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Derivative Instruments
 9 Months Ended
Sep. 30, 2016
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments

6.        Derivative Instruments

 

RMB Warrants

 

The RMB Warrants, which entitled the holder to purchase a total of 1,624,748 shares of Solitario common stock, expired worthless on August 21, 2016. Solitario no longer has any liability related to the RMB Warrants as of September 30, 2016. Solitario recorded a $4,000 liability for the RMB Warrants as of December 31, 2015 for the fair value of the RMB Warrants based upon a Black-Scholes model. Solitario recorded a gain on derivative instruments of $4,000 for the nine months ended September 30, 2016 related to the expiration of the RMB Warrants.

 

Covered Call Options

 

From time to time Solitario has sold covered call options against its holdings of Kinross Gold Corporation (“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. As of September 30, 2016, Solitario had written two covered calls, one covering 50,000 shares, expiring January 20, 2017, with an exercise price of $4.00 per share and another covering 50,000 shares, expiring January 20, 2017 with an exercise price of $4.50 per share. Solitario has recorded a liability of $56,000 for the fair value of its Kinross covered call as of September 30, 2016, based on quoted market prices.

 

Solitario recorded the following gain (loss) on derivative instruments:

(in thousands)

Three months ended

September 30,

Nine months ended

September 30,

  2016 2015 2016 2015
  (Loss) gain on Kinross calls $ 72  $  1   $ (11) $ 84 
  Gain on Vendetta Warrants 91  -   306  -  
Total $163  $  1  $295  $ 84