La Tola NSR Royalty Project - Peru

In February 2011 we signed a definitive agreement with Estrella Gold Corp. (EGC), successor to Canadian Shield Resources, allowing Estrella to earn a 100%-interest in the property, subject to a 2% NSR royalty to Solitario's benefit on the La Tola gold property in southern Peru. To earn its interest, EGC is required to spend $2.0 million in exploration by December 31, 2015. EGC has the right to purchase the 2% NSR royalty for $1.5 million anytime before commercial production is reached. Because the agreement wth EGC provides that our ending interest in La Tola will be a 2% NSR royalty, rather than a working interest, we currently classify the La Tola gold property as a royalty property interest.