Executive Summary / Key Takeaways

• Solitario Resources Corp. ($XPL) is an exploration-stage company focused on discovering and advancing precious and base metal deposits, highlighted by a recent high-grade silver intersection at its Golden Crest project.
• The company demonstrated improved financial performance in the first nine months of 2025, significantly reducing its net loss and exploration expenses compared to the prior year, while bolstering its liquidity through strategic capital raises.
• A key operational achievement at Golden Crest, revealing an "unrecognized style of precious metal mineralization," underscores Solitario's geological expertise and offers a potential differentiator in its exploration strategy.
• Despite its exploration-stage status and inherent industry risks, Solitario maintains a solid cash and short-term investment position, providing runway for ongoing exploration and potential future acquisitions.
• The company's strategy hinges on leveraging joint ventures and strategic partnerships to de-risk projects and secure funding for advancing its core assets, positioning it for potential monetization events rather than direct production.

Unearthing Potential: Solitario's Strategic Exploration in a Dynamic Market

Solitario Resources Corp. operates as an exploration-stage company, dedicated to the acquisition and advancement of precious metal, zinc, and other base metal mineral properties across North and South America. Since its incorporation in 1984 and public listing in 1994, Solitario has consistently pursued a business model centered on discovering economic deposits and progressing them to the development stage, often through joint ventures. The company's historical journey has been marked by strategic evaluations and the infrequent monetization of mineral properties and royalties, rather than direct mining operations. This foundational approach positions Solitario as a pure-play exploration entity, seeking to create value through discovery and strategic partnerships.

The mineral exploration industry is inherently capital-intensive and subject to significant volatility driven by fluctuations in precious metal and other commodity prices. This dynamic environment presents both opportunities for acquiring promising assets at attractive terms and challenges related to funding and market sentiment. Solitario's strategic response involves a focused portfolio of core assets, including its carried interest in the Florida Canyon zinc project in Peru, its interest in the Lik zinc project in Alaska, and its Golden Crest project in South Dakota. The company expanded its early-stage portfolio in the third quarter of 2025 with the acquisition of the Cat Creek and Bright Angel projects in Colorado, demonstrating a continuous pursuit of new exploration potential.

Technological Edge and High-Grade Discoveries

Solitario's operational prowess in exploration is a critical component of its investment thesis. A recent significant achievement at the Golden Crest project in South Dakota highlights this capability. The company announced an intersection of 1,445 grams per tonne silver over 1.2 meters in drill hole GC-012, a discovery that represents an "unrecognized style of precious metal mineralization" unique to the project and distinct from mineralization in the historic Homestake and Wharf mining areas. This specific, high-grade intersection is a tangible benefit, demonstrating the potential for significant resource discovery and validating Solitario's geological targeting and exploration methodologies.

This operational success at Golden Crest is not merely a data point; it signifies a potential competitive advantage. By identifying novel mineralization styles, Solitario demonstrates a deeper understanding of regional geology or a more effective application of exploration techniques, which could lead to more efficient and impactful discoveries. While the company does not detail proprietary "technology" in the traditional sense of a manufacturing process, this geological insight and successful targeting serve as a critical differentiator in the highly competitive exploration landscape. For investors, this implies a higher probability of future discoveries and potentially more valuable assets, enhancing the company's competitive moat by demonstrating its ability to unlock value where others may not have. The strategic intent behind such exploration is to prove up resources that can attract further joint venture interest or lead to lucrative asset sales, directly contributing to long-term growth and financial performance.

Competitive Landscape: A Niche Player Among Giants

In the broader mining industry, Solitario operates as a specialized, exploration-focused entity, distinguishing itself from diversified mining giants like Teck Resources (TECK), Glencore (GLNCY), BHP Group (BHP), and Rio Tinto (RIO). These larger competitors possess extensive operational scales, integrated supply chains, and substantial financial resources, enabling them to pursue large-scale production and global market penetration. Teck, for instance, has established production assets in zinc and base metals, offering cost efficiencies and global market access that Solitario, as an exploration-stage company, does not yet possess. Similarly, Glencore's integrated trading and mining model, BHP's technological innovation, and Rio Tinto's advanced technology and global reach represent formidable competitive strengths.

Solitario's market positioning is more peripheral, focusing on targeted, high-potential exploration sites. Its agility in early-stage project development and specialized regional expertise in areas like Alaska and Peru are key strengths. However, Solitario lags behind its larger rivals in terms of operational execution, growth rates, and consistent profitability, given its pre-production status. The company's financial health is more susceptible to funding needs and cash flow challenges compared to the diversified income streams of its larger counterparts. Solitario's strategy of leveraging joint ventures, such as with Nexa Resources (NEXA) for the Florida Canyon Project and Teck American Incorporated for the Lik Project, is a direct response to these competitive dynamics, allowing it to de-risk projects and access capital and operational expertise without bearing the full burden of development costs. This approach aims to maximize the value of its discoveries through partnerships, rather than competing directly on scale or production volume.

Financial Performance and Liquidity Management

Solitario Resources demonstrated a notable improvement in its financial performance for the three and nine months ended September 30, 2025. The net loss for the three months ended September 30, 2025, decreased to $1.87 million, or $0.02 per basic and diluted share, from $2.28 million, or $0.03 per share, in the same period of 2024. For the nine-month period, the net loss improved to $3.32 million ($0.04 per share) from $3.77 million ($0.05 per share) in the prior year. This reduction in net loss was primarily driven by a decrease in exploration expenses, which fell to $1.65 million for the three months and $2.56 million for the nine months ended September 30, 2025, compared to $2.07 million and $2.91 million, respectively, in 2024. This was largely due to fewer holes drilled and a slightly lower cost per hole at the Golden Crest Project, alongside reduced activity at the Cat Creek Project. General and administrative expenses also saw a modest decrease.

The company's liquidity position significantly strengthened, with cash and short-term investments totaling $7.95 million as of September 30, 2025, including $7.57 million in a money market account. This increase in liquidity was largely attributable to successful capital-raising activities. During the nine months ended September 30, 2025, Solitario completed private placements totaling $4.41 million in net proceeds, including $980,000 from Newmont Overseas Exploration Ltd. and $3.43 million from a single third-party investor. Additionally, the company raised $512,000 in net proceeds through its At-The-Market (ATM) offering program. These capital injections are crucial for funding ongoing exploration activities and potential future mineral asset acquisitions, providing a runway for the next year's expected expenditures. Net cash used in operations also decreased to $3.06 million for the nine months ended September 30, 2025, from $3.35 million in the prior year, reflecting improved operational cash management.

Outlook and Strategic Trajectory

Solitario's outlook for 2025 reflects a continued focus on advancing its core exploration projects while prudently managing capital. The company has budgeted approximately $3.91 million for full-year exploration expenditure in 2025, with about $1.91 million allocated to drilling at the Golden Crest Project. This overall exploration spending is anticipated to be comparable to 2024 levels, with no significant additional exploration expenditures expected in the fourth quarter of 2025 as the drilling program concluded. General and administrative costs are also projected to remain comparable for the full year.

The recent capital raises are expected to boost interest income for the remainder of 2025, although this will be partially offset by the ongoing use of funds for exploration and administrative expenses. The strategic sale of its Kinross Gold Corp. (KGC) holdings for net proceeds of $998,000 and a portion of its Vox Royalty (VOXR) common stock for $230,000 during the nine months ended September 30, 2025, demonstrates active portfolio management aimed at optimizing liquidity and realizing gains. The company may continue to sell marketable equity securities based on cash needs and market conditions. The Zacks Rank #2 (Buy) upgrade, driven by an upward trend in earnings estimates, suggests a positive shift in analyst sentiment regarding Solitario's underlying business and future earnings potential, with an expected EPS of -$0.07 for fiscal year 2025.

Risks and Challenges

Investing in an exploration-stage company like Solitario Resources carries inherent risks. The primary challenge is the significant capital required to fund exploration, development, and eventual operation of mining projects. While current liquidity is adequate for the near term, substantial additional capital will be necessary if any of its projects advance to the development or operational stage. This future funding could come from cash reserves, short-term investments, joint ventures, debt, equity issuance, or asset sales.

Furthermore, Solitario is exposed to broad macroeconomic risks, including global economic uncertainty, inflationary pressures, interest rate volatility, and geopolitical tensions. Fluctuations in precious metal and other commodity prices directly impact the economic viability of its exploration projects. The company also faces operational risks specific to mineral exploration, such as geological uncertainties, permitting challenges, and environmental compliance. The absence of proven or probable reserves on any of its exploration properties means there is no assurance that any discovered resources will ever be economically viable or converted into reserves.

Conclusion

Solitario Resources Corp. presents a compelling investment narrative rooted in its focused exploration strategy and recent operational successes. The high-grade silver discovery at Golden Crest underscores the company's geological expertise and the potential for significant value creation from its core assets. Financially, Solitario has demonstrated prudent management by reducing losses and strengthening its balance sheet through strategic capital raises and asset monetization, providing a solid foundation for continued exploration.

While the inherent risks of an exploration-stage company remain, particularly the need for substantial future capital for development, Solitario's proactive approach to joint ventures and its enhanced liquidity position it to pursue its strategic objectives. The company's ability to identify and advance promising mineral properties, coupled with a favorable shift in analyst sentiment, suggests that Solitario is well-positioned to potentially unlock further value for investors as it progresses its projects in a dynamic global commodities market.