ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

Certain 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 the Company's judgment as of the date of this filing. The Company disclaims, however, any intent or obligation to update these forward-looking statements.

RESULTS OF OPERATIONS

The Company reported net income of $332,364 in 2008 compared to a net loss of $623,692 in 2007.

In the Antimony Division, sales decreased from $4,116,863 in 2007 to $3,705,240 in 2008, a decrease of 10%. Gross profit from antimony operations fell from $681,137 in 2007 to $447,961 in 2008. The decreases in revenues and gross profit were due to the decreased supply of raw materials. Sales of antimony products during the year ended December 31, 2008 consisted of 1,362,598 pounds at an average sale price of $2.72 per pound. During the year ended December 31, 2007, sales of antimony products consisted of 1,634,670 pounds at an average sale price of $2.52 per pound. Combined costs of antimony sales were $3,257,279 or $2.39 per pound sold for the year ended December 31, 2008, as compared to $3,435,726 or $2.10 per pound sold for the year ended December 31, 2007. Depreciation expense in the Antimony division was $23,075 during 2008 compared to $20,502 during 2007. Direct sales expenses were $45,000 for 2008 compared to $44,328 for 2007.

Total sales of zeolite products were $1,570,747 for 2008, compared with $1,142,264 for 2007, an increase of 38%. Combined costs of zeolite sales were $1,756,728 for 2008, compared with $1,851,704 for 2007. The tons shipped in 2008 were 11,919 tons at an average price of $131.79 per ton compared to 9,147 tons at an average price of $124.88 in 2007, a 30% increase in tonnage. Depreciation expense was $192,653 for BRZ during 2008, compared to $144,912 during 2007. Direct sales expenses for 2008 were $72,287 compared to $64,395 for 2007. The loss from operations in 2008 was $185,981, which decreased from $709,440 in 2007. This decrease in the loss from operations was due to decreased fuel costs for diesel electric generators, equipment, and drying; a large decrease in MSHA fines and elimination of an unprofitable bagging line.

The Company sold certain sales rights for the sale of zeolite for $300,000 and $500,000 during 2007 and 2006, respectively. The agreement called for shipping zeolite product under this agreement beginning in 2008. In 2008, the $800,000 was recorded as other income and was recognized in its entirety because the agreement expired without any performance required by the Company. Improvements at the BRZ plant this year included more silos, conveyors and other equipment.

During 2008, the Company incurred corporate general and administrative expenses totaling $299,588, compared with $434,088 during 2007. The Company incurred $342,161 of exploration expense during 2008 compared to $256,611 in 2007. The exploration was on property located in Mexico.

The Company sold surface rights of idle mining claims in 2008. In 2008, the Company sold claims worth $66,268 compared to $145,420 of sales in 2007.

Net interest expense was $40,938 for 2008, compared with $45,444 for 2007.

Accounts receivable factoring expense was $113,197 for 2008, compared with $94,989 for 2007.

SUBSIDIARIES

The Company has a 100% investment in two subsidiaries in Mexico, USAMSA and AM, whose carrying value was assessed at December 31, 2008 for impairment. Based on management's assessment of the subsidiaries' future benefit to

the Company no impairment charges were deemed necessary at year-end. During the first quarter of 2009 the Company's subsidiaries in Mexico commenced operations.

FINANCIAL CONDITION AND LIQUIDITY

At December 31, 2008, Company assets totaled $3,271,114, and stockholders' equity was $1,783,498. At December 31, 2008, the Company's total current liabilities exceeded its total current assets by $1,095,749. Due to the Company's prior operating losses and other liquidity concerns, the Company's independent accountants included a paragraph in its report on our 2008 financial statements relating to a going concern uncertainty. To continue as a going concern, the Company must generate profits from its antimony and zeolite sales and acquire additional capital resources through exercise of warrants to purchase shares of common stock or short and long-term debt financing. Without financing and profitable operations, the Company may not be able to meet its obligations, fund operations and continue existence. While management is optimistic, there can be no assurance that the Company will be able to sustain profitable operations and meet its financial obligations.

Other significant financial commitments for future periods will include:

o Servicing notes payable to bank.
o Paying delinquent property and payroll tax liabilities and accounts payable.
o Fulfilling responsibilities with environmental, labor safety and securities regulatory agencies.

Cash used by operating activities during 2008 was $378,576

Cash used by investing activities during 2008 was $259,592, which was primarily related to the construction and purchases of capital assets used at the Bear River Zeolite facility and for construction of a plant and mill in Mexico.

The Company was able to offset cash outflows from operations and its acquisition of plant and equipment during 2008 from net cash provided by financing activities of $610,269 including $687,496 generated from sales of unregistered common stock and warrants.

The Company sold certain sales rights for the sale of zeolite for $300,000 and $500,000 during 2007 and 2006, respectively. The agreement called for shipping zeolite product under this agreement beginning in 2008. In 2008, the $800,000 was recorded as other income and was recognized in its entirety because the agreement expired without any performance required by the Company. The funds were used for the installation of a small packaging plant: the installation of a semi-automatic packaging line for large bags; the completion of the Raymond Mill and the installation of line electricity.

The Company hopes that it will have additional financial resources from increasing gross profits from its antimony business and sales of zeolite from BRZ.