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Commitments and Contingencies
6 Months Ended
Jun. 30, 2019
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

8.       Commitments and contingencies

 

Solitario has recorded an asset retirement obligation of $125,000 related to its Lik project in Alaska. See Note 2, “Mineral Property,” above.

 

In August of 2018, Solitario agreed to fund a portion of a 2018 – 2019 drilling program at the Florida Canyon project. Pursuant to the agreement, Solitario will fund up to $1,580,000 of a planned 41-hole 17,000-meter drilling program to be conducted through December 31, 2019 (the “Drilling Program”). Upon Nexa completing the first 1,700 meters of the Drilling Program, Solitario will pay Nexa $527,000, upon completion of the next 1,700 meters (3,400 meters total) of the Drilling Program, Solitario will pay Nexa $527,000, and upon completion of the next 1,700 meters (5,100 meters total) of the Drilling Program, Solitario will pay Nexa the balance remaining on its $1,580,000 funding commitment, or $526,000. Solitario has no obligation to pay Nexa prior to the attainment of the separate 1,700-meter thresholds. The funding commitments are in the form of an advance on Solitario’s commitment to fund 30% of any future development of Florida Canyon under the existing joint venture agreement with Nexa. Accordingly, in the event Florida Canyon is developed, which cannot be assured at this time, any funds paid to Nexa under this agreement, will reduce the amount of Solitario’s obligation to fund 30% of future development costs, and / or repay loans from Nexa for future development costs at the Florida Canyon project. During 2018, Nexa completed a total of 2,203 meters under the Drilling Program and Solitario recorded a charge to exploration expense of $527,000, which Solitario paid during 2019. During the six months ended June 30, 2019, Nexa completed additional drilling to meet the second required meter threshold of 1,700 meters (or a total of 3,400 meters). Solitario recorded a charge to exploration expense of $527,000 during the three and six months ended June 30, 2019 and Solitario has recorded an account payable as of June 30, 2019 to Nexa of $527,000, which was paid in July 2019 for the completion of this second phase of the drilling during the six months ended June 30, 2019. Should Nexa complete the remaining 1,700 meters (5,100 meters less the completed 3,400 meters) during the remainder of 2019, Solitario will be obligated to pay Nexa the final tranche under the agreement of $526,000 during the remainder of 2019.