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Marketable Equity Securities

12 Months Ended

Dec. 31, 2014

3. Marketable Equity Securities

Investment in Kinross

Solitario has a significant investment in Kinross Gold Corporation (“Kinross”), which consisted of the following at December 31, 2014 and 2013:

(in thousands)	Year ended December 31,
	2014	2013
Shares	480	600
Fair value
Current assets	$1,354	$1,577
Long term assets	-	$1,051

The current assets represent Solitario's estimate of the portion of marketable equity securities that will be liquidated within one year. Solitario sold the following shares of Kinross during 2014 and 2013:

(in thousands)	Year ended December 31,
	2014	2013
Shares sold	120	70
Proceeds	$556	$358
Gain on sale	$472	$308

As of March 25, 2015, Solitario owns 480,000 shares of Kinross common stock which have a value of approximately $1.18 million based upon the market price of $2.46 per Kinross share. Solitario’s investment in Kinross common stock represents a significant concentration of assets, with the inherent risk that entails. Any significant fluctuation in the market value of Kinross common shares could have a material impact on Solitario’s liquidity and capital resources.

Investment in Ely

On November 22, 2013, Solitario subscribed for 13,571,354 shares of Ely common stock for $1,300,000 and, pursuant to a letter agreement between Solitario Ely and DHI (the “Letter Agreement”) whereby, Ely used the funds from the sale of their shares to fully pay off the Augusta Resources, Inc. (“Augusta”) long-term debt. Solitario recorded a gain on early retirement of debt of $313,000 during 2013 as a result of the payoff of the Augusta long-term debt.

During 2013, prior to the subscription of the Ely shares discussed above, Solitario sold 6,303,563 shares of Ely common stock for proceeds of $481,000, recording a loss on sale of marketable equity securities of $166,000. Solitario received 3,333,333 of these shares in connection with the formation of MH-LLC during 2012 and received 2,070,230 of these shares in connection with the May 2013 payment of the Augusta long-term debt discussed below under “Long-term debt.”

As of December 31, 2014 Solitario owns 15,732,274 shares of Ely common stock, representing approximately 19.5% of the outstanding shares of Ely with a fair value of $946,000. We have classified our holdings of Ely common stock as marketable equity shares available-for-sale and gains and losses on our holdings of Ely are recorded in accumulated other comprehensive income in the shareholders’ equity section of our Consolidated Balance Sheet.

The following tables summarize Solitario’s marketable equity securities and accumulated other comprehensive income related to its marketable equity securities:

(in thousands)	December 31, 2014	December 31, 2013
Marketable equity securities at fair value	$2,308	$3,973
Cost	1,869	1,954
Accumulated other comprehensive income for unrealized holding gains	439	2,019
Deferred taxes on accumulated other comprehensive income for unrealized holding gains	(1,559)	(1,559)
Accumulated other comprehensive income	$ (1,120)	$ 460

The following table represents changes in marketable equity securities:

(in thousands)	Year ended December 31,
	2014	2013
Gross cash proceeds	$556	$839
Cost	84	697
Gross gain on sale included in earnings during the period	472	142
Deferred taxes on gross gain on sale included in earnings	-	(58)
Reclassification adjustment to unrealized gain in other comprehensive income for net gains included in earnings	(472)	(84)
Gross unrealized holding loss arising during the period included in other comprehensive loss.	(1,108)	(4,081)
Deferred taxes on unrealized holdings loss included in other comprehensive loss	384	1,582
Valuation allowance on deferred taxes on unrealized holding losses included in other comprehensive loss	(384)	(871)
Net unrealized holding gain (loss)	(1,108)	(3,370)
Other comprehensive income (loss) from marketable equity securities	$(1,580)	$(3,454)

- Definition

Disclosure of accounting policy for investments in financial assets, including marketable securities (debt and equity securities with readily determinable fair values), investments accounted for under the equity method and cost method, securities borrowed and loaned, and repurchase and resale agreements. For marketable securities, the disclosure may include the entity's accounting treatment for transfers between investment categories and how the fair values for such securities are determined. Also, for all investments, an entity may describe its policy for assessing, recognizing and measuring impairment of the investment.

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