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Short Term Debt
 12 Months Ended
Dec. 31, 2012
Debt Disclosure [Abstract]  
Short Term Debt

3. Short-term debt:

 

           Solitario entered into a secured credit line agreement with UBS Bank, USA (“UBS Bank”). At December 31, 2012, the credit line is secured by all of Solitario’s assets held in its UBS brokerage account, consisting primarily of 460,000 of Kinross shares. The UBS Bank credit line carries an interest rate which floats, based upon a base rate of 2.25% plus the one-month London Interbank Offered Rate ("LIBOR"), which is 0.27% as of December 31, 2012. The average interest rate was approximately 2.49% and 2.48%, respectively, for 2012 and 2011. UBS Bank may change the base rate at any time. The UBS Bank credit line provides that Solitario may borrow up to $2 million and that Solitario maintain a minimum equity value percentage in its UBS brokerage account above 40%, based upon the value of its Kinross shares and any other assets held in Solitario's UBS brokerage account, less the value of its UBS Bank credit line and any other balances owed to UBS Bank. UBS Bank may modify the minimum equity value percentage of the loan at any time. In addition, if the equity value in Solitario's UBS brokerage account falls below the minimum equity value, UBS Bank may sell enough Kinross shares held in Solitario's UBS brokerage account or liquidate any other assets to restore the minimum equity value. At December 31, 2012, the equity value in Solitario's UBS brokerage account was 67%.

 

          Solitario also maintains a short-term margin account with RBC Capital Markets, LLC ("RBC"). At December 31, 2012, the credit line is secured by all of Solitario’s assets held in its RBC brokerage account, consisting primarily of 210,000 of Solitario’s Kinross shares. Solitario has utilized short-term margin loans from RBC, using Solitario's investment in Kinross held at RBC as collateral for the short-term margin loans. During 2012, the loans carried interest at a margin loan rate of 4.25% per annum, which floats based upon the London Interbank Offered Rate. The margin loan rate can be modified by RBC at any time. The margin loans are callable by RBC at any time. Per the terms of the margin loans, Solitario is required to maintain a minimum equity value in the account of 35%, based upon the value of its Kinross shares and any other assets held at RBC, less any short-term margin loan balance and any other balances owed to RBC. The equity value percentage may be modified by RBC at any time. If the equity value in Solitario's account at RBC falls below the minimum, RBC may call the loan, or may sell enough Kinross shares held in Solitario's brokerage account or liquidate any other assets to restore the minimum equity value. At December 31, 2012, Solitario had no outstanding borrowing on the RBC margin account and the equity balance in Solitario's account at RBC was 100%.

 

The following tables summarize Solitario’s short-term debt:

  December 31,
(in thousands) 2012 2011
  UBS short-term credit line    
      Beginning balance $ 2,000  $1,918 
        Borrowing 1,200  82 
        Repayments (1,700)       -   
      Ending balance 1,500  2,000 
  RBC short term margin loan    
      Beginning balance -    905 
        Borrowing 1,465  1,000 
        Repayments (1,465) (1,905)
      Ending balance        -         -    
    Total short-term margin loans $1,500   $2,000 

 

(in thousands) Year ended
December 31,
  2012 2011
Interest expense UBS short-term credit line $  36  $  50 
Interest expense RBC short-term margin loan 22  21 
   Total interest expense, short term margin loans $  58  $  71