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Long Term Debt
 9 Months Ended
Sep. 30, 2013
Debt Disclosure [Abstract]  
Long Term Debt

5.       Long-term debt

 

Augusta debt

 

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

 

(in thousands)

Payment date

September 30,

2013

December
31, 2012

June 1, 2013 $   -     $   750 
June 1, 2014 750  750 
June 1, 2015 1,000  1,000 
Unamortized discount   (154)  (264)
Total 1,596  2,236 
Current portion 714    727 
Long-term debt $882  $1,509 

 

(in thousands)

Three months ended

September 30,

Nine months ended

September 30,

  2013 2012 2013 2012
Interest accretion on Augusta debt $ 29  $41  $ 110  $143 

 

During the three and nine months ended September 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 10, 2012 (both agreements collectively the “LOI, as amended”). Under the LOI, as amended, on or before May 1, 2014 and May 1, 2015, Solitario is required to subscribe for Ely common stock, in an amount equal to the required Augusta debt payment due June 1, 2014 and June 1, 2015, respectively, at a price equal to the greater of (A) the weighted moving average price of Ely Common stock as quoted on the TSX Venture Exchange (the “TSX-V”) over the 20 trading days immediately preceding the date of the subscription agreement and (B) the Discounted Market Price (as that term is defined in the policies of the TSX-V) of Ely common stock on the last trading day immediately preceding the date of the subscription agreement, however, Ely has the right to reduce the amount of the subscriptions if it pays the remaining amount required to make the required Augusta debt payment. Ely is required to use the funds from the subscription to pay the Augusta debt. Solitario records the payment of the subscription price as a reduction of its Augusta debt obligation and records the value of the Ely common stock received as an increase to paid-in-capital. 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. Solitario recorded $500,000 for the fair value of the 5,131,150 shares of Ely common stock received as marketable equity securities and as an increase in its additional paid-in-capital.

 

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 September 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 
        Borrowing -        -     
        Amortization of discount to interest cost  -      55  55 
      Ending September 30, 2013 $3,500  $(410) 3,090 

 

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

(in thousands) Three months ended
September 30		 Nine months ended
September 30
  2013 2012 2013 2012
Interest paid in cash $ 48  $ 8  $ 118  $ 8 
Amortization of the RMB Warrants discount 55  23  163  23 
Amortization of RMB deferred financing costs   49    21   147    21 
  Total interest expense related to the RMB Loan $152  $52  $428  $52 

 

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