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Mineral Properties

12 Months Ended

Dec. 31, 2016

2. Mineral Properties:

The following table details Solitario’s capitalized investment in exploration mineral property:

(in thousands)	December 31,
	2016	2015
Exploration
La Promesa (Peru)	$ 6	$ 6
Montana Royalty property (US)	40	-
Canta Colorado (Peru)	-	3
Norcan (Mexico)	-	5
Aconchi (Mexico)	-	5

Total exploration mineral property	$46	$19

Capitalized costs

Solitario had been capitalizing its development costs incurred at its Mt. Hamilton project subsequent to the completion of a feasibility study on the Mt. Hamilton project in February 2012. The following table details the capitalization during 2015 up to the date of the Transaction:

(in thousands)	Year ended December 31,
	2015
Development expenditures	$692
Capitalized interest	493
Property payments	190
Capitalized depreciation	7
Total capitalized costs	$ 1,382

Included in the property payments during 2015 are the issuance of 66,500 common shares of Solitario with fair values of $51,000, issued to underlying leaseholders, which were recorded as an increase to common stock, for the par value of the shares issued and to additional paid-in-capital. Additionally, during 2015, Solitario capitalized interest due to RMBAH under the Facility Agreement, which was paid in full upon completion of the Transaction.

Exploration property

Solitario's exploration mineral properties at December 31, 2016 and 2015 consist of use rights related to its exploration properties, and the value of such assets is primarily driven by the nature and amount of economic mineral ore believed to be contained, or potentially contained, in such properties. The amounts capitalized as mineral properties include concession and lease or option acquisition costs. Capitalized costs related to a mineral property represent its fair value at the time it was acquired. At December 31, 2016, none of Solitario’s exploration properties have production (are operating) or contain proven or probable reserves. Solitario's exploration mineral properties represent interests in properties that Solitario believes have exploration and development potential. Solitario's mineral use rights generally are enforceable regardless of whether proven and probable reserves have been established.

In addition to its capitalized exploration properties, Solitario has an interest in its Bongará exploration concession, which is currently subject to a joint venture agreement where joint venture partners made stand-by joint venture payments to Solitario prior to January 1, 2015. Solitario recorded joint venture property payment revenue received in excess of capitalized costs. Per the joint venture agreement, as of December 31, 2016, no further standby joint-venture payments are due to Solitario on the Bongará project. At December 31, 2016 and 2015, Solitario has no remaining capitalized costs related to its Bongará joint venture.

Solitario previously sold its mineral interests in its Yanacocha exploration projects and retained a royalty interest. Solitario has no capitalized costs related to its Yanacocha royalty interest. During the year ended December 31, 2016, Solitario acquired certain net smelter royalties on non-producing exploration leases in Montana previously owned by Atna Resources, Ltd. for $40,000.

Discontinued projects

During 2016, Solitario closed its exploration office in Mexico. Solitario retained a 1% net smelter royalty on its Norcan and Aconchi exploration projects in Mexico. Solitario recorded a mineral property write-down of $10,000 related to the Norcan and Aconchi properties during 2016. During 2016, Solitario abandoned its interest in its Canta Colorado property in Peru and recorded a mineral property write-down expense of $3,000 related to Canta Colorado. In addition, Solitario recorded a loss on other assets in Mexico of $14,000 related to the cessation of its exploration activities in Mexico during 2016.

During 2015, Solitario converted its operating interest in Pedra Branca Mineracao, Ltd (“PBM”), which was the owner of the Pedra Branca project in Brazil, to a 1% net smelter royalty in the Pedra Branca project, upon the termination of its interest in PBM. Solitario had no remaining asset value related to its investment in PBM, as it had accounted for its interest in PBM under the equity method of accounting and had recognizing a reduction of its remaining interest in PBM to zero prior to the year ended December 31, 2015. Solitario recorded no mineral property write-down expense during 2015.

Exploration Expense

The following items comprised exploration expense:

	For the year ended December 31,
(in thousands)	2016	2015
Geologic and field expenses	$537	$31
Administrative	91	58
Total exploration expense	$628	$89