Solitario Resources Corp. (XPL, Financial) filed Amended Quarterly Report for the period ended 2008-06-30.
Solitario is a gold silver platinum-palladium and base metal exploration company actively exploring in Brazil Mexico and Peru. Solitario has significant business relationships with Anglo Platinum Newmont Mining and Votorantim Metais. Solitario has approximately US$24 million in cash and marketable securities and no debt. Solitario is traded on the American Stock Exchange (AMEX: XPL) and on the Toronto Stock Exchange (TSX: SLR). Solitario Resources Corp. has a market cap of $42.54 million; its shares were traded at around $1.18 with and P/S ratio of 425.4.
Our net exploration expense increased to $1,026,000 during the second quarter of 2008 compared to $659,000 in the second quarter of 2007. During 2008, we have significantly increased our exploration efforts on existing properties and reconnaissance exploration in Peru, Brazil and Mexico, portions of which led to the addition of certain exploration projects. This included exploration activities associated with the Strategic Alliance, discussed below under "Joint Ventures," during 2008 compared to 2007. We also increased our exploration activities at Pedra Branca, which is wholly-owned by PBM. As a result of Anglo Platinum earning 15% of PBM during 2007, Anglo Platinum is now directly funding Pedra Branca exploration activities through capital contributions to PBM, and all PBM exploration, which amounted to $282,000 during the three months ended June 30, 2008, is consolidated into our net exploration expense. Previous to Anglo Platinum earning their 15% of PBM, Anglo reimbursed exploration costs to us, which was netted against our gross exploration expense. During the three months ended June 30, 2008, exploration expenses of $11,000, for our management fees, were offset by joint venture reimbursements by Anglo Platinum on our Pedra Branca project compared to the reimbursement of all exploration expenses and management fees recorded during the second quarter of 2007, resulting in a net credit to exploration expense of $17,000. During the second quarter of 2008 we recorded exploration costs of $275,000 related to our newly acquired Chonta and Cajatambo projects in Peru; $82,000 for exploration associated with the Mercurio Project, where we conducted a drilling program during the first six months of 2008 compared to $68,000 in the second quarter of 2007. We continued to perform sampling and exploration in our Alliance Project Areas, as well as reconnaissance efforts to add new prospects and ongoing geologic work to evaluate and advance our existing exploration properties and targets. As a result of some of this effort we added the Paria Cruz, La Noria and Purica projects during the three months ended June 30, 2008. We also acquired the Santiago project during the first quarter of 2007. We anticipate continuing to acquire mineral properties, either through staking, joint venture or lease, in Latin America during 2008 and have budgeted our related net exploration expenditure to be approximately $4,200,000 for 2008. The primary factor in our decision to increase exploration expenditures in 2008 relate to an increase in commodity prices which has allowed us to increase our existing and potential projects upon which to explore. We also have additional drill targets on our existing non-joint venture projects.
We had a loss of $2,923,000 or $0.10 per share for the six months ended June 30, 2008 compared to a loss of $921,000 or $0.03 per share for the six months ended June 30, 2007. The primary reason for the increase in the loss in the six months ended June 30, 2008 from the loss in the same period of 2007 was the recording of a loss on derivative instrument related to our Kinross Collar, discussed above of $2,731,000 during the first half of 2008, and there was no similar item in 2007. In addition our exploration expense increased to $2,047,000 in the first half of 2008 compared to $1,052,000 as a result of consolidating all Pedra Branca exploration costs in 2008, which were netted against joint venture payments in 2007 as well as an increase in reconnaissance exploration activities in 2008 compared to 2007. Our general and administrative costs decreased to $1,223,000 in the first half of 2008 compared to $1,644,000 in the first half of 2007 primarily as a result of a significant decrease in our stock option compensation expense. These cost increases were partially offset by an increase in the gain on sale of marketable equity securities of $2,583,000 on the sale of 142,920 shares of Kinross common stock in the first half of 2008 compared to the gain on sale of marketable equity securities of $2,068,000 on the sale of 200,000 shares of Kinross common stock in the first half of 2007 and an income tax benefit of $342,000 recorded in the first half of 2008 compared to an income tax expense of $286,000 recorded in the first half of 2007. Each of these items is discussed in more detail below.
Excluding the $17,000 and $618,000, respectively, of stock-option compensation expense during the first half of 2008 and 2007, discussed below, other general and administrative costs were $1,205,000 during the first six months of 2008 compared to $1,026,000 in the same period of 2007. Salary and benefits expense increased to $601,000 in the first six months of 2008 compared to $508,000 in the first six months of 2007. Office and insurance expense increased to $160,000 in the first six months of 2008 compared to $135,000 in the first six months of 2007. Legal and accounting costs increased to $152,000 in the first six months of 2008 compared to $87,000 in the first six months of 2007. Our travel and shareholder services expenses also increased to $257,000 in the first six months of 2008 compared to $217,000 in the same period of 2007. Partially mitigating these increased costs were reductions for employment agency fees which were $30,000 in 2007, and there was no similar expense in 2008 and an increase in currency gain to $24,000 during in the first six months of 2008 compared to a currency gain of $17,000 in the first six months of 2007.
Our marketable equity securities are classified as available-for-sale and are carried at fair value, which is based upon market quotes of the underlying securities. At June 30, 2008 and December 31, 2007, we owned 1,200,000 and 1,342,920 shares of Kinross common stock, respectively. The Kinross shares are recorded at their fair market value of $28,332,000 and $24,710,000 at June 30, 2008 and December 31, 2007, respectively. Of these, 900,000 Kinross shares are subject to the Kinross Collar. In addition we own other marketable equity securities with a fair value of $267,000 and $316,000 as of June 30, 2008 and December 31, 2007, respectively. Changes in the fair value of marketable equity securities are recorded as gains and losses in other comprehensive income in stockholders' equity. During the three and six months ended June 30, 2008, we recorded a loss on marketable equity securities in accumulated other comprehensive income in stockholders' equity of $1,782,000 and $6,789,000, respectively, less related deferred tax benefit of $665,000 and $2,532,000, in addition we reclassified $796,000 and $2,583,000, respectively, of unrealized gain on marketable equity securities, net of related deferred taxes of $297,000 and $963,000, respectively, to gain on sale of marketable equity securities as a result of the sale of 42,920 and 142,920, respectively, shares of Kinross during the three and six months ended June 30, 2008. During the three and six months ended June 30, 2007, we recorded a loss on marketable equity securities in accumulated other comprehensive income in stockholders' equity of $3,245,000 and $3,000, respectively, less related deferred tax benefit of $1,265,000 and $1,000, in addition we reclassified $2,068,000 of unrealized gain on marketable equity securities, net of related deferred taxes of $807,000 to gain on sale of marketable equity securities as a result of the sale of 200,000 shares of Kinross during the six months ended June 30, 2007. Any change in the market value of the shares of Kinross common stock could have a material impact on our liquidity and capital resources. The price of shares of Kinross common stock has varied from a high of $26.84 per share to a low of $10.91 per share during the 52 weeks ended June 30, 2008.
We provided $2,108,000 and $2,612,000, respectively, in cash from investing activities during the six months ended June 30, 2008 and 2007 which were primarily from the sale of 100,000 shares and 200,000 shares, respectively, of Kinross common stock for proceeds of $2,229,000 and $2,645,000, respectively, discussed above. As discussed above, we sold an additional 42,920 shares of Kinross stock in the six months ended June 30, 2008, however the proceeds of $986,000 from this sale was not received until July 2008. In addition we used $100,000 for acquisition of mineral property discussed above under "Recent Developments" in the first six montRead the The complete Report
Solitario is a gold silver platinum-palladium and base metal exploration company actively exploring in Brazil Mexico and Peru. Solitario has significant business relationships with Anglo Platinum Newmont Mining and Votorantim Metais. Solitario has approximately US$24 million in cash and marketable securities and no debt. Solitario is traded on the American Stock Exchange (AMEX: XPL) and on the Toronto Stock Exchange (TSX: SLR). Solitario Resources Corp. has a market cap of $42.54 million; its shares were traded at around $1.18 with and P/S ratio of 425.4.
Highlight of Business Operations:
We had a net loss of $1,409,000 or $0.05 per basic and diluted share for the three months ended June 30, 2008 compared to a loss of $1,492,000 or $0.05 per basic and diluted share for the three months ended June 30, 2007. As explained in more detail below, the primary reason for the decrease in the net loss for the three months ended June 30, 2008 compared to the loss in the same period of 2007 was related to a decrease in our general and administrative expense to $487,000 during the three months ended June 30, 2008 compared to $1,241,000 in the three months ended June 30, 2007, partially offset by an increase in our exploration expense to $1,026,000 in the three months ended June 30, 2008 compared to $659,000 in the three months ended June 30, 2007. In addition we recorded a loss on derivative instrument related to our Kinross Collar of $864,000 during the three months ended June 30, 2008, and there was no similar item in the three months ended June 30, 2007. These increased costs were partially offset by a gain of $796,000 from the sale of share of Kinross during the three months ended June 30, 2008 and there were no similar sales during the three months ended June 30, 2007 and, as a result of the losses incurred during the three months ended June 30, 2008 and 2007, we recorded an income tax benefit of $130,000 in the second quarter of 2008 compared to an income tax benefit of $401,000 during the second quarter of 2007. Each of these items is discussed in more detail below.Our net exploration expense increased to $1,026,000 during the second quarter of 2008 compared to $659,000 in the second quarter of 2007. During 2008, we have significantly increased our exploration efforts on existing properties and reconnaissance exploration in Peru, Brazil and Mexico, portions of which led to the addition of certain exploration projects. This included exploration activities associated with the Strategic Alliance, discussed below under "Joint Ventures," during 2008 compared to 2007. We also increased our exploration activities at Pedra Branca, which is wholly-owned by PBM. As a result of Anglo Platinum earning 15% of PBM during 2007, Anglo Platinum is now directly funding Pedra Branca exploration activities through capital contributions to PBM, and all PBM exploration, which amounted to $282,000 during the three months ended June 30, 2008, is consolidated into our net exploration expense. Previous to Anglo Platinum earning their 15% of PBM, Anglo reimbursed exploration costs to us, which was netted against our gross exploration expense. During the three months ended June 30, 2008, exploration expenses of $11,000, for our management fees, were offset by joint venture reimbursements by Anglo Platinum on our Pedra Branca project compared to the reimbursement of all exploration expenses and management fees recorded during the second quarter of 2007, resulting in a net credit to exploration expense of $17,000. During the second quarter of 2008 we recorded exploration costs of $275,000 related to our newly acquired Chonta and Cajatambo projects in Peru; $82,000 for exploration associated with the Mercurio Project, where we conducted a drilling program during the first six months of 2008 compared to $68,000 in the second quarter of 2007. We continued to perform sampling and exploration in our Alliance Project Areas, as well as reconnaissance efforts to add new prospects and ongoing geologic work to evaluate and advance our existing exploration properties and targets. As a result of some of this effort we added the Paria Cruz, La Noria and Purica projects during the three months ended June 30, 2008. We also acquired the Santiago project during the first quarter of 2007. We anticipate continuing to acquire mineral properties, either through staking, joint venture or lease, in Latin America during 2008 and have budgeted our related net exploration expenditure to be approximately $4,200,000 for 2008. The primary factor in our decision to increase exploration expenditures in 2008 relate to an increase in commodity prices which has allowed us to increase our existing and potential projects upon which to explore. We also have additional drill targets on our existing non-joint venture projects.
We had a loss of $2,923,000 or $0.10 per share for the six months ended June 30, 2008 compared to a loss of $921,000 or $0.03 per share for the six months ended June 30, 2007. The primary reason for the increase in the loss in the six months ended June 30, 2008 from the loss in the same period of 2007 was the recording of a loss on derivative instrument related to our Kinross Collar, discussed above of $2,731,000 during the first half of 2008, and there was no similar item in 2007. In addition our exploration expense increased to $2,047,000 in the first half of 2008 compared to $1,052,000 as a result of consolidating all Pedra Branca exploration costs in 2008, which were netted against joint venture payments in 2007 as well as an increase in reconnaissance exploration activities in 2008 compared to 2007. Our general and administrative costs decreased to $1,223,000 in the first half of 2008 compared to $1,644,000 in the first half of 2007 primarily as a result of a significant decrease in our stock option compensation expense. These cost increases were partially offset by an increase in the gain on sale of marketable equity securities of $2,583,000 on the sale of 142,920 shares of Kinross common stock in the first half of 2008 compared to the gain on sale of marketable equity securities of $2,068,000 on the sale of 200,000 shares of Kinross common stock in the first half of 2007 and an income tax benefit of $342,000 recorded in the first half of 2008 compared to an income tax expense of $286,000 recorded in the first half of 2007. Each of these items is discussed in more detail below.
Excluding the $17,000 and $618,000, respectively, of stock-option compensation expense during the first half of 2008 and 2007, discussed below, other general and administrative costs were $1,205,000 during the first six months of 2008 compared to $1,026,000 in the same period of 2007. Salary and benefits expense increased to $601,000 in the first six months of 2008 compared to $508,000 in the first six months of 2007. Office and insurance expense increased to $160,000 in the first six months of 2008 compared to $135,000 in the first six months of 2007. Legal and accounting costs increased to $152,000 in the first six months of 2008 compared to $87,000 in the first six months of 2007. Our travel and shareholder services expenses also increased to $257,000 in the first six months of 2008 compared to $217,000 in the same period of 2007. Partially mitigating these increased costs were reductions for employment agency fees which were $30,000 in 2007, and there was no similar expense in 2008 and an increase in currency gain to $24,000 during in the first six months of 2008 compared to a currency gain of $17,000 in the first six months of 2007.
Our marketable equity securities are classified as available-for-sale and are carried at fair value, which is based upon market quotes of the underlying securities. At June 30, 2008 and December 31, 2007, we owned 1,200,000 and 1,342,920 shares of Kinross common stock, respectively. The Kinross shares are recorded at their fair market value of $28,332,000 and $24,710,000 at June 30, 2008 and December 31, 2007, respectively. Of these, 900,000 Kinross shares are subject to the Kinross Collar. In addition we own other marketable equity securities with a fair value of $267,000 and $316,000 as of June 30, 2008 and December 31, 2007, respectively. Changes in the fair value of marketable equity securities are recorded as gains and losses in other comprehensive income in stockholders' equity. During the three and six months ended June 30, 2008, we recorded a loss on marketable equity securities in accumulated other comprehensive income in stockholders' equity of $1,782,000 and $6,789,000, respectively, less related deferred tax benefit of $665,000 and $2,532,000, in addition we reclassified $796,000 and $2,583,000, respectively, of unrealized gain on marketable equity securities, net of related deferred taxes of $297,000 and $963,000, respectively, to gain on sale of marketable equity securities as a result of the sale of 42,920 and 142,920, respectively, shares of Kinross during the three and six months ended June 30, 2008. During the three and six months ended June 30, 2007, we recorded a loss on marketable equity securities in accumulated other comprehensive income in stockholders' equity of $3,245,000 and $3,000, respectively, less related deferred tax benefit of $1,265,000 and $1,000, in addition we reclassified $2,068,000 of unrealized gain on marketable equity securities, net of related deferred taxes of $807,000 to gain on sale of marketable equity securities as a result of the sale of 200,000 shares of Kinross during the six months ended June 30, 2007. Any change in the market value of the shares of Kinross common stock could have a material impact on our liquidity and capital resources. The price of shares of Kinross common stock has varied from a high of $26.84 per share to a low of $10.91 per share during the 52 weeks ended June 30, 2008.
We provided $2,108,000 and $2,612,000, respectively, in cash from investing activities during the six months ended June 30, 2008 and 2007 which were primarily from the sale of 100,000 shares and 200,000 shares, respectively, of Kinross common stock for proceeds of $2,229,000 and $2,645,000, respectively, discussed above. As discussed above, we sold an additional 42,920 shares of Kinross stock in the six months ended June 30, 2008, however the proceeds of $986,000 from this sale was not received until July 2008. In addition we used $100,000 for acquisition of mineral property discussed above under "Recent Developments" in the first six montRead the The complete Report
