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Fair Value of Financial Instruments
 12 Months Ended
Dec. 31, 2016
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments

7. Fair Value of Financial Instruments:

 

For certain of Solitario's financial instruments, including cash and cash equivalents, payables and short-term debt, the carrying amounts approximate fair value due to their short maturities. Solitario's marketable equity securities, including its investment in shares of Kinross common stock, Vendetta common stock and TNR Gold Corp (“TNR”) common stock, are carried at their estimated fair value primarily based on publicly available quoted market prices.

 

Solitario applies ASC 820, "Fair Value Measurements" (“ASC 820”). ASC 820 establishes a framework for measuring fair value and requires enhanced disclosures about fair value measurements. ASC 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. ASC 820 also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows:

 

Level 1: Quoted prices in active markets for identical assets or liabilities;
Level 2: Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability; or
Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

 

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. During the years ended December 31, 2016 and 2015, there were no reclassifications in financial assets or liabilities between Level 1, 2 or 3 categories.

 

The following is a listing of Solitario’s financial assets and liabilities required to be measured at fair value on a recurring basis and where they are classified within the hierarchy as of December 31, 2016:

 

(in thousands) Level 1 Level 2 Level 3 Total
Assets        
  Marketable equity securities $1,339  $   -    $  -    $1,339 
  Vendetta Warrants   735    735 
Liabilities        
  Kinross calls -    2  -    2 

 

The following is a listing of Solitario’s financial assets and liabilities required to be measured at fair value on a recurring basis and where they are classified within the hierarchy as of December 31, 2015:

 

(in thousands) Level 1 Level 2 Level 3 Total
Assets        
  Marketable equity securities $202  $   -    $  -    $202 
Liabilities        
  RMB Warrants -    4  -    4 

 

Items measured at fair value on a recurring basis:

 

Marketable equity securities: At December 31, 2016 and 2015, the fair value of Solitario’s holdings in shares of Vendetta, Kinross, and TNR marketable equity securities and the Kinross calls are based upon quoted market prices.

Vendetta Warrants: The Vendetta Warrants are not traded on any public exchange. Solitario determines the fair value of the Vendetta Warrants using a Black-Scholes pricing model, using inputs, including share price, volatility of Vendetta common stock and discount rates that include an assessment of performance risk, that are readily available from public markets; therefore, they are classified as Level 2 inputs as of December 31, 2016.

RMB Warrants: The RMB Warrants were not traded on any public exchange. Solitario determined the fair value of the RMB Warrants using a Black-Scholes pricing model, using inputs, including share price, volatility of Solitario common stock and discount rates that include an assessment of performance risk, that are readily available from public markets; therefore, they are classified as Level 2 inputs as of December 31, 2015.

 

During the year ended December 31, 2016, Solitario did not change any of the valuation techniques used to measure its financial assets and liabilities at fair value.