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Derivative Instruments
 12 Months Ended
Dec. 31, 2021
Derivative Instruments  
Derivative Instruments

7. Derivative Instruments:

 

Covered call options

 

From time-to-time Solitario has sold covered call options against its holdings of shares of common stock of Kinross Gold Corporation (“Kinross”) included in Marketable Equity Securities. The business purpose of selling covered calls is to provide additional income 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 and any changes in the fair value of its covered calls are recognized in the statement of operations in the period of the change.  During 2021, Solitario sold covered calls against its holdings of Kinross for cash proceeds of $8,000 all of which expired unexercised.  During 2020, Solitario sold covered calls against its holdings of Kinross for cash proceeds of $103,000, and repurchased certain of its covered calls prior to expiration for $224,000.  As of December 31, 2021, Solitario has no remaining liability related to Kinross call options. 

 

Vendetta Warrants

 

At both December 31, 2021 and 2020 Solitario held Vendetta Warrants which give Solitario the right to purchase 3,450,000 Vendetta common shares for Cdn$0.13 per share through July 31, 2022.  At December 31, 2021, and 2020 Solitario recorded Vendetta Warrants at their fair value of $3,000 and $49,000, respectively, based upon a Black Scholes model. 

The following items comprise gain (loss) on derivative instruments:

 

(in thousands)

 

Year ended

December 31,

 

 

 

 2021

 

 

 2020

 

Gain (loss) on Kinross calls – realized

 

$8

 

 

$(121)

Gain (loss) on Vendetta Warrants – unrealized

 

 

(46)

 

 

29

 

 

 

$(38)

 

$(92)