SOLITARIO RESOURCES CORP. Leases Disclosure
4. Operating Lease
Solitario leases one facility, its Wheat Ridge, Colorado administrative office (the “WR Lease”), that has a term of more than one year. Solitario has no other significant operating lease costs. The WR Lease was extended in October 2023 to February 2026 and Solitario recorded a net increase in right of use assets of $87,000 during 2023 upon the extension of the WR Lease. The WR Lease is classified as an operating lease and has a remaining term of 14 months at December 31, 2024. The right-of-use office lease asset for the WR Lease is classified as other assets and the related liability as a current office lease liability, for the portion of the liability due in one year and a long-term liability for the balance in the consolidated balance sheet. Lease expense is recognized over the lease term, with variable lease payments recognized in the period those payments are incurred.
During 2024 and 2023, Solitario recognized $42,000 and $41,000, respectively, of lease expense for the WR Lease included in general and administrative expense. Cash lease payments of $44,000 and $40,000, respectively, were made on the WR Lease during 2024 and 2023. The discount rate within the WR Lease is not determinable and Solitario applied a discount rate of 7% based upon Solitario’s estimate of its cost of capital in recording the WR Lease. Solitario has $52,000 remaining cash payments as of December 31, 2024, of which $2,000 is imputed interest on the WR Lease, and Solitario has recorded the remaining $50,000 lease liability as $43,000 as a current liability and $7,000 as non-current liability in the consolidated balance sheet.
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.