Chambara Zinc Project - Peru

The Chambara zinc project in northern Peru is centered in what we consider to be one of the best under-explored zinc terrains in the world. In 2008 we signed a joint venture arrangement with Votorantim Metais that established a huge area of interest that is approximately 200 kilometers long and 85 kilometers wide – about the size of New Jersey. Any acquisition of properties within this area of interest by Votorantim is subject to this joint venture. Consequently, we will participate in all new projects that Votorantim generates in the future. As with our other agreements with major mining company partners, this agreement is a NPI royalty structured joint venture.

To date, four high-quality zinc prospects have been identified within our vast 175,000-hectare land position. Surface work has demonstrated sizable areas of highgrade zinc in rock outcrops. Additional surface work is required before drill targets can be firmly established. However, we are optimistic that significant new zinc discoveries, similar in size to Florida Canyon, will be made within our area of interest. Votorantim is planning approximately 2,000 meters of drilling on this project, pending receipt of permit approvals.

The Chambara Agreement with Votorantim Agreement

Votorantim has the option to earn a 49% interest in Minera Chambara by spending a total of $6.25 million on exploration over the next seven years.  Votorantim will then have the right to earn an additional 21% (total 70%) by funding a feasibility study and arranging construction financing for Solitario's 30%-interest at LIBOR+3.5%.  Solitario will repay the loan facility through 80% of its cash flow distributions.