XML 45 R12.htm IDEA: XBRL DOCUMENT v3.3.0.814
Derivative Instruments
 9 Months Ended
Sep. 30, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments

6.        Derivative instruments

 

RMB Warrants

The RMB Warrant entitle the holder to purchase one share of Solitario common stock pursuant to the terms and conditions of the RMB Warrants. As amended, the RMB Warrants expire on August 21, 2016, and have an exercise price of $1.5387 per share, subject to customary anti-dilution adjustments. Solitario recorded a warrant discount at the time it entered into the Facility Agreement, which it amortized on a straight-line basis. See Note 5, short-term debt, above.

 

Solitario has recorded a liability as of September 30, 2015 and December 31, 2014 of $6,000 and $55,000, respectively, for the fair value of the RMB Warrants based upon a Black-Scholes model. Solitario adjusts the fair value of the warrants at each balance sheet date, with changes in value recorded in other income (loss) in the statement of operations. Solitario recorded a gain of $28,000 and $49,000, respectively, on the RMB Warrants during the three and nine months ended September 30, 2015 and a gain of $77,000 and a loss of $142,000, respectively, on the RMB Warrants during the three and nine months ended September 30, 2014.

 

Covered Call Options

From time to time Solitario has sold covered call options against its holdings of Kinross. The business purpose of selling covered calls is to provide additional liquidity on a limited portion of shares of Kinross that Solitario may sell in the near term, which is generally defined as less than one year. Solitario has not designated its covered calls as hedging instruments and records gains or loss on the covered call in the period of the change.

 

Solitario recorded the following gain on derivative instruments related to Kinross calls:

(in thousands)  Three months ended
September 30,		  Nine months ended
September 30,
   2015  2014  2015  2014
  Gain on derivative instrument  $1   $—     $84   $39