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Subsequent Event Mt. Hamilton Feasibility Study
 12 Months Ended
Dec. 31, 2011
Notes to Financial Statements  
Subsequent Event Mt. Hamilton Feasibility Study

15. Subsequent event, Mt. Hamilton feasibility study:

 

On February 22, 2012, Solitario announced the completion of the Feasibility Study on its Mt. Hamilton project prepared by SRK. As a result of the completion of the Feasibility Study, Solitario has earned an 80% interest in MH-LLC, owner of the Mt. Hamilton project, and we intend to develop the Mt. Hamilton project, subject to a number of factors including obtaining necessary permits and availability of required capital, none of which is currently in place. As a result of the completion of the Feasibility Study and our intention to develop the Mt. Hamilton project, Solitario became a development stage company (but not a company in the “Development Stage”). The Feasibility Study reported the following proven and probable reserves at Solitario’s Mt. Hamilton project:

 

Mineral Reserves Statement, Centennial Gold-Silver Deposit,

White Pine County, Nevada

SRK Consulting (Inc.)

 

Reserve Category

Tons

(millions)

 Gold Grade Silver Grade*

Contained

Gold (koz)**

Contained

Silver (koz)**

oz/ton g/tonne oz/ton g/tonne
Proven   0.923 0.032 1.10 0.155 5.31 29,300   142.7
Probable 21.604 0.021 0.72 0.134 4.59 457,800 2,884.3
Proven + Probable 22.527 0.022 0.75 0.136 4.66 487,100 3,028.2

*Reported silver grade is cyanide soluble. ** Some numbers may not add due to rounding

 

The MH Agreement provides that if Solitario completes a bankable feasibility study and earns an 80% interest in MH-LLC, as of that date, Solitario will no longer be able to opt-out of any future required payments, and will be obligated to make any unpaid payments of cash and stock to DHI-US, any unpaid payments to the underlying royalty holder and, pursuant to the LOI, Solitario will be obligated to make any uncompleted investment Tranches due to Ely by the due dates described above. Upon completion of the Feasibility Study, the MH Agreement provides that all costs for development at Mt. Hamilton will be shared by Solitario and DHI-US pro-rata. However DHI-US has the option of having Solitario contribute its share of costs through commercial completion as a loan, with such loan, plus interest, being repaid to Solitario from 80% of DHI-US’s share of net proceeds from MH-LLC.