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Derivative Instruments
 12 Months Ended
Dec. 31, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments

7. Derivative Instruments:

 

RMB warrants

 

The RMB Warrants entitle the holder to purchase one shares 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 December 31, 2015 and 2014 of $4,000 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 $51,000 and $85,000, respectively, on the RMB Warrants during the year ended December 31, 2015 and 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 income 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 as described in ASC 815, “Derivatives and Hedging,” and any changes in the fair value of its covered calls are recognized in the statement of operations in the period of the change. As of December 31 2015 and 2014 all of the covered calls had expired unexercised and there were no liabilities related to those calls entered during each of the years.

 

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

(in thousands) Year ended
  December 31, 2015 December 31, 2014
  Gain on derivative instrument  $84  $39 

 

The following table provides the location and amount of the fair values of Solitario's derivative instruments presented in the consolidated balance sheet as of December 31, 2015 and 2014:

  Derivatives
(in thousands) Balance Sheet Location December 31, 2015 December 31, 2014
Derivatives not designated as hedging instruments under ASC 815      
 RMB warrants Other current labilities $  4  $55 
 Kinross calls Other current liabilities $  -   $  -