SOLITARIO RESOURCES CORP.

SOLITARIO RESOURCES CORP. Annual Report Summary – Fiscal Year Ended December 31, 2025

Discover how SOLITARIO RESOURCES CORP. (NYSE American: XPL) navigated the past year. This summary offers retail investors a clear, concise look at the company's unique business model, financial health, and future prospects for the fiscal year ended December 31, 2025.

1. Business Overview

Established in 1984, Solitario Resources Corp. operates as a mineral exploration and project generation company. Unlike traditional miners, Solitario does not develop or operate full-scale mines. Instead, it identifies, acquires, and explores promising mineral properties for precious metals (gold, silver) and base metals (zinc, lead). Once a project shows significant potential, Solitario typically partners with larger mining companies to advance development, sells the property outright, or establishes a royalty agreement. This strategy means Solitario relies on its partners or asset sales for monetization, never developing a property into a producing mine itself.

For fiscal year 2025, Solitario actively managed and advanced its portfolio of key projects:

• Florida Canyon Project (Peru): This advanced zinc project is a joint venture with Nexa Resources. Solitario holds a "carried interest," meaning Nexa funds all exploration and development costs. This allows Solitario to benefit from potential future production without current capital outlay. Solitario last contributed direct funding of $1.58 million for a drilling program in 2018-2019. The project hosts a significant zinc resource, and Nexa continues ongoing studies.
• Lik Project (Alaska): Solitario holds a 50% interest in this high-grade zinc-lead-silver project with Teck American, a subsidiary of Teck Resources Limited. Teck served as project manager through 2025. A Preliminary Economic Assessment (PEA) completed in 2019 outlined robust economics for a potential underground mine, indicating substantial resources and a viable path to development under favorable market conditions. Teck continued technical evaluations in 2025.
• Golden Crest Project (South Dakota): Solitario 100%-owns this gold project, which is in the early-to-mid exploration stage. Solitario actively conducted its own exploration programs here during 2025.
• New Acquisitions (Colorado): In the third quarter of 2025, Solitario expanded its early-stage portfolio by acquiring two new projects, Cat Creek and Bright Angel. Solitario 100%-owns both and began initial exploration.

2. Financial Performance

As an exploration company, Solitario does not generate consistent operating revenue from mining or metal sales. Its financial performance primarily reflects exploration expenditures and administrative costs, typically resulting in a net loss. Any revenue Solitario generates is infrequent, coming from the sale of mineral properties or royalty interests.

For the fiscal year ended December 31, 2025:

• Revenue: Solitario reported no significant revenue from property sales or royalties in 2025.
• Net Loss: The company reported a net loss of approximately $4.2 million, primarily due to exploration expenses and general administrative costs.
• Exploration & Evaluation Expenses: These totaled approximately $2.8 million for the year, reflecting active work on Golden Crest, Cat Creek, and Bright Angel, as well as contributions to joint ventures.
• Market Capitalization: As of December 31, 2025, Solitario's market capitalization stood at approximately $45 million, with its stock trading around $0.75 per share.

3. Operational Highlights and Challenges

Highlights:

• Portfolio Expansion: Solitario successfully acquired two new early-stage gold projects (Cat Creek and Bright Angel) in Colorado, demonstrating proactive growth and a commitment to replenishing its exploration pipeline.
• Partner-Funded Advancement: The company continued progress on the Florida Canyon and Lik projects, benefiting from significant funding and technical expertise provided by industry-leading partners Nexa Resources and Teck American. This strategy minimizes Solitario's direct capital exposure while maintaining upside potential.
• ESG Commitment: Solitario maintained a strong focus on Environmental, Social, and Governance (ESG) principles, engaging positively with local communities and ensuring partners adhere to responsible mining practices. This commitment is crucial for project permitting and maintaining community support.

Challenges:

• Commodity Price Volatility: The prices of zinc, lead, silver, and gold experienced significant fluctuations throughout 2025. While volatility can create acquisition opportunities, it also introduces uncertainty for project economics and potential monetization events.
• Macroeconomic Headwinds: The company faced broader economic uncertainties, including persistent inflation, rising interest rates, and geopolitical instability. These factors can impact capital availability, operating costs, and investor sentiment for the junior mining sector.
• Exploration Risk: Mineral exploration inherently involves uncertainty. There is no guarantee that current projects will yield economically viable discoveries or that existing resources will be successfully developed or monetized.

4. Management Discussion and Analysis (MD&A) Highlights

Management's discussion highlights the company's strategic approach as a project generator. This strategy emphasizes advancing its mineral property portfolio through both wholly-owned exploration and strategic joint ventures. For fiscal year 2025, the company continued to execute this strategy, resulting in a net loss primarily from exploration and general administrative expenses, consistent with its business model as a non-producing exploration entity.

Management points to the successful expansion of its early-stage portfolio with the acquisition of the Cat Creek and Bright Angel projects. It also notes continued progress on the advanced Florida Canyon and Lik projects, thanks to partner funding. This approach is critical for managing capital resources and mitigating direct exploration risk.

The company's financial health, characterized by a strong cash position and no significant long-term debt, provides a solid foundation for future operations. Management remains focused on prudent capital allocation, deploying resources to advance promising projects while actively seeking new opportunities.

Key challenges include the inherent volatility of commodity prices, which directly impacts project economics and potential monetization events, and broader macroeconomic uncertainties. Despite these, management views market fluctuations as opportunities for strategic acquisitions. The long-term strategy remains centered on creating shareholder value through discovery and the eventual monetization of high-quality mineral assets.

5. Financial Health

As of December 31, 2025, Solitario maintained a healthy balance sheet for an exploration company:

• Cash and Short-Term Investments: Approximately $12.5 million.
• Debt: The company reported no significant long-term debt.
• Liquidity: Based on its current cash reserves and an annual spending rate (burn rate) of approximately $4-5 million (including general and administrative costs and direct exploration), Solitario has sufficient liquidity. This allows it to fund planned exploration activities and general corporate expenses for at least the next 2 to 3 years without needing to raise additional capital, assuming no major new project acquisitions or unexpected expenditures. This provides a solid financial runway for advancing its current project pipeline.

6. Risk Factors

Investing in Solitario Resources Corp. carries specific risks inherent to the mineral exploration sector:

• Exploration Success Uncertainty: There is no assurance that exploration efforts will discover economically viable mineral deposits or that existing resources will be successfully developed.
• Commodity Price Exposure: The value of Solitario's projects and potential future revenues directly depends on volatile global commodity prices. A sustained decline in metal prices could render projects uneconomic.
• Funding and Dilution Risk: While currently well-funded, significant future project development or acquisitions may require additional capital. Raising funds through equity offerings could reduce the ownership percentage of existing shareholders.
• Regulatory and Permitting Risk: Mineral exploration and development are subject to extensive environmental regulations and permitting processes. These can be complex, costly, and lead to delays or project abandonment.
• Joint Venture Dependence: Solitario's strategy relies heavily on its joint venture partners. Changes in partner priorities, financial capacity, or strategic direction could impact project advancement.
• Geopolitical and Jurisdictional Risk: Operations in Peru and Alaska are subject to political, social, and environmental risks specific to those regions.

7. Competitive Position

Solitario operates as a "project generator" within the highly competitive mineral exploration industry. As a smaller reporting company, its competitive advantages include:

• Strategic Partnerships: Leveraging the financial strength, technical expertise, and operational capabilities of industry leaders like Nexa and Teck allows Solitario to participate in large-scale projects without bearing the full financial burden or operational risk.
• Diversified Portfolio: A mix of precious and base metal projects across different stages (early-stage to advanced exploration) and jurisdictions helps mitigate commodity-specific and regional risks.
• Experienced Management: A long-standing management team with a proven track record in mineral discovery and project generation.

8. Leadership and Strategic Continuity

No significant changes occurred in Solitario's executive leadership or board of directors during 2025. The company's strategic direction remains consistent: identify and acquire high-potential mineral properties, advance them through cost-effective exploration, and then monetize them through joint ventures, sales, or royalties. The acquisition of the Cat Creek and Bright Angel projects in 2025 directly aligns with this established strategy of continuously replenishing its project pipeline.

9. Future Outlook

Solitario plans to continue deploying its strong cash position to fund ongoing exploration at its 100%-owned Golden Crest, Cat Creek, and Bright Angel projects. The company will also continue to support its joint venture partners in advancing Florida Canyon and Lik. Management views fluctuating commodity prices as both a challenge and an opportunity, actively seeking to acquire new prospective mineral properties on favorable terms. The focus remains on growing its portfolio of high-quality exploration assets with the ultimate goal of creating shareholder value through discovery and strategic monetization events.

10. Market Trends and Regulatory Environment

The primary market trend impacting Solitario is the cyclical nature and volatility of global commodity prices, particularly for zinc, lead, silver, and gold. These price movements directly influence the economic viability of exploration projects and the attractiveness of potential asset sales or joint venture agreements. The mineral exploration sector continuously faces evolving environmental protection laws, land use regulations, and permitting requirements. Solitario emphasizes its commitment to navigating these regulatory landscapes responsibly.

In summary, Solitario Resources Corp. offers a unique investment proposition as a project generator, aiming to create value through strategic exploration and partnerships without the direct operational risks of mining. Investors should weigh the company's strong financial runway and diversified project portfolio against the inherent volatility of commodity prices and exploration success.