Wall Street Transcript Interview with Christopher E. Herald, the CEO, President and Director of Solitario Exploration & Royalty Corp. (XPL)

Wall Street Transcript

67 WALL STREET, New York - April 14, 2014 - The Wall Street Transcript has just published its Metals & Mining Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Mining Safety and Environmental Concerns - Global Iron Ore Production - Emerging Market Infrastructure Construction - Chinese Demand for Industrial Metals - Zinc Supply Deficit - Demand Growth in Zinc - Accelerated Grid Spending in China - Copper Demand in China

Companies include: Solitario Exploration & Royalt (XPL) and many more.

In the following excerpt from the Metals & Mining Report, the CEO, President and Director of Solitario Exploration & Royalty Corp. (XPL) discusses company strategy and the outlook for this vital industry:

TWST: What are your goals for these projects over the next year or two, and how do you envision them over the longer term, maybe five years or more?

Mr. Herald: Over the next 12 months, there are really two goals we have at Mount Hamilton. The first one will be completion of permitting, and we think we'll be done with that in July or August of this year. That will allow us to initiate, really, financing - where we need to raise in the neighborhood of $80 million. We think most of that will come from debt. We've had a lot of positive responses from banks and lending institutions on this project, it's very robust economically. So over the next 12 months, we want to complete permitting and then put the financing in place.

In terms of the Bongara high-grade zinc deposit, which is in Peru, our partner Votorantim Metais is about two-thirds of the way through a prefeasibility study. We're hoping that they complete that feasibility study on schedule, which is scheduled for the end of this year. Now in the meantime, we also hope to release for the first time the initial resource estimate for the Bongara zinc deposit. The time frame on that is probably in the neighborhood of one or two, maybe as much as three months, but we're very close to being able to release a resource estimate. So that's going to be another, I think, very important event for the company. So we have a lot of things going on over the next 12 months.

Now over the next five years, what we want to see is Mount Hamilton become a very strong cash and gold producer that will average about 60,000 ounces of gold per year. And at today's gold price of around $1,300, that project will throw off over $40 million a year in cash flow, and we control 80% of that project. So with only 39 million shares outstanding, you can see we'll have a very healthy cash flow per share ratio.

Then looking at the zinc project, what's unique about that is that we're carried to production by our partner, Votorantim Metais, so it's a dilution-free project to us and to our shareholders. At full production, our current estimate - based on a scoping study that our partner did - is that this project will throw off somewhere around $30 million a year to Solitario at current zinc prices. We repay Votorantim the loan that they're required to extend to us for construction, so we'll get half of that cash flow in the first probably four or five years, and then all of that cash flow thereafter once that loan is paid back.

So between these two situations, we have the ability to become a very healthy cash flow company, and we think the reserve life of both of these projects are well in excess of 10 years. So I think we have a very good future moving downstream in the three- to five-year range.

TWST: What is your short-term price outlook for gold and zinc, as well as supply and demand dynamics for these two metals?

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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