Solitario(US:XPL)2023-03-15 21:50Financial Position and Funding - As of December 31, 2022, Solitario anticipates using its cash and short-term investments to fund exploration of its Golden Crest, Florida Canyon, and Lik projects, and potentially acquire additional mineral property assets[21]. - Solitario has incurred costs totaling $1,035,000 for staking, filing fees, legal, and other costs related to claims on the Golden Crest project as of December 31, 2022[33]. - The Golden Crest Agreement includes scheduled payments totaling $340,000 over five years and a success fee of $1.00 per ounce of gold for up to 1.5 million ounces[32]. - As of December 31, 2022, the company has invested $3,951,000 in U.S. Treasury securities and approximately $293,000 in uninsured deposit accounts[81]. - The company may not have sufficient funding for exploration and development, which could impair operational results and growth potential[55]. - The company has never paid cash dividends and does not intend to do so in the foreseeable future, relying on stock price appreciation for returns[76]. Exploration Projects - Solitario holds a 50% operating interest in the Lik project, which is estimated to contain a large tonnage, high-grade deposit potentially mineable by open-pit methods[31]. - The Florida Canyon project has a significant mineral resource, and Solitario is fully carried to production by its joint venture partner Nexa, which will increase its ownership to 70% by funding all project expenditures[31]. - The Florida Canyon project consists of 16 concessions covering 12,600 hectares, with Solitario holding a 39% interest[126]. - The Lik Zinc project consists of 47 contiguous mining claims covering approximately 6,075 acres (2,460 ha)[165]. - Solitario plans to conduct a 4,000-5,000 meter drilling program in 2023, pending permit approvals[121]. - The company has committed to escalating work expenditures totaling $3,000,000 over the first five years of the Golden Crest lease, with $600,000 already fulfilled[89]. Mineral Resources and Reserves - The company has no reported mineral reserves as defined by SEC rules, which may hinder near-term revenues or sale proceeds[48]. - The Florida Canyon and Lik projects have reported mineral resources, but significant additional geological work is required to upgrade these to mineral reserves[50]. - The Florida Canyon project has estimated mineral resources of 2,441,647 tonnes in the Measured and Indicated categories, with a Zn grade of 10.62%[159]. - The Inferred mineral resources at Florida Canyon total 14,858,733 tonnes with a Zn grade of 9.63%[159]. - The Lik Mineral Resource Estimate totals 17.6 million tonnes with an indicated resource grade of 8.07% Zn, 2.68% Pb, and 50.1 g/t Ag[213]. - Inferred resources amount to 2.8 million tonnes with a grade of 8.64% Zn, 2.73% Pb, and 38.9 g/t Ag[213]. Operational Risks and Challenges - The company may face increased costs and operational delays due to changing climate change laws and regulations[65]. - The company faces competition from larger firms with greater financial resources, which may affect its ability to acquire and develop mineral properties[56]. - Operations outside the United States are subject to political and economic risks that could adversely affect financial performance[53]. - The company has limited insurance coverage for various risks, which could lead to significant unexpected costs[58]. - The company is subject to various risks related to information technology systems, including cybersecurity incidents that could lead to operational delays and financial losses[83]. - Exploration activities are subject to significant financial risks, and the inability to sell or joint venture mineral properties may lead to unrecoverable costs[46]. Environmental, Social, and Governance (ESG) Practices - The company has a long history of committed environmental, social, and governance (ESG) practices, which are important to its investors and stakeholders[27]. - Changes in laws and regulations, particularly environmental regulations, may increase operational costs and affect exploration activities[62]. Historical Performance - The company has reported losses in 26 of its 29 years of operations, with net income in only three years[75]. - Solitario recorded revenue in the past from the sale of mineral properties and assets, but these revenues have not been a consistent source of cash[19]. Joint Ventures and Partnerships - Teck and Solitario have agreed to annual exploration funding for the Lik project, with expenditures exceeding $1 million requiring unanimous approval[169]. - Nexa may earn an additional 9% interest in the Florida Canyon project by funding future exploration and development expenditures[127]. - The company is subject to risks associated with joint ventures, including reliance on partners for operational expertise and financial condition[69]. Geological Insights - The geological setting of the Golden Crest project includes significant Precambrian and Paleozoic rock formations, which are important for gold mineralization[100]. - The Black Hills region has a rich history of gold production, totaling approximately 51 million ounces through 2020, primarily from the Homestake Mine[97]. - Significant drill hole intercepts included 58.8 meters at 12.0% zinc and 2.8% lead in the Sam zone, and 56.6 meters at 22.69% zinc and 1.15% lead in the San Jorge zone[142].