Projects & Properties– About Royalties
Traditional mineral royalty companies are built upon NSR-Royalties (“Net Smelter Return”). Solitario is choosing a different path by building NPI-Royalties (“Net Profit Interest”) that we believe provide our shareholders with higher financial returns than a traditional NSR-Royalty company and a much lower risk profile than a junior exploration company that independently tries to develop and fund its own exploration projects through to production.

We are able to do this because of our demonstrated success in acquiring new projects with outstanding potential to host major deposits and our ability to create favorable NPI-Royalty structured joint ventures with high-quality major mining companies.

NSR vs. NPI Royalty Comparison

Our joint ventures are all NPI-Royalty structured joint ventures. In many ways, our joint venture structures are better than NPI-Royalties in that we have influence over production decisions as members of a Board of Directors that manages the asset. Another more favorable attribute with all of our joint ventures compared to a pure NPI-Royalty is that we receive a percentage of cash flow from project profits upon the commencement of production. Generally, a NPI-Royalty does not generate any cash flow until all capital is paid back.

The following are exceptionally important in understanding why Solitario Exploration and Royalty Corp. is a breed apart:

• Our business model has a significantly lower amount of upfront capital risk than a typical NSR-Royalty acquisition or a full-participation, independently financed project. This results in considerably less upfront risk.

• Our business model produces a much more robust financial return on a per share basis than a traditional NSR-Royalty investment. Although our model results in a lower financial return on an absolute basis, compared to a 100%-owned interest, our return on equity would be superior with much less upfront financial risk.

• The total investment that Solitario has to contribute to achieve cash flow in its five NPI-Royalty structured joint ventures is approximately $7.5 million. That is truly a low-risk profile.