 30, 2001, we had an accumulated deficit of $2,059,674 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 June 30,
2001, we had total current assets of $312,172 and total current liabilities of
$1,543,568 or negative working capital of approximately $1,231,396. 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 June 30, 2001, we are delinquent on the payment of several
current liabilities including payroll and property taxes in the amount of
$146,632, accounts payable in the amount of $367,359, judgments payable in the
amount of $45,001 and accrued interest payable in the amount of $14,640. While
we have made payment arrangements with many of our creditors, there exists the
risk that these creditors individually or collectively could demand immediate
payment and jeopardize our ability to fund operations. The creditors who are
owed taxes have the power to seize our assets for payment of amounts past due
and close down our operations.

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, develope 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. The issuance of equity or equity-related securities to raise
additional cash could result in dilution to our stockholders. Further,
additional 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 June 30, 2001, our bank debt in the amount of $424,772 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 our outstanding 10% Convertible Debentures 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.


                                 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 Bloomburg 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.

         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.


                                    DILUTION

         At the close of business on June 30, 2001, there were 19,134,564
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 requires us to register
5,784,393 shares of our common stock that, depending on the market price at the
time of conversion, we could be required to issue upon conversion of the
debentures and/or exercise of related warrants which are currently issued and
outstanding and held by Selling Shareholders. The minimum number of conversion
and warrant shares we are required to issue, if all debentures are converted at
the maximum conversion price of $.29125 per share and all related warrants are
exercised, is 3,711,647. We are also registering 483,672 shares held by the
Series C Holders.

         The following table sets forth the net tangible book value per share at
June 30, 2001, and the net tangible book value per share assuming that all
2,317,597 shares were issued at June 30, 2001 upon conversion of debentures at
$0.29125 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 June 30,
2001 is calculated by dividing total tangible assets less total liabilities, or
($2,059,674), by the number of shares outstanding, 19,134,564.

         After giving effect to the issuance of 2,317,597 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 $(840,924), or $(0.071) per
share, representing an immediate increase in pro forma net tangible book value
of $0.037 per share for existing shareholders.
<TABLE>
<S>      <C>                                                                    <C>
         Net tangible book value at June 30, 2001                               $(.108) per share

         Net tangible book value after giving effect to issuance of 2,317,597
         shares at $0.29125 per share and 1,394,050 shares
         at $0.39 per Share                                                     $(.037) per share

         Per share dilution to Selling Shareholders                             $(.071) per share

         Percent dilution to Selling Shareholders                               65.74%
</TABLE>

                              Selling Shareholders

            The following table sets forth information with respect to the
Selling Shareholders as of July 31, 2001. 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 and 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 and Co. Limited. Ian
McKinnon is the father of Michelle McKinnon, both of whom were employees of
Thomson Kernaghan and Co. Limited.

            The table assumes:

   o     all debentures are converted at $0.29125 per share and all warrants
         are exercised at $0.39 per share.

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

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

   o     we do not issue or cancel any other shares.
<TABLE>
- ----------------------------------- ------------------- ----------------- ------------- ----------------------- ----------------

                                     NUMBER OF SHARES                      NUMBER OF
                                       BENEFICIALLY        Percent of     SHARES THAT      NUMBER OF SHARES       PERCENT OF
                                     OWNED BEFORE THE     Class Before       MAY BE       BENEFICIALLY OWNED      CLASS after
   Name of Beneficial Owner(1)           OFFERING         offering(1)       OFFERED       after the offering      offering(1)
- ----------------------------------- ------------------- ----------------- ------------- ----------------------- ----------------
- ----------------------------------- ------------------- ----------------- ------------- ----------------------- ----------------
<S>                                 <C>                 <C>               <C>           <C>                     <C>
Abuck Investments Ltd. (2)(7)          1,308,206             6.79         1,308,206              0                    0
Archer Foundation                         32,684              .17            6,536              26,148               0.10
Caliber Resources Ltd. (3) (7)         1,360,458             6.94         1,360,458              0                    0
Claude H.C. Archer                       163,423              .51            32,684            130,739               0.51
CALP II LP and Striker Capital           141,025             0.73          141,025               0                    0
Ltd. (4) (8)
Delta Funds(11)                           81,712              .43            16,342             65,370               0.26
H.R. Gurtsmith                            49,026              .26            9,805              39,221               0.15
Barbara Howley                           284,153              1.49           56,830            227,323               0.89
George W. Moffitt Jr.                     49,027              .26            9,805              39,222               0.15
Ian McKinnon (5)                         384,543              1.97          384,543               0                    0
Ian McKinnon Family Trust                 44,302              0.23           44,302               0                    0
Michelle McKinnon (6)                    192,272              0.99          192,272               0                    0
Nancy Ann Moffitt                         98,053              0.51           19,610             78,443               0.13
Nancy J. Moffitt                          65,369              0.34           13,073             52,296               0.21
Sanders County Ledger                     28,510              0.15           5,702              22,808               0.09
John C. Lawrence                       3,537,827              17.4          266,354           3,271,473              12.30
JCL/Ham Pass Thru                        138,398              0.72           27,679            110,719               0.44
Robert A. Rice                           217,762              1.14           12,715            205,047               0.81
Sulico                                    32,684              0.17           6,536              26,148               0.10
Rebecca McKinnon(10)                      88,604              0.46           88,604               0                    0
Thomson Kernaghan and Co. Limited        150,000              0.78          150,000               0                    0
(4) (7) (8)
Ursa Capital/Holdings Ltd. (7)(9)        432,581              2.26          432,581               0                    0
  Total                                 8,880,618                          4,585,662          4,294,957
- ----------------------------------- ------------------- ----------------- ------------- ----------------------- ----------------
</TABLE>
1.       Shares of common stock subject to options or warrants currently
         exercisable or convertible, or exercisable or convertible within 60
         days of June 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 19,134,564 shares of common stock
         outstanding before the offering and 25,402,629 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 disclaim
         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 1,057,511 shares of common
         stock issuable upon conversion of debentures, 141,026 shares of common
         stock issuable upon exercise of warrants, and 109,669 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 233,000
         shares of common stock issuable upon exercise of debentures, 92,949
         shares of common stock issuable upon exercise of warrants, and 82,966
         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 and Co. Limited
         are under the common control of Mark Valentine, the Chief Executive
         Officer of Thomson Kernaghan and 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  conversion
         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 and 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  are  convertible  into common  stock at the
         lower of $0.29125  per share or 75% of the average of the
         lowest closing bid prices during the 20 trading days preceding the
         conversion  date.  Thomson  Kernaghan and 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
         inss. 13(d) of the  Securities  and  Exchange  Act of 1934,
         which owns 5% or more of Company's common stock.

8.       Thomson  Kernaghan  and Co.  Limited is the  record  holder,  as agent
         for  non-US  persons  under the  Escrow  Agreement,  of a
         certificate  for  1,000,000  contingently  issued  shares  issued in
         escrow to  facilitate  issuance  of common  stock to the
         debenture  holders and warrant holders upon exercise of their
         conversion or purchase rights.  Thomson  Kernaghan and Co. Limited
         disclaims beneficial ownership of these shares.

9.       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 104,000 shares of common stock issuable upon
         conversion of debentures, 38,462 shares of common stock issuable upon
         exercise of warrants, and 37,037 shares of common stock issued as
         liquidated damages for failure to have registration statement declared
         effective.

10.      Includes 20,000 shares of common stock issuable upon conversion of
         debentures, 12,820 shares of common stock issuable upon exercise of
         warrants, and 7,114 shares of common stock issued as liquidated damages
         for failure to have registration statement declared effective.


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

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 Bloomburg 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 Bloomburg 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 Bloomburg 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 are convertible into 2,317,597
shares of our common stock at the initial conversion price of $0.29125 per
share. If our stock price declines below $0.29125 per share and the debentures
are converted, the conversion price formula will result in a lower conversion
price and we will be required to issue a greater number of shares. There is no
floor on the conversion price; and the lower our stock price, the greater the
dilution of the outstanding shares upon conversion of the debentures. 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 bid price of our common stock reported on the
Over-the-Counter Bulletin Board on September 10, 2001 was $0.14 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 requires 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 are registering 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 and Co. Limited for
payment of consulting fees.

         If all outstanding debentures were converted to common stock at the
initial conversion price of $0.29125 per share and all of the outstanding
related warrants were exercised as of June 30, 2001, the debenture and warrant
holders would own, and would be able to sell pursuant to this prospectus,
3,711,647 shares of common stock representing 16.2% of the then outstanding
shares of our common stock.

         We are 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.


                              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:

   o     ordinary brokerage transactions and transactions in which the broker-
         dealer solicits the purchaser;
   o     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;
   o     purchases by a broker-dealer as principal and resale by the broker-
         dealer for its account;
   o     an exchange distribution in accordance with the rules of the
         applicable exchange;
   o     privately-negotiated transactions;
   o     broker-dealers may agree with the Selling Shareholders to sell a
         specified number of shares at a stipulated price per share;
   o     a combination of any of the methods of sale; and o 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.

         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 19,134,564 shares of common stock outstanding at
the close of business on June 30, 2001. In addition, 1,394,050 shares of common
stock were reserved for issuance upon exercise of outstanding warrants to
purchase our common stock; and 4,240,343 shares were reserved for issuance upon
conversion of debentures and payment of liquidated damages to the debenture
holders.

         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 June 30, 2001, 4,500 shares of Series A preferred stock were outstanding; and
cumulative dividends in arrears amounted to $67,500, or $15.00 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 June 30, 2001, cumulative dividends in arrears on the 750,000
outstanding Series B shares were $56,250, or $0.075 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 June 30, 2001, 177,904 shares of Series C preferred stock
remained outstanding and unconverted.

Debentures

         We have issued $675,000 of 10% convertible debentures due June 30, 2002
and related warrants to purchase our common stock. The debentures are due June
30, 2002 and accrue interest at 10% to be paid annually on each anniversary date
of the issue. The debentures are 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
Bloomburg 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.

         We have also 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 accrue interest at 10% to be paid
annually on each anniversary date of the issue. The debentures are 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 Bloomburg 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 holders of these debentures do not have
registration rights in connection with the common stock issuable upon conversion
of the debentures or 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."
<TABLE>
<S>                                 <C>                       <C>              <C>
                                    2001                       High             Low
                                    First Quarter              $0.41            $0.17
                                    Second Quarter              0.53             0.24

                                    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

</TABLE>
         The approximate number of record holders of our common stock at June
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:

o        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.
o        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.
o        Sewage  Treatment.  Zeolite is used in sewage treatment plants to
         remove nitrogen from waste streams and to deodorize  methane
         gas.
o        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.
o        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.
o        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.
o        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 June 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
comment 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 June 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 June 30, 2001 is as follows:
<TABLE>
============================== ================ ================ =============== =============== ===================
<S>                            <C>              <C>              <C>             <C>             <C>
                                                                                  Bear River
                                 Yankee Fork    Thompson Falls   Yellow Jacket      Zeolite
                                  Mill Site     Antimony Plant        Mine                             Totals
- ------------------------------ ---------------- ---------------- --------------- --------------- -------------------

Balance December 31, 1997        $171,500        $ 270,000         $115,044                          $ 556,544
- ------------------------------ ---------------- ---------------- --------------- --------------- -------------------

Less: Reclamation work            (55,472)                                                             (55,472)
- ------------------------------ ---------------- ---------------- --------------- --------------- -------------------

Adjustment of Accrued                                                                                    2,200
Remediation Costs                                    2,200
- ------------------------------ ---------------- ---------------- --------------- --------------- -------------------

Balance December 31, 1998        $116,028        $ 272,200         $115,044                           $503,272
- ------------------------------ ---------------- ---------------- --------------- --------------- -------------------
                                                                   (73,893)
Less: Reclamation work                            (169,736)                                           (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                   0            25,615          86,960                             112,575
Remediation Costs
- ------------------------------ ---------------- ---------------- --------------- --------------- -------------------

Balance December 31, 2000        $ 46,028        $ 118,316         $115,044                          $ 279,388
- ------------------------------ ---------------- ---------------- --------------- --------------- -------------------
- ------------------------------ ---------------- ---------------- --------------- --------------- -------------------

Less: Reclamation work                             (1,766)         (10,666)                           (12,432)
- ------------------------------ ---------------- ---------------- --------------- --------------- -------------------
- ------------------------------ ---------------- ---------------- --------------- --------------- -------------------
Adjustment of Accrued
Remediation Costs                                                                   $7,500               7,500
- ------------------------------ ---------------- ---------------- --------------- --------------- -------------------
- ------------------------------ ---------------- ---------------- --------------- --------------- -------------------
Balance June 30, 2001
                                  $46,028         $116,550         $104,318         $7,500            $274,456
============================== ================ ================ =============== =============== ===================
</TABLE>
         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
   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
   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  June  30,  2001,  we  employed  28  full-time
employees.  The  number  of  full-time  employees  may  vary
seasonally.  None of our employees is covered by any collective bargaining
agreement.

                           [GRAPHICS OMITTED][MAPS]

                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

         We reported a net loss of $67,699 during 2000 compared to net income of
$304,015 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 debts to common stock of $917,726. The net
income in 1999 is primarily due to an extraordinary gain of $611,693 recognized
on the conversion of debts to common stock. Without the effect of the
extraordinary gain, we would have experienced a net loss from our operating
activities of $307,677 during 1999.

         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 our sharing of 50% of antimony product sales with an affiliated sales
company during the first quarter of 1999 compared to selling all of our 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, we anticipate 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 our increased
reclamation activities during 2000 compared to 1999.

         During 2000 and 1999 we recorded $25,615 and $51,150, respectively, of
reclamation costs on our antimony properties that were not charged against our
accrued reclamation liability based on our revised estimates of reclamation
costs required to fulfill our antimony reclamation obligations.

         During 1999, we made adjustments to accrued reclamation costs of
$70,000 to reflect management's estimate of costs remaining to reclaim our
Preacher's Cove property. During 2000, no adjustments were made to reclamation
liabilities at the Preacher's Cove property.

         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 our 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 our 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 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 us
during 2000 as the Yellow Jacket property reclamation progressed.

         In 2000, we 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 our
restricted common stock. In connection with the settlement, we recorded an
extraordinary gain of $917,726. In 1999, we converted $682,397 of defaulted
debenture principal and interest and $144,339 of principal and interest related
to mining lease royalties (Judgments payable) into our common stock. In
connection with these conversions we recorded an extraordinary gain of $611,692.

Financial Condition and Liquidity

         At December 31, 2000, our assets totaled $843,920, 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, we are 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, we may not be able to meet our obligations, fund
operations and continue in existence. There can be no assurance that management
will be successful in our plans to improve the financial condition of us.

         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 $892,588 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 some of our 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 our financial condition, our 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"). We 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 our 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 and 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 our
convertible debentures to the investment banker and our 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 our common
stock as reported by Bloomburg 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, we 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,
we issued warrants to purchase 1,394,050 shares of common stock at $0.39 per
share.

         The financing agreement required that we execute a registration rights
agreement, binding us 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 our authorized but outstanding
shares of common stock to accommodate the exercise of the warrants and
conversion of the debentures. During 2000, we 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 we executed provides for 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. In April 2001, the
debenture holders agreed to quantify the liquidated damages at $70,000 payable
in the form of 240,343 shares of our common stock.

         During 2000, we issued $247,922 of 10% convertible debentures (due
December 2003) to John C. Lawrence, our president and a director. The debentures
were issued in exchange for various cash advances we had received for working
capital purposes from Mr. Lawrence during the year. Also in December 2000, we
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 A.W.
Dugan, a shareholder of the company 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 our 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 our 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 we 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, we sold 782,511 shares of our 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 our operations.

         We anticipate funding our operations through additional sales of common
stock and debt financing in 2001. We believe that it 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.


                             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
<TABLE>
                                                   Affiliation
         Name                       Age              with us                            Expiration of Term
<S>      <C>                        <C>            <C>                                  <C>
         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

         Gary D. Babbitt            54             Director                             Annual Meeting

</TABLE>
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.

         Gary D.  Babbitt.  Mr. Babbitt is a partner in the Boise,  Idaho law
firm of Hawley Troxell Ennis and Hawley LLP, and has served as our legal counsel
for several years.  Mr. Babbitt  concentrates  his law practice in commercial
litigation,  environmental  matters and mining law. He is a member of the
Society of Mining  Engineers,  a director of the Idaho Mining  Association,
and a trustee of the Rocky  Mountain  Mineral Law  Foundation.  Mr.  Babbitt
was appointed as a director when the Board expanded to four members in November
2000.

         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 is 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 June 30, 2001 (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.
<TABLE>
                           Name and Address of                Amount and Nature of                       Percent of
Title of Class             Beneficial Owner(1)                Beneficial Ownership                          Class
<S>                        <C>                                <C>                                        <C>
Common stock               The Maguire Family and                1,501,898(2)                               7.78 (1)
                           related entities as a group
                           c/o Walter L. Maguire, Sr.
                           P.O. Box 129
                           Keller, VA 23401
- ------------------------------------------------------------------------------------------------------------------------------------
Common stock               The Dugan Family                   2,863,072(4)                                13.67 (1)
                           c/o A. W. Dugan
                           1415 Louisiana Street, Suite 3100
                           Houston, TX 77002
- ------------------------------------------------------------------------------------------------------------------------------------
Common stock               Thomson Kernaghan and Co Limited(6)  291,025 (5)                                 1.51 (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                            3,537,827(3)                         17.9
- ------------------------------------------------------------------------------------------------------------------------------------
Common stock               Robert A. Rice                                 217,762                            1.17
- ------------------------------------------------------------------------------------------------------------------------------------
Common stock               Leo Jackson                                      60,700                               Nil
- ------------------------------------------------------------------------------------------------------------------------------------
Common stock               Gary D. Babbitt                                    5,967                                Nil
- ------------------------------------------------------------------------------------------------------------------------------------
Common stock               All Directors and executive
                           officers as a group
                           (4 persons)                                 3,822,256                           19.07
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(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 June 30, 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 19,134,564
         shares of common stock, 4,500 shares of Series A Preferred Stock and
         177,904 shares of Series C Preferred Stock outstanding on June 30,
         2001, and the shares issuable upon the exercise of options and warrants
         exercisable on or within 60 days of June 30, 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;  219,555 shares owned by Walter
         L. Maguire, Jr.; and warrants issued to donees of Walter
         L. Maguire, Sr. to purchase 100,000 shares of common stock.  Excludes
         1,003,409 shares owned by the 1934 Maguire Trust.

(3)      Includes 2,336,640 shares of common stock, warrants to purchase 401,213
         shares of common stock, and 799,974 shares issuable upon the conversion
         of the principal balance of convertible debentures into common stock at
         $0.31 per share. Excludes 75,000 shares owned by Mr. Lawrence's sister,
         as to which Mr. Lawrence disclaims beneficial ownership.

(4)      Includes 316,667 shares owned by A.W. Dugan; 183,333 shares owned by
         Lydia Dugan; 1,631,440 shares, in the aggregate, owned by companies
         owned and controlled by A.W. Dugan; warrants issued to Mr. Dugan to
         purchase 409,051 shares of common stock; and 322,581 shares issuable
         upon the conversion of the principal balance of convertible debentures
         into common stock at $0.31 per share. The debenture conversion price is
         the lower of $.31 per share or 75% of the average of the three lowest
         closing bid prices during the 20 trading days prior to the conversion
         date. If the actual conversion price is less than $.31 per share, the
         debenture holder will be entitled to a greater number of common shares
         upon conversion.

(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 and Co. Limited. CALP II LP,Striker Capital, Ltd. and Thomson
         Kernaghan and Co.Limited are under the common control of MarkValentine,
         Chief Executive Officer of Thomson Kernaghan and 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 and Co. Limited and have
         represented that they are not controlled by, controlling, or under
         common control of Thomson Kernaghan and Co. Limited.

(6)      By Agreement effective July 11, 2000,Thomson Kernaghan and 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 are convertible into common stock at the lower of
         $0.29125 per share or 75% of the average of the lowest closing bid
         prices during the 20 trading days preceding the conversion date.
         Thomson Kernaghan and 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 ss. 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. o 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.
o        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 June 30,
         2001, we reimbursed Mr. Lawrence $26,489 for these expenses.
o        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.  The conversion price
         of these  debentures  is based on market  prices at the time of
         conversion,  but not greater  than $0.31 per shares.  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.
o        At June 30, 2001, we owed a legal fee in the amount of $121,582 to our
         outside firm in which Gary  Babbit,  a director,  is a  partner.
o        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.
o        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.
o        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.
o        On July 11, 2000, we issued our 10% Convertible debentures due June 30,
         2002 to Thomson Kernaghan and 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.
o        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 six months of 2001, Mr. Lawrence advanced
         the Company $50,000 for working capital purposes. At June 30, 2001
         $40,000 of these advances were still owing.
o        On March 17, 2000, we issued to Thomson Kernaghan and 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.
o        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.
o        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.
o        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.
o        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.
o        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.
o        On May 24, 2001, we sold Lee Fransdal, 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.
o        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.
o        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.
o        On June 20, 2001, we sold Harlen Ockler, a vendor, 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.
o        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.
o        On June 26, 2001, we sold Delaware Royalty, a stockholder, 100,000
         shares of our common stock and issued warrants to purchase 50,000
         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.
o        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.
o        On June 27, 2001, we issued 12,500 shares of our common stock an issued
         warrants to purchase 6,250 shares of common stock exercisable at $0.35
         per share and expire June 27, 2004, as compensation for consulting
         services with an estimated value of $2,500.
o        On June 28, 2001, we sold an employee, 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.
o        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.
o        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.
o        On July 11, 2001, we sold Gary Babbitt, 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.


                             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.
<TABLE>
- -------------------------- ------ ----------------------------------- ---------------------------------------------

                                         Annual Compensation                     Long-Term Compensation
- -------------------------- ------ ----------------------------------- ---------------------------------------------
- -------------------------- ------ ----------- ------- --------------- --------------------- -----------------------

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

John C. Lawrence,          2000   $81,000     N/A         $4,154       $3,250      None       None        None
President
- -------------------------- ------ ----------- ------- --------------- ---------- ---------- ---------- ------------
- -------------------------- ------ ----------- ------- --------------- ---------- ---------- ---------- ------------

John C. Lawrence,          1999   $72,000     N/A         $4,154        $720       None       None        None
President
- -------------------------- ------ ----------- ------- --------------- ---------- ---------- ---------- ------------
- -------------------------- ------ ----------- ------- --------------- ---------- ---------- ---------- ------------

John C. Lawrence,          1998   $72,000     N/A         $4,154        $844       None       None        None
President
- -------------------------- ------ ----------- ------- --------------- ---------- ---------- ---------- ------------
</TABLE>
(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

         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 and 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 and 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..................................8-22



FINANCIAL STATEMENTS AS OF JUNE 30, 2001 (UNAUDITED)

Consolidated Balance Sheets...................................................23

Consolidated Statements of Operations.........................................24

Consolidated Statements of Cash Flows.........................................25

Notes to Consolidated Financial Statements.................................26-27





                          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.

/s/Decoria, Maichel and Teague P.S.

Spokane, Washington
March 22, 2001





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

<TABLE>
                                                                                            2000               1999
                           ASSETS
<S>                                                                                 <C>             <C>
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                                                            14,818,285          14,289,947
   Accumulated deficit                                                                  (16,719,449)        (16,651,750)
                                                                                    ---------------  ------------------
              Total stockholders' deficit                                                (1,708,085)         (2,183,195)
                                                                                    ---------------  ------------------
              Total liabilities and stockholders' deficit                           $       893,920  $          968,522
                                                                                    ===============  ==================
</TABLE>






United States Antimony Corporation and Subsidiaries
Consolidated Statements of Operations
For the years ended December 31, 2000 and 1999
<TABLE>
                                                                                               2000              1999
<S>                                                                                <C>              <C>
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             611,692
                                                                                    ---------------  ------------------

Net income (loss)                                                                   $       (67,699) $          304,015
                                                                                    ================ ===================

Basic net income (loss) per share of common stock
   Before extraordinary item                                                        $         (0.06) $            (0.02)
   Extraordinary item                                                                          0.05                 0.04
                                                                                    ---------------                 ----
   Net income (loss)                                                                $         (0.01) $             0.02
                                                                                    ================ ==================

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

Diluted net income (loss) per share of common stock
   Before extraordinary item                                                        $         (0.06) $            (0.02)
   Extraordinary item                                                                          0.05                 0.04
                                                                                    ---------------                 ----
   Net income (loss)                                                                $          0.01                $0.02
                                                                                    ===============                =====

Diluted weighted average shares outstanding                                              17,772,693          14,839,455
                                                                                    ===============  ==================
</TABLE>





United States Antimony Corporation and Subsidiaries
Consolidated Statements of Changes in Stockholders' Deficit
for the years ended December 31, 2000 and 1999
<TABLE>
                                   Preferred Stock
                              Series A        Series B            Series C     Common Stock         Additional
                                                                                                       Paid    Accumulated
                            Shares Amount  Shares    Amount   Shares    Amount  Shares   Amount     In Capital    Deficit     Total
                            -------------------------------------------------------------------------------------------------------
<S>                         <C>    <C>     <C>       <C>      <C>       <C>     <C>      <C>         <C>        <C>
Balances, December 31, 1998 4,500 $ 45  750,000  $ 7,500 2,560,762  $25,608 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     195,555                  205,923

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)   2,354,766    23,548

Net income                                                                                                304,015           304,015
                           ------ ------  ------  ---------  ---------  --------- ---------  -------  -----------    -------------
Balances December 31, 1999  4,500 $45 750,000  $7,500 205,996 $2,060 16,900,252 $169,003$14,289,947    $(16,651,750)    $(2,183,195)

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

Exercise of stock warrants                                                   100,000        1,000      24                     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)     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 4,500 $45 750,000 $7,500 177,904 $ 1,779 18,375,564 $183,755 $ 14,818,285    $(16,719,449)  $(1,708,085)
                           ======    =======     =======    =========     =========     ==========    ==========   ========    ====

</TABLE>








United States Antimony Corporation and Subsidiaries
Consolidated Statements of Cash Flows
for the years ended December 31, 2000 and 1999
<TABLE>
                                                                                               2000                 1999
<S>                                                                                 <C>              <C>
Cash flows from operating activities:
   Net income (loss)                                                                $       (67,699) $          304,015
   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)           (611,692)
        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
           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                                     892,588              16,431
                                                                                    ---------------  ------------------
Net decrease in cash                                                                              0                   0
Cash, beginning of year                                                                           0                   0
                                                                                    ---------------  ------------------
Cash, end of year                                                                   $             0  $                0
                                                                                    ===============  ==================


</TABLE>






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


<S>                                                                                 <C>              <C>
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





</TABLE>







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 $16.7 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:

o               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.

o               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.

o               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.

o               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.

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
       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

       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.

       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 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:
<TABLE>
                                                 2000                       1999

<S>                                 <C>                        <C>
       Antimony Metal               $           32,187         $          58,365
       Antimony Oxide                          118,728                   206,316
       Sodium Antimonate                        70,542                    11,918
                                    ------------------         -----------------
                                    $          221,457         $         276,599
                                    ==================         =================
</TABLE>

       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:
<TABLE>
                                                                           2000                       1999

<S>                                                               <C>                        <C>
       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
                                                                  ==================         =================
</TABLE>
       (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.

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:
<TABLE>
                                                                 December 31, 2000
                                       ASSETS
<S>                                                               <C>
            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
                                                                  ==================

            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                                                   $          (28,878)
                                                                  ===================
</TABLE>
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):
<TABLE>
                                                                          2000                       1999
<S>                                                               <C>                        <C>
       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
                                                                  ==================         =================
</TABLE>

       Transactions affecting the payable to Mr. Lawrence during 2000 and 1999
were as follows:
<TABLE>
                                                                          2000                       1999
<S>                                                               <C>                        <C>
       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
                                                                  ==================         =================
</TABLE>
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:
<TABLE>
<S>                                                                                         <C>
       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
                                                                                             =================

</TABLE>
At December 31, 2000, principal payments on the notes payable to bank are due as
follows:
<TABLE>
                                           Year Ending
                                          December 31,

<S>                                       <C>                     <C>
                                            2001                  $          150,625
                                            2002                              19,993
                                            2003                              22,197
                                            2004                              24,642
                                            2005                              27,358
                                            Thereafter                       111,187
                                                                  ------------------
                                                                  $          356,002
                                                                  ==================

</TABLE>
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 and 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 and 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
       and 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 Bloomburg 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 Bloomburg 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 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 Bloomburg
       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 and 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:
<TABLE>
                                         Amount                     Maturing
<S>                                 <C>                          <C>

                                    $     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

</TABLE>
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 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:
<TABLE>

                                                                    Number of              Exercise        Expiration
                                                                    Warrants                Prices            Date
<S>                                                            <C>                     <C>                <C>
            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
                                                                 ============
</TABLE>
(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.
(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 extraordinary gain 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 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.

       Preferred Stock, Continued:

       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.

         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:
<TABLE>
                                                                                                           Per Share
                                                                      Loss                      Shares      Amounts
<S>                                                           <C>                         <C>              <C>
            Basic EPS:
            Net loss before extraordinary item                 $     (307,677)                14,597,917    $(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)
                                                               ==============-                ==========    ======
</TABLE>
(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:

o                   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.

o        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 and 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 and Co., Ltd. returned 150,000 shares to the Company inexchange
       for 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 and 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. If the liquidated damages
       provision of the registration rights agreement is enforced or is
       enforceable, such damages would be approximately $38,000 as of December
       31, 2000. However, the Company's management and its legal counsel believe
       that the Company is not responsible for any delay in effectiveness of its
       registration statement and that assertion of a claim for liquidated dames
       under the registration rights agreement is not probable. Accordingly, the
       Company's financial statements do not include any accrual for this
       contingency.

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.










United States Antimony Corporation and Subsidiaries
Consolidated Balance Sheets
<TABLE>
                                                                                       (Unaudited)
                                                                                        June 30,       December 31,
                                                                                          2001             2000

                           ASSETS
<S>                                                                                 <C>              <C>
Current assets:
   Restricted cash                                                                  $         5,966  $            8,518
   Inventories                                                                              153,688             221,457
   Accounts receivable, less allowance
   for doubtful accounts of $30,000                                                         152,518             119,568
              Total current assets                                                          312,172             349,543

Investment in USAMSA, net                                                                   102,905             111,088
Properties, plants and equipment, net                                                       293,439             246,250
Restricted cash for reclamation bonds                                                       130,750             123,250
Deferred financing charges, net                                                              43,163              63,789
              Total assets                                                          $       882,429  $          893,920



                           LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
   Checks issued and payable                                                        $        80,454  $          107,133
   Accounts payable                                                                         609,152             429,654
   Accrued payroll and property taxes                                                       146,622             241,588
   Accrued payroll and other liabilities                                                    212,597              89,680
   Judgment payable                                                                          45,002              43,480
   Accrued debenture interest payable                                                        98,474              47,324
   Due to related parties                                                                    46,802              10,307
   Notes payable to bank, current                                                           236,896             150,625
   Accrued reclamation costs, current                                                        67,569              80,000
              Total current liabilities                                                   1,543,568           1,199,791

Debentures payable, net of discount                                                       1,003,771             997,449
Notes payable to bank, noncurrent                                                           187,876             205,377
Accrued reclamation costs, noncurrent                                                       206,888             199,388
              Total liabilities                                                           2,942,103           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; 19,134,564 and 18,375,564 shares issued and outstanding                   191,345             183,755
   Additional paid-in capital                                                            14,962,495          14,818,285
   Accumulated deficit                                                                  (17,222,838)        (16,719,449)
              Total stockholders' deficit                                                (2,059,674)         (1,708,085)
              Total liabilities and stockholders' deficit                           $       882,429  $          893,920


</TABLE>



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

                                                               Three Months Ended                  Six Months Ended
                                                                    June 30,                           June 30,
                                                              2001            2000              2001              2000

<S>                                                     <C>              <C>               <C>             <C>
Revenues:
   Sales of antimony products and other                  $   1,076,909   $   1,190,413      $   2,038,040   $   2,363,463
   Sales of zeolite products                                     2,655                              2,655
                                                             1,079,564       1,190,413          2,040,695       2,363,463

   Cost of antimony production                                 821,401         995,888          1,623,769       1,844,043
   Freight and delivery                                        118,921         142,363            222,535         243,977
                                                               940,322       1,138,251          1,846,304       2,088,020

      Gross profit                                             139,242          52,162            194,391         275,443

Other operating expenses:
   Bear River Zeolite                                          119,425                            165,668
   Care, maintenance, and reclamation-Yellow Jacket              2,500          50,105              2,860          77,906
   General and administrative                                  156,921          91,351            330,608         344,195
   Sales expenses                                               34,342          84,286             72,838         194,351
                                                               313,188         225,742            571,974         616,452
Other (income) expense:
   Interest expense                                             41,714          40,129             81,600          81,239
   Factoring expense                                            23,911          24,827             47,175          49,288
   Interest income and other                                    (1,488)         (2,507)            (2,969)         (4,647)
                                                                64,137          62,449            125,806         125,880

Net loss                                                 $    (238,083)  $    (236,029)     $    (503,389)  $    (466,889)

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

Basic weighted average shares outstanding                   18,948,294      17,625,252         18,608,177      17,334,092


</TABLE>
  The accompanying notes are an integral part of the financial statements.


United States Antimony Corporation and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
<TABLE>
                                                                                           For the six months ended
                                                                                          June 30,          June 30,
                                                                                            2001              2000

<S>                                                                                 <C>                   <C>
Cash flows from operating activities:
   Net loss                                                                         $      (503,389)      $    (466,889)
   Adjustments to reconcile net loss to
      net cash used by operations:
        Depreciation and amortization                                                        83,131              66,000
        Accrued reclamation costs                                                             7,500
        Provision for doubtful accounts                                                                         (20,000)
        Issuance of common stock for consulting services                                                        153,000
   Change in:
           Restricted cash                                                                    2,552                  (3)
           Accounts receivable                                                              (32,950)             10,243
           Inventories                                                                       67,769              56,410
           Restricted cash for reclamation bonds                                             (7,500)              7,170
           Prepaid expenses                                                                                      (1,747)
           Accounts payable                                                                 194,510              64,612
           Accrued payroll and property taxes                                               (94,966)             (8,166)
           Accrued payroll and other                                                         73,214             (32,029)
           Judgments payable                                                                  1,522               1,422
           Accrued debenture interest payable                                                51,150
           Payable to related parties                                                        (3,505)            (11,209)
           Accrued reclamation costs                                                        (12,431)            (35,300)
              Net cash used by operating activities                                        (173,393)           (216,486)

Cash flows from investing activities:
   Purchase of properties, plants and equipment                                             (92,689)            (35,079)
              Net cash used in investing activities                                         (92,689)            (35,079)

Cash flows from financing activities:
   Proceeds from issuance of common stock and warrants                                      149,300             155,000
   Proceeds from related party advances                                                      40,000              70,000
   Proceeds from notes payable to bank, net                                                  68,770              53,846
   Proceeds from factoring company, net                                                      34,691
   Change in checks issued and payable                                                      (26,679)             12,749
   Payments on note payable to Bobby C. Hamilton                                                                (40,030)
              Net cash provided by financing activities                                     266,082             251,565
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                                         $        19,068       $      79,159

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


</TABLE>


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 six-month period ended June 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 six-month period ended June 30, 2000, have been reclassified to
    conform to the 2001 presentation. These reclassifications had no effect on
    the net loss 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.   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 and 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 common
    stock be returned to the Company in exchange for a certificate bearing a
    restrictive legend. In March of 2001, Thomson Kernaghan andCo., 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. At June 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.


                                     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.
<TABLE>
- -------------------------------------- --------------------
<S>                                    <C>
Registration Fees                                  $219.38
- -------------------------------------- --------------------
Legal Fees (estimate)                          $100,000.00
- -------------------------------------- --------------------
Accounting Fees (estimate)                      $15,000.00
====================================== ====================
</TABLE>
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, 2000 to Thomson Kernaghan and Co. Limited
and Blue Water Partners, Inc.) a restrictive legend was placed on each
certificate evidencing the security. In instances where warrants were issued,
the underlying shares of common stock are restricted as stated in the warrant
contract.

         On July 11, 2001, we sold Gary Babbitt, 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, 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 an issued
warrants to purchase 6,250 shares of common stock exercisable at $0.35 per share
and expire 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 26, 2001, we sold Delaware Royalty, a stockholder, 100,000
shares of our common stock and issued warrants to purchase 50,000 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 Harlen Ockler, a vendor, 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 Fransdal, 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.

         On April 11, 2001, we sold an employee 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, a private company,
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 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 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 and 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 and 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 and 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.

         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) 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.


                                   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
Registration Statement to be signed on its behalf by the undersigned, in
Thompson Falls, State of Montana, on August 28, 2001.

                       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
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
Signature                                   Capacity                                          Date

<S>                                 <C>                                               <C>
/s/John C. Lawrence                 President and Chairman of the Board                August 28, 2001
John C. Lawrence                    (Principal Executive and Chief
                                    Financial Officer and Director)


/s/Robert A. Rice                           Director                                   September 5, 2001
Robert A. Rice


/s/Leo Jackson                              Director                                   August 28, 2001
Leo Jackson


/s/Gary D. Babbitt                          Director                                   September 4, 2001
Gary D. Babbitt

</TABLE>



                                  EXHIBIT INDEX
                                       to
                       REGISTRATION STATEMENT ON FORM SB-2

<TABLE>

Exhibit Number             Description
<S>                        <C>
   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 and Sonfield*

   10.0                    Material Contracts**

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 and 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 and Co., Ltd. ***

   21.01                   Subsidiary of USAC**

   23.01                   Consent of Sonfield and Sonfield (included in Exhibit 5.01) *

   23.02                   Consent of DeCoria, Maichel and 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
                           USAC's Form  10-KSB  for the year  ended  December  31,  1995  (File No.  1-8675)  is
                           incorporated herein by this reference.

</TABLE>
- ----------------------
* Filed herewith.
**Previously filed.
***To be filed by amendment.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>exhibit1043.txt
<DESCRIPTION>UAMY EXHIBIT 10.45
<TEXT>

                                 AGENT'S WARRANT

Warrant No. TK2 (Amended and Restated)

THIS WARRANT, AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF
(COLLECTIVELY, THE "SECURITIES"), HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), NOR HAVE THEY BEEN REGISTERED OR
QUALIFIED UNDER THE SECURITIES LAWS OF ANY U.S. STATE OR TERRITORY. THIS WARRANT
IS BEING OFFERED AND SOLD PURSUANT TO REGULATION S OF THE U.S. SECURITIES AND
EXCHANGE COMMISSION UNDER THE ACT. THE SECURITIES, ARE "RESTRICTED SECURITIES"
AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO A U.S. PERSON (AS
DEFINED IN REGULATION S) UNLESS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT, OR PURSUANT TO REGULATION S, OR PURSUANT TO OTHER AVAILABLE
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT. A HOLDER OF ANY OF THE
SECURITIES MAY NOT ENGAGE IN HEDGING TRANSACTION WITH REGARD TO SUCH SECURITIES
UNLESS IN COMPLIANCE WITH THE ACT.

                       UNITED STATES ANTIMONY CORPORATION

                            Warrant for the Purchase
                            of Shares of Common Stock

July 11, 2000                                                     961,358 Shares

         FOR VALUE RECEIVED, United States Antimony Corporation, a Montana
corporation (the "Company"), hereby certifies that Thomson Kernaghan and Co.
Limited or other holder hereof (collectively, the "Holder"), is entitled,
subject to the provisions of this Warrant, to purchase from the Company, at any
time or from time to time beginning on the date hereof, and ending at 5:00 pm,
Toronto time, on the fifth anniversary of the date hereof (the "Exercise
Period") Nine Hundred Sixty-One Thousand Three Hundred Fifty-Eight (961,358)
fully paid and nonassessable shares of common stock of the Company, par value
$.01 per share (the "Common Stock") at the exercise price of Thirty-Nine Cents
(US$.39) per share (the "Exercise Price"). This Warrant is the Agent's Warrant
described in and is being issued pursuant to an Amended and Restated Agreement
(the "Agreement") effective as of July 11, 2000, between the Company and Thomson
Kernaghan and Co. Limited (the "Agent"). Capitalized terms not defined in this
Warrant shall have the meanings ascribed to them in the Agreement.

         For purposes of this Warrant, "Warrant Shares" means the shares of
Common Stock deliverable upon exercise of this Warrant, as adjusted from time to
time. Unless the context requires otherwise all references to Common Stock and
Warrant Shares in this Warrant shall, in the event of an adjustment pursuant to
Section 7 hereof, be deemed to refer also to any securities or property then
issuable upon exercise of this Warrant as a result of such adjustment.

Section 1. Exercise of Warrant.

(a) This Warrant may be exercised, as a whole or
in part, at any time or from time to time during the Exercise Period or, if such
day is not a Trading Day (as defined in the Agreement), then on the next
succeeding Trading Day. The Holder may exercise this Warrant by telecopying an
executed and completed Notice of Exercise in the form annexed hereto as Exhibit
A (a "Notice of Exercise") to the Escrow Holder and the Company, and sending the
original by mail or overnight delivery service to the Escrow Holder together
with the Exercise Price. Each Trading Day on which a Notice of Exercise is
telecopied to the Company in accordance with the provisions hereof shall be
deemed an "Exercise Date." Notices given under this Warrant shall be delivered
as required by the Escrow Agreement, and also delivered or telecopied as
follows:

   If to the Holder or Escrow Holder:  If to the Company:
   c/o Thomson Kernaghan and Co. Ltd.    United States Antimony Corporation
   365 Bay Street, Tenth Floor         1250 Prospect Creek, P.O. Box 643
   Toronto, Ontario M5H 2V2            Thompson Falls, Montana 59873-0643
   Attention: Ms. Michelle McKinnon  Attention: John Lawrence, President and CEO
   Facsimile No. (416) 860-6355        Facsimile No. (406) 827-3523

or to such other address as the Holder may specify.

         If the Company has not delivered the Warrant Shares to the Escrow
Holder prior to the expiration of five Trading Days after the Holder send a
Notice of Exercise, the, in addition to all other remedies the Holder may have,
the Company shall pay to the Holder, on demand and in immediately available
funds, as liquidated damages for such failure and not as a penalty, the amounts
stated in the following schedule, which liquidated damages shall begin to accrue
on the sixth Trading Day after the Conversion Date.
<TABLE>
                                                              Late Payment For Each $10,000
                           No. Business Days Late             of the Warrant Exercise Price
<S>                        <C>                                <C>
                                    1                                           $100
                                    2                                           $200
                                    3                                           $300
                                    4                                           $400
                                    5                                           $500
                                    >5                                          $500+$200 for each Business Day Late beyond 5 days
                                                                                from the Delivery Date
</TABLE>
         Nothing in this Warrant shall limit the holder's right to seek specific
performance of the Company's obligations hereunder and other remedies and
damages for the Company's actions or inactions resulting in the transfer agent's
failure to issue and deliver the Warrant Shares to the Holder. The Company shall
not be liable for any damages resulting from the Escrow Holder's failure to
deliver Warrant Shares to the Holder.

(b) The Company shall pay any and all documentary stamp or similar issue or
transfer taxes payable in respect of the issue or delivery of the Warrant
Shares.

(c) Limitation on Right and Power to Exercise. Any provision in this
Warrant, the Agreement or any other document to the contrary not withstanding,
the Holder shall not have the right or power to exercise this warrant, either in
whole or in part, if, and any attempt to do so shall be void, after having given
effect to such exercise, the Holder shall be or shall be deemed to be the
beneficial owner of 10% or more of the then outstanding Common Stock within the
meaning or for the purposes of Section 13(d) or 13(g) of the U.S. Securities
Exchange Act of 1934, as amended, or as the term "beneficial owner" is defined
in Rule 13d-3 of the U.S. Securities and Exchange Commission or otherwise. Any
attempt to exercise the Warrant shall also be ineffective to the extent that the
Company does not have sufficient authorized, unissued and unreserved Common
Stock to issue the Warrant Shares.

Section 2. Reservation of Shares. Subject to shareholder approval pursuant to
Section 10.2.1 of the Agreement, the Company hereby agrees that at all times
there shall be reserved for issuance and delivery upon exercise of this Warrant
all shares of its Common Stock or other shares of capital stock of the Company
or other property from time to time issuable upon exercise of this Warrant. All
such shares shall be duly authorized and, when issued upon such exercise in
accordance with the terms of this Warrant, shall be validly issued, fully paid
and nonassessable, free and clear of all liens, security interests, charges and
other encumbrances or restrictions on sale (other than any restrictions on sale
pursuant to applicable federal and state securities laws) and free and clear of
all preemptive rights.

Section 3. Fractional Shares. The Company shall not be required to issue
fractional shares of Common Stock on the exercise of this Warrant. If any
fraction of a share of Common Stock would, except for the provisions of this
Section 4, be issuable on the exercise of this Warrant (or specified portion
thereof), the Company shall pay an amount in cash calculated by it to be equal
to the then Current Market Value (as hereinafter defined) per share of Common
Stock multiplied by such fraction computed to the nearest whole cent. For the
purposes of any computation under this Warrant, the Current Market Value per
share of Common Stock or of any other equity security (herein collectively
referred to as a "security") at the date herein specified shall be:

(i) if the security is not registered under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), the "Current Market Value" per share of the
security shall be determined in good faith by the Board of Directors of the
Company, or

(ii) if the security is registered under the Exchange Act, the "Current Market
Value" per share of the security shall be deemed to be the average of the daily
market prices of the security for the ten (10) consecutive trading Days
immediately preceding the day as of which Current Market Value is being
determined or, if the security has been registered under the Exchange Act for
less than ten (10) consecutive Trading Days before such date, then the average
of the daily market prices for all of the Trading Days before such date for
which daily market prices are available. The market price for each such Trading
Day shall be: (A) in the case of a security listed or admitted to trading on
any securities exchange, the Closing Bid Price on the primary exchange on which
the Common Stock is then listed, on such day, (B) in the case of a security not
then listed or admitted to trading on any securities exchange, the Closing Bid
Price reported by Bloomberg LP on such day, (C) in the case of a security not
then listed or admitted to trading on any securities exchange and as to which
no such reported sale price or bid and asked prices are available, the reported
high bid on such day, as reported by a reputable quotation service, or a
newspaper of general circulation in the Borough of Manhattan, City and State of
New York, customarily published on each business day, designated by the Holder,
or if there shall be no bid prices on such day, the high bid price, as so
reported, on the most recent day (not more than 10 days prior to the date in
question) for which prices have been so reported, and (D) if there are no bid
prices reported during the 10 days prior to the date in question, the Current
Market Value of the security shall be determined as if the security were not
registered under the Exchange Act.

Section 4. Exchange, Transfer, Assignment or Loss of Warrant.

(a) This Warrant is exchangeable, without expense, at the option of the Holder,
upon presentation and surrender hereof to the Company or at the office of its
stock transfer agent or warrant agent, if any, for other warrants of different
denomination, entitling the Holder thereof to purchase in the aggregate the same
number of Warrant Shares and otherwise carrying the same rights as this Warrant.

(b) This Warrant may be divided or combined by the Holder with other warrants
that carry the same rights upon presentation hereof at the office of the Company
or at the office of its stock transfer agent or warrant agent, if any, together
with a written notice specifying the names and denominations in which new
warrants are to be issued and signed by the Holder hereof. The term "Warrant" as
used herein includes any warrants into which this Warrant may be divided or for
which it may be exchanged.

(c) Upon receipt by the Company of evidence satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant, and (in the case of loss,
theft or destruction) of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date.

Section 5. Restrictions on Issuance of Securities. So long
as this Warrant is outstanding, the Company will not issue, or permit any
Subsidiary to 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 (i) securities issued pursuant to the Securities Purchase Agreement (which
includes Warrant Shares), (ii) securities of a Subsidiary that are issued to the
Company; and (iii) 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 with the prior
written consent of the Holder, which consent the Holder agrees not to
unreasonably withhold.

Section 6. Reclassification, Reorganization, Consolidation or Merger. In the
event of any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the Company or in the event of any
consolidation or merger of the Company with or into another corporation (other
than a merger in which merger the Company is the continuing corporation and that
does not result in any reclassification, capital reorganization or other change
of outstanding shares of Common Stock of the class issuable upon exercise of
this Warrant) or in the event of any sale, lease, transfer or conveyance to
another corporation of the property and assets of the Company as an entirety or
substantially as an entirety, the Company shall, as a condition precedent to
such transaction, cause effective provisions to be made so that such other
corporation shall assume all of the obligations of the Company hereunder and the
Holder shall have the right thereafter, by exercising this Warrant, to purchase
the kind and amount of shares of stock and other securities and property
(including cash) receivable upon such reclassification, capital reorganization
and other change, consolidation, merger, sale, lease, transfer or conveyance by
a holder of the number of shares of Common Stock that might have been received
upon exercise of this Warrant immediately prior to such reclassification,
capital reorganization, change, consolidation, merger, sale, lease or
conveyance. Any such provision shall include provision for adjustments in
respect of such shares of stock and other securities and property that shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this Warrant. The foregoing provisions of this Section 8 shall similarly apply
to successive reclassification, capital reorganizations and changes of shares of
Common Stock and to successive changes, consolidations, mergers, sales, leases,
transfers or conveyances. In the event that in connection with any such capital
reorganization, or reclassification, consolidation, merger, sale, lease,
transfer or conveyance, additional shares of Common Stock shall be issued in
exchange, conversion, substitution or payment, as a whole or in part, for, or
of, a security of the Company other than Common Stock, any such issue shall be
treated as an issue of Common Stock covered by the provisions of Section 5.

Section 7. Transfer to Comply with the Securities Act. Neither this Warrant nor
any of the Warrant Shares may be offered or sold in the United States or to a
U.S. Person (as defined in Regulation S) unless pursuant to an effective
registration statement under the Act, or pursuant to Regulation S, or pursuant
to other available exemptions from the registration requirements of the Act. The
Holder of this Warrant or any of the Warrant Shares may not engage in hedging
transaction with regard to such securities unless in compliance with the Act.

Section 8. Availability of Information. So long as any of this Warrant remains
unexercised and this Warrant has not expired, the Company shall comply with the
reporting requirements of Sections 13 and 15(d) of the Exchange Act to the
extent it is required to do so under the Exchange Act, and shall likewise comply
with all other applicable public information reporting requirements of the
Securities and Exchange Commission (including those required to make available
the benefits of Rule 144 under the Securities Act) to which it may from time to
time be subject. The Company shall also cooperate with the Holder of this
Warrant and the Holder of any Warrant Shares in supplying such information as
may be necessary for such holder to complete and file any information reporting
forms currently or hereafter required by the Commission as a condition to the
availability of Rule 144 or any successor rule under the Securities Act for the
sale of this Warrant or the Warrant Shares. The provisions of this Section 8
shall survive termination of this Warrant, whether upon exercise of this Warrant
in full or otherwise. The Company shall also provide to holders of this Warrant
the same information that it provides to holders of its Common Stock.

Section 9. Registration Rights. The Company is obligated to register the shares
of Common Stock issuable upon exercise of this Warrant pursuant to a
Registration Rights Agreement (the "Registration Rights Agreement") dated as of
the Effective Date, among the Company, the Holder, other holders of Debentures
and the Agent.

Section 10. Successors and Assigns. All the provisions of this Warrant by or for
the benefit of the Company or the Holder shall bind and inure to the benefit of
their respective successors, assigns, heirs and personal representatives.

Section 11. Headings. The headings of sections of this Warrant have been
inserted for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms or provisions
hereof.

Section 12. Amendments. This Warrant may not be amended except by the
written consent of the Company and the Holder.

Section 13. Notices. All notices given under this Agreement and under the other
Transaction Documents shall be in writing, addressed to the parties as set
forth below, or to such other address as a party may specify by notice given
in accordance with this paragraph and shall be effective on the earliest of (i)
the date received, or (ii) if given by facsimile transmittal on the date given
if transmitted before 5:00 p.m. the recipient's time, otherwise it is effective
the next day, or (iii) on the second Trading Day after delivery to a major
international air delivery or air courier service (such as Federal Express or
Network Couriers):
<TABLE>

<S>                                       <C>
  If to the Holder or Escrow Holder:      If to the Company:
  c/o Thomson Kernaghan and Co. Ltd.      United States Antimony Corporation
  365 Bay Street                          1250 Prospect Creek, P.O. Box 643
  Toronto, Ontario M5H 2V2                Thompson Falls, Montana 59873-0643
  Attention: Mr. Gregg Badger, Sr. V.P.   Attention: John Lawrence, President and CEO
  Facsimile No. (416) 860-6352            Facsimile No. (406) 827-3523
</TABLE>
Section 14. Law Governing; Jurisdiction. This Warrant shall be governed by and
construed in accordance with the laws of the Province of Ontario, Canada,
provided however, that if any provision of this Warrant is unenforceable under
the laws of Ontario but is enforceable under the laws of the U.S. State of
Montana, then that provision shall be governed by and construed in accordance
with the laws the State of Montana. The courts of the Province of Ontario,
Canada, shall have jurisdiction and venue for the adjudication of any civil
action between or among any of them arising out of relating to this Debenture.
The Company and the Holder irrevocably consent to such jurisdiction and venue,
and irrevocably waive any claim of forum non conveniens or right to change
venue. The prevailing party in any action or proceeding to enforce or construe
this Warrant is entitled to recover reasonable attorney's fees.

         IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed, as of the day and year first above written.

                       UNITED STATES ANTIMONY CORPORATION





                              By
                                  ----------------------------------------------
                                   President and CEO

                              Date Signed
                                  ----------------------------------------------





                               NOTICE OF EXERCISE

To:  United States Antimony Corporation:

         The undersigned irrevocably exercises this Warrant for the purchase of
____________________ shares (subject to adjustment) of Common Stock of United
States Antimony Corporation (the "Company"): for this Warrant and agrees to make
payment of $____________________ (the "Exercise Price") through the following
method:

     such payment of the Exercise  Price being in cash or by certified or
     official  bank check payable to the order of the Company

all at the Exercise Price and on the terms and conditions specified in this
Warrant, and directs that the shares of Common Stock deliverable upon the
exercise of this Warrant be registered or placed in the name and at the address
specified below and delivered thereto.

Date:  ________________, _______

____________________________________________________________________________
(Signature of Owner)1

____________________________________________________________________________
(Street Address)

____________________________________________________________________________
(City)            (State or Province)         (Postal Code)

____________________________________________________________________________
(Country)

- ----------

1    The signature must correspond with the name as written upon the face of the
     within Warrant in every particular, without alteration or enlargement or
     any change whatever.





Securities and/or check to be issued to:
____________________________________________________________________________



Name:
____________________________________________________________________________



Street Address:
____________________________________________________________________________



City, State and Zip Code:
____________________________________________________________________________



Any unexercised part of the Warrant evidenced by the within Warrant to be issued
to:




Name:
____________________________________________________________________________



Street Address:
____________________________________________________________________________



City, State and Zip Code:
____________________________________________________________________________




                               FORM OF ASSIGNMENT

         FOR VALUE RECEIVED the undersigned registered holder of the within
Warrant hereby sells, assigns, and transfers unto the Assignee(s) named below
(including the undersigned with respect to any part of the Warrant not being
assigned hereby) all of the right of the undersigned under the within Warrant,
with respect to the number of shares of Common Stock set forth below:
<TABLE>
- -------------------------------- --------------------------------------- --------------------- ---------------------
<S>                              <C>                                     <C>                   <C>
                                                                          Social Security or   Number of Shares of
                                                                          Other Identifying        Common Stock
       Name of Assignee                   Address of Assignee             Number of Assignee   Assigned to Assignee
- -------------------------------- --------------------------------------- --------------------- ---------------------
- -------------------------------- --------------------------------------- --------------------- ---------------------


- -------------------------------- --------------------------------------- --------------------- ---------------------
- -------------------------------- --------------------------------------- --------------------- ---------------------


- -------------------------------- --------------------------------------- --------------------- ---------------------
</TABLE>
and does hereby irrevocably constitute and appoint ______________________ as the
undersigned's attorney to make such transfer on the books of
______________________ United States Antimony Corporation maintained for that
purpose, with full power of substitution in the premises.

Date:  ________________, _______

____________________________________________________________________________
(Signature of Owner)1

____________________________________________________________________________
(Street Address)

____________________________________________________________________________
(City)            (State or Province)         (Postal Code)

____________________________________________________________________________
(Country)

- --------
1    The signature must correspond with the name as written upon the face of the
     within Warrant in every particular, without alteration or enlargement or
     any change whatever.



                              AMENDED AND RESTATED
                          REGISTRATION RIGHTS AGREEMENT

         THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this
"Registration Rights Agreement") is made and entered into the _____ day of
__________, 2001 but is retroactively effective as of July 11, 2000 (the
"Effective Date"), by and among United States Antimony Corporation, a Montana
corporation (the "Company") and Thomson Kernaghan and Co. Limited (the "Agent"),
pursuant to that certain Amended and Restated Agreement (the "Agreement") of
even date herewith between the Company and the Agent.

                             Preliminary Statements

         In connection with the consummation of the transactions contemplated by
the Agreement, the Company has agreed, upon the terms and subject to the
conditions of the Agreement, to issue and sell to the Agent for the benefit of
certain Purchasers, which may include the Agent, up to $1,500,000 in principal
amount of the Company's 10% convertible Debentures Due June 30, 2002 (the
"Debentures"). At any time beginning 30 days after the Closing Date and prior to
their respective payment in full, all or any part of the principal and interest
of each Debenture may, at the option of the Holder, be converted into shares
(the "Conversion Shares') of the Company's Common Stock, $.01 par value per
share, at a price per share equal to (i) the lower of $0.29125 or (ii) seventy
five percent (75%) of the average of the three (3) lowest Closing Bid Prices in
the twenty (20) Trading Days immediately preceding the Conversion Date.

         The Company has also agreed, upon the terms and subject to the
conditions of the Agreement, to issue to the Agent, for the pro rata benefit of
the Purchasers, a Warrant (the "Purchaser's Warrant") to purchase the number of
shares of Common Stock (the Purchaser's Warrant Shares") determined by
multiplying .25 by the face amount of Debentures being sold at such Closing Date
and dividing the resulting figure by $0.39 per share and (ii) to issue to the
Agent a Warrant (the "Agent's Warrant") to purchase the number of shares of
Common Stock (the "Agent's Warrant Shares") determined by dividing $375,000 by
$0.39 per share.

         To induce the Agent to execute and deliver the Purchase Agreement, the
Company has agreed, pursuant to the terms and conditions of this Registration
Rights Agreement, to provide certain registration rights with respect to the
Common Shares, the Conversion Shares and the Warrant Shares.

                                    Agreement

         In consideration of the foregoing, the mutual covenants and conditions
set forth in this Registration Rights Agreement and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties, intending to become legally bound, hereby agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

         As used in this Registration Rights Agreement, the following terms
shall have the following respective meanings:

         "Agent" shall mean Thomson Kernaghan and Co. Limited.

         "Agent's Warrant" shall have the meaning ascribed to such term in the
Preliminary Statements to this Registration Rights Agreement.

         "Agent's Warrant Shares" shall have the meaning ascribed to such term
in the Preliminary Statements to this Registration Rights Agreement.

         "Agreement" shall have the meaning ascribed to such term in the
introductory paragraph of this Registration Rights Agreement.

         "Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.

         "Common Shares" shall have the meaning ascribed to such term in the
Preliminary Statements to this Registration Rights Agreement.

         "Company" shall mean United States Antimony Corporation.

         "Conversion Shares" shall have the meaning ascribed to such term in the
Preliminary Statements to this Registration Rights Agreement.

         "Debentures" shall have the meaning ascribed to such term in the
Preliminary Statements to this Registration Rights Agreement.

         "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any successor federal statute, and the rules and regulations of the
Commission thereunder, all as in effect from time to time.

         "Effective Date" shall have the meaning ascribed to such term in the
Preliminary Statements to this Registration Rights Agreement.

         "Filing Deadline" shall have the meaning ascribed to such term in
Section 2.1 of this Registration Rights Agreement.

         "Holder" or "Holders" shall mean (a) each Purchaser, to the extent that
the Purchaser holds Registrable Securities, (b) the Agent, to the extent that
the Agent holds Registrable Securities, and (c) any Person holding Registrable
Securities as a transferee of a Purchaser or the Agent (directly or indirectly,
including subsequent transfers).

         "Person" shall mean any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.

         The terms "register," "registered" and "registration" shall refer to a
registration effected by preparing and filing with the Commission one or more
registration statements covering Registrable Securities in compliance with the
Securities Act that is declared or ordered effective by the Commission.

         "Registrable Securities" shall mean the Conversion Shares, the
Purchaser's Warrant Shares and the Agent's Warrant Shares, and any shares of
capital stock issued or issuable with respect to the Securities, the Purchaser's
Warrant Shares or the Agent's Warrant Shares as a result of any stock split,
stock dividend, recapitalization, exchange or similar event; provided, however,
that such securities shall cease to be Registrable Securities when (a) a
registration statement with respect to such securities shall have been declared
effective under the Securities Act and such securities shall have been disposed
of pursuant to the registration statement, (b) such securities are distributed
to the public pursuant to Rule 144(k) (or any successor provisions) promulgated
under the Securities Act or (c) such securities shall have ceased to be
outstanding.

         "Registration Deadline" shall have the meaning ascribed to such term in
Section 2.1 of this Registration Rights Agreement.

         "Registration Expenses" shall mean all expenses incurred in order to
comply with Article II hereof, including, without limitation, all registration
and filing fees, printing expenses, fees and disbursements of counsel for the
Company, reasonable fees and disbursements of one (1) counsel for the Holders,
blue sky fees and expenses, and the expense of any special audits incident to or
required by any such registration, but excluding the compensation of regular
employees of the Company (which shall be paid in any event by the Company) and
excluding Selling Expenses.

         "Registration Rights Agreement" shall mean this Amended and Restated
Registration Rights Agreement, made and entered into as of July 11, 2000, by and
between the Company and the Agent.

         "Restricted Securities" shall mean Registrable Securities that are
"restricted securities" as defined in Rule 144 under the Securities Act.

         "Securities" shall mean the Debentures, the Warrants, the Conversion
Shares and the Warrant Shares.

         "Securities Act" shall mean the Securities Act of 1933, as amended, or
any successor federal statute, and the rules and regulations of the Commission
thereunder, all as in effect from time to time.

         "Selling Expenses" shall mean all underwriting discounts and selling
commissions incurred in connection with the sale of securities pursuant to a
registration effected hereunder.

         "Warrant Shares" shall mean the Purchaser's Warrant Shares and the
Agent's Warrant Shares.

         Capitalized terms used in this Registration Rights Agreement and not
otherwise defined herein shall have the respective meanings ascribed to such
terms in the Purchase Agreement.

                                   ARTICLE II
                               REGISTRATION RIGHTS

2.1     Mandatory Registration.
         ----------------------
(a) The Company shall prepare and file with the Commission within sixty (60)
days from the Initial Closing Date (the "Filing Deadline") a registration
statement (the "Registration Statement") on Form S-3, if the Company is eligible
to use that form, otherwise on Form SB-2 or Form S-1, covering the resale of all
of the Registrable Securities. The Registration Statement shall initially
register for resale the lesser of the number of authorized, unissued and
unreserved shares of Common Stock or the sum of 150% of the Conversion Shares,
calculated by assuming that the Initial Closing Date is the Conversion Date,
plus 100% of the Warrant Shares. The Company shall use its best efforts,
including calling shareholders' meetings for such purpose, to ensure that it has
sufficient shares of authorized, unissued and reserved Common Stock available to
register all of the Registrable Securities. The Company shall use its best
efforts to have the registration statement declared effective by the Commission
within one hundred and twenty (120) days after the Closing Date (the
"Registration Deadline") as to the number of Registrable Securities then
authorized, unissued and unreserved. The Company shall permit the registration
statement to become effective within five (5) business days after receipt of a
"no review" notice from the Commission. The Company shall amend the registration
statement to include additional Registrable Securities promptly following
authorization of additional shares of Common Stock pursuant to the Agreement,
and shall keep the registration statement current and effective for a period of
at least ninety (90) days after (x) all of the Debentures shall have been
converted into Conversion Shares or paid and (y) the Agent's Warrant and the
Agent's Warrant shall have been fully exercised or expired.

(b) If the Company has not filed a Registration Statement with respect to the
number of then authorized, unissued and unreserved Registrable Securities by the
Filing Deadline, the Company shall pay the Agent liquidated damages per day
equal to two percent (2%) per month of the unpaid principal amount of all issued
Debentures outstanding on the date of such Filing Deadline plus two percent (2%)
per month of the aggregate exercise price of all issued Purchaser's Warrants and
Agent's Warrants, for each day after the Filing Deadline until the Company files
a Registration Statement.

(c) If a Registration Statement with respect to the Registrable Securities is
not effective on any day after the Registration Deadline, the Company shall pay
the Agent liquidated damages per day equal to two percent (2%) per month of the
unpaid principal amount of all issued Debentures outstanding on the date of such
Registration Deadline, plus two percent (2%) per month of the aggregate exercise
price of all issued Purchasers' Warrants and Agent's Warrants, for each day
after the Registration Deadline that the Registration Statement is not
effective. Company and Agent acknowledge that the Registration Statement was not
effective on or before the Registration Deadline but disagree on which party is
at fault for the delay. In full compromise and settlement of this dispute,
Company hired special securities counsel recommended by Agent to assist Company
in completing the registration process and Agent agreed on behalf of the
Purchasers to accept, in full satisfaction of any and all penalty due under this
Section 2.1(c), $70,000 in the form of 240,343 shares of Company's common stock
at $0.29125 per share.

2.2 Expenses of Registration. All Registration Expenses incurred in connection
with any registration, qualification or compliance pursuant to Section 2.1 shall
be borne by the Company; and all Selling Expenses in connection with such
registration, qualification or compliance shall be borne by the holders of the
securities so registered pro rata on the basis of the number of shares so
registered.

2.3 Registration Procedures. In the case of each registration, qualification or
compliance effected by the Company pursuant to this Article II, the Company will
keep the Agent advised in writing as to the initiation of each registration,
qualification and compliance and as to the completion thereof. At its expense,
the Company will:

(a) prepare and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement;

(b) furnish to the Agent such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirement of the Securities Act, and such other documents as the Agent may
reasonably request (including a conformed copy of the registration statement
filed with the Commission and any amendments thereto and an original executed
underwriting agreement entered into in connection with such registration) in
order to facilitate the disposition of Registrable Securities owned by the
Holders;

(c) use reasonable efforts to register and qualify the securities
covered by such registration statement under such other securities or blue sky
laws of one jurisdiction as shall be reasonably requested by the Agent, provided
that the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions;

(d) in the event of any underwritten public offering, enter into and perform
its obligations under an underwriting agreement with the managing
underwriter(s) of such offering; each Holder participating in such underwriting
shall also enter into and perform its obligations under such underwriting
agreement;

(e) notify the Agent at any time when a prospectus relating thereto is required
to be delivered under the Securities Act, of the happening of any event as a
result of which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing; and

(f)furnish, at the request of any Holder requesting registration of Registrable
Securities pursuant to this Article II, on the date that such Registrable
Securities are delivered to the underwriters for sale in connection with
registration pursuant to this Article II, if such securities are being sold
through underwriters, or on the date that the registration statement with
respect to such securities becomes effective, if such securities are not being
sold through underwriters, (i) a copy of any opinion, dated such date, of the
counsel representing the Company for the purposes of such registration,
addressed to the underwriters of the Company, and (ii) a copy of any letter,
dated such date, from the independent accountants of the Company, addressed to
the underwriters of the Company.

         Each Holder of Registrable Securities agrees that upon receipt of any
notice from the Company of the happening of any event of the kind described in
clause (f) of this Section 2.3, such Holder will forthwith discontinue
disposition of Registrable Securities pursuant to the registration statement
covering such Registrable Securities until such Holder's receipt of the copies
of a supplemented or amended prospectus and, if so directed by the Company, such
Holder will deliver to the Company (at the Company's expense), all copies, other
than permanent file copies then in such Holder's possession, of the prospectus
covering such Registrable Securities that was in effect prior to such amendment
or supplement. In the event the Company shall give any such notice, the period
set forth in clause (a) of this Section 2.3 shall be extended by the number of
days during the period from and including the date of the giving of such notice
pursuant to clause (e) of this Section 2.3 to and including the date when each
seller of Registrable Securities covered by such registration statement shall
have received the copies of a supplemented or amended prospectus.

2.4 Indemnification.

(a) The Company will indemnify each Holder, each Holder's officers, directors
and partners, and each Person controlling such Holder (collectively, "Holder's
Parties"), participating in any registration, qualification, or compliance
effected pursuant to this Article II with respect to Registrable Securities held
by such Holder and each underwriter, if any, and each Person who controls any
underwriter, against all claims, losses, damages and liabilities (or actions in
respect thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, to which they may become subject under the
Securities Act, the Exchange Act or other federal or state law, arising out of
or based on (i) any untrue statement (or alleged untrue statement) of a material
fact contained in any prospectus, offering circular or other similar document
(including any related registration statement, notification or the like)
incident to any such registration, qualification or compliance, or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
(ii) any violation by the Company of any federal, state or common law rule or
regulation applicable to the Company in connection with any such registration,
qualification or compliance, and will reimburse each such Holder's Parties each
such underwriter, and each Person who controls any such underwriter, for any
legal and any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action, as
incurred, provided that the Company will not be liable in any such case to the
extent that any such claim, loss, damage, liability or expense arises out of or
is based on any untrue statement or omission, made in reliance on and in
conformity with written information furnished to the Company by such Holder's
Parties or underwriter or Person controlling such underwriter specifically for
use in the preparation thereof.

(b) Each Holder will, if Registrable Securities held by such Holder are
included in the securities as to which such registration, qualification or
compliance is being effected, severally and not
jointly, indemnify the Company, each of its directors and officers, each
underwriter, if any, of the Company securities covered by such a registration
statement, and each Person who controls the Company or such underwriter within
the meaning of the Securities Act, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on (i) any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other similar
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company, such directors, officers, Persons,
underwriters or control Persons for any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action, as incurred, in each case to the extent, but only
to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with the written information furnished to the Company by such Holder
specifically for use in the preparation thereof, or (ii) any violation by any
such Holder of any federal, state or common law rule or regulation applicable to
such Holder in connection with the distribution of securities pursuant to a
registration statement, and will reimburse the Company, such directors,
officers, Persons, underwriters or control Persons for any legal any other
expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability, or action, as incurred; provided, however,
that the obligations of each such Holder hereunder shall be limited to an amount
equal to the aggregate proceeds received by such Holder in such offering.

(c) Each party entitled to indemnification under this Section 2.4 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has received written
notice of any claim as to which indemnity may be sought, and shall permit the
Indemnifying Party to assume the defense of any such claim or any litigation
resulting therefrom, provided that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or litigation, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld). The
Indemnified Party may participate in such defense at such party's expense;
provided, however, that the Indemnifying Party shall bear the expense of such
defense of one counsel representing the Indemnified Party if representation of
both parties by the same counsel would be inappropriate due to actual or
potential conflicts of interest. The failure of any Indemnified Party to give
notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 2.4, except to the extent such failure to give
notice shall materially and adversely prejudice the Indemnifying Party in the
defense of any such claim or any such litigation. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement
that does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all liability
in respect to such claim or litigation.

(d)  (i) If the indemnification provided for in this Section 2.4 is held by a
         court of competent jurisdiction to be
         unavailable to an Indemnified Party with respect to any loss,
         liability, claim, damage or expense referred to herein, then the
         Indemnifying Party hereunder shall contribute to the amount paid or
         payable by such Indemnified Party as a result of such loss, liability,
         claim, damage or expense, in such proportion as is appropriate to
         reflect the relative fault of the Indemnifying Party on the one hand
         and the Indemnified Party on the other hand in connection with the
         statements or omissions which resulted in such loss, liability, claim,
         damage or expense as well as any other relevant equitable
         considerations. The relative fault of the Indemnifying Party and of the
         Indemnified Party shall be determined by reference to, among other
         things, whether the untrue or alleged untrue statement of a material
         fact or the omission to state a material fact relates to information
         supplied by the Indemnifying Party or by the Indemnified Party and the
         parties' relevant intent, knowledge, access to information and
         opportunities to correct or prevent such statement or omission.

                  (ii) The parties agree that it would not be just and equitable
         if contribution pursuant to this Section 2.4 were determined by pro
         rata allocation or by any other method of allocation that does not take
         account of the equitable considerations referred to above. The amount
         paid or payable by an Indemnified Party as a result of the claims,
         losses, damages and liabilities referred to above shall be deemed to
         include, subject to the limitations set forth above, any legal or other
         expenses reasonably incurred by such Indemnified Party in connection
         with investigating or defending any such action or claim.

                  (iii) No Holder that is a seller of Registrable Securities
         covered by such registration statement or Person controlling such
         seller other than the Company shall be obligated to make contribution
         hereunder that in the aggregate exceeds the total public offering price
         of the Registrable Securities sold by such Holder, less the aggregate
         amount of any damages that such Holder and its controlling Persons have
         otherwise been required to pay pursuant to this Section 2.4. The
         obligations of such Holders to contribute are several in proportion to
         their respective ownership of the securities covered by such
         registration statement and not joint.

                  (iv) The indemnity and contribution provided herein shall be
         in addition to, and not in lieu of, any other liability that one party
         may have to another.

2.5 Information by Holder. Each Holder of Registrable Securities included in any
registration shall furnish to the Company such information regarding such Holder
and the distribution proposed by such Holder as the Company may request in
writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Article II.

2.6 Rule 144 Reporting. With a view to making available the benefits of certain
rules and regulations of the Commission that may at any time permit the sale
of the Restricted Securities to the public without registration, the Company
agrees to:

(a) use its best efforts to facilitate the sale of the Restricted Securities to
the public without registration under the Securities Act, pursuant to Rule 144
under the Securities Act;

(b) make and keep public information available, as those terms are understood
and defined in Rule 144 under the Securities Act, at all times after the
effective date of the first registration statement filed by
the Company for an offering of its securities to the general public;

(c) file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act
(at any time after it has become subject to such reporting requirements); and

(d) so long as a Holder owns any Restricted Securities to furnish to the
Holder forthwith upon request a written statement by the Company as to its
compliance with the public information requirements of said Rule 144, and the
reporting requirements of the Securities Act and the Exchange Act, a copy of
the most recent annual or quarterly report of the Company, and such other
reports and documents so filed by the Company as a Holder may reasonably
request in availing itself of any rule or regulation of the Commission allowing
a Holder to sell any such securities without registration.

2.7 Transfer of Registration Rights. The rights granted
under this Article II may be assigned or otherwise conveyed by any Holder of
Registrable Securities to any transferee, subject to compliance with all
applicable securities laws and regulations.

2.8 Certain Limitations in Connection with Future Grants of Registration Rights.
From and after the date of this Registration Rights Agreement, without the
prior written consent of the Holders of a majority of the Registrable
Securities, the Company shall not enter
into any agreement with any holder or prospective holder of any securities of
the Company providing for the granting to such holder of registration rights
that would be superior to those granted to Holders pursuant to Section 2.1.

2.9 Restrictions on Market Manipulation. In the event any shares of Common
Stock are offered or sold by any Holder in a registration, each such Holder
will:

(a) advise the Company in writing of any offer, sale or other disposition by it
of any Common Stock in any manner other than as set forth in the registration
statement or any prospectus included therein on or for the 30-day period prior
to the filing of such registration statement until the distribution under the
registration statement has been completed;

(b) not effect any stabilization activity in connection with the Company's
Common Stock;

(c) not bid or purchase, for any account in which it has a beneficial
interest, any Common Stock except as may be permitted pursuant to Rule 10b-6
under the Exchange Act (if applicable);

(d) not until it has sold all of such shares of Common Stock,
attempt to induce any Person to purchase any Common Stock except as may be
permitted pursuant to Rule 10b-6; and

(e) not until it has sold all such shares of Common Stock, pay any compensation
for soliciting another to purchase any securities of the Company, except as may
be permitted pursuant to Rule 10b-6.


                                   ARTICLE III
                                  MISCELLANEOUS

3.1 Governing Law; Jurisdiction and Venue. This Registration Rights Agreement
shall be governed by and interpreted in accordance with the laws of the Province
of Ontario, Canada; provided, however, that if any provision of this
Registration Rights Agreement is unenforceable under the laws of the Province of
Ontario , but is enforceable under the laws of the State of Montana, then such
provision shall be governed by and interpreted in accordance with the laws of
the State of Montana. The parties agree that the courts of the Province of
Ontario, Canada, shall have jurisdiction and venue for the adjudication of any
civil action between or among any of them arising out of relating to this
Registration Rights Agreement or any other Transaction Document. The parties
hereby irrevocably consent to such jurisdiction and venue, and hereby
irrevocably waive any claim of forum non conveniens or right to change venue.

3.2 Successors and Assignees. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assignees, heirs, executors and administrators (as the case may be)
of the parties hereto.

3.3 Entire Agreement. This Registration Rights Agreement
constitutes the full and entire understanding and agreement between the parties
with regard to the subject matter hereof and supercedes all oral statements and
prior writings with respect thereto, including (without limitation) the
registration rights agreement executed and delivered on July 25, 2000.

3.4 Notices, etc. All notices given under this Registration Rights Agreement and
under the other Transaction Documents shall be in writing, addressed to the
parties as set forth below, and shall be effective on the earliest of (i) the
date received, or (ii) if given by facsimile transmittal on the date given if
transmitted before 5:00 p.m. the recipient's time, otherwise it is effective the
next day, or (iii) on the second Trading Day after delivery to a major
international air delivery or air courier service (such as Federal Express or
Network Couriers):
<TABLE>
         If to the Agent or the Escrow Holder:                     If to the Company:
<S>  <C>                                                           <C>
     Thomson Kernaghan and Co. Ltd.                                United States Antimony Corporation
     365 Bay Street                                                1250 Prospect Creek, P.O. Box 643
     Toronto, Ontario M5H 2V2                                      Thompson Falls, Montana 59873-0643
     Attention: Ms. Michelle McKinnon                              Attention: John Lawrence, President and CEO
     Facsimile No. (416) 860-6355                                  Facsimile No. (406) 827-3523

              If to the Purchasers                                 With a copy (that does not constitute
     c/o Thomson Kernaghan and Co. Ltd.                            notice) to:
     as Agent                                                      Hawley Troxell Ennis and Hawley LLP
     365 Bay Street                                                Attn: Gary D. Babbitt
     Toronto, Ontario M5H 2V2                                      P.O. Box 1617
     Attention: Ms. Michelle McKinnon                              Boise, Idaho 83701
     Facsimile No. (416) 860-6355                                  Facsimile No. (203) 342-3829

     In   either case, with a copy (that does not constitute notice) to:
     John M. Mann
     Attorney at Law
     1330 Post Oak Boulevard, Suite 2800
     Houston, Texas 77056-3060
     Facsimile No. (713) 622-7185
</TABLE>
3.5 Delays or Omissions. No delay or omission to exercise any right, power or
remedy accruing to any Holder of any Registrable Securities, upon any breach or
default of the Company under this Registration Rights Agreement, shall impair
any such right, power or remedy of such Holder nor shall it be construed to be a
waiver of any such breach or default or an acquiescence therein or of or in any
similar breach or default thereunder occurring nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or approval of
any kind or character on the part of any Holder of any breach or default under
this Registration Rights Agreement or any waiver on the part of any Holder of
any provisions or conditions of this Registration Rights Agreement must be in
writing and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Registration Rights Agreement or by law
or otherwise afforded to any Holder shall be cumulative and not alternative.

3.6 Counterparts. This Registration Rights Agreement may be executed in any
number of counterparts, each of which may be executed by less than all of the
parties hereto, each of which shall be enforceable against the parties actually
executing such counterparts and all of which together shall constitute one
instrument.

3.7 Severability. In the event any provision of this Registration Rights
Agreement shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

3.8 Amendments. The provisions of this Registration Rights
Agreement may be amended at any time and from time to time, and particular
provisions of this Registration Rights Agreement may be waived, with and only
with, an agreement or consent in writing signed by the Company and by the
Holders of a majority of the Registrable Securities voting as a single class.

         The parties have executed this Registration Rights Agreement as of the
date first written above.
<TABLE>

The Agent:                                                         The Company:
<S>                                                               <C>
THOMSON KERNAGHAN and CO. LTD.                                       UNITED STATES ANTIMONY CORPORATION


By                                                                 By
   --------------------------------------------------                 -----------------------------------
Name                                                               Name
     ------------------------------------------------                 -----------------------------------
Title                                                              Title
      -----------------------------------------------                 -----------------------------------
Date signed                                                        Date signed
            -----------------------------------------                 -----------------------------------

</TABLE>



                              AMENDED AND RESTATED
                                Escrow Agreement

Section 1.       Parties

1.1 This Amended and Restated Escrow Agreement ("Escrow Agreement") is made and
entered into the _____ day of __________, 2001 but is retroactively effective as
of July 11, 2000 (the "Effective Date"), by and between United States Antimony
Corporation (the "Company") and Thomson Kernaghan and Co.Limited as escrow
holder (the "Escrow Holder").

Section 2.       Recitals

2.1      This Escrow Agreement is made with reference to the following facts
and circumstances:

(a) The Company and Thomson Jernigan and Co.Limited, as Agent, are entering into
an Amended and Restated Agreement effective as of July 11, 2000 (the
"Agreement"), pursuant to which the Company will issue to the Agent up to an
aggregate of US$1,500,000 of debentures (the "Debentures"). The Debentures are
convertible, at the option of the holder or holders thereof, into shares of the
Company's common stock, $0.01 par value ("Common Stock"). Under the terms of the
Agreement, the Company has agreed to issue and deliver to the Agent a
Purchaser's Warrant and an Agent's Warrant (collectively, the "Warrants"). The
shares of Common Stock into which the Debentures are convertible are referred to
as the "Conversion Shares." The shares of Common Stock underlying the Warrants
are referred to as the "Warrant Shares." The Conversion Shares and the Warrant
Shares are issuable in such amounts and upon the terms set forth in the
Agreement. Capitalized terms used but not defined in this Escrow Agreement shall
have the meanings ascribed to them in the Agreement.

(b) Under the terms of an Amended and Restated Registration Rights Agreement
effective as of July 11, 2000 between the Company and the Agent, the Company has
agreed to file a registration statement (the "Registration Statement") under the
United States Securities Act of 1933 as amended (the "Securities Act"), for the
purpose of registering the resale of the Conversion Shares and the Warrant
Shares.

(c) Under the terms of the Agreement, the Company has agreed to execute this
Escrow Agreement with the Escrow Holder, to issue certificates for the
Conversion Shares (the "Conversion Shares Certificates") and the Warrant Shares
(the "Warrant Shares Certificates"), registered in the name of the Escrow
Holder, and to deliver those certificates to the Escrow Holder pursuant to the
terms of this Escrow Agreement.

2.2 In consideration of the premises, and in order to establish the escrow for
the Conversion Shares and the Warrant Shares required by the Agreement, the
Company is entering into this Escrow Agreement with the Escrow Holder.

Section 3. Escrow

3.1 Contemporaneously with the execution of this Escrow
Agreement, the Company shall issue and deliver to the Escrow Holder, to the
extent that the Company has authorized shares available, a certificate for the
Conversion Shares and Warrant Shares underlying the Initial Debentures and the
Warrants. Prior to any additional sale of Debentures, the Company shall have
obtained its shareholders' consent to authorize, and shall have delivered to
the Escrow Holder, all of the Conversion Shares and Warrant Shares required by
the Agreement. Prior to each additional sale of Debentures, the Company shall,
if necessary, issue and deliver to the Escrow Holder a certificate for such
additional Conversion Shares as may be necessary to ensure that the appropriate
number of Conversion Shares underlying the Debentures have been issued and
delivered to the Escrow Holder.

3.2 All certificates for Conversion Shares and
Warrant Shares delivered to the Escrow Holder shall be registered in the name of
Thomson Kernaghan and Co. Ltd.. Until such time as the registration statement
covering the Conversion Shares and the Warrant shares is effective, the
certificates shall bear a legend indicating that they have been issued in a
transaction that is exempt from the registration requirements of the Securities
Act, and may not be transferred except pursuant to registration under the
Securities Act or an exemption from such registration. Except for such legend,
the Common Stock underlying the Purchasers' Warrants and the Agent's Warrant
shall be free and clear of any legends, liens, claims, stop orders or other
restrictions.

3.3 Not later than the third Business Day following the effective
date of the Registration Statement, the Company shall cause the Common Stock
underlying the Purchasers' Warrants and the Agent's Warrant to be registered in
Agent's street name, in DTC form, free and clear of any legends, liens, claims,
stop orders or other restrictions.

3.4      All Conversion  Shares and Warrant  Shares  deposited by the Company
after the effective  date of the  Registration  Statement
shall be registered  in the street name of Thomson  Kernaghan and Co. Ltd., in
DTC form,  free and clear of any legends,  liens,  claims, stop orders or other
restrictions.

Section 4.       Release of Conversion Shares and Warrant Shares

4.1 Upon receipt of a Conversion Notice, the Escrow Holder shall promptly (and
in any event within three business days) release the number of Conversion Shares
specified in the Conversion Notice to the person specified therein. If all of
the unpaid principal of and interest on the Debenture is being converted; then
the Escrow Holder shall endorse the Debenture as paid in full, and transmit the
Debenture, so endorsed, and the Conversion Notice, to the Company. If the
conversion is for less than all of the unpaid principal of and interest on the
Debenture, the Escrow Holder shall endorse upon the Debenture the amount of
principal thereof and interest thereon that is being converted, and transmit a
copy of the Debenture, so endorsed, and the Conversion Notice, to the Company.

4.2 Upon receipt of a Warrant, together with an executed Purchase Form and the
Exercise Price for the number of Warrant Shares specified therein, the Escrow
Holder shall promptly (and in any event within three business days (i) release
the number of Warrant Shares specified in the Purchase Form to the person
specified therein; (ii) transmit a copy of the Warrant and Purchase Form to the
Company; and (ii) disburse the Exercise Price for such Warrant Shares to the
Company, either by check or wire transfer as the Company shall specify by
written instructions to the Escrow Holder. Promptly upon the written request of
the Escrow Holder, the Company shall issue replacement Warrants and deliver them
to the Escrow Holder, upon any partial exercise of a Warrant ,or upon the
transfer of a Warrant or any interest therein.

Section 5.       Termination and Resignation

5.1 This Escrow Agreement, unless sooner terminated, shall terminate on the date
on which all of the Debentures have been redeemed or converted, and all of the
Warrants have been exercised or expired.

5.2 The Escrow Holder may resign as such at any time, without liability
therefor, by giving the Company and the Agent not less than 10 days prior
written notice of its election to do so. In the event of the Escrow Holder's
resignation, the Company shall promptly appoint a successor Escrow Holder
acceptable to the Agent.

Section 6.       Limitation on the Escrow Holder's Liability; Indemnification

6.1 The Escrow Holder shall not be liable to the Company, to any Debenture
holder, to any Warrant holder, or to any other person or entity for any action
taken or omitted by it, except for the Escrow Holder's own gross negligence or
willful misconduct. Without limiting the generality of the foregoing:

(a) The Escrow Holder may rely upon, and shall be protected in acting or
refraining from acting in reliance upon, any notice, certificate, instrument,
request, paper or other document believed by it to be genuine and made, sent,
signed or presented by the Company, any Debenture holder, any Warrant holder, or
any other person or entity.

(b) The Escrow Holder shall not be responsible or liable for the genuineness,
validity or sufficiency of any Debenture, Warrant, stock certificate, notice or
other instrument delivered to it, including without limitation the genuineness
of any signature thereon, or of the identity or authority of any person
executing or delivering the same.

6.2 The Escrow Holder shall not be obligated to take any action to defend or
enforce this Escrow Agreement, or to appear in, prosecute or defend any action
or legal proceeding, or to file any income or other tax return that, in the
Escrow Holder's opinion, would or might involve any cost, expense, loss or
liability, unless, and as often as required by it, the Company shall furnish it
with security and indemnity satisfactory to it against all such cost, expense,
loss and liability.

6.3 The Escrow Holder shall not be responsible for the
validity or enforceability of any provision of this Escrow Agreement, or for the
execution thereof by the Company, or for the truth or accuracy of any recitals
or other statements of fact contained in this Escrow Agreement.

6.4 The Escrow Holder is not, and shall not be deemed for any purpose to be, a
fiduciary under this Escrow Agreement or otherwise, for the Company, for any
Debenture holder, for any Warrant holder, or for any other person or entity.

6.5 Except for matters for which the Escrow Holder is liable to the Company
under paragraph 6.1 of this Escrow Agreement, the Company hereby agrees to
defend and indemnify the Escrow Holder and its shareholders, directors,
officers, employees and agents, and to hold each of them harmless from and
against any and all judgments, awards, orders, damages, claims, demands,
liability, penalties, costs, and expenses (including attorney fees and court or
arbitration costs) of any nature whatsoever, directly or indirectly arising out
of or relating to this Escrow Agreement, or any act or omission of the Escrow
Holder hereunder. This indemnity shall survive termination of this Escrow
Agreement.

Section 7.       Miscellaneous Provisions

7.1 No amendment, modification, termination, or waiver of any provision of this
Escrow Agreement, nor consent to any departure by the Company from any of its
provisions, shall in any event be effective unless the same shall be in writing
and signed by the Escrow Holder, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.

7.2 All notices given under this Escrow Agreement shall be in writing, addressed
to the parties as set forth below, and shall be effective on the earliest of (i)
the date received, or (ii) if given by facsimile transmittal on the date given
if transmitted before 5:00 p.m. the recipient's time, otherwise it is effective
the next day, or (iii) on the second business day after delivery to a major
international air delivery or air courier service (such as Federal Express or
Network Couriers):
<TABLE>
If to the Agent or Escrow Holder:                          If to the Company:
<S>  <C>                                                   <C>
     Thomson Kernaghan and Co. Ltd.                               United States Antimony Corporation
     365 Bay Street                                             1250 Prospect Creek, P.O. Box 643
     Toronto, Ontario M5H 2V2                                   Thompson Falls, Montana 59873-0643
     Attention: Mark E. Valentine, Chairman                     Attention: John Lawrence, President and CEO
     Facsimile No. (416)  860-6140                              Facsimile No. (406) 827-3523

With a copy (that does not constitute notice) to:          With a copy (that does not constitute notice) to:
     John M. Mann                                               Hawley Troxell Ennis and Hawley LLP
     Attorney at Law                                            Attorneys and Counselors
     1330 Post Oak Boulevard, Suite 2800                        877 Main Street, Suite 1000
     Houston, Texas 77056-3060                                  Boise, Idaho 83 702
     Facsimile No. (713) 622-7185                               Attention: Gary D. Babbitt
</TABLE>
7.3 No failure or delay on the part of the Escrow Holder in exercising any
right, power, or remedy hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right, power, or remedy preclude any
other or further exercise thereof or the exercise of any other right, power, or
remedy hereunder. The rights and remedies provided herein are cumulative, and
are not exclusive of any other rights, powers, privileges, or remedies, now or
hereafter existing, at law or in equity or otherwise.

7.4 This Escrow Agreement
shall be binding upon and inure to the benefit of the Company and the Escrow
Holder, and their respective successors and assigns, except that the Company may
not assign or transfer any of its r rights under this Escrow Agreement without
the prior written consent of the Escrow Holder.

7.5 The Company agrees to pay on demand all costs and expenses incurred by the
Escrow Holder in connection with the preparation, execution, delivery, filing,
and administration of this Escrow Agreement, and of any amendment, modification,
or supplement hereto, including, without limitation, the fees and out-of-pocket
expenses of counsel for the Escrow Holder incurred in connection with advising
the Escrow Holder as to its rights and responsibilities hereunder. The Company
also agrees to pay all such costs and expenses, including court costs, incurred
in connection with enforcement of this Escrow Agreement, or any amendment,
modification, or supplement thereto, whether by negotiation, legal proceedings,
or otherwise. In addition, the Company shall pay any and all stamp and other
taxes and fees payable or determined to be payable in connection with the
issuance, transfer and deliver of any Warrant or Warrant Shares, and agrees to
hold the Escrow Holder harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes
and fees. This provision shall survive termination of this Escrow Agreement.

7.6This Escrow Agreement shall be governed by, and construed in accordance with,
the laws of the Province of Ontario, Canada; provided, however, if any provision
of this Escrow Agreement is unenforceable under Ontario law, but is enforceable
under the laws of the U.S. State of Montana, then Montana law shall govern the
construction and enforcement of that provision.

7.7 The parties agree that the
courts of the Province of Ontario, Canada, shall have jurisdiction and venue for
the adjudication of any civil action between or among any of them arising out of
relating to this Agreement or any other Transaction Document. The parties hereby
irrevocably consent to such jurisdiction and venue, and hereby irrevocably waive
any claim of forum non conveniens or right to change such venue.

7.8 This Escrow Agreement constitutes the full and entire understanding and
agreement between the parties with regard to the subject matter hereof and
supercedes all oral statements and prior writings with respect thereto,
including (without limitation) the escrow agreement executed and delivered on
July 25, 2000.

         IN WITNESS WHEREOF, the Company and the Escrow Holder have executed
this Escrow Agreement as of the Effective Date.
<TABLE>
The Escrow Holder:                                            The  Company:
<S>                                                           <C>
THOMSON KERNAGHAN and CO. LIMITED                               UNITED STATES ANTIMONY CORPORATION


By _________________________________                          By _________________________________
Name ______________________________                           Name ______________________________
Title _______________________________                         Title _______________________________
Date signed _________________________                         Date signed _________________________

</TABLE>



This Debenture, and the securities issuable upon the conversion hereof
(collectively, the "Securities"), have not been registered under the U.S.
Securities Act of 1933, as amended (the "Act"), nor have they been registered or
qualified under the securities laws of any U.S. state or territory. This
Debenture is being offered and sold pursuant to Regulation S of the U.S.
Securities and Exchange Commission under the Act. The Securities, are
"restricted securities" and may not be offered or sold in the United States or
to a U.S. Person (as defined in Regulation S) unless pursuant to an effective
registration statement under the Act, or pursuant to Regulation S, or pursuant
to other available exemptions from the registration requirements of the Act. A
Holder of any of the Securities may not engage in hedging transaction with
regard to such securities unless in compliance with the Act.

US $600,000.00                                                Debenture No. TK1
                                                         (Amended and Restated)


                       UNITED STATES ANTIMONY CORPORATION

                   10% Convertible Debenture Due June 30, 2002


         THIS DEBENTURE is one of a duly authorized issue of up to US$1,500,000
of 10% Convertible Debentures due June 30, 2002 (the "Debentures"), of United
States Antimony Corporation (the "Company"), a corporation duly organized and
existing under the laws of the State of Montana, designated as its 10%
Convertible Debentures due June 30, 2002. This Debenture is issued pursuant to
the Amended and Restated Agreement (the "Agreement") entered into effective as
of July 11, 2000, among the Company, the Purchasers named therein, and Thomson
Kernaghan and Co. Limited, individually and as Agent (the" Agent"). Capitalized
terms not defined in this Debenture shall have the meanings ascribed to them in
the Agreement.

         FOR VALUE RECEIVED, the Company promises to pay to the order of Thomson
Kernaghan and Co., Limited, as Nominee, or other registered holder hereof
(collectively, the "Holder"), the principal sum of Six Hundred Thousand Dollars
and No Cents in lawful currency of the United States of America (US $600,000.00)
on June 30, 2002 (the "Maturity Date"), and to pay interest on the principal sum
outstanding from time to time on the Maturity Date at the rate of Ten Percent
(10%) per year accruing from the date of initial issuance. Subject to the
provisions of paragraph 4 below, the principal of and interest on this Debenture
are payable at the option of the Holder, in shares of the Company's Common Stock
("Common Stock"). The Company will pay the principal of and interest upon this
Debenture to the Holder in immediately available funds, in care of the Agent, at
the Agent's address, 365 Bay Street, Tenth Floor, Toronto, Ontario M5H 2V2,
Canada, or at such other address as the Agent shall designate by written notice
to the Company. The delivery of such funds to the Agent shall constitute a
payment and shall satisfy and discharge the liability for principal and interest
on this Debenture to the extent of the sum represented by such payment.

         This Debenture is subject to the following additional provisions:

        1. This Debenture is exchangeable for an equal aggregate principal
amount of Debentures of different denominations, as requested by the Holders
surrendering the same. No service charge will be made for such registration or
transfer or exchange.

        2. This Debenture may be transferred only in
compliance with the Securities Act of 1933, as amended (the "Securities Act"),
and other applicable state and foreign securities laws, pursuant to registration
thereunder or exemption therefrom. In the event of any proposed transfer of this
Debenture, the Company may require, prior to issuance of a new Debenture in the
name of such other person, that it receive reasonable transfer documentation
including opinions that the issuance of the Debenture in such other name does
not and will not cause a violation of the Securities Act or any applicable state
or foreign securities laws. Prior to due presentment for transfer of this
Debenture, the Company and any agent of the Company may treat the person in
whose name this Debenture is duly registered on the Company's Debenture Register
as the owner hereof for the purpose of receiving payment as herein provided and
for all other purposes, whether or not this Debenture be overdue, and neither
the Company nor any such agent shall be affected by notice to the contrary.

       3. The Company is obligated to register the shares of Common Stock into
which the principal and interest of this Debenture are convertible pursuant to
an Amended and Restated Registration Rights Agreement (the "Registration Rights
Agreement") entered into as of the Effective Date, among the Company, the
Holder, other holders of Debentures and the Agent.

4. The Holder is entitled, at its option, to convert at any time and from time
to time beginning on the thirty-first (31st) day after the date hereof, all or
any part of the principal amount of the Debenture, plus accrued interest, into
shares of Common Stock ("Conversion Shares"). No fraction of shares or scrip
representing fractions of shares will be issued on conversion, but the number
of Conversion Shares issuable shall be rounded to the nearest whole share. The
price per share of Common Stock into which the principal of and interest on
this Debenture is convertible (the "Conversion Price") shall be the lower of
(i) $0.29125 or (ii)
seventy-five percent (75%) of the average of the 3 lowest Closing Bid Prices of
the Common Stock quoted by Bloomburg L.P. in the twenty (20) Trading Days
immediately preceding the Conversion Date. The Holder may exercise its right to
convert this Debenture by telecopying an executed and completed Notice of
Conversion in the form annexed hereto as Exhibit A (a "Notice of Conversion") to
the Company and sending the original by mail or overnight delivery service. Each
Trading Day on which a Notice of Conversion is telecopied to the Company in
accordance with the provisions hereof shall be deemed a "Conversion Date."
Within three Trading Days after a Conversion Date, the Company will transmit, or
instruct its transfer agent to transmit, the certificates representing the
Conversion Shares issuable upon conversion of this Debenture to the Holder by
express overnight courier or by electronic transfer. If the Company fails to
deliver the Conversion Shares within such three Trading Day period, the Holder
shall be entitled to revoke the Notice of Conversion by delivering a notice to
such effect to the Company whereupon the Company and the Holder shall each be
restored to their respective positions immediately prior to delivery of such
Notice of Conversion. Notices of Conversion and any other notices given under
this Debenture shall be delivered as follows:
<TABLE>
              If to the Holder:                                             If to the Company:
<S>  <C>                                                                <C>
     c/o Thomson Kernaghan and Co. Ltd.                                 United States Antimony Corporation
     365 Bay Street, Tenth Floor                                        1250 Prospect Creek, P.O. Box 643
     Toronto, Ontario M5H 2V2                                           Thompson Falls, Montana 59873-0643
     Attention: Ms. Michelle McKinnon                                   Attention: John Lawrence, President and CEO
     Facsimile No. (416) 860-6355                                       Facsimile No. (406) 827-3523
</TABLE>
         or to such other address as the Holder may specify.

         If the Company does not deliver the Conversion Shares to the Escrow
Holder prior to the expiration of five Trading Days after the Holder sends a
Notice of Conversion, the, in addition to all other remedies the Holder may
have, the Company shall pay to the Holder, on demand and in immediately
available funds, as liquidated damages for such failure and not as a penalty,
the amounts stated in the following schedule, which liquidated damages shall
begin to accrue on the sixth Trading Day after the Conversion Date.
<TABLE>
                                                                         Late Payment For Each $10,000
                  No. Business Days Late                                of the Debenture Being Converted
<S>               <C>                                                   <C>
                             1                                                  $100
                             2                                                  $200
                             3                                                  $300
                             4                                                  $400
                             5                                                  $500
                            >5                                                  $500 + $200  for each  Business  Day
                                                                                Late   beyond   5  days   from   the
                                                                                Delivery Date
</TABLE>
         Nothing in this Debenture shall limit the holder's right to seek
specific performance of the Company's obligations hereunder and other remedies
and damages for the Company's actions or inactions resulting in the transfer
agent's failure to issue and deliver the Common Stock to the holder. The Company
shall not be liable for any damages resulting from the Escrow Holder's failure
to deliver Warrant Shares to the Holder.

       5. Any provision in this Debenture or any other document to the
contrary not withstanding, the Holder shall not have the right or power to
convert this Debenture into Common Stock, either in whole or in part, and any
attempt to do so shall be void, if, after having given effect to such
conversion, the Holder shall be or shall be deemed to be the beneficial owner of
more than 9.9% of the then outstanding Common Stock within the meaning or for
the purposes of Section 13(d) or 13(g) of the U.S. Securities Exchange Act of
1934, as amended, or as the term "beneficial owner" is defined in Rule 13d-3 of
the U.S. Securities and Exchange Commission or otherwise. Any attempt to convert
this Debenture into Common Stock shall also be ineffective to the extent that
the Company does not have sufficient authorized, unissued and unreserved shares
of Common Stock to effectuate the conversion.

6. No provision of this
Debenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of and interest on, this Debenture at
the time, place and rate, and in the coin or currency herein prescribed. This
Debenture and all other Debentures now or hereafter issued of similar terms are
direct obligations of the Company.

7. So long as any of the principal of or interest on this Debenture
remains 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 this clause (v) with
the prior written consent of the Holder, which consent the Holder agrees not to
unreasonably withhold.

8.       The following constitute an "Event of Default":

(a)      The Company shall default in the payment of principal or interest on
 this Debenture; or

(b) Any of the representations or warranties made by the Company herein or in
any certificate or financial or other written statements heretofore or hereafter
furnished by the Company in connection with the execution and delivery of this
Debenture or any other Transaction Document shall be false or misleading in any
material respect at the time made; or

(c) The Company shall fail to timely
perform or observe, in any material respect, any other covenant, term,
provision, condition, agreement or obligation of the Company under this
Debenture or any other Transaction Document; or

(d) The Company shall fail to
deliver conversion Shares to the Escrow Holder as provided for in this Debenture
or in the Escrow Agreement.

         Then, or at any time thereafter, and in each and every case, unless
such Event of Default shall have been waived in writing by the Holder (which
waiver shall not be deemed to be a waiver of any subsequent default) at the
option of the Holder and in the Holder's sole discretion, the Holder may
consider this Debenture immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which are hereby expressly waived,
anything herein or in any note or other instruments contained to the contrary
notwithstanding, and the Holder may immediately enforce any and all of the
Holder's rights and remedies provided herein or any other rights or remedies
afforded by law.

9. This Debenture shall be governed by and construed in accordance with
the laws of the Province of Ontario, Canada, provided however, that if any
provision of this Debenture is unenforceable under the laws of Ontario but is
enforceable under the laws of the U.S. State of Montana, then that provision
shall be governed by and construed in accordance with the laws the State of
Montana. The courts of the Province of Ontario, Canada, shall have jurisdiction
and venue for the adjudication of any civil action between or among any of them
arising out of relating to this Debenture. The Company and the Holder
irrevocably consent to such jurisdiction and venue, and irrevocably waive any
claim of forum non conveniens or right to change venue. The prevailing party in
any action or proceeding to enforce or construe this Debenture is entitled to
recover reasonable attorney's fees.

10. This Debenture is issued in
substitution for that certain Debenture signed by Company on July 20, 2000 (the
"Superceded Debenture") and replaces the Superceded Debenture in its entirety.
Holder's acceptance of delivery of this Debenture shall automatically effectuate
the cancellation of the Superceded Debenture, which shall thereafter have no
further force or effect, without the necessity of further action by either
Holder or Company. Nevertheless, Holder shall return the Superceded Debenture to
Company.

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by an officer thereunto duly authorized.

                                             UNITED STATES ANTIMONY CORPORATION


                                              By-------------------------------
                                              Name-----------------------------
                                              Title----------------------------

Dated:------------------------------







                                   EXHIBIT "A"

                              NOTICE OF CONVERSION

    (To be executed by the Registered Holder in order to Convert the Debenture)


         TO:      UNITED STATES ANTIMONY CORPORATION


     The undersigned  hereby  irrevocably  elects to convert  $________________
of the principal amount of the above Debenture No. ______ into Shares of
Common Stock of United States Antimony  Corporation.  according to the
conditions  hereof, as of the date written above.

         Date of Conversion
                            ----------------------------------------------------


         Applicable Conversion Price
                                     -------------------------------------------


         Signature
                   -------------------------------------------------------------


         Name
              ------------------------------------------------------------------


         Address:
              -----------------------------------------------------------------






This Debenture, and the securities issuable upon the conversion hereof
(collectively, the "Securities"), have not been registered under the U.S.
Securities Act of 1933, as amended (the "Act"), nor have they been registered or
qualified under the securities laws of any U.S. state or territory. This
Debenture is being offered and sold pursuant to Regulation S of the U.S.
Securities and Exchange Commission under the Act. The Securities, are
"restricted securities" and may not be offered or sold in the United States or
to a U.S. Person (as defined in Regulation S) unless pursuant to an effective
registration statement under the Act, or pursuant to Regulation S, or pursuant
to other available exemptions from the registration requirements of the Act. A
Holder of any of the Securities may not engage in hedging transaction with
regard to such securities unless in compliance with the Act.

         US $75,000.00                                         Debenture No. TK2


                       UNITED STATES ANTIMONY CORPORATION

                    10% Convertible Debenture Due June 30, 2002


         THIS DEBENTURE is one of a duly authorized issue of up to US$1,500,000
of 10% Convertible Debentures due June 30, 2002 (the "Debentures"), of United
States Antimony Corporation (the "Company"), a corporation duly organized and
existing under the laws of the State of Montana, designated as its 10%
Convertible Debentures due June 30, 2002. This Debenture is issued pursuant to
the Amended and Restated Agreement (the "Agreement") entered into effective as
of July 11, 2000, among the Company, the Purchasers named therein, and Thomson
Kernaghan and Co. Limited, individually and as Agent (the" Agent"). Capitalized
terms not defined in this Debenture shall have the meanings ascribed to them in
the Agreement.

         FOR VALUE RECEIVED, the Company promises to pay to the order of Thomson
Kernaghan and Co., Limited, as Nominee, or other registered holder hereof
(collectively, the "Holder"), the principal sum of Seventy-Five Thousand Dollars
and No Cents in lawful currency of the United States of America (US $75,000.00)
on June 30, 2002 (the "Maturity Date"), and to pay interest on the principal sum
outstanding from time to time on the Maturity Date at the rate of Ten Percent
(10%) per year accruing from the date of initial issuance. Subject to the
provisions of paragraph 4 below, the principal of and interest on this Debenture
are payable at the option of the Holder, in shares of the Company's Common Stock
("Common Stock"). The Company will pay the principal of and interest upon this
Debenture to the Holder in immediately available funds, in care of the Agent, at
the Agent's address, 365 Bay Street, Tenth Floor, Toronto, Ontario M5H 2V2,
Canada, or at such other address as the Agent shall designate by written notice
to the Company. The delivery of such funds to the Agent shall constitute a
payment and shall satisfy and discharge the liability for principal and interest
on this Debenture to the extent of the sum represented by such payment.

         This Debenture is subject to the following additional provisions:

1. This Debenture is exchangeable for an equal aggregate principal
amount of Debentures of different denominations, as requested by the Holders
surrendering the same. No service charge will be made for such registration or
transfer or exchange.

2. This Debenture may be transferred only in
compliance with the Securities Act of 1933, as amended (the "Securities Act"),
and other applicable state and foreign securities laws, pursuant to registration
thereunder or exemption therefrom. In the event of any proposed transfer of this
Debenture, the Company may require, prior to issuance of a new Debenture in the
name of such other person, that it receive reasonable transfer documentation
including opinions that the issuance of the Debenture in such other name does
not and will not cause a violation of the Securities Act or any applicable state
or foreign securities laws. Prior to due presentment for transfer of this
Debenture, the Company and any agent of the Company may treat the person in
whose name this Debenture is duly registered on the Company's Debenture Register
as the owner hereof for the purpose of receiving payment as herein provided and
for all other purposes, whether or not this Debenture be overdue, and neither
the Company nor any such agent shall be affected by notice to the contrary.

3. The Company is obligated to register the shares of Common Stock into
which the principal and interest of this Debenture are convertible pursuant to
an Amended and Restated Registration Rights Agreement (the "Registration Rights
Agreement") entered into as of the Effective Date, among the Company, the
Holder, other holders of Debentures and the Agent.

4. The Holder is
entitled, at its option, to convert at any time and from time to time beginning
on the thirty-first (31st) day after the date hereof, all or any part of the
principal amount of the Debenture, plus accrued interest, into shares of Common
Stock ("Conversion Shares"). No fraction of shares or scrip representing
fractions of shares will be issued on conversion, but the number of Conversion
Shares issuable shall be rounded to the nearest whole share. The price per share
of Common Stock into which the principal of and interest on this Debenture is
convertible (the "Conversion Price") shall be the lower of (i) $0.29125 or (ii)
seventy-five percent (75%) of the average of the 3 lowest Closing Bid Prices of
the Common Stock quoted by Bloomburg L.P. in the twenty (20) Trading Days
immediately preceding the Conversion Date. The Holder may exercise its right to
convert this Debenture by telecopying an executed and completed Notice of
Conversion in the form annexed hereto as Exhibit A (a "Notice of Conversion") to
the Company and sending the original by mail or overnight delivery service. Each
Trading Day on which a Notice of Conversion is telecopied to the Company in
accordance with the provisions hereof shall be deemed a "Conversion Date."
Within three Trading Days after a Conversion Date, the Company will transmit, or
instruct its transfer agent to transmit, the certificates representing the
Conversion Shares issuable upon conversion of this Debenture to the Holder by
express overnight courier or by electronic transfer. If the Company fails to
deliver the Conversion Shares within such three Trading Day period, the Holder
shall be entitled to revoke the Notice of Conversion by delivering a notice to
such effect to the Company whereupon the Company and the Holder shall each be
restored to their respective positions immediately prior to delivery of such
Notice of Conversion. Notices of Conversion and any other notices given under
this Debenture shall be delivered as follows:
<TABLE>
              If to the Holder:                                             If to the Company:
<S>  <C>                                                                <C>
     c/o Thomson Kernaghan and Co. Ltd.                                 United States Antimony Corporation
     365 Bay Street, Tenth Floor                                        1250 Prospect Creek, P.O. Box 643
     Toronto, Ontario M5H 2V2                                           Thompson Falls, Montana 59873-0643
     Attention: Ms. Michelle McKinnon                                   Attention: John Lawrence, President and CEO
     Facsimile No. (416) 860-6355                                       Facsimile No. (406) 827-3523
</TABLE>
         or to such other address as the Holder may specify.

         If the Company does not deliver the Conversion Shares to the Escrow
Holder prior to the expiration of five Trading Days after the Holder sends a
Notice of Conversion, the, in addition to all other remedies the Holder may
have, the Company shall pay to the Holder, on demand and in immediately
available funds, as liquidated damages for such failure and not as a penalty,
the amounts stated in the following schedule, which liquidated damages shall
begin to accrue on the sixth Trading Day after the Conversion Date.
<TABLE>
                                                                         Late Payment For Each $10,000
                  No. Business Days Late                                of the Debenture Being Converted
<S>               <C>                                                   <C>
                             1                                                  $100
                             2                                                  $200
                             3                                                  $300
                             4                                                  $400
                             5                                                  $500
                            >5                                                  $500 + $200  for each  Business  Day
                                                                                Late   beyond   5  days   from   the
                                                                                Delivery Date
</TABLE>
         Nothing in this Debenture shall limit the holder's right to seek
specific performance of the Company's obligations hereunder and other remedies
and damages for the Company's actions or inactions resulting in the transfer
agent's failure to issue and deliver the Common Stock to the holder. The Company
shall not be liable for any damages resulting from the Escrow Holder's failure
to deliver Warrant Shares to the Holder.

5. Any provision in this Debenture or any other document to the
contrary not withstanding, the Holder shall not have the right or power to
convert this Debenture into Common Stock, either in whole or in part, and any
attempt to do so shall be void, if, after having given effect to such
conversion, the Holder shall be or shall be deemed to be the beneficial owner of
more than 9.9% of the then outstanding Common Stock within the meaning or for
the purposes of Section 13(d) or 13(g) of the U.S. Securities Exchange Act of
1934, as amended, or as the term "beneficial owner" is defined in Rule 13d-3 of
the U.S. Securities and Exchange Commission or otherwise. Any attempt to convert
this Debenture into Common Stock shall also be ineffective to the extent that
the Company does not have sufficient authorized, unissued and unreserved shares
of Common Stock to effectuate the conversion.

6. No provision of this
Debenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of and interest on, this Debenture at
the time, place and rate, and in the coin or currency herein prescribed. This
Debenture and all other Debentures now or hereafter issued of similar terms are
direct obligations of the Company.

7. So long as any of the principal of or interest on this Debenture
remains 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 this clause (v) with
the prior written consent of the Holder, which consent the Holder agrees not to
unreasonably withhold.

8.       The following constitute an "Event of Default":

(a)      The Company shall default in the payment of principal or interest on
this Debenture; or

(b) Any of the representations or warranties made by the Company herein or in
any certificate or financial or other written statements heretofore or hereafter
furnished by the Company in connection with the execution and delivery of this
Debenture or any other Transaction Document shall be false or misleading in any
material respect at the time made; or

(c) The Company shall fail to timely
perform or observe, in any material respect, any other covenant, term,
provision, condition, agreement or obligation of the Company under this
Debenture or any other Transaction Document; or

(d) The Company shall fail to deliver conversion Shares to the Escrow Holder as
provided for in this Debenture or in the Escrow Agreement.

         Then, or at any time thereafter, and in each and every case, unless
such Event of Default shall have been waived in writing by the Holder (which
waiver shall not be deemed to be a waiver of any subsequent default) at the
option of the Holder and in the Holder's sole discretion, the Holder may
consider this Debenture immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which are hereby expressly waived,
anything herein or in any note or other instruments contained to the contrary
notwithstanding, and the Holder may immediately enforce any and all of the
Holder's rights and remedies provided herein or any other rights or remedies
afforded by law.

9. This Debenture shall be governed by and construed in accordance with
the laws of the Province of Ontario, Canada, provided however, that if any
provision of this Debenture is unenforceable under the laws of Ontario but is
enforceable under the laws of the U.S. State of Montana, then that provision
shall be governed by and construed in accordance with the laws the State of
Montana. The courts of the Province of Ontario, Canada, shall have jurisdiction
and venue for the adjudication of any civil action between or among any of them
arising out of relating to this Debenture. The Company and the Holder
irrevocably consent to such jurisdiction and venue, and irrevocably waive any
claim of forum non conveniens or right to change venue. The prevailing party in
any action or proceeding to enforce or construe this Debenture is entitled to
recover reasonable attorney's fees.

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by an officer thereunto duly authorized.

                                              UNITED STATES ANTIMONY CORPORATION


                                              By-------------------------------
                                              Name-----------------------------
                                              Title----------------------------

Date of Issuance:  August 31, 2000




                                   EXHIBIT "A"

                              NOTICE OF CONVERSION

    (To be executed by the Registered Holder in order to Convert the Debenture)


         TO:      UNITED STATES ANTIMONY CORPORATION


     The undersigned  hereby  irrevocably  elects to convert  $________________
of the principal amount of the above Debenture No. ______ into Shares of Common
Stock of United States Antimony  Corporation.  according to the conditions
hereof, as of the date written above.

         Date of Conversion
                            ---------------------------------------------------


         Applicable Conversion Price
                                     ------------------------------------------


         Signature
                   ------------------------------------------------------------


         Name
              -----------------------------------------------------------------


         Address:
              -----------------------------------------------------------------



                               PURCHASER'S WARRANT

Warrant No. TK1 (Amended and Restated)

THIS WARRANT, AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF
(COLLECTIVELY, THE "SECURITIES"), HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), NOR HAVE THEY BEEN REGISTERED OR
QUALIFIED UNDER THE SECURITIES LAWS OF ANY U.S. STATE OR TERRITORY. THIS WARRANT
IS BEING OFFERED AND SOLD PURSUANT TO REGULATION S OF THE U.S. SECURITIES AND
EXCHANGE COMMISSION UNDER THE ACT. THE SECURITIES, ARE "RESTRICTED SECURITIES"
AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO A U.S. PERSON (AS
DEFINED IN REGULATION S) UNLESS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT, OR PURSUANT TO REGULATION S, OR PURSUANT TO OTHER AVAILABLE
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT. A HOLDER OF ANY OF THE
SECURITIES MAY NOT ENGAGE IN HEDGING TRANSACTION WITH REGARD TO SUCH SECURITIES
UNLESS IN COMPLIANCE WITH THE ACT.

                       UNITED STATES ANTIMONY CORPORATION

                            Warrant for the Purchase
                            of Shares of Common Stock

July 11, 2000                                                     384,615 Shares

         FOR VALUE RECEIVED, United States Antimony Corporation, a Montana
corporation (the "Company"), hereby certifies that Thornson Kernaghan and Co.
Limited, as Nominee, or other holder hereof (collectively, the "Holder"), is
entitled, subject to the provisions of this Warrant, to purchase from the
Company, at any time or from time to time beginning on the date hereof, and
ending at 5:00 pm, Toronto time, on the fifth anniversary of the date hereof
(the "Exercise Period") Three Hundred Eighty-Four Thousand Six Hundred Fifteen
(384,615) fully paid and nonassessable shares of common stock of the Company,
par value $.01 per share (the "Common Stock") at the exercise price of
Thirty-Nine Cents (US$.39) per share (the "Exercise Price"). This Warrant is a
Purchaser's Warrant described in and is being issued pursuant to an Amended and
Restated Agreement (the "Agreement") effective as of July 11, 2000, between the
Company and Thomson Kernaghan and Co. Limited (the "Agent"). Capitalized terms
not defined in this Warrant shall have the meanings ascribed to them in the
Agreement.

         For purposes of this Warrant, "Warrant Shares" means the shares of
Common Stock deliverable upon exercise of this Warrant, as adjusted from time to
time. Unless the context requires otherwise all references to Common Stock and
Warrant Shares in this Warrant shall, in the event of an adjustment pursuant to
Section 7 hereof, be deemed to refer also to any securities or property then
issuable upon exercise of this Warrant as a result of such adjustment.

Section 1.       Exercise of Warrant.

(a) This Warrant may be exercised, as a whole or in part, at any time or from
time to time during the Exercise Period or, if such day is not a Trading Day (as
defined in the Agreement), then on the next succeeding Trading Day. The Holder
may exercise this Warrant by telecopying an executed and completed Notice of
Exercise in the form annexed hereto as Exhibit A (a "Notice of Exercise") to the
Escrow Holder and the Company, and sending the original by mail or overnight
delivery service to the Escrow Holder together with the Exercise Price. Each
Trading Day on which a Notice of Exercise is telecopied to the Company in
accordance with the provisions hereof shall be deemed an "Exercise Date."
Notices given under this Warrant shall be delivered as required by the Escrow
Agreement, and also delivered or telecopied as follows:
<TABLE>
     If to the Holder or Escrow Holder:                            If to the Company:
<S>  <C>                                                                <C>
     c/o Thomson Kernaghan and Co. Ltd.                                   United States Antimony Corporation
     365 Bay Street, Tenth Floor                                        1250 Prospect Creek, P.O. Box 643
     Toronto, Ontario M5H 2V2                                           Thompson Falls, Montana 59873-0643
     Attention: Ms. Michelle McKinnon                                   Attention: John Lawrence, President and CEO
     Facsimile No. (416) 860-6355                                       Facsimile No. (406) 827-3523
</TABLE>
or to such other address as the Holder may specify.

         If the Company has not delivered the Warrant Shares to the Escrow
Holder prior to the expiration of five Trading Days after the Holder send a
Notice of Exercise, the, in addition to all other remedies the Holder may have,
the Company shall pay to the Holder, on demand and in immediately available
funds, as liquidated damages for such failure and not as a penalty, the amounts
stated in the following schedule, which liquidated damages shall begin to accrue
on the sixth Trading Day after the Conversion Date.

<TABLE>
                                                              Late Payment For Each $10,000
                           No. Business Days Late             of the Warrant Exercise Price
<S>                        <C>                                <C>
                                    1                                           $100
                                    2                                           $200
                                    3                                           $300
                                    4                                           $400
                                    5                                           $500
                                    >5                                          $500+$200 for each Business Day Late beyond 5 days
                                                                                from The Delivery Date
</TABLE>
         Nothing in this Warrant shall limit the holder's right to seek specific
performance of the Company's obligations hereunder and other remedies and
damages for the Company's actions or inactions resulting in the transfer agent's
failure to issue and deliver the Warrant Shares to the Holder. The Company shall
not be liable for any damages resulting from the Escrow Holder's failure to
deliver Warrant Shares to the Holder.

(b) The Company shall pay any and all documentary stamp or similar issue or
transfer taxes payable in respect of the issue or delivery of the Warrant
Shares.

(c) Limitation on Right and Power to Exercise. Any provision in this
Warrant, the Agreement or any other document to the contrary not withstanding,
the Holder shall not have the right or power to exercise this warrant, either in
whole or in part, if, and any attempt to do so shall be void, after having given
effect to such exercise, the Holder shall be or shall be deemed to be the
beneficial owner of 10% or more of the then outstanding Common Stock within the
meaning or for the purposes of Section 13(d) or 13(g) of the U.S. Securities
Exchange Act of 1934, as amended, or as the term "beneficial owner" is defined
in Rule 13d-3 of the U.S. Securities and Exchange Commission or otherwise. Any
attempt to exercise the Warrant shall also be ineffective to the extent that the
Company does not have sufficient authorized, unissued and unreserved Common
Stock to issue the Warrant Shares.

Section 2. Reservation of Shares. Subject to
shareholder approval pursuant to Section 10.2.1 of the Agreement, the Company
hereby agrees that at all times there shall be reserved for issuance and
delivery upon exercise of this Warrant all shares of its Common Stock or other
shares of capital stock of the Company or other property from time to time
issuable upon exercise of this Warrant. All such shares shall be duly authorized
and, when issued upon such exercise in accordance with the terms of this
Warrant, shall be validly issued, fully paid and nonassessable, free and clear
of all liens, security interests, charges and other encumbrances or restrictions
on sale (other than any restrictions on sale pursuant to applicable federal and
state securities laws) and free and clear of all preemptive rights.

Section 3. Fractional Shares. The Company shall not be required to issue
fractional shares of Common Stock on the exercise of this Warrant. If any
fraction of a share of Common Stock would, except for the provisions of this
Section 3, be issuable on the exercise of this Warrant (or specified portion
thereof), the Company shall pay an amount in cash calculated by it to be equal
to the then Current Market Value (as hereinafter defined) per share of Common
Stock multiplied by such fraction computed to the nearest whole cent. For the
purposes of any computation under this Warrant, the Current Market Value per
share of Common Stock or of any other equity security (herein collectively
referred to as a "security") at the date herein specified shall be:

(i) if the security is not registered under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), the "Current Market Value" per share of
the security shall be determined in good faith by the Board of Directors of the
Company, or

(ii) if the security is registered under the Exchange Act, the "Current Market
Value" per share of the security shall be deemed to be the average of the daily
market prices of the security for the ten (10) consecutive Trading Days
immediately preceding the day as of which Current Market Value is being
determined or, if the security has been registered under the Exchange Act for
less than ten (10) consecutive Trading Days before such date, then the average
of the daily market prices for all of the trading days before such date for
which daily market prices are available. The market price for each such Trading
Day shall be:

(A) in the case of a security listed or admitted to trading on any securities
exchange, the Closing Bid Price on the primary exchange on which the Common
Stock is then listed, on such day,

(B) in the case of a security not then listed
or admitted to trading on any securities exchange, the Closing Bid Price
reported by Bloomburg LP on such day,

(C) in the case of a security not then
listed or admitted to trading on any securities exchange and as to which no such
reported sale price or bid and asked prices are available, the reported high bid
on such day, as reported by a reputable quotation service, or a newspaper of
general circulation in the Borough of Manhattan, City and State of New York,
customarily published on each business day, designated by the Holder, or if
there shall be no bid prices on such day, the high bid price, as so reported, on
the most recent day (not more than 10 days prior to the date in question) for
which prices have been so reported, and

(D) if there are no bid prices reported
during the 10 days prior to the date in question, the Current Market Value of
the security shall be determined as if the security were not registered under
the Exchange Act.

Section 4. Exchange, Transfer, Assignment or Loss of Warrant.

(a) This Warrant is exchangeable, without expense, at the option of the Holder,
upon presentation and surrender hereof to the Company or at the office of its
stock transfer agent or warrant agent, if any, for other warrants of different
denomination, entitling the Holder thereof to purchase in the aggregate the same
number of Warrant Shares and otherwise carrying the same rights as this Warrant.

(b) This Warrant may be divided or combined by the Holder with other warrants
that carry the same rights upon presentation hereof at the office of the Company
or at the office of its stock transfer agent or warrant agent, if any, together
with a written notice specifying the names and denominations in which new
warrants are to be issued and signed by the Holder hereof. The term "Warrant" as
used herein includes any warrants into which this Warrant may be divided or for
which it may be exchanged.

(c) Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Warrant, if mutilated, the Company shall execute and deliver a new Warrant of
like tenor and date.

Section 5. Restrictions on Issuance of Securities. So long
as this Warrant is outstanding, the Company will not issue, or permit any
Subsidiary to 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 (i) securities issued pursuant to the Securities Purchase Agreement (which
includes Warrant Shares), (ii) securities of a Subsidiary that are issued to the
Company; and (iii) 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 with the prior
written consent of the Holder, which consent the Holder agrees not to
unreasonably withhold.

Section 6. Reclassification, Reorganization, Consolidation or Merger. In the
event of any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the Company or in the event of any
consolidation or merger of the Company with or into another corporation (other
than a merger in which merger the Company is the continuing corporation and that
does not result in any reclassification, capital reorganization or other change
of outstanding shares of Common Stock of the class issuable upon exercise of
this Warrant) or in the event of any sale, lease, transfer or conveyance to
another corporation of the property and assets of the Company as an entirety or
substantially as an entirety, the Company shall, as a condition precedent to
such transaction, cause effective provisions to be made so that such other
corporation shall assume all of the obligations of the Company hereunder and the
Holder shall have the right thereafter, by exercising this Warrant, to purchase
the kind and amount of shares of stock and other securities and property
(including cash) receivable upon such reclassification, capital reorganization
and other change, consolidation, merger, sale, lease, transfer or conveyance by
a holder of the number of shares of Common Stock that might have been received
upon exercise of this Warrant immediately prior to such reclassification,
capital reorganization, change, consolidation, merger, sale, lease or
conveyance. Any such provision shall include provision for adjustments in
respect of such shares of stock and other securities and property that shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this Warrant. The foregoing provisions of this Section 6 shall similarly apply
to successive reclassification, capital reorganizations and changes of shares of
Common Stock and to successive changes, consolidations, mergers, sales, leases,
transfers or conveyances. In the event that in connection with any such capital
reorganization, or reclassification, consolidation, merger, sale, lease,
transfer or conveyance, additional shares of Common Stock shall be issued in
exchange, conversion, substitution or payment, as a whole or in part, for, or
of, a security of the Company other than Common Stock, any such issue shall be
treated as an issue of Common Stock covered by the provisions of Section 5.

Section 7. Transfer to Comply with the Securities Act. Neither this Warrant nor
any of the Warrant Shares may be offered or sold in the United States or to a
U.S. Person (as defined in Regulation S) unless pursuant to an effective
registration statement under the Act, or pursuant to Regulation S, or pursuant
to other available exemptions from the registration requirements of the Act. The
Holder of this Warrant or any of the Warrant Shares may not engage in hedging
transaction with regard to such securities unless in compliance with the Act.

Section 8. Availability of Information. So long as any of this Warrant remains
unexercised and this Warrant has not expired, the Company shall comply with the
reporting requirements of Sections 13 and 15(d) of the Exchange Act to the
extent it is required to do so under the Exchange Act, and shall likewise comply
with all other applicable public information reporting requirements of the
Securities and Exchange Commission (including those required to make available
the benefits of Rule 144 under the Securities Act) to which it may from time to
time be subject. The Company shall also cooperate with the Holder of this
Warrant and the Holder of any Warrant Shares in supplying such information as
may be necessary for such holder to complete and file any information reporting
forms currently or hereafter required by the Commission as a condition to the
availability of Rule 144 or any successor rule under the Securities Act for the
sale of this Warrant or the Warrant Shares. The provisions of this Section 8
shall survive termination of this Warrant, whether upon exercise of this Warrant
in full or otherwise. The Company shall also provide to holders of this Warrant
the same information that it provides to holders of its Common Stock.

Section 9. Registration Rights. The Company is obligated to register the shares
of Common Stock issuable upon exercise of this Warrant pursuant to an Amended
and Restated Registration Rights Agreement (the "Registration Rights Agreement")
effective as of the Effective Date, among the Company, the Holder, other holders
of Debentures and the Agent.

Section 10. Successors and Assigns. All the provisions of this Warrant by or for
the benefit of the Company or the Holder shall bind and inure to the benefit of
their respective successors, assigns, heirs and personal representatives.

Section 11. Headings. The headings of sections of this Warrant have been
inserted for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms or provisions
hereof.

Section 12. Amendments. This Warrant may not be amended except by the
written consent of the Company and the Holder.

Section 13. Notices. All notices given under this Agreement and under the other
Transaction Documents shall be in writing, addressed to the parties as set
forth below, or to such other address as a party may specify by notice given in
accordance with this paragraph and shall be effective on the earliest of (i) the
date received, or (ii) if given by facsimile transmittal on the date given if
transmitted before 5:00 p.m. the recipient's time, otherwise it is effective
the next day, or (iii) on the second Trading Day after delivery to a major
international air delivery or air courier service (such as Federal Express or
Network Couriers):
<TABLE>
              If to the Holder or Escrow Holder:                            If to the Company:
<S>  <C>                                                                <C>
     c/o Thomson Kernaghan and Co. Ltd.                                   United States Antimony Corporation
     365 Bay Street                                                     1250 Prospect Creek, P.O. Box 643
     Toronto, Ontario M5H 2V2                                           Thompson Falls, Montana 59873-0643
     Attention: Mr. Gregg Badger, Sr. V.P.                              Attention: John Lawrence, President and CEO
     Facsimile No. (416) 860-6352                                       Facsimile No. (406) 827-3523
</TABLE>
Section 14. Law Governing; Jurisdiction. This Warrant shall be governed by and
construed in accordance with the laws of the Province of Ontario, Canada,
provided however, that if any provision of this Warrant is unenforceable under
the laws of Ontario but is enforceable under the laws of the U.S. State of
Montana, then that provision shall be governed by and construed in accordance
with the laws the State of Montana. The courts of the Province of Ontario,
Canada, shall have jurisdiction and venue for the adjudication of any civil
action between or among any of them arising out of relating to this Debenture.
The Company and the Holder irrevocably consent to such jurisdiction and venue,
and irrevocably waive any claim of forum non conveniens or right to change
venue. The prevailing party in any action or proceeding to enforce or construe
this Warrant is entitled to recover reasonable attorney's fees.

Section 15. Replacement of Superceded Warrant. This Warrant is issued in
substitution for that certain Warrant signed by Company on July 20, 2000
("Superceded Warrant")
and replaces the Superceded Warrant in its entirety. Holder's acceptance of
delivery of this Warrant shall automatically effectuate the cancellation of the
Superceded Warrant, which shall thereafter have no further force or effect,
without the necessity of further action by either Holder or Company.
Nevertheless, Holder shall return the Superceded Warrant to Company.

         IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed the _____ day of ___________, 2001.

                                              UNITED STATES ANTIMONY CORPORATION


                                                    By
                                                       ------------------------
                                                       President and CEO

                                                     Date Signed
                                                        -----------------------







                               NOTICE OF EXERCISE

To:  United States Antimony Corporation:

         The undersigned irrevocably exercises this Warrant for the purchase of
____________________ shares (subject to adjustment) of Common Stock of United
States Antimony Corporation (the "Company"): for this Warrant and agrees to make
payment of $____________________ (the "Exercise Price") through the following
method:

                  such payment of the Exercise  Price being in cash or by
                  certified or official  bank check payable to the order of the
                  Company

all at the Exercise Price and on the terms and conditions specified in this
Warrant, and directs that the shares of Common Stock deliverable upon the
exercise of this Warrant be registered or placed in the name and at the address
specified below and delivered thereto.

The undersigned represents, warrants and certifies to the Company that the
undersigned is not a U.S. Person (as defined in SEC Rule 902(k)), and that this
Warrant is not being exercised on behalf of a U.S. Person.

Date:  ________________, _______

- --------------------------------------------------------------
(Signature of Owner)1

- --------------------------------------------------------------
(Street Address)

- ---------------------------------------------------------------
(City)            (State or Province)         (Postal Code)

- ---------------------------------------------------------------
(Country)


- --------
1    The signature must correspond with the name as written upon the face of the
     within Warrant in every particular, without alteration or enlargement or
     any change whatever.






Securities and/or check to be issued to:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

Name:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

Street Address:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

City, State and Zip Code:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

Any unexercised part of the Warrant evidenced by the within Warrant to be issued
to:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

Name:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

Street Address:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

City, State and Zip Code:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------







                               FORM OF ASSIGNMENT

         FOR VALUE RECEIVED the undersigned registered holder of the within
Warrant hereby sells, assigns, and transfers unto the Assignee(s) named below
(including the undersigned with respect to any part of the Warrant not being
assigned hereby) all of the right of the undersigned under the within Warrant,
with respect to the number of shares of Common Stock set forth below:
<TABLE>
- -------------------------------- --------------------------------------- --------------------- ---------------------
<S>                              <C>                                     <C>                   <C>
                                                                          Social Security or   Number of Shares of
                                                                          Other Identifying        Common Stock
       Name of Assignee                   Address of Assignee             Number of Assignee   Assigned to Assignee
- -------------------------------- --------------------------------------- --------------------- ---------------------
- -------------------------------- --------------------------------------- --------------------- ---------------------


- -------------------------------- --------------------------------------- --------------------- ---------------------
- -------------------------------- --------------------------------------- --------------------- ---------------------


- -------------------------------- --------------------------------------- --------------------- ---------------------
</TABLE>
and does hereby irrevocably constitute and appoint ______________________ as the
undersigned's attorney to make such transfer on the books of
______________________ United States Antimony Corporation maintained for that
purpose, with full power of substitution in the premises.

Date:  ________________, _______

- --------------------------------------------------------------
(Signature of Owner)1

- --------------------------------------------------------------
(Street Address)

- ---------------------------------------------------------------
(City)            (State or Province)         (Postal Code)

- ---------------------------------------------------------------
(Country)

- --------
1    The signature must correspond with the name as written upon the face of the
     within Warrant in every particular, without alteration or enlargement or
     any change whatever.

                               PURCHASER'S WARRANT

Warrant No. TK3

THIS WARRANT, AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF
(COLLECTIVELY, THE "SECURITIES"), HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), NOR HAVE THEY BEEN REGISTERED OR
QUALIFIED UNDER THE SECURITIES LAWS OF ANY U.S. STATE OR TERRITORY. THIS WARRANT
IS BEING OFFERED AND SOLD PURSUANT TO REGULATION S OF THE U.S. SECURITIES AND
EXCHANGE COMMISSION UNDER THE ACT. THE SECURITIES, ARE "RESTRICTED SECURITIES"
AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO A U.S. PERSON (AS
DEFINED IN REGULATION S) UNLESS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT, OR PURSUANT TO REGULATION S, OR PURSUANT TO OTHER AVAILABLE
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT. A HOLDER OF ANY OF THE
SECURITIES MAY NOT ENGAGE IN HEDGING TRANSACTION WITH REGARD TO SUCH SECURITIES
UNLESS IN COMPLIANCE WITH THE ACT.

                       UNITED STATES ANTIMONY CORPORATION

                            Warrant for the Purchase
                            of Shares of Common Stock

August 31, 2000                                                   48,077 Shares

         FOR VALUE RECEIVED, United States Antimony Corporation, a Montana
corporation (the "Company"), hereby certifies that Thornson Kernaghan and Co.
Limited, as Nominee, or other holder hereof (collectively, the "Holder"), is
entitled, subject to the provisions of this Warrant, to purchase from the
Company, at any time or from time to time beginning on the date hereof, and
ending at 5:00 pm, Toronto time, on the fifth anniversary of the date hereof
(the "Exercise Period") Forty-Eight Thousand Seventy-Seven (48,077) fully paid
and nonassessable shares of common stock of the Company, par value $.01 per
share (the "Common Stock") at the exercise price of Thirty-Nine Cents (US$.39)
per share (the "Exercise Price"). This Warrant is a Purchaser's Warrant
described in and is being issued pursuant to an Amended and Restated Agreement
(the "Agreement") effective as of July 11, 2000, between the Company and Thomson
Kernaghan and Co. Limited (the "Agent"). Capitalized terms not defined in this
Warrant shall have the meanings ascribed to them in the Agreement.

         For purposes of this Warrant, "Warrant Shares" means the shares of
Common Stock deliverable upon exercise of this Warrant, as adjusted from time to
time. Unless the context requires otherwise all references to Common Stock and
Warrant Shares in this Warrant shall, in the event of an adjustment pursuant to
Section 7 hereof, be deemed to refer also to any securities or property then
issuable upon exercise of this Warrant as a result of such adjustment.

Section 1.       Exercise of Warrant.

(a) This Warrant may be exercised, as a whole or in part, at any time or from
time to time during the Exercise Period or, if such day is not a Trading Day (as
defined in the Agreement), then on the next succeeding Trading Day. The Holder
may exercise this Warrant by telecopying an executed and completed Notice of
Exercise in the form annexed hereto as Exhibit A (a "Notice of Exercise") to the
Escrow Holder and the Company, and sending the original by mail or overnight
delivery service to the Escrow Holder together with the Exercise Price. Each
Trading Day on which a Notice of Exercise is telecopied to the Company in
accordance with the provisions hereof shall be deemed an "Exercise Date."
Notices given under this Warrant shall be delivered as required by the Escrow
Agreement, and also delivered or telecopied as follows:
<TABLE>
              If to the Holder or Escrow Holder:                            If to the Company:
<S>  <C>                                                                <C>
     c/o Thomson Kernaghan and Co. Ltd.                                   United States Antimony Corporation
     365 Bay Street, Tenth Floor                                        1250 Prospect Creek, P.O. Box 643
     Toronto, Ontario M5H 2V2                                           Thompson Falls, Montana 59873-0643
     Attention: Ms. Michelle McKinnon                                   Attention: John Lawrence, President and CEO
     Facsimile No. (416) 860-6355                                       Facsimile No. (406) 827-3523
</TABLE>
or to such other address as the Holder may specify.

         If the Company has not delivered the Warrant Shares to the Escrow
Holder prior to the expiration of five Trading Days after the Holder send a
Notice of Exercise, the, in addition to all other remedies the Holder may have,
the Company shall pay to the Holder, on demand and in immediately available
funds, as liquidated damages for such failure and not as a penalty, the amounts
stated in the following schedule, which liquidated damages shall begin to accrue
on the sixth Trading Day after the Conversion Date.

<TABLE>
                                                              Late Payment For Each $10,000
                           No. Business Days Late             of the Warrant Exercise Price
<S>                        <C>                                <C>
                                    1                                           $100
                                    2                                           $200
                                    3                                           $300
                                    4                                           $400
                                    5                                           $500
                                    >5                                          $500+$200 for each Business Day Late beyond 5 days
                                                                                from The Delivery Date
</TABLE>
         Nothing in this Warrant shall limit the holder's right to seek specific
performance of the Company's obligations hereunder and other remedies and
damages for the Company's actions or inactions resulting in the transfer agent's
failure to issue and deliver the Warrant Shares to the Holder. The Company shall
not be liable for any damages resulting from the Escrow Holder's failure to
deliver Warrant Shares to the Holder.

(b) The Company shall pay any and all documentary stamp or similar issue or
transfer taxes payable in respect of the issue or delivery of the Warrant
Shares.

(c) Limitation on Right and Power to Exercise. Any provision in this
Warrant, the Agreement or any other document to the contrary not withstanding,
the Holder shall not have the right or power to exercise this warrant, either in
whole or in part, if, and any attempt to do so shall be void, after having given
effect to such exercise, the Holder shall be or shall be deemed to be the
beneficial owner of 10% or more of the then outstanding Common Stock within the
meaning or for the purposes of Section 13(d) or 13(g) of the U.S. Securities
Exchange Act of 1934, as amended, or as the term "beneficial owner" is defined
in Rule 13d-3 of the U.S. Securities and Exchange Commission or otherwise. Any
attempt to exercise the Warrant shall also be ineffective to the extent that the
Company does not have sufficient authorized, unissued and unreserved Common
Stock to issue the Warrant Shares.

Section 2. Reservation of Shares. Subject to
shareholder approval pursuant to Section 10.2.1 of the Agreement, the Company
hereby agrees that at all times there shall be reserved for issuance and
delivery upon exercise of this Warrant all shares of its Common Stock or other
shares of capital stock of the Company or other property from time to time
issuable upon exercise of this Warrant. All such shares shall be duly authorized
and, when issued upon such exercise in accordance with the terms of this
Warrant, shall be validly issued, fully paid and nonassessable, free and clear
of all liens, security interests, charges and other encumbrances or restrictions
on sale (other than any restrictions on sale pursuant to applicable federal and
state securities laws) and free and clear of all preemptive rights.

Section 3. Fractional Shares. The Company shall not be required to issue
fractional shares of Common Stock on the exercise of this Warrant. If any
fraction of a share of Common Stock would, except for the provisions of this
Section 3, be issuable on the exercise of this Warrant (or specified portion
thereof), the Company shall pay an amount in cash calculated by it to be equal
to the then Current Market Value (as hereinafter defined) per share of Common
Stock multiplied by such fraction computed to the nearest whole cent. For the
purposes of any computation under this Warrant, the Current Market Value per
share of Common Stock or of any other equity security (herein collectively
referred to as a "security") at the date herein specified shall be:

(i) if the security is not registered under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), the "Current Market Value" per share of the
security shall be determined in good faith by the Board of Directors of the
Company, or

(ii) if the security is registered under the Exchange Act, the "Current
Market Value" per share of the security shall be deemed to be the average
of the daily market
prices of the security for the ten (10) consecutive Trading Days immediately
preceding the day as of which Current Market Value is being determined or, if
the security has been registered under the Exchange Act for less than ten (10)
consecutive Trading Days before such date, then the average of the daily market
prices for all of the trading days before such date for which daily market
prices are available. The market price for each such Trading Day shall be: (A)
in the case of a security listed or admitted to trading on any securities
exchange, the Closing Bid Price on the primary exchange on which the Common
Stock is then listed, on such day, (B) in the case of a security not then listed
or admitted to trading on any securities exchange, the Closing Bid Price
reported by Bloomburg LP on such day, (C) in the case of a security not then
listed or admitted to trading on any securities exchange and as to which no such
reported sale price or bid and asked prices are available, the reported high bid
on such day, as reported by a reputable quotation service, or a newspaper of
general circulation in the Borough of Manhattan, City and State of New York,
customarily published on each business day, designated by the Holder, or if
there shall be no bid prices on such day, the high bid price, as so reported, on
the most recent day (not more than 10 days prior to the date in question) for
which prices have been so reported, and (D) if there are no bid prices reported
during the 10 days prior to the date in question, the Current Market Value of
the security shall be determined as if the security were not registered under
the Exchange Act.

Section 4. Exchange, Transfer, Assignment or Loss of Warrant.

(a) This Warrant is exchangeable, without expense, at the option of the Holder,
upon presentation and surrender hereof to the Company or at the office of its
stock transfer agent or warrant agent, if any, for other warrants of different
denomination, entitling the Holder thereof to purchase in the aggregate the same
number of Warrant Shares and otherwise carrying the same rights as this Warrant.

(b) This Warrant may be divided or combined by the Holder with other warrants
that carry the same rights upon presentation hereof at the office of the Company
or at the office of its stock transfer agent or warrant agent, if any, together
with a written notice specifying the names and denominations in which new
warrants are to be issued and signed by the Holder hereof. The term "Warrant" as
used herein includes any warrants into which this Warrant may be divided or for
which it may be exchanged.

(c) Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Warrant, if mutilated, the Company shall execute and deliver a new Warrant of
like tenor and date.

Section 5. Restrictions on Issuance of Securities. So long
as this Warrant is outstanding, the Company will not issue, or permit any
Subsidiary to 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 (i) securities issued pursuant to the Securities Purchase Agreement (which
includes Warrant Shares), (ii) securities of a Subsidiary that are issued to the
Company; and (iii) 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 with the prior
written consent of the Holder, which consent the Holder agrees not to
unreasonably withhold.

Section 6. Reclassification, Reorganization, Consolidation or Merger. In the
event of any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the Company or in the event of any
consolidation or merger of the Company with or into another corporation (other
than a merger in which merger the Company is the continuing corporation and that
does not result in any reclassification, capital reorganization or other change
of outstanding shares of Common Stock of the class issuable upon exercise of
this Warrant) or in the event of any sale, lease, transfer or conveyance to
another corporation of the property and assets of the Company as an entirety or
substantially as an entirety, the Company shall, as a condition precedent to
such transaction, cause effective provisions to be made so that such other
corporation shall assume all of the obligations of the Company hereunder and the
Holder shall have the right thereafter, by exercising this Warrant, to purchase
the kind and amount of shares of stock and other securities and property
(including cash) receivable upon such reclassification, capital reorganization
and other change, consolidation, merger, sale, lease, transfer or conveyance by
a holder of the number of shares of Common Stock that might have been received
upon exercise of this Warrant immediately prior to such reclassification,
capital reorganization, change, consolidation, merger, sale, lease or
conveyance. Any such provision shall include provision for adjustments in
respect of such shares of stock and other securities and property that shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this Warrant. The foregoing provisions of this Section 6 shall similarly apply
to successive reclassification, capital reorganizations and changes of shares of
Common Stock and to successive changes, consolidations, mergers, sales, leases,
transfers or conveyances. In the event that in connection with any such capital
reorganization, or reclassification, consolidation, merger, sale, lease,
transfer or conveyance, additional shares of Common Stock shall be issued in
exchange, conversion, substitution or payment, as a whole or in part, for, or
of, a security of the Company other than Common Stock, any such issue shall be
treated as an issue of Common Stock covered by the provisions of Section 5.

Section 7. Transfer to Comply with the Securities Act. Neither this Warrant nor
any of the Warrant Shares may be offered or sold in the United States or to a
U.S. Person (as defined in Regulation S) unless pursuant to an effective
registration statement under the Act, or pursuant to Regulation S, or pursuant
to other available exemptions from the registration requirements of the Act. The
Holder of this Warrant or any of the Warrant Shares may not engage in hedging
transaction with regard to such securities unless in compliance with the Act.

Section 8. Availability of Information. So long as any of this Warrant remains
unexercised and this Warrant has not expired, the Company shall comply with the
reporting requirements of Sections 13 and 15(d) of the Exchange Act to the
extent it is required to do so under the Exchange Act, and shall likewise comply
with all other applicable public information reporting requirements of the
Securities and Exchange Commission (including those required to make available
the benefits of Rule 144 under the Securities Act) to which it may from time to
time be subject. The Company shall also cooperate with the Holder of this
Warrant and the Holder of any Warrant Shares in supplying such information as
may be necessary for such holder to complete and file any information reporting
forms currently or hereafter required by the Commission as a condition to the
availability of Rule 144 or any successor rule under the Securities Act for the
sale of this Warrant or the Warrant Shares. The provisions of this Section 8
shall survive termination of this Warrant, whether upon exercise of this Warrant
in full or otherwise. The Company shall also provide to holders of this Warrant
the same information that it provides to holders of its Common Stock.

Section 9. Registration Rights. The Company is obligated to register the shares
of Common Stock issuable upon exercise of this Warrant pursuant to an Amended
and Restated Registration Rights Agreement (the "Registration Rights Agreement")
effective as of the Effective Date, among the Company, the Holder, other holders
of Debentures and the Agent.

Section 10. Successors and Assigns. All the provisions of this Warrant by or for
the benefit of the Company or the Holder shall bind and inure to the benefit of
their respective successors, assigns, heirs and personal representatives.

Section 11. Headings. The headings of sections of this Warrant have been
inserted for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms or provisions
hereof.

Section 12. Amendments. This Warrant may not be amended except by the
written consent of the Company and the Holder.

Section 13. Notices. All notices given under this Agreement and under the other
Transaction Documents shall be in writing, addressed to the parties as set
forth below, or to such other address as a party may specify by notice given in
accordance with this paragraph and shall be effective on the earliest of (i)
the date received, or (ii) if given by facsimile transmittal on the date given
if transmitted before 5:00 p.m. the recipient's time, otherwise it is effective
the next day, or (iii) on the second Trading Day after delivery to a major
international air delivery or air courier service (such as Federal Express or
Network Couriers):
<TABLE>
     If to the Holder or Escrow Holder:                                 If to the Company:
<S>  <C>                                                                <C>
     c/o Thomson Kernaghan and Co. Ltd.                                 United States Antimony Corporation
     365 Bay Street                                                     1250 Prospect Creek, P.O. Box 643
     Toronto, Ontario M5H 2V2                                           Thompson Falls, Montana 59873-0643
     Attention: Mr. Gregg Badger, Sr. V.P.                              Attention: John Lawrence, President and CEO
     Facsimile No. (416) 860-6352                                       Facsimile No. (406) 827-3523
</TABLE>
Section 14. Law Governing; Jurisdiction. This Warrant shall be governed by and
construed in accordance with the laws of the Province of Ontario, Canada,
provided however, that if any provision of this Warrant is unenforceable under
the laws of Ontario but is enforceable under the laws of the U.S. State of
Montana, then that provision shall be governed by and construed in accordance
with the laws the State of Montana. The courts of the Province of Ontario,
Canada, shall have jurisdiction and venue for the adjudication of any civil
action between or among any of them arising out of relating to this Debenture.
The Company and the Holder irrevocably consent to such jurisdiction and venue,
and irrevocably waive any claim of forum non conveniens or right to change
venue. The prevailing party in any action or proceeding to enforce or construe
this Warrant is entitled to recover reasonable attorney's fees.

         IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed, as of August 31, 2000.

                                             UNITED STATES ANTIMONY CORPORATION


                                               By
                                                  ----------------------------
                                                  President and CEO

                                                Date Signed
                                                   ----------------------------




                               NOTICE OF EXERCISE

To:  United States Antimony Corporation:

         The undersigned irrevocably exercises this Warrant for the purchase of
____________________ shares (subject to adjustment) of Common Stock of United
States Antimony Corporation (the "Company"): for this Warrant and agrees to make
payment of $____________________ (the "Exercise Price") through the following
method:

                  such payment of the Exercise  Price being in cash or by
                  certified or official  bank check payable to the order of the
                  Company

all at the Exercise Price and on the terms and conditions specified in this
Warrant, and directs that the shares of Common Stock deliverable upon the
exercise of this Warrant be registered or placed in the name and at the address
specified below and delivered thereto.

The undersigned represents, warrants and certifies to the Company that the
undersigned is not a U.S. Person (as defined in SEC Rule 902(k)), and that this
Warrant is not being exercised on behalf of a U.S. Person.

Date:  ________________, _______

- --------------------------------------------------------------
(Signature of Owner)1

- --------------------------------------------------------------
(Street Address)

- ---------------------------------------------------------------
(City)            (State or Province)         (Postal Code)

- ---------------------------------------------------------------
(Country)


- --------
1    The signature must correspond with the name as written upon the face of the
     within Warrant in every particular, without alteration or enlargement or
     any change whatever.




Securities and/or check to be issued to:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

Name:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

Street Address:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

City, State and Zip Code:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

Any unexercised part of the Warrant evidenced by the within Warrant to be issued
to:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

Name:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

Street Address:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

City, State and Zip Code:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------





                               FORM OF ASSIGNMENT

         FOR VALUE RECEIVED the undersigned registered holder of the within
Warrant hereby sells, assigns, and transfers unto the Assignee(s) named below
(including the undersigned with respect to any part of the Warrant not being
assigned hereby) all of the right of the undersigned under the within Warrant,
with respect to the number of shares of Common Stock set forth below:
<TABLE>
- -------------------------------- --------------------------------------- --------------------- ---------------------
<S>                              <C>                                     <C>                   <C>
                                                                          Social Security or   Number of Shares of
                                                                          Other Identifying        Common Stock
       Name of Assignee                   Address of Assignee             Number of Assignee   Assigned to Assignee
- -------------------------------- --------------------------------------- --------------------- ---------------------
- -------------------------------- --------------------------------------- --------------------- ---------------------


- -------------------------------- --------------------------------------- --------------------- ---------------------
- -------------------------------- --------------------------------------- --------------------- ---------------------


- -------------------------------- --------------------------------------- --------------------- ---------------------
</TABLE>
and does hereby irrevocably constitute and appoint ______________________ as the
undersigned's attorney to make such transfer on the books of
______________________ United States Antimony Corporation maintained for that
purpose, with full power of substitution in the premises.

Date:  ________________, _______

- --------------------------------------------------------------
(Signature of Owner)1

- --------------------------------------------------------------
(Street Address)

- ---------------------------------------------------------------
(City)            (State or Province)         (Postal Code)

- ---------------------------------------------------------------
(Country)

- --------
1    The signature must correspond with the name as written upon the face of the
     within Warrant in every particular, without alteration or enlargement or
     any change whatever.



               AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT

         This Amended and Restated Securities Purchase Agreement (as amended,
restated, supplemented or otherwise modified from time to time, this
"Agreement") is made and entered into as of the 19th day of June, 2001, by and
among United States Antimony Corporation, a corporation incorporated under the
laws of the State of Montana (the "Company"), the purchasers signatory hereto or
who become parties hereto as provided in Section 6.4 (collectively, the
"Purchasers" and individually, a "Purchaser"), Thomson Kernaghan and Co. Ltd., a
corporation incorporated under the laws of Ontario, as agent for the Purchasers
(in such capacity, the "Agent"), and Agent's Beneficial Owners (as defined in
Section 4.2).

                              W I T N E S S E T H:


         WHEREAS, the Company and the Estate of Bobby C. Hamilton (the "Estate")
are parties to that certain Settlement Agreement and Release of All Claims dated
June 30, 2000 (the "Settlement Agreement"); and

         WHEREAS, pursuant to the terms of the Settlement Agreement, the Company
agreed to, among other things, (a) pay U.S.$500,000 in same day currency to the
Estate, (b) arrange for the purchase of 614,000 unrestricted shares of the
Company's authorized common stock, U.S.$.01 par value (the "Common Stock") (the
"Unrestricted Settlement Shares"), and (c) issue and deliver 250,000 restricted
shares of Common Stock to the Estate (the "Restricted Shares"); and

         WHEREAS, the Agent and the Purchasers are parties to that certain
Securities Purchase Agreement dated July 25, 2000 (the "Original Purchase
Agreement"); and

         WHEREAS, at the Company's request, the Agent, on the terms and subject
to the conditions set forth in the Original Purchase Agreement, (a) arranged for
the Purchasers to purchase U.S. $675,000 in aggregate principal amount of the
Debentures, (b) purchased the Unrestricted Settlement Shares from the Estate and
(c) agreed to arrange for the purchase of the remaining U.S.$825,000 in
aggregate principal amount of the Debentures; and

         WHEREAS, concurrently with the consummation of the transactions
contemplated by the Original Purchase Agreement, the Company, using proceeds
from the sale of the Debentures, paid the U.S.$500,000 owed by the Company to
the Estate under the Settlement Agreement; and

         WHEREAS, concurrently with the consummation of the transactions
contemplated by the Settlement Agreement, the Company, the Estate and the City
concluded certain transactions described in the FSB Escrow Instructions; and

         WHEREAS, the Company, the Agent and the Purchasers now wish to amend
and restate the Original Purchase Agreement as provided herein; and

         NOW, THEREFORE, in consideration of the mutual promises contained in
this Agreement and in order to carry out the purpose and intent of the parties
set forth above, the parties hereto agree that the Original Purchase Agreement
is hereby amended and restated as follows:
<TABLE>
1.       Definition and Accounting Terms
<S>      <C>
1.1      Definitions.  As used in this Agreement:
(a)      "Affiliate"  means any Person that  directly or  indirectly  Controls,  or is  Controlled  by, or is under
         common Control with the Company and an  "affiliate"  of the Company within the meaning of Reg.ss.240.12b-2
         of the Exchange Act.
(b)      "Agent" shall have the meaning ascribed in the preamble.
(c)      "Agent's Fee" shall have the meaning ascribed in Section 11.11 of this Agreement.
(d)      "Agent's Principal Office" means the Agent's principal office at 365
         Bay Street, Toronto, Ontario M5H 2V2 or such other office of the Agent
         as the Agent may from time to time specify to the Company and the
         Purchasers as the Agent's principal office.
(e)      "Agent's Warrant" shall have the meaning ascribed in Section 6.2 of this Agreement.
(f)      "Agreement" shall have the meaning ascribed in the preamble.
(g)      "Capital  Lease" means all leases or similar  arrangements  that have been or should be capitalized on the
         books of the lessee in accordance with GAAP.
(h)      "City" means the City of Moscow, Idaho.
(i)      "Closing Bid Price" shall mean, on any Trading Day, the closing bid
         price per share of the Common Stock on such day as reported by
         Bloomburg L.P.
(j)      "Closing Date" means, with respect to any Debenture, the date on which
         all of the conditions precedent to the purchase and sale of such
         Debentures are satisfied, or such other date, time and place as the
         Agent and the Company may mutually agree in writing to be the Closing
         Date.
(k)      "Code" means the US Internal Revenue Code of 1986, as amended from time
         to time, and the regulations and published interpretations thereof.
(l)      "Common Stock" shall have the meaning ascribed in the second recital.
(m)      "Commonly Controlled Entity" means an entity, whether or not
         incorporated, that is under common control with the Company, within the
         meaning of Section 414(b) or 414(c) of the Code.
(n)      "Company" shall have the meaning ascribed in the preamble.
(o)      "Control" means possessing, directly or indirectly, the power to (a)
         vote five percent (5%) or more of the securities (on a fully diluted
         basis) having ordinary voting power for the election of directors or
         managing members or managing general partners or (b) direct or cause
         the direction of management, policies or action through ownership of
         voting securities, contract, voting trust or membership in management
         or in the group appointing or electing management or otherwise through
         formal or informal arrangements or business relationships.
(p)      "Conversion  Shares" means the aggregate  number of shares of Common Stock into which the  Debentures  are
         convertible.
(q)      "Debentures" means the Company's 10% Convertible Debentures due June
         30, 2002, in the aggregate principal amount of up to $1,500,000, issued
         from time to time in accordance with this Agreement, in substantially
         the form and substance of Exhibit A to this Agreement.
(r)      "Debt" means,  with respect to the Company,  without  duplication,  (a) all  indebtedness or liability for
         borrowed  money;  (b) all  obligations  evidenced  by  bonds,  debentures,  Debentures  or  other  similar
         instruments;  (c) all  obligations  for the  deferred  purchase  price of property or services  (including
         trade  obligations);  (d) all  obligations  under Capital  Leases;  (e) all  obligations  under letters of
         credit;  (f) all obligations under acceptance  facilities;  (g) all guaranties,  endorsements  (other than
         for  collection  or deposit in the ordinary  course of  business),  and other  contingent  obligations  to
         purchase,  to provide funds for payment,  to supply funds to invest in any Person or entity,  or otherwise
         to assure a creditor  against  loss;  and (h) all  obligations  secured  by any Liens,  whether or not the
         obligations have been assumed.
(s)      "Default" means any of the events specified in Section 12.1, whether or
         not any requirement for the giving of notice, the lapse of time, or
         both, or any other condition has been satisfied.
(t)      "EDGAR" means the computer system maintained by the SEC for the
         receipt, acceptance, review and dissemination of documents submitted to
         it in electronic format.
(u)      "Effective Date" means July 11, 2000.
(v)      "Escrow Agreement" shall have the meaning ascribed in Section 8.2(c).
(w)      "Escrow Shares" shall have the meaning ascribed in Section 8.2(c) of this Agreement.
(x)      "Estate" shall have the meaning ascribed in the first recital.
(y)      "ERISA" means the Employee  Retirement  Income Security Act of 1974, as amended from time to time, and the
         regulations and published interpretations thereof.
(z)      "Event of Default" means any of the events specified in Section 12.1;
         provided that any requirement for the giving of notice, the lapse of
         time, or both, or any other condition, has been satisfied.
(aa)     "Exchange Act" means the United States of America Securities Exchange Act of 1934, as amended.
(bb)     "FSB" means the First State Bank of Thompson Falls, Montana.
(cc)     "FSB Escrow  Instructions"  means the  written  Escrow  Instructions  for the First State Bank of Thompson
         Falls, Montana, dated June __, 2000, to which Thomson Kernaghan, the
         City, the Estate, the Company and FSB are parties.
(dd)     "GAAP" means generally accepted accounting principles in the U.S.
(ee)     "Holder" means, with respect to any Debenture, the holder of such Debenture.
(ff)     "Initial Closing Date" means the date on which all of the conditions
         precedent to the purchase and sale of the Initial Debentures shall have
         been satisfied, which date shall be July 25, 2000.
(gg)     "Initial Debentures" shall have the meaning ascribed in Section 3.5 of this Agreement.
(hh)     "Initial Purchase" shall have the meaning ascribed in Section 3.1 of this Agreement.
(ii)     "Known" or  "Knowledge"  means,  with  respect to any Person,  the  knowledge of such  Person's  executive
         officers after reasonable inquiry.
(jj)     "Lien" means any mortgage, deed of trust, pledge, security interest,
         hypothecation, assignment, deposit arrangement, encumbrance, lien
         (statutory or other), or preference, priority, or other security
         agreement or preferential arrangement, charge or encumbrance of any
         kind or nature whatsoever (including, without limitation, any
         conditional sale or other title retention agreement, any financing
         lease having substantially the same economic effect as any of the
         foregoing, and the filing of any financing statement, charge or similar
         notice under the law of any jurisdiction to evidence any of the
         foregoing.
(kk)     "Material Adverse Effect" means with respect to the Company, any event,
         change, circumstance or effect which has or is reasonably likely to be
         materially adverse on (a) the business, condition (financial or
         otherwise), prospects, properties or results of operations of the
         Company and its Subsidiaries taken as a whole, other than any event,
         change, circumstance or effect relating (i) to the economy or financial
         markets in general, or (ii) in general to the industries in which the
         Company or its Subsidiaries operate and not specifically relating to
         the Company or its Subsidiaries; or (b) the ability of the Company to
         consummate the transactions contemplated by this Agreement.
(ll)     "Multiemployer Plan" means a Plan described in Section 4001(a)(3) of ERISA.
(mm)     "PBGC"  means the Pension  Benefit  Guaranty  Corporation  or any entity  succeeding  to any or all of its
         functions under ERISA.
(nn)     "Person" means an individual, partnership, corporation, business trust,
         joint stock company, trust, unincorporated association, joint venture,
         governmental authority, or other entity of whatever nature.
(oo)     "Plan" means any pension plan which is covered by Title IV of ERISA and
         in respect of which the Company or a Commonly Controlled Entity is an
         "employer" as defined in Section 3(5) of ERISA.
(pp)     "Prohibited  Transaction"  means any  transaction set forth in Section 406 of ERISA or Section 4975 of the
         Code.
(qq)     "Purchaser" shall have the meaning ascribed in the preamble.
(rr)     "Purchaser's Warrant" shall have the meaning ascribed in Section 4.1 of this Agreement.
(ss)     "Purchasers'  Warrants" means,  with respect to any day, the aggregate of all Purchaser's  Warrants issued
         and outstanding as of such day.
(tt)     "Purchasers' Warrant Shares" means the aggregate of all Purchaser's Warrant Shares.
(uu)     "Purchaser's Warrant Shares" shall have the meaning ascribed in Section 4.1 of this Agreement.
(vv)     "Registration Rights Agreement" shall have the meaning ascribed in Section 5.1 of this Agreement.
(ww)     "Reportable Event" means any of the events set forth in Section 4043 of ERISA.
(xx)     "Restricted Settlement Shares" shall have the meaning ascribed in the second recital.
(yy)     "SEC" means the Securities and Exchange Commission of the United States of America.
(zz)     "SEC  Documents"  means all forms,  statements,  reports  and other  documents  and  information  that the
         Company has filed and in the future may file with the SEC.
(aaa)    "Securities Act" means the U.S. Securities Act of 1933, as amended.
(bbb)    "Settlement Agreement" shall have the meaning ascribed in the first recital.
(ccc)    "Subsidiary" means a corporation of which shares of stock having
         ordinary voting power (other than stock having such power only by
         reason of the happening of a contingency) to elect a majority of the
         board of directors or other managers of that corporation are at the
         time owned, or the management of which is otherwise controlled,
         directly or indirectly through one or more intermediaries, or both, by
         the Company.
(ddd)    "Trading Day" means any day, other than a Saturday or Sunday, on which
         the New York Stock Exchange is open for business.
(eee)    "Transaction Documents" means this Agreement, the Debentures, the
         Warrants, the Amended and Restated Escrow Agreement, the Amended and
         Restated Registration Rights Agreement.
(fff)    "Unrestricted Settlement Shares" shall have the meaning ascribed in the second recital.
(ggg)    "U.S." means the United States of America.
(hhh)    "Warrant  Shares"  means the  aggregate  number of shares of Common Stock  issuable  upon  exercise of the
         Warrants.
(iii)    "Warrants" means the Purchasers' Warrants issued hereunder and the Agent's Warrant.
</TABLE>

1.2 Singular and Plural Terms. As used in this Agreement, terms defined in the
singular have the same meaning when used in the plural, and terms defined in the
plural have the same meaning when used in the singular.

1.3 Accounting Terms. All accounting terms not specifically defined in this
Agreement shall be
construed in accordance with GAAP, consistently applied. All financial data
submitted pursuant to this Agreement shall be prepared in accordance with GAAP,
consistently applied.

1.4      Currency.  All currency  described or otherwise  referred to in the
Transaction  Documents is the currency of the United States of America.

2.       Settlement  Agreement.  On the Initial  Closing Date,  and subject to
the  satisfaction  of the conditions set forth in Section 6 of this  Agreement,
(a) the Agent agrees to purchase,  as the third party  contemplated  by the
Settlement  Agreement,  the Unrestricted  Settlement  Shares from the Estate
for the purchase price of $93,440; and (b) the Company shall pay the Estate
$500,000 and shall issue and deliver the Restricted  Settlement  Shares to
Estate.

3.       Purchase and Sale of the Debentures.

3.1 Initial Purchase of Debentures. On the Initial Closing Date, and subject to
the satisfaction of the conditions set forth in Section 6.1 of this Agreement,
the Agent agrees to purchase, for the account of the Purchasers, $600,000 in
aggregate principal amount of Debentures (the "Initial Purchase"), at a price
equal to 100% of the face amount thereof.

3.2 Subsequent Purchase of Debentures. At the Company's request, and subject to
the satisfaction of the conditions set forth in Section 6.3 of this Agreement,
the Agent agrees to purchase, for the account of the Purchasers who will be
identified on a supplemental Exhibit G on the Closing Date of each subsequent
purchase of Debentures, up to an additional $900,000 in aggregate principal
amount of Debentures; provided, however, that the Agent shall not be obligated
to purchase more than $200,000 in principal amount of Debentures in any thirty
(30) day period. The Company shall give the Agent at least ten (10) Trading
Days' prior written notice of any request for the purchase of additional
Debentures, which notice shall specify, among other things, the date and amount
thereof.

3.3 Manner of Funding. The Company shall give the Agent written wiring
instructions for the disbursement of the Debenture proceeds, which shall be
either by check or wire transfer as the Company shall designate, and if by wire
transfer, the notice shall specify the name, address and ABA routing number for
the Company's bank, and the Company's account number to be credited with the
proceeds.

3.4 Interest. The Company shall pay interest to Purchasers on the outstanding
and unpaid principal amount of the Debentures at the rate of ten percent (10%)
per year, calculated on the basis of a year of 360 days comprised of twelve
30-day months. Interest shall be payable upon any prepayment of principal and at
maturity at the Agent's principal office.

3.5 The Debentures. The Debentures shall be duly executed by the Company on each
Closing Date with all blanks appropriately filled in, payable to the order of
the Agent, for the account of the Purchasers, or the Purchaser purchasing the
same, as the Agent may specify. The Debentures evidencing the Initial Purchase
shall be herein referred to as the "Initial Debentures." Each Debenture shall be
dated the date on which the Agent, on behalf of the Purchasers, advances
proceeds to the Company, and each Debenture shall be due and payable on the
second (2nd) anniversary of the Closing Date of the purchase of such Debenture
hereunder. At any time beginning thirty (30) days after the Closing Date of a
purchase of a Debenture hereunder and prior to the payment in full of such
Debenture, all or any part of the principal and interest of such Debenture may,
at the option of the Holder, but subject to the limitation set forth in Section
8.4 and 8.5 of this Agreement, be converted into Common Stock (the "Conversion
Shares") at a price per share equal to seventy-five percent (75%) of the average
of the three (3) lowest Closing Bid Prices in the twenty (20) Trading Days
immediately preceding (a) the Effective Date or (b) the Conversion Date,
whichever is lower; provided, however, that the conversion price shall not
exceed ninety cents ($.90) per share; and further provided that such conversion
rights are exercisable only to the extent that there is sufficient authorized,
unissued and unreserved Common Stock available for such conversion.
Notwithstanding the foregoing conversion price formula, the parties agree that
the maximum conversion price of the Initial Debentures is $0.29125 per share.

3.6 Prepayments. The Company may prepay any Debenture, in whole or in part,
without the Holder's prior written consent. 3.7 Method of Payment. The Company
shall make each payment under this Agreement and under the Debentures at the
Agent's principal office not later than 2:00 P.M., Toronto time, on the date
when due in lawful currency of the United States of America and in immediately
available funds. Whenever any payment to be made under this Agreement or under
any Debenture shall be stated to be due on a day other than a Trading Day, such
payment shall be made on the next succeeding Trading Day, and such extension of
time shall in such case be included in the computation of interest due under
this Agreement or such Debenture, as the case may be. 3.8 Use of Proceeds.

(a)      Proceeds  from Initial Sale of the  Debentures.  The Company  shall
         use the proceeds  from the sale of the
         Initial Debentures solely for the following  purposes and in the
         following order and priority:  (i) to pay
         the  Agent's  Fee;  (ii)  to pay  the  fees  and  expenses  of the
         Agent's  counsel  in the  negotiation,
         preparation  and execution of this  Agreement,  which payment shall
         not exceed  $15,000;  (iii) to pay the
         Estate the sum of $500,000 pursuant to the Settlement  Agreement;
         (iv) to fund the Company's performance of all of its other obligations
         under the Settlement  Agreement and the FSB Escrow  Instructions;
         and (v) for the Company's  working  capital  purposes.  The Company
         hereby  authorizes the Agent to withhold from proceeds of the sale of
         the Initial  Debentures all amounts  necessary to pay the Agent's Fee
         and the fees and expenses of Agent's counsel.

(b)      Proceeds from Subsequent Sales of Debentures. The Company shall use the
         proceeds from the sale of the Debenture subsequent to the sale of the
         Initial Debentures solely for the following purposes and in the
         following order and priority: (i) to pay the Agent's Fee; and (ii) for
         the Company's working capital purposes. The Company authorizes the
         Agent to withhold from proceeds of the sale of subsequent Debentures
         all amounts necessary to pay the Agent's Fee.

4.       Warrants.

4.1 Purchasers' Warrant. On each Closing Date, the Company shall issue and
deliver to the Agent, for the account of the Purchasers, pro rata, according to
the percentage of the total principal amount of the Debentures that a Purchaser
is purchasing on such date, a warrant in substantially the form and substance of
Exhibit B hereto (the "Purchaser's Warrant") to purchase the number of shares of
Common Stock (the "Purchaser's Warrant Shares") determined by multiplying .25 by
the face amount of Debentures being sold at such Closing Date and by dividing
the resulting figure by $0.39 per share.

4.2 Agent's Warrant. On each Closing Date, the Company shall issue and deliver
to the Agent, for the Agent's own account, a warrant in substantially the form
and substance of Exhibit C hereto (the "Agent's Warrant") to purchase the number
of shares of Common Stock (the "Agent's Warrant Shares") determined by dividing
$375,000 by the Closing Bid Price on the Trading Day immediately preceding the
Effective Date, at a price per share equal to the Closing Bid Price on the
Trading Day immediately preceding the Effective Date. Pursuant to [Name of
agreement pursuant to which beneficial interest is being transferred], the Agent
hereby assigns and transfers all of the beneficial ownership of each Agent's
Warrant to the following Persons in the percentages set forth next to such
Person's name (collectively, the "Agent's Beneficial Owners"):

                  Name of Assignee                        Percentage Assigned

                  Michelle McKinnon                                20%
                  Ian McKinnon                                     40%
                  Caliber Resources Ltd.                           40%

The Agent's Beneficial Owners hereby accept such assignment and transfer from
the Agent.

4.3 Limitations on Exercise of Warrants. The Purchasers' Warrants and all
Agent's Warrants are exercisable only to the extent that there is sufficient
authorized, unissued and unreserved Common Stock available for such exercise.
The rights of each Purchaser and each of the Agent's Beneficial Owners to
exercise their respective Warrants are subject to the further limitation set
forth in Section 8.4 hereof.

5.       Registration Rights Agreement

5.1 Registration of Common Stock Underlying the Debentures and the Warrants.
Contemporaneously with the execution of this Agreement, the Company shall
execute and deliver to the Agent an Amended and Restated Registration Rights
Agreement in the form of Exhibit D hereto (the "Registration Rights Agreement").
The Company shall register the resale of the Conversion Shares and the Warrant
Shares in accordance with the provisions of the Registration Rights Agreement.

6.       Conditions Precedent

6.1 Conditions Precedent to the Agent's and Purchasers' Obligations to Purchase
the Unrestricted Settlement Shares and the Initial Debentures. The obligation of
the Agent to purchase the Unrestricted Settlement Shares and to purchase the
Initial Debentures for the account of the Purchasers is subject to the following
conditions precedent:

(a)      Each of the Company, the Estate, the City and FSB shall have confirmed
         their intent to complete the transactions contemplated by the
         Settlement Agreement and the FSB Escrow contemporaneously with the
         Company's sale of the Initial Debentures, and the Agent shall have
         received satisfactory evidence thereof.

(b)      The Agent shall have received, on or before the Initial Closing Date,
         each of the following, in form and substance satisfactory to the Agent
         and its counsel:

(i)      Initial Debentures.  The Initial Debentures, duly executed by the
         Company;

(ii)     Incumbency and signature certificate of the Company. A
         certificate (dated as of the Closing Date) of the Secretary of
         the Company certifying the names and true signatures of the
         officers of the Company authorized to sign the Transaction
         Documents and any other documents and instruments to be
         delivered by the Company under this Agreement;

(iii)    Purchasers'  Warrants.  Purchasers'  Warrants  for the number of
         shares of Common Stock determined under Section 4.1 of this Agreement;

(iv)     Agent's  Warrant.  The Agent's Warrant for the number of shares of
         Common Stock  determined  under Section 4.2 of this Agreement;

(v)      Registration  Rights  Agreement.  The  Registration  Rights
         Agreement duly executed by all of the parties thereto;

(vi)     Escrow Agreement.  The Escrow Agreement duly executed by all of the
         parties thereto;

(vii)    Opinion of counsel for the Company. A favorable opinion of
         counsel for the Company, in substantially the form of Exhibit
         F hereto, and as to such other matters as the Agent may
         reasonably request.

(c)      The Company shall have deposited with the Escrow Holder the lesser of
         (i) the required amount of Escrow Shares pursuant to paragraph 10.2.3
         of this Agreement and (ii) the number of Company's remaining authorized
         unissued and previously unreserved shares of Common Stock. Solely for
         purposes of this Section 6.1(c), the Agent and the Purchasers
         acknowledge that Company will not have sufficient shares of authorized
         and unissued and unreserved shares to fund the escrow on the Initial
         Closing Date.

6.2      Conditions  Precedent to the Company's  Obligations.  The Company's
obligations  under this Agreement are subject to the following conditions
precedent:

(a)      All of the conditions  precedent to the  effectiveness  of the
         Settlement  Agreement (other than those set
         forth in Section ___ thereof) and the FSB Escrow Instructions (other
         than those set forth in Section ___ thereof) shall have been satisfied
         and the Settlement Agreement and the FSB Escrow shall be in full force
         and effect.

(b)      The Agent and each Purchaser shall have executed and delivered a
         counterpart of this Agreement.

6.3      Conditions  Precedent to Purchase of Additional  Debentures.  The
obligation of the Purchasers to purchase additional Debentures shall be subject
to the further  conditions  precedent that on the Closing Date with respect
to that purchase:

(a)      The following statements shall be true, complete and correct on and as
         of such Closing Date and the Agent shall have received a certificate
         signed by a duly authorized officer of the Company, dated such Closing
         Date, certifying that (i) the representations and warranties contained
         in Section 7.1 of this Agreement are true, complete and correct on and
         as of the relevant Closing Date as though made on and as of such date;
         and (ii) no Default or Event of Default has occurred and is continuing,
         or would result from such purchase;

(b)      The Agent shall have received a detailed statement of the anticipated
         use of proceeds from the additional Debentures, which use of proceeds
         shall be reasonably satisfactory to the Agent, certified by the
         Company's chief financial officer and chief executive officer;

(c)      The Agent, for the account of the Purchasers purchasing the additional
         Debentures on such Closing Date, shall have received the Debentures and
         the Purchasers' Warrants with respect to the additional Debentures;

(d)      The Agent shall have received such other  approvals,  opinions,  or
         documents as the Agent may  reasonably
         request;

(e)      The Company shall have effected a 1 for 3 reverse split of the Common
         Stock, or shall have effected an increase in the number of authorized
         shares of Common Stock, so that the aggregate number of authorized and
         unissued shares of Common Stock authorized is, on a fully diluted
         basis, sufficient to enable the Company to contingently issue and
         deliver to the Escrow Holder all of the Conversion Shares and Warrant
         Shares required by Section 8.2(c) of the Agreement.

(f)      The Company shall have deposited the required amount of Escrow Shares
         with the Escrow Holder pursuant to Section 8.2(c) of this Agreement.

(g)      The Company shall have filed the Registration Statement required under
         the Registration Rights Agreement and such filing shall have been
         accepted by the SEC; and

(h)      For each of the thirty (30) Trading Days immediately preceding such
         Closing Date, (i) the Closing Bid Price shall have been above $0.50
         (adjusted for any stock splits or reverse splits, or any reduction in
         the number of shares of outstanding Common Stock), and (ii) the number
         of shares of Common Stock traded shall be more than 30,000 (adjusted
         for any stock splits or reverse stock splits, or any reduction in the
         number of shares of outstanding Common Stock).

6.4 Conditions Precedent to Company's Obligation to Sell Additional Indentures.
The obligation of Company to sell additional Debentures shall be subject to the
further conditions precedent that on the Closing Date with respect to that sale:

(a)      Each of the Purchasers purchasing the additional Debentures on such
         Closing Date shall have been identified on a supplement Exhibit G and
         shall have executed and delivered a counterpart of this Agreement.

(b)      The Company shall have effected a 1 for 3 reverse split of the Common
         Stock, or shall have effected an increase in the number of authorized
         shares of Common Stock, so that the aggregate number of authorized and
         unissued shares of Common Stock authorized is, on a fully diluted
         basis, sufficient to enable the Company to contingently issue and
         deliver to the Escrow Holder all of the Conversion Shares and Warrant
         Shares required by Section 8.2(c) of the Agreement.

(c)      The SEC shall have accepted for filing the Registration Statement
         required under the Registration Right Agreement.

7.       Representations and Warranties

7.1      The Company's  Representations  and  Warranties.  The Company
represents  and warrants to the  Purchasers that, as of the Effective Date:

(a)      Incorporation,  Good Standing,  and Due  Qualification.  The Company
         is a corporation  duly  incorporated,
         validly existing and in good standing under the laws of the
         jurisdiction of its incorporation; has the corporate power and
         authority to own its assets and to transact the business in which it is
         now engaged and proposes to be engaged in; and is duly qualified as a
         foreign corporation and in good standing under the laws of each other
         jurisdiction in which such qualification is required.

(b)      Subsidiaries.  The Company had no  Subsidiaries  at Effective Date but
         now has two  Subsidiaries,  USAMSA and Bear River Zeolite.

(c)      Capitalization. As of the Effective Date, the capital stock of the
         Company consists of (1) 10,000,000 shares of preferred stock, $.01 par
         value, of which 4,500 shares have been designated Series A, all of
         which are issued and outstanding, 750,000 shares have been designated
         Series B, all of which are issued and outstanding, and 205,966 shares
         have been designated Series C, all of which are issued and outstanding;
         and (2) 20,000,000 shares of Common Stock of which 17,989,747 are
         issued and outstanding and 1,010,000 are subject to and reserved for
         issuance upon exercise of outstanding options, covenants and other
         rights to acquire Common Stock.

(d)      Corporate  Power and Authority.  Except for the  shareholder  action
         contemplated  by Section 8.2 and the fact that,  as of the Initial
         Closing  Date,  the  Company  has insufficient  authorized,  unissued
         and unreserved  Common Stock to permit the issuance of all of the
         Conversion  Shares and Warrant  Shares,  the execution,  delivery  and
         performance  by the  Company  of  the  Transaction  Documents  have
         been  duly authorized by all necessary  corporate  action and do not
         and will not (i) require any consent or approval of any Person or
         governmental  authority;  (ii)  contravene  its  charter or bylaws;
         (iii)  violate  any provision of any law, rule,  regulation,  order,
         writ,  judgment,  injunction,  decree,  determination or award in
         effect as of the Effective Date or such Closing Date having
         applicability  to the Company;  (iv) result in a breach of or
         constitute  a default  under any  indenture  or loan or credit
         agreement or any other  agreement,  lease or  instrument  to which the
         Company is a party or by which it or its  properties may be bound or
         affected;  (v) result in or require the creation or  imposition  of
         any Lien upon or with respect  to any to the  properties  now owned or
         hereafter  acquired  by the  Company;  or (vi) cause the Company  to
         be in  default  under any such law,  rule,  regulation,  order,  writ,
         judgment,  injunction, decree, determination or award, or any such
         indenture, agreement, lease or instrument.

(e)      Legally Enforceable Agreement. This Agreement is, and each of the other
         Transaction Documents when executed and delivered will be, legal, valid
         and binding obligations of the Company, enforceable against the Company
         in accordance with their respective terms, except to the extent that
         such enforcement may be limited by applicable bankruptcy, insolvency
         and other similar laws affecting creditors' rights generally.

(f)      Financial  Statements.  Each financial  statement of the Company
         contained in the SEC Documents  filed as of the  Effective  Date and
         as of each Closing  Date (copies of which have been  provided to the
         Agent) is true,  complete and correct,  and fairly  presents the
         financial  condition of the Company as at the dates set forth  therein
         and the  results of the  operations  of the  Company  for the  periods
         covered by such statements,  all in accordance  with GAAP  consistently
         applied  (subject to year end  adjustments in the case of the interim
         financial  statements).  Since  March 31,  2000,  there has been no
         material  adverse change in the condition (financial or otherwise),
         business,  operations,  assets,  business properties or prospects  of
         the  Company,  except  as  disclosed  in SEC  Documents.  There  are
         no  liabilities  of the Company,  fixed or  contingent,  which are
         material but are not  reflected in the SEC  Documents  publicly
         available on EDGAR,  other than  liabilities  arising in the ordinary
         course of business  since March 31, 2000.

(g)      Full  Disclosure.  The SEC Documents  filed as of the  Effective  Date
         and all  information,  exhibits and reports  furnished  by the Company
         to the Agent or any  Purchaser  in  connection  with the  negotiation,
         execution and delivery of this  Agreement  (including  any schedule or
         exhibit  attached  hereto) are, and all other  similar  information
         hereafter  furnished  by and on behalf of the Company to the Agent or
         any Purchaser  will be,  true,  complete,  and  correct  in every
         material  respect on the date on which such information  is dated or
         certified  and as of each Closing Date and such  information  does
         not, and shall not contain any material  misstatement  of fact or omit
         to state a material fact or any fact  necessary to make the statement
         contained therein not misleading.

(h)      Labor Disputes and Acts of God. Neither the business nor any of the
         properties of the Company has been or is affected by any fire,
         explosion, accident, strike, lockout or other labor dispute, drought,
         storm, hail, earthquake, embargo, act of God or of the public enemy, or
         other casualty (whether or not covered by insurance) materially and
         adversely affecting such business, properties or the operation of the
         Company.

(i)      Other  Agreements.  Except as set forth in the SEC  Documents publicly
         available on EDGAR or on Schedule 7.1(i), the Company is not a party
         to any indenture,  loan, or credit agreement,  or to any lease or other
         agreement or instrument,  or subject to any charter or corporate
         restriction  which could have a material adverse effect on the
         business,  properties,  assets,  operations, or conditions,  financial
         or otherwise, of the  Company or such  Subsidiary, or on the Company's
         ability to perform its  obligations  under the Transaction  Documents.
         Except as  disclosed in the SEC  Documents,  the Company is not in
         default in any respect  in  the  performance,  observance,  or
         fulfillment  of any of  the  obligations,  covenants,  or conditions
         contained in any agreement,  document or instrument  material to its
         business to which it is a party.

(j)      Litigation. Except as set forth in the SEC Documents publicly available
         on EDGAR on the Effective Date and each Closing Date or on Schedule
         7.1(j), there is no pending or threatened action or proceeding against
         or affecting the Company before any court, governmental agency, or
         arbitrator which may, in any one case or in the aggregate, materially
         adversely affect the condition (financial or otherwise), operations,
         properties, prospects or business of the Company, or the ability of the
         Company to perform its obligations under any of the Transaction
         Documents.

(k)      No Defaults. Except as set forth in the SEC Documents publicly
         available on EDGAR on the Effective Date and each Closing Date or on
         Schedule 7.1(k), the Company is not in material default with respect to
         any judgment, writ, injunction or decree, or with respect to any rule
         or regulation of any court, arbitrator, or federal, state municipal, or
         other governmental authority, commission, board, bureau, agency or
         instrumentality, domestic or foreign.

(l)      Ownership and Liens. Except as disclosed in the SEC Documents, the
         Company has valid and defensible title to, or valid leasehold interests
         in, free and clear of all Liens, all of its properties and assets, real
         and personal, including, without limitation, all patents, trademarks
         and other intellectual property, and including, without limitation, the
         properties and assets and leasehold interest reflected in the financial
         statements referred to in Section 7.1(e) of this Agreement (other than
         any properties or assets disposed of in the ordinary course of
         business).

(m)      ERISA. Except as set forth in the SEC Documents publicly available on
         Edgar on the Effective Date and each Closing Date or on Schedule
         7.1(m), the Company is in material compliance with all applicable
         provisions of ERISA, and neither a Reportable Event nor an Prohibited
         Transaction has occurred and is continuing with respect to any Plan.
(n)      Operation of Business. The Company possesses all licenses, permits,
         franchises, patents, copyrights, trademarks, and trade names, or rights
         thereto, to conduct its business substantially as now conducted and as
         presently proposed to be conducted, and the Company is not in violation
         of any valid rights of others with respect to any of the foregoing.
(o)      Taxes. Except as set forth in the SEC Documents publicly available on
         EDGAR on the Effective Date and each Closing Date or on Schedule
         7.1(o), the Company has timely filed all tax returns (federal, state,
         and local) required to be filed and timely paid all taxes due and
         payable.

(p)      Debt.  Set forth in the SEC Documents  publicly  available on EDGAR on
         the Effective Date and each Closing Date or on Schedule  7.1(p) is a
         true, complete and correct list of all credit agreements,  indentures,
         purchase  agreements,  guaranties,  Capital Leases,  and other
         investments,  agreements,  and arrangements presently in effect
         providing  for or relating to extensions of credit  (including,
         without  limitation, agreements  and  arrangements  for the  issuance
         of letters  of credit or for  acceptance  financing)  in respect  of
         which the  Company  is in any manner  directly  or  contingently
         obligated;  and the  maximum principal or face amounts of the credit
         in question,  which are  outstanding and which can be outstanding,
         are  correctly  stated,  and all Liens of any nature given or agreed
         to be given as security  therefor are correctly described or indicated
         in the SEC Documents or on Schedule 7.1(p).

(q)      Environment. Except as set forth in the SEC Documents publicly
         available on EDGAR on the Effective Date and on each Closing Date or as
         would not reasonably be expected to have a Material Adverse Effect on
         the Company, the Company has materially complied with, and their
         respective businesses, operations, assets, equipment, property,
         leaseholds and other facilities are in material compliance with, the
         applicable provisions of all federal, state, and local environmental,
         health and safety laws, codes and ordinances, and all rules and
         regulations promulgated thereunder.

(r)      Registration and Listing of Common Stock. The Company is a reporting
         company and has continuously been a reporting company since 1995. The
         Common Stock is registered under the Exchange Act and listed on the OTC
         Bulletin Board. Since 1995, the Company has filed in an timely manner
         all SEC Documents required of it by the Exchange Act, the rules and
         regulations of the SEC, and the rules and regulations of the OTC
         Bulletin Board.

(s)      No U.S.  Offering.  The  Company  has not  offered  any of the
         Debentures,  the  Conversion  Shares,  the Warrants or the Warrant
         Shares to, or  solicited  such an offer  from,  a U.S.  Person (as
         defined in SEC Rule 902(k)) or to a Person in the United States.

(t)      Offshore  Transaction.  The  negotiations  for and the issuance of the
         Debentures and the Warrants to the Agent has been made in an offshore
         transaction as defined in SEC Rule 902(h).

(u)      No Directed  Selling Efforts.  The Company has not engaged in any
         directed selling efforts,  as defined in
         SEC Rule 902(c), with respect to the Debentures and the Warrants.

(v)      Category 3 Securities. The Company has complied with all of the
         conditions required of it under SEC Rules 903(a) and 903(b)(3) with
         respect to the issuance of the Debentures and Warrants.

(w)      Exemption of Debentures and Warrants from Registration. The Company's
         issuance of the Debentures and the Warrants is exempt from the
         registration requirements of Section 5 of the Securities Act pursuant
         to the provisions of Section 4(2)of the Act and SEC Regulation S. In
         making this representation, Company has relied on the representations
         of the Agent and each Purchaser in Sections 7.2 and 7.3 of this
         Agreement.

7.2      The Agent's  Representations  and Warranties.  The Agent  represents
and warrants to the Company as of the Effective Date and each Closing Date that:

(a)      Accredited  Investor.  It is and each Purchaser is an accredited
         investor as that term is defined in Rule 501(a)(3) of Regulation D of
         the SEC.

(b)      U. S. Persons.  It is not and no Purchaser is a U.S. Person as
         defined in SEC Rule 902(k).

(c)      SEC  Rules  903(a)  and  903(b)(3).  It has  complied  and  each
         Purchaser  will  comply  with all of the
         conditions required of it by SEC Rules 903(a) and 903(b)(3) to be
         complied with by it and each Purchaser in connection with the
         transactions contemplated by this Agreement.

(d)      SEC Rule 903. All offers and sales of the Debentures and related
         Warrants to Purchasers have been and will be made only in accordance
         with SEC Rule 903, or pursuant to registration under the Securities
         Act, or pursuant to an available exemption from the registration
         requirements of the Securities Act.

(e)      Group. Except as disclosed in Exhibit H, it is not a member of any
         "group" (within the meaning of Regulation 13D under the Exchange Act)
         with respect to Company's Common Stock and which includes the Agent or
         any other Purchaser.

7.3      The Purchasers'  Representations  and Warranties.  Each Purchaser
severally and not jointly represents and
warrants to the Company that as of the Effective Date and each Closing Date:

(a)      Accredited  Investor.  It is an  accredited  investor  as  that  term
         is  defined  in  Rule  501(a)(3)  ofRegulation D of the SEC.

(b)      U. S. Persons.  It is not a U.S. Person as defined in SEC Rule 902(k).
         SEC Rule 903(b)(3).  It has complied with all of the conditions
         required of it by SEC Rule 903(b)(3) to be complied with by it in
         connection with the transactions contemplated by this Agreement.

(c)      Group.  Except as  disclosed  in Schedule  7.3,  it is not a member of
         any "group"  (within the meaning of Regulation 13D under the Exchange
         Act) with respect to Company's Common
         Stock and which includes the Agent or any other Purchaser.

(d)      Group. Except as disclosed in Exhibit H, it is not a member of any
         "group" (within the meaning of Regulation 13D under the Exchange Act)
         with respect to Company's Common Stock and which includes the Agent or
         any other Purchaser.

8.       Affirmative Covenants

8.1 Financial and Operational Covenants. So long as (a) any amounts shall be due
and payable by the Company hereunder, (b) any of the Debentures shall remain
outstanding or unconverted, or (c) not all of the Warrants have been fully
exercised or expired, the Company will:

(a)      Maintenance of Existence. Preserve and maintain its corporate existence
         and good standing in the jurisdiction of its incorporation, and qualify
         and remain qualified and in good standing as a foreign corporation in
         each jurisdiction in which such qualification is required.

(b)      Maintenance of Records. Keep adequate records and books of account, in
         which complete entries will be made in accordance with GAAP
         consistently applied, reflecting all financial transactions of the
         Company and each Subsidiary.

(c)      Maintenance of Properties. Maintain, keep and preserve all of its
         properties (tangible and intangible) necessary or useful in the proper
         conduct of its business in good working order and condition, ordinary
         wear and tear excepted.

(d)      Conduct of Business.  Continue to engage in an efficient and
         economical  manner in a business of the same
         general type as conducted by it on the date of this Agreement.

(e)      Maintenance of Insurance. Maintain insurance with financially sound and
         reputable insurance companies or associations in such amounts and
         covering such risks as are usually carried by companies engaged in the
         same or a similar business and similarly situated, which insurance may
         provide for reasonable deductibility from its coverage.

(f)      Compliance With Laws. Materially comply, and cause each Subsidiary to
         materially comply, with all applicable laws, codes, regulations, rules,
         ordinances and orders, including without limitation paying before the
         same become delinquent all taxes, assessments and governmental charges
         imposed upon it or upon its property, if and to the extent
         noncompliance would reasonably be expected to have a Material Adverse
         Effect on the Company.

(g)      Right of Inspection. At any reasonable time and from time to time but
         subject to the requirements of SEC Regulation FD or any restriction
         imposed by Company which, in the judgment of its management or legal
         counsel, may be required in order for the Company to comply with
         Regulation FD, permit the Agent or any Purchaser, or any of their
         agents or representatives to examine and make copies of and abstracts
         from the records and books of account of, and visit the properties of,
         the Company, and to discuss its affairs, finances and accounts with any
         of its officers, directors and independent accountants.

(h)      Reporting Requirements.  Furnish to the Agent:

(i)      Quarterly  Financial  Statements.  The  Company's  reports on Form
         10-Q or 10-QSB  contemporaneously  with their filing with the SEC.

(ii)     Annual Financial Statements.  The Company's annual reports on Form
         10-K or 10-KSB  contemporaneously  with their filing with the SEC.

(iii)    Management  Letters.  Promptly  upon receipt  thereof,  copies of any
         reports  submitted to the Company by independent  accountants in
         connection with their examination of the financial  statements of the
         Company.

(iv)     Certificate of No Default. Within twenty-five (25) days after
         the end of each month a certificate of the Company's chief
         financial officer certifying that to the best of his or her
         knowledge no Default or Event of Default has occurred and is
         continuing or, if a Default or Event of Default has occurred
         and is continuing, a statement as to the nature thereof and
         the action that has been taken and is proposed to be taken
         with respect thereto.

(v)      Notice of Litigation. Promptly after the commencement thereof,
         notice of all actions, suits and proceedings before any court
         or governmental department, commission, board, bureau, agency,
         or instrumentality (domestic or foreign) or arbitrator,
         affecting the Company, which, if determined adversely to the
         Company, could have a Material Adverse Effect on the Company.

(vi)     Notice of Defaults and Events of Default. As soon as possible
         and in any event within ten (10) days after the occurrence of
         each material Default or material Event of Default, a written
         notice setting forth the details of such Default or Event of
         Default and the action that has been taken and is proposed to
         be taken by the Company with respect thereto.

(vii)    The Company's Reporting and Listing Status. The Company shall
         be and remain a reporting company under the Exchange Act, and
         shall file in a timely manner all SEC Documents required by
         the Exchange Act or SEC regulations to be filed by a reporting
         company; and the Company shall cause its Common Stock to
         continuously be quoted on the OTC Bulletin Board or listed on
         a Nasdaq market. The Company shall apply for listing on the
         Nasdaq Small Cap Market as soon as it is eligible therefor.

(viii)   ERISA  Reports.  As soon as  possible,  and in any event within thirty
         (30) days after the Company  knows or has reason to know that any
         circumstances  exist that constitute  grounds  entitling the PBGC
         to  institute  proceedings  to  terminate a Plan  subject to
         ERISA with respect to the Company or any  Commonly  Controlled Entity,
         and  promptly but in any event within two (2) Trading Days of
         receipt by the  Company or any  Commonly  Controlled  Entity of notice
         that the PBGC  intends to terminate  a Plan or appoint a trustee to
         administer  the same,  and  promptly  but in any event
         within five (5) Trading Days of the receipt of notice  concerning  the
         imposition  of withdrawal liability  with  respect to the Company or
         any  Commonly  Controlled  Entity,  the  Company  will deliver to the
         Agent a certificate of the chief  financial  officer of the Company
         setting forth all relevant details and the action which the Company
         proposes to take with respect thereto.

(ix)     Reports to Other Creditors. Promptly after the furnishing
         thereof, copies of any statement or report furnished by the
         Company to any other party pursuant to the terms of any
         indenture, loan, credit or similar agreement and not otherwise
         required to be furnished to the Agent pursuant to any other
         clause of this Agreement.

(x)      Other Regulatory Reports and Filings. Promptly after the
         sending or filing thereof, copies of all proxy statements,
         financial statements and reports that the Company sends to its
         shareholders, and copies of all regular, periodic and special
         reports, and all registration statements that the Company
         files with the securities regulatory authorities of any
         country, province or state, or with any securities exchange.

(xi)     General Information. Subject to the requirements of SEC
         Regulation FD or any restriction imposed by Company which, in
         the judgment of its management or legal counsel, may be
         required in order for the Company to comply with Regulation
         FD, such other information respecting the properties,
         prospects, condition or operations, financial or otherwise, of
         the Company as the Agent or any Purchaser may from time to
         time reasonably request.

(i)      Environment, Health and Safety. Be and remain in material compliance
         with all applicable environmental, health and safety laws, rules and
         regulations, if and to the extent that noncompliance would reasonably
         be expected to have a Material Adverse Effect on the Company.

8.2      Additional  Covenants.  So long as (a) any amounts shall be due and
payable by the Company hereunder,  (b) any of the  Debentures  shall remain
outstanding  or  unconverted,  or (c) not all of the Warrants have been fully
exercised or expired, the Company hereby further covenants and agrees with the
Agent and each Purchaser that:

(a)      Shareholders  Meeting.  As soon as possible  and in any event  within
         120 days of the  Effective  Date the
         Company shall hold a shareholders meeting for the purpose of reducing
         the number of outstanding shares of Common Stock or increasing the
         number of authorized shares of Common Stock available for issuance in
         order to satisfy the requirements of Section 8.2(b). The Company shall
         solicit proxies in favor of that action, and shall cause its directors
         and officers, who are holders of Common Stock to vote their shares in
         favor thereof.

(b)      Adequate  Available Shares of Common Stock.  Subject to shareholder
         approval  pursuant to Section 8.2(a), the Company shall at all times
         keep an adequate  number duly  authorized  shares of Common Stock
         reserved and  available for issuance upon the  conversion  of
         Debentures  and the exercise of Warrants.  If at any time the Company
         does not have such an adequate  number of shares of Common Stock
         reserved and  available for issuance,  then the Company shall
         immediately  call and within 120 days hold a special meeting of its
         shareholders  for the  purpose of  increasing  the  number of the
         Company's  authorized  shares of Common Stock.  The Company  shall
         cause its  directors,  officers,  and employees who are holders of
         Common Stock to vote their shares in favor of such  increase in the
         Company's  number of  authorized  shares of Common Stock.

(c)      TK Escrow.  Contemporaneously  with the execution of this Agreement,
         the Company shall execute an Amended and Restated Escrow  Agreement
         with the Agent as escrow holder (the "Escrow  Agreement") in
         substantially the form and substance of Exhibit E to this  Agreement.
         On the Initial  Closing Date,  the Borrower shall deliver to the
         Escrow Holder a  certificate  for number of shares equal to (i) the
         lesser of the number of authorized,  unissued  and  unreserved  shares
         of Common  Stock or (ii) the sum of 150% of the  Conversion Shares for
         the Initial  Debentures,  calculated as if the Initial  Closing Date
         were the Conversion  Date, plus 100% of the related  Warrant  Shares.
         To the extent that the  Company  has not  deposited  shares of Common
         Stock in an amount  equal to 150% of the  Conversion  Shares (as so
         calculated)  plus 100% of the related  Warrant Shares in connection
         with the Initial  Purchase,  within five (5) Trading Days after the
         Company  receives  authorization  from its  shareholders  pursuant to
         Section  8.2(a),  the Company  shall deliver to the Escrow Holder a
         certificate  for  additional  Conversion  Shares and Warrant Shares so
         that the  aggregate  number of  Conversion  Shares and Warrant  Shares
         held by the Escrow Holder equals 150% of the  Conversion  Shares for
         outstanding  Debentures,  calculated as if the Initial  Closing Date
         were the Conversion Date, plus 100% of the Warrant Shares.  As a
         condition  precedent to the Agent's  obligation to purchase  any
         additional  Debenture,  the  Company  shall  deposit  with the  Escrow
         Holder  150% of the Conversion  Shares into which each such Debenture
         is  convertible,  calculated as if the  Conversion  Date were the
         Closing  Date with  respect to such  Debenture  plus 100% of the
         Warrant  Shares.  All shares of Common Stock  deposited  with the
         Escrow  Holder pursuant to this  Section 8.2(c) are referred to as the
         "Escrow  Shares."  Until  the  Registration  Statement  is  effective,
         the  certificates  shall  bear  an appropriate  restrictive  legend.
         Except for such  legend,  all Escrow  Shares shall be free and clear of
         any legends,  liens,  claims,  stop orders or other  restrictions.
         Within five (5) Trading Days after the effective date of the
         Registration  Statement,  the Company shall authorize its transfer
         agent to register the Escrow Shares in the Agent's street name, in DTC
         form, free and clear of any legends,  liens,  claims, stop orders or
         other restrictions.

8.3 The Purchasers' Covenants. No Purchaser (a) shall offer, sell or otherwise
dispose of any securities issued to it, except in compliance with the provisions
of Regulation S, or pursuant to registration under the Securities Act, or
pursuant to an available exemption from such registration; or (b) shall engage
in hedging transactions with regard to such securities unless in compliance with
the Securities Act. 8.4 Limitation on Common Stock Ownership. The Agent and each
of the Purchasers covenants and agrees that at no time shall it, either
individually or collectively with each other person deemed for purposes of
Exchange Act Regulation 13D to be a member of a group which includes it,
beneficially own in excess of 9.9% of the then issued and outstanding Common
Stock (determined on an undiluted basis). Debentures may be converted into
Common Stock and Warrants may be exercised for Common Stock only if and to the
extent that, following such conversion or exercise, it (or the group of which it
is deemed to be a member) beneficially owns less than ten percent (10%) of
Company's then outstanding Common Stock. For the purpose of this Agreement,
beneficial ownership of Common Stock shall be determined in accordance with
Exchange Act Rule 13d-3 (as amended).

9.       Negative  Covenants.  So long as (a) any  amounts  shall  be due  and
payable  hereunder,  (b) any of the Debentures remains  outstanding,  or (c)
the Agent shall be obligated to purchase  Debentures under this Agreement,
the Company will not:

9.1 Mergers, Etc. Wind up, liquidate or dissolve itself, reorganize, merge or
consolidate with or into, or convey, sell, assign, transfer, lease, or otherwise
dispose of (whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired) to any
Person, or acquire all or substantially all of the assets or the business of any
Person.

9.2 Sale and Leaseback. Sell, transfer, or otherwise dispose of, or permit any
Subsidiary to sell, transfer, or otherwise dispose of, any real or personal
property to any Person and thereafter directly or indirectly lease back the same
or similar property.

9.3 Dividends and other Distributions. Declare or pay any dividends; or
purchase, redeem, retire, or otherwise acquire for value any of its capital
stock now or hereafter outstanding; or make any distribution of assets to its
stockholders as such whether in cash, assets, or obligations of the Company; or
allocate or otherwise set apart any sum for the payment of any dividend or
distribution on, or for the purchase, redemption, or retirement of any shares of
its capital stock; or make any other distribution by reduction of capital or
otherwise in respect of any shares of its capital stock; or permit any of its
Subsidiaries to do any of the foregoing or to purchase or otherwise acquire for
value any stock of the Company or another Subsidiary.

9.4 Sale of Assets. Sell, lease, assign, transfer, or otherwise dispose of any
of its now owned or hereafter acquired assets (including, without limitation,
shares of stock and indebtedness of Subsidiaries, receivables, and leasehold
interests), except: (a) inventory disposed of in the ordinary course of
business; and (b) the sale or other disposition of assets no longer used or
useful in the conduct of its business.

9.5 Investments. (a) Make any loan or advance to any Person, or (b)
purchase or otherwise acquire any capital stock, assets, obligations, or other
securities of, make any capital contribution to, or otherwise invest in or
acquire any interest in any Person, or participate as a partner or joint
venturer with any other Person, except: (i) direct obligations of the U.S. or
any agency thereof with maturities of one year or less from the date of
acquisition; (ii) commercial paper of a domestic issuer rated at least "A-1" by
Standard and Poor's Corporation or "P-1" by Moody's Investors Service, Inc.;
(iii) certificates of deposit with maturities of one year or less from the
date of acquisition issued by any commercial bank having capital and surplus
in excess of One Hundred Million U.S. Dollars (US$100,000,000); and (iv) stock,
obligations, or securities received in settlement of debts (created in the
ordinary course of business) owing to the Company.

9.6 Guaranties, Etc. Assume, guaranty, endorse, or otherwise be or become
directly or contingently responsible or liable (including, but not limited to,
an agreement to purchase any obligation, stock, assets, goods, or services, or
to supply or advance any funds, assets, goods, or services, or an agreement to
maintain or cause such Person to maintain a minimum working capital or net
worth, or otherwise to assure the creditors of any Person against loss), for
obligations of any Person, except guaranties by endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business.

9.7 Transactions With Affiliates. Enter into any transaction, including, without
limitation, the purchase, sale, or exchange of property or the rendering of any
service, with any Affiliate, including, without limitation, the purchase, sale,
or exchange of property or the rendering of any service, with any Affiliate,
except in the ordinary course of and pursuant to the reasonable requirements of
the Company's business and upon fair and reasonable terms no less favorable to
the Company than would obtain in a comparable arm's length transaction with a
Person not an Affiliate.

9.8 Issue Securities. 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 issued pursuant to this Agreement 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 with the prior written consent of the Agent on
behalf of the Purchasers, which consent the Agent agrees not to unreasonably
withhold. 10. Events of Default 10.1 Events of Default. If any of the following
events shall occur, the Agent may, by notice to the Company, declare its
obligation to purchase Debentures to be terminated, whereupon the same shall
forthwith terminate, and declare the Debentures, all interest thereon, and all
other amounts payable under this Agreement to be forthwith due and payable,
whereupon the Debentures, all such interest, and all such amounts shall become
and be forthwith due and payable, without presentment, demand, protest, or
further notice of any kind, all of which are hereby expressly waived by the
Company:

(a)      The Company should fail to pay the principal of or interest on any
         Debenture as and when due and payable, or any amount of any other fee
         by or within 10 days after the date that such fee is due and payable;

(b)      Any representation or warranty made or deemed made by the Company in
         this Agreement or any other Transaction Document, or which is contained
         in any certificate, document, opinion, or financial or other statement
         furnished at any time under or in connection with any Transaction
         Document, shall prove to have been incorrect, incomplete, or misleading
         in any material respect on or as of the date made or deemed made;

(c)      The Company shall fail to perform or observe any term, covenant, or
         agreement contained in this Agreement or any other Transaction Document
         to be performed or observed by it;

(d)      Except  as  disclosed  in the SEC  Documents,  the  Company  or any
         subsidiary  shall (i) fail to pay any material  indebtedness  for
         borrowed  money (other than any  Debenture)  of the Company or any
         interest or premium thereon, when due (whether by scheduled maturity,
         required prepayment,  acceleration,  demand, or otherwise),  or (ii)
         fail to perform or observe any material term,  covenant,  or condition
         on its part to be performed  or observed  under any  agreement  or
         instrument  relating to any such  indebtedness,  when required  to be
         performed  or  observed,  if the  effect of such  failure  to  perform
         or  observe is to accelerate,  or to permit the  acceleration  of,
         after the giving of notice or passage of time,  or both, the maturity
         of such  indebtedness,  whether or not such failure to perform or
         observe  shall be waived by the holder of such  indebtedness;  or any
         such indebtedness shall be declared to be due and payable, or required
         to be prepaid  (other than by a regularly  scheduled  required
         prepayment),  prior to the stated maturity thereof;

(e)      The Company (i) shall admit in writing its  inability  to pay its
         debts as such debts  become due; or (ii) shall make an  assignment
         for the benefit of  creditors,  or petition  or apply to any  tribunal
         for the appointment  of a custodian,  receiver,  or trustee for it or
         a substantial  part of its assets;  or (iii) shall commence any
         proceeding  under any bankruptcy,  reorganization,  arrangement,
         readjustment of debt, dissolution,  or liquidation law or statute of
         any  jurisdiction,  whether now or hereafter in effect;  or (iv) shall
         have had any such petition or application  filed or any such
         proceeding  commenced  against it in which an order for relief is
         entered or an  adjudication  or  appointment  is made,  and which
         remains undismissed  for a period of thirty (30) days or more; or (v)
         shall take any corporate  action  indicating its consent to, approval
         of, or acquiescence in any such petition,  application,  proceeding,
         or order for relief or the  appointment of a custodian,  receiver,
         or trustee for all or any  substantial  part of its properties;  or
         (vi)  shall  suffer any such  custodianship,  receivership,  or
         trusteeship  to  continue undischarged for a period of thirty (30)
         days or more;

(f)      One or more judgments, decrees, or orders for the payment of money in
         excess of $100,000 shall be rendered against the Company and such
         judgments, decrees, or orders shall continue unsatisfied and in effect
         for a period of thirty (30) consecutive days without being vacated,
         discharged, satisfied, or stayed or bonded pending appeal;

(g)      Any of the  following  events shall occur or exist with respect to the
         Company or any Commonly  Controlled Entity  under  ERISA:  any
         Reportable  Event  shall  occur;  complete  or  partial  withdrawal
         from  any  Multiemployer  Plan shall take  place;  any  Prohibited
         Transaction  shall  occur;  a notice of intent to terminate  a Plan
         shall be filed,  or a Plan shall be  terminated;  or  circumstances
         shall  exist  which constitute  grounds  entitling  the PBGC to
         institute  proceedings  to terminate a Plan, or the PBGC shall
         institute  such  proceedings;  and in each case above,  such event or
         condition,  together with all other events or conditions,  if any,
         could subject the Company to any tax, penalty,  or other liability
         which in the aggregate may exceed Ten Thousand Dollars ($10,000); or

(h)      If the Agent receives its first notice of a hazardous  discharge or an
         environmental  complaint  regarding the Company  from a source  other
         than the Company,  and the Agent does not receive notice (which may be
         given in oral form,  provided same is followed with all due dispatch
         by written  notice given by Certified Mail, Return Receipt  Requested)
         of such hazardous discharge or environmental complaint from the Company
         within  twenty-four  (24) hours of the time the Agent first  receives
         said notice from a source other than the Company;  or if any federal,
         state, or local agency asserts or creates a Lien upon any or all of the
         assets,  equipment,  property,  leaseholds, or other facilities of the
         Company by reason of the occurrence of a hazardous  discharge  or an
         environmental complaint; or if any  federal,  state,  or local  agency
         asserts a claim against the Company or its assets,  equipment,
         property,  leaseholds, or other facilities for damages or cleanup costs
         relating to a hazardous  discharge or an environmental  complaint;
         provided, however,  that such  claim  shall not  constitute  a  default
         if,  within  five (5)  Trading  Days of the occurrence  giving  rise
         to the claim,  (a) the Company  can prove to the  Agent's  satisfaction
         that the Company has  commenced  and is  diligently  pursuing  either:
         (i) a cure or correction of the event which constitutes  the basis for
         the claim,  and  continues  diligently  to pursue  such cure or
         correction  to completion or (ii)  proceedings  for an injunction,  a
         restraining  order, or other  appropriate  emergent relief  preventing
         such agency or agencies from asserting such claim,  which relief is
         granted within ten (10)  Trading  Days of the  occurrence  giving rise
         to the claim and the  injunction,  order,  or emergent relief is not
         thereafter  resolved or reversed on appeal;  and (b) in either of the
         foregoing events,  the Company has posted a bond,  letter of credit,
         or other  security  satisfactory  in form,  substance,  and amount to
         both the Agent and the agency or entity  asserting  the claim to
         secure the proper and  complete cure or correction of the event which
         constitutes the basis for the claim;

(i)      A change of Control of the Company.

10.2 Agent's Right to Setoff. Upon the occurrence and during the continuance of
any Event of Default, the Agent is hereby authorized at any time and from time
to time, without notice to the Company (any such notice being expressly waived
by the Company), to set off and apply any and all funds, deposits and accounts
at any time held and other indebtedness at any time owing by the Agent to or for
the credit or the account of the Company against any and all of the obligations
of the Company now or hereafter existing under this Agreement or the Debenture
or any other Transaction Document, irrespective of whether or not the Agent
shall have made any demand under this Agreement or the Debenture or such other
Transaction Document and although such obligations may be unmatured. The Agent
agrees promptly to notify the Company after any such setoff and application;
provided that the failure to give such notice shall not affect the validity of
such setoff and application. The rights of the Agent under this Section 12.2 are
in addition to other rights and remedies (including, without limitation, other
rights of setoff) which the Agent may have.

11.      Miscellaneous

11.1 Amendments, Etc. No amendment, modification, termination, or waiver of any
provision of any Transaction Document to which the Company is a party, nor
consent to any departure by the Company from any Transaction Document to which
it is a party, shall in any event be effective unless the same shall be in
writing and signed by the Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.

11.2 Notices, Etc. All notices given under this Agreement and under the other
Transaction Documents shall be in writing, addressed to the parties as set forth
below, or to such other address as a party may specify by notice given in
accordance with this paragraph, and shall be effective on the earliest of (a)
the date received, or (b) if given by facsimile transmittal on the date given if
transmitted before 5:00 p.m. the recipient's time, otherwise it is effective the
next day, or (c) on the second Trading Day after delivery to a major
international air delivery or air courier service (such as Federal Express or
Network Couriers):
<TABLE>

<S>     <C>                                                      <C>
        If to the Agent:                                         If to the Company:
        Thomson Kernaghan and Co. Ltd.                             United States Antimony Corporation
        365 Bay Street                                           1250 Prospect Creek
        Toronto, Ontario M5H 2V2                                 P.O. Box 643
        Attention:  Ms. Michelle McKinnon                        Thompson Falls, Montana 59873-0643
        Facsimile No.:    (416) 860-6355                         Attention:     John Lawrence
                                                                                President and CEO
                                                                 Facsimile No.: (406) 827-3543

        If to the Purchasers:                                    With a copy (that does not constitute notice) to:
        c/o Thomson Kernaghan and Co. Ltd.
        365 Bay Street
        Toronto, Ontario M5H 2V2
        Attention:  Ms. Michelle McKinnon
        Facsimile No.:    (416) 860-6355

                                                                 Hawley Troxell Ennis and Hawley LLP
                                                                 P.O. Box 1617
                                                                 Boise, Idaho 83701
                                                                 Attention:     Gary D. Babbitt
        In either case, with a copy (that does not constitute
        notice) to:
        Mayer Brown and Platt
        700 Louisiana Street, Suite 3600
        Houston, Texas 77002-2730
        Attention:  John M. Mann
        Facsimile No.     (713) 224-6410
</TABLE>
11.3 No Waiver. No failure or delay on the part of the Agent or any Purchaser in
exercising any right, power, or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power, or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power, or remedy hereunder. The rights and remedies provided herein
are cumulative, and are not exclusive of any other rights, powers, privileges,
or remedies, now or hereafter existing, at law or in equity or otherwise.

11.4 Successors and Assigns.This Agreement shall be binding upon and inure to
the benefit of the Company, the Agent, the Purchasers and their respective
successors and assigns, except that the Company may not assign or transfer any
of its rights under any Transaction Document to which the Company is a party
without the prior written consent of the Agent and the Purchasers.

11.5 Costs, Expenses, and Taxes. If any legal action is necessary to enforce the
obligation of a party hereto, the prevailing party shall be reimbursed for any
expense in protecting or enforcing its rights under this Agreement including,
without limitation, reasonable attorneys' fees and expenses and all expenses
incurred by the prevailing party in exercising its rights and remedies under
this Agreement. The Company shall pay any and all stamp and other taxes and fees
payable or determined to be payable in connection with the execution, delivery,
filing, and recording of any of the Transaction Documents and the other
documents to be delivered under any such Transaction Documents, and agree to
hold the Agent harmless from and against any and all liabilities with respect to
or resulting from any delay in paying or omission to pay such taxes and fees.
This provision shall survive termination of this Agreement.

11.6 Integration. This Agreement and the other Transaction Documents contain the
entire agreement between the parties relating to the subject matter hereof and
thereof and supersede all oral statements and prior writings with respect hereto
and thereto, including (without limitation) the Original Agreement and each of
the related Transaction Documents (as that term is defined in the Original
Agreement) also executed and delivered on July 25, 2000.

11.7 Governing Law. This Agreement and the Debentures shall be governed by, and
construed in accordance with, the laws of the Province of Ontario, Canada;
provided, however, if any provision of this Agreement is unenforceable under
Ontario law, but is enforceable under the laws of the U.S. State of Montana,
then Montana law shall govern the construction and enforcement of that
provision.

11.8 Severability of Provisions. Any provision of any Transaction Document which
is prohibited or unenforceable in any jurisdiction (after applying the
provisions of Section [11.7] of this Agreement to that provision) shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of such
Transaction Document or affecting the validity or enforceability of such
provision in any other jurisdiction.

11.9 Headings. Section and paragraph headings in the Transaction Documents are
included for the convenience of reference only and shall not constitute a part
of the applicable Transaction Documents for any other purpose. 11.10 Dispute
Resolution. The parties agree that the courts of the Province of Ontario,
Canada, shall have jurisdiction and venue for the adjudication of any civil
action between or among any of them arising out of relating to this Agreement or
any other Transaction Document. The parties hereby irrevocably consent to such
jurisdiction and venue, and hereby irrevocably waive any claim of forum non
conveniens or right to change such venue.

11.11 Agent's Fee. At each Closing Date, the Company shall pay the Agent a fee
for its services as agent (the "Agent's Fee") in an amount equal to ten percent
(10%) of the aggregate principal amount of the Debentures sold by the Company at
such closing.

11.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which shall
constitute one and the same agreement. 11.13 Indemnity. The Company shall
defend, protect, indemnify, and hold harmless the Agent and each Purchaser, and
all of their respective officers, directors, employees, and agents (including,
without limitation, those retained in connection with the transactions
contemplated by this Agreement) (collectively, the "Indemnitees") from and
against any and all actions, causes of action, suits, claims, losses, costs,
penalties, fees, liabilities, damages, and expenses in connection therewith
(irrespective of whether any such Indemnitee is a party to the action for which
indemnification hereunder is sought), and including, without limitation,
reasonable attorneys' fees and disbursements (the "Indemnified Liabilities"),
incurred by the Indemnitees or any of them as a result of, or arising out of, or
relating to (a) any misrepresentation or breach of any representation or
warranty made by the Company in this Agreement or any other Transaction
Document, or any other certificate, instrument, or document contemplated hereby
or thereby; or (b) any breach of any covenant, agreement, or obligation of the
Company contained in this Agreement or any other Transaction Document; or (c)
the activities of the Company, each of its predecessors in interest or third
parties with whom it or any of them have or had a contractual relationship, or
arising directly or indirectly from the violation of any environmental
protection, health, or safety law, whether such claims are asserted by any
governmental agency or any other person; or (d) any cause of action, suit, or
claim brought or made against such Indemnitee and arising out of or resulting
from the execution, delivery, performance or enforcement of this Agreement or
any Transaction Document, or any other instrument, document, or agreement
executed pursuant hereto or thereto by any of the Indemnitees, any transaction
financed or to be financed in whole or in part, directly or indirectly, with the
proceeds of the Debentures or from the exercise of the Warrants, or the status
of the Agent or any Purchaser or holder of any of the Debentures, Warrants,
Conversion Shares or Warrant Shares, or as a stockholder in the Company;
provided, however, that the Company shall not be required to indemnify the
Indemnitees to the extent that any Indemnified Liabilities are caused by or
result from any material misrepresentation or breach of any material
representation or warranty made by the Agent or any Purchaser in this Agreement,
or by the breach of any covenant, agreement or obligation of the Agent in this
Agreement or any of the other Transaction Documents or in any other certificate,
instrument or document contemplated hereby or thereby. To the extent that the
foregoing undertaking by the Company may be unenforceable for any reason, the
Company shall make the maximum contribution to the payment and satisfaction of
each of the Indemnified Liabilities that is permissible under applicable law.
This indemnity shall survive termination of this Agreement.

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the
Effective Date.

                                    The Company:

                                    UNITED STATES ANTIMONY CORPORATION


                                    By______________________________
                                    Name____________________________
                                    Title___________________________
                                    Date signed_____________________


                                    The Agent:

                                    THOMSON KERNAGHAN and CO., LTD.


                                    By______________________________
                                    Name____________________________
                                    Title___________________________
                                    Date signed_____________________


                                    The Purchasers:

                                    ABUCK INVESTMENTS LTD.


                                    By______________________________
                                    Name____________________________
                                    Title___________________________
                                    Date signed_____________________



                                    B-MAC TRADING


                                    By______________________________
                                    Name____________________________
                                    Title___________________________
                                    Date signed_____________________



                                    CALIBER RESOURCES LTD.



                                    By______________________________
                                    Name____________________________
                                    Title___________________________
                                    Date signed_____________________



                                    CALP II LP



                                    By______________________________
                                    Name____________________________
                                    Title___________________________
                                    Date signed_____________________



                                    STRIKER CAPITAL LTD.



                                    By______________________________
                                    Name____________________________
                                    Title___________________________
                                    Date signed_____________________



                                    URSA CAPITAL/HOLDING LTD.


                                    By______________________________
                                    Name____________________________
                                    Title___________________________
                                    Date signed_____________________







         For purposes of Section 4.2, each of the undersigned Agent's Beneficial
Owners has executed, or cause a duly authorized officer to execute this
Agreement as of the Effective Date:

                                    CALIBER RESOURCES LTD.



                                    By______________________________
                                    Name____________________________
                                    Title___________________________
                                    Date signed_____________________


                                    _________________________________
                                    Michelle McKinnon




                                    _________________________________
                                    Ian McKinnon






                                    EXHIBITS



Exhibit A         Debenture
Exhibit B         Purchaser's Warrant
Exhibit C         Agent's Warrant
Exhibit D         Registration Rights Agreement
Exhibit E         Escrow Agreement
Exhibit F         Opinion of Company's Counsel
Exhibit G         Purchasers
Exhibit H         Members of Section 13(d) Group






                                    EXHIBIT A


                                FORM OF DEBENTURE




                                 Refer to Tab 2






                                    EXHIBIT B


                           FORM OF PURCHASER'S WARRANT



                                 Refer to Tab 4









                                    EXHIBIT C


                                 AGENT'S WARRANT



                                 Refer to Tab 3









                                    EXHIBIT D


                          REGISTRATION RIGHTS AGREEMENT





                                 Refer to Tab 7









                                    EXHIBIT E


                                ESCROW AGREEMENT





                                 Refer to Tab 8









                                    EXHIBIT F


                      FORM OF OPINION OF COMPANY'S COUNSEL





                   Refer to Hawley Troxell Ennis and Hawley LLP

             Opinion of Company's Counsel Letter dated July 25, 2000









                                    EXHIBIT G


                                   PURCHASERS

<TABLE>

                                                                        Amount of Debentures Purchased

            Name of Purchaser                                    Initial Tranche                Second Tranche
<S>                                                              <C>                            <C>
1.   Abuck Investments Ltd.                                         $125,000                       $75,000
2.   B-Mac Trading                                                  $100,000
3.   Caliber Resources Ltd.                                         $125,000
4.   Calp II LP                                                     $100,000
5.   Striker Capital Ltd.                                           $100,000
6.   Ursa Capital/Holdings Ltd.                                     $ 50,000

                                                                     $600,000                      $75,000


</TABLE>




                                    EXHIBIT H


                         MEMBERS OF SECTION 13 (d) GROUP


CALP II LP,  Striker  Capital  Ltd.  and  Thomson  Kernaghan  and Co.,  Ltd.
are under the  common  control  of Mark Valentine,  the Chief Executive Officer
of Thomson Kernaghan and Co., Ltd., 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.




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5
<SEQUENCE>5
<FILENAME>opinion.txt
<DESCRIPTION>UAMY EXHIBIT 5
<TEXT>
                       LETTERHEAD OF SONFIELD AND SONFIELD


September 10, 2001

United States Antimony Corporation
P.O. Box 643
1250 Prospect Creek Road
Thompson Falls, Montana  59873

Re:   Registration Statement on Form SB-2
      United States Antimony Corporation Common Stock, Par Value $.01 Per Share

Ladies and Gentlemen:

         We are counsel for United States Antimony Corporation, a Montana
corporation (the "Company"), in connection with the preparation of the
Registration Statement on Form SB-2 (the "Registration Statement") as to which
this opinion is a part, filed with the Securities and Exchange Commission (the
"Commission") on September 10, 2001.

         The Registration Statement relates to the offering by the Selling
Stockholders, as listed in the Registration Statement, of 6,268,065 of common
stock, par value $0.01 per share, of the Company (the "Shares"), of which (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.

         In connection with rendering our opinion as set forth below, we have
reviewed and examined originals or copies of such corporate records and other
documents and have satisfied ourselves as to such other matters as we have
deemed necessary to enable us to express our opinion hereinafter set forth.

         Based upon the foregoing, it is our opinion that:

                  Based upon such examinations, it is our opinion that (i) the
            Shares (other than the Warrant Shares and the Debenture Shares) are
            validly issued, fully paid and nonassessable and (ii) when there has
            been compliance with the Securities Act of 1933 and the applicable
            state securities laws and when the Warrant Shares and the Debenture
            Shares have been issued, delivered and paid for upon exercise of the
            Warrants or the conversion of the Debentures, as the case may be, in
            accordance with their respective terms, the Warrant Shares and the
            Debenture Shares will be validly issued, fully paid and
            nonassessable.

         The opinions herein are limited to the laws of the State of Texas, the
Montana Business Corporation Act, including the applicable provisions of the
Montana Constitution and reported judicial decisions interpreting these laws and
the federal laws of the United States, and we express no opinion as to the
effect of the matters covered by this opinion of the laws of any other
jurisdiction.

         We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the prospectus included in the Registration Statement.

Very truly yours,

/s/SONFIELD AND SONFIELD
- ------------------------
Sonfield and Sonfield



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>6
<FILENAME>auditorconsent.txt
<DESCRIPTION>UAMY EXHIBIT 23
<TEXT>
                    CONSENT OF DECORIA, MAICHEL & TEAGUE P.S.


         As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our report dated
March 11, 2001, included in USAC's Form 10-KSB for the year ended December 31,
2000, and to all references to our Firm included in this registration statement.

                         /s/DECORIA, MAICHEL & TEAGUE P.S.
                             Decoria, Maichel & Teague P.S

Spokane, Washington

September 6, 2001


</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
