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Long-Term Debt

6 Months Ended

Jun. 30, 2013

5. Long-term debt

Augusta debt

The following is the schedule of debt payments due Augusta as of June 30, 2013 and December 31, 2012:

(in thousands) Payment date	June 30, 2013	December31, 2012
June 1, 2013	$ -	$ 750
June 1, 2014	750	750
June 1, 2015	1,000	1,000
Unamortized discount	(183)	(264)
Total	1,567	2,236
Current portion	700	727
Long-term debt	$867	$1,509

(in thousands)

Three months ended

June 30,

Six months ended

June 30,

2013

2012

2013

2012

Interest accretion on Augusta debt

$ 38

$49

$ 81

$102

During the three months ended June 30, 2013, Solitario capitalized all of its interest to mineral property. See Note 2, “Mineral property,” above.

On April 22, 2013, Solitario entered into an agreement, (the “Letter Agreement”) between Solitario, Ely and DHI Minerals (US), Ltd. (“DHI”). The Letter Agreement modified certain terms and conditions of the letter of intent dated August 26, 2010 between Solitario, Ely and DHI, as amended, in the MH-LLC OA Side Agreement between Solitario Ely, DHI, RMBAH and RMBR dated August 21, 2012 (both agreements collectively the “LOI, as amended”). Under the Letter Agreement, Ely exercised its right to reduce Solitario’s required subscription of $750,000 due on May 1, 2013 to $500,000, the proceeds of which Ely used to pay a portion of the $750,000 payment due on June 1, 2013 due to Augusta. Ely paid the remaining $250,000 of the payment due to Augusta from their funds. Concurrent with the Letter Agreement, Solitario delivered a subscription agreement, (the “Subscription Agreement”) to Ely for the subscription of 5,131,150 shares of Ely common stock at a price of Cdn$0.10 as of April 22, 2013. Solitario paid Ely $500,000 in cash and received the 5,131,150 shares of Ely common stock after Ely’s acceptance of the Subscription Agreement. The delivery and acceptance of the Subscription Agreement, and payment of the subscription price of $500,000, satisfied Solitario’s obligations with respect to the June 1, 2013 payment due Augusta.

RMB Facility Agreement

On August 10, 2012, Solitario entered into a Facility Agreement (the “Facility Agreement”) with RMB Australia Holdings Limited, an Australian corporation (“RMBAH”), and RMB Resources Inc., a Delaware corporation (“RMBR”) whereby Solitario may borrow up to $5,000,000 from RMBAH (with any amounts outstanding collectively being the “RMB Loan”) at any time during the 24 month period commencing on August 21, 2012, (the “Availability Period”), after which time any undrawn portion of the $5,000,000 commitment will be cancelled and will no longer be available for drawdown. In connection with the Facility Agreement, Solitario recorded a warrant discount related to the 1,624,748 warrants issued to RMBAH at the time Solitario entered into the Facility Agreement (the “RMB Warrants”). The warrant discount is being amortized to interest cost over 36 months, the term of the Facility Agreement. The RMB Loan amounts bear interest at the 90-day LIBOR rate plus 5%, payable in arrears on the last day of each quarterly interest period. The RMB Loan interest rate was 5.28% at June 30, 2013. The RMB Loan may be repaid at any time without penalty. Any amounts repaid may not be redrawn under the Facility Agreement. The RMB Loan is secured by a lien on Solitario’s 80% interest in MH-LLC as well as a general security interest in Solitario’s remaining assets.

The following table summarizes the RMB Loan:

	RMB	RMB	RMB
(in thousands)	Loan borrowing	Warrant discount	Long-term Debt
Beginning balance December 31, 2012	$ 1,500	$(573)	$927
Borrowing	1,000		1,000
Amortization of discount to interest cost	-	54	54
Ending balance March 31, 2013	$2,500	$(519)	1,981
Borrowing	1,000		1,000
Amortization of discount to interest cost	-	54	54
Ending June 30, 2013	$3,500	$(465)	3,035

Solitario recorded the following interest cost related to the RMB Loan:

(in thousands)	Three months ended June 30, 2013	Six months ended June 30, 2013
Interest paid in cash	$ 43	$ 70
Amortization of the RMB Warrants discount	54	108
Amortization of RMB deferred financing costs	49	98
Total interest expense related to the RMB Loan	$146	$276

During the three months ended June 30, 2013, Solitario capitalized all of its interest to mineral property. See Note 2, “Mineral property,” above.