Bongará, Peru– Zinc Project

2008 marked the most aggressive exploration drilling year in Bongará's history with 54 holes and 16,468 meters of core drilling completed.  Highlights of the program include drill hole V-44, that cut 28.3 meters grading 15.2% zinc, 0.8% lead and 16.0 grams per tonne (“gpt”) silver, and hole V-165, that intersected 19.0 meters grading 12.8% zinc, 0.8% lead and 29.4 gpt silver (2008 drilling results).  The program was managed and funded by Solitario's joint venture partner Votorantim Metais (“Votorantim”). 

These impressive drilling results confirm the excellent size potential of this high-grade zinc deposit, leading us to believe that Florida Canyon represents one of the best undeveloped zinc deposits in the world.  Moreover, the deposit is open to expansion in all directions.  Since September of 2006, work conducted by Votorantim has demonstrated that high-grade zinc mineralization is widespread as both stratigraphically controlled deposits and also as thicker structurally controlled breakout zones.  We believe a fourth breakout zone, called the South Zone, was intersected in 2008.  These zones display relatively high-grade mineralized bodies extending vertically across thick intervals of stratigraphy as evidenced by the drilling results presented in the chart below.

A high-resolution laser survey was conducted in 2008 that very accurately determined the regional topographic surface to aid in detailed engineering for infrastructure planning.   This survey will be utilized in 2009 for the selection of the final road alignment to access the Florida Canyon deposit - a key component to future development of the project.   Other plans for 2009 consist of another round of detailed core drilling to further define higher grade portions of the deposit.

In January, 2010, Solitario announced that significant new exploration and development activities are planned for 2010 on its high-grade Bongará zinc project in northern Peru.  Highlights for 2010 include the initiation of road construction to the project area, initiation of underground access to the San Jorge deposit, metallurgical testing and an aggressive continuation of surface drilling to further define mineralization.
 
The planned road construction encompasses approximately 18 kilometers of new road alignment to the deposit.  To date, access to the deposit has occurred via helicopter and foot-trails.  The initiation of underground access to mineralization is also scheduled for this field season, with approximately 700 meters of planned underground workings.  Initially the underground work will be supported by helicopter transportation of personnel and materials, until road access is completed.  Construction of additional infrastructure near the underground portal site is planned for personnel and underground operations. 
 
Advanced metallurgical testing will also be conducted on mineralized material to further evaluate metallurgical recovery and ore characterization.  Completion of this work is anticipated by the end of the first quarter of 2010.  Finally, Votorantim is planning on completing approximately 10,000 meters of helicopter-assisted core drilling from the surface during 2010 to further define and extend mineralization.
 
Timing of many of the aforementioned activities is substantially contingent upon obtaining permits required by the Peruvian government.   In order to fast-track the project, Votorantim is updating its social impact risk assessment in parallel with archeological clearance activities, as well as other permit requirements.  Approvals are expected sometime in the second quarter of 2010, coinciding with the cessation of the rainy season.

About Votorantim Metais

Votorantim Metais belongs to a Brazilian privately held, wide-ranging business conglomerate with 2007 revenues of US$15.6 billion.  The metals business division accounted for 30% of revenues from production of zinc, nickel, steel and aluminum.  Votorantim Metais is the world's third largest primary zinc producer with three operating zinc smelters and two operating zinc mines.   It owns the Cajamarquilla zinc smelter in Peru and is a major shareholder of Milpo (a significant Peruvian zinc producer).

The Bongará Agreement with Votorantim Metais

Votorantim Metais has completed approximately $12.0 million in exploration expenditures since signing the initial Letter Agreement in August 2006.  Solitario is entitled to cash payments of $200,000 per year until Votorantim makes a production decision.  Votorantim has the option to earn up to a 70% interest in the project by committing to place the project into production based upon a feasibility study and spending a minimum of $18.0 million on exploration and development.  Once Votorantim has spent $18.0 million on exploration and development, and committed to place the project into production, it has further agreed to finance Solitario's 30% participating interest for construction.  Solitario will repay the loan facility through 50% of its cash flow distributions.