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Mineral Properties

12 Months Ended

Dec. 31, 2024

2. Mineral Properties:

The following table details Solitario’s capitalized mineral properties:

(in thousands)	December 31,
	2024		2023
Exploration
Lik project (Alaska – US)	$	15,611	$	15,611
Golden Crest (South Dakota – US)		1,078		1,035
Cat Creek (Colorado – US)		12		-
Total exploration mineral properties	$	16,701	$	16,646

Exploration property

Solitario's exploration mineral properties at December 31, 2024 and 2023 consist of use rights related to its exploration properties. The amounts capitalized as mineral properties include initial concession and lease or option acquisition costs. At December 31, 2024, none of Solitario’s exploration properties have production (are operating) or have established proven or probable reserves. Solitario's exploration mineral properties represent interests in properties that Solitario believes have exploration and development potential.

Golden Crest

On May 27, 2021, Solitario entered into a lease agreement (the “Golden Crest Agreement”) whereby Solitario acquired exclusive exploration rights in certain claims (the “GC Claims”) in the Black Hills region of South Dakota. The GC Claims are part of Solitario’s Golden Crest project. Terms of the Golden Crest Agreement include scheduled payments to the underlying owner of $65,000 paid upon signing and a required payment to the underlying owner of $60,000 at the first anniversary date during 2022. Solitario recorded an initial acquisition cost of $125,000 during 2021 related to these required payments. In addition, to continue the lease, Solitario has agreed to pay, at its option, the underlying owner escalating annual payments over five years that total $340,000 and annual payments of $150,000 thereafter, which will be expensed as paid. All required payments have been made through December 31, 2024 and 2023. Solitario has agreed to pay the underlying owner an additional success fee of $1.00 per ounce of gold in the event Solitario files a 43-101 qualified resource of up to 1.5 million ounces of gold or a maximum of $1,500,000. In order to maintain the leases in good standing, Solitario has agreed to escalating work commitments on the GC Claims and an area of interest around the GC claims totaling $3,000,000 during the first five years of the lease, with first and second-year minimum exploration expenditures of $400,000 during 2023, and $600,000 during 2024, which Solitario exceeded during both 2023 and 2024. The term of the Golden Crest Agreement is for twenty years and is automatically extended as long as Solitario is performing any exploration, development or mining activities on the GC Claims. The underlying owner retained a 2.0% Net Smelter Return royalty. Solitario will have the option, but not the obligation, to reduce the Net Smelter Return royalty to 1.0% by paying the owner $1,000,000.

Through December 31, 2024, Solitario has staked additional mineral claims, including some claims included in an area of interest of the GC Claims and claims not related to the GC Claims, as part of the Golden Crest project. As of December 31, 2024, Solitario has capitalized costs for staking, initial filing fees, legal and other costs of $1,078,000 as initial acquisition costs related to the Golden Crest project. During 2024 Solitario purchased a certificate of deposit of $100,000 for reclamation bonding as part of the Golden Crest drilling permit received and is recorded as restricted cash in the consolidated balance sheet at December 31, 2024.

Lik Property

Solitario holds a 50% operating interest in the Lik zinc-lead sliver property in northwest Alaska, which we acquired as part of the acquisition of Zazu Metals Corporation (“Zazu”) in July 2017. Solitario recorded its acquisition cost of $15,611,000 as mineral property at the date of acquisition. Teck is Solitario’s 50% partner on the Lik project and acted as the project manager during 2024 and 2023. Teck and Solitario share exploration expenditures at Lik on a 50/50 basis, with Teck earning a manager’s fee of ten percent of the total expenditures of which Solitario contributes one-half to Teck. All of Solitario’s share of expenditures at Lik are included in exploration expense for the years ended December 31, 2024 and 2023.

Florida Canyon

Solitario has an interest in its Florida Canyon exploration concessions, which are 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 previously recorded joint venture property payment revenue received in excess of capitalized costs. Per the joint venture agreement, as of December 31, 2024 and 2023, no further standby joint-venture payments are due to Solitario on the Florida Canyon project. At December 31, 2024 and 2023, Solitario has no remaining capitalized costs related to its Florida Canyon joint venture. Per the joint venture agreement with Nexa covering the Florida Canyon project, Solitario currently holds a 39% interest in the Florida Canyon project. Nexa is required to fund 100% of exploration expenditures at the Florida Canyon project, until Nexa commits to put the project into production based upon a positive feasibility study, at which time Nexa’s interest will increase from its current 61% interest to a 70% interest.

Cat Creek

During 2023 Solitario entered into a lease agreement with Cat Creek LLC, the underlying owner of certain mineral claims in Colorado covering the Cat Creek project (the “Cat Creek Agreement”). During 2024 Solitario capitalized its initial payments of $12,000 related to the Cat Creek project. Per the terms of the Cat Creek Agreement, to maintain the lease, Solitario has agreed to pay, at its option, additional annual payments totaling $127,000 through July 2028, of which $12,000 has been paid through December 31, 2024. In addition, to maintain the lease, Solitario has agreed to escalating work commitments on the Cat Creek claims and the related area of interest around the Cat Creek claims totaling $2,270,000 through December 31, 2029, with additional work commitments totaling $750,000 per year until December 2033. Solitario has exceeded the minimum exploration expenditure required through December 31, 2024. The underlying owner retained a 2.0% Net Smelter Return royalty. Solitario will have the option, but not the obligation, to reduce the Net Smelter Return royalty to 1.0% by paying the owner $1,000,000. During 2024 Solitario purchased a certificate of deposit of $130,000 for reclamation bonding as part of the Cat Creek drilling permit received and is recorded as restricted cash in the consolidated balance sheet at December 31, 2024.

Exploration Expense

The following items comprised exploration expense:

	For the year ended December 31,
(in thousands)	2024		2023
Geologic and field expenses	$	3,939	$	2,176
Administrative		209		202
Total exploration expense	$	4,148	$	2,378

Asset Retirement Obligation and Reclamation Liabilities

Solitario recorded an asset retirement obligation of $125,000 upon the acquisition of the Lik project for Solitario’s estimated reclamation cost of the existing disturbance at the Lik project. This disturbance consists of an exploration camp including certain drill sites and access roads at the camp. The estimate was based upon estimated cash costs for reclamation as determined by Solitario and its joint venture partner Teck and is supported by a permitting bond required by the State of Alaska, for which Solitario has retained a reclamation bond insurance policy in the event Solitario or its 50% partner, Teck, do not complete required reclamation.

Solitario has not applied a discount rate to the recorded asset retirement obligation as the estimated time frame for reclamation is not currently known, as completion reclamation is not expected to occur until the end of the related project life, which would follow future development and operations, the start of which cannot be estimated or assured at this time. Additionally, no depreciation will be recorded on the related asset for the asset retirement obligation until the Lik project goes into operation, which cannot be assured.

As of December 31, 2024 and 2023, Solitario has no reclamation liability at its Florida Canyon project as Nexa is responsible for the costs at Florida Canyon, including reclamation, if any. In addition, the activities to date at Solitario’s Cat Creek project of staking claims and mapping, soil and rock sampling, and assaying have not created any material environmental or other disturbances.

Solitario is also involved in certain matters concerning its 2024 drilling program remediation at its Golden Crest project. Generally, the bulk of remediation at Golden Crest associated with its 2024 drilling program was carried out concurrently with drilling activities, with only ongoing contouring and reseeding of drill sites remaining as of December 31, 2024. At December 31, 2024, Solitario has recorded a reclamation liability of $20,000, included in asset retirement and reclamation liabilities related to the Golden Crest project.