Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 30, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Entity Registrant Name | SOLITARIO ZINC CORP. | ||
Entity Central Index Key | 0000917225 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Voluntary Filers | Yes | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Current Reporting Status | Yes | ||
Document Period End Date | Dec. 31, 2021 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Entity Common Stock Shares Outstanding | 64,760,123 | ||
Entity Public Float | $ 35,379,000 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 001-32978 | ||
Entity Incorporation State Country Code | CO | ||
Entity Tax Identification Number | 84-1285791 | ||
Entity Interactive Data Current | Yes | ||
Icfr Auditor Attestation Flag | false | ||
Entity Address Address Line 1 | 4251 Kipling St | ||
Entity Address Address Line 2 | Suite 390 | ||
Entity Address City Or Town | Wheat Ridge | ||
Entity Address State Or Province | CO | ||
Entity Address Postal Zip Code | 80033 | ||
City Area Code | 303 | ||
Local Phone Number | 534-1030 | ||
Security 12b Title | Common Stock, $0.01 par value | ||
Trading Symbol | XPL | ||
Security Exchange Name | NYSEAMER | ||
Auditor Name | Plante & Moran, PLLC | ||
Auditor Location | Denver, Colorado | ||
Auditor Firm Id | 166 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 462 | $ 605 |
Short-term investments, at fair value | 5,087 | 5,798 |
Investments in marketable equity securities, at fair value | 1,307 | 1,620 |
Prepaid expenses and other | 303 | 26 |
Total current assets | 7,159 | 8,049 |
Mineral properties | 16,306 | 15,628 |
Other assets | 154 | 124 |
Total assets | 23,619 | 23,801 |
Current liabilities: | ||
Accounts payable | 239 | 157 |
Paycheck Protection Loan | 0 | 10 |
Operating lease liability | 37 | 7 |
Total current liabilities | 276 | 174 |
Long-term liabilities | ||
Asset retirement obligation - Lik | 125 | 125 |
Operating lease liability | 35 | 0 |
Total long-term liabilities | 160 | 125 |
Shareholders' equity: | ||
Preferred stock, $0.01 par value, authorized 10,000,000 shares (none issued and outstanding at December 31, 2021 and 2020) | 0 | 0 |
Common stock, $0.01 par value, authorized, 100,000,000 shares (62,036,399 and 58,108,366, respectively, shares issued and outstanding at December 31, 2021 and 2020) | 620 | 581 |
Additional paid-in capital | 72,523 | 70,514 |
Accumulated deficit | (49,960) | (47,593) |
Total shareholders' equity | 23,183 | 23,502 |
Total liabilities and shareholders' equity | $ 23,619 | $ 23,801 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 62,036,399 | 58,108,366 |
Common stock, shares outstanding | 62,036,399 | 58,108,366 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Costs, expenses and other | ||
Exploration expense | $ 1,198 | $ 413 |
Depreciation and amortization | 27 | 25 |
Mineral property impairment | 17 | 6 |
General and administrative | 952 | 1,044 |
Total costs, expenses and other | 2,194 | 1,488 |
Other (expense) income | ||
Interest and dividend income (net) | 123 | 184 |
Other income | 10 | 104 |
Loss on derivative instruments | (38) | (92) |
(Loss) gain on sale of marketable equity securities | (248) | 50 |
Unrealized loss on short-term investments | (102) | (57) |
Unrealized gain on marketable equity securities | 82 | 360 |
Total other income (expense) | (173) | 549 |
Net loss | $ (2,367) | $ (939) |
Loss per common share | ||
basic and diluted | $ (0.04) | $ (0.02) |
Weighted average shares outstanding | ||
Basic and diluted | 58,709 | 58,116 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) |
Balance, shares at Dec. 31, 2019 | 58,133,066 | |||
Balance, amount at Dec. 31, 2019 | $ 24,131 | $ 581 | $ 70,204 | $ (46,654) |
Stock option expense | 315 | $ 0 | 315 | 0 |
Repurchase of shares for cancellation, shares | 24,700,000 | |||
Repurchase of shares for cancellation, amount | (5) | $ 0 | (5) | |
Net loss | (939) | $ 0 | 0 | (939) |
Balance, shares at Dec. 31, 2020 | 58,108,366 | |||
Balance, amount at Dec. 31, 2020 | 23,502 | $ 581 | 70,514 | (47,593) |
Stock option expense | 124 | 0 | 124 | 0 |
Net loss | (2,367) | $ 0 | 0 | (2,367) |
Issuance of shares - option exercises, shares | 185,000 | |||
Issuance of shares - option exercises, amount | 83 | $ 2 | 81 | |
Issuance of shares - ATM, net, shares | 643,033 | |||
Issuance of shares - ATM, net, amount | 299 | $ 6 | 293 | |
Issuance of shares - private placement, shares | 3,100,000 | |||
Issuance of shares - private placement, amount | 1,542 | $ 31 | 1,511 | |
Balance, shares at Dec. 31, 2021 | 62,036,399 | |||
Balance, amount at Dec. 31, 2021 | $ 23,183 | $ 620 | $ 72,523 | $ (49,960) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating activities: | ||
Net loss | $ (2,367,000) | $ (939,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Unrealized gain on marketable equity securities | (82,000) | (360,000) |
Unrealized loss on short-term investments | 102,000 | 57,000 |
Loss (gain) on sale of marketable equity securities | 248,000 | (50,000) |
Loss on derivative instruments | 38,000 | 92,000 |
Other income - Paycheck Protection Program loan forgiveness | (10,000) | (60,000) |
Other income - gain on conversion of SilverStream note | 0 | (44,000) |
Mineral property impairment | 17,000 | 6,000 |
Employee stock option expense | 124,000 | 315,000 |
Depreciation | 27,000 | 25,000 |
Amortization of right of use lease asset | 40,000 | 38,000 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | (277,000) | 38,000 |
Accounts payable and other current liabilities | 17,000 | 128,000 |
Net cash used in operating activities | (2,157,000) | (1,010,000) |
Investing activities: | ||
Sale of short-term investments - net | 609,000 | 974,000 |
Additions to mineral property | (635,000) | |
Sale of marketable equity securities | 147,000 | 123,000 |
Sale (Purchase) of derivative instruments - net | 8,000 | (121,000) |
Additions to other assets | (39,000) | 0 |
Net cash provided by investing activities | 90,000 | 976,000 |
Financing activities: | ||
Issuance of common stock - net of acquisition costs | 1,841,000 | |
Stock options exercised for cash | 83,000 | |
Paycheck Protection Program loan | 0 | 70,000 |
Repurchase of Solitario common stock for cancellation | 0 | (5,000) |
Net cash provided in financing activities | 1,924,000 | 65,000 |
Net (decrease) increase in cash and cash equivalents | (143,000) | 31,000 |
Cash and cash equivalents, beginning of year | 605,000 | 574,000 |
Cash and cash equivalents, end of year | 462,000 | 605,000 |
Supplemental Cash Flow information: | ||
Accrued mineral property acquisition costs included in accounts payable | 60,000 | 0 |
Acquisition of right to use asset | 99,000 | 0 |
Conversion of SilverStream note to Marketable equity securities | 0 | 294,000 |
Acquisition of Gold Coin property included in accounts payable | $ 0 | $ 17,000 |
Business and Summary of Signifi
Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Business and Summary of Significant Accounting Policies | |
Business and Summary of Significant Accounting Policies | 1. Business and Summary of Significant Accounting Policies Business and company formation Solitario Zinc Corp. (“Solitario,” or the “Company”) is an exploration stage company as defined by rules issued by the United States Securities and Exchange Commission (“SEC”). Solitario was incorporated in the state of Colorado on November 15, 1984 as a wholly-owned subsidiary of Crown Resources Corporation ("Crown"). In July 1994, Solitario became a publicly traded company on the Toronto Stock Exchange (the "TSX") through its initial public offering. Solitario has been actively involved in mineral exploration since 1993. Solitario’s primary business is to acquire exploration mineral properties or royalties and/or discover economic deposits on its mineral properties and advance these deposits, either on its own or through joint ventures, up to the development stage. At that point, or sometime prior to that point, Solitario would likely attempt to sell its mineral properties, pursue their development either on its own or through a joint venture with a partner that has expertise in mining operations, or create a royalty with a third party that continues to advance the property. Solitario is primarily focused on the acquisition and exploration of precious metal, zinc and other base metal exploration mineral properties. In addition to focusing on its mineral exploration properties and the evaluation of mineral properties for acquisition, Solitario also evaluates potential strategic transactions for the acquisition of new precious and base metal properties and assets with exploration potential or business combinations that Solitario determines to be favorable to Solitario. Solitario has previously recorded revenue in the past from the sale of mineral properties. Revenues and / or proceeds from the sale or joint venture of properties or assets have not been a consistent annual source of cash and would only occur in the future, if at all, on an infrequent basis. Solitario currently considers its carried interest in the Florida Canyon project, its interest in the Lik project and its interest in the Golden Crest project in South Dakota to be its core mineral property assets. Nexa Resources, Ltd. (“Nexa”), Solitario’s joint venture partner, is continuing the exploration and furtherance of the Florida Canyon project and Solitario is monitoring progress at Florida Canyon. Solitario is working with its 50% joint venture partner, Teck American Incorporated, a wholly owned subsidiary of Teck Resources Limited (both companies are referred to as “Teck”), in the Lik deposit to further the exploration of the Lik project, and to evaluate potential development plans for the Lik project. During 2021 Solitario entered into a lease for exclusive exploration and mining rights to certain mineral claims (the “GC Claims”) in the Black Hills region of South Dakota. The GC claims along with certain other claims (the “SRC Claims”) which Solitario acquired through staking during 2021 form the Golden Crest project, which is further described below. Solitario capitalized $695,000 as initial acquisition costs on the Golden Crest project during 2021. All future exploration expenditures for the Golden Crest project will be expensed as incurred as until such time Solitario establishes proven and probable reserves, which cannot be assured. As of December 31, 2021 and 2020, Solitario has balances of cash and short-term investments that Solitario anticipates using, in part, to further the development of the Florida Canyon project, the Lik project and the Golden Crest project and to potentially acquire additional mineral property assets. If Solitario establishes proven and probable reserves in the future, subsequent expenditures would be evaluated to determine appropriate accounting treatment. The fluctuations in precious metal and other commodity prices have contributed to a challenging environment for mineral exploration and development, which has created opportunities as well as challenges for the potential acquisition of early-stage and advanced mineral exploration projects or other related assets at potentially attractive terms. Financial reporting The consolidated financial statements include the accounts of Solitario and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("generally accepted accounting principles") and are expressed in US dollars. Revenue recognition Solitario has recorded revenue from the sale of exploration mineral properties and joint venture property payments. Solitario’s policy is to recognize revenue from the sale of its exploration mineral properties (those without reserves) on a property-by-property basis, computed as the cash received and / or collectable receivables less any capitalized cost. Payments received for the sale of exploration property interests that are less than the properties cost are recorded as a reduction of the related property's capitalized cost. In addition, Solitario’s policy is to recognize revenue on any receipts of joint venture property payments in excess of its capitalized costs on a property that Solitario may lease to another mining company. Solitario has not recognized any revenue during 2021 or 2020. Solitario expects any property sales in the future to be on an infrequent basis. Solitario last recognized revenue in 2019 from the sale of certain royalties and in 2018 from the sale of its royalty in the Yanacocha property. Solitario does not expect to record joint venture property payments on any of its currently held properties for the foreseeable future. Historically, Solitario’s revenues have been infrequent and significant individual transactions have only been from sales to well known or vetted mining companies. Solitario has never had a return on any of its sales recorded as revenue in its history and does not anticipate it will recognize any estimated returns on its future recorded revenues. Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Some of the more significant estimates included in the preparation of Solitario's financial statements pertain to: (i) the recoverability of its investment in mineral properties related to its mineral exploration properties and their future exploration potential; (ii) the fair value of stock option grants to employees; (iii) the ability of Solitario to realize its deferred tax assets; and (iv) Solitario's investment in marketable equity securities. In performing its activities, Solitario has incurred certain costs for mineral properties. The recovery of these costs is ultimately dependent upon the sale of mineral property interests or the development of economically recoverable mineral reserves and the ability of Solitario to obtain the necessary permits and financing to successfully place the properties into production, and upon future profitable operations, none of which is assured. Cash and cash equivalents Cash equivalents include investments in highly liquid money-market securities with original maturities of three months or less when purchased. At December 31, 2021, approximately $451,000 of Solitario’s cash and cash equivalents are held in brokerage accounts and foreign banks, which are not covered under the Federal Deposit Insurance Corporation (“FDIC”) rules for the United States. Short-term investments At December 31, 2021, Solitario has United States Treasury securities (“USTS”) with maturities of 15 days to one year, recorded at their fair value of $4,236,000 compared to USTS recorded at their fair value of $3,989,000 at December 31, 2020. Solitario also holds FDIC insured bank certificates of deposit (“CD’s”) with face values between $100,000 and $250,000 and maturities of three months to one year, which are recorded at their fair value of $851,000 at December 31, 2021 compared to the fair value of Solitario’s CD’s of $1,809,000 at December 31, 2020. Solitario’s short-term investments are recorded at their fair value based upon quoted market prices. The short-term investments are highly liquid and may be sold in their entirety at any time at their quoted market price and are classified as a current asset. Mineral properties Solitario expenses all exploration costs incurred on its mineral properties prior to the establishment of proven and probable reserves through the completion of a feasibility study. Initial acquisition costs of its mineral properties are capitalized. Solitario regularly performs evaluations of its investment in mineral properties to assess the recoverability and/or the residual value of its investments in these assets. All long-lived assets are reviewed for impairment whenever events or circumstances change which indicate the carrying amount of an asset may not be recoverable, utilizing established guidelines based upon undiscounted future net cash flows from the asset or upon the determination that certain exploration properties do not have sufficient potential for economic mineralization. Derivative instruments Solitario accounts for its derivative instruments in accordance with ASC 815, "Accounting for Derivative Instruments and Hedging Activities" (“ASC 815”). Fair value Financial Accounting Standards Board ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”) establishes a framework for measuring fair value and requires enhanced disclosures about fair value measurements. ASC 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Solitario's short-term investments in USTS and CD’s, its marketable equity securities and any covered call options against those marketable equity securities are carried at their estimated fair value based on quoted market prices. See Note 9, “Fair Value of Financial Instruments,” below. Marketable equity securities Solitario's investments in marketable equity securities are carried at fair value, which is based upon quoted prices of the securities owned. Solitario records investments in marketable equity securities for investments in publicly traded marketable equity securities for which it does not exercise significant control and where Solitario has no representation on the board of directors of those companies and exercises no control over the management of those companies. The cost and realized gain or loss on marketable equity securities sold is determined by the specific identification method. Changes in fair value on Solitario’s holdings of marketable equity securities are recorded as unrealized gain or loss in the consolidated statement of operations. Financial statement classification Solitario separately shows its classification of changes in the fair value of its short-term investment in USTS and CD’s as unrealized gain or loss on short-term investments in the statement of operations rather than a portion of interest and dividend income (net). During the year ended December 31, 2021 and 2020 the non-cash decrease in the fair value of its short-term investments, due primarily to changes in interest rates on held securities, was $102,000 and $57,000, respectively. The 2020 income statement and cash flows have been reclassified for comparability to the 2021 presentation. Total other income (expense) and net cash used in operations was not impacted. Foreign exchange The United States dollar is the functional currency for all of Solitario's foreign subsidiaries. Although Solitario's South American exploration activities during 2021 and 2020 were conducted primarily in Peru, a portion of the payments for the land, leasehold and exploration agreements as well as certain exploration activities are denominated in United States dollars. Inter-company funding is transacted in United States dollars. Foreign currency gains and losses are included in the results of operations in the period in which they occur. Income taxes Solitario accounts for income taxes in accordance with ASC 740, “Accounting for Income Taxes” (“ASC 740”). Under ASC 740, income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related to certain income and expenses recognized in different periods for financial and income tax reporting purposes. Deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes are also recognized for operating losses and tax credits that are available to offset future taxable income and income taxes, respectively. A valuation allowance is provided if it is more likely than not that some portion or all of the deferred tax assets will not be realized. Accounting for uncertainty in income taxes ASC 740 clarifies the accounting for uncertainty in income taxes recognized in a company's financial statements. ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. ASC 740 provides that a company's tax position will be considered settled if the taxing authority has completed its examination, the company does not plan to appeal, and it is remote that the taxing authority would reexamine the tax position in the future. These provisions of ASC 740 had no effect on Solitario's financial position or results of operations. See Note 6, “Income Taxes,” below. Earnings per share The calculation of basic and diluted earnings (loss) per share is based on the weighted average number of shares of common stock outstanding during the years ended December 31, 2021 and 2020. Potentially dilutive shares, consisting of outstanding common stock options of 5,513,000 and 5,558,000, respectively, exercisable for Solitario common shares were excluded from the calculation of diluted loss per share for the year ended December 31, 2021 and 2020 because the effects were anti-dilutive. Employee stock compensation and incentive plans Solitario classifies all of its stock options as equity options in accordance with the provisions of ASC 718, “Compensation – Stock Compensation.” See Note 11, “Employee Stock Compensation Plans,” below. Risks and Uncertainties Solitario faces risks related to health epidemics and other outbreaks of communicable diseases, which could significantly disrupt its operations and may materially and adversely affect its business and financial conditions. Solitario’s business still could be adversely impacted by the effects of the coronavirus (“COVID-19”) or other epidemics or pandemics. Solitario has recommended all of its employees and contractors follow government guidelines for health and safety policies for employees and contractors, including encouraging tele-commuting and working from home where possible. Solitario has evaluated the effects of COVID-19 on its operations and taken pro-active steps to address the impacts on its operations, including at times reducing costs, in response to the economic uncertainty associated with potential risks from COVID-19. These prior reductions included implementing salary reductions and evaluation and reduction in certain planned 2021 exploration programs through its joint venture partners at the Florida Canyon and Lik exploration projects. Also, Solitairo has evaluated the potential impacts on its ability to access future traditional funding sources on the same or reasonably similar terms as in past periods. Solitario will continue to monitor the effects of COVID-19 on its operations, financial condition and liquidity. However, the extent to which COVID-19 impacts Solitario’s business, including our exploration and other activities and the market for its securities, will depend on future developments, which are highly uncertain and cannot be predicted at this time, and include the duration, severity and scope of any new outbreak and the actions taken to contain or treat the COVID-19 pandemic. |
Mineral Properties
Mineral Properties | 12 Months Ended |
Dec. 31, 2021 | |
Mineral Properties | |
Mineral Properties | 2. Mineral Properties The following table details Solitario’s capitalized investment in exploration mineral property: (in thousands) December 31, 2021 2020 Exploration Lik project (Alaska – US) $ 15,611 $ 15,611 Golden Crest (South Dakota – US) 695 - Gold Coin (Arizona – US) - 17 Total exploration mineral property $ 16,306 $ 15,628 Exploration property Solitario's exploration mineral properties at December 31, 2021 and 2020 consist of use rights related to its exploration properties, and the value of such assets is primarily driven by the nature and amount of economic mineral ore believed to be contained, or potentially contained, in such properties. The amounts capitalized as mineral properties include concession and lease or option acquisition costs. Capitalized costs related to a mineral property represent its fair value at the time it was acquired or the cost to acquire the property, as appropriate. At December 31, 2021, none of Solitario’s exploration properties have production (are operating) or contain proven or probable reserves. Solitario's exploration mineral properties represent interests in properties that Solitario believes have exploration and development potential. Solitario's mineral use rights generally are enforceable regardless of whether proven and probable reserves have been established. 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 an obligation to pay the underlying owner $60,000 at the first anniversary date. 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. 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. Solitario has agreed to escalating work commitments, at Solitario’s option, on the GC Claims totaling $3,000,000 during the first five years of the lease, with the first year totaling $200,000. 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. In addition, during 2021 Solitario staked additional mineral claims, including some claims included in the area of interest of the GC Claims and claims not related to the GC Claims (the “SRC Claims”), as part of the Golden Crest project. Solitario incurred costs for staking, filing fees, legal and other costs totaling $570,000 capitalized as initial acquisition costs related to the SRC Claims and the GC Claims. 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 2021 and 2020. Florida Canyon In addition to its capitalized exploration properties, 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, 2021, no further standby joint-venture payments are due to Solitario on the Florida Canyon project. At December 31, 2021 and 2020, 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 zinc project. Nexa is required to fund 100% of exploration expenditures at Florida Canyon, 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. Royalty sale On January 22, 2019, Solitario completed a sale of certain royalties to SilverStream SEZC (“SilverStream”), for Cdn$600,000. On closing of the sale, Solitario received Cdn$250,000 in cash and a convertible note from SilverStream in the principal amount of Cdn$350,000 (the “SilverStream Note”). The SilverStream Note, as amended, was due on June 30, 2020 and was convertible into common shares of SilverStream, at the option of SilverStream, by providing Solitario a notice of conversion. On May 19, 2020, SilverStream completed an initial public offering, including changing its name to Vox Royalty Corp. (“Vox”) and, in accordance with the terms of the SilverStream Note, issued Solitario 137,255 shares of common stock of Vox in full satisfaction of obligations owed under the SilverStream Note. In accordance with the terms of the SilverStream Note, the 137,255 Vox shares were issued at a price of Cdn$2.55 per share, which was at a 15% discount to the initial public offering price of Cdn$3.00 per share. Solitario recorded its initial investment in the Vox common shares at the initial public offering price, or a total of Cdn$412,000 or $294,000. Solitario recorded other income of $44,000 for the gain on the conversion of the SilverStream Note during 2020. Solitario recorded interest income from the SilverStream Note of $7,000 during 2020. Discontinued projects During 2021 Solitario recorded $17,000 of mineral property impairment related to its decision to abandon its Gold Coin project in Arizona. During 2020 Solitario recorded $6,000 of mineral property impairment related to its decision to abandon its La Promesa project in Peru. Exploration Expense The following items comprised exploration expense: For the year ended December 31, (in thousands) 2021 2020 Geologic and field expenses $ 1,092 $ 326 Administrative 106 87 Total exploration expense $ 1,198 $ 413 Asset Retirement Obligation Solitario recorded an asset retirement obligation of $125,000 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 the 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 reclamation is not expected to occur until the end of the Lik 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, 2021, 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 Golden Crest project of staking claims and mapping, soil sampling, and assaying have not created any material environmental or other disturbances. Historically Solitario’s exploration activities have not resulted in any long-term environmental disturbances or liabilities and where there have been required restoration of disturbances, these have been completed contemporaneously with the completion of our mineral exploration activities. |
Marketable Equity Securities
Marketable Equity Securities | 12 Months Ended |
Dec. 31, 2021 | |
Marketable Equity Securities | |
Marketable Equity Securities | 3. Marketable Equity Securities During 2021, Solitario sold (i) 2,550,000 shares of Vendetta Mining Corp. (“Vendetta”) for proceeds of $112,000 and recorded a realized loss on the sale of $269,000; (ii) 430,000 shares of TNR Gold Corp. (“TNR”) for proceeds of $27,000 and recorded a realized gain on the sale of $19,000; and (iii) 3,200 shares of Vox for proceeds of $8,000 and recorded a realized gain on the sale of $2,000. During 2020 Solitario sold 2,900,000 shares of Vendetta common stock for proceeds of $123,000 and recorded a realized gain on sale of $50,000. During 2020, Solitario received 137,255 shares of Vox upon conversion of the SilverStream Note valued at $294,000. On July 31, 2019, Solitario purchased 3,450,000 Vendetta units for aggregate consideration of $233,000. Each unit consisted of one share of Vendetta common stock and one warrant which allows the holder to purchase one additional share of Vendetta common stock at a purchase price of Cdn$0.13 per share for a period of three years (the “Vendetta Warrants”). The purchase of the units increased Solitario’s holdings of Vendetta common shares to 14,450,000 shares. During 2021, Solitario charged loss on derivative instruments of $46,000 for the change in the value of the Vendetta Warrants. During 2020, Solitario charged gain on derivative instruments of $29,000 for the change in the value of the Vendetta Warrants. At December 31, 2021 Solitario owns the following marketable equity securities: Year ended December 31, 2021 shares Fair value (000’s) Kinross Gold Corp 100,000 $ 581 Vendetta Mining Corp. 9,000,000 356 Vox Royalty Corp. 134,055 370 Total $ 1,307 The following tables summarize Solitario’s marketable equity securities and adjustments to fair value: (in thousands) Year ended December 31, 2021 2020 Marketable equity securities at cost $ 1,704 $ 2,099 Cumulative unrealized (loss) gain on marketable equity securities (397 ) (479 ) Marketable equity securities at fair value $ 1,307 $ 1,620 The following table represents changes in marketable equity securities: (in thousands) Year ended December 31, 2021 2020 Cost of marketable equity securities sold $ 395 $ 73 Realized (loss) gain on marketable equity securities sold (248 ) 50 Proceeds from the sale of marketable equity securities sold (147 ) (123 ) Net gain (loss) on marketable equity securities (166 ) 410 Additions to marketable equity securities - 294 Change in marketable equity securities at fair value $ (313 ) $ 581 The following table represents the realized and unrealized gain (loss) on marketable equity securities: (in thousands) Year ended December 31, 2021 2020 Unrealized gain on marketable equity securities $ 82 $ 360 Realized (loss) gain on marketable equity securities sold (248 ) 50 Net (loss) gain on marketable equity securities $ (166 ) $ 410 |
Operating Lease
Operating Lease | 12 Months Ended |
Dec. 31, 2021 | |
Operating Lease | |
Operating Lease | 4. Operating Lease Solitario accounts for its leases in accordance with ASC 842. Solitario leases one facility, its Wheat Ridge, Colorado administrative office (the “WR Lease”), that has a term of more than one year. Solitario has no other material operating lease costs. The WR Lease was extended to October 2023 during 2021 and Solitario recorded a net increase in right of use assets of $99,000 during 2021 upon the extension of the WR Lease. The WR Lease is classified as an operating lease and has a remaining term of 22 months at December 31, 2021. The right-of-use office lease asset for the WR Lease is classified as other assets and the related liability as a current office lease liability in the consolidated balance sheet. Lease expense is recognized on a straight-line basis over the lease term, with variable lease payments recognized in the period those payments are incurred. During 2021 and 2020, Solitario recognized $40,000 and $40,000, respectively, of non-cash lease expense for the WR Lease included in general and administrative expense. Cash lease payments of $39,000 and $42,000, respectively, were made on the WR Lease during 2021 and 2020 and this amount, less $4,000 and $4,000, respectively, of imputed interest during 2021 and 2020, reduced the related liability on the WR Lease. The discount rate within the WR Lease is not determinable and Solitario applied a discount rate of 5% based upon Solitario’s estimate of its cost of capital in recording the WR Lease. Solitario has $75,000 remaining cash payments as of December 31, 2021. The following is supplemental cash flow information related to our operating lease for 2021 and 2020: (in thousands) Year ended December 31, 2021 Year ended December 31, 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash outflows from WR Lease payments $ 39 $ 42 Non-cash amounts related to the WR lease Right of use assets recorded in exchange for new operating lease liabilities $ 99 $ - |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2021 | |
Other Assets | |
Other Assets | 5. Other Assets The following items comprised other assets: (in thousands) December 31, 2021 2020 Furniture and fixtures, net of accumulated depreciation $ 65 $ 34 Lik project equipment, net of accumulated depreciation 10 30 Office lease asset 72 7 Vendetta warrants 3 49 Exploration bonds and other assets 4 4 Total other assets $ 154 $ 124 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes | |
Income Taxes | 6. Income Taxes Consolidated loss before income taxes includes losses from foreign operations of $136,000 and $79,000 in 2021 and 2020, respectively. The net deferred tax assets/liabilities in the December 31, 2021 and 2020 consolidated balance sheets include the following components: (in thousands) 2021 2020 Deferred tax assets: Loss carryovers $ 12,148 $ 12,636 Investment in Mineral Property 1,669 1,669 Capitalized Exploration Costs 418 410 Stock option compensation expense 309 286 Unrealized loss on derivative securities 98 148 Other 91 110 Lease Liability 18 - Valuation allowance (14,561 ) (15,050 ) Total deferred tax assets 190 209 Deferred tax liabilities: Unrealized gains on marketable equity securities 173 207 Lease Asset 17 - Other - 2 Total deferred tax liabilities 190 209 Net deferred tax liabilities $ - $ - A reconciliation of expected federal income taxes on income (loss) from continuing operations at statutory rates, with the expense for income taxes is as follows: (in thousands) 2021 2020 Expected income tax benefit $ (497 ) $ (197 ) Equity based compensation 4 7 Foreign tax rate differences (12 ) (8 ) State income tax (98 ) (37 ) Expiration of Capital Loss and Foreign Tax Credit Carryovers 1,385 1,225 Adjustment to Deferred Taxes (114 ) (23 ) Change in valuation allowance (489 ) (949 ) Change in Tax Rates (194 ) - Permanent differences and other 15 (18 ) Income tax (benefit) expense $ - $ - During 2021 and 2020, the valuation allowance decreased primarily due to the expiration of Capital Loss carryovers. At December 31, 2021, Solitario has unused US Federal Net Operating Loss carryovers of $21,106,000 and unused US State Net Operating Loss carryovers of $22,974,000 which begin expiring in 2027. As a result of the ownership change of Zazu Metals (Alaska) Corp, utilization of some of these federal and state losses will be limited due to the annual limitation provided by Section 382 of the Internal Revenue Code. Solitario has unused Capital Loss carryovers of $319,000 for US Federal and US State purposes which begin expiring in 2025. Solitario has Canadian loss carryforwards of $9,944,000 which begin expiring in 2027. Other foreign loss carryforwards for which Solitario has provided a full valuation allowance related to Solitario’s exploration activities in Peru. The Peru losses do not expire. Solitario adopted ASC 740, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 requires that Solitario recognize in its consolidated financial statements, only those tax positions that are “more-likely-than-not” of being sustained as of the adoption date, based on the technical merits of the position. As a result of the implementation of ASC 740, Solitario performed a comprehensive review of its material tax positions in accordance with recognition and measurement standards established by ASC 740. The provisions of ASC 740 had no effect on Solitario’s financial position, cash flows or results of operations at December 31, 2021 or December 31, 2020, or for the years then ended as Solitario had no unrecognized tax benefits. Solitario and its subsidiaries are subject to the following material taxing jurisdictions: United States Federal, State of Colorado, State of Alaska, State of South Dakota, Canada and Peru. Solitario’s United States federal, Canada and State of Alaska returns for years 2018 and forward and Solitario’s Peru and State of Colorado returns for tax years 2017 and forward are subject to examination. Solitario’s policy is to recognize interest and penalties related to uncertain tax benefits in income tax expense. Solitario has no accrued interest or penalties related to uncertain tax positions as of December 31, 2021, or December 31, 2020 or for the years then ended. |
Derivative Instruments
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 ) |
Paycheck Protection Program Loa
Paycheck Protection Program Loan | 12 Months Ended |
Dec. 31, 2021 | |
Paycheck Protection Program Loan | |
Paycheck Protection Program Loan | 8. Paycheck Protection Program Loan On April 20, 2020, in response to significant market volatility and uncertainty, our general history of operating losses, and the resulting need for Solitario to conserve its financial resources, Solitario applied for and received a loan in the amount of $70,000 (the “PPP Loan”) pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) to help fund payroll, rent and utilities obligations. The PPP Loan had a two-year term and an interest at a rate of 1.0% per annum. Monthly principal and interest payments were deferred for six months after the date of the loan. The Paycheck Protection Program provides that the PPP Loan may be partially or wholly forgiven if the funds are used for certain qualifying expenses as described in the CARES Act. Solitario believes it used the proceeds from the PPP Loan for qualifying expenses and applied for forgiveness of the PPP Loan in accordance with the terms of the CARES Act. During 2021 and 2020, $10,000 and $60,000, respectively, of the PPP Loan was forgiven, and Solitario recorded $10,000 and $60,000, respectively, of other income related to the forgiveness of the PPP Loan. The Small Business Administration retains the right to review the eligibility requirements of Solitario for its PPP Loan. As of December 31, 2021, Solitario has no remaining balance due on the PPP Loan. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 9. Fair Value of Financial Instruments For certain of Solitario's financial instruments, including cash and cash equivalents, payables and short-term debt, the carrying amounts approximate fair value due to their short maturities. Solitario's marketable equity securities, including its investment in shares of Kinross common stock, Vendetta common stock, Vox common stock and TNR common stock are carried at their estimated fair value based on publicly available quoted market prices. Solitario applies ASC 820 that establishes a framework for measuring fair value and requires enhanced disclosures about fair value measurements. ASC 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. ASC 820 also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows: Level 1: Quoted prices in active markets for identical assets or liabilities; Level 2: Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability; or Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. During the years ended December 31, 2021 and 2020, there were no reclassifications in financial assets or liabilities between Level 1, 2 or 3 categories. The following is a listing of Solitario’s financial assets and liabilities required to be measured at fair value on a recurring basis and where they are classified within the hierarchy as of December 31, 2021: (in thousands) Level 1 Level 2 Level 3 Total Assets Short-term investments $ 5,087 $ - $ - $ 5,087 Marketable equity securities $ 1,307 $ - $ - $ 1,307 Vendetta Warrants $ - $ 3 $ - $ 3 The following is a listing of Solitario’s financial assets and liabilities required to be measured at fair value on a recurring basis and where they are classified within the hierarchy as of December 31, 2020: (in thousands) Level 1 Level 2 Level 3 Total Assets Short-term investments $ 5,798 $ - $ - $ 5,798 Marketable equity securities $ 1,620 $ - $ - $ 1,620 Vendetta Warrants $ - $ 49 $ - $ 49 Items measured at fair value on a recurring basis: Short-term investments: Marketable equity securities : Vendetta Warrants During the year ended December 31, 2021, Solitario did not change any of the valuation techniques used to measure its financial assets and liabilities at fair value. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and contingencies (Note 10) | |
Commitments and Contingencies | 10. Commitments and Contingencies: In acquiring its interests in mineral claims and leases, Solitario has entered into lease agreements, which may be canceled at its option without penalty. Solitario is required to make minimum rental and option payments in order to maintain its interests in certain claims and leases. See Note 2, “Mineral Properties,” above. Solitario estimates its 2022 property claim, lease and option payments for properties Solitario owns, has under joint venture or Solitario operates to be approximately $1,046,000. Assuming that Solitario’s joint ventures continue in their current status and that Solitario does not appreciably change its property positions on existing properties, approximately $777,000 of these estimated 2022 property claim, lease and rental payments are paid or are reimbursable to us by Solitario’s joint venture partners. Solitario may be required to make further payments in the future if it acquires new properties or enters into new agreements. |
Employee Stock Compensation Pla
Employee Stock Compensation Plans | 12 Months Ended |
Dec. 31, 2021 | |
Employee Stock Compensation Plans | |
Employee Stock Compensation Plans | 11. Employee Stock Compensation Plans: On June 18, 2013, Solitario’s shareholders approved the Solitario Exploration & Royalty Corp. Omnibus Stock Incentive Plan (the “2013 Plan”). Under the terms of the 2013 Plan, as amended, a total of 5,750,000 shares of Solitario common stock are reserved for awards to directors, officers, employees and consultants. Awards granted under the 2013 Plan may take the form of stock options, stock appreciation rights, restricted stock, and restricted stock units. The terms and conditions of the awards are pursuant to the 2013 Plan and are granted by the Board of Directors or a committee appointed by the Board of Directors. a.) 2013 Plan stock option grants The following table shows the grant date fair value of Solitario’s awards during 2021 and 2020 pursuant to the 2013 Plan: Grant Date 5/5/21 (1) 6/10/21 (1) 4/2/20 (1) Option – grant date price $ 0.67 $ 0.69 $ 0.20 Options granted 90,000 50,000 1,325,000 Expected life years 5.0 5.0 5.0 Expected volatility 76 % 76 % 67 % Risk free interest rate 0.9 % 0.9 % 0.4 % Weighted average fair value $ 0.41 $ 0.41 $ 0.11 Grant date fair value $ 37,000 $ 20,000 $ 145,000 (1) Option grants have a five-year term, and vest 25% on date of grant and 25% on each of the next three anniversary dates. b.) Stock option activity During 2021, options for 185,000 shares of common stock were exercised for proceeds of $83,000. During 2020 no options granted from the 2013 Plan were exercised. The following table summarizes the activity for stock options outstanding under the 2013 Plan for the years ended December 31, 2021 and 2020: 2021 2020 Weighted Weighted Average Aggregate Average Aggregate RSUs/ Exercise Intrinsic RSUs/ Exercise Intrinsic Options Price Value (1) Options Price Value (1) Outstanding, beginning of year 5,558,000 $ 0.58 4,373,000 $ 0.58 Granted 140,000 $ 0.67 1,325,000 $ 0.20 Exercised (185,000 ) $ 0.45 - - Expired - - - - Forfeited - - (140,000 ) $ 0.77 Outstanding, end of year 5,513,000 $ 0.49 $ 718,000 5,558,000 $ 0.58 $ 925,000 Exercisable, end of year 4,718,000 $ 0.53 $ 506,000 4,083,500 $ 0.57 $ 446,000 (1) Intrinsic value based upon December 31, 2021 and 2020 price of a share of Solitario common stock as quoted on the NYSE American exchange of $0.50 and $0.56, respectively, per share. During the years ended December 31, 2021 and 2020, Solitario recorded $124,000 and $315,000, respectively, of stock option expense under the 2013 Plan for the amortization of the grant date fair value of each of its outstanding options with a credit to additional paid-in-capital. At December 31, 2021, the total unrecognized stock option compensation cost related to non-vested options is $80,000 and is expected to be recognized over a weighted average period of 21 months. |
Shareholders Equity
Shareholders Equity | 12 Months Ended |
Dec. 31, 2021 | |
Shareholders Equity | |
Shareholders' Equity | 12. Shareholders’ Equity At the Market Offering Agreement On February 2, 2021, Solitario entered into an at-the-market offering agreement (the “ATM Agreement”) with H. C. Wainwright & Co., LLC (“Wainwright”), under which Solitario may, from time to time, issue and sell shares of Solitario’s common stock through Wainwright as sales manager in an at-the-market offering under a prospectus supplement for aggregate sales proceeds of up to $9.0 million (the “ATM Program”). The common stock is distributed at the market prices prevailing at the time of sale. As a result, prices of the common stock sold under the ATM Program may vary as between purchasers and during the period of distribution. The ATM Agreement provides that Wainwright is entitled to compensation for its services at a commission rate of 3.0% of the gross sales price per share of common stock sold. During 2021, Solitario recorded $144,000 as a charge to additional paid-in-capital for one-time expenses related to entering into the ATM Agreement. During 2021, Solitario sold an aggregate of 643,033 shares of common stock under the ATM Program at an average price of $0.68 per share for net proceeds of $299,000 after commissions, sale, and one-time expenses. Share Repurchase Program On October 28, 2015, Solitario’s Board of Directors approved a share repurchase program that authorized Solitario to purchase up to two million shares of its outstanding common stock. During 2020 Solitario’s Board of Directors extended the expiration date of the share repurchase program through December 31, 2021. During 2021, Solitario did not purchase any shares pursuant to the share repurchase program. During the year ended December 31, 2020, Solitario purchased 24,700 shares of Solitario common stock for an aggregate purchase price of $5,000. As of December 31, 2021, Solitario has purchased a total of 994,000 shares for an aggregate purchase price of $467,000 under the share repurchase program since its inception. The share repurchase plan expired on December 31, 2021 and no additional shares will be purchased under the plan in the future. December 2021 Equity Offering On December 6, 2021 Solitario completed the sale of 3,100,000 shares of common stock (the “Shares”), at a price of $0.50 per share (the “Offering”) for net proceeds after expenses of $1,542,000. Solitario did not engage an underwriter or placement agent for the Offering, and therefore there were no underwriter discounts or commissions or placement agent fees. The sale of the Shares was made through a subscription agreement between Solitario and each respective investor. The Shares were offered and sold pursuant to the Company’s existing shelf registration statement on Form S-3 (File No. 333-249129). Solitario filed a prospectus supplement, dated December 1, 2021, with the SEC in connection with the sale of the securities in the Offering. Three of Solitario’s executive officers participated in the Offering, purchasing 50,000 Shares each, on the same terms as the other investors. The Offering was unanimously approved by Solitario’s Board of Directors and the participation by our executive officers was also unanimously approved by the Audit Committee of the Board of Directors. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Shareholders Equity | |
Subsequent Events | 13. Subsequent Events Solitario has evaluated events subsequent to December 31, 2021 to assess the need for potential recognition or disclosure in this report. Such events were evaluated through the date these financial statements were available to be issued. In February of 2022, Solitario entered into a lease agreement (the “Easter Agreement”) whereby Solitario acquired exclusive exploration rights in certain claims (the “Easter Claims”) in the Black Hills region of South Dakota. The Easter Claims are part of Solitario’s Golden Crest project. Terms of the Easter Agreement include $10,000 paid upon signing, scheduled annual payments to the underlying owner totaling $180,000 through the tenth anniversary, and $30,000 per year thereafter. Solitario has agreed to escalating work commitments, at Solitario’s option, on the Easter Claims totaling $660,000 during the first five years of the lease, with the first year totaling $20,000. In March 2022, we sold 2,650,724 shares of our common stock under the ATM program at a price of $0.79 per share for net proceeds of $2,023,000 after commissions and sale expenses. |
Business and Summary of Signi_2
Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Business and Summary of Significant Accounting Policies | |
Business and company formation | Solitario Zinc Corp. (“Solitario,” or the “Company”) is an exploration stage company as defined by rules issued by the United States Securities and Exchange Commission (“SEC”). Solitario was incorporated in the state of Colorado on November 15, 1984 as a wholly-owned subsidiary of Crown Resources Corporation ("Crown"). In July 1994, Solitario became a publicly traded company on the Toronto Stock Exchange (the "TSX") through its initial public offering. Solitario has been actively involved in mineral exploration since 1993. Solitario’s primary business is to acquire exploration mineral properties or royalties and/or discover economic deposits on its mineral properties and advance these deposits, either on its own or through joint ventures, up to the development stage. At that point, or sometime prior to that point, Solitario would likely attempt to sell its mineral properties, pursue their development either on its own or through a joint venture with a partner that has expertise in mining operations, or create a royalty with a third party that continues to advance the property. Solitario is primarily focused on the acquisition and exploration of precious metal, zinc and other base metal exploration mineral properties. In addition to focusing on its mineral exploration properties and the evaluation of mineral properties for acquisition, Solitario also evaluates potential strategic transactions for the acquisition of new precious and base metal properties and assets with exploration potential or business combinations that Solitario determines to be favorable to Solitario. Solitario has previously recorded revenue in the past from the sale of mineral properties. Revenues and / or proceeds from the sale or joint venture of properties or assets have not been a consistent annual source of cash and would only occur in the future, if at all, on an infrequent basis. Solitario currently considers its carried interest in the Florida Canyon project, its interest in the Lik project and its interest in the Golden Crest project in South Dakota to be its core mineral property assets. Nexa Resources, Ltd. (“Nexa”), Solitario’s joint venture partner, is continuing the exploration and furtherance of the Florida Canyon project and Solitario is monitoring progress at Florida Canyon. Solitario is working with its 50% joint venture partner, Teck American Incorporated, a wholly owned subsidiary of Teck Resources Limited (both companies are referred to as “Teck”), in the Lik deposit to further the exploration of the Lik project, and to evaluate potential development plans for the Lik project. During 2021 Solitario entered into a lease for exclusive exploration and mining rights to certain mineral claims (the “GC Claims”) in the Black Hills region of South Dakota. The GC claims along with certain other claims (the “SRC Claims”) which Solitario acquired through staking during 2021 form the Golden Crest project, which is further described below. Solitario capitalized $695,000 as initial acquisition costs on the Golden Crest project during 2021. All future exploration expenditures for the Golden Crest project will be expensed as incurred as until such time Solitario establishes proven and probable reserves, which cannot be assured. As of December 31, 2021 and 2020, Solitario has balances of cash and short-term investments that Solitario anticipates using, in part, to further the development of the Florida Canyon project, the Lik project and the Golden Crest project and to potentially acquire additional mineral property assets. If Solitario establishes proven and probable reserves in the future, subsequent expenditures would be evaluated to determine appropriate accounting treatment. The fluctuations in precious metal and other commodity prices have contributed to a challenging environment for mineral exploration and development, which has created opportunities as well as challenges for the potential acquisition of early-stage and advanced mineral exploration projects or other related assets at potentially attractive terms. |
Financial reporting | The consolidated financial statements include the accounts of Solitario and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("generally accepted accounting principles") and are expressed in US dollars. |
Revenue recognition | Solitario has recorded revenue from the sale of exploration mineral properties and joint venture property payments. Solitario’s policy is to recognize revenue from the sale of its exploration mineral properties (those without reserves) on a property-by-property basis, computed as the cash received and / or collectable receivables less any capitalized cost. Payments received for the sale of exploration property interests that are less than the properties cost are recorded as a reduction of the related property's capitalized cost. In addition, Solitario’s policy is to recognize revenue on any receipts of joint venture property payments in excess of its capitalized costs on a property that Solitario may lease to another mining company. Solitario has not recognized any revenue during 2021 or 2020. Solitario expects any property sales in the future to be on an infrequent basis. Solitario last recognized revenue in 2019 from the sale of certain royalties and in 2018 from the sale of its royalty in the Yanacocha property. Solitario does not expect to record joint venture property payments on any of its currently held properties for the foreseeable future. Historically, Solitario’s revenues have been infrequent and significant individual transactions have only been from sales to well known or vetted mining companies. Solitario has never had a return on any of its sales recorded as revenue in its history and does not anticipate it will recognize any estimated returns on its future recorded revenues. |
Use of estimates | The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Some of the more significant estimates included in the preparation of Solitario's financial statements pertain to: (i) the recoverability of its investment in mineral properties related to its mineral exploration properties and their future exploration potential; (ii) the fair value of stock option grants to employees; (iii) the ability of Solitario to realize its deferred tax assets; and (iv) Solitario's investment in marketable equity securities. In performing its activities, Solitario has incurred certain costs for mineral properties. The recovery of these costs is ultimately dependent upon the sale of mineral property interests or the development of economically recoverable mineral reserves and the ability of Solitario to obtain the necessary permits and financing to successfully place the properties into production, and upon future profitable operations, none of which is assured. |
Cash and cash equivalents | Cash equivalents include investments in highly liquid money-market securities with original maturities of three months or less when purchased. At December 31, 2021, approximately $451,000 of Solitario’s cash and cash equivalents are held in brokerage accounts and foreign banks, which are not covered under the Federal Deposit Insurance Corporation (“FDIC”) rules for the United States. |
Short-term investments | At December 31, 2021, Solitario has United States Treasury securities (“USTS”) with maturities of 15 days to one year, recorded at their fair value of $4,236,000 compared to USTS recorded at their fair value of $3,989,000 at December 31, 2020. Solitario also holds FDIC insured bank certificates of deposit (“CD’s”) with face values between $100,000 and $250,000 and maturities of three months to one year, which are recorded at their fair value of $851,000 at December 31, 2021 compared to the fair value of Solitario’s CD’s of $1,809,000 at December 31, 2020. Solitario’s short-term investments are recorded at their fair value based upon quoted market prices. The short-term investments are highly liquid and may be sold in their entirety at any time at their quoted market price and are classified as a current asset. |
Mineral properties | Solitario expenses all exploration costs incurred on its mineral properties prior to the establishment of proven and probable reserves through the completion of a feasibility study. Initial acquisition costs of its mineral properties are capitalized. Solitario regularly performs evaluations of its investment in mineral properties to assess the recoverability and/or the residual value of its investments in these assets. All long-lived assets are reviewed for impairment whenever events or circumstances change which indicate the carrying amount of an asset may not be recoverable, utilizing established guidelines based upon undiscounted future net cash flows from the asset or upon the determination that certain exploration properties do not have sufficient potential for economic mineralization. |
Derivative instruments | Solitario accounts for its derivative instruments in accordance with ASC 815, "Accounting for Derivative Instruments and Hedging Activities" (“ASC 815”). |
Fair value | Financial Accounting Standards Board ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”) establishes a framework for measuring fair value and requires enhanced disclosures about fair value measurements. ASC 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Solitario's short-term investments in USTS and CD’s, its marketable equity securities and any covered call options against those marketable equity securities are carried at their estimated fair value based on quoted market prices. See Note 9, “Fair Value of Financial Instruments,” below. |
Marketable equity securities | Solitario's investments in marketable equity securities are carried at fair value, which is based upon quoted prices of the securities owned. Solitario records investments in marketable equity securities for investments in publicly traded marketable equity securities for which it does not exercise significant control and where Solitario has no representation on the board of directors of those companies and exercises no control over the management of those companies. The cost and realized gain or loss on marketable equity securities sold is determined by the specific identification method. Changes in fair value on Solitario’s holdings of marketable equity securities are recorded as unrealized gain or loss in the consolidated statement of operations. |
Financial statement classification | Solitario separately shows its classification of changes in the fair value of its short-term investment in USTS and CD’s as unrealized gain or loss on short-term investments in the statement of operations rather than a portion of interest and dividend income (net). During the year ended December 31, 2021 and 2020 the non-cash decrease in the fair value of its short-term investments, due primarily to changes in interest rates on held securities, was $102,000 and $57,000, respectively. The 2020 income statement and cash flows have been reclassified for comparability to the 2021 presentation. Total other income (expense) and net cash used in operations was not impacted. |
Foreign exchange | The United States dollar is the functional currency for all of Solitario's foreign subsidiaries. Although Solitario's South American exploration activities during 2021 and 2020 were conducted primarily in Peru, a portion of the payments for the land, leasehold and exploration agreements as well as certain exploration activities are denominated in United States dollars. Inter-company funding is transacted in United States dollars. Foreign currency gains and losses are included in the results of operations in the period in which they occur. |
Income taxes | Derivative instruments Solitario accounts for its derivative instruments in accordance with ASC 815, "Accounting for Derivative Instruments and Hedging Activities" (“ASC 815”). Fair value Financial Accounting Standards Board ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”) establishes a framework for measuring fair value and requires enhanced disclosures about fair value measurements. ASC 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Solitario's short-term investments in USTS and CD’s, its marketable equity securities and any covered call options against those marketable equity securities are carried at their estimated fair value based on quoted market prices. See Note 9, “Fair Value of Financial Instruments,” below. Marketable equity securities Solitario's investments in marketable equity securities are carried at fair value, which is based upon quoted prices of the securities owned. Solitario records investments in marketable equity securities for investments in publicly traded marketable equity securities for which it does not exercise significant control and where Solitario has no representation on the board of directors of those companies and exercises no control over the management of those companies. The cost and realized gain or loss on marketable equity securities sold is determined by the specific identification method. Changes in fair value on Solitario’s holdings of marketable equity securities are recorded as unrealized gain or loss in the consolidated statement of operations. Financial statement classification Solitario separately shows its classification of changes in the fair value of its short-term investment in USTS and CD’s as unrealized gain or loss on short-term investments in the statement of operations rather than a portion of interest and dividend income (net). During the year ended December 31, 2021 and 2020 the non-cash decrease in the fair value of its short-term investments, due primarily to changes in interest rates on held securities, was $102,000 and $57,000, respectively. The 2020 income statement and cash flows have been reclassified for comparability to the 2021 presentation. Total other income (expense) and net cash used in operations was not impacted. Foreign exchange The United States dollar is the functional currency for all of Solitario's foreign subsidiaries. Although Solitario's South American exploration activities during 2021 and 2020 were conducted primarily in Peru, a portion of the payments for the land, leasehold and exploration agreements as well as certain exploration activities are denominated in United States dollars. Inter-company funding is transacted in United States dollars. Foreign currency gains and losses are included in the results of operations in the period in which they occur. Income taxes Solitario accounts for income taxes in accordance with ASC 740, “Accounting for Income Taxes” (“ASC 740”). Under ASC 740, income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related to certain income and expenses recognized in different periods for financial and income tax reporting purposes. Deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes are also recognized for operating losses and tax credits that are available to offset future taxable income and income taxes, respectively. A valuation allowance is provided if it is more likely than not that some portion or all of the deferred tax assets will not be realized. |
Accounting for uncertainty in income taxes | ASC 740 clarifies the accounting for uncertainty in income taxes recognized in a company's financial statements. ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. ASC 740 provides that a company's tax position will be considered settled if the taxing authority has completed its examination, the company does not plan to appeal, and it is remote that the taxing authority would reexamine the tax position in the future. These provisions of ASC 740 had no effect on Solitario's financial position or results of operations. See Note 6, “Income Taxes,” below. |
Earnings per share | The calculation of basic and diluted earnings (loss) per share is based on the weighted average number of shares of common stock outstanding during the years ended December 31, 2021 and 2020. Potentially dilutive shares, consisting of outstanding common stock options of 5,513,000 and 5,558,000, respectively, exercisable for Solitario common shares were excluded from the calculation of diluted loss per share for the year ended December 31, 2021 and 2020 because the effects were anti-dilutive. |
Employee stock compensation and incentive plans | Solitario classifies all of its stock options as equity options in accordance with the provisions of ASC 718, “Compensation – Stock Compensation.” See Note 11, “Employee Stock Compensation Plans,” below. |
Risk and uncertainties | Solitario faces risks related to health epidemics and other outbreaks of communicable diseases, which could significantly disrupt its operations and may materially and adversely affect its business and financial conditions. Solitario’s business still could be adversely impacted by the effects of the coronavirus (“COVID-19”) or other epidemics or pandemics. Solitario has recommended all of its employees and contractors follow government guidelines for health and safety policies for employees and contractors, including encouraging tele-commuting and working from home where possible. Solitario has evaluated the effects of COVID-19 on its operations and taken pro-active steps to address the impacts on its operations, including at times reducing costs, in response to the economic uncertainty associated with potential risks from COVID-19. These prior reductions included implementing salary reductions and evaluation and reduction in certain planned 2021 exploration programs through its joint venture partners at the Florida Canyon and Lik exploration projects. Also, Solitairo has evaluated the potential impacts on its ability to access future traditional funding sources on the same or reasonably similar terms as in past periods. Solitario will continue to monitor the effects of COVID-19 on its operations, financial condition and liquidity. However, the extent to which COVID-19 impacts Solitario’s business, including our exploration and other activities and the market for its securities, will depend on future developments, which are highly uncertain and cannot be predicted at this time, and include the duration, severity and scope of any new outbreak and the actions taken to contain or treat the COVID-19 pandemic. |
Mineral Property (Tables)
Mineral Property (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Mineral Properties | |
Investment in mineral property | (in thousands) December 31, 2021 2020 Exploration Lik project (Alaska – US) $ 15,611 $ 15,611 Golden Crest (South Dakota – US) 695 - Gold Coin (Arizona – US) - 17 Total exploration mineral property $ 16,306 $ 15,628 |
Exploration expense | For the year ended December 31, (in thousands) 2021 2020 Geologic and field expenses $ 1,092 $ 326 Administrative 106 87 Total exploration expense $ 1,198 $ 413 |
Marketable Equity Securities (T
Marketable Equity Securities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Marketable Equity Securities (Tables) | |
Marketable equity securities | Year ended December 31, 2021 shares Fair value (000’s) Kinross Gold Corp 100,000 $ 581 Vendetta Mining Corp. 9,000,000 356 Vox Royalty Corp. 134,055 370 Total $ 1,307 |
Marketable securities and adjustment to fair value | (in thousands) Year ended December 31, 2021 2020 Marketable equity securities at cost $ 1,704 $ 2,099 Cumulative unrealized (loss) gain on marketable equity securities (397 ) (479 ) Marketable equity securities at fair value $ 1,307 $ 1,620 |
Changes in marketable securities | (in thousands) Year ended December 31, 2021 2020 Cost of marketable equity securities sold $ 395 $ 73 Realized (loss) gain on marketable equity securities sold (248 ) 50 Proceeds from the sale of marketable equity securities sold (147 ) (123 ) Net gain (loss) on marketable equity securities (166 ) 410 Additions to marketable equity securities - 294 Change in marketable equity securities at fair value $ (313 ) $ 581 |
Realized and unrealized gain (loss) on marketable equity securities | (in thousands) Year ended December 31, 2021 2020 Unrealized gain on marketable equity securities $ 82 $ 360 Realized (loss) gain on marketable equity securities sold (248 ) 50 Net (loss) gain on marketable equity securities $ (166 ) $ 410 |
Operating Lease (Tables)
Operating Lease (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Operating Lease | |
Supplemental cash flow for operating lease | (in thousands) Year ended December 31, 2021 Year ended December 31, 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash outflows from WR Lease payments $ 39 $ 42 Non-cash amounts related to the WR lease Right of use assets recorded in exchange for new operating lease liabilities $ 99 $ - |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Other Assets | |
Other assets | (in thousands) December 31, 2021 2020 Furniture and fixtures, net of accumulated depreciation $ 65 $ 34 Lik project equipment, net of accumulated depreciation 10 30 Office lease asset 72 7 Vendetta warrants 3 49 Exploration bonds and other assets 4 4 Total other assets $ 154 $ 124 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes | |
Deferred tax assets and liabilities | (in thousands) 2021 2020 Deferred tax assets: Loss carryovers $ 12,148 $ 12,636 Investment in Mineral Property 1,669 1,669 Capitalized Exploration Costs 418 410 Stock option compensation expense 309 286 Unrealized loss on derivative securities 98 148 Other 91 110 Lease Liability 18 - Valuation allowance (14,561 ) (15,050 ) Total deferred tax assets 190 209 Deferred tax liabilities: Unrealized gains on marketable equity securities 173 207 Lease Asset 17 - Other - 2 Total deferred tax liabilities 190 209 Net deferred tax liabilities $ - $ - |
Income tax from continuing operations | (in thousands) 2021 2020 Expected income tax benefit $ (497 ) $ (197 ) Equity based compensation 4 7 Foreign tax rate differences (12 ) (8 ) State income tax (98 ) (37 ) Expiration of Capital Loss and Foreign Tax Credit Carryovers 1,385 1,225 Adjustment to Deferred Taxes (114 ) (23 ) Change in valuation allowance (489 ) (949 ) Change in Tax Rates (194 ) - Permanent differences and other 15 (18 ) Income tax (benefit) expense $ - $ - |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments | |
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 ) |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value of Financial Instruments | |
Financial assets and liabilities measured at fair value | The following is a listing of Solitario’s financial assets and liabilities required to be measured at fair value on a recurring basis and where they are classified within the hierarchy as of December 31, 2021: (in thousands) Level 1 Level 2 Level 3 Total Assets Short-term investments $ 5,087 $ - $ - $ 5,087 Marketable equity securities $ 1,307 $ - $ - $ 1,307 Vendetta Warrants $ - $ 3 $ - $ 3 The following is a listing of Solitario’s financial assets and liabilities required to be measured at fair value on a recurring basis and where they are classified within the hierarchy as of December 31, 2020: (in thousands) Level 1 Level 2 Level 3 Total Assets Short-term investments $ 5,798 $ - $ - $ 5,798 Marketable equity securities $ 1,620 $ - $ - $ 1,620 Vendetta Warrants $ - $ 49 $ - $ 49 |
Employee Stock Compensation P_2
Employee Stock Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Employee Stock Compensation Plans | |
Stock option grant assumptions | Grant Date 5/5/21 (1) 6/10/21 (1) 4/2/20 (1) Option – grant date price $ 0.67 $ 0.69 $ 0.20 Options granted 90,000 50,000 1,325,000 Expected life years 5.0 5.0 5.0 Expected volatility 76 % 76 % 67 % Risk free interest rate 0.9 % 0.9 % 0.4 % Weighted average fair value $ 0.41 $ 0.41 $ 0.11 Grant date fair value $ 37,000 $ 20,000 $ 145,000 |
Stock option activity | 2021 2020 Weighted Weighted Average Aggregate Average Aggregate RSUs/ Exercise Intrinsic RSUs/ Exercise Intrinsic Options Price Value (1) Options Price Value (1) Outstanding, beginning of year 5,558,000 $ 0.58 4,373,000 $ 0.58 Granted 140,000 $ 0.67 1,325,000 $ 0.20 Exercised (185,000 ) $ 0.45 - - Expired - - - - Forfeited - - (140,000 ) $ 0.77 Outstanding, end of year 5,513,000 $ 0.49 $ 718,000 5,558,000 $ 0.58 $ 925,000 Exercisable, end of year 4,718,000 $ 0.53 $ 506,000 4,083,500 $ 0.57 $ 446,000 |
Business and Summary of Signi_3
Business and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Business and Summary of Significant Accounting Policies | ||
Joint venture partner | 50.00% | |
Capitalized of initial acquisition costs on the Golden Crest project | $ 695,000 | |
Cash and cash equivalents held in brokerage accounts and foreign banks | $ 451,000 | |
Maturities period of current assets in United States Treasury Securities | 15 days to one year | |
Current assets in United States Treasury Securities | $ 4,236,000 | $ 3,989,000 |
Certificates of deposit, Face value | $ 100,000 | 250,000 |
Maturities period of certificates of deposit | three months to one year | |
Certificates of deposit, Fair value | $ 851,000 | 1,809,000 |
fair value of short-term investments | $ 102,000 | $ 57,000 |
Potentially dilutive shares related to outstanding common stock options | 5,513,000 | 5,558,000 |
Mineral Property (Details)
Mineral Property (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Mineral properties | $ 16,306 | $ 15,628 |
Mineral properties | 16,306 | 15,628 |
Lik project (Alaska - US) | ||
Mineral properties | 15,611 | 15,611 |
Golden Crest (South Dakota - US) | ||
Mineral properties | 695 | 0 |
Gold Coin (Arizona - US) | ||
Mineral properties | $ 0 | $ 17 |
Mineral Property (Details 1)
Mineral Property (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Mineral Properties | ||
Geologic and field expenses | $ 1,092 | $ 326 |
Administrative | 106 | 87 |
Total exploration costs | $ 1,198 | $ 413 |
Mineral Property (Details Narra
Mineral Property (Details Narrative) | 1 Months Ended | 12 Months Ended | |||||
May 27, 2021USD ($)$ / shares | May 19, 2020USD ($)$ / sharesshares | Jan. 22, 2019CAD ($) | Jul. 31, 2017USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2020CAD ($) | |
Interest income from SiverStream Note | $ 7,000 | ||||||
Asset retirement obligation | $ 125,000 | ||||||
GC Claims | 3,000,000 | ||||||
Mineral property impairment | $ 17,000 | 6,000 | |||||
Return royalty rate | 2.00% | ||||||
Reduce return royalty rate | 1.00% | ||||||
Royalty Sale | $ 250,000 | ||||||
Income from sale of royalty | $ 600,000 | ||||||
Purchase price of share issued to Solitario | $ / shares | $ 2.55 | ||||||
Discount rate | 15.00% | 5.00% | |||||
Initial public offering price per share | $ / shares | $ 3 | ||||||
Principal amount | $ 350,000 | ||||||
Total | $ 200,000 | ||||||
Payment | 1,000,000 | ||||||
Sale of Vox Mining Corp., amount | $ 1,500,000 | ||||||
Other cost | 570,000 | ||||||
Gain on the conversion | $ 10,000 | 60,000 | |||||
Golden Crest Agreement | |||||||
Payment period | 5 years | ||||||
Resource amount | $ 150,000 | ||||||
Payment of underlying owner | 65,000 | ||||||
Obligation to pay the underlying owner | 60,000 | ||||||
Initial acquisition cost | 125,000 | ||||||
Totaling underlying owner annual payments | 340,000 | ||||||
Annual payments | $ 150,000 | ||||||
Per share | $ / shares | $ 1 | ||||||
Lik Property [Member] | |||||||
Initial acquisition cost | $ 15,611,000 | ||||||
Vox Royalty Corp. [Member] | |||||||
Sale of Vox Mining Corp., amount | $ 294,000 | 8,000 | |||||
Common stock shares issued | shares | 137,255 | ||||||
Gain on the conversion | $ 44,000 |
Marketable Equity Securities (D
Marketable Equity Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Marketable equity securities at fair value | $ 1,307 | $ 1,620 |
Vox Royalty Corp. [Member] | ||
Marketable equity securities at fair value | $ 370 | |
Shares | 134,055 | |
Vendetta Mining Corp. [Member] | ||
Marketable equity securities at fair value | $ 356 | |
Shares | 9,000,000 | |
Kinross Gold Corp | ||
Marketable equity securities at fair value | $ 581 | |
Shares | 100,000 |
Marketable Equity Securities _2
Marketable Equity Securities (Details 1) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Marketable Equity Securities (Tables) | ||
Marketable equity securities at cost | $ 1,704 | $ 2,099 |
Cumulative unrealized loss on marketable equity securities | 397 | 479 |
Marketable equity securities at fair value | $ 1,307 | $ 1,620 |
Marketable Equity Securities _3
Marketable Equity Securities (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Marketable Equity Securities (Tables) | ||
Cost of marketable equity securities sold | $ 395 | $ 73 |
Realized (loss) gain on marketable equity securities sold | (248) | 50 |
Proceeds from the sale of marketable equity securities sold | 147 | 123 |
Net (loss) gain on marketable equity securities | (166) | 410 |
Additions to marketable equity securities | 0 | 294 |
Change in marketable equity securities at fair value | $ (313) | $ 581 |
Marketable Equity Securities _4
Marketable Equity Securities (Details 3) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Marketable Equity Securities (Tables) | ||
Unrealized (loss) gain on marketable securities | $ 82 | $ 360 |
Realized (loss) gain on marketable equity securities sold | (248) | 50 |
Net (loss) gain on marketable securities | $ (166) | $ 410 |
Marketable Equity Securities _5
Marketable Equity Securities (Details Narrative) - USD ($) | 1 Months Ended | 7 Months Ended | 12 Months Ended | |
May 19, 2020 | Jul. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | |
Sale of Vox Mining Corp., shares | 137,255 | |||
Sale of Vox Mining Corp., amount | $ 294,000 | |||
Purchased Vendetta units | 3,450,000 | |||
Vendetta units for aggregate consideration | $ 233,000 | |||
purchase price, Per unit | $ 0.13 | |||
Purchase of the units increased of Vendetta common shares | 14,450,000 | |||
Charged loss on derivative instruments | $ 46,000 | |||
Charged gain on derivative instruments | $ 29,000 | |||
Sale of Vox Mining Corp., amount | $ 1,500,000 | |||
Common Stock | ||||
Sale of Vox Mining Corp., shares | 2,900,000 | |||
Sale of Vox Mining Corp., amount | $ 123,000 | |||
(Loss) gain on sale | $ 50,000 | |||
Vox Royalty Corp. [Member] | ||||
Sale of Vox Mining Corp., shares | 3,200 | |||
Sale of Vox Mining Corp., amount | $ 294,000 | $ 8,000 | ||
(Loss) gain on sale | $ 2,000 | |||
Vendetta Mining Corp. [Member] | ||||
Sale of Vox Mining Corp., shares | 2,550,000 | |||
Sale of Vox Mining Corp., amount | $ 112,000 | |||
(Loss) gain on sale | $ 269,000 | |||
TNR Gold Corp.[Member] | ||||
Sale of Vox Mining Corp., shares | 430,000 | |||
Sale of Vox Mining Corp., amount | $ 27,000 | |||
(Loss) gain on sale | $ 19,000 |
Operating Leases (Details)
Operating Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Lease | ||
Operating cash outflows from WR Lease payments | $ 39 | $ 42 |
Leased assets recorded in exchange for new operating lease liabilities | $ 99 | $ 0 |
Operating Leases (Details Narra
Operating Leases (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
May 19, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Non-cash lease amortization of right of use lease asset expense recognized | $ 40,000 | $ 40,000 | |
Discount rate | 15.00% | 5.00% | |
Cash lease payments | $ 39,000 | 42,000 | |
Imputed interest | 4,000 | $ 4,000 | |
Remaining cash payments | 75,000 | ||
WR Lease [Member] | |||
Net increased asset and liability | $ 99,000 | ||
Operating lease term in months | 22 |
Other Assets (Details)
Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Other assets | $ 154 | $ 124 |
Vendetta Warrants [Member] | ||
Other assets | 3 | 49 |
Furniture and Fixtures [Member] | ||
Other assets | 65 | 34 |
Lik Project Equipment [Member] | ||
Other assets | 10 | 30 |
Office Lease Asset [Member] | ||
Other assets | 72 | 7 |
Exploration Bonds and Other Assets [Member] | ||
Other assets | $ 4 | $ 4 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Loss carryovers | $ 12,148,000 | $ 12,636,000 |
Investment in mineral property | 1,669,000 | 1,669,000 |
Capitalized exploration costs | 418,000 | 410,000 |
Stock option compensation expense | 309,000 | 286,000 |
Unrealized loss on derivative securities | 98,000 | 148,000 |
Other | 91,000 | 110,000 |
Lease liability | 18 | 0 |
Valuation allowance | (14,561,000) | (15,050,000) |
Total deferred tax assets | 190,000 | 209,000 |
Deferred tax liabilities: | ||
Unrealized gains on marketable equity securities | 173,000 | 207,000 |
Lease asset | 17 | 0 |
Other | 0 | 2,000 |
Total deferred tax liabilities | 190,000 | 209,000 |
Net deferred tax liabilities | $ 0 | $ 0 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Taxes | ||
Expected income tax benefit | $ (497,000) | $ (197,000) |
Equity based compensation | 4,000 | 7,000 |
Foreign tax rate differences | (12,000) | (8,000) |
State income tax | (98,000) | (37,000) |
Expiration of capital loss carryovers | 1,385,000 | 1,225,000 |
Adjustment to deferred taxes | (114,000) | (23,000) |
Change in valuation allowance | (489,000) | (949,000) |
Changes in tax rate | (194) | 0 |
Permanent differences and other | 15,000 | (18,000) |
Income tax (benefit) expense | $ 0 | $ 0 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Consolidated loss before income taxes | $ 136,000 | $ 79,000 |
State | ||
Net operating loss carryovers | 22,974,000 | |
Unused capital loss carryovers | 319,000 | |
Federal | ||
Net operating loss carryovers | 21,106,000 | |
Unused capital loss carryovers | 319,000 | |
Canada | ||
Net operating loss carryovers | $ 9,944,000 |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Gain (loss) on derivative instruments | $ (38) | $ (92) |
Vendetta Warrants [Member] | ||
Gain (loss) on derivative instruments | (46) | 29 |
Kinross Calls [Member] | ||
Gain (loss) on derivative instruments | $ 8 | $ (121) |
Derivative Instruments (Detai_2
Derivative Instruments (Details Narrative) | 12 Months Ended | |||||
Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2021$ / shares | Dec. 31, 2021USD ($)shares | Dec. 31, 2020$ / shares | Dec. 31, 2020USD ($)shares | |
Vendetta Warrants [Member] | ||||||
Number of securities called by warrants | shares | 3,450,000 | 3,450,000 | ||||
Warrants, exercise price | $ / shares | $ 0.13 | $ 0.13 | ||||
Warrants, fair value | $ 3,000 | $ 49,000 | ||||
Kinross Calls [Member] | ||||||
Proceeds from sale of covered calls | $ 8,000 | $ 103,000 | ||||
Payments for repurchase of covered calls | $ 224,000 |
Paycheck Protection Program L_2
Paycheck Protection Program Loan (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Apr. 20, 2020 | |
Paycheck Protection Program Loan | |||
Other income | 10,000 | 60,000 | |
Forgiveness of the Paycheck Protection Program Loan | $ 10,000 | $ 60,000 | |
Interest rate | 1.00% | ||
Paycheck Protection Program Loan, term | two-year | ||
Paycheck Protection Program Loan | $ 70,000 |
Fair Value (Details)
Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Short-term investments | $ 5,087 | $ 5,798 |
Marketable equity securities | 1,307 | 1,620 |
Vendetta warrants | 3 | 49 |
Level 1 | ||
Assets | ||
Short-term investments | 5,087 | 5,798 |
Marketable equity securities | 1,307 | 1,620 |
Vendetta warrants | 0 | 0 |
Level 2 | ||
Assets | ||
Short-term investments | 0 | 0 |
Marketable equity securities | 0 | 0 |
Vendetta warrants | 3 | 49 |
Level 3 | ||
Assets | ||
Short-term investments | 0 | 0 |
Marketable equity securities | 0 | 0 |
Vendetta warrants | $ 0 | $ 0 |
Commitments and contingencies (
Commitments and contingencies (Details Narrative) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Other Assets | |
Lease and option payments for properties Solitario owns | $ 1,046,000 |
Rent paid | $ 777,000 |
Employee Stock Compensation P_3
Employee Stock Compensation Plans (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Options granted | 140,000 | 1,325,000 |
2013 Plan | 6/10/21 | ||
Option - grant date price | $ 0.69 | |
Options granted | 50,000 | |
Expected life years | 5 years | |
Expected volatility | 76.00% | |
Risk free interest rate | 0.90% | |
Weighted average fair value | $ 0.41 | |
Grant date fair value | $ 20,000 | |
2013 Plan | 4/2/20 | ||
Option - grant date price | $ 0.20 | |
Options granted | 1,325,000 | |
Expected life years | 5 years | |
Expected volatility | 67.00% | |
Risk free interest rate | 0.40% | |
Weighted average fair value | $ 0.11 | |
Grant date fair value | $ 145,000 | |
2013 Plan | 5/5/21 | ||
Option - grant date price | $ 0.67 | |
Options granted | 90,000 | |
Expected life years | 5 years | |
Expected volatility | 76.00% | |
Risk free interest rate | 0.90% | |
Weighted average fair value | $ 0.41 | |
Grant date fair value | $ 37,000 |
Employee Stock Compensation P_4
Employee Stock Compensation Plans (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Employee Stock Compensation Plans | ||
Number of options outstanding, beginning | 5,558,000 | 4,373,000 |
Number of options granted | 140,000 | 1,325,000 |
Number of options exercised | 185,000 | |
Number of options expired | 0 | |
Number of options forfeited | (140,000) | |
Number of options exercisable | 4,718,000 | 4,083,500 |
Number of options outstanding, ending | 5,513,000 | 5,558,000 |
Weighted average exercise price outstanding, beginning | $ 0.58 | $ 0.58 |
Weighted average exercise price granted | 0.67 | 0.20 |
Weighted average exercise price exercised | 0.45 | |
Weighted average exercise price forfeited | 0.77 | |
Weighted average exercise price outstanding, ending | 0.49 | 0.58 |
Weighted average exercise price exercisable | $ 0.53 | $ 0.57 |
Aggregate intrinsic value outstanding | $ 718,000 | $ 925,000 |
Aggregate intrinsic value exercisable | $ 506,000 | $ 446,000 |
Employee Stock Compensation P_5
Employee Stock Compensation Plans (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Jun. 18, 2013 | |
Unrecognized stock option compensation cost related to non-vested options | $ 80,000 | ||
Unrecognized stock option compensation cost related to non-vested options, period of recognition | 21 years | ||
Proceeds from stock options exercised | $ 83,000 | ||
Employee stock option expense | $ 124,000 | $ 315,000 | |
2013 Plan | |||
Common stock, capital shares reserved for future issuance | 5,750,000 | ||
2013 Plan | Stock Option | |||
Award vesting rights on grant date, percentage | 25.00% | ||
Award vesting rights, percentage | 25.00% | ||
Stock option exercised in period, shares | 185,000 | ||
Proceeds from stock options exercised | $ 83,000 | ||
Aggregate intrinsic value per share | $ 0.50 | $ 0.56 | |
Employee stock option expense | $ 124,000 | $ 315,000 |
Shareholders Equity (Details Na
Shareholders Equity (Details Narrative) - USD ($) | Feb. 02, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Shares repurchased | 24,700 | ||
Aggregate purchase price | $ 5,000 | ||
Total shares repurchased | 994,000 | ||
Total aggregate purchase price | $ 467,000 | ||
Sale of shares of common stock | 3,100,000,000 | ||
Sale per share | $ 0.50 | ||
Net proceeds | $ 1,542,000,000 | ||
Purchase Share | 50,000,000 | ||
Additional paid-in-capital | $ 72,523,000 | $ 70,514,000 | |
ATM Agreement [Member] | |||
Additional paid-in-capital | $ 144,000 | ||
Issuance of shares - ATM, net, shares | 643,033 | ||
Proceeds from sales of shares | $ 9,000,000 | ||
Commission rate | 3.00% | ||
Average price | $ 0.68 | ||
Net proceeds, after commissions and sale expenses | $ 299,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 1 Months Ended | |
Mar. 31, 2022 | Feb. 28, 2022 | |
Easter Agreement Paid Upon Signing | $ 10,000 | |
Underlying owner Total | 180,000 | |
Payment after anniversary | 30,000 | |
Claim first five year of lease | 660,000 | |
First year totaling | $ 20,000 | |
Sale of common stock | 2,650,724 | |
Sale of common per share | $ 0.79 | |
Net proceeds | $ 2,023,000 |