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Derivative Instruments
 3 Months Ended
Mar. 31, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments

5.        Derivative Instruments

 

Vendetta Warrants

 

During the three months ended March 31, 2017, Solitario exercised 2,240,000 of its Vendetta Warrants and received 2,240,000 Vendetta common shares, by paying $167,000 (Cdn$224,000) to Vendetta. As a result as of March 31, 2017, Solitario owns 5,000,000 Vendetta Warrants, which are carried at fair value, based upon a Black-Scholes model. During the three months ended March 31, 2017, Solitario recorded a gain on derivative instruments of $148,000, related to the Vendetta Warrants; see Note 6, “Derivative Instruments,” below.

 

RMB Warrants

 

The warrants originally issued by Solitario in 2012 to RMB Australia Holdings Limited (the “RMB Warrants”) entitled the holder to purchase a total of 1,624,748 shares of Solitario common stock. The RMB Warrants had an exercise price of $1.54 per share and expired on August 21, 2016. Solitario recorded a gain on the RMB Warrants of $3,000 during the three months ended March 31, 2016.

 

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 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.

 

Solitario recorded the following gain on derivative instruments:

(in thousands)

Three months ended

March 31,

   2017 2016
  Gain (loss) on Kinross calls  $  24   $  (1)
  Gain on Vendetta Warrants 148  -  
  $172  $  (1)

 

The following table provides the location and amount of the fair values of Solitario's derivative instruments presented in the consolidated balance sheets as of March 31, 2017 and December 31, 2016:

  Derivatives
    March 31, December 31,
(in thousands) Balance Sheet Location 2017 2016
 Vendetta warrants Other assets $574  $735 
 Kinross calls Other current liabilities $    3  $    2