What changed in this filing

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Item 1. Business

2024-03-22 compared with 2023-03-16 · 30 added, 29 removed, 108 unchanged (35% of the section changed)

Business and Company Formation

Solitario Zinc Corp.

Solitario Resources Corp.

(“Solitario” or the “Company”) is an exploration stage company as defined by rules issued by the SEC.

Solitario was incorporated in the State of Colorado on November 15, 1984 as a wholly owned subsidiary of Crown Resources Corporation ("Crown").

In July 1994, Solitario became a publicly traded company on the Toronto Stock Exchange (the "TSX") through its initial public offering.

Solitario was incorporated in the State of Colorado on November 15, 1984.

Solitario has been actively involved in mineral exploration since 1993.

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Solitario’s primary focus is on the acquisition and exploration of precious metal, zinc and other base metal exploration mineral properties.

In addition to focusing on its mineral exploration properties and the evaluation of mineral properties for acquisition, Solitario also evaluates potential strategic transactions as a means to acquire an interest in new precious and base metal properties and assets with exploration potential or other potential corporate transactions that Solitario determines to be favorable to Solitario.

In addition to focusing on its mineral exploration properties and the evaluation of mineral properties for acquisition, Solitario also from time to time evaluates potential strategic transactions as a means to acquire an interest in new precious and base metal properties and assets with exploration potential or other potential corporate transactions that Solitario determines to be favorable to Solitario.

Solitario has recorded revenue in the past from the sale of mineral properties, including the sale of certain mineral royalties.

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Solitario is working with its 50% joint venture partner, Teck American Inc., a wholly owned subsidiary of Teck Resources Limited (both companies are referred to in this Annual Report as “Teck”) at its Lik project.

Teck completed a drilling program and conducted mapping and ground gravity geophysical activities at the Lik project during 2022.

Teck completed a drilling program and conducted mapping and ground gravity geophysical activities at the Lik project during 2022 and 2023.

Solitario is conducting mineral exploration on its Golden Crest project on its own.

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Human Capital Management

As of December 31, 2022, Solitario had three full-time employees and three part-time seasonal employees.

As of December 31, 2023, Solitario had six full-time employees and three part-time seasonal employees.

In addition, we use consultants and contractors with specific skills to assist with exploration activities, administration, due diligence, environmental and regulatory compliance, corporate governance, and asset and operations management.

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Risks and Uncertainties

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

Solitario’s business could be adversely impacted by the on-going effects of the coronavirus (“COVID-19”) or other epidemics or pandemics.

Solitario continues to evaluate the effects of COVID-19 on its operations and at times during the pandemic took pro-active steps to address the impacts on its operations, including at times reducing costs, in response to the economic uncertainty associated with potential risks from COVID-19.

These prior cost reductions included implementing salary reductions and evaluating and reducing certain planned 2021 exploration programs through our joint venture partners at the Florida Canyon and Lik exploration projects.

Certain of Solitario’s joint venture partners have, from time to time, modified plans with respect to the projects in which Solitario holds an interest in response to the COVID-19 pandemic.

Also, Solitario has evaluated the potential impacts on its ability to access future traditional funding sources on the same or reasonably similar terms as in past periods.

Solitario will continue to monitor the effects of COVID-19 on its operations, financial condition, and liquidity.

However, the extent to which the COVID-19 pandemic or other epidemics or pandemics ultimately impacts Solitario’s business, including our 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 scope of new outbreaks and governmental actions taken to contain or treat any such outbreak.

Solitario is subject to various risks and uncertainties that are specific to the nature of its business and the exploration of its mineral properties.

Solitario also faces various macro risks and uncertainties, such as risks related to health epidemics, pandemics, and other outbreaks or resurgences of communicable diseases, the occurrence of natural disasters, rising geopolitical tension and instability, acts of war or terrorism, global economic uncertainty, inflationary pressures, increased interest rates, and volatility and disruption in national and international financial markets.

These risks and uncertainties could significantly disrupt Solitario’s operations and may materially and adversely affect its business and financial condition.

Certain of these risks and uncertainties are discussed under the heading “Risk Factors” below in Item 1A of this Annual Report.

Solitario will continue taking proactive steps to monitor and address the impacts of these risks and uncertainties on its operations, financial condition, and liquidity.

Such steps may include, for example, modifying the scope of exploration projects to the extent necessary to respond to public-health emergencies, a step Solitario and its joint venture partners took to address the impacts of the COVID-19 pandemic;

reducing costs and increasing operational efficiency in response to inflationary stress and economic downturn;

and performing ongoing evaluations of the potential impacts of market volatility, general economic uncertainty, and rising geopolitical tension on Solitario’s ability to access future traditional funding sources on the same or reasonably similar terms as in past periods.

While Solitario will continue to monitor and address the effects of these risks and uncertainties, the extent to which they ultimately impact Solitario’s business, including its exploration and other activities and the market for its securities, will depend on future developments, which are highly uncertain and cannot be predicted at this time.

Corporate Structure

Solitario Zinc Corp.

Solitario Resources Corp.

- Golden Crest Project [South Dakota] (100%)

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Solitario would then repay the loan facility through 50% of its net cash flow distributions from the project.

During 2021 Solitario entered into a lease agreement (the “Golden Crest Agreement”) whereby Solitario acquired exclusive exploration rights in certain claims (the “GC Claims”) in the Black Hills region of South Dakota.

During 2021 Solitario entered into a lease agreement with Golden Crest II, LLC, a Wyoming limited liability company (the “GC Agreement”) whereby Solitario acquired exclusive exploration rights in certain claims (the “GC Claims”) in the Black Hills region of South Dakota.

The GC Claims are part of Solitario’s Golden Crest project.

Terms of the Golden Crest Agreement include scheduled payments by Solitario to the underlying owner of $65,000 (paid upon signing) and an obligation to pay the underlying owner $60,000 at the first anniversary date which was paid in June 2022.

Terms of the GC Agreement include required scheduled payments by Solitario to the underlying owner of $65,000 (paid upon signing) and an obligation to pay the underlying owner $60,000 at the first anniversary date which was paid in June 2022.

Solitario recorded an initial acquisition cost of $125,000 during 2021 related to these required payments.

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Solitario has agreed to pay the underlying owner an additional success fee of $1.00 per ounce of gold in the event Solitario files a 43-101 qualified resource of up to 1.5 million ounces of gold or a maximum of $1,500,000.

Solitario has agreed to escalating work commitments, at Solitario’s option, on the GC Claims and a related area of interest around the GC Claims totaling $3,000,000 during the first five years of the lease, with the first-year minimum expenditures totaling $200,000 ending June 2022.

Solitario has exceeded the minimum exploration expenditures required in 2022.

The term of the Golden Crest Agreement is for twenty years and is automatically extended as long as Solitario is performing any exploration, development or mining activities on the GC Claims.

In order to maintain the lease in good standing, Solitario has agreed to escalating work commitments, on the GC Claims and a related area of interest around the GC Claims totaling $3,000,000 during the first five years of the lease, with the first and second-year minimum expenditures totaling $600,000 ending June 2022.

Solitario has exceeded the minimum exploration expenditures required through 2023.

The term of the GC Agreement is for twenty years and is automatically extended as long as Solitario is performing any exploration, development or mining activities on the GC Claims.

The underlying owner retained a 2.0% Net Smelter Return royalty.

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At December 31, 2023, Solitario also holds an 85% interest in the Chambara exploration project in Peru.

Nexa holds the remaining 15%.

Nexa holds the remaining 15% interest.

We conduct exploration and property evaluation activities in Peru and in the United States in Alaska and South Dakota either on our own using contract geologists, or through joint ventures operated by our partners.

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These activities may include prospecting, geologic mapping, sampling, geophysics and drilling.

When we determine that this work indicates a project may not be economically feasible or contain sufficient geologic or economic potential, we may impair or completely write-off the property.

When we determine that this work indicates a project may not be economically feasible or not contain sufficient geologic or economic potential, we may impair or completely write-off the property.

A significant factor in the success or failure of our activities is the price of commodities.

For example, when the price of zinc or other commodities is down, we may determine that the value of our mineral exploration properties decreases;

For example, when the price of zinc, gold or other commodities is down, we may determine that the value of our mineral exploration properties decreases;

however, during such down markets it may also become easier and less expensive to locate and acquire new mineral exploration properties.

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Accordingly, while we conduct exploration activities on our projects, we need to maintain and replenish our capital resources.

Historically, we have met our need for capital through (i) the sale of our investments in, and interest on, our short-term treasury notes and bank certificates of deposit (“CDs”);

Historically, we have met our need for capital through (i) the sale of our investments in, and interest on, money market accounts and our short-term treasury notes and bank certificates of deposit (“CDs”);

(ii) issuances of common stock;

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mineral exploration.

We currently conduct exploration activities in Peru, Alaska and South Dakota and evaluate properties for potential acquisition and evaluation of strategic corporate opportunities throughout North and South America.

As of March 15, 2023, we had three full-time employees located in the United States and no full-time employees outside of the United States.

We currently conduct, whether directly or through our joint venture partners, exploration activities in Peru, Alaska and South Dakota and evaluate properties for potential acquisition and evaluation of strategic corporate opportunities throughout North and South America.

As of March 21, 2024, we had six full-time employees located in the United States and no full-time employees outside of the United States.

We utilize contract managers, geologists, administrators and part-time laborers to execute our Latin American and North American project work and acquisition evaluations.

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Governmental Regulations

Mineral development and exploration activities are subject to various national, state/provincial, and local laws and regulations, which govern prospecting, development, mining, production, exports, taxes, labor standards, occupational health, waste disposal, protection of the environment, mine safety, hazardous substances and other matters.

Mineral development and exploration activities are subject to various national, state/provincial, and local laws and regulations, which govern prospecting, permitting, development, mining, production, exports, taxes, labor standards, occupational health, waste disposal, protection of the environment, mine safety, hazardous substances and other matters.

Similarly, if any of our properties are developed and/or mined those activities are also subject to significant governmental regulation and oversight.

We are required to obtain licenses, permits and other authorizations in order to conduct our exploration programs.

We are required to obtain licenses, permits and other authorizations in order to maintain our various mineral property rights and interests and to conduct our exploration programs.

Our failure to comply with any of these requirements could result in the loss of our ability to conduct mining activities in a particular location, which could have a material adverse impact on our business.

Environmental Regulations

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Changes to current local, state or federal laws and regulations in each jurisdiction in which we conduct our exploration activities could, in the future, require additional capital expenditures and increased operating and/or reclamation costs.

We have reviewed and considered current federal legislation relating to climate change and do not believe it to currently have a material effect on our operations.

We have reviewed and considered current federal legislation relating to climate change and given our current small size and limited activities, we do not believe it to currently have a material effect on our operations.

Future changes in U.S.

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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 1. Business