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Commitments and Contingencies
 12 Months Ended
Dec. 31, 2011
Notes to Financial Statements  
Commitments and Contingencies

8. Commitments and contingencies:

 

In acquiring its interests in mineral claims and leases, Solitario has entered into lease agreements, which may be canceled at its option without penalty. Solitario is required to make minimum rental and option payments in order to maintain its interests in certain claims and leases. See Note 2, above. Solitario estimates its 2012 property rentals and option payments, excluding the Augusta long term-debt, discussed above and certain earn-in payments to DHI-US discussed below in Note 12, “Ely Gold investment and the Mt. Hamilton joint venture,” for properties we own or operate to be approximately $860,000, assuming that our joint ventures continue in their current status and that we do not appreciably change our property positions on existing properties; approximately $655,000 of these annual payments are reimbursable to us by our joint venture partners. In addition, we may be required to make further payments in the future if we elect to exercise our options under those agreements or if we enter into new agreements.

 

Solitario has entered into certain month-to-month office leases for its field offices in Nevada, Peru and Mexico as well as Brazil, prior to the deconsolidation of PBM. The total rent expense for these offices during 2011, 2010 and 2009 was approximately $55,000, $89,000 and $60,000, respectively. In addition, Solitario leases office space under a non-cancelable operating lease for the Wheat Ridge, Colorado office which provides for total minimum rent payments through October of 2012 of $30,000.

 

As a result of completion of the Mt. Hamilton feasibility study, Solitario is committed to make certain earn-in payments to DHI-US, excluding payments for the Augusta debt, discussed above in Note 4, “Long-term debt,” as contemplated in the MH Agreement: (1) payment of $300,000 in cash for an advance minimum royalty due to an underlying royalty holder, payment of $300,000 in cash and delivery of 50,000 shares of Solitario common stock by August 23, 2012; (2) payment of $300,000 in cash for an advance minimum annual royalty due to an underlying royalty holder; payment of $500,000 in cash and delivery of 100,000 shares of Solitario common stock by August 23, 2013; (3) payment of $300,000 in cash for an advance minimum annual royalty due to an underlying royalty holder; payment of $500,000 in cash; delivery of 100,000 shares of Solitario common stock and buy down of the existing 6% net smelter royalty to a 1% net smelter royalty by paying $5,000,000 to an underlying royalty holder by November 19, 2014. See Note 12, “Ely Gold investment and the Mt. Hamilton joint venture” below.