XML 61 R10.htm IDEA: XBRL DOCUMENT v2.4.0.6
Short Term Debt
 3 Months Ended
Mar. 31, 2013
Debt Disclosure [Abstract]  
Short Term Debt

4.       Short-term debt

 

          Solitario maintains a secured credit line agreement with UBS Bank, USA (“UBS Bank”). At March 31, 2013, the credit line is secured by all of Solitario’s assets held in its UBS brokerage account, consisting primarily of 460,000 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 0.20% as of March 31, 2013. The average interest rate was approximately 2.45% and 2.48%, respectively, for the three months ended March 31, 2013 and 2012. 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 March 31, 2013, the equity value in Solitario's UBS brokerage account was 59%. At May 7, 2013, the balance outstanding in the UBS Bank credit line was $1,200,000, and the equity value in Solitario’s UBS brokerage account was 51%.

 

          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. Solitario did not borrow against its short-term margin account during the three months ended March 31, 2013. The margin account calls for 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 March 31, 2013, 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:

   
  (in thousands)  
  UBS short-term credit line  
      Beginning balance December 31, 2012 $ 1,500 
        Borrowing 900 
        Repayments   (900)
      Ending balance March 31, 2013 $1,500 

 

(in thousands)

Three months ended

March 31,

  2013 2012
Interest UBS short-term credit line $ 8  $13 
Interest RBC short-term margin loan   -    4 
   Total interest, short-term margin loans $ 8  $17 

 

During the three months ended March 31, 2013, Solitario capitalized all of its interest to mineral property. See Note 2, “Mineral property,” above.