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Marketable Equity Securities

3 Months Ended

Mar. 31, 2020

Investments, Debt and Equity Securities [Abstract]

Solitario's investments in marketable equity securities are carried at fair value, which is based upon quoted prices of the securities owned. The cost of marketable equity securities sold is determined by the specific identification method. Changes in market value are recorded in the condensed consolidated statement of operations. During the three months ended March 31, 2020, Solitario recorded an unrealized loss on marketable equity securities of $233,000. During the three months ended March 31, 2019, Solitario recorded an unrealized loss on marketable equity securities of $326,000.

The following tables summarize Solitario’s marketable equity securities and adjustments to fair value:

(in thousands)	March 31, 2020			December 31, 2019
Marketable equity securities at cost	$	1,828		$	1,879
Cumulative unrealized loss on marketable equity securities		(1,073	)		(840	)
Marketable equity securities at fair value	$	755		$	1,039

The following table represents changes in marketable equity securities during the three months ended March 31, 2020 and 2019:

(in thousands)	Three months ended March 31,
	2020			2019
Cost of marketable equity securities sold	$	51		$	-
Realized gain on marketable equity securities sold		25			-
Proceeds from the sale of marketable equity securities sold		(76	)		-
Net loss on marketable equity securities		(208	)		(326	)
Change in marketable equity securities at fair value	$	(284	)	$	(326	)

The following table represents the realized and unrealized gain (loss) on marketable equity securities:

(in thousands)	Three months ended March 31,
	2020			2019
Unrealized loss on marketable securities	$	(233	)	$	(326	)
Realized gain on marketable equity securities sold		25			-
Net loss on marketable securities	$	(208	)	$	(326	)

Solitario sold 2,000,000 shares of Vendetta Mining Corp. (“Vendetta”) common stock during the three months ended March 31, 2020 for proceeds of $76,000 and recorded a gain on sale of $25,000 on the date of sale. Solitario did not sell any marketable equity securities during the three months ended March 31, 2019 and the change in the fair value of marketable equity securities was related entirely to the unrealized loss on marketable equity securities related to their fair values based upon quoted market prices for the marketable equity securities held by Solitario during that period.

Vendetta Warrants

On July 31, 2019, Solitario purchased 3,450,000 Vendetta units for a total of $233,000. Each Vendetta unit consisted of one share of Vendetta common stock and one Vendetta warrant (the “Vendetta Warrants”). Each Vendetta Warrant entitles the holder to purchase one additional share of Vendetta common stock for a purchase price of Cdn$0.13 per share for a period of three years. On the purchase date Solitario recorded marketable equity securities of $165,000 for the Vendetta shares acquired and $68,000 for the Vendetta Warrants based upon an allocation of the purchase price of the Vendetta units, based upon (i) the fair value of the Vendetta common shares received, based upon the quoted market price for Vendetta common shares and (ii) the fair value of Vendetta Warrants based upon a Black Scholes model. During the three months ended March 31, 2020, Solitario charged loss on derivative instruments $7,000 for the change in the fair value of the Vendetta Warrants based on a Black Scholes model.