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Solitario Announces Mt. Hamilton Feasibility Study Results

Solitario Exploration & Royalty Corp. (“Solitario;” NYSE Amex: XPL; TSX: SLR) and Ely Gold & Minerals (“Ely Gold;” TSX.V: ELY) are pleased to announce positive Feasibility Study results on the Centennial Gold deposit situated on the Mt. Hamilton property in eastern Nevada, U.S.A. The Feasibility Study demonstrates robust economics with excellent potential for developing additional resources. Development of the project will deliver significant economic benefits to the local economy of White Pine County with an estimated 120 fulltime jobs.

With the completion of this Feasibility Study, Solitario will hold an 80% interest in Mt. Hamilton LLC (the “Company”), a limited liability company which holds 100% of the Mt. Hamilton project assets. Ely Gold will hold a 20% interest in the Company. The Feasibility Study has been prepared on behalf of the Company by SRK Consulting (U.S.) Inc. (SRK).

Project Economics All currency figures in U.S. $’s; Economic base case in bold; M=millions
Item     Pre-Tax     After Tax (Federal=35%, State=5%)
Gold US$/oz.     $1,323     $1,500     $1,700     $1,900     $1,323     $1,500     $1,700     $1,900
Silver US$/oz. $25.34 $29.00 $33.00 $37.00 $25.34 $29.00 $33.00 $37.00
Cash Flow (US$M) $226.4 $284.9 $389.9 $476.1 $136.4 $183.9 $237.5 $290.8
NPV @ 8% (US$M) $111.1 $154.4 $207.0 $259.3 $60.7 $87.3 $120.0 $152.3
NPV @ 5% (US$M) $145.3 $198.5 $261.5 $324.1 $83.1 $116.0 $155.0 $193.7
IRR 35.0% 41.3% 51.2% 60.6% 25.4% 30.5% 37.9% 44.9%
Payback (Years)     2.7     2.5     2.2     1.9     3.2     2.9     2.6     2.3

Life-of-mine cash operating costs on a gold equivalent basis (at a 52:1 silver to gold ratio) are estimated at $535 per gold-equivalent ounce recovered, well below world-average industry cash costs. The economic base case assumes a $1,323 life-of-mine gold price and a $25.34 silver price, generating approximately $226 million in cash flow (operating margin – EBITDA) on a pre-tax basis over the mine’s currently anticipated eight-year mine-life. At gold and silver prices of $1,700 and $33 per ounce, respectively, the project will generate nearly $390 million in life-of-mine cash flow. Initial capital costs are estimated at $71.9 million, including a contingency of $6.3 million. On average, silver production contributes approximately 11% to the overall project revenues.

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