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Marketable Equity Securities

9 Months Ended

Sep. 30, 2015

3. Marketable equity securities

Solitario's investments in marketable equity securities are classified as available-for-sale and are carried at fair value, which is based upon quoted prices of the securities owned. The cost of marketable equity securities sold is determined by the specific identification method. Changes in market value are recorded in accumulated other comprehensive income or loss within shareholders' equity, unless a decline in market value is considered other than temporary, in which case the decline is recognized as a loss in the consolidated statement of operations.

Prior to the Transaction, Solitario entered into an agreement with Ely and transferred 15,732,274 shares of Ely common stock it held, in exchange for cancellation of certain payment obligations related to MH-LLC, and in consideration for consent to extend the RMB Loan from August 21, 2015 to September 30, 2015 (the “Ely Consent”). Solitario recorded a loss on sale of marketable equity securities of $1,511,000 on the transfer of the Ely common stock during the three and nine months ended September 30, 2015. In addition, during the three and nine months ended September 30, 2015, Solitario sold 160,000 and 380,000, respectively, shares of Kinross Gold Corporation (“Kinross”) for gross proceeds of $290,000 and $809,000, respectively, and recorded a gain on sale of $178,000 and 541,000, respectively. At September 30, 2015 Solitario owned 100,000 shares of Kinross carried at the fair value of $172,000.

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

(in thousands)	September 30, 2015		December 31, 2014
Marketable equity securities at fair value	$	188	$	2,308
Cost		91		1,870
Accumulated other comprehensive (loss) income for unrealized holding gains		97		438
Deferred taxes on accumulated other comprehensive income for unrealized holding gains		-		(1,558	)
Accumulated other comprehensive income (loss)	$	97	$	(1,120	)

The following table represents changes in marketable equity securities.

(in thousands)	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
Gross cash proceeds	$	290		$	83		$	809		$	556
Cost		1,623			14			1,778			84
Gross loss (gain) on sale included in earnings during the period		1,333			(69	)		969			(472	)
Deferred taxes on gross gain on sale included in earnings		-			-			-			-
Reclassification adjustment to unrealized loss (gain) in other comprehensive income for net gain (loss) included in earnings		1,333			(69	)		969			(472	)
Gross unrealized holding (loss) gain arising during the period included in other comprehensive loss		(647	)		(625	)		(1,310	)		(404	)
Clearing of disproportionate tax effect for deferred taxes on unrealized holding losses -included in other comprehensive loss		1,558			-			1,558			-
Net unrealized holding loss (gain) in other comprehensive income		911			(625	)		248			(404	)
Total other comprehensive gain (loss) from marketable equity securities	$	2,244		$	(694	)	$	1,217		$	(876	)

- 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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