Solitario Exploration & Royalty Corp. (“Solitario;” NYSE
MKT: XPL; TSX: SLR) is pleased to announce today that
its board of directors approved a share repurchase program that
authorizes the Company to purchase up to 2.0 million shares of its
outstanding common stock through December 31, 2016. All shares
repurchased will be cancelled and reduce Solitario’s current 39.2
million shares outstanding.
The timing and amount of any stock repurchased will be
determined by the Company’s management in the open market or in
privately negotiated transactions based on market conditions and
other factors, including price, regulatory requirements and capital
availability, and in compliance with applicable state and federal
securities laws. Repurchases may also be made under Rule 10(b)-18.
The program does not require the purchase of any minimum number of
shares and may be suspended, modified or discontinued at any time
without prior notice. No purchases will be made outside of the
United States, including shares trading on the Toronto Stock
Exchange. Payment for shares repurchased under the program will be
funded using the Company’s working capital.
Chris Herald, President and CEO, stated: "The share repurchase
program demonstrates our commitment to creating, enhancing and
returning value to shareholders. We believe our current stock value
does not reflect the value of our current cash position, our
carried interest in the high-grade Bongará zinc project, and our
past success in identifying, acquiring and enhancing precious and
base metal properties with solid technical work."
2015 Review and Outlook for 2016
Solitario is embarking on a fresh start for our company and
shareholders. We are excited about our newly defined corporate
strategy presented below and the opportunities that abound in our
financially stressed industry. We want to share with our
shareholders our plans and objectives for 2016.
Mt. Hamilton Sale Paves the Way for a New Chapter
With the recent sale of our 80% interest in the Mt. Hamilton
gold project to Waterton (see Solitario news release dated August 25, 2015),
Solitario is now in a position to redefine its corporate goals
moving forward. We received $24 million in cash from the
transaction and paid-off $5.0 million in corporate debt to become
debt-free. We begin the fourth quarter of 2015 with approximately
$18 million in cash.
As a note of interest, we invested approximately $14 million
into the Mt. Hamilton project since its acquisition in August 2010.
We have estimated we will report a gain of approximately $10
million on the transaction. This is an exceptional outcome during
this period of nearly universal losses reported by most other
mining companies that have sold assets within the past two years.
Clearly, we acquired the right property under favorable terms and
successfully enhanced its value in these challenging times.
We should also mention that Solitario’s management team executed
a similar strategy in 2006 when we sold our parent, Crown
Resources, owner of the Buckhorn Mt. gold project, to Kinross Gold
for proceeds in excess of $150 million, benefitting Crown’s
shareholders. Solitario was a major beneficiary of this transaction
netting approximately $25 million in Kinross stock within the
framework of that transaction.
A Strong Tradition as a Project Generator
Prior to the Mt. Hamilton acquisition, Solitario was
historically a very successful project generator. We identified and
acquired new properties, conducted early-stage exploration that
demonstrated mineral potential and then joint ventured many of
these projects with major mining companies, while retaining a
significant carried interest. Over the years we have partnered with
over a dozen intermediate to major mining companies on a number of
projects involving multiple commodities (gold, silver, zinc,
copper, lead, and platinum-palladium). One of these projects, our
Bongará zinc project in Peru, remains under a carried joint venture
arrangement with Milpo Mining, one of Peru’s largest zinc
producers. In total, Solitario’s partners have expended over $100
million on our joint venture projects.
Recapping Our Strengths and Defining Our New Direction
• Solitario is in a very strong financial position with
approximately $18 million in cash and no debt.
• Solitario is a proven project generator that has attracted
major mining company interest and investment under favorable joint
venture arrangements on multiple projects.
• Solitario management has taken two projects through resource
expansion, feasibility and permitting, resulting in attractive
transactions to the company and its shareholders.
• Solitario retains a fully carried 30% interest in the
high-grade Bongará zinc project.
Our Future
Our future plans and objectives are simple - Solitario will
continue its battle tested strategy of identifying and acquiring
attractive, high-potential precious and base metal projects where
we can add significant value through additional work. We believe
that this is the best path for generating significant new
shareholder value. With the current depressed commodity price
environment and stressed balance sheets for both senior and junior
mining companies, we believe it is an optimal time for the company
to judiciously deploy its new found financial strength.
We want to remain flexible in our approach – we will focus on
gold, silver and zinc, but will not rule out other metals or
corporate opportunities. Our targeted geographic range will be the
safe jurisdictions in the Americas, but with an emphasis in Peru,
Mexico, Canada and the U.S. We plan to focus on relatively
early-stage exploration projects that have some drilling and
potentially a defined resource, but we will also look at select
greenfield projects and/or advanced exploration projects where our
feasibility and permitting experience may be beneficial. We will
continue to evaluate royalty opportunities on advanced projects,
but we believe current royalty acquisition costs in the industry
are generally fully valued and do not offer the opportunity for
multiple returns on investment.
We will be patient in not only finding the right project, but
also the right terms for transactions that fit our technical and
financial capabilities. Finally, we will be vigilant in maintaining
a strong balance sheet and a low number of shares outstanding.
Bongará Update – Our Core Asset
Bongará is currently our core asset. It is an advanced
exploration stage high-grade zinc project located in northern Peru.
We are fully carried to production by our joint venture partner
Milpo Mining. We are not required to contribute any funds prior to
the completion of a feasibility study and our share of mine
construction costs will be funded by a loan from Milpo and repaid
from 50% of the net proceeds from production attributable to our
30% interest. Based on the high-grade zinc content of the defined
resources, and the fact that the deposit remains open to expansion,
we believe it is one of the best undeveloped zinc projects in the
world.
Although the price of zinc fell significantly during 2015, our
partner, Milpo Mining still elected to advance the project. Thus
far in 2015, six more kilometers of access road have been
completed, and an additional four kilometers is expected by the end
of the year. This will complete the 35 kilometer access road from
the main highway to the project site and represents a major
milestone for the project. Significant progress was also made to
further refine the resource estimate as well as additional
engineering studies. Milpo is planning on 10 to 12 kilometers of
drill access roads in 2016. These roads will be used for testing
the extension of San Jorge zone to the south and the Karen-Milagros
zone to the northeast.
About Solitario
Solitario is an exploration and royalty company. Solitario has a
joint venture with Minera Milpo (a Peruvian zinc miner) on its
high-grade Bongará zinc project in Peru. Solitario is traded on the
NYSE MKT ("XPL") and on the Toronto Stock Exchange
("SLR"). Solitario’s Management and Directors hold
approximately 7.6% (excluding options) of the Company’s 39.2
million shares outstanding. Solitario’s cash balance at the
beginning of the fourth quarter was approximately US$18 million.
Additional information about Solitario is available online at
www.solitarioxr.com
Cautionary Statement Regarding Forward Looking
Information
This press release contains forward-looking statements within
the meaning of the U.S. Securities Act of 1933 and the U.S.
Securities Exchange Act of 1934, and as defined in the United
States Private Securities Litigation Reform Act of 1995 (and the
equivalent under Canadian securities laws), that are intended to be
covered by the safe harbor created by such sections.
Forward-looking statements are statements that are not historical
fact. They are based on the beliefs, estimates and opinions of the
Company's management on the date the statements are made and
address activities, events or developments that Solitario expects
or anticipates will or may occur in the future, and are based on
current expectations and assumptions. Forward-looking statements
involve a number of risks and uncertainties. Consequently, there
can be no assurances that such statements will prove to be accurate
and actual results and future events could differ materially from
those anticipated in such statements. Such forward-looking
statements include, without limitation, statements regarding the
Company’s intentions to repurchase shares of its common stock from
time to time under the stock repurchase program, that any or all
purchases will be in conformance with Rule 10(b)-18, the timing and
amounts of any repurchases, the intended use of any repurchased
shares, the source of funding for the stock repurchase program. It
can give no assurance that these expectations will prove correct.
Additional risk factors are discussed in Solitario’s filings with
the U.S. Securities and Exchange Commission (the “SEC”)
including Solitario’s latest Annual Report on Form 10-K and its
other SEC filings (and Canadian filings) including, without
limitation, its latest Quarterly Report on Form 10-Q. The Company
does not intend to publicly update any forward-looking statements,
whether as a result of new information, future events, or
otherwise, except as may be required under applicable securities
laws.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151028005807/en/
SolitarioChristopher E. Herald, 303-534-1030 Ext. 14President
& CEOorDebbie Mino-Austin, 800-229-6827Director-Investor
Relations
Solitario Resources (TSX:SLR)
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