What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-03-22 compared with 2023-03-16 · 260 added, 209 removed, 308 unchanged (60% of the section changed)

1 unchanged sentence

Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

(Plante & Moran, PLLC, Denver, Colorado, PCAOB ID 166 )

Report of Independent Registered Public Accounting Firm ( Assure CPA, LLC , Spokane, Washington , PCAOB ID 444 )

Report of Independent Registered Public Accounting Firm (Plante & Moran, PLLC, Denver, Colorado, PCAOB ID 166)

Consolidated Balance Sheets as of December 31, 2023 and 2022

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of Solitario Zinc Corp.

To the Board of Directors and Stockholders

of Solitario Resources Corp.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Solitario Zinc Corp.

(the “Company”) as of December 31, 2022 and 2021, the related statements of operations, shareholders' equity, and cash flows for each of the years in the two-year period ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheet of Solitario Resources Corp.

(“the Company”) as of December 31, 2023, and the related consolidated statement of operations, statement of shareholders’ equity and cash flows for the year then ended, and the related notes (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

The Company's management is responsible for these financial statements.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

We have served as the Company’s auditor since July of 2023

Spokane, Washington

Firm ID is 444

March 21, 2024

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of Solitario Resources Corp.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Solitario Resources Corp.

(fka Solitario Zinc Corp.) (the “Company”) as of December 31, 2022, the related consolidated statements of operations, shareholders' equity, and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

The Company's management is responsible for these financial statements.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (the “PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

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We determined that there are no critical audit matters.

/s/ Plante & Moran, LLLC

We have served as the Company’s auditor since 2004.

/s/ Plante & Moran, PLLC

We served as the Company’s auditor from 2004 through 2023.

Denver, Colorado

March 15, 2023

SOLITARIO ZINC CORP.

SOLITARIO RESOURCES CORP.

CONSOLIDATED BALANCE SHEETS

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See Notes to Consolidated Financial Statements.

SOLITARIO ZINC CORP.

SOLITARIO RESOURCES CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(in thousands of U.S.

Dollars, except per share amounts)

For the years ended December 31,

Costs, expenses and other

Operating expenses

Exploration expense

Depreciation and amortization

Mineral property impairment

General and administrative

Total costs, expenses and other

Total operating expenses

Other (expense) income

Interest and dividend income (net)

Loss on derivative instruments

Interest and dividend income

Gain (loss) on derivative instruments

Loss on sale of marketable equity securities

Unrealized loss on short-term investments

Unrealized (loss) gain on marketable equity securities

Unrealized gain (loss) on short-term investments

Unrealized gain (loss) on marketable equity securities

Total other income (expense)

Loss per common share

Net loss per common share

Basic and diluted

2 unchanged sentences

See Notes to Consolidated Financial Statements.

SOLITARIO ZINC CORP.

SOLITARIO RESOURCES CORP.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

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Balance at December 31, 2021

Stock option expense

Stock-based compensation

Issuance of shares – option exercises

Issuance of shares – ATM, net

Issuance of shares – private placement

Balance at December 31, 2022

Stock option expense

Stock-based compensation expense

Issuance of shares – option exercises

Issuance of shares – ATM, net

Issuance of shares – private placements, net

Issuance of shares – services

Balance at December 31, 2023

See Notes to Consolidated Financial Statements.

SOLITARIO ZINC CORP.

SOLITARIO RESOURCES CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands of U.S.

For the year ended

For the years ended

Operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Unrealized loss (gain) on marketable equity securities

Unrealized loss on short-term investments

Unrealized (gain) loss on marketable equity securities

Unrealized (gain) loss on short-term investments

Loss on sale of marketable equity securities

Loss on derivative instruments

Other income – Paycheck Protection Program loan forgiveness

Mineral property impairment

Employee stock option expense

Gain (loss) on derivative instruments

Stock-based compensation expense

Amortization of right of use lease asset

Changes in operating assets and liabilities:

Prepaid expenses and other current assets

Accounts payable and other current liabilities

Current assets

Current liabilities

Net cash used in operating activities

Investing activities:

Sale of short-term investments – net

(Purchase) sale of short-term investments – net

Additions to mineral property

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Additions to other assets

Net cash provided by investing activities

Net cash (used by) provided by investing activities

Financing activities:

Issuance of common stock – net of issuance costs

Stock options exercised for cash

Issuance of common stock from private placements – net of issuance costs

Issuance of common stock upon exercise of stock options

Net cash provided by financing activities

2 unchanged sentences

Cash and cash equivalents, end of year

Supplemental Cash Flow information:

Accrued mineral property acquisition costs included in accounts payable

Acquisition of right to use asset

Non-cash financing and investing activities:

Issuance of shares of common stock for services

Recognition of operating lease liability and right of use asset

See Notes to Consolidated Financial Statements.

SOLITARIO ZINC CORP.

SOLITARIO RESOURCES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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Business and company formation

Solitario Zinc Corp.

(“Solitario,” or the “Company”) is an exploration stage company as defined by rules issued by the United States Securities and Exchange Commission (the “SEC”).

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

Solitario Resources Corp.

(“Solitario,” or the “Company”) is an exploration stage company as defined by rules issued by the United States Securities and Exchange Commission (“SEC”).

Solitario was incorporated in the state of Colorado on November 15, 1984 as a wholly-owned subsidiary of Crown Resources Corporation.

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

Solitario has been actively involved in mineral exploration since 1993.

In June 2023, Solitario’s shareholders approved an amendment to the Company’s Articles of Incorporation to change the Company’s name from Solitario Zinc Corp.

to Solitario Resources Corp., and that name change was effected in July 2023.

Solitario’s primary business is to acquire exploration mineral properties or royalties and/or discover economic deposits on its mineral properties and advance these deposits, either on its own or through joint ventures, up to the development stage.

At that point, or sometime prior to that point, Solitario would likely attempt to sell its mineral properties, pursue their development either on its own or through a joint venture with a partner that has expertise in mining operations, or create a royalty with a third party that continues to advance the property.

At or prior to development, Solitario would likely attempt to sell its mineral properties, pursue their development either independently or through a joint venture with a partner that has expertise in mining operations, or create a royalty with a third party that would continue to advance the property.

Solitario has never developed a property.

Solitario is primarily focused 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 for the acquisition of new precious and base metal properties and assets with exploration potential or business combinations that Solitario determines to be favorable to Solitario.

Solitario has recorded revenue in the past from the sale of mineral properties.

Revenues and / or proceeds from the sale or joint venture of properties or assets have not been a consistent annual source of cash and would only occur in the future, if at all, on an infrequent basis.

Solitario currently considers its carried interest in the Florida Canyon project in Peru, its interest in the Lik project in Alaska and its interest in the Golden Crest project in South Dakota to be its core mineral property assets.

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

Revenues and / or proceeds from the sale or joint venture of properties or assets, although potentially significant when they occur, have not been a consistent annual source of cash and would only occur in the future, if at all, on an infrequent basis.

Solitario currently considers its carried interest in the Florida Canyon zinc project in Peru (the “Florida Canyon Project"), its interest in the Lik zinc project in Alaska (the “Lik Project”), and its Golden Crest project in South Dakota (the “Golden Crest Project”) to be its core mineral property assets.

Nexa Resources, Ltd.

(“Nexa”), Solitario’s joint venture partner, is continuing the exploration and furtherance of the Florida Canyon Project and Solitario is monitoring progress at Florida Canyon.

Solitario is working with its 50 % joint venture partner, Teck American Incorporated, a wholly owned subsidiary of Teck Resources Limited (both companies are referred to as “Teck”), in the Lik deposit to further the exploration of the Lik project, and to evaluate potential development plans for the Lik project.

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

As of December 31, 2022 and 2021, Solitario has balances of cash and short-term investments that Solitario anticipates using, in part, to further the development of the Florida Canyon project, the Lik project and the Golden Crest project and to potentially acquire additional mineral property assets.

The fluctuations in precious metal and other commodity prices have contributed to a challenging environment for mineral exploration and development, which has created opportunities as well as challenges for the potential acquisition of early-stage and advanced mineral exploration projects or other related assets at potentially attractive terms.

Solitario is working with its 50% joint venture partner in the Lik Project, Teck American Incorporated, a wholly-owned subsidiary of Teck Resources Limited (both companies are referred to as “Teck”), to further the exploration and evaluate potential development plans for the Lik Project.

Solitario is conducting mineral exploration on the Golden Crest Project on its own.

As of December 31, 2023, Solitario has balances of cash and short-term investments that Solitario anticipates using, in part, to further the development of the Florida Canyon project, the Lik project and the Golden Crest project and to potentially acquire additional mineral property assets.

The fluctuations in precious metal and other commodity prices contribute to a challenging environment for mineral exploration and development, which has created opportunities as well as challenges for the potential acquisition of early-stage and advanced mineral exploration projects or other related assets at potentially attractive terms.

Financial reporting

The consolidated financial statements include the accounts of Solitario and its wholly owned subsidiaries.

The consolidated financial statements include the accounts of Solitario and its wholly owned subsidiaries, the most significant of which are Zazu Metals Corporation, Zazu Metals (AK) Corp., and Minera Solitario Peru, S.A.

All significant intercompany accounts and transactions have been eliminated in consolidation.

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Revenue recognition

Solitario has recorded revenue from the sale of exploration mineral properties and joint venture property payments.

Solitario’s policy is to recognize revenue from the sale of its exploration mineral properties (those without reserves) on a property-by-property basis, computed as the cash received and / or collectable receivables less any capitalized cost.

1 unchanged sentence

In addition, Solitario’s policy is to recognize revenue on any receipts of joint venture property payments in excess of its capitalized costs on a property that Solitario may lease to another mining company.

Solitario has not recognized any revenue during 2022 or 2021.

Solitario expects any property sales in the future to be on an infrequent basis.

Solitario last recognized revenue in 2019 from the sale of certain royalties and in 2018 from the sale of its royalty in the Yanacocha property.

Solitario does not expect to record joint venture property payments on any of its currently held properties for the foreseeable future.

Historically, Solitario’s revenues have been infrequent and significant individual transactions have only been from sales to well known or vetted mining companies.

Solitario has never had a return on any of its sales recorded as revenue in its history and does not anticipate it will recognize any estimated returns on any potential future recorded revenues.

Solitario has not recorded revenue from the sale of exploration mineral properties or joint venture property payments during 2023 or 2022.

Use of estimates

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Some of the more significant estimates included in the preparation of Solitario's financial statements pertain to:

(i) the recoverability of its investment in mineral properties related to its mineral exploration properties and their future exploration potential;

(ii) the fair value of stock option grants to employees;

(iii) the ability of Solitario to realize its deferred tax assets;

and (iv) Solitario's investment in marketable equity securities.

In performing its activities, Solitario has incurred certain costs for mineral properties.

The recovery of these costs is ultimately dependent upon the sale of mineral property interests or the development of economically recoverable mineral reserves and the ability of Solitario to obtain the necessary permits and financing to successfully place the properties into production, and upon future profitable operations, none of which is assured.

(i) the recoverability of its mineral properties related to its mineral exploration properties and their future exploration potential;

(ii) the fair value of stock option grants to directors, officers, employees and consultants;

and (iii) the ability of Solitario to realize its deferred tax assets.

Cash and cash equivalents

Cash equivalents include investments in highly liquid money-market securities with original maturities of three months or less when purchased.

At December 31, 2022, approximately $ 293,000 of Solitario’s cash and cash equivalents are held in brokerage accounts and foreign banks, which are not covered under the Federal Deposit Insurance Corporation (“FDIC”) rules for the United States.

Cash equivalents generally include investments securities with original maturities of three months or less when purchased.

Cash equivalents at December 31, 2023 include approximately $ 140,000 held in brokerage accounts and foreign banks, which are not covered under the Federal Deposit Insurance Corporation (“FDIC”) rules for the United States.

Money Market Funds

Solitario invests in money market funds that seek to maintain a stable net asset value.

These funds invest in high-quality, short-term, diversified money market instruments, short-term treasury bills, federal agency securities, certificates of deposits, and commercial paper.

Solitario includes its money market funds in short-term investments.

Solitario believes the redemption value of these funds is likely to be the fair value, which is represented by the net asset value.

Redemption is permitted daily without written notice.

Short-term investments

At December 31, 2022, Solitario has United States Treasury securities (“USTS”) with maturities of 15 days to one year , recorded at their fair value of $ 3,951,000 compared to USTS recorded at their fair value of $ 4,236,000 at December 31, 2021.

At December 31, 2021, Solitario also held FDIC insured bank certificates of deposit (“CD’s”) with face values between $ 100,000 and $ 250,000 and maturities of three months to one year, which are recorded at their fair value of $851,000 .

Solitario’s short-term investments are recorded at their fair value based upon quoted market prices.

During the year ended December 31, 2022 and 2021 the non-cash decrease in the fair value of its short-term investments, due primarily to changes in interest rates on held securities, was $ 108,000 and $ 102,000 , respectively.

Solitario’s investments in short-term securities are classified as held for sale securities and recorded at their quoted fair market values.

Interest income and unrealized gains or losses are recorded in the statement of operations in the period when they occur.

At December 31, 2023, Solitario has United States Treasury securities (“USTS”) with maturities of less than two months, recorded at their fair value of $ 698,000 compared to USTS recorded at their fair value of $ 3,951,000 at December 31, 2022.

Solitario has included $ 7,738,000 in a money market fund held in a brokerage account in short-term investments.

The short-term investments are highly liquid and may be sold in their entirety at any time at their quoted market price and are classified as a current asset.

During the year ended December 31, 2023 the unrealized gain on USTS (increase) in the fair value of its short-term investments, due primarily to changes in interest rates on held securities, was $ 56 ,000.

During the year ended December 31, 2022 the unrealized loss (decrease) in the fair value of its short-term investments, due primarily to changes in interest rates on held securities, was $ 108 ,000.

Mineral properties

1 unchanged sentence

Initial acquisition costs of its mineral properties are capitalized.

Solitario regularly performs evaluations of its investment in mineral properties to assess the recoverability and/or the residual value of its investments in these assets.

Solitario regularly performs evaluations of its mineral properties to assess the recoverability and/or the residual value of its investments in these assets.

All long-lived assets are reviewed for impairment whenever events or circumstances change which indicate the carrying amount of an asset may not be recoverable, utilizing established guidelines based upon undiscounted future net cash flows from the asset or upon the determination that certain exploration properties do not have sufficient potential for economic mineralization.

Derivative instruments

Solitario accounts for its derivative instruments in accordance with ASC 815, "Accounting for Derivative Instruments and Hedging Activities" (“ASC 815”).

During 2019, Solitario acquired certain Vendetta Mining Corp.

(“Vendetta”) units, which included Vendetta Warrants (defined below).

Changes in fair value of the Vendetta Warrants are recognized in the statements of operations in the period of change as gain or loss on derivative instruments.

Solitario accounts for its derivative instruments in accordance with ASC 815, "Derivatives and Hedging” (“ASC 815”).

Solitario has entered into covered calls from time to time on its investment in Kinross Gold Corporation (“Kinross”) marketable equity securities.

Solitario has not designated its covered calls as hedging instruments and any changes in the fair value of the covered calls are recognized in the statements of operations in the period of the change as gain or loss on derivative instruments.

Financial Accounting Standards Board ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”) establishes a framework for measuring fair value and requires enhanced disclosures about fair value measurements.

Financial Accounting Standards Board ASC 820, “Fair Value Measurements” (“ASC 820”) establishes a framework for measuring fair value and requires enhanced disclosures about fair value measurements.

ASC 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

Solitario's short-term investments in USTS and CD’s, its marketable equity securities and any covered call options against those marketable equity securities are carried at their estimated fair value based on quoted market prices.

ASC 820 also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows:

Quoted prices in active markets for identical assets or liabilities;

Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability;

Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Solitario's short-term investments in USTS, money market investments, its marketable equity securities and any covered call options against those marketable equity securities are carried at their estimated fair value based on quoted market prices.

See Note 8, “Fair Value of Financial Instruments,” below.

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Changes in fair value on Solitario’s holdings of marketable equity securities are recorded as unrealized gain or loss in the consolidated statement of operations.

Mineral property joint ventures

Solitario accounts for investments in companies and joint ventures in which we have the ability to exercise significant influence, but do not control, are accounted for under the equity method of accounting.

In determining whether significant influence exists, the Company considers its participation in policy-making decisions and representation on governing bodies.

Under the equity method of accounting, our share of the net earnings or losses of the investee are included in net income (loss) in the consolidated statements of operations.

Solitario’s mineral property joint ventures represent cost sharing of project costs.

Shared costs are expensed as incurred.

Solitario does not apply equity-method accounting nor consolidate the operations of Lik, Florida Canyon or Bongara joint ventures as it does not exercise significant control over these projects.

Foreign exchange

The United States dollar is the functional currency for all of Solitario's foreign subsidiaries.

Although Solitario's South American exploration activities during 2022 and 2021 were conducted primarily in Peru, a portion of the payments for the land, leasehold and exploration agreements as well as certain exploration activities are denominated in United States dollars.

Inter-company funding is transacted in United States dollars.

The United States dollar is the functional currency for Solitario and all of Solitario's foreign subsidiaries.

Foreign currency gains and losses are included in the results of operations in the period in which they occur.

Solitario accounts for income taxes in accordance with ASC 740, “Accounting for Income Taxes” (“ASC 740”).

Under ASC 740, income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related to certain income and expenses recognized in different periods for financial and income tax reporting purposes.

Solitario accounts for income taxes in accordance with ASC 740, “Income Taxes” (“ASC 740”).

Under ASC 740, income tax expense or benefit are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related to certain income and expenses recognized in different periods for financial and income tax reporting purposes.

Deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled.

Deferred taxes are also recognized for operating losses and tax credits that are available to offset future taxable income and income taxes, respectively.

Deferred taxes are also recognized for operating losses, carryovers and tax credits that are available to offset future taxable income and income taxes, respectively.

A valuation allowance is provided if it is more likely than not that some portion or all of the deferred tax assets will not be realized.

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Employee stock compensation and incentive plans

Solitario classifies all of its stock options as equity options in accordance with the provisions of ASC 718, “Compensation – Stock Compensation.” See Note 10, “Employee Stock Compensation Plans,” below.

Solitario classifies all of its stock options as equity options in accordance with the provisions of ASC 718, “Compensation – Stock Compensation.” Solitario calculates grant date fair value of options based upon a Black-Scholes model utilizing the vesting term of the option, the grant date historical volatility and the risk-free interest rate on the date of grant.

The grant date fair value is amortized on a straight-line basis over the vesting term of the option, and the stock-based compensation is charged to the statement of operations and credited to additional-paid-in-capital.

See Note 10, “Employee Stock Compensation Plans,” below.

Reclamation and asset retirement obligations

Reclamation obligations associated with Solitario’s exploration activities are recognized when an obligation is incurred, can be reasonably estimated and not concurrently remediated.

Expected reclamation costs are periodically reviewed and adjusted to reflect changes related to on-going exploration activities, inflation and on-going activities that reduce potential future reclamation liabilities.

Solitario does not apply a discount rate to its asset retirement obligation as the estimated time frame for reclamation on its exploration projects is not currently known, as reclamation is not expected to occur until the end of project life, which would follow future development and operations, the start of which cannot be estimated or assured at this time.

Additionally, no depreciation will be recorded on the related asset for the asset retirement obligation until the project goes into operation, which cannot be assured.

Recent accounting pronouncements

In August 2023, the FASB issued ASU 2023-05, Business Combinations - Joint Venture Formations (Subtopic 805-60):

Recognition and Initial Measurement, which clarifies the business combination accounting for joint venture formations.

The amendments in the ASU seek to reduce diversity in practice that has resulted from a lack of authoritative guidance regarding the accounting for the formation of joint ventures in separate financial statements.

The amendments also seek to clarify the initial measurement of joint venture net assets, including businesses contributed to a joint venture.

The guidance is applicable to all entities involved in the formation of a joint venture.

The amendments are effective for all joint venture formations with a formation date on or after January 1, 2025.

Early adoption and retrospective application of the amendments are permitted.

Solitario does not anticipate early adoption.

Solitario is evaluating the new guidance and has not determined the impact of ASU No.

2023-05 on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvement to Income Tax Disclosures, amending income tax disclosure requirements for the effective tax rate reconciliation and income taxes paid.

The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024 and are applied prospectively.

Early adoption and retrospective application of the amendments are permitted.

Solitario does not anticipate early adoption.

Solitario does not expect the adoption of ASU No.

2023-09 to have a material impact on its consolidated financial position or results of operations.

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 still could be adversely impacted by the 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 has taken 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 its 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, Solitairo 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 COVID-19 ultimately impacts 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, and include the duration, severity and scope of any new outbreak and the actions taken to contain or treat the COVID-19 pandemic.

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, environmental impacts including compliance with environmental laws and permitting requirements, 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.

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.

Mineral Properties :

The following table details Solitario’s capitalized investment in exploration mineral property:

The following table details Solitario’s capitalized mineral property:

(in thousands)

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Exploration property

Solitario's exploration mineral properties at December 31, 2022 and 2021 consist of use rights related to its exploration properties, and the value of such assets is primarily driven by the nature and amount of economic mineral ore believed to be contained, or potentially contained, in such properties.

The amounts capitalized as mineral properties include concession and lease or option acquisition costs.

Capitalized costs related to a mineral property represent its fair value at the time it was acquired or the cost to acquire the property, as appropriate.

At December 31, 2022, none of Solitario’s exploration properties have production (are operating) or contain proven or probable reserves.

Solitario's exploration mineral properties at December 31, 2023 and 2022 consist of use rights related to its exploration properties.

The amounts capitalized as mineral properties include initial concession and lease or option acquisition costs.

At December 31, 2023, none of Solitario’s exploration properties have production (are operating) or have established proven or probable reserves.

Solitario's exploration mineral properties represent interests in properties that Solitario believes have exploration and development potential.

Solitario's mineral use rights generally are enforceable regardless of whether proven and probable reserves have been established.

On May 27, 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.

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

Terms of the Golden Crest Agreement include scheduled payments to the underlying owner of $ 65,000 paid upon signing and the payment to the underlying owner of $ 60,000 at the first anniversary date during 2022.

Terms of the Golden Crest Agreement include scheduled payments to the underlying owner of $ 65,000 paid upon signing and a required payment to the underlying owner of $ 60,000 at the first anniversary date during 2022.

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

In addition, to continue the lease, Solitario has agreed to pay, at its option, the underlying owner escalating annual payments over five years that total $ 340,000 and annual payments of $ 150,000 thereafter, which will be expensed as paid.

All required payments have been made through December 31, 2023 and 2022.

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 an area of interest around the GC claims totaling $ 3,000,000 during the first five years of the lease, with the first-year minimum exploration expenditures of $ 200,000 , which Solitario exceeded during 2022.

In order to maintain the leases in good standing, Solitario has agreed to escalating work commitments on the GC Claims and an area of interest around the GC claims totaling $ 3,000,000 during the first five years of the lease, with first and second-year minimum exploration expenditures of $ 200,000 during 2022, and $ 400,000 during 2023, which Solitario exceeded during both 2022 and 2023.

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.

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Solitario will have the option, but not the obligation, to reduce the Net Smelter Return royalty to 1.0 % by paying the owner $ 1,000,000 .

In addition, through December 31, 2022, Solitario has staked additional mineral claims, including some claims included in an area of interest of the GC Claims and claims not related to the GC Claims, as part of the Golden Crest project.

As of December 31, 2022 and 2021 Solitario has capitalized costs for staking, initial filing fees, legal and other costs of $ 1,035,000 and $ 695,000 as initial acquisition costs related to the Golden Crest project.

Through December 31, 2023, Solitario has staked additional mineral claims, including some claims included in an area of interest of the GC Claims and claims not related to the GC Claims, as part of the Golden Crest project.

As of December 31, 2023 and 2022 Solitario has capitalized costs for staking, initial filing fees, legal and other costs of $ 1,035,000 as initial acquisition costs related to the Golden Crest project.

Solitario holds a 50% operating interest in the Lik zinc-lead sliver property in northwest Alaska, which we acquired as part of the acquisition of Zazu Metals Corporation (“Zazu”) in July 2017.

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Teck is Solitario’s 50% partner on the Lik Project and acted as the project manager during 2023 and 2022.

Teck and Solitario share exploration expenditures at Lik on a 50/50 basis, with Teck earning a manager’s fee of ten percent of the total expenditures of which Solitario contributes one-half to Teck.

All of Solitario’s share of expenditures at Lik are included in exploration expense for the years ended December 31, 2023 and 2022.

Florida Canyon

In addition to its capitalized exploration properties, Solitario has an interest in its Florida Canyon exploration concessions, which are currently subject to a joint venture agreement where joint venture partners made stand-by joint venture payments to Solitario prior to January 1, 2015.

Solitario has an interest in its Florida Canyon exploration concessions, which are currently subject to a joint venture agreement where joint venture partners made stand-by joint venture payments to Solitario prior to January 1, 2015.

Solitario previously recorded joint venture property payment revenue received in excess of capitalized costs.

Per the joint venture agreement, as of December 31, 2022, no further standby joint-venture payments are due to Solitario on the Florida Canyon project.

Per the joint venture agreement, as of December 31, 2023 and 2022, no further standby joint-venture payments are due to Solitario on the Florida Canyon project.

At December 31, 2023 and 2022, Solitario has no remaining capitalized costs related to its Florida Canyon joint venture.

Per the joint venture agreement with Nexa covering the Florida Canyon project, Solitario currently holds a 39% interest in the Florida Canyon zinc project.

Nexa is required to fund 100% of exploration expenditures at Florida Canyon, until Nexa commits to put the project into production based upon a positive feasibility study, at which time Nexa’s interest will increase from its current 61% interest to a 70% interest.

Discontinued projects

During 2021 Solitario recorded $ 17,000 of mineral property impairment related to its decision to abandon its Gold Coin project in Arizona.

Solitario did not record any mineral property impairments during 2022.

Per the joint venture agreement with Nexa covering the Florida Canyon project, Solitario currently holds a 39% interest in the Florida Canyon project.

Nexa is required to fund 100% of exploration expenditures at the Florida Canyon project, until Nexa commits to put the project into production based upon a positive feasibility study, at which time Nexa’s interest will increase from its current 61% interest to a 70% interest.

Exploration Expense

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Asset Retirement Obligation

Solitario recorded an asset retirement obligation of $ 125,000 for Solitario’s estimated reclamation cost of the existing disturbance at the Lik project.

Solitario recorded an asset retirement obligation of $ 125,000 upon the acquisition of the Lik project for Solitario’s estimated reclamation cost of the existing disturbance at the Lik project.

This disturbance consists of an exploration camp including certain drill sites and access roads at the camp.

The estimate was based upon estimated cash costs for reclamation as determined by Solitario and its joint venture partner Teck and is supported by a permitting bond required by the State of Alaska, for which Solitario has retained a reclamation bond insurance policy in the event Solitario or its 50% partner, Teck, do not complete required reclamation.

Solitario has not applied a discount rate to the recorded asset retirement obligation as the estimated time frame for reclamation is not currently known, as reclamation is not expected to occur until the end of the Lik project life, which would follow future development and operations, the start of which cannot be estimated or assured at this time.

Additionally, no depreciation will be recorded on the related asset for the asset retirement obligation until the Lik project goes into operation, which cannot be assured.

As of December 31, 2022, Solitario has no reclamation liability at its Florida Canyon project as Nexa is responsible for the costs at Florida Canyon, including reclamation, if any.

As of December 31, 2023 and 2022, Solitario has no reclamation liability at its Florida Canyon project as Nexa is responsible for the costs at Florida Canyon, including reclamation, if any.

In addition, the activities to date at Solitario’s Golden Crest project of staking claims and mapping, soil and rock sampling, and assaying have not created any material environmental or other disturbances.

Historically Solitario’s exploration activities have not resulted in any long-term environmental disturbances or liabilities and where there have been required restoration of disturbances, these have been completed contemporaneously with the completion of our mineral exploration activities.

As of December 31, 2023 and 2022 Solitario has no reclamation liability at its Golden Crest project, as all of the activities to date at Golden Crest have consisted of hand-collected surface sampling and related non-disturbance geophysical studies.

Certain minimal disturbances, such as trenching, which has been limited to existing roads, are concurrently remediated and do not require on-going or future reclamation.

Marketable Equity Securities

During 2022 Solitario sold 1,250,000 shares of Vendetta common stock for proceeds of $ 63,000 and recorded a realized loss on sale of $ 201,000 .

During 2021, Solitario sold (i) 2,550,000 shares of Vendetta common stock for proceeds of $ 112,000 and recorded a realized loss on the sale of $ 269,000 ;

(ii) 430,000 shares of TNR Gold Corp.

(“TNR”) common stock for proceeds of $ 27,000 and recorded a realized gain on the sale of $ 19,000 ;

and (iii) 3,200 shares of Vox Royalty Corp.

(“Vox”) common stock for proceeds of $ 8,000 and recorded a realized gain on the sale of $ 2,000 .

On July 31, 2019, Solitario purchased 3,450,000 Vendetta units for aggregate consideration of $ 233,000 .

Each unit consisted of one share of Vendetta common stock and one warrant which allows the holder to purchase one additional share of Vendetta common stock at a purchase price of Cdn$ 0.13 per share for a period of three years (the “Vendetta Warrants”).

The Vendetta Warrants expired unexercised during 2022.

During 2022 and 2021, Solitario recorded a loss on derivative instruments of $ 4,000 and $ 46,000 , respectively, for the change in the value of the Vendetta Warrants.

At December 31, 2022 Solitario owns the following marketable equity securities:

Solitario did not sell any of its marketable equity securities during 2023.

At December 31, 2023 and 2022 Solitario owns the following marketable equity securities:

December 31, 2023

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Vox Royalty Corp.

Highland Silver Corp.

Highlander Silver Corp.

The following tables summarize Solitario’s marketable equity securities and adjustments to fair value:

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Proceeds from the sale of marketable equity securities sold

Net loss on marketable equity securities

Additions to marketable equity securities

Net gain (loss) on marketable equity securities

Change in marketable equity securities at fair value

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(in thousands)

Unrealized (loss) gain on marketable equity securities

Unrealized gain (loss) on marketable equity securities

Realized loss on marketable equity securities sold

Net loss on marketable equity securities

Net gain (loss) on marketable equity securities

During 2022, Solitario sold rights to certain exploration data on a non-owned mineral property upon which Solitario had previously done exploration activities.

The data was sold to Highland Silver Corp., a Canadian exploration company (“Highland”) for $ 20,000 cash and 200,000 shares of Highland common stock.

On the date of sale, the Highland common stock carried a restrictive legend.

The shares were not available for trade on the date of sale and at December 31, 2022 and no value has been assigned to the common stock.

The data was sold to Highlander Silver Corp., a Canadian exploration company (“Highlander”) for $ 20,000 cash and 200,000 shares of Highlander common stock.

On the date of sale, the Highlander common stock carried a restrictive legend.

The shares were not available for trade on the date of sale and at December 31, 2022 and no value has been assigned to the common stock as of December 31, 2022.

Solitario recorded $20,000 of other income on the date of the sale.

Any future changes to the value of the Highland common stock owned by Solitario will be recorded as changes in value of marketable equity securities.

The change to the value of the Highlander common stock owned by Solitario during 2023 was included in the changes in value of marketable equity securities.

Operating Lease

Solitario accounts for its leases in accordance with ASC 842.

Solitario leases one facility, its Wheat Ridge, Colorado administrative office (the “WR Lease”), that has a term of more than one year.

Solitario has no other significant operating lease costs.

The WR Lease was extended to October 2023 during 2021 and Solitario recorded a net increase in right of use assets of $ 99,000 during 2021 upon the extension of the WR Lease.

The WR Lease was extended in October 2023 to February 2026 and Solitario recorded a net increase in right of use assets of $87,000 during 2023 upon the extension of the WR Lease.

The WR Lease is classified as an operating lease and has a remaining term of 26 months at December 31, 2023.

The right-of-use office lease asset for the WR Lease is classified as other assets and the related liability as a current office lease liability in the consolidated balance sheet.

Lease expense is recognized on a straight-line basis over the lease term, with variable lease payments recognized in the period those payments are incurred.

During 2022 and 2021, Solitario recognized $ 40 ,000 and $ 40 ,000, respectively, of non-cash lease expense for the WR Lease included in general and administrative expense.

Cash lease payments of $ 39,000 and $ 39,000 , respectively, were made on the WR Lease during 2022 and 2021 and this amount, less $ 3,000 and $ 4,000 , respectively, of imputed interest during 2022 and 2021, reduced the related liability on the WR Lease.

The right-of-use office lease asset for the WR Lease is classified as other assets and the related liability as a current office lease liability, for the portion of the liability due in one year and a long-term liability for the balance in the consolidated balance sheet.

Lease expense is recognized over the lease term, with variable lease payments recognized in the period those payments are incurred.

During 2023 and 2022, Solitario recognized $ 41 ,000 and $ 40 ,000, respectively, of lease expense for the WR Lease included in general and administrative expense.

Cash lease payments of $ 40,000 and $ 39,000 , respectively, were made on the WR Lease during 2023 and 2022.

The discount rate within the WR Lease is not determinable and Solitario applied a discount rate of 7 % based upon Solitario’s estimate of its cost of capital in recording the WR Lease.

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Furniture and fixtures, net of accumulated depreciation

Lik project equipment, net of accumulated depreciation

Office lease asset

Vendetta warrants

Right of use office lease asset

Exploration bonds and other assets

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Income Taxes :

Consolidated loss before income taxes includes losses from foreign operations of $ 37,000 and $ 136,000 in 2022 and 2021, respectively.

The net deferred tax assets/liabilities in the December 31, 2022 and 2021 consolidated balance sheets include the following components:

The net deferred income tax assets/liabilities in the December 31, 2023 and 2022 consolidated balance sheets include the following components:

(in thousands)

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Loss carryovers

Investment in Mineral Property

Mineral Property

Capitalized Exploration Costs

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Unrealized gains on marketable equity securities

Basis difference on fixed assets

Total deferred tax liabilities

Net deferred tax liabilities

A reconciliation of expected federal income taxes on income (loss) from continuing operations at statutory rates, with the expense for income taxes is as follows:

Federal Statutory Tax Rate for 2023 is 21%.

The reconciliation of the expected income tax expense (benefit) and the actual income tax expense (benefit) is as follows:

(in thousands)

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Income tax (benefit) expense

During 2022, the valuation allowance increased primarily due to the addition of deferred tax assets related to current year net operating losses.

During 2021, the valuation allowance decreased primarily due to the expiration of capital loss carryovers.

At December 31, 2022, Solitario has unused US Federal net operating loss carryovers of $ 22,905,000 and unused US State net operating loss carryovers of $ 24,811,000 which begin expiring in 2027.

As a result of the ownership change of Zazu Metals (Alaska) Corp, utilization of some of these federal and state losses will be limited due to the annual limitation provided by Section 382 of the Internal Revenue Code.

Solitario has unused capital loss carryovers of $ 380,000 for US Federal and US State purposes which begin expiring in 2025.

Solitario has Canadian loss carryforwards of $ 9,294,000 which begin expiring in 2027.

Other foreign loss carryforwards for which Solitario has provided a full valuation allowance related to Solitario’s exploration activities in Peru.

The Peru losses do not expire.

Solitario adopted ASC 740, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

ASC 740 requires that Solitario recognize in its consolidated financial statements only those tax positions that are “more-likely-than-not” of being sustained as of the adoption date, based on the technical merits of the position.

As a result of the implementation of ASC 740, Solitario performed a comprehensive review of its material tax positions in accordance with recognition and measurement standards established by ASC 740.

The provisions of ASC 740 had no effect on Solitario’s financial position, cash flows or results of operations at December 31, 2022 or December 31, 2021, or for the years then ended as Solitario had no unrecognized tax benefits.

Solitario and its subsidiaries are subject to the following material taxing jurisdictions:

United States Federal, State of Colorado, State of Alaska, State of South Dakota, Canada and Peru.

Solitario’s United States federal, Canada and State of Alaska returns for years 2019 and forward and Solitario’s Peru and State of Colorado returns for tax years 2018 and forward are subject to examination.

Solitario’s policy is to recognize interest and penalties related to uncertain tax benefits in income tax expense.

Solitario has no accrued interest or penalties related to uncertain tax positions as of December 31, 2022, or December 31, 2021 or for the years then ended.

Solitario has U.S.

Federal net operating loss (NOL) carryovers of $ 25,943,000 as of December 31, 2023.

Under the Tax Cuts and Jobs Act (“TCIA”) Federal NOL’s incurred in taxable years beginning in 2018 and later have an indefinite carryforward period, but the use of the NOL carryover is limited to 80% of taxable income in the subsequent year.

Federal NOL carryovers incurred prior to 2018 expire after 20 years.

Solitario has Federal NOL carryovers incurred prior to 2018 which begin expiring in 2027.

Solitario has State NOL carryovers in Colorado, Montana, and Alaska of $ 25,996,000 which begin expiring in 2026.

Solitario has Canadian and Peruvian NOL carryovers of $ 19,118,000 which begin expiring in 2026.

Solitario has U.S.

Federal and State capital loss carryovers of $ 468,000 which begin expiring in 2025.

NOL carryovers and capital loss carryovers are a benefit to Solitario in the form of future tax savings and such carryovers are recorded as deferred tax assets, subject to a valuation allowance.

Solitario has provided a valuation allowance of 100% of its net deferred tax assets due to the uncertainty of generating future profits that would allow for the realization of such deferred tax assets.

Derivative Instruments:

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During 2023, Solitario sold covered calls against its holdings of Kinross for cash proceeds of $ 31,000 all of which expired unexercised.

As of December 31, 2022 and 2021, Solitario has no remaining liability related to Kinross call options.

During 2022, Solitario recorded a loss of $ 4,000 related to certain Vendetta warrants it held, which expired unexercised during 2022.

Fair Value of Financial Instruments :

For certain of Solitario's financial instruments, including cash and cash equivalents, payables and short-term debt, the carrying amounts approximate fair value due to their short maturities.

Solitario's marketable equity securities, including its investment in shares of Kinross common stock, Vendetta common stock, Vox common stock and TNR common stock are carried at their estimated fair value based on publicly available quoted market prices.

Solitario applies ASC 820 that establishes a framework for measuring fair value and requires enhanced disclosures about fair value measurements.

Quoted prices in active markets for identical assets or liabilities;

Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability;

Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

For certain of Solitario's financial instruments, including cash and cash equivalents, and short-term investments the carrying amounts approximate fair value due to their short maturities.

Solitario's marketable equity securities, including its investment in shares of Kinross common stock, Vendetta common stock, and Vox common stock are carried at their estimated fair value based on publicly available quoted market prices.

Solitario applies ASC 820 that establishes a framework for measuring fair value and requires enhanced disclosures about fair value measurements within a hierarchy between Level 1:

quoted market prices;

Level 2 quoted market prices for similar assets and liabilities;

unobservable inputs with little or no market data.

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

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Marketable equity securities

Vendetta Warrants

Items measured at fair value on a recurring basis:

Short-term investments:

At December 31, 2022 and 2021, Solitario’s holdings of short-term investments consist of USTS and CD’s at December 31, 2021, both recorded at their fair value based upon quoted market prices.

At December 31, 2023 and 2022, Solitario’s holdings of short-term investments consist of USTS recorded at their fair values of $ 698,000 and $ 3,951,000 , respectively, based upon quoted market prices.

In addition, at December 31, 2023 Solitario has $ 7,738,000 in a money market account included in short-term investments.

Marketable equity securities :

At December 31, 2023 and 2022, the fair value of Solitario’s holdings in shares of Vendetta, Kinross, and Vox marketable equity securities are based upon quoted market prices.

Vendetta Warrants :

At December 31, 2021 the fair value of Solitario’s Vendetta Warrants is based upon a Black Scholes model, using market inputs.

During the year ended December 31, 2023, Solitario did not change any of the valuation techniques used to measure its financial assets and liabilities at fair value.

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On June 18, 2013, Solitario’s shareholders approved the 2013 Solitario Exploration & Royalty Corp.

Omnibus Stock Incentive Plan (the “2013 Plan”).

Under the terms of the 2013 Plan, as amended, a total of 5,750,000 shares of Solitario common stock are reserved for awards to directors, officers, employees and consultants.

Awards granted under the 2013 Plan may take the form of stock options, stock appreciation rights, restricted stock, and restricted stock units.

Omnibus Stock and Incentive Plan, as amended (the “2013 Plan”), which expired in April 2023.

Under the terms of the 2013 Plan, a total of 5,750,000 shares of Solitario common stock are reserved for awards to directors, officers, employees and consultants.

The 2013 plan permitted the Board of Directors of the Company (the “Board of Directors”) or a committee appointed by the Board of Directors to grant awards in the form of stock options, stock appreciation rights, restricted stock, and restricted stock units.

As of December 31, 2023, the 2013 Plan has expired and no additional awards may be granted under the 2013 Plan, although awards made prior to the 2013 Plan’s expiration will remain outstanding in accordance with their terms.

The outstanding awards under the 2013 Plan are detailed below.

On June 20, 2023, Solitario’s shareholders approved the 2023 Solitario Stock and Incentive Plan (the “2023 Plan”).

Under the terms of the 2023 Plan, a total of 5,000,000 shares of Solitario common stock are reserved for awards to directors, officers, employees and consultants.

Awards may take the form of stock options, stock appreciation rights, restricted stock and restricted stock units.

The terms and conditions of the awards are pursuant to the 2023 Plan and are granted by the Board of Directors or a committee appointed by the Board of Directors.

a.) 2013 Plan stock option grants

The following table shows the grant date fair value of Solitario’s awards during 2022 and 2021 pursuant to the 2013 Plan:

The 2023 Plan has a term of 10 years.

As of December 31, 2023, awards for a total of 50,000 options have been granted under the 2023 Plan.

a.) Stock option grants

The following table shows the grant date fair value of Solitario’s awards during 2023 and 2022 pursuant to the 2013 Plan and the 2023 Plan:

Option – grant date price

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During 2023 and 2022, options for 1,486,500 and 114,250 , respectively, shares of common stock were exercised for proceeds of $ 459,315 and $ 30,000 respectively.

The following table summarizes the activity for stock options outstanding under the 2013 Plan for the years ended December 31, 2022 and 2021:

The following table summarizes the activity for stock options outstanding under the 2023 Plan and the 2013 Plan for the years ended December 31, 2023 and 2022:

Outstanding, beginning of year

( 1,486,500 )

( 2,360,000 )

Outstanding, end of year

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Intrinsic value based upon December 31, 2023 and 2022 price of a share of Solitario common stock as quoted on the NYSE American exchange of $ 0.56 and $ 0.62 , respectively, per share.

During the years ended December 31, 2022 and 2021, Solitario recorded $ 338,000 and $ 124,000 , respectively, of stock option expense under the 2013 Plan for the amortization of the grant date fair value of each of its outstanding options with a credit to additional paid-in-capital.

For options exercised during 2023 the intrinsic value based upon the price of a share of Solitario common stock as quoted on the NYSE American on the date of exercise of each option.

During the years ended December 31, 2023 and 2022, Solitario recorded $ 247,000 and $ 338,000 , respectively, of stock-based compensation expense under the 2023 Plan and the 2013 Plan for the amortization of the grant date fair value of each of its outstanding options with a credit to additional paid-in-capital.

At December 31, 2023, the total unrecognized stock option compensation cost related to non-vested options is $ 387,000 and is expected to be recognized over a weighted average period of 20 months.

At December 31, 2023, the average remaining contractual life of Solitario’s outstanding options is 2.9 years.

At December 31, 2023, the average remaining contractual life of Solitario’s vested options is 2.4 years.

Shareholders’ Equity

Private Placements

On July 31, 2023, Solitario entered into a Stock Purchase Agreement (the “SPA”) with Newmont Overseas Exploration Ltd.

(“Newmont”), for the purchase and sale of 4,166,667 shares of Solitario common stock (the “Newmont Shares”), at a price of $ 0.60 per share for net proceeds of $ 2,422,000 after certain legal and regulatory offering costs of $ 78,000 .

In connection with the sale of the Newmont Shares, Solitario and Newmont entered into an Investor Rights Agreement, which granted Newmont certain additional rights, including a preemptive right, certain anti-dilution protections and certain other rights and notice provisions related to Solitario’s Gold Crest mineral property assets.

On October 13, 2023, Solitario completed a private placement of 8,631,818 shares of its common stock (the “Shares”) at a price of $ 0.55 per share for net proceeds of $ 4,727,000 after certain legal and regulatory offering costs of $ 21,000 .

The sale of the Shares was made through a subscription agreement between Solitario and each respective investor.

The Shares were issued pursuant to an exemption from registration under United States and Canadian securities laws.

No officers, directors or other affiliates of Solitario participated in the private placement.

Investors in the private placement were provided certain registration rights with respect to the Shares they purchased.

Solitario did not engage an underwriter or placement agent for the private placement, and therefore there were no underwriter discounts or commissions or placement agent fees.

On November 16, 2023, Solitario entered into a consulting and capital markets advisory contract (the “Consulting Contract”) with an independent advisory firm, in exchange for the issuance of 500,000 shares which were issued on December 6, 2023, at the closing market price of $ 0.51 per share as quoted on the NYSE-American.

The issuance of the Shares was made through a subscription agreement between Solitario and the advisory firm.

The Shares were issued pursuant to an exemption from registration under United States and Canadian securities laws.

The Consulting Contract is for a period of one-year and Solitario recorded a pre-paid expense of $ 255,000 for the issuance of the shares.

No cash was paid for the issuance of the shares.

The pre-paid expense is being amortized over the one-year term of the Consulting Contract and Solitario recorded $ 32,000 in general and administrative expense during 2023 related to the Consulting Contract.

At the Market Offering Agreement

On February 2, 2021, Solitario entered into an at-the-market offering agreement (the “ATM Agreement”) with H.

On December 19, 2023, Solitario entered into an amendment to its at-the-market offering agreement that was originally entered into in 2021 (the “ATM Agreement”) with H.

Wainwright & Co., LLC (“Wainwright”), under which Solitario may, from time to time, issue and sell shares of Solitario’s common stock through Wainwright as sales manager in an at-the-market offering under a prospectus supplement for aggregate sales proceeds of up to $ 10.0 million (the “ATM Program”).

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The ATM Agreement provides that Wainwright is entitled to compensation for its services at a commission rate of 3.0 % of the gross sales price per share of common stock sold.

During 2021, Solitario recorded $ 144,000 as a charge to additional paid-in-capital for one-time expenses related to entering into the ATM Agreement.

During 2022, Solitario sold 2,650,724 shares of its common stock under the ATM Program at a price of $ 0.79 per share for net proceeds of $ 2,023,000 after commissions and sale expenses.

During 2021, Solitario sold an aggregate of 643,033 shares of its common stock under the ATM Program at an average price of $ 0.68 per share for net proceeds of $ 299,000 after commissions, sale, and one-time expenses.

2021 Equity Offering

In December 2021 Solitario completed the sale of 3,100,000 shares of common stock (the “Shares”), at a price of $ 0.50 per share (the “Offering”) for net proceeds after expenses of $ 1,542,000 .

Solitario did not engage an underwriter or placement agent for the Offering, and therefore there were no underwriter discounts or commissions or placement agent fees.

The sale of the Shares was made through a subscription agreement between Solitario and each respective investor.

The Shares were offered and sold pursuant to the Company’s existing shelf registration statement on Form S-3 (File No.

Solitario filed a prospectus supplement, dated December 1, 2021, with the SEC in connection with the sale of the securities in the Offering.

Three of Solitario’s executive officers participated in the Offering, purchasing 50,000 Shares each, on the same terms as the other investors.

The Offering was unanimously approved by Solitario’s Board of Directors and the participation by our executive officers was also unanimously approved by the Audit Committee of the Board of Directors.

Share Repurchase Program

On October 28, 2015, Solitario’s Board of Directors approved a share repurchase program that authorized Solitario to purchase up to two million shares of its outstanding common stock.

During 2021, Solitario did not purchase any shares pursuant to the share repurchase program.

As of December 31, 2021, Solitario had purchased a total of 994,000 shares for an aggregate purchase price of $ 467,000 under the share repurchase program since its inception.

The share repurchase plan expired on December 31, 2021 and no additional shares will be purchased under the plan in the future.

During 2023, Solitario recorded $ 46,000 as a charge to additional paid-in-capital for one-time expenses related the amendment of the ATM Agreement.

Solitario did not sell any shares under the ATM program during 2023.

During 2022, Solitario sold 2,650,724 shares of its common stock under the ATM Program at an average price of $ 0.79 per share for net proceeds of $ 2,023,000 after commissions and sale expenses.

Subsequent Events

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What changed 10-K

Item 8. Financial Statements and Supplementary Data