Mercurio Gold NSR Royalty Project - Brazil

In March of 2010, we successfully optioned the Mercurio gold project in Brazil to Regent Holding Ltd, a private company. Regent has the option to purchase the property for $1.0 million in cash payable in escalating annual payments over a four-year period and drilling a minimum of 8,000 meters over a three-year period, with a firm 1,000 meter commitment the first year, subject to due diligence. Upon completion of the cash payments and work commitments, Solitario would retain a 1.5% NSR royalty for the first two million ounces of production, and a 2% NSR royalty for all production thereafter. The 2% NSR royalty could be reduced to 1.5% by a one-time cash payment of $1.0 million to Solitario.

The Mercurio Gold Property, located in Para State in northern Brazil, consists of three concessions totaling 8,476 hectares. Regent will be responsible for making all payments to the underlying claim and surface rights holder that total $512,000 over the next two years. Thirty-six drill holes totaling 4,621 meters have thus far tested three principal target areas: the Colonia, Patoa and Tucanaré prospects. Mineralization remains open at all three prospects and numerous additional geochemical targets remain untested.