Interviewer: This is Al Alper talking with Christopher Herald, who's president and CEO of Solitario Exploration & Royalty Corp. It has great properties in Peru and some in Brazil and Mexico. Would you like to tell our readers a little bit about yourself, Solitario and your team; also about where your projects are now and what you see for the future?

Chris Herald: Thank you Al. Solitario is an exploration and royalty company that's been doing exploration in Latin America now for 15 years, primarily in Mexico, Peru and Brazil. Our philosophy is to go out and identify good projects, develop and advance them to a certain stage. At this point, we' typically look for a major mining company to joint venture the project with. We've been quite successful with this strategy during the past 15 years.

Solitario’s Joint Ventures are Essentially NPI-Royalties

Our partners include Anglo Platinum, the largest platinum producer in the world, Votorantium Metais, the third largest zinc producer in the world, and Newmont Mining, the second largest gold producer in the world, who owns 9% of Solitario.

We also look at investment opportunities. About five years ago we invested in one of our associated sister companies, Crown Resources. We helped Crown redevelop an exploration project called Buckhorn Mountain. Spent two years doing that and then we were able to sell Buckhorn Mountain to Kinross Gold for $240 million. This was a major transaction and our shareholders made a lot of money on that deal. Solitario's $1.5 million investment turned into about a $30 million worth of Kinross stock.

Today we still retain slightly over $20 million in Kinross stock and approximately $2 million dollars in cash.

I have been with Solitario since its inception approximately 15 years ago and have spent 30+ years in the mining industry as a geologist. The other executive officers in the company have been there essentially since day one. Walter Hunt, our Chief Operating Officer, a geologist with 30 years of experience, runs our Latin American operations. Jim Maronick, our chief financial officer, has been in the mining business now for well over 15 years. Our management team is quite seasoned.

There are 12 geologists on staff who are evenly distributed throughout the regions in which we work. We have three in Brazil, five in Peru, and four in Mexico. We have a fully integrated staff, very senior people. Their job is to be out looking every day for new projects, new opportunities for us to acquire and advance.

We're well financed with $20 million in cash and marketable securities with no debt. We’re in quite an enviable position right now with all the financial turmoil that's going on in the world. We don’t have to raise money. Our capital structure is, I think, quite good. We only have 29.7 million shares outstanding and another 2 million in options. For a company who has been around for over 15 years, we have a low number of shares issued and we’ve never had a roll back. We have always been very frugal in issuing new shares. Consequently, if there's a new shareholder that wants to invest in Solitario they know they're not going to see a massive dilution in the next 6 to 12 months. I think that's real important in this day and time.

Our Projects

Turning to our principle projects, the Bongará project in Peru is one of our more advanced projects. It's a high-grade zinc project and is one that we think that, in the very near term, we'll be able to talk about our reserve numbers. Currently, we believe there are in the neighborhood of 20 million ounces averaging 9 percent zinc, 1 percent lead and about a half-ounce per ton silver.

Our partner at Bongará, Votorantium Metais, is spending a minimum of $18 million to earn a 70 percent interest. We'll retain a 30 percent. But they also have to finish a feasibility study and finance our 30 percent portion of construction costs to earn their 70 percent. So, we're fully carried on this project. We'll never have to invest another dime, and we see this as one of the largest and perhaps highest grade undeveloped zinc projects in the world. I think Votorantium also feels the same way. And they would know as they're the third largest zinc producer.

A 3-4,000 meter drilling program is planned at Bongará during 2009.

The other major project is our Pedra Braca platinum, palladium project in Brazil which is joint ventured with Anglo Platinum. To date, about $10 million has been spent on the project which is fully funded by Anglo Platinum. It's similar to the deal we have at Bongará with Votorantium in that we're fully carried to production and will retain a 35 percent interest with Anglo Platinum financing our 35 percent interest. So, again, it's a very favorable deal for us. A $1.5 million, 4,000 meter drilling campaign will be conducted at Pedra Branca during the second half of 2009.

These types of joint venture arrangements allow us to maintain significant participating interests in projects without spending money. That's why we call ourselves Solitario Exploration and Royalty. These two joint ventures at Bongará and Pedra Branca are essentially net profit royalty interests because we're fully carried. So, I think it provides the Solitario shareholder with a lot of benefits while maintaining the financial integrity of the company.

Besides those two major joint ventures, we have 100 percent-owned properties that we're advancing. We have about four or five in Peru and there are two I'd like to specifically mention. One is called Chonta, and it's a high-grade silver, lead, zinc property that’s never been drilled. We spent the last year and a half developing surface targets there. We're going to start drilling no later than early May and hopefully by mid-April. We're ready to go. We're fully permitted. We'll have one or two core rigs drilling there within two or three months now. We think Chonta has tremendous potential. Current plans call for an initial eight-hole, 1,600 meter drilling campaign beginning in early May 2009.

The other 100%-owned property is called La Promesa (which means the promise) which is an extremely high-grade silver, lead, zinc vein system. We've had some of the best surface samples at La Promesa that we've ever collected in our 15-year history. One sample is 2.4 meters of 600-gram silver and about 20 percent combined-lead zinc. Another one is 1.2 meters of almost 1800 grams silver, which is just a super high-grade number with 30 percent combined lead-zinc. We see this vein and a number of other veins having anywhere from half a kilometer of length up to a kilometer an a half.

Again, La Promesa has never been drill tested. We think it holds tremendous promise for us, and we're looking forward to drilling that. Additional surface work to further define drill targets followed by an initial ten-hole, 1,500 meter drilling program are scheduled for the second and third quarters of 2009.

In Brazil we have a good gold project, Mercurio, which we've drilled about 30 holes on, most of which hit potentially ore-grade mineralization in gold. We're talking to two companies now to joint venturing it to them. We hope we're going to be able to conclude an agreement with them over the next two months.

In the meantime, we're doing a lot of genitive work on exploration, and today we’re one of the fortunate companies here that has money to invest in new projects. We're seeing a lot of quite interesting projects from junior companies that basically are out of money. They have a good asset and they're looking for a partner to come in and invest money. So that's another avenue we're strongly pursuing right now.

Interviewer: Okay. Nice talking with you, Chris. Sounds like you have a great opportunity.

Chris Herald: Thank you.

For more information Contact:

Debbie Mino-Austin, Director
Investor Relations at (800) 229-6827
dwmino@slrxpl.com
Website: http://www.solitarioxr.com

Corporate Address:
4251 Kipling St., Suite 390,
Wheat Ridge, Colorado 80033
(303) 534-1030