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Item 1A. Risk Factors

2022-03-30 compared with 2021-03-05 · 220 added, 1789 removed, 16 unchanged (99% of the section changed)

addition to considering the other information in this Form 10-K,

you should consider carefully the following factors.

described below are the significant risks we face and include all

material risks of which we are aware.

Additional risks not

presently known to us or risks that we currently consider

immaterial may also adversely affect our business.

In addition to considering the other information in this Form 10-K, you should consider carefully the following factors.

The risks described below are the significant risks we face and include all material risks of which we are aware.

Additional risks not presently known to us or risks that we currently consider immaterial may also adversely affect our business.

Risks Related to Our Business and Industry

Our mineral exploration activities involve a high degree of risk,

and a significant portion of our business model envisions the sale

or joint venture of mineral properties.

If we are unable to sell or

joint venture these properties, the money spent on acquisition and

exploration of our mineral properties may never be recovered and we

could incur an impairment of our investments in our

exploration for mineral deposits involves significant financial and

other risks over an extended period of time.

Few properties that

are explored are ultimately developed into producing mines.

expenditures are required to determine if any of our mineral

properties may have the potential to be commercially viable, be

salable or joint ventured.

Significant additional expense and

risks, including drilling and determining the feasibility of a

project, are required prior to the establishment of reserves.

impossible to ensure that the current or proposed exploration

programs on properties in which we have an interest will be

commercially viable or that we will be able to sell, joint venture

or develop our properties.

Whether a mineral deposit will be

commercially viable depends on a number of factors, some of which

are the particular attributes of the deposit, such as its size and

grade, costs and efficiency of the recovery methods that can be

employed, proximity to infrastructure, commodity prices, financing

costs and governmental regulations, including regulations relating

to prices, taxes, royalties, infrastructure, land use, importing

and exporting of mineral products and environmental

believe the data obtained from our own exploration activities or

our partners' activities to be reliable;

however, the nature of

exploration of mineral properties and analysis of geological

information is often subjective, and data and conclusions are

subject to uncertainty.

Even if exploration activities determine

that a project is commercially viable, it is impossible to ensure

that such determination will result in a profitable sale of the

project or development either on our own or by a joint venture in

the future and that such project will result in profitable

commercial mining operations.

If we determine that capitalized

costs associated with any of our mineral interests are not likely

to be recovered, we would incur an impairment of our investment in

such property interest.

All of these factors may result in losses

in relation to amounts spent, which are not recoverable.

experienced losses of this type from time to time in the past and

may record mineral property impairments in the future.

The outbreak of pandemics, including the coronavirus (COVID-19) may

affect our assets and development plans.

risks related to health epidemics and other outbreaks of

communicable diseases, which could significantly disrupt our

operations and may materially and adversely affect our business and

financial conditions.

business could be adversely impacted by the effects of the COVID-19

or other epidemics or pandemics.

In December 2019, a novel strain

of COVID-19 emerged in China and has spread globally, including the

areas we operate in - the western U.S., Alaska, and

The extent to which the coronavirus impacted our

business and projects during 2020 is discussed above.

may further impact our business, including our future exploration

and other activities and the market for our securities, will depend

on future developments, which are highly uncertain and cannot be

predicted at this time, and include the duration, severity, and any

recurrence of various strains of the outbreak and the actions taken

to contain or treat the coronavirus outbreak.

In particular, the

continuing spread of COVID-19 and travel and other restrictions

established to curb the spread of COVID-19, could materially and

adversely impact our business including without limitation, planned

exploration programs at our Florida Canyon and Lik projects during

2021 and beyond, employee health, workforce productivity, increased

insurance premiums, limitations on travel, the availability of

industry experts and personnel, the timing to process drill and

other metallurgical testing, and other factors that will depend on

future developments beyond our control, which may have a material

and adverse effect on our business, financial condition and results

of operations.

There can be no assurance that our personnel will

not be impacted by COVID-19 or other pandemic diseases and that we

could ultimately see our workforce productivity reduced or incur

increased medical costs or insurance premiums as a result of these

health risks.

In addition, the outbreak of COVID-19 has resulted in

a widespread global health crisis that has adversely affected

global economies and financial markets result ing in an economic downturn that could have an

adverse effect on the future demand for precious and base metals

and our prospects.

We have no reported proven and probable mineral reserves, and our

current projects and any projects we may acquire are not likely to

offer the opportunity for near term revenues or sale proceeds.

we are unsuccessful in identifying mineral reserves in the future,

we may not be able to realize any profit from our property

our current projects have reported proven and probable mineral

reserves as those terms are used in SEC Guide 7.

reserves on these projects will only come from extensive additional

exploration, engineering and evaluation of existing or future

mineral properties.

The lack of reserves on these mineral

properties could prohibit us from any near-term sale or joint

venture of our mineral properties and we would not be able to

realize any proceeds and or profit from our interests in such

mineral properties, which could materially adversely affect our

financial position or results of operations.

Mineral exploration activities are inherently dangerous and could

cause us to incur significant unexpected costs, including legal

liability for loss of life, damage to property and environmental

damage, any of which could materially adversely affect our

financial position or results of operations.

exploration operations are subject to the hazards and risks

normally related to exploration of a mineral deposit, including,

but not limited to mapping and sampling, drilling, road building,

trenching, assaying and analyzing rock samples, transportation over

primitive roads or via small contract aircraft or helicopters and

severe weather conditions.

Any of the hazards of mining exploration

could result in damage to life or property, and environmental

damage, and possible legal liability for such damage.

risks could cause us to incur significant unexpected costs that

could have a material adverse effect on our financial condition and

ability to finance our exploration and development

We have a history of losses and if we do not operate profitably in

the future it could have a material adverse effect on our financial

position or results of operations and the trading price of our

common stock would likely decline.

reported losses in 24 of our 27 years of operations.

We can provide

no assurance that we will be able to operate profitably in the

future or begin to generate significant and consistent sources of

revenues or cash flows from operations.

We have had net income in

only three years in our history;

(i) during 2015, as a result of

the sale of our former Mt.

Hamilton project;

(ii) during 2003, as a

result of a $5,438,000 gain on a derivative instrument related to

our investment in certain Crown warrants and (iii) during 2000,

when we sold our former Yanacocha property.

We cannot predict when,

if ever, we will be profitable again or able to begin generating

consistent revenues or cash flows from our operations or assets.

we do not operate profitably or identify and execute on outside

sources of funding, we may be unable to fund our current or

contemplated exploration activities, acquire new assets, or

otherwise further our business plan.

Our operations outside of the United States of America may be

adversely affected by factors outside of our control, such as

changing political, local and economic conditions, any of which

could materially adversely affect our financial position or results

of operations.

mineral properties located in Latin America consist primarily of

mineral concessions granted by national governmental agencies and

are held 100% by us or in conjunction with our joint venture

partners, or under lease, option or purchase agreements.

our mineral properties are located in Peru and we have previously

held mineral properties and royalties on non-producing exploration

properties in Peru, Mexico and Brazil.

We have acted as operator on

all of our mineral properties or assets that are not held in joint

ventures or are royalty interests.

current exploration activities and mineral properties located

outside of the United States are subject to the laws of Peru and

any other countries in which we may conduct business.

and potential development activities in other countries we may

conduct exploration are potentially subject to political and

economic risks, including:

cancellation or renegotiation of

disadvantages of competing against companies from countries that

are not subject to U.S.

Our mineral exploration activities involve a high degree of risk, and a significant portion of our business model envisions the sale or joint venture of mineral properties.

If we are unable to sell or joint venture these properties, the money spent on acquisition and exploration of our mineral properties may never be recovered and we could incur an impairment of our investments in our projects.

The exploration for mineral deposits involves significant financial and other risks over an extended period of time.

Few properties that are explored are ultimately developed into producing mines.

Major expenditures are required to determine if any of our mineral properties may have the potential to be commercially viable, be salable or joint ventured.

From time to time, we may acquire a mineral property asset and later determine to abandon that project for various reasons (as occurred with our Gold Coin project), and as a result costs incurred to acquire the asset, and any costs incurred for initial exploration efforts will be lost.

Moreover, significant expense and risks, including drilling and determining the feasibility of a project, are required prior to the establishment of reserves.

It is impossible to ensure that the current or proposed exploration programs on properties in which we have an interest will be commercially viable or that we will be able to sell, joint venture or develop our properties.

Whether a mineral deposit will be commercially viable depends on a number of factors, some of which are the particular attributes of the deposit, such as its size and grade, costs and efficiency of the recovery methods that can be employed, proximity to infrastructure, commodity prices, financing costs and governmental regulations, including regulations relating to prices, taxes, royalties, infrastructure, land use, importing and exporting of mineral products and environmental protection.

We believe the data obtained from our own exploration activities or our partners' activities to be reliable;

however, the nature of exploration of mineral properties and analysis of geological information is often subjective, and data and conclusions are subject to uncertainty.

Even if exploration activities determine that a project is commercially viable, it is impossible to ensure that such determination will result in a profitable sale of the project or development either on our own or by a joint venture in the future and that such project will result in profitable commercial mining operations.

If we determine that capitalized costs associated with any of our mineral interests are not likely to be recovered, we would incur an impairment of our investment in such property interest.

All of these factors may result in losses in relation to amounts spent, which are not recoverable.

We have experienced losses of this type from time to time in the past and may record mineral property impairments in the future.

We have no reported mineral reserves as defined by SEC rules, and our current projects and assets or any projects we may acquire are not likely to offer the opportunity for near term revenues or sale proceeds.

If we are unsuccessful in identifying mineral reserves in the future, we may not be able to realize any profit from our property interests.

None of our current projects have reported mineral reserves as those terms are used in SEC rules.

Any mineral reserves on these projects will only come from extensive additional exploration, engineering and evaluation of existing or future mineral properties.

The lack of reserves on these mineral properties could prohibit us from any near-term sale or joint venture of our mineral properties and we would not be able to realize any proceeds and or profit from our interests in such mineral properties, which could materially adversely affect our financial position or results of operations.

We have mineral resources reported on our Florida Canyon and Lik projects upon which we do not exercise 100% control.

The potential for reported mineral reserves on these projects is dependent on additional geologic work and economic evaluation which our joint venture partners may or may not conduct, and there can be no assurance that if such activities are performed that these will result in a positive feasibility or other study to allow the mineral resources to be upgraded to mineral reserves as defined by SEC rules, and as a result we may not be able to sell or otherwise realize any profit from our property interests in the Florida Canyon or Lik projects.

Our Florida Canyon and Lik projects have reported mineral resources in accordance with SEC rules.

However, these resources may never be upgraded to mineral reserves without significant additional geologic work, including additional drilling, economic and environmental analysis, and the completion of a feasibility or other study to demonstrate the mineral potential and economic viability of these projects.

To a significant degree, the completion of this work and a feasibility or other appropriate study is dependent on our joint venture partners desire to do so, over which we have limited influence.

In addition, there is no assurance that if such work and studies are undertaken and completed, that either or both of these projects will be determined to be economically viable.

Our Golden Crest project is an early-stage exploration project with no mineral resources or mineral reserves as defined by SEC rules.

There can be no assurance that additional geologic work will result in reported mineral resources or mineral reserves in the future.

If we are unsuccessful in identifying mineral reserves in the future, we may not be able to sell or otherwise realize any profit from our property interests.

Our Golden Crest project, which was acquired during 2021, has no reported mineral resources or mineral reserves as defined by SEC rules.

We have conducted limited geologic activities at the Golden Crest project consisting primarily of soil and rock sampling.

Additional geologic, environmental, and economic work would be required to allow us to report mineral resources at the Golden Crest project, including drilling and completion of a preliminary economic study.

Furthermore, significant additional work would be required to prepare a feasibility or other study to allow us to report mineral reserves at the Golden Crest project.

There can be no assurance that if such work is completed that the results would allow us to report either mineral resources or mineral reserves in the future.

The lack of mineral resources or mineral reserves at the Golden Crest project could prohibit us from any near-term sale or joint venture of our interest in the Golden Crest project and we may not be able to realize any proceeds and or profit from our interests in the Golden Crest project, which could materially adversely affect our financial position or results of operations.

Mineral exploration activities are inherently dangerous and could cause us to incur significant unexpected costs, including legal liability for loss of life, damage to property and environmental damage, any of which could materially adversely affect our financial position or results of operations.

Mining exploration operations are subject to the hazards and risks normally related to exploration of a mineral deposit, including, but not limited to mapping and sampling, drilling, road building, trenching, assaying and analyzing rock samples, transportation over primitive roads or via small contract aircraft or helicopters and severe weather conditions.

Any of the hazards of mining exploration could result in damage to life or property, and environmental damage, and possible legal liability for such damage.

Any of these risks could cause us to incur significant unexpected costs that could have a material adverse effect on our financial condition and ability to finance our exploration and development activities.

Our operations outside of the United States of America may be adversely affected by factors outside of our control, such as changing political, local and economic conditions, any of which could materially adversely affect our financial position or results of operations.

Our mineral properties located in Latin America consist primarily of mineral concessions granted by national governmental agencies and are held 100% by us or in conjunction with our joint venture partners, or under lease, option or purchase agreements.

Certain of our mineral properties are located in Peru and we have previously held mineral properties and royalties on non-producing exploration properties in Peru, Mexico and Brazil.

Our current exploration activities and mineral properties located outside of the United States are subject to the laws of Peru and any other countries in which we may conduct business.

Exploration and potential development activities in other countries we may conduct exploration are potentially subject to political and economic risks, including:

cancellation or renegotiation of contracts;

disadvantages of competing against companies from countries that are not subject to U.S.

laws and regulations, including the U.S.

Foreign Corrupt Practices Act (“FCPA”);

changes in foreign laws or regulations;

changes in tax laws;

royalty and tax increases or claims by governmental entities,

including retroactive claims;

royalty and tax increases or claims by governmental entities, including retroactive claims;

expropriation or nationalization of property;

currency fluctuations (particularly related to a change in the U.S.

dollar compared to local currencies);

foreign exchange controls;

restrictions on the ability for us to hold U.S.

dollars or other

foreign currencies in offshore bank accounts;

dollars or other foreign currencies in offshore bank accounts;

import and export regulations;

environmental controls;

risks of loss due to community opposition to our activities, civil

strife, acts of war, guerrilla activities, insurrection and

other risks arising out of foreign sovereignty over the areas in

which our exploration activities are conducted.

Accordingly, our

current exploration activities outside of the United States may be

substantially affected by factors beyond our control, any of which

could materially adversely affect the value of certain of our

assets or results of operations.

Furthermore, in the event of a

dispute arising from such activities, we would likely be subject to

the exclusive jurisdiction of courts outside of the United States

or may not be successful in subjecting persons to the jurisdictions

of the courts in the United States, which could adversely affect

the outcome of a dispute.

We may not have sufficient funding for exploration and development,

which may impair our results of operations and growth

capital required for exploration and development of mineral

properties is substantial.

In the past we have financed operations

through the sale of interests in mineral properties, including the

sale of our former Mt.

Hamilton project in 2015, the utilization of

joint venture arrangements with third parties (generally providing

that the third party will obtain a specified percentage of our

interest in a certain property or a subsidiary owning a property in

exchange for the expenditure of a specified amount), the sale of

other assets including short-term investments, the sale of

marketable equity securities we hold, funds from the issuance of

long-term debt, and the issuance of common stock.

We may need to

raise additional capital, or enter into new joint venture

arrangements, in order to fund our obligations with respect to our

properties and our exploration activities required to determine

whether mineral deposits on our projects are commercially viable.

New financing or acceptable joint venture partners may or may not

be available on a basis that is acceptable to us.

The inability to

obtain new financing or joint venture partners on acceptable terms

may prohibit us from continued development or exploration of our

mineral properties.

Without the successful sale or future

development of our mineral properties through joint ventures, or on

our own, we will not be able to realize any profit from our

interests in such properties, which could have a material adverse

effect on our financial position and results of

A large number of companies are engaged in the exploration and

development or sale of mineral properties, many of which have

substantially greater technical and financial resources than us

and, accordingly, we may be unable to compete effectively which

could have a material adverse effect on our financial position,

prospects, or results of operations.

at a disadvantage with respect to many of our competitors in the

acquisition, exploration and development or sale of mineral

property assets and mining projects.

Our competitors with greater

financial resources than us are better able to withstand the

uncertainties and fluctuations associated with sustained downturns

in the market and to acquire high quality exploration and mining

properties when market conditions are favorable.

In addition, we

compete with other companies in the mineral properties sector to

attract and retain key executives and other personnel with

technical skills and experience in the mineral exploration

There can be no assurance that we will continue to retain

skilled and experienced employees or to acquire additional

exploration projects.

The realization of any of these risks from

competitors could have a material adverse effect on our financial

position or results of operations.

The title to our mineral properties may be defective or challenged

which could have a material adverse effect on our financial

position or results of operations.

connection with the acquisition of our mineral properties, we

conduct limited reviews of title and related matters, and obtain

certain representations regarding ownership.

These limited reviews

and representations do not necessarily preclude third parties from

challenging our title and, furthermore, our title may be defective.

Consequently, there can be no assurance that we hold good and

marketable title to all of our mineral interests.

Additionally, we

have to make annual filings to various government agencies on all

of our mineral properties.

If we, or our joint venture partners,

fail to make such filings, or improperly document such filings, the

validity of our title to a mineral property could be lost or

If any of our mineral interests were challenged, we

could incur significant costs in defending such a challenge.

costs or an adverse ruling with regards to any challenge of our

titles could have a material adverse effect on our financial

position or results of operations.

Occurrence of events for which we are not insured may materially

adversely affect our business.

exploration is subject to risks of human injury, environmental

liability and loss of assets.

We maintain limited insurance

coverage to protect ourselves against certain risks related to loss

of assets for equipment in our operations and limited corporate

liability coverage;

however, we have elected not to have insurance

for other risks because of the high premiums associated with

insuring those risks or for various other reasons including those

risks where insurance may not be available.

There are additional

risks in connection with investments in parts of the world where

civil unrest, war, nationalist movements, political violence or

economic crisis are possible.

These countries may also pose

heightened risks of expropriation of assets, business interruption,

increased taxation and a unilateral modification of concessions and

risks of loss due to community opposition to our activities, civil strife, acts of war, guerrilla activities, insurrection and terrorism;

other risks arising out of foreign sovereignty over the areas in which our exploration activities

are conducted.

Accordingly, our current exploration activities outside of the United States may be substantially affected by factors beyond our control, any of which could materially adversely affect the value of certain of our assets or results of operations.

Furthermore, in the event of a dispute arising from such activities, we would likely be subject to the exclusive jurisdiction of courts outside of the United States or may not be successful in subjecting persons to the jurisdictions of the courts in the United States, which could adversely affect the outcome of a dispute.

We may not have sufficient funding for exploration and development, which may impair our results of operations and growth potential.

The capital required for exploration and development of mineral properties is substantial.

In the past we have financed operations through the sale of interests in mineral properties, including the sales of our common stock, and the sale of our interest in the former Mt.

Hamilton project in 2015, the utilization of joint venture arrangements with third parties (generally providing that the third party will obtain a specified percentage of our interest in a certain property or a subsidiary owning a property in exchange for the expenditure of a specified amount), the sale of other assets including short-term investments, the sale of marketable equity securities we hold, and funds from the issuance of long-term debt.

We likely will need to raise additional capital, or enter into new joint venture arrangements, in order to fund our obligations with respect to our properties and our exploration activities required to determine whether mineral deposits on our projects are commercially viable.

New financing or acceptable joint venture partners may or may not be available on a basis that is acceptable to us.

The inability to obtain new financing or joint venture partners on acceptable terms may prohibit us from continued exploration or development of our existing mineral properties or any new mineral property assets we may acquire.

Without the successful sale or future development of our mineral properties through joint ventures, or on our own, we will not be able to realize any profit from our interests in such properties, which could have a material adverse effect on our financial position or results of operations.

A large number of companies are engaged in the exploration and development or sale of mineral properties, many of which have substantially greater technical and financial resources than us and, accordingly, we may be unable to compete effectively which could have a material adverse effect on our financial position, prospects, or results of operations.

We are at a disadvantage with respect to many of our competitors in the acquisition, exploration and development or sale of mineral property assets and mining projects.

Our competitors with greater financial resources than us are better able to withstand the uncertainties and fluctuations associated with sustained downturns in the market and to acquire high quality exploration and mining properties when market conditions are favorable.

In addition, we compete with other companies in the mineral properties sector to attract and retain key executives and other personnel with technical skills and experience in the mineral exploration business.

There can be no assurance that we will continue to retain skilled and experienced employees or to acquire additional exploration projects.

The realization of any of these risks from competitors could have a material adverse effect on our financial position or results of operations.

The title to our mineral properties may be defective or challenged which could have a material adverse effect on our financial position or results of operations.

In connection with the acquisition of our mineral properties, we conduct limited reviews of title and related matters, and obtain certain representations regarding ownership.

These limited reviews and representations do not necessarily preclude third parties from challenging our title and, furthermore, our title may be defective.

Consequently, there can be no assurance that we hold good and marketable title to all of our mineral interests.

Additionally, we have to make annual filings with various government agencies on all of our mineral properties.

If we, or our joint venture partners, fail to make such filings, or improperly document such filings, the validity of our title to a mineral property could be lost or challenged.

If any of our mineral interests were challenged, we could incur significant costs in defending such a challenge.

These costs or an adverse ruling with regards to any challenge of our titles could have a material adverse effect on our financial position or results of operations.

Occurrence of events for which we are not insured may materially adversely affect our business.

Mineral exploration is subject to risks of human injury, environmental liability and loss of assets.

We maintain limited insurance coverage to protect ourselves against certain risks related to loss of assets for equipment in our operations and limited corporate liability coverage;

however, we have elected not to have insurance for other risks because of the high premiums associated with insuring those risks or for various other reasons including those risks where insurance may not be available.

There are additional risks in connection with investments in parts of the world where civil unrest, war, nationalist movements, political violence or economic crisis are possible.

These countries may also pose heightened risks of expropriation of assets, business interruption, increased taxation and a unilateral modification of concessions and contracts.

We do not maintain insurance against political risk.

Occurrence of events for which we are not insured could have a

material adverse effect on our financial position or results of

Severe weather or violent storms could materially affect our

operations due to damage or delays caused by such

exploration activities are subject to normal seasonal weather

conditions that often hamper and may temporarily prevent

exploration or development activities.

There is a risk that

unexpectedly harsh weather or violent storms could affect areas

where we conduct these activities.

Delays or damage caused by

severe weather could materially affect our operations or our

financial position.

Our business is dependent on the market price of certain

commodities, particularly zinc, and currency exchange rates over

which we have no control.

operations are significantly affected by changes in the market

price of commodities since the evaluation of whether a mineral

deposit is commercially viable is heavily dependent upon the market

price of the commodities related to any specific project.

our core assets are currently in zinc related projects, the spot

price of zinc is particularly important to the value of our assets

and future prospects.

The price of commodities also affects the

value of exploration projects we own or may wish to acquire or

joint venture.

These commodity prices fluctuate on a daily basis

and are affected by numerous factors beyond our control.

and demand for commodities, the level of interest rates, the rate

of inflation, investment decisions by large holders of these

commodities, including governmental reserves, and stability of

exchange rates can all cause significant fluctuations in prices.

Currency exchange rates relative to the United States dollar can

affect the cost of doing business in a foreign country in United

States dollar terms, which is our functional currency.

Consequently, the cost of conducting exploration in the countries

where we operate, accounted for in United States dollars, can

fluctuate based upon changes in currency exchange rates and may be

higher than we anticipate in terms of United States dollars because

of a decrease in the relative strength of the United States dollar

to currencies of the countries where we operate.

We currently do

not hedge against currency or commodity fluctuations.

The prices of

commodities as well as currency exchange rates have fluctuated

widely and future significant price declines in commodities or

changes in currency exchange rates could have a material adverse

effect on our financial position or results of

Our business is dependent on key executives and the loss of any of

our key executives could adversely affect our business, future

operations and financial condition.

dependent on the services of key executives, including our Chief

Executive Officer, Christopher E.

Herald, our Chief Operating

Officer, Walter H.

Occurrence of events for which we are not insured could have a material adverse effect on our financial position or results of operations.

Severe weather or violent storms could materially affect our operations due to damage or delays caused by such weather.

Our exploration activities are subject to normal seasonal weather conditions that often hamper and may temporarily prevent exploration or development activities.

There is a risk that unexpectedly harsh weather or violent storms could affect areas where we conduct these activities.

Delays or damage caused by severe weather could materially affect our operations or our financial position.

Our operations could be negatively affected by existing laws as well as potential changes in laws and regulatory requirements to which we are subject, including regulation of mineral exploration and ownership, environmental regulations and taxation.

The exploration and development of mineral properties is subject to federal, state, provincial and local laws and regulations in the countries in which they are located in a variety of ways, including regulation of mineral exploration and land ownership, environmental regulation and taxation.

These laws and regulations, as well as future interpretation of or changes to existing laws and regulations, may require substantial increases in capital and operating costs to us and delays, interruptions, or a termination of operations.

In the United States and the other countries in which we operate or own assets, in order to obtain permits for exploration or potential future development of mineral properties, environmental regulations generally require a description of the existing environment, including but not limited to natural, archeological and socio-economic environments, at the project site and in the region;

an interpretation of the nature and magnitude of potential environmental impacts that might result from such activities;

and a description and evaluation of the effectiveness of the operational measures planned to mitigate the environmental impacts.

Currently, the expenditures to obtain exploration permits to conduct our exploration activities are not material to our total exploration cost.

The laws and regulations in all the countries in which we operate or own assets are continually changing and are generally becoming more restrictive, especially environmental laws and regulations.

As part of our ongoing exploration activities, we have made expenditures to comply with such laws and regulations, but such expenditures could substantially increase our costs to achieve compliance in the future.

Delays in obtaining or failure to obtain government permits and approvals or significant changes in regulation could have a material adverse effect on our exploration activities, our ability to locate economic mineral deposits, and our potential to sell, joint venture or eventually develop our properties, which could have a material adverse effect on our financial position or results of operations.

Our operations are subject to permitting requirements which could require us to delay, suspend or terminate our operations on our mining properties.

Our exploration operations, including any exploration drilling programs and other exploration activities, require permits from various state and federal governments, including permits for the use of water and for drilling water wells.

We may be unable to obtain these permits in a timely manner, on reasonable terms or on terms that provide us sufficient resources to develop our properties in any way.

Even if we are able to obtain such permits, the time required by the permitting process can be significant.

If we cannot obtain or maintain the necessary permits, or if there is a delay in receiving these permits, our timetable and business plan for exploration of our properties will be adversely affected, which may in turn adversely affect our results of operations, financial condition, cash flows and market price of our securities.

Due to increased activity levels of non-governmental, native American, aboriginal, and local groups targeting the mining industry, the potential for the government or process instituted by these local groups, to delay the issuance of permits or impose new requirements or conditions upon mining operations may be increased.

Any changes in government policies may be costly to comply with and may delay mining operations.

Future changes in such laws and regulations, if any, may adversely affect our operations, make them prohibitively expensive, or prohibit them altogether.

If our interests are materially adversely affected as a result of a violation of applicable laws, regulations, permitting requirements or a change in applicable law or regulations, it would have a significant negative impact on the value of our company and could have a significant impact on our stock price.

Our business is sensitive to nature and climate conditions.

A number of governments have introduced or are moving to introduce climate change legislation and treaties at the international, national, state/provincial and local levels.

Regulations relating to emission levels (such as carbon taxes) and energy efficiency are becoming more stringent.

If the current regulatory trend continues, this may result in increased costs at some or all of our project locations.

In addition, the physical risks of climate change may also have an adverse effect on our operations and properties.

Some of the countries in which we own mineral property assets have implemented, and are developing, laws and regulations related to climate change and greenhouse gas emissions.

Legislation and increased regulation and requirements regarding climate change could impose increased costs on us, our joint venture partners and our suppliers, including increased energy, capital equipment, environmental monitoring and reporting and other costs to comply with such regulations.

Our business is dependent on the market price of certain commodities, particularly gold and zinc, and currency exchange rates over which we have no control.

Our operations are significantly affected by changes in the market price of commodities since the evaluation of whether a mineral deposit is commercially viable is heavily dependent upon the market price of the commodities related to any specific project.

Because our core assets are currently in zinc and gold related projects, the spot price of zinc and gold is particularly important to the value of our assets and future prospects.

The price of commodities also affects the value of exploration projects we own or may wish to acquire or joint venture.

These commodity prices fluctuate on a daily basis and are affected by numerous factors beyond our control.

The supply and demand for commodities, the level of interest rates, the rate of inflation, investment decisions by large holders of these commodities, including governmental reserves, and stability of exchange rates can all cause significant fluctuations in prices.

Currency exchange rates relative to the United States dollar can affect the cost of doing business in a foreign country in United States dollar terms, which is our functional currency.

Consequently, the cost of conducting exploration in the countries where we operate, accounted for in United States dollars, can fluctuate based upon changes in currency exchange rates and may be higher than we anticipate in terms of United States dollars because of a decrease in the relative strength of the United States dollar to currencies of the countries where we operate.

We currently do not hedge against currency or commodity fluctuations.

The prices of commodities as well as currency exchange rates have fluctuated widely and future significant price declines in commodities or changes in currency exchange rates could have a material adverse effect on our financial position or results of operations.

Our business is dependent on key executives and the loss of any of our key executives could adversely affect our business, future operations and financial condition.

We are dependent on the services of key executives, including our Chief Executive Officer, Christopher E.

Herald, our Chief Operating Officer, Walter H.

Hunt, and our Chief Financial Officer, James R.

All of those officers have many years of experience and

an extensive background with Solitario and in the mining industry

We may not be able to replace that experience and

knowledge with other individuals.

We do not have "Key-Man" life

insurance policies on any of our key executives.

The loss of these

persons or our inability to attract and retain additional highly

skilled employees may adversely affect our business, future

operations and financial condition.

Our business model relies significantly on other companies to joint

venture our projects and we anticipate continuing this practice in

Therefore, our results are subject to the additional

risks associated with the financial condition, operational

expertise and corporate priorities of our joint venture

success of projects held under joint ventures or royalty interests

that are not operated by us are substantially dependent on the

joint venture partner, over which we have limited or no control.

Our Florida Canyon project and our Lik project are joint ventured

with other mining companies that manage the exploration and

development activities on the projects.

minority-interest party at Florida Canyon and a 50% partner at the

Lik project, where Teck is the operator for 2021.

joint venture agreements provide certain voting rights and other

minority-interest safeguards, the majority partner and/or operator

not only manages operations, but controls most decisions, including

budgets and scope and pace of exploration and development

Consequently, we are highly dependent on the

operational expertise and financial condition of our joint venture

partners, as well as their corporate priorities.

For instance, even

though our joint venture property may be highly prospective for

exploration success, or economically viable based on feasibility

studies, our partner may decide to not fund the further exploration

or development of our project based on their respective financial

condition or other corporate priorities.

Therefore, our results are

subject to the additional risks associated with the financial

condition, operational expertise and corporate priorities of our

joint venture partners, which could have a material adverse effect

on our financial position or results of operations.

Our Lik project

requires unanimous consent by the joint venture partners for annual

budgets in excess of $1.0 million.

Consequently, development of the

Lik project could be delayed without the unanimous consent of both

parties to certain proposed actions or transactions.

We may look to joint venture with another mining company in the

future to develop and/or operate our current or future projects;

therefore, in the future, our results may become subject to

additional risks associated with development and production of our

foreign mining projects.

not currently involved in mining development or operation at any of

our properties.

In order to realize a profit from our mineral

interests we have to:

(1) sell our properties or interests outright

(2) form a joint venture for the project with a larger

mining company with greater resources, both technical and

financial, to further develop and/or operate a project;

and operate such projects at a profit on our own;

or (4) create and

retain a royalty interest in a property with a third party that

agrees to advance the property toward development and mining.

the future, if our exploration results show sufficient promise in a

future domestic or foreign project, not currently under joint

venture, we may either look to form a joint venture with another

mining company to develop and/or operate the project or sell the

property outright and retain partial ownership or a retained

royalty based on the success of such project.

Therefore, in the

future, our results may become subject to the additional risks

associated with development and production of mining projects in

In the future, we may attempt to acquire a new property, or another

company and the acquisition may require a substantial amount of

capital or the issuance of our capital stock to complete.

Acquisition costs may never be recovered due to changing market

conditions, or our own miscalculation concerning the recoverability

of our acquisition investment.

Such an occurrence could adversely

affect our business, future operations and financial

evaluated a wide variety of acquisition opportunities involving

mineral properties and companies for acquisition and we anticipate

evaluating potential acquisition opportunities in the future.

of these opportunities may involve a substantial amount of capital

or the issuance of our capital stock to successfully acquire.

many of these opportunities do not have reliable feasibility-level

studies, we may have to rely on our own estimates for investment

Such estimates, by their very nature, contain substantial

In addition, economic assumptions, such as future

costs and commodity prices, also contain significant uncertainty.

Consequently, if we are successful in acquiring any new

opportunities and our estimates prove to be in error, either

through miscalculations or changing market conditions, this could

have a material adverse effect on our financial position or results

of operations.

We are dependent upon information technology systems, which are

subject to disruption, damage, failure and risks associated with

implementation and integration.

dependent upon information technology systems in the conduct of our

operations. Our information technology systems are subject to

disruption, damage or failure from a variety of sources, including,

without limitation, computer viruses, security breaches,

cyber-attacks, natural disasters and defects in

design. Cybersecurity incidents, in particular, are evolving

and include, but are not limited to, malicious software, attempts

to gain unauthorized access to data and other electronic security

breaches that could lead to disruptions in systems, theft of

assets, unauthorized release of confidential or otherwise protected

information and the corruption of data.

Various measures have been

implemented to manage our risks related to information technology

systems and network disruptions.

However, given the

unpredictability of the timing, nature and scope of information

technology disruptions, we could potentially be subject to

operational delays, the compromising of confidential or otherwise

protected information, loss of assets, including our cash,

short-term investments, or marketable equity securities,

destruction or corruption of data, security breaches, other

manipulation or improper use of our systems and networks or

financial losses from remedial actions, any of which could have a

material adverse effect on our cash flows, competitive position,

financial condition or results of operations.

Failure to comply with the FCPA could subject us to penalties and

other adverse consequences.

Colorado corporation, we are subject to the FCPA and similar

worldwide anti-bribery laws, which generally prohibit United States

companies and their intermediaries from engaging in bribery or

other improper payments to foreign officials for the purpose of

obtaining or retaining business.

Foreign companies, including some

that may compete with our company, are not subject to U.S.

regulations, including the FCPA, and therefore our exploration,

development, production and mine closure activities are subject to

the disadvantage of competing against companies from countries that

are not subject to these prohibitions.

addition, we could be adversely affected by violations of the FCPA

and similar anti-bribery laws in other jurisdictions.

extortion, bribery, pay-offs, theft and other fraudulent practices

may occur from time-to-time in the countries outside of the United

States in which we operate.

Our mineral properties are located in

countries that may have experienced governmental corruption to some

degree and, in certain circumstances, strict compliance with

anti-bribery laws may conflict with local customs and practices.

Our policies mandate compliance with the FCPA and other

anti-bribery laws;

however, we cannot assure you that our internal

controls and procedures always will protect us from the reckless or

criminal acts committed by our employees or agents.

We can make no

assurance that our employees or other agents will not engage in

such conduct for which we might be held responsible.

employees or other agents are found to have engaged in such

practices or we are found to be liable for FCPA violations, we

could suffer severe criminal or civil penalties or other sanctions

and other consequences that may have a material adverse effect on

our business, financial condition and results of

All of those officers have many years of experience and an extensive background with Solitario and in the mining industry in general.

We may not be able to replace that experience and knowledge with other individuals.

We do not have "Key-Man" life insurance policies on any of our key executives.

The loss of these persons or our inability to attract and retain additional highly skilled employees may adversely affect our business, future operations and financial condition.

Our business model relies significantly on other companies to joint venture our projects and we anticipate continuing this practice in the future.

Therefore, our results are subject to the additional risks associated with the financial condition, operational expertise and corporate priorities of our joint venture partners.

The success of projects held under joint ventures or royalty interests that are not operated by us are substantially dependent on the joint venture partner, over which we have limited or no control.

Our Florida Canyon project and our Lik project are joint ventured with other mining companies that manage the exploration activities on the projects.

We are the minority-interest party at Florida Canyon and a 50% partner at the Lik project.

Although our joint venture agreements provide certain voting rights and other minority-interest safeguards, the majority partner and/or operator not only manages operations, but controls most decisions, including budgets and scope and pace of exploration and other activities.

Consequently, we are highly dependent on the operational expertise and financial condition of our joint venture partners, as well as their corporate priorities.

For instance, even though our joint venture property may be highly prospective for exploration success, or economically viable based on feasibility studies, our partner may decide to not fund the further exploration or development of our project based on their respective financial condition or other corporate priorities.

Therefore, our results are subject to the additional risks associated with the financial condition, operational expertise and corporate priorities of our joint venture partners, which could have a material adverse effect on our financial position or results of operations.

Our Lik project requires unanimous consent by the joint venture partners for annual budgets in excess of $1.0 million.

Consequently, exploration of the Lik project could be delayed without the unanimous consent of both parties to certain proposed actions or transactions.

We may look to joint venture with another mining company in the future to explore, develop and/or operate our current or future projects;

therefore, in the future, our results may become subject to additional risks associated with development and production of our foreign mining projects.

We are not currently involved in mining development or operation at any of our properties.

In order to realize a profit from our mineral interests we have to:

(1) sell our properties or interests outright at a profit;

(2) form a joint venture for the project with a larger mining company with greater resources, both technical and financial, to further develop and/or operate a project;

(3) develop and operate such projects at a profit on our own;

or (4) create and retain a royalty interest in a property with a third party that agrees to advance the property toward development and mining.

In the future, if our exploration results show sufficient promise in a future domestic or foreign project, not currently under joint venture, we may either look to form a joint venture with another mining company to develop and/or operate the project or sell the property outright and retain partial ownership or a retained royalty based on the success of such project.

Therefore, in the future, our results may become subject to the additional risks associated with development and production of mining projects in general.

In the future, we may attempt to acquire a new property, or another company and the acquisition may require a substantial amount of capital or the issuance of our capital stock to complete.

Acquisition costs may never be recovered due to changing market conditions, or our own miscalculation concerning the recoverability of our acquisition investment.

Such an occurrence could adversely affect our business, future operations and financial condition.

We have evaluated a wide variety of acquisition opportunities involving mineral properties and companies for acquisition and we anticipate evaluating potential acquisition opportunities in the future.

Some of these opportunities may involve a substantial amount of capital or the issuance of our capital stock to successfully acquire.

As many of these opportunities do not have reliable feasibility-level studies, we may have to rely on our own estimates for investment analysis.

Such estimates, by their very nature, contain substantial uncertainty.

In addition, economic assumptions, such as future costs and commodity prices, also contain significant uncertainty.

Consequently, if we are successful in acquiring any new opportunities and our estimates prove to be in error, either through miscalculations or changing market conditions, this could have a material adverse effect on our financial position or results of operations.

Failure to comply with the FCPA could subject us to penalties and other adverse consequences.

As a Colorado corporation, we are subject to the FCPA and similar worldwide anti-bribery laws, which generally prohibit United States companies and their intermediaries from engaging in bribery or other improper payments to foreign officials for the purpose of obtaining or retaining business.

Foreign companies, including some that may compete with our company, are not subject to U.S.

laws and regulations, including the FCPA, and therefore our exploration, and potential future development, production and mine closure activities are subject to the disadvantage of competing against companies from countries that are not subject to these prohibitions.

In addition, we could be adversely affected by violations of the FCPA and similar anti-bribery laws in other jurisdictions.

Corruption, extortion, bribery, pay-offs, theft and other fraudulent practices may occur from time-to-time in the countries outside of the United States in which we operate.

Certain of our mineral properties are located in countries that may have experienced governmental corruption to some degree and, in certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices.

Our policies mandate compliance with the FCPA and other anti-bribery laws;

however, we cannot assure you that our internal controls and procedures always will protect us from the reckless or criminal acts committed by our employees or agents.

We can make no assurance that our employees or other agents will not engage in such conduct for which we might be held responsible.

If our employees or other agents are found to have engaged in such practices or we are found to be liable for FCPA violations, we could suffer severe criminal or civil penalties or other sanctions and other consequences that may have a material adverse effect on our business, financial condition and results of operations.

Risks Related to Our Common Stock

The market for shares of our common stock has limited liquidity and

the market price of our common stock has fluctuated and may

investment in our common stock involves a high degree of risk.

liquidity of our shares, or the ability of a shareholder to buy or

sell our common stock, may be significantly limited for various

unforeseeable periods.

The average combined daily volume of our

shares traded on the NYSE American and the TSX during 2020 was

approximately 486,000 shares.

The market price of our shares of

common stock has historically fluctuated within a wide range.

price of our common stock may be affected by many factors,

including an adverse change in our business, a decline in the price

of zinc or other commodity prices, negative news on our projects,

negative investment sentiment for mining and commodity equities and

general economic trends.

Our operations could be negatively affected by existing laws as

well as potential changes in laws and regulatory requirements to

which we are subject, including regulation of mineral exploration

and ownership, environmental regulations and taxation.

exploration and development of mineral properties is subject to

federal, state, provincial and local laws and regulations in the

countries in which they are located in a variety of ways, including

regulation of mineral exploration and land ownership, environmental

regulation and taxation.

These laws and regulations, as well as

future interpretation of or changes to existing laws and

regulations, may require substantial increases in capital and

operating costs to us and delays, interruptions, or a termination

of operations.

United States and the other countries in which we operate or own

assets, in order to obtain permits for exploration or potential

future development of mineral properties, environmental regulations

generally require a description of the existing environment,

including but not limited to natural, archeological and

socio-economic environments, at the project site and in the region;

an interpretation of the nature and magnitude of potential

environmental impacts that might result from such activities;

description and evaluation of the effectiveness of the operational

measures planned to mitigate the environmental impacts.

the expenditures to obtain exploration permits to conduct our

exploration activities are not material to our total exploration

laws and regulations in all the countries in which we operate or

own assets are continually changing and are generally becoming more

restrictive, especially environmental laws and regulations.

of our ongoing exploration activities, we have made expenditures to

comply with such laws and regulations, but such expenditures could

substantially increase our costs to achieve compliance in the

Delays in obtaining or failure to obtain government permits

and approvals or significant changes in regulation could have a

material adverse effect on our exploration activities, our ability

to locate economic mineral deposits, and our potential to sell,

joint venture or eventually develop our properties, which could

have a material adverse effect on our financial position or results

of operations.

We have never paid and do not intend to pay cash dividends and,

consequently, the ability to achieve a return on any investment in

our common stock will depend on appreciation in the price of our

common stock.

never paid cash dividends on any of our capital stock, and we

currently intend to retain future earnings, if any, to fund the

development and growth of our business.

Therefore, a holder of our

stock is not likely to receive any dividends on our common stock

for the foreseeable future.

Since we do not intend to pay

dividends, the ability to receive a return on an investment in our

common stock will depend on any future appreciation in the market

value of our common stock.

There is no guarantee that our common

stock will appreciate or even maintain the price at which it was

Issuances of our stock in the future could dilute existing

shareholders and adversely affect the market price of our common

the authority to issue up to 100,000,000 shares of common stock,

10,000,000 shares of preferred stock, and to issue options and

warrants to purchase shares of our common stock without shareholder

Future issuances of our securities could be at prices

substantially below the price paid for our common stock by our

current shareholders.

In addition, we can issue blocks of our

common stock in amounts up to 20% of the then-outstanding shares

without further shareholder approval.

Sales of a substantial number

of shares by the Company in the public market (or otherwise), or

the perception that those sales may occur, could cause the market

price of our common stock to decline.

The market for shares of our common stock has limited liquidity and the market price of our common stock has fluctuated and may decline.

An investment in our common stock involves a high degree of risk.

The liquidity of our shares, or the ability of a shareholder to buy or sell our common stock, may be significantly limited for various unforeseeable periods.

The average combined daily volume of our shares traded on the NYSE American and the TSX during 2021 was approximately 1,413,000 shares.

The market price of our shares of common stock has historically fluctuated within a wide range.

The price of our common stock may be affected by many factors, including an adverse change in our business, a decline in the price of zinc or other commodity prices, negative news on our projects, negative investment sentiment for mining and commodity equities and general economic trends.

We have a history of losses and if we do not operate profitably in the future it could have a material adverse effect on our financial position or results of operations and the trading price of our common stock would likely decline.

We have reported losses in 25 of our 28 years of operations.

We can provide no assurance that we will be able to operate profitably in the future or begin to generate significant and consistent sources of revenues or cash flows from operations.

We have had net income in only three years in our history;

(i) during 2015, as a result of the sale of our former Mt.

Hamilton project;

(ii) during 2003, as a result of a $5,438,000 gain on a derivative instrument related to our investment in certain Crown warrants and (iii) during 2000, when we sold our former Yanacocha property.

We cannot predict when, if ever, we will be profitable again or able to begin generating consistent revenues or cash flows from our operations or assets.

If we do not operate profitably or identify and execute on outside sources of funding, we may be unable to fund our current or contemplated exploration activities, acquire new assets, or otherwise further our business plan.

We have never paid and do not intend to pay cash dividends and, consequently, the ability to achieve a return on any investment in our common stock will depend on appreciation in the price of our common stock.

We have never paid cash dividends on any of our capital stock, and we currently intend to retain future earnings, if any, to fund the development and growth of our business.

Therefore, a holder of our stock is not likely to receive any dividends on our common stock for the foreseeable future.

Since we do not intend to pay dividends, the ability to receive a return on an investment in our common stock will depend on any future appreciation in the market value of our common stock.

There is no guarantee that our common stock will appreciate or even maintain the price at which it was purchased.

Issuances of our stock in the future could dilute existing shareholders and adversely affect the market price of our common stock.

We have the authority to issue up to 100,000,000 shares of common stock, 10,000,000 shares of preferred stock, and to issue options and warrants to purchase shares of our common stock without shareholder approval.

In addition, during 2021 we put an ATM program in place and expect to sell shares of our common stock under that program from time to time.

Future issuances of our securities could be at prices substantially below the price paid for our common stock by our current shareholders.

In addition, we can issue blocks of our common stock in amounts up to 20% of the then-outstanding shares without further shareholder approval.

Sales of a substantial number of shares by the Company in the public market (or otherwise), or the perception that those sales may occur, could cause the market price of our common stock to decline.

General Risk Factors

The outbreak of pandemics, including the coronavirus (COVID-19) may affect our assets and development plans.

We face risks related to health epidemics and other outbreaks of communicable diseases, which could significantly disrupt our operations and may materially and adversely affect our business and financial conditions.

Our business still could be adversely impacted by the effects of the COVID-19 or other epidemics or pandemics.

In December 2019, a novel strain of COVID-19 emerged in China and has spread globally, including the areas we operate in - the western U.S., Alaska, and Peru.

How COVID-19 may ultimately impact our business, including our future exploration and other activities and the market for our securities, will depend on future developments, which are highly uncertain and cannot be predicted at this time, and include the duration, severity, and any recurrence of various strains of the outbreak and the actions taken to contain or treat the coronavirus outbreak.

In particular, the continuing spread of COVID-19 and travel and other restrictions established to curb the spread of COVID-19, could materially and adversely impact our business including without limitation, planned exploration programs at our Florida Canyon, Lik and Golden Crest projects during 2022 and beyond, employee health, workforce productivity, increased insurance premiums, limitations on travel, labor shortages and the availability of industry experts and personnel, the timing to process drill, other metallurgical testing, supply chain constraints that impede exploration operations, and other factors that will depend on future developments beyond our control, which may have a material and adverse effect on our business, financial condition and results of operations.

There can be no assurance that we will not be impacted by COVID-19 or other pandemic diseases and that we could ultimately see our workforce productivity reduced or incur increased medical costs or insurance premiums as a result of these health risks.

In addition, the outbreak of COVID-19 has resulted in a widespread global health crisis that contributed to volatility in the economy and financial markets that could have an adverse effect on the future demand for precious and base metals and, in turn, our prospects.

A significant portion of our liquid assets consist of U.S.

Treasuries and cash held in brokerage and foreign bank accounts.

The failure of the financial institutions that issued or hold these

financial instruments or our cash could have a material adverse

impact on the market price of our common stock and our liquidity

and capital resources.

December 31, 2020, we have invested $3,989,000 in United States

Treasury securities (“USTS”), with maturities of

between 30 days and 12 months and we have approximately $595,000 of

our cash in uninsured deposit accounts and brokerage accounts which

are not covered by FDIC insurance.

The failure of a financial

institution holding these funds and assets could have a material

impact on the market price of our common stock and our liquidity

and capital resources.

We are dependent upon information technology systems, which are

subject to disruption, damage, failure and risks associated with

implementation and integration.

dependent upon information technology systems in the conduct of our

operations. Our information technology systems are subject to

disruption, damage or failure from a variety of sources, including,

without limitation, computer viruses, security breaches,

cyber-attacks, natural disasters and defects in

design. Cybersecurity incidents, in particular, are evolving

and include, but are not limited to, malicious software, attempts

to gain unauthorized access to data and other electronic security

breaches that could lead to disruptions in systems, theft of

assets, unauthorized release of confidential or otherwise protected

information and the corruption of data.

Various measures have been

implemented to manage our risks related to information technology

systems and network disruptions.

However, given the

unpredictability of the timing, nature and scope of information

technology disruptions, we could potentially be subject to

operational delays, the compromising of confidential or otherwise

protected information, loss of assets, including our cash,

short-term investments, or marketable equity securities,

destruction or corruption of data, security breaches, other

manipulation or improper use of our systems and networks or

financial losses from remedial actions, any of which could have a

material adverse effect on our cash flows, competitive position,

financial condition or results of operations.

U nresolved Staff Comments

Florida Canyon Zinc Project (Peru)

Property Description and

Florida Canyon Property, formerly Bongará)

August 15, 2006, Solitario signed a Letter Agreement with

Votorantim Metais Cajamarquilla, S.A., a wholly-owned subsidiary of

Votorantim (now known as Nexa) (both companies are referred to in

this Item 2 as "Nexa”) on Solitario's 100%-owned Florida

Canyon zinc project (formerly called the Bongará

March 24, 2007, Solitario signed the Framework Agreement with

Votorantim for the Exploration and Potential Development of Mining

Properties (the “Framework Agreement”), pursuant to,

and replacing, the Florida Canyon Letter Agreement.

Votorantim transferred its interest in the Florida Canyon project

to Milpo, an 80%-owned affiliate of Votorantim.

In October of 2017,

Milpo and Votorantim merged to form Nexa.

Nexa is listed on the

NYSE under the trading symbol “NEXA”

and the TSX under

the trading symbol “NEXA.”

For the remainder of this

Florida Canyon property section, all references to Votorantim,

Milpo or Nexa are collectively referred to as Nexa.

Florida Canyon project consists of 16 concessions comprising 12,600

hectares of mineral rights originally granted to Minera

S.A., our subsidiary incorporated in Peru.

property is located in the Department of Amazonas, northern Peru.

Solitario's and Nexa’s property interests are held through

the ownership of shares in Minera Bongará

S.A., a joint

operating company that holds a 100% interest in the mineral rights

and other project assets.

Solitario currently owns a 39% interest

in the Florida Canyon project.

2015 Nexa completed the steps required to earn a 61% interest in

the Florida Canyon project, with Solitario retaining a 39%

Nexa may earn an additional 9% interest (up to a 70%

shareholding interest) in Minera Bongará

S.A., by sole-funding

future annual exploration and development expenditures until a

production decision is made.

The option to earn the 70% interest

can be exercised by Nexa at any time by committing to place the

project into production based upon a completed feasibility study.

Nexa is the project manager.

Once Nexa has committed to place the

project into production based upon a feasibility study, it has

further agreed to finance Solitario's 30% participating interest

until production with a loan facility from Nexa to Solitario.

Solitario will repay this loan facility through 50% of Solitario's

cash flow distributions from the joint operating company.

completed the funding of $1,580,000 of the Drilling Program during

Solitario was not obligated to fund under the terms of the

Framework Agreement.

The paid funding of the Drilling Program will

be treated as an advance on Solitario’s commitment to fund

30% of any future construction development costs of Florida Canyon

under the original joint venture agreement.

Accordingly, in the

event the Florida Canyon project is developed, which cannot be

assured at this time, the funds paid to Nexa under this arrangement

will reduce the amount of Solitario’s obligation to fund 30%

of future development costs, and / or repay loans from Nexa for

future development costs at the Florida Canyon

Peruvian law, concessions may be held indefinitely, subject only to

payment of annual fees to the government.

In June 2021, payments of

approximately $313,000 to the Peruvian government will be due in

order to maintain all the Florida Canyon mineral rights of Minera

Nexa is responsible for paying these costs as

part of its earn-in expenditures.

Peru imposes a sliding scale

royalty varying from 1% to 12% of the operating profit of a mining

The percentage royalty is determined by rule based on

the operating margin;

however, the minimum royalty is 1% of the

time-to-time Nexa may enter into surface rights agreements with

individual landowners to provide access for exploration work at the

Florida Canyon project.

Generally, these are short-term agreements.

Nexa has an agreement with the local community which specifies

certain obligations and payments that Nexa is required to provide

in exchange for community permissions to perform work.

compliance with the terms of the community agreement.

Environmental

permits are required for exploration and development projects in

Peru that involve drilling, road building or underground mining.

The requisite environmental and archeological studies were

completed for all past work, but new studies are required for

expanded activities planned for future years at the Florida Canyon

Although we believe that these permits will be obtained in

a timely fashion, the timing of government approval of permits

remains beyond our control.

Accessibility, Climate,

Local Resources, Infrastructure and Physiology

Florida Canyon property is accessed from the coastal city of

Chiclayo by the paved Carretera Marginal road, which is a heavily

travelled paved national highway that passes approximately eight

kilometers south of the deposit.

The nearest town to the project is

Pedro Ruiz located 15 kilometers southeast of the property.

area of the majority of past drilling and the most prospective

mineralization, Florida Canyon, was previously inaccessible by

road, the work to date having been done by either foot or

helicopter access.

Nexa has now completed approximately 40

kilometers of access road and is planning to complete the road

access to local communities and the mineralized area of the project

Nexa maintains project field offices in Pedro Ruiz and a

drill core processing facility and operations office in the nearby

community of Shipasbamba.   

project area elevation ranges between 1,800 and 3,200 meters above

The climate is tropical with an average annual

temperature of approximately 25 o C.

rainfall exceeds one meter with up to two meters in the cloud

forest at higher elevations.

Most precipitation occurs during the

rainy season, between November and April.

Field work is

considerably more difficult in the rainy season.

Topography is

steep, consisting of prominent escarpments and deep valleys.

jungle or forest vegetation covers the project area.

exception of the partially completed access road and approximately

700 meters of tunneling, no permanent infrastructure facilities

have been constructed within the project area.

A private Peruvian

power company has proposed building a hydro-electric power plant

within 10 kilometers of the Florida Canyon deposit and has obtained

nearly all permits required to begin construction.

Nexa signed a

Memorandum of Understanding with the power company that provides

for 100% of the power required for mining and milling operations at

discovered the Florida Canyon mineralized zone of the Florida

Canyon project in 1996.

Subsequently, we joint ventured the

property in December 1996 to Cominco (now Teck).

Cominco drilled 80

core holes from 1997-2000.

Cominco withdrew from the joint venture

in February 2001, and at that time Solitario retained its 100%

interest in the project.

We maintained the claims from 2001 to

2006, until the Florida Canyon Letter Agreement was signed.

conducted surface drilling on an annual basis from 2006 to 2013 and

from 2018 to 2019, and underground tunneling and drilling from 2010

All significant work on the property has been conducted by

our joint venture partners, Cominco and Nexa, and is described

below in Section 5, “Prior Exploration.”

project is located within an extensive belt of Mesozoic carbonate

rocks belonging to the Upper Triassic to Lower Jurassic Pucará

Group and equivalents.

This belt extends through the central and

eastern extent of the Peruvian Andes for nearly 1,000 km and is the

host for many polymetallic and base metal vein and replacement

deposits in the Peruvian Mineral Belt.

Among these is the San

Vicente Mississippi Valley Type (“MVT”)

zinc-lead-silver deposit that has many similarities to the Florida

Canyon deposit and other MVT occurrences in the Project

geology of the Florida Canyon area is relatively simple consisting

of a sequence of Jurassic and Triassic clastic and carbonate rocks

which are gently deformed into a broad northwesterly trending domal

The MVT zinc-lead-silver mineralization occurs in the

carbonate facies of the Chambara (rock) Formation.

anticline is cut on the west by the Sam Fault and to the east by

the Tesoro-Florida Fault.

conducted a regional stream sediment survey and reconnaissance

geological surveys leading to the discovery of the Florida Canyon

area in 1996.

The discovered outcropping mineralization is located

in two deeply incised canyons within the limestone

stratigraphy.

Subsequent to our

initial work, Cominco conducted extensive mapping, soil and rock

sampling, stream sediment surveys and drilling.

This work was

designed to determine the extent and grade of the zinc-lead

mineralization, to determine the controls of mineral deposition and

to identify areas of potential new mineralization.

Nexa began work

in the fall of 2006 and drilled annually from 2006 through 2013,

and in 2018-2019.

Underground exploration operations were conducted

from 2011-2013.

Mineralization

important styles of mineralization occur at Florida Canyon:

Manto-style with mineralization usually localized in favorable

carbonate strata in a near horizontal orientation;

style with mineralization in a near-vertical orientation occurring

within high-angle structural zones.

Manto mineralization occurs as

both massive to semi-massive replacements and disseminations of

sphalerite and galena localized by specific sedimentary facies

(rock strata) within the limestone stratigraphy.

Often manto-style

mineralization is laterally associated with near-vertical

structural feeders and karst breccias that cut the carbonate

stratigraphy.

A total of 11 preferred beds for replacement

mineralization have been located within the middle unit of the

Chambara Formation.

Mineralization is associated with the

conversion of limestone to dolomite, which creates porosity and

permeability within the rock formations.

It is believed that

mineralizing fluids passed through structurally controlled vertical

feeder zones and into adjacent near-horizontal rock formations to

produce mineralized vertical replacement bodies and

stratigraphically controlled near-horizontal manto deposits.

Drilling of stratigraphic targets has shown that certain

coarser-grained facies of the stratigraphy are the best hosts for

manto mineralization.

Stratigraphically controlled mineralization

is typically one to several meters in thickness, but often attains

thicknesses of five to ten meters.

mineralization was originally deposited in the form of sulfide

However, some near-surface mineralization has been

oxidized to varying degrees.

More than three-quarters of

mineralization defined at Florida Canyon is sulfide-dominant with

the remainder being mixed sulfide-oxide, or oxide-dominant.

Processing of sulfide mineralization is commercially more

features are localized along the feeder faults and locally produce

"breakout zones" where mineralization may extend vertically across

thick stratigraphic intervals where collapse breccias have been

replaced by ore minerals.

Mineralized karst structures are up to 50

meters in width (horizontal), up to 900 meters vertically, and up

to 1,000 meters along strike.

Evidence for these

breakout zones is provided by the following drill holes from

various locations on the property:

Breakout Zone Name

Drill Hole Number

Intercepts (meters)

Dolomitization

reaches stratigraphic thicknesses in excess of 100 meters locally.

This alteration is thought to be related to the mineralizing event

and is an important exploration tool.

Continuity of the

mineralization is demonstrable in areas of highest drilling density

by correlation of mineralization within characteristic sedimentary

facies, typical of specific stratigraphic intervals or within

through-going observable structural zones in drill core.

Canyon the two largest-sized high-angle zones identified to date

are the San Jorge and 1021 zones.

These zones represent

well-defined north-northeast structural feeder zones.

important mineralization occurs along northwest and northeast

fracture systems.

These structures occur in conjugate fractures,

with N10º-50ºE trends present at a number of mineralized

surface outcrops while trends of N50º-80ºW are identified

at other showings.

1997 through 2001, Cominco drilled 80 surface core holes totaling

24,696 meters.

From 2006-2013, Nexa completed 309 surface core

holes totaling 77,193 meters.

From 2011-2013, Nexa completed 95

underground core holes totaling 15,144 meters.

The underground

drilling was conducted from 10 drill stations at generally 40-meter

centers (two drill stations at 20-meter centers) and entirely

within the San Jorge mineralized zone.

Anywhere from three to 14

holes were drilled from each of the ten drill stations.

underground drilling was tightly spaced and designed to allow for

feasibility-level reserve estimation.

November 2018 to October 2019, Nexa completed a 39-hole,

17,033-meter core drilling program.

The majority of holes were

drilled 2019.

The program had three major objectives:

1) extend the

San Jorge near-vertical replacement body to the south and the

adjacent near-horizontal manto bodies to the east;

previously drilled hole V-21 in the northern part of Florida Canyon

to determine if it represented a significant near-vertical

replacement body with horizontal mantos similar to the San Jorge

and 3) extend horizontal mantos in the central and northern

parts of the Florida Canyon drilling footprint.

objectives were successfully achieved.

past drilling conducted is within a footprint measuring

approximately 2.5 kilometers long in a north-south direction and a

little over a kilometer in an east-west direction.

The entire drill

pattern is within what we have informally labeled the Florida

Canyon district.

Within this district, several zones of strong zinc

mineralization have been defined.

The three zones with the largest

amount of drilling are the San Jorge, the Karen-Milagros and the

Drilling indicates that, for the most part, the entire

Florida Canyon district remains open to expansion and the

identified zones are interconnected.

Better 2018-2019 drill-hole

intercepts are provided in the table below:

Mineralized Intersections

was calculated using the following price assumptions:

Zn=$1.10/lb.,

Pb=$0.91lb., Ag=$16.50/oz.

Reported intervals

are estimated to be at least 80% of the true thickness

in this table may not add exactly as numbers have been rounded to

the nearest decimal

Sampling, Analysis and

Security of Samples

samples were transported from the drill by helicopter in sealed

boxes to the processing facility in Shipasbamba where they were cut

with a diamond saw.

Half of the core was taken of intervals

selected according to geologic criteria under the supervision of

the geologist in charge and shipped in sealed bags by land.

used SGS Laboratories (“SGS”) and Nexa used ALS-Chemex,

both in Lima, Peru, where all samples were analyzed by ICP.

samples that contained greater than 1% zinc were then analyzed by

wet chemistry assay for zinc and lead to provide a more accurate

analysis of grade.

2006, Nexa has been in control of all field activities on the

project and is responsible for the security of samples.

indicated that there have been no breaches in the security of the

We have reviewed, and periodically been assisted by SRK

Consulting (USA) Inc.

(“SRK) and Gustavson Associates, both

independent international mining engineering firms, to review

Nexa’s sampling procedures and believe that adequate

procedures are in place to ensure the future security and integrity

No breaches of security of samples are known to have

occurred prior to Nexa’s work on the project.

Prefeasibility

either through its engineering staff or contracted independent

mining engineering firms, has conducted prefeasibility-level

studies to provide estimates of deposit size and grade, mining and

processing recoveries, sizing of appropriate scale of operations,

infrastructure design, and capital and operating cost estimates at

a level of detail varying from preliminary economic assessment to

prefeasibility levels.

Solitario and Nexa

jointly completed a PEA for the entire project in 2017 that

incorporated a variety of Nexa-generated studies into the analysis.

The PEA evaluation included resource estimation, mining and

processing recovery estimates, a preliminary mining and processing

plan, infrastructure layout, environmental considerations and an

economic analysis based on certain base case parameters.

envisioned an underground mining operation with a 2,500 tonne per

day floatation mill for processing, resulting in a 12.5-year mine

It was assumed that concentrates would be trucked to

Nexa’s Cajamarquilla zinc smelter facility in Lima,

Metallurgical

testing to evaluate metal recoveries and various processing options

for mineralized material at Florida Canyon was conducted in 2010,

2011 and 2014.

Tests to date on composited samples indicate zinc

recoveries of 91.8% and lead recoveries of 81.9% in the San Jorge

zone and zinc recoveries of 80.3% and lead recoveries of 71.7% in

the Karen-Milagros zone.

These recoveries represent averages for

each zone based on sulfide dominant mineralization, but oxide

material was present in the tested samples.

Nexa also conducted a

comprehensive geochemical testing program that demonstrated that

zinc (and lead) recoveries were significantly affected by the

Zn-sulfide/Zn-oxide ratio of mineralization.

mineralized material with greater than an 80% ratio of

Zn-sulfide/Zn-oxide, recoveries are greater than 90% for Zn.

Conversely, for mineralized material, with less than a 20% ratio of

Zn-sulfide/Zn-oxide, recoveries are approximately 40% for Zn.

Although sulfide recoveries achieved to date are very good, SRK

suggests that optimization of processing and metallurgical

parameters may result in improved recoveries and concentrate

prefeasibility work completed by Nexa included drilling 16 diamond

core holes in 2013 to evaluate geotechnical and hydrological

parameters of the mineralized areas for both engineering and

environmental purposes.

In 2016, Nexa completed a

geochemical/metallurgical study that more accurately defined the

distribution of sulfide/oxide mineralization based on re-assaying

of nearly all past drill-hole samples.

This information was

critical in resource estimation and accurately estimating metal

2017 Florida Canyon Project PEA was completed by SRK on behalf of

Nexa and Solitario in August of 2017.

The NI 43-101 compliant study

Technical Report,

Preliminary Economic Assessment, Florida Canyon Zinc Project,

Amazonas Department, Peru;

Effective Date:

July 13, 2017, Report

August 3, 2017 ;”

can be found in the

Company’s Canadian Sedar filings and is furnished in the

Company’s U.S.

Edgar filings.

December 31, 2020, there are no reported mineral

commercial mining operations to recover metals have occurred on the

However, in September 2010 Nexa initiated an underground

tunneling program to access mineralization and completed its

underground work in 2013.

As of December 31, 2019, 700 meters of

tunneling were completed.

Planned Exploration and

2020, Nexa worked on a new NI-43-101 compliant resource estimate

incorporating the 2018-2019 drill hole assay results and remodeling

the previous 2017 resource model.

This new estimate was reported on

February 23, 2021.

Nexa is currently working on two new drilling

permits that will greatly expand the area available for exploration

One of the permits would allow for 84 new drilling

platforms and associated interconnecting roads scattered over an

area approximately six kilometers by five kilometers.

proposed platforms are located immediately south, east and

southeast of the current Florida Canyon drilling footprint.

addition, Nexa plans to conduct additional road construction in

2021 to access the mineralized areas of the project as well as

local communities as part of their social commitment to these

Lik Project (Alaska)

Property Description and

Lik Property) Lik.jpg

property consists of 47 contiguous Alaska state mining claims.

contiguous claims have been grouped together for the purpose of

working and operating under a common plan of development for the

benefit of all of the claims.

The claims cover an area of

approximately 6,075 acres (2,460 ha).

The claims are located in the

southwestern DeLong Mountains in the Wulik River

retain the state claims, the Company is required to make annual

rental payments to the State of Alaska.

The estimated rental

payments for 2021 are $9,000.

Property holders are also required to

perform assessment work with the amount dependent on the area of

the State claims.

Excess assessment expenditure credits may be

carried forward for a maximum of four years.

If required, payments

may be made in lieu of work to allow retention of the property for

a period of five consecutive years.

The geographical coordinates of

the Lik deposit are approximately 163 o 12’

The figure above illustrates the location of the Lik

Acquisition History and

Joint Venture Arrangement

Solitario acquired

its 50% interest in the Lik property from the acquisition of Zazu

Metals Corp (“Zazu”) on July 12, 2017.

As a result of

the acquisition, Zazu became a wholly owned subsidiary of

Prior to that, Zazu acquired its 50% interest in the Lik

property from GCO Minerals Company, a wholly owned subsidiary of

the International Paper Company (“GCO”), on June 28,

2007 by making a cash payment to GCO of $20,000,000 and granting

GCO a 2% net proceeds interest.

GCO also owns an additional 1% net

profits interest in the Lik property from a 1997

Company is participating in the exploration and possible

development of the Lik property through a joint venture with Teck.

The terms of the joint venture were governed by the Lik Block

Agreement, made as of January 27, 1983, between Houston Oil &

Minerals Exploration Company (“HOMEX”) and GCO.

assigned its interest in the Lik Block Agreement to Echo Bay Mines

Ltd., which, in turn, assigned such interest to Teck.

The Lik Block

Agreement terminated on January 27, 2018 and the joint venture is

now governed under the Joint Operating Agreement

(“JOA”) that was attached to the Lik Block Agreement.

Since 2018, Teck and Solitario have agreed to annual exploration

funding to advance the Lik project.

The JOA requires unanimous

approval by the parties for annual expenditures in excess of $1

Solitario is the operator of the joint venture.

and Teck each retain a 50% interest in the Lik

2018, the Company and Teck signed a Joint Exploration Agreement

(“JEA”) whereby both parties agreed to fund a surface

exploration program on a 50%/50% basis for 2018.

extending the JEA and providing funding for continued exploration

were signed in 2019, 2020, and a third Addendum to the JEA is

expected to be signed in 2021.

Teck has acted as manager of the

exploration programs for the past three years.

Accessibility, Climate,

Local Resources, Infrastructure and Physiology

to the Lik property is by air to a gravel surfaced airstrip located

on the property.

The airstrip is capable of handling multi-engine

cargo planes.

Charter flights may be arranged from a number of

sites in northwestern Alaska.

The town of Kotzebue, which is

located about 90 miles from the deposit, is a seaport with

commercial air service from Anchorage.

Kotzebue is the center for

access to the nearby Red Dog mine operated by Teck.

nearest location for which climatic data is available is the town

The average annual temperature at Kotzebue is

with seasonal extremes ranging between 77 o F in summer to

There is an average of nine inches of rain and 47 inches of

snowfall per year.

Snow falls are not extreme but blowing snow may

form significant drifts.

Strong winds are common in most parts of

Diamond drilling is possible at the Lik property between

June and October.

exposures of mineralization at the Lik property are located at

about 800 feet above sea level.

West of the deposit, the land rises

steeply to peaks about 2,300 feet above sea level.

southeast, the land slopes down to the Wulik River where the bottom

of the valley is about 700 feet above sea level.

sufficient space for tailings and waste rock disposal, and

sufficient water is expected to be available for any proposed

Locally, there is vegetation on the property consisting

of tundra grasses and low brush made up of willow, dwarf birch, and

is a camp located on the Lik property.

The camp has been used

periodically over the last twelve years and was substantially

refurbished as a part the 2007 and 2008 field programs.

of electric power and workforce accommodation will have to be

There are no local resources adjacent to the Lik

The Red Dog mine, operated by Teck, is located about 13.6

miles southeast of the deposit.

Potentially, concentrates could be

moved along the access road from the Red Dog mine to the port on

the Chukchi Sea.

The port has a shipping season in excess of

100 days.

Dog ore deposit was originally discovered in 1970 by a geologist

undertaking mapping in the De Long Mountains area on behalf of the

United States Geological Survey.

GCO, in joint venture with New

Jersey Zinc Company and WGM Inc., carried out stream geochemical

sampling and reconnaissance for color anomalies.

Claims were staked

in July 1976 to cover a stream geochemical anomaly on Lik Creek.

HOMEX replaced New Jersey Zinc Company in the joint venture in

drilling on the Lik property commenced in 1977 and targeted a

gossan with a coincident soil and electromagnetic anomaly.

first hole encountered massive lead-zinc-silver-bearing sulfides.

By the end of 1977, the joint venture had completed 25 line-miles

of ground geophysics, a soil sampling program, and ten diamond

drill holes with an aggregate depth of 5,260 feet.

1979, further geological, geochemical and geophysical surveys were

carried out, together with the drilling of another 93 diamond

drill holes aggregating 51,200 feet.

A mineral resource was

The joint venture continued to work in the district in

the period 1980 to 1983.

However, only limited diamond drilling

activity continued on the Lik property.

The Lik Block Agreement was

signed in 1984.

1984, Noranda optioned the GCO holding of the Lik property.

Noranda’s activity was concentrated in the Lik North Area

where ten diamond drill holes with an aggregate depth of 13,710

feet were completed on four sections.

Noranda also drilled holes in

the Lik South deposit to better define the deposit.

released its interest in the Lik property after a re-organization

of its holdings in the United States.

From 1985 through June of

2007, when Zazu acquired its interest in the Lik property, only a

limited amount of work was conducted at Lik.

completed diamond drilling programs during the 2007, 2008 and 2011

summer field seasons.

From 2009 through 2014, Zazu conducted a

suite of economic, engineering, environmental and metallurgical

studies on the Lik property, culminating with the completion of a

regional geology of the Western Brooks Range area is structurally

The sedimentary rocks of the area have been significantly

disrupted by thrust sheets.

The Lik property and the other

zinc-lead deposits of the Brooks Range, including Red Dog, are

hosted in the Kuna Formation of the Lisburne Group.

In the Western

Brooks Range, the Lisburne Group includes both deep and shallow

water sedimentary facies and local volcanic rocks.

The rocks have

been extensively disrupted by thrusting.

The deep-water facies of

the Lisburne Group, the Kuna Formation, are exposed chiefly in the

Endicott Mountains.

district scale, the Lik property is hosted in the Red Dog plate of

the Endicott Mountains thrust sheet.

The stratigraphically lowest

rocks within the Red Dog plate belong to the Kayak Shale.

of the Kayak Shale is interbedded with rocks of the Kuna Formation.

The Ikalukrok Unit has been divided into a lower laminated black

shale sub-unit and an upper medium- to thick-bedded black chert

The Ikalukrok Unit hosts all of the known massive sulfide

deposits in the area.

Locally, the Lik

property is hosted in the upper part of the Ikalukrok Unit of the

Kuna Formation.

The host rocks are carbonaceous and siliceous black

shale, with subordinate black chert and fine-grained limestone.

These rocks strike broadly north-south and dip at about

The massive sulfides are overlain conformably by rocks of the

Siksikpuk Formation.

The sequence is overridden by allochthonous

rocks that form high hills north and west of the

mineralized sequence is cut by a number of faults.

significant disruption is the Main Break Fault, which drops the

northern end of the Lik deposit down about 500 feet.

It is unclear

whether there is a change in strike north of the fault, or whether

the change is more apparent due to topography.

The Main Break Fault

strikes east-west and dips north at about 60 o .

There is another

group of steeper faults that tend to strike northerly or

northwesterly and which are interpreted as being both normal and

reverse with throws of up to 330 feet.

angle thrust faults also cut the rocks at Lik and regionally.

faults are known to cut and displace massive sulfide mineralization

at the Red Dog deposits and others in the district.

Prior Exploration and the

Results of the 2019 Exploration Program

deposit was discovered by GCO in the mid-1970’s by following

up on soil color and stream geochemical anomalies.

From the late

1970’s to 2011, various geochemical, geophysical and geologic

activities were intermittently conducted to define drill targets.

The Lik property was sporadically drill tested from the

late-1970’s to 2011 by seven different companies.

these historical drilling campaigns are discussed above under the

heading “History”

and below under the heading

“Drilling.”

field work was conducted on the Lik property in 2020 due to

COVID-19 travel restrictions and limited availability of Teck

employees for field geology as well as health concerns for local

However, significant progress was made in further

analyzing previously acquired data from both historical Zazu work

and Teck field work in 2018 and 2019.

The focus of Teck’s

2020 work consisted of reinterpretation of the stratigraphic and

structural setting in the vicinity of the Lik deposit, and refining

the results of the 2019gravity geophysical information.

resulted in a better understanding of the stratigraphic and

structural control of mineralization at Lik, and the potential

trend of mineralization to the north.

Geochemical sampling

indicates an area of elevated geochemistry to the north that could

be proximal to zinc mineralization.

The gravity survey results are

somewhat uncertain, but point to an area of interest, also to the

The stratigraphic and structural reinterpretation in the

vicinity of the Lik deposit suggests the potential for stacked

deposits below the Lik deposit.

Mineralization

deposit is a black shale-hosted stratiform zinc-lead-silver

sedimentary-exhalitive (SEDEX) deposit.

Mineralization is

syngenetic with respect to sediment deposition.

Silicification

occurs within and peripheral to the main mass of sulfides.

sulfides in decreasing order of abundance are pyrite-marcasite,

sphalerite and galena.

The ore textures are massive, fragmental,

chaotic, and veined;

they rarely show typical sedimentary layering.

The portion of the ore body near the surface is oxidized.

deposit is continuous outside the Lik property onto the adjacent

100%-owned Teck property to the south.

The southern continuation of

the Lik deposit is referred to as the Su deposit, lying on

Teck’s Su property.

the Lik property, the deposit is divided into two parts by the Main

The main part of the deposit within the existing

claims is referred to as the Lik South deposit.

tested, the Lik South deposit has a surface footprint of about

3,600 feet long and about 2,000 feet wide.

It has been tested down

dip to a depth of about 650 feet.

The Lik South deposit remains

open down dip.

North of the Main Break Fault, the Lik North deposit

has a surface footprint of about 2,300 feet long and about 1,150

It has been tested down dip to a depth of about 1,000

The Lik North deposit remains strongly open down dip and to

deposits strike northerly and dip westerly at about 25 o to 40 o .

The mineralization

comprises irregular, stratiform lenses.

The mineralogy of the

sulfides is simple and comprises pyrite, marcasite, sphalerite, and

Gangue minerals include quartz (as chert), clay minerals,

carbonate and barite.

Noranda recognized six different ore types in

its logging of drill core.

Typical grades of mineralized

intersections within the Lik deposit are listed in the table

Typical Mineralized Intersections

Previous work by

GCO determined that sulfides were deposited in four distinct

Individual cycles may be quite thin near the margins of the

deposit and the thickest accumulation in a single cycle noted to

date is about 45 feet thick.

The base of a sulfide cycle begins

abruptly with the deposition of sphalerite, galena and pyrite.

Typically, the highest grades are found at or within 5-10 feet of

the base of a sulfide cycle.

In the central portion of the deposit

several cycles are stacked and comprise a cumulative thickness of

up to 100 feet of mineralization.

diamond drill programs are summarized in the following

Historical Diamond Drilling Campaigns

Number of Holes

Aggregate Depth (m)

completed two diamond drilling programs during 2007 and 2008 to

further test the Lik South deposit and to obtain samples for

metallurgical testing.

At the end of 2008, most of the Lik South

deposit had been tested on lines spaced at 200 ft.

spaced at about 100 ft.

2011 drilling program at Lik combined exploration and development

The exploration drilling focused on improving resource

definition, in particular near the transition zone between Lik

South and Lik North and also Lik North.

The development drilling

focused on obtaining additional metallurgical samples and

geotechnical drilling for the open pit design and foundation

information to assist in infrastructure design.

By the end of 2011,

a total of approximately 38,328 meters (125,700 feet) of drilling

in 229 holes had been completed on the Lik property by the Company

(Zazu) and the previous owners.

No drilling has been completed on

the Lik project since 2011.

Sampling, Analysis and

Security of Samples

recoveries were typically high within the massive sulfides, but

lower, more variable recoveries were obtained in the unmineralized

and weakly mineralized sections.

The entire core obtained from the

Lik deposit, usually NQ-size, was logged on site.

All of the core

containing sulfide mineralization was cut using diamond saws and

half of the core was sent for assay.

Reference samples were not

included in the sample stream.

Sample lengths in massive sulfides

were typically from two to three feet, but occasionally up to nine

Sample lengths were probably controlled by geology and the

location of depth markers in the core boxes.

the samples were assayed by Bondar Clegg Laboratory Group

(“Bondar Clegg”) of Vancouver British Columbia.

various times, the laboratory-maintained preparation facilities in

Anchorage and Fairbanks Alaska.

In the initial years, when the bulk

of the drilling was completed, it is believed that sample

preparation and analysis were carried out in Vancouver.

Clegg was not a registered laboratory at that time.

However, Bondar

Clegg was a recognized, reputable laboratory and was experienced in

the use of atomic absorption spectrophotometry.

entire core was logged and sampled in an isolated field camp,

security was not a major concern because access to the camp was

closely controlled.

It is noted that four different companies (WGM,

GCO, Noranda and Moneta) have completed drilling programs at the

Lik property and all of them have obtained consistent results.

work was considered completed to industry standards in use at the

time of the work.

Sample preparation was completed in the assay

core obtained during the 2007, 2008 and 2011 drilling campaigns was

logged on site.

The entire core containing sulfide mineralization

was sawn using diamond saws and half of the core was sent for

All massive and high-sulfide cores were sampled.

methods were used to select sample boundaries and lengths.

mineralization at Lik is considered to be appropriately logged and

It is not evident that logging or sampling is leading to

any bias in the sample results.

An examination of logging showed

that core recovery in sulfide areas was generally very

drilled in 2007 was placed in the sample bags, the air was

evacuated and replaced with nitrogen.

The samples were sent to

Kotzebue by charter and then by licensed carrier to Anchorage.

samples were stored under refrigeration in Anchorage.

were dispatched to G & T Metallurgical Services Ltd.

& T”) of Kamloops, British Columbia, an ISO 9001:2000

certified laboratory for precious metals and base metals.

as completing metallurgical testing, G & T crushed and analyzed

The 2008 diamond drill core was not required for

metallurgical testing and core was handled normally.

were securely bagged and boxed on site and dispatched to a facility

of ALS Laboratory Group (“ALS Chemex”) located in

Fairbanks, Alaska, for sample preparation.

Transportation of the

samples was through third-party companies that provided secure

transportation services.

The pulps were analyzed at ALS Chemex

located in Fairbanks or Elko, Nevada.

Zazu did not participate in

any part of the sample preparation or analysis except for cutting

samples from the 2007 drilling program and all samples from the

2008 drilling campaign were sent to the preparation and assaying

facilities of ALS Chemex (ISO 17025 accreditation).

procedures employed by Zazu included the use of blanks

(unmineralized core from outside of the mineralized zone) and

quartered core duplicates.

Zazu was unable to obtain acceptable

reference samples for the 2007 field season and reference samples

were not included as part of the 2007 ongoing QA/QC program.

Reproducibility between G & T and ALS Chemex was found to be

A detailed description of QA/QC procedures can be found in

the Solitario’s Canadian SEDAR filings and in the

Company’s US Edgar filings:

Technical Report;

Corporation, Lik Deposit, Alaska, USA;

April 23, 2014;

Effective Date:

March 3, 2014;

prepared by JDS Energy and Mining

Inc (“JDS”).

Prefeasibility

completed a PEA in 2014 that incorporated a variety of

prefeasibility level studies into the analysis.

These studies

included resource estimation, mining and processing recovery

estimates, a preliminary mining and processing plan, infrastructure

layout, environmental considerations and an economic analysis based

on the base case parameters.

The PEA envisioned an open pit mining

operation with a 5,500 ton per day floatation mill for processing

resulting in a nine-year mine life.

Concentrates would be handled

through the DeLong Mountain Regional Transportation System (the

“DMTS”) road and port system that currently handles all

concentrate produced by the nearby Red Dog zinc mine of Teck.

summary of metallurgical testing and mineral processing is provided

The PEA analyzed the Lik project as a stand-alone operation

building its own independent processing, tailings and port

engaged JDS to complete the PEA on the Lik deposit in 2013.

43-101 compliant study entitled:

Technical Report;

Zazu Metals Corporation, Lik

Deposit, Alaska, USA;

April 23, 2014;

Effective Date:

March 3, 2014 ;”

can be found in the Company’s

Canadian Sedar filings and is furnished in the Company’s U.S.

Edgar filings.

JDS is a Canadian independent and internationally

recognized mining engineering firm providing engineering services

internationally.

Metallurgical Testing and

Mineral Processing

have been five metallurgical test work reports issued to date on

the Lik ores.

The most recent and comprehensive processing and

metallurgical testing programs include work performed by G&T

Samples collected during drilling in 2007 and 2008 were

composited into one Master Composite for testing at G&T in

2008, and later testing by SGS was carried out in 2010 on the

remainder of the Master Composite.

These key testing results have

formed the basis for this economic evaluation of the Lik deposit.

Results are summarized in the table below:

Summary of SGS 2010 and G&T 2008 Metallurgical Test

Lead Concentrate

Zinc Concentrate

Average Used for Mass Balance and NSR Estimates

metallurgical flowsheet for this PEA includes conventional

crushing, grinding, and floatation processing methods.

Run-of–Mine (ROM) ore will be delivered to a primary crushing

plant and stored in a coarse ore stockpile awaiting reclaim into

the grinding circuit.

Crusher ore will be reclaimed and delivered

to a two-stage grinding circuit equipped with a Semi-Autogenous

Grinding (SAG) mill and a ball mill in closed circuit with

Recoveries from

these modeled methods and metallurgical testing conducted to date

are anticipated to be 85% of zinc to the zinc concentrate and 69.7%

of the lead to the lead concentrate.

Silver is also recovered and

payable at times in the zinc concentrate and more significantly in

the lead concentrate.

are no reported mineral reserves.

Mining Operations

commercial mining operations to recover metals have occurred on the

Planned Exploration and Development

Solitario and Teck

are in discussions to jointly fund a 2021 exploration program with

Teck acting as project manager.

The program, if approved, consists

of drilling four-to-five core holes totaling approximately 1,000

Drill targets under consideration are extensions to the

currently defined Lik deposit on the northeast, northwest and

southern limits of the deposit, including one-hole testing for

stacked mineralized horizons.

Drilling is expected to begin during

the 2021 summer field season.

Besides drilling, a rigorous soil

sampling program of up to 500 samples and an eight-line-kilometer

induced polarization geophysical program is planned for an area

northeast of the Lik deposit where there are indications of a

second mineralized zone where no drilling has been conducted.

expect to reach a final decision on this program before the end of

the first quarter of 2021.

Timing of this program could be impacted

by COVID-19 restrictions.

Chambara Zinc Property (Peru)

April 2008, we signed the Minera Chambara shareholders’

agreement with Votorantim on Solitario's 100%-owned Chambara zinc

In 2015 Votorantim transferred its interest in the

Chambara project to Milpo.

In October of 2017, Milpo and Votorantim

merged to form Nexa.

For the remainder of this Chambara property

section, all references to Votorantim, Milpo or Nexa are

collectively referred to as “Nexa.”

 The original

purpose of the Chambara joint venture was to collectively pool

independently owned Solitario

Nexa properties into a jointly held joint venture.

These properties

were located within a large area of interest in northern Peru

measuring approximately 200 by 85 kilometers, but outside of the

Florida Canyon property position.

Nexa originally contributed 52

mineral concessions within the area of interest totaling 52,000

hectares to Minera Chambara for a 15% interest in Minera Chambara.

We contributed 9,600 hectares of mineral claims and an extensive

exploration data base in our possession for an 85% interest in

Minera Chambara.

Existing and future acquired properties subject to

the terms of the shareholders’

agreement will be controlled

by Minera Chambara.

Minera Chambara dropped selected concessions in

2013 and 2016 and acquired the rights to 13 new concessions

totaling 11,600 hectares in 2017.

The current claim holdings of

Minera Chambara are 28 concessions totaling 28,000 hectares of

valid concessions that completely surround the Florida Canyon

project area held by Minera Bongará.

As of December 31, 2020,

Minera Chambara’s only assets are the properties and Minera

Chambara has no debt.

Nexa may increase its shareholding interest

to 49% through cumulative spending of $6,250,000 and may further

increase its interest to 70% by funding a feasibility study and

providing construction financing for Solitario's interest.

provides such construction financing, we would repay that

financing, including interest, from 80% of Solitario's portion of

the project cash flow.

 The project

has been on care and maintenance in recent years.

geochemical anomalies and outcropping mineralization have been

identified at several locations on the Chambara property.

responsible for maintaining the property in good standing and

making all concession payments to the Peruvian government.

Concession costs in 2021 to be paid by Nexa are estimated to be

Gold Coin (Arizona)

 Solitario

acquired an option-to-buy a 100% interest in the Gold Coin Property

in southeastern Arizona in late-2020.

Gold Coin hosts significant

surface gold values over an area of more than 400 acres.

property has never been drilled to depths greater than 20 meters

Work to date has identified five potential target areas

for drilling.

In addition, a second property, the Texas-Arizona,

which contains polymetallic mineralization

(copper-lead-zinc-silver-gold) which is included in the Gold Coin

option agreement.

Geologically, Gold

Coin is a low-sulfidation system hosted primarily in low-angle

thrust faults that offset Paleozoic carbonate and Tertiary volcanic

Gold occurs in oxidized rocks with associated

quartz-hematite alteration and siliceous hydrothermal breccias.

Historical rock chip sampling (collected before NI 43-101

protocols) was conducted by several companies since the

1990’s in trenches, prospect pits and outcrops.

chip samples, 53 contain greater than 350 ppb gold, with the

overall average of these 53 samples containing 3.2 grams per tonne

gold, with slightly higher grades of silver.

Geologic mapping and

geochemical sampling is planned for 2021 to further identify

potential drill targets.

of the Gold Coin option agreement include scheduled payments to the

underlying owner of $12,000 upon signing (paid), and at

Solitario’s option, to pay $15,000 at the first anniversary

date, with a total of $242,000 over a five-year period.

signing the Gold Coin option agreement Solitario paid a

finders’

fee of $5,000 to a contract geologist.

Solitario has

agreed to escalating work commitments at Solitario’s option

totaling $1,025,000 during the first four years, with the first

year totaling $75,000.

The underlying owner will retain a 2.0% Net

Smelter Return royalty.

Solitario will have the option, but not

obligation, to reduce the Net Smelter Return royalty to 1.0% by

paying the owner $500,000 and will have the option to eliminate the

remaining royalty of 1.0% by paying the owner $1.0

Discontinued Projects

2020 we recorded $6,000 of mineral property impairment related to

its decision to abandon its La Promesa project in Peru.

abandon any mineral properties during 2019.

GLOSSARY OF MINING TERMS

“Allochthonous”

means originating in a place

other than a place where it was formed.

 “

Assay ”

means to test minerals by chemical or other methods for the purpose

of determining the amount of valuable metals

“Anticline”

means folds in which each half of

the fold dips away front the crest.

Breccia ”

means rock consisting of

fragments, more or less angular, in a matrix of finer-grained

material or of cementing material.

Carbonaceous ”

means a compound relating to or containing carbon.

Chert ”

means a sedimentary rock of microcrystalline quartz (the mineral

form Silicon dioxide - SiO2).

 “

Claim”

or “Concession ”

means a mining interest giving

its holder the right to prospect, explore for and exploit minerals

within a defined area.

“Clastic”

means pertaining to rock or rocks

composed of fragments or particles of older rocks or previously

existing solid matter;

Deposit ”

means an informal term for an accumulation of mineral

“Development”

means work carried out for the

purpose of opening up a mineral deposit and making the actual ore

extraction possible.

“Domal”

means of a dome shape.

Dolomite”

means calcium

magnesium carbonate, CaMg (CO 3 ) 2 , occurring in

crystals and in masses.

“Facies”

means the appearance and

characteristics of a sedimentary deposit, especially as they

reflect the conditions and environment of deposition and serve

to distinguish the deposit from

contiguous deposits.

Fault ”

means a fracture in rock along which there has been displacement of

the two sides parallel to the fracture.

Galena ”

means a bluish gray or black mineral of metallic appearance,

generally the chief ore of lead sulfide.

“gpt”

means grams per tonne.

“Karst”

means a landscape that is characterized by the

features of solution weathering and erosion in the subsurface.

These features include caves, sinkholes, disappearing streams,

subsurface drainage and deeply incised narrow canyons.

“M anto

deposits”

means replacement ore bodies that are strata

bound, irregular to rod shaped ore occurrences usually horizontal

or near horizontal in attitude.

Mineralization ”

means the concentration of metals within a body of

means net smelter return royalty.

means material containing minerals that can be economically

“Ounce”

means a troy ounce.

“Oxide”

means a mineral class in which the

chemical compound that typically contains an 0 -2 oxygen atom in

its chemical formula.

“Pyrite”

means a compound of iron sulfide

(FeSO2) commonly found in mineral rich areas.

 “

Reserves ”

means that part of a mineral deposit, which

could be economically and legally extracted or produced at the time

of the reserve determination.

Sampling ”

means selecting a fractional, but representative, part of a mineral

deposit for analysis.

Shale ”

means a fine-grained sedimentary rock that forms from the

compaction of silt and clay commonly referred to as

Sediment ”

means solid material settled from suspension in a

“Sedimentary Exhalative Deposits (SEDEX)”

ore deposits which have been formed by the release of ore-bearing

hydrothermal fluids into a water reservoir.

“Silicification”

means the process in which

organic matter becomes saturated with silica (silicon

“Sphalerite”

means a very common mineral,

zinc sulfide, usually containing some iron and a little

cadmium, occurring in yellow, brown, or black crystals or

cleavable masses with resinous luster and it is the principal

“Spectrophotometry”

means the quantitative

measurement of the reflection properties of a material as a

function of its wavelength.

“Stratiform”

means formed parallel to the

bedding places of surrounding rock.

“Stratigraphy”

means t he arrangement of rock

strata, especially as to the geographic, chronologic order of

sequence (age), classification, characteristics and

Strike ”

when used as a noun, means the direction, course or bearing of a

vein or rock formation measured on a level surface and, when used

as a verb, means to take such direction, course

or bearing.

Sulfide ”

means a compound of sulfur and some other element.

“Syngenetic”

means a mineral deposit that forms

at the same time as the surrounding rock.

means a short ton (2,000

Tonne”

means a metric measure that contains 2,204.6 pounds or 1,000

Vein ”

means a fissure, fault or crack in a rock filled by minerals that

have traveled upwards from some deep source.

Treasuries and cash held in brokerage accounts.

The failure of the financial institutions that issued or hold these financial instruments or our cash could have a material adverse impact on the market price of our common stock and our liquidity and capital resources.

At December 31, 2021, we have invested $4,236,000 in United States Treasury securities (“USTS”) held in a brokerage account, with maturities of between 30 days and 12 months and we have approximately $451,000 of our cash in uninsured deposit accounts and brokerage accounts which are not covered by FDIC insurance.

The failure of a financial institution holding these funds and assets could have a material impact on the market price of our common stock and our liquidity and capital resources.

We are dependent upon information technology systems, which are subject to disruption, damage, failure and risks associated with implementation and integration.

We are dependent upon information technology systems in the conduct of our operations.

Our information technology systems are subject to disruption, damage or failure from a variety of sources, including, without limitation, computer viruses, security breaches, cyber-attacks, natural disasters and defects in design.

Cybersecurity incidents, in particular, are evolving and include, but are not limited to, malicious software, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in systems, theft of assets, unauthorized release of confidential or otherwise protected information and the corruption of data.

Various measures have been implemented to manage our risks related to information technology systems and network disruptions.

However, given the unpredictability of the timing, nature and scope of information technology disruptions, we could potentially be subject to operational delays, the compromising of confidential or otherwise protected information, loss of assets, including our cash, short-term investments, or marketable equity securities, destruction or corruption of data, security breaches, other manipulation or improper use of our systems and networks or financial losses from remedial actions, any of which could have a material adverse effect on our cash flows, competitive position, financial condition or results of operations.

Unresolved Staff Comments

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors