The following discussion should be read in conjunction with the information
contained in the consolidated financial statements and notes thereto included in
Item 8, "Financial Statements and Supplementary Data." Our financial condition
and results of operations are not necessarily indicative of what may be expected
in future years.



(a). Effects of COVID-19



As of December 31, 2022, the effects of COVID-19 have not had a material adverse
effect on Solitario's administrative activities as we have three full-time
employees, all of whom can work remotely, and are not required to meet in person
on a regular basis. We use part-time employees and contract geologists at our
Golden Crest project in South Dakota and to date, the effects of COVID-19 have
not had a material impact on our operations at the Golden Crest project.
However, as a result of the pandemic our joint-venture partners, Teck at our Lik
project and Nexa at our Florida Canyon project, reduced, with our concurrence,
the planned exploration activities on these projects for 2021 and during 2022
implemented safety and operational protocols for COVID-19 and are reviewing
their 2023 exploration plans on our projects to comply with these protocols.
These protocols include, but are not limited, to; (i) our partners' limited
exploration staffing; (ii) certain safety and operational guidelines for
COVID-19 and other potential pandemics related to their exploration activities;
(iii) the reallocation of exploration resources to non-site specific tasks, such
as data and resource review, and planning for future drilling; and (iv) the
ability to modify and or postpone 2023 exploration activities if necessary.
Solitario has discussed these operational and safety measures with our joint
venture partners and currently does not believe these measures are expected to
have a major impact on planned 2023 exploration activities and does not believe
these measures negatively reflect on the long-term economic potential of either
its Lik or Florida Canyon projects.



The extent to which the COVID-19 pandemic impacts our business, including our
exploration and other activities and the market for our securities, will depend
on future developments, which are highly uncertain and cannot be predicted at
this time. Please see Item 1A, "Risk Factors," in this Annual Report on Form
10-K for the year ended December 31, 2022.

Solitario believes its current cash and short-term assets together with potential access to capital under its ATM Program (defined below) or otherwise, provide Solitario with the flexibility to continue its short and mid-term operations.

(b). Business Overview and Summary


We are an exploration stage company as defined by rules issued by the SEC. We
were incorporated in the state of Colorado on November 15, 1984 as a wholly
owned subsidiary of Crown. In July 1994, we became a publicly traded company on
the TSX through our initial public offering. We have been actively involved in
mineral exploration since 1993. Our primary focus is the acquisition and
exploration of precious metals and zinc-related exploration mineral properties.
We have historically held a portfolio of mineral exploration properties and
assets for future sale, for joint venture or to create a royalty up to the
development stage of the project (development activities include, among other
things, completion of a feasibility study for the identification of proven and
probable reserves, as well as permitting and preparing a deposit for mining). At
that point, or sometime prior to that point, we would likely attempt to sell a
given mineral property, pursue its development either on our own or through a
joint venture with a partner that has expertise in mining operations, or obtain
a royalty from a third party that continues to advance the property. Although
our mineral properties may be developed in the future by us, through a joint
venture or by a third party, we have never developed a mineral property. In
addition to focusing on our current mineral exploration properties, we also from
time to time evaluate potential strategic transactions for the acquisition of
new precious and base metal properties and assets with exploration potential.



Our current geographic focus for the evaluation of potential mineral properties
is in North and South America; however, we have conducted property evaluations
for potential acquisition in other parts of the world. At December 31, 2022, we
consider our Golden Crest project in South Dakota, our carried interest in our
Florida Canyon project in Peru, and our interest in the Lik project in Alaska to
be our core mineral property assets. We are conducting independent exploration
activities in Peru and through joint ventures operated by our partners in Peru
and the United States. We conduct potential acquisition evaluations in other
countries of both North and South America.



As of December 31, 2022, we have balances of cash and short-term investments
that we anticipate using, in part, to fund planned 2023 exploration, to further
the exploration of our Lik and Golden Crest projects, conduct reconnaissance
exploration and to potentially acquire additional mineral properties. The
fluctuations in commodity prices of base and precious metals have contributed to
a challenging environment for mineral exploration and development, which has
created opportunities as well as challenges for the potential acquisition of
advanced mineral exploration projects or other related assets at potentially
attractive terms.




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In analyzing our activities, the most significant aspect relates to the results
of our exploration and potential development activities and those of our joint
venture partners on a property-by-property basis. When our exploration or
potential development activities, including drilling, sampling and geologic
testing, indicate a project may not be economically feasible or contain
sufficient geologic or economic potential we may impair or completely write-off
the property. Another significant factor in the success or failure of our
activities is the price of commodities. For example, when the price of zinc or
gold is down, the value of zinc, gold or other precious metal-bearing mineral
properties decreases; however, when the price of zinc or gold is up it may
become more difficult and expensive to locate and acquire new zinc, gold or
other precious metal-bearing mineral properties with potential to have economic
deposits.




The potential sale, joint venture or development of our mineral properties will
occur, if at all, on an infrequent basis. Historically, we have recorded
revenues and met our need for capital in the past through (i) the issuance of
common stock, (ii) the sale of properties and assets; (iii) a royalty sale on
our former Mt. Hamilton property; (iv) the sale of shares of marketable equity
securities we hold; (v) long-term debt secured by our mineral properties; (vi)
short-term borrowing; and (vii) joint venture payments, including delay rental
payments. During 2022 we issued a total of 2,650,724 shares of common stock
pursuant to our ATM Program for net proceeds of $2,023,000. We did not record
any mineral property income from the sale of mineral properties during 2022 or
2021. Proceeds from the sale or joint venture of properties, although
potentially significant when they occur, have not been a consistent annual
source of cash and would occur in the future, if at all, on an infrequent basis.
We have reduced our exposure to the costs of our exploration activities in the
past through the use of joint ventures. Although we anticipate the use of joint
venture funding for some of our exploration activities will continue for the
foreseeable future, we can provide no assurance that these or other sources of
capital will be available in sufficient amounts to meet our needs, if at all.



(c). Results of Operations

Comparison of the year ended December 31, 2022 to the year ended December 31, 2021





We had a net loss of $3,928,000 or $0.06 per basic and diluted share for the
year ended December 31, 2022 compared to a net loss of $2,367,000 or $0.04 per
basic and diluted share for the year ended December 31, 2021. As explained in
more detail below, the primary reasons for the increase in net loss during 2022
compared to 2021 was (i) an increase in exploration expense to $2,283,000 during
2022 compared to exploration expense of $1,198,000 during 2021; (ii) an increase
in general and administrative expense to $1,360,000 during 2022 compared to
general and administrative expense of $952,000 during 2021; and (iii) the
recording of an unrealized loss on marketable equity securities during 2022 of
$94,000 compared to an unrealized gain on marketable equity securities of
$82,000 during 2021. Partially offsetting these factors that contributed to the
increase in our net loss in 2022 were the following (i) a decrease in the loss
on sale of marketable equity securities to $201,000 during 2022 compared to a
loss on the sale of marketable equity securities of $248,000 during 2021; (ii)
an increase in interest and dividend income to $131,000 during 2022 compared to
interest and dividend income of $123,000 during 2021; (iii) an increase in other
income to $20,000 during 2022 compared to other income of $10,000 during 2021;
and (iv) a decrease in the loss on derivative instruments to $4,000 during 2022
compared to a loss on derivative instruments of $38,000 during 2021. Each of
these items is discussed in greater detail below.



Our primary exploration activities during 2022 were related to our Golden Crest
project in South Dakota and our Lik project in Alaska. We recorded $1,505,000 of
exploration costs at Golden Crest during 2022 compared to $420,000 during 2021.
The Golden Crest expenditures during 2022 and 2021 consisted primarily of
geologic evaluation of claims for staking, mapping and soil and rock sampling
with related assay costs. In addition to these exploration costs, we also
capitalized $340,000 and 695,000 of mineral acquisition costs at Golden Crest
for our initial acquisition costs related to leasing, staking and filings on
claims acquired during 2022 and 2021, respectively. All future exploration and
filing costs related to these claims will be expensed as incurred. Solitario's
share of exploration expenses at our Lik project in Alaska was $668,000 during
2022 compared to $362,000 of exploration expense at the Lik project 2021. Teck
completed a three-hole drilling program during 2022 which accounted for the
increase in expenses during 2022 compared to 2021. This was the first drilling
program conducted since 2011. Drill hole Lik-231 intersected 3.5 meters (11.5
feet) grading 9% zinc and 3% lead. Holes Lik-230 and 232 did not intersect
significant mineralization. In addition, Teck performed on-going geologic
evaluation of the Lik project during both 2022 and 2021, which included on-site
geophysics, mapping and analysis of prior drilling and permitting as part of a
50/50 exploration program managed by Teck. The geophysical survey was successful
in defining a low-amplitude gravity anomaly that requires further follow-up
work. We are evaluating, along with Teck, the completed 2022 drilling program
for planned exploration including potential drilling in 2023. The decision to
drill at Lik during 2023 is expected to be made prior to the end of the second
quarter of 2023. Given that the exploration program at our Florida Canyon
project in Peru is fully funded by our joint venture partner, Nexa, we had
relatively small exploration expenses at Florida Canyon of $16,000 during 2022
compared to $85,000 in 2021. During 2021 we made the decision to abandon our
Gold Coin project in Arizona after initial exploration efforts did not provide
sufficient encouragement to move the project forward. The remaining exploration
expenditures during 2022 and 2021 were reconnaissance work, including the
evaluation of potential mineral properties for acquisition, including work
during 2021 at Golden Crest, prior to its acquisition. Our 2023 total
exploration and development budget, excluding any new projects, in which we may
acquire an interest, is approximately $2,000,000, which reflects planned work at
the Golden Crest project as well as the Lik project. Our planned exploration
activities in 2023 may be modified, as necessary for any drilling programs we
may undertake at Golden Crest or projects we may acquire, changes related to any
number of factors including COVID-19 adjustments and delays, potential
acquisition of new properties, joint venture funding, commodity prices and
changes in the deployment of our capital.




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Exploration expense (in thousands) by property consisted of the following:




                                          Year ended
(in thousands of dollars)                December 31,
Property Name                          2022        2021
Golden Crest                          $ 1,505     $   420
Florida Canyon                             16          85
Lik project                               668         362
Gold Coin                                   -          25

Reconnaissance exploration activity 94 306 Total exploration expense

$ 2,283     $ 1,198




We believe a discussion of our general and administrative costs should be viewed
without the non-cash stock option compensation expense (discussed below).
Excluding these costs, general and administrative costs were $1,022,000 during
2022 compared to $828,000 during 2021. The major components of our general and
administrative costs were (i) salary and benefits expense which increased to
$411,000 during 2022 compared to $301,000 during 2021;(ii) legal and accounting
costs which increased to $287,000 during 2022 compared to $199,000 during 2021
primarily due to increased exploration activity, as well as initial costs to
comply with initial SK-1300 disclosure requirements during 2022; (iii) travel
and investor relation costs which decreased to $205,000 during 2022 compared to
$234,000 during 2021 as a result of less travel and fewer investor conferences
attended during 2022 compared to 2021, despite some increased investor relations
costs related to the Golden Crest project during 2022; and (iv) other costs
related to office, insurance and miscellaneous costs which increased to $119,000
during 2022 compared to $94,000 during 2021 as a result of additional activity
and general cost increases. We anticipate general and administrative costs for
2023 to be $1,085,000 which will be somewhat higher than the costs incurred
during 2022; however, this amount may vary significantly during 2023 depending
on the outcome of our exploration activity at Golden Crest and Lik and any
strategic transactions we may attempt to execute upon.



We account for our employee stock options under the provisions of Accounting
Standards Codification No. 718 ("ASC No. 718"). We recognize stock option
compensation expense on the date of grant for 25% of the grant date fair value,
and subsequently, based upon a straight-line amortization of the grant date fair
value of each of our outstanding options. During the year ended December 31,
2022, we recorded $338,000 of non-cash stock option expense for the amortization
of our outstanding options grant date fair value with a credit to additional
paid-in-capital compared to $124,000 of non-cash stock option compensation
expense during 2021. The amount was higher during 2022 primarily due the grant
of 2,360,000 options with a total grant date fair value of $876,000, of which
Solitario recognized 25% on the grant date or $218,000 compared to expense of
$23,000 for the amortization of 25% of the grant date fair value of the 140,000
new options granted during 2021. The remaining compensation expense was related
to the straight-line amortization of our outstanding options in 2022 and 2021.
See Note 10, "Employee Stock Compensation Plans," to our consolidated financial
statements in Item 8, "Financial Statements and Supplementary Data to this
Annual Report on Form 10-K" for an analysis of the changes in the fair value of
our outstanding stock options and the components that are used to determine

the
fair value.



We recorded an unrealized loss on marketable equity securities of $94,000 during
2022 compared to a gain on marketable equity securities of $82,000 during 2021.
The net loss on marketable equity securities during 2022 was primarily related
to a $172,000 unrealized loss related to a decrease in the value of our holdings
of Kinross common stock and a decrease of $59,000 in the value of our holdings
of Vox common stock, which was partially offset by an unrealized gain related to
the increase of $137,000 in the value of our holdings of Vendetta stock. The net
gain during 2021 was primarily related to an unrealized gain on marketable
equity securities of $193,000 due to an increase in the value of our holdings of
shares of Vendetta common stock, and an unrealized gain on marketable equity
securities of $53,000 on our holdings of Vox common stock offset by an
unrealized loss on marketable equity securities of $153,000 in the value of our
holdings of Kinross common stock and an unrealized loss on the value of our
holdings of TNR Gold Corp. ("TNR") of $11,000 during 2021. Changes in the
unrealized value of our holdings of marketable equity securities are related to
the changes in the fair values of those holdings which are dependent on the
market prices of the individual securities.




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During 2022 we sold 1,250,000 shares of Vendetta common stock for proceeds of
$63,000 and recorded a realized loss on the sales of $201,000. During 2021 we
sold (i) 2,550,000 shares of Vendetta common stock for proceeds of $112,000 and
recorded a realized loss on the sales of $269,000; (ii) 430,000 shares of TNR
common stock for proceeds of $27,000 and recorded a gain on the sale of $19,000
and (iii) 3,200 shares of Vox for proceeds of $8,000 and recorded a gain on the
sale of $2,000. See Note 3, "Marketable Equity Securities" to our consolidated
financial statements in Item 8, "Financial Statements and Supplementary Data" of
this Annual Report on Form 10-K for additional discussion of our marketable
equity securities. We may sell some of our marketable equity securities from
time to time during 2023 for working capital needs; however, we do not expect to
sell all of our holdings of marketable equity securities during 2023. Any
proceeds we may receive from sales of marketable equity securities during 2023
will be dependent on the quoted market price of the securities sold on the date
of sale and may be at prices below the fair value at December 31, 2022. See
"Liquidity and Capital Resources" below.



We recorded a loss on derivative instruments of $4,000 during 2022 compared to a
loss on derivative instruments of $38,000 during 2021. During 2022, our warrants
to acquire Vendetta common stock ("Vendetta Warrants") expired unexercised,
which resulted in the $4,000 loss on derivative instruments. The loss during
2021 was primarily related to a $46,000 loss on our Vendetta Warrants offset by
a gain on certain Kinross calls we sold for $8,000, which expired unexercised.
See Note 7, "Derivative Instruments" to our consolidated financial statements in
Item 8, "Financial Statements and Supplementary Data" of this Annual Report on
Form 10-K for additional discussion of our derivative instruments. We anticipate
we may write calls against our holdings of Kinross common stock in 2023 to
provide additional income on a limited portion of shares of Kinross that
Solitario may sell in the near term, which is generally defined as less than one
year.



We recorded $29,000 of depreciation and amortization during 2022 compared to
$27,000 of depreciation and amortization during 2021. We added approximately
$50,000 of equipment for use at our Golden Crest project which accounted for the
majority of the increase in our depreciation between 2022 and 2021. We amortize
our equipment over a five-year period. We anticipate our 2023 depreciation and
amortization expense will be similar to our 2022 depreciation expense.



We recorded interest income of $131,000 during 2022 compared to interest income
of $123,000 during 2021. The increase during 2022 was primarily related to an
increase in the outstanding balances of our investments in United States
Treasury securities during the majority of the year as a result of the
$2,036,000 received from sales of our common stock under our ATM Program
effected in the first quarter of 2022. In addition, during 2022we recorded an
unrealized loss of $108,000related to the value of our mark-to-market short term
investments in United States Treasury securities compared to an unrealized loss
of $102,000 during 2021 as a result of changing interest rates. We anticipate
our interest income will decrease in 2023 compared to 2022 as a result of the
use of our short-term investments and our cash balances for ordinary overhead,
operational costs, and the exploration, evaluation and or acquisition of mineral
properties discussed above. See "Liquidity and Capital Resources," below, for
further discussion of our cash and cash equivalent balances.



Our other income of $20,000 during 2022 was from the sale of certain exploration
data on a non-owned mineral property upon which Solitario had previously done
exploration activities. Our other income of $10,000 during 2021 related to the
forgiveness of $10,000 remaining balance on our Paycheck Protection Program loan
(the "PPP Loan") that originated in 2019 with an original balance of $70,000. We
do not anticipate other income will be a significant source of cash in 2023, if
at all.




We recorded no deferred tax expense or benefit in either 2022 or 2021 as we
provide a valuation allowance for the tax benefit arising out of our net
operating losses for all periods presented. See Note 6, "Income Taxes" to our
consolidated financial statements in Item 8, "Financial Statements and
Supplementary Data" of this Annual Report on Form 10-K for additional discussion
of our income tax valuation allowance, deferred tax assets and our net operating
losses for 2022 and 2021. We anticipate we will continue to provide a valuation
allowance for these net operating losses until we are in a net tax liability
position with regards to those countries where we operate or until it is more
likely than not that we will be able to realize those net operating losses

in
the future.



We regularly perform evaluations of our mineral property assets to assess the
recoverability of our investments in these assets. All long-lived assets are
reviewed for impairment whenever events or circumstances change which indicate
the carrying amount of an asset may not be recoverable utilizing guidelines
based upon future net cash flows from the asset as well as our estimates of the
geologic potential of early-stage mineral property and its related value for
future sale, joint venture or development by us or others. During 2022 we
recorded no mineral property impairments. During 2021 we recorded $17,000 of
mineral property impairment related to our decision to abandon our Gold Coin
project in Arizona.

(d). Liquidity and Capital Resources





Cash



As of December 31, 2022, we had $316,000 in cash. We intend to utilize a portion
of this cash and a portion of our short-term investments, discussed below, to
fund our ordinary overhead, operational costs, exploration activities and for
the potential acquisition of additional mineral properties and other assets

over
the next several years.




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Short-term Investments



As of December 31, 2022, we have USTS with maturities of 15 days to one year,
recorded at their fair value of $3,951,000. Solitario has also held CD's during
2021 and 2022 which matured during 2022 and Solitario has no outstanding CD's at
December 31, 2022. The USTS and CD's are recorded at their fair value based upon
quoted market prices. Our short-term investments in USTS and CD's are highly
liquid and may be sold in their entirety at any time at their quoted market
price and are classified as a current asset. We anticipate we will roll over
that portion of our short-term investments not used for operating costs or
mineral property acquisitions as they mature during 2023.

Marketable Equity Securities





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. We owned 100,000 shares of Kinross common stock as of December 31,
2022, which are recorded at their fair value of $409,000. As of December 31,
2022, we own 7,750,000 shares of Vendetta common stock recorded at their fair
market value of $229,000 and we own 134,055 shares of Vox common stock recorded
at their fair market value of $311,000. Changes in the fair value of marketable
equity securities are recorded as gains and losses in the statements of
operations. Solitario also holds 200,000 shares of Highlander Silver Corp. stock
at December 31, 2022, which has a restrictive legend and has been recorded with
a zero fair value until the restrictive legend is removed.



Working Capital



We had working capital of $4,991,000 at December 31, 2022 compared to working
capital of $6,883,000 as of December 31, 2021. Our working capital at December
31, 2022 consists primarily of our cash and cash equivalents, our investment in
short-term investments and our marketable equity securities, less our current
liabilities of $263,000. As of December 31, 2022, our cash balances along with
our short-term investments and marketable equity securities are adequate to fund
our expected expenditures over the next year.



The nature of the mineral exploration business requires significant sources of
capital to fund exploration, development and operation of mining projects. We
anticipate using our working capital and any additional funds we might acquire
to carry out our 2023 planned expenditures. Our existing resources are adequate
to fund these expenditures. These expenditures include planned exploration for
Golden Crest, including potential drilling, pending the receipt of required
permits, as well as planned exploration at our Lik project where we are in
discussions with our joint venture partner, Teck regarding planned 2023
expenditures. We do not expect any significant exploration expenditures at our
Florida Canyon project where Nexa is responsible for all 2023 planned
expenditures. We expect we will need additional capital if we decide to develop
or operate any of our current exploration projects or any projects or assets we
may acquire. We anticipate we would finance any such development through the use
of our cash reserves, short-term investments, joint ventures, issuance of debt
or equity, or the sale of other exploration projects or assets.

Stock-Based Compensation Plans


As of December 31, 2022, options to acquire 5,390,000 shares of our common stock
were outstanding. There are 3,227,500 options that are vested and exercisable at
December 31, 2022. As of December 31, 2022, our outstanding options include
5,250,000 options that are in the money with a weighted average exercise price
of $0.41 per share, which is below the market price of a share of Solitario
common stock at December 31, 2022 of $0.62 per share as quoted on the NYSE
American exchange. See Note 10, "Employee Stock Compensation Plans" to our
consolidated financial statements in Item 8, "Financial Statements and
Supplementary Data of this Annual Report on Form 10-K for a discussion of the
activity in our 2013 Plan during 2022 and 2021. We anticipate that a portion of
stock options for 1,561,500 shares of our common stock, which expire in October
2023 with an exercise price of $0.31 per share may be exercised during 2023 if
our stock price as quoted on the NYSE American exchange exceeds the exercise
price prior to the expiration date.

December 2021 Equity Offering





On December 6, 2021 we completed the sale of 3,100,000 shares of common stock
(the "Shares"), at a price of $0.50 per share (the "Offering") for net proceeds
after expenses of $1,542,000. We did not engage an underwriter or placement
agent for the Offering, and therefore there were no underwriter discounts or
commissions or placement agent fees. The sale of the Shares was made through a
subscription agreement between Solitario and each respective investor. The
Shares were offered and sold pursuant to our existing shelf registration
statement on Form S-3 (File No. 333-249129). We filed a prospectus supplement,
dated December 1, 2021, with the SEC in connection with the sale of the Shares
in the Offering. Three of our executive officers participated in the Offering,
purchasing 50,000 Shares each, on the same terms as the other investors. The
Offering was unanimously approved by our Board of Directors and the
participation by our executive officers was also unanimously approved by the
Audit Committee of our Board of Directors.




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At the Market Offering



On February 2, 2021, we entered into an at-the-market offering agreement (the
"ATM Agreement") with H. C. Wainwright & Co., LLC ("Wainwright"), under which we
may, from time to time, issue and sell shares of our common stock through
Wainwright as sales manager in an at-the-market offering under a prospectus
supplement for aggregate sales proceeds of up to $9.0 million (the "ATM
Program"). The common stock is distributed at the market prices prevailing at
the time of sale. As a result, prices of the common stock sold under the ATM
Program may vary as between purchasers and during the period of distribution.
The ATM Agreement provides that Wainwright is entitled to compensation for its
services at a commission rate of 3.0% of the gross sales price per share of
common stock sold. In March 2022, we sold 2,650,724 shares of our common stock
under the ATM Program at a price of $0.79 per share for net proceeds of
$2,023,000 after commissions and sale expenses. During 2021, we recorded
$144,000 as a charge to additional paid-in-capital for one-time expenses related
to entering into the ATM Agreement. During 2021, we sold an aggregate of 643,033
shares of our common stock under the ATM Program at an average price of $0.68
per share for net proceeds of $299,000 after commissions, sale expenses, and
one-time expenses.

Off-balance sheet arrangements

As of December 31, 2022 and 2021, we have no off-balance sheet arrangements.





(e). Cash Flows



Net cash used in operations during the year ended December 31, 2022 increased to
$2,900,000 compared to $2,157,000 for the year ended December 31, 2021 primarily
as a result of (i) the increase in exploration expense at our Golden Crest
project to $1,505,000 during 2022 compared to $420,000 of exploration expense
incurred at our Golden Crest project during 2021, and the increase in
exploration expense at our Lik project to $668,000 during 2022 compared to
$362,000 expense incurred at Lik during 2021; and (ii) an increase in the use of
cash from the net change in accounts payable and other current liabilities to
$51,000 during 2022 compared the a net use of cash of $17,000 from the net
change in accounts payable and other current liabilities during 2021. Partially
offsetting this increased use of cash in operations was (i) a net source of cash
from changes in prepaid expenses and other current assets of $265,000 during
2022 compared to a net use of cash from changes in prepaid expenses and other
current assets of $277,000 during 2021; (ii) a reduction in reconnaissance
exploration expense to $94,000 during 2022 compared to reconnaissance
exploration of $306,000 during 2021; and (iii) and increase in interest income
to $131,000 during 2022 compared to interest income of $123,000 during 2021.
These items are discussed in further detail above under "Results of Operations."



Net cash provided by investing activities increased to $701,000 during 2022
compared to net cash provided of $90,000 during 2021. The primary reasons for
the increase in cash provided by investing activities are (i) an increase in the
cash provided from the sale of short-term investments to $1,028,000 during 2022
compared to $609,000 during 2021; and (ii) a reduction in capitalized initial
costs for new Golden Crest claims to $340,000 compared to the capitalization of
initial costs on claims and lease acquisition costs at Golden Crest of $695,000
during 2021. Partially offsetting these net increases in cash provided by
investing activities were (i) an increase in acquired exploration related
equipment classified as other assets related to the Golden Crest project to
$50,000 during 2022 compared to additions to other assets of $39,000 during
2021, and (ii) a decrease in the cash from the sale of marketable equity
securities to $63,000 during 2022 compared to cash from the sale of marketable
equity securities of $147,000 during 2021. We anticipate we will continue to
utilize proceeds from the sale of our short-term investments and any proceeds we
may derive from potential sales of marketable equity securities to fund our
operations during 2023.



Our net cash provided by financing activities during 2022 was from (i) the sale
of 2,650,724 shares of our common stock under the ATM Program at a price of
$0.79 per share for net proceeds of $2,023,000, and (ii) the exercise of options
for 114,250 shares of our common stock for net proceeds of $30,000. Our net cash
provided by financing activities during 2021 was from (i) the sale of 3,100,000
shares in December 2021 of our common stock for net proceeds of $1,542,000; (ii)
the issuance of 643,033 shares of our common stock under the ATM Program for net
proceeds of $299,000 and (ii) the exercise of options for 185,000 shares of our
common stock for net proceeds of $83,000. We may utilize the ATM Program during
2023 to supplement our existing cash resources, however we will only use the ATM
Program when we believe the market conditions based upon the quoted price of a
share of our common stock are appropriate.

(f). Development Activities, Exploration Activities, Environmental Compliance and Contractual Obligations





Development Activities

We do not have any ongoing mineral development activities, which are activities for the development of mineral properties with reserves for potential mining.






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Exploration Activities



A historically significant part of our business involves the review of potential
property acquisitions and continuing review and analysis of properties in which
we have an interest to determine the exploration and development potential of
the properties. In analyzing expected levels of expenditures for work
commitments and property payments, our obligations to make such payments
fluctuate greatly depending on whether, among other things, we make a decision
to sell a property interest, convey a property interest to a joint venture, or
allow our interest in a property to lapse by not making the work commitment or
payment required. In acquiring many of our interests in mining claims and
leases, we have entered into agreements, which generally may be canceled at our
option. We are often required to make minimum rental and option payments in
order to maintain our interest in certain claims and leases. Our net 2022
mineral and surface property filing rental and option payments, included in
exploration expense, were $107,000. Our 2023 total exploration property rentals
and option payments for properties we own, have under joint venture, or operate
are estimated to be approximately $1,273,000. Assuming that our joint ventures
continue in their current status and that we do not appreciably change our
property positions on existing properties, we estimate that our joint venture
partners will pay on our behalf or reimburse us approximately $854,000 of these
annual payments. These obligations are detailed below under "Contractual
Obligations." In addition, we may be required to make further payments in the
future if we elect to exercise our options under those agreements or if we

enter
into new agreements.



Environmental Compliance



We are subject to various federal, state and local environmental laws and
regulations in the countries where we operate. We are required to obtain permits
in advance of initiating certain of our exploration activities, to monitor and
report on certain activities to appropriate authorities, and to perform
remediation of environmental disturbance as a result of certain of our
activities. Historically, the nature of our activities of review, acquisition
and exploration of properties prior to the establishment of reserves, which may
include mapping, sampling, geochemistry and geophysical studies as well as some
limited exploration drilling, has not resulted in significant environmental
impacts in the past. We have historically carried on our required environmental
remediation expenditures and activities, if any, concurrently with our
exploration activities and expenditures. The expenditures to comply with our
environmental obligations are included in our exploration expenditures in the
statement of operations and have not been material to our capital or exploration
expenditures and have not had a material effect on our financial position. For
the years ended December 31, 2022 and 2021, we have not capitalized any costs
related to environmental control facilities. We do not anticipate our
exploration activities will result in any material new or additional
environmental expenditures or liabilities in the near future.



Contractual Obligations

The following table provides an analysis of our contractual obligations:





                                               As of December 31, 2022
                                                Payments due by period
(in                               Less than                                               More than
thousands)        Total           1 year            1-3 years         4-5 years             5 years
Operating
Lease
Obligations
(1)           $        35       $         35     $            -     $             -     $           -
Mineral
property
option and
lease
payments
(2)           $       419       $        419     $            -     $             -     $           -

(1) Lease obligation on our Wheat Ridge, Colorado office.

(2) Mineral property payments under lease and property claim and concession payments for the next year, net of joint venture payments.

(g). Exploration Joint Ventures, Royalty and Other Properties

The following discussion relates to an analysis of our anticipated property exploration plans as of December 31, 2022. Please also see Note 2, "Mineral Properties," to the consolidated financial statements in Item 8, "Financial Statements and Supplementary Data," and our discussion of our properties under Item 2, "Properties" of this Annual Report on Form 10-K for a more complete discussion of all of our mineral properties.

Golden Crest



The Golden Crest project is 100%-owned early-stage exploration project located
in the northern Black Hills of western South Dakota in Lawrence County. The
Golden Crest project is comprised of 1707 unpatented lode claims, with an
associated area of approximately 33,000 acres. Solitario acquired its initial
interest in the Golden Crest project during 2021.



During 2022 Solitario conducted exploration activities on the Golden Crest
project including grid soil and grab rock sampling, hand trenching, mapping,
induced polarization ground geophysics, permitting and geotechnical work. Over
twenty gold-enriched target areas have been identified, with fourteen of these
areas containing multi-gram gold per tonne assays.




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A Plan of Operations for drilling has been submitted to the USFS and is currently under review. If permits to drill are received during 2023 field season, Solitario will conduct a 4,000-5,000 meter drilling program. In addition, we will be continuing a surface exploration program during 2023 consisting of prospecting for new areas of mineralization through the collection of select rock grab samples, systematic soil sampling and geophysics.

Florida Canyon
The Florida Canyon project is an advanced-stage high-grade zinc project in Peru.
Based on extensive exploration and development work conducted to date, we
believe the property has potential to be developed into a mine over the next
several years. The project is held in a joint venture between Nexa (61%) and
Solitario (39%).



Solitario and Nexa jointly completed a PEA in 2017 that incorporated a variety
of Nexa-generated prefeasibility studies into the analysis. The PEA evaluation
included resource estimation, mining and processing recovery estimates, a
preliminary mining and processing plan, infrastructure layout, environmental
considerations and an economic analysis based on certain base case parameters.
The PEA envisioned an underground mining operation with a 2,500 tonne per day
floatation mill for processing, resulting in a 12.5-year mine life. Concentrates
would be trucked to Nexa's Cajamarquilla zinc smelter facility in Lima, Peru.



The terrain at Florida Canyon is steep and previous project access supporting
surface and underground work programs was conducted by helicopter. The lack of
road access restricted the scope of field activities to further advance the
project. During 2022 and 2021 limited work was undertaken on road access to the
project, and Nexa expects to continue to work on completing the road access
during 2023.



Nexa's expenditures during 2022 were for the advancement of the access road,
community outreach, and a metallurgical testing program. During 2021, Nexa
worked on two separate drilling permits. The first of these permits (4MEIAsd)
was approved and allows additional drilling immediately to the south and east of
the current Florida Canyon drilling footprint. The second permit (5MEIAsd)
greatly expands the area in which drilling is permitted to the south and east.
The metallurgical testing program was undertaken to better quantify recoveries
of zinc, lead and silver and to more accurately determine the quality of
concentrate that the Florida Canyon ores can produce. The results of the program
were encouraging by increasing the estimated recoveries and concentration grades
at Florida Canyon. Nexa has indicated during 2023 they will undertake a 4,000 to
5,000 meter drilling program to focus on the extension of the current resource,
Nexa is also continuing to extend road construction to local communities that
currently do not have vehicle access as part of their ESG commitment.



Lik project

The Lik project is an advanced-staged high-grade zinc project. The project is held in a joint venture between Teck (50%) and Solitario (50%).





During 2022 Teck completed a three-hole, 737-meter (2,415 feet) drilling program
in 2022. Drill hole Lik-231 intersected 3.5 meters (11.5 feet) grading 9% zinc
and 3% lead. In addition to the drilling, Teck also conducted traverse geologic
mapping and a ground gravity geophysics survey, which was successful in defining
a low-amplitude gravity anomaly that requires further follow-up work.



For 2023, Teck has submitted a drilling permit application to the Alaskan
Department of Natural Resources for 70 core holes, including water sources for
drilling. Drill hole location include step-out drilling surrounding the
currently defined deposit as well as location along strike to the northeast and
theoretical targets more distant to the deposit. This robust permitting
submission allows for significant flexibility for the next five years.



Solitario and Teck are in discussions to jointly fund a 2023 exploration
program, with Teck acting as project manager. The program will include core
analysis, mapping and other surface work, project maintenance and, if approved,
a limited drilling program to follow-up on the results of the three core holes
drilled during 2022. No specific drill targets have been approved, which is
expected to be decided prior to the end of the second quarter of 2023.



Other Properties



Chambara



The current claim holdings of Minera Chambara are 48 concessions totaling 36,080
hectares of valid concessions that surround the Florida Canyon project area held
by Minera Bongará. The project has been on care and maintenance in recent years.
Significant geochemical anomalies and outcropping mineralization have been
identified at several locations on the Chambara property. Nexa is responsible
for maintaining the property in good standing and making all concession payments
to the Peruvian government.




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2023 Planned Expenditures





Our 2023 total exploration and development budget is approximately $2,000,000
for our planned exploration expenditures. This amount does not include any
significant expenditures for our Florida Canyon project where our joint venture
partner, Nexa, is responsible for 100% of exploration costs. It includes
$1,852,000 planned exploration expense at our Golden Crest project, excluding
drilling, pending permitting. We will continue the evaluation of potential new
acquisitions of properties primarily in the United States around the Golden
Crest project as well as other regions of North and South America. We expect to
carry out our exploration activities during 2023 utilizing Teck at Lik, Nexa at
Florida Canyon, and our own employees and contract geologists at Golden Crest
and other projects.



(h). Discontinued Projects



We recorded no mineral property impairments during 2022. During 2021 we recorded
$17,000 of mineral property impairment related to our decision to abandon the
Gold Coin project in Arizona.

(i). Significant Accounting Policies and Critical Accounting Estimates





See Note 1, "Business and Summary of Significant Accounting Policies," in Item
8, "Financial Statements and Supplementary Data" of this Annual Report on Form
10-K for a discussion of our significant accounting policies.



Solitario's valuation of mineral properties is a critical accounting estimate.
We review and evaluate our mineral properties for impairment when events or
changes in circumstances indicate that the related carrying amounts may not be
recoverable. Significant negative industry or economic trends, adverse social or
political developments, geologic results, geo-technical difficulties, or other
disruptions to our business are a few examples of events that we monitor, as
they could indicate that the carrying value of the mineral properties may not be
recoverable. In such cases, a recoverability test may be necessary to determine
if an impairment charge is required. There has been no change to our
assumptions, estimates or calculations during the year ended December 31, 2022.

(j). Related Party Transactions





None

(k). Recent Accounting Pronouncements





See Note 1, "Business and Summary of Significant Accounting Policies," in Item 8
"Financial Statements and Supplementary Data" of this Annual Report on Form 10-K
for a discussion of recent accounting pronouncements.

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