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Short Term Debt
 12 Months Ended
Dec. 31, 2014
Short-term Debt, Other Disclosures [Abstract]  
Short Term Debt

5. Short-term Debt:

RMB Facility Agreement

 

On August 10, 2012, Solitario entered into the Facility Agreement with RMBAH, and RMBR whereby Solitario was permitted to 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 ending on August 21, 2014, (the “Availability Period”). On August 11, 2014 Solitario borrowed $1,500,000 to bring its total borrowing under the RMB Loan to $5,000,000. Solitario may not borrow any additional funds under the Facility Agreement. Solitario recorded $588,000 of deferred offering costs related to the Facility Agreement in long-term assets, which are being amortized over the 36 month life of the Facility Agreement on a straight-line basis. See Note 4, “Other Assets,” above. 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”) and recorded a debt discount of $650,000 for the fair value of the RMB warrants. The debt discount is being amortized to interest cost over 36 months, the term of the Facility Agreement. See Note 8, “Derivative Instruments,” below. 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 5.23% at December 31, 2014. 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.

 

Prior to August 21, 2014, the RMB Loan was classified as long-term debt in the consolidated balance sheet.

 

The following table summarizes the RMB Loan:

  RMB RMB RMB
  (in thousands) Loan borrowing Warrant discount Long-term
Debt
      Beginning balance January 1, 2013 $1,500  $(573) 927 
        Borrowing 2,000  -   2,000 
        Amortization of discount to interest cost  -      217  217 
      Ending balance December 31, 2013 $3,500  $(356) $3,144 
        Borrowing 1,500  -   1,500 
        Amortization of discount to interest cost  -      217  217 
      Ending balance December 31, 2014 $5,000  $(139) $4,861 

 

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

(in thousands) Year ended
December 31,
  2014 2013
Interest paid in cash $ 217  $ 165 
Amortization of the RMB Warrants discount 217  217 
Amortization of RMB deferred financing costs  196   196 
  Total interest expense related to the RMB Loan $629  $578 

 

Solitario capitalized all of its interest incurred during 2013 to mineral property. See Note 3, “Mineral Properties,” above.

 

UBS Short-term credit line

 

During 2014 and 2013 Solitario had a secured credit line agreement with UBS Bank, USA (“UBS”), which was secured by all of Solitario’s assets held in its UBS brokerage account, consisting primarily of Kinross shares. The UBS secured line of credit carried an interest rate which floated based upon a base rate of 2.25% plus the one-month London Interbank Offered Rate (“LIBOR”) which averaged 0.16% during the period the UBS secured line of credit was outstanding during 2014. Solitario paid its entire balance owing on the UBS secured line of credit during 2014 and the secured line of credit was terminated.

 

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

  December 31,
  (in thousands) 2014 2013
  UBS short-term credit line    
      Beginning balance $ 802  $ 1,500 
        Borrowing 100  2,300 
        Repayments (902) (2,998)
    Total short-term margin loans -    802 

 

(in thousands) Year ended
December 31,
  2014 2013
Interest UBS short-term credit line $4  $22 

 

During 2014 and 2013 Solitario capitalized all of its interest to mineral property. See Note 3, “Mineral Properties,” above.