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Solitario and Ely Announce Resource and Metallurgy Update for Their Mt. Hamilton Gold Project, Nevada

September 19, 2013

Denver, Colorado: Solitario Exploration & Royalty Corp. ("Solitario;" NYSE MKT: XPL; TSX: SLR) and Ely Gold & Minerals ("Ely Gold;" TSX.V: ELY) are pleased to announce an updated resource estimate and favorable metallurgical testing results on the Mt. Hamilton gold project in eastern Nevada, U.S.A. A new NI-43-101 compliant Mt. Hamilton resource estimate was completed incorporating both the Centennial and Seligman gold and silver deposits. The resources for these two deposits were previously reported separately; however, drilling completed in 2012 suggests that these two mineralized zones are a single deposit and could be potentially mined by a single pit. The recently completed metallurgical testing on the Seligman area oxide mineralization has shown similar column leach gold recoveries and moderately enhanced silver recoveries compared to the Centennial area mineralization. This 2013 resource estimate was prepared on behalf of Solitario by SRK Consulting (U.S.) Inc. ("SRK") and serves to update the previous resource estimate for the Mt. Hamilton Project stated in the most recent October 25, 2012 Technical Report.

The updated Mount Hamilton resource estimate was constrained by a potentially mineable optimized pit using a gold price of $1,500 per ounce of gold and $25.00 per ounce of silver. The in-pit Measured and Indicated Resource, at a cutoff grade of 0.006 ounces per ton gold, contains approximately 791,000 ounces of gold equivalent ("AuEq") using a 60:1 silver-to-gold ratio. An additional Inferred Resource totaling approximately 207,000 AuEq ounces is also estimated within the optimized pit. Previously reported Mineral Reserves for the Centennial deposit are fully contained within, and are not additional to the Mineral Resources stated in the table below.

Mineral Resource Statement, Mount Hamilton Gold-Silver Deposit,
White Pine County, Nevada, September 19, 2013
Resource Category Tons Millions Gold Grade Silver Grade AuEQ Contained Ounces
(thousands of oz.)
Oz/Ton g/Tonne Oz/Ton g/Tonne Oz/Ton Gold Silver AuEq
Measured 1.43 0.029 0.99 0.21 7.17 0.032 42.1 298.3 47.1
Indicated 30.45 0.021 0.72 0.19 6.62 0.024 645.6 5,889.60 743.8
Measured + Indicated 31.88 0.022 0.75 0.19 6.65 0.025 687.7 6,187.90 790.8
Inferred 10.33 0.017 0.58 0.16 5.62 0.020 178.8 1,685.90 206.9
  • Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that any part of the Mineral Resources estimated will be converted into Mineral Reserves estimate;
  • Resources stated as contained within a potentially economically minable open pit; pit optimization was based on assumed gold and silver prices of US$1,500/oz and US$25.00/oz, respectively, effective heap leach recoveries of 79.3% for gold , and 39.3% for silver, an average ore mining and a processing cost of US$6.04/t; and pit slopes of 50°;
  • Resources are reported using a 0.006 ounce per short ton gold cutoff grade;
  • Gold Equivalent (AuEq) was calculated using a Ag:Au ratio of 60:1; and
  • Numbers in the table have been rounded to reflect the accuracy of the estimate and may not sum due to rounding.

Gold and silver mineralization is hosted in moderate to strongly oxidized calc-silicate skarn and hornfels and altered granodiorite. The new Mt. Hamilton resource estimate was based --on 857 drill holes with an average hole depth of 396 ft for a total of 317,739 ft of drilling. The drill data were verified and validated by SRK in compliance with NI-43-101 requirements. This consolidated Mt. Hamilton resource estimate includes 60 new infill drill holes that converted earlier Inferred Seligman resources to the Indicated category, while also expanding the Seligman resource.

This resource estimate utilizes lower gold and silver price assumptions ($1,500 versus $1,600 for gold and $25.00 versus $40.00 for silver) than the previous Centennial resource estimate, and similar gold and silver price assumptions to those used for the 2012 Seligman estimate. It should be emphasized that more conservative specific gravity assumptions were incorporated into this latest resource model in comparison to previous models based on recently completed, more detailed density testing.

Solitario is currently working on a new mine plan that considers mining the Seligman deposit first as it would require less pre-stripping of waste than previously envisioned in mining only the Centennial deposit. This could advance initial ore delivery by as much as six months, reduce working capital costs, modestly increase initial capital costs and reduce life-of-mine operating costs compared to the 2012 Centennial Feasibility Study mining plan that did not include Seligman mineralization. 2013 field work includes drilling two geotechnical core holes to better design the conveyor adit and vertical ore pass that connects the Mt. Hamilton open pit operations to the heap leach facilities. Figures showing the new resource model for the combined Seligman - Centennial resource can be accessed at http://www.solitarioxr.com/art/Seligman-CentennialResourceModel.pdf. Additional project information is found at http://www.solitarioxr.com/hamilton.html.

Chris Herald, President and CEO of Solitario, stated, "With this increase in our resource base, the project is now at the million ounce threshold of contained gold-equivalent mineralization. An updated reserve estimate and an expanded mine plan will be initiated in the fourth quarter. The objective is to increase the production rate and mine life from the eight-year 8,500 tpd plan developed in the 2012 Feasibility Study to a 10,000 tpd production profile with a nine or ten-year mine life."

Trey Wasser, Ely Gold's President and CEO, stated, "All the building blocks necessary to permit, finance, design and construct the Mt. Hamilton gold project are falling into place on schedule. We are pleased with our solid progress on the permitting front and Mt Hamilton LLC remains fully financed through 2014."

Cautionary Note to U.S. Investors concerning estimates of Resources: This news release uses the terms "Measured, Indicated and Inferred Resources." The Company advises U.S. investors that while these terms are recognized and required by Canadian regulations, the SEC does not recognize the terms. U.S. investors are cautioned not to assume that any part or all of Measured or Indicated Mineral Resources will ever be converted into Reserves. Inferred Resources have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. U.S. investors are cautioned not to assume that any part or all of a measured, indicated or inferred resource exists, or is economically or legally minable.

Seligman Metallurgical Testing Results

Metallurgical testing of Seligman area oxide mineralization was recently completed with overall favorable results that were similar to metallurgical test work on the Centennial ores. In summary, the Seligman skarn and igneous oxide ores are amenable to cyanidation. Column leach test results averaged 80 percent for gold and 43.6 percent for silver, and are similar to the 2012 Centennial Feasibility Study recoveries of 79 percent for gold and 38 for percent silver. Additionally, projected recoveries were achieved in 120 days compared to 160 days in the Feasibility Study. The ¾-inch crush size for leaching recommended in the 2012 Mt. Hamilton Technical Report was also confirmed to be appropriate for the Seligman ore.

2012 Mt. Hamilton Feasibility Study

The Mt. Hamilton Feasibility Study on the Centennial Deposit updated in October, 2012 detailed the development of an open pit mining operation with heap leach processing. The economic base case in the Feasibility Study assumed a $1,323 life-of-mine gold price and a $25.34 silver price, generating approximately $226 million in cash flow (operating margin -- EBITDA) over the mine's anticipated eight-year mine life. The Feasibility Study estimated life-of-mine cash operating costs on a gold equivalent basis (at a 55:1 silver to gold ratio) to be approximately $575 per gold-equivalent ounce recovered (including the costs of a 2.4% NSR sold after completion of the Feasibility Study). Initial capital costs were estimated at $71.9 million, including a contingency of $6.3 million. Processing is straight forward with two-stage crushing to minus ¾-inch, no agglomeration and rapid gold leach rates, followed by conventional ADR (adsorption-desorption-recovery) metal extraction. Waste to ore stripping ratio was 2.4 to 1.

The Feasibility Study and the Seligman NI-43-101 Seligman resource estimate were prepared by SRK Consulting (U.S.), Inc., an independent and internationally recognized consulting firm. The Feasibility Study provides mineral resource and mineral reserve estimates, and a classification of resources and reserves in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum Standards on Mineral Resources and Mineral Reserves: Definitions and Guidelines, November 27, 2010 (CIM). It also meets the standards of the U.S. Securities and Exchange Commission Industry Guide 7 for estimating and reporting reserves. This release has been reviewed for accuracy by Mr. J. B. Pennington of SRK and for Solitario by Walter Hunt, Chief Operating Officer, both of whom are "qualified persons" as that term is defined in NI 43-101.

Terms of the Mt. Hamilton LLC Joint Venture

Solitario and Ely Gold formed Mt. Hamilton LLC ("MH-LLC"), a limited liability company which now holds 100% of the Mt. Hamilton project assets under an Operating Agreement ("MH-Agreement"). Solitario holds an 80% interest in MH-LLC, and DHI-US. Ely Gold's wholly owned US subsidiary, holds a 20% interest in MH-LLC. Further Solitario obligations include arranging project financing, and making future property and advanced royalty payments.

About Solitario

Solitario is a gold, silver, platinum-palladium, and base metal exploration and royalty company actively exploring in Brazil, Mexico, and Peru. Solitario has significant business relationships with Votorantim Metais on its high-grade Bongará zinc project in Peru, Hochschild Mining on its Pachuca Norte silver-gold project in Mexico and Anglo Platinum on its Pedra Branca platinum-palladium project in Brazil. Solitario is traded on the NYSE MKT ("XPL") and on the Toronto Stock Exchange ("SLR"). Additional information about Solitario is available online at www.solitarioxr.com.

About Ely Gold

Ely Gold is focused on the acquisition and development of gold resources in Nevada, including its recently acquired Green Springs property, 10 miles south of Mt. Hamilton. Ely Gold is traded on the TSX Venture Exchange ("ELY"). Additional information about Ely Gold is available online at www.elygoldandminerals.com

OR MORE INFORMATION AT SOLITARIO, CONTACT:

Debbie Mino-Austin
Director -- Investor Relations
(800) 229-6827
Christopher E. Herald
President & CEO
(303) 534-1030

FOR MORE INFORMATION AT ELY GOLD, CONTACT:

Steve Kenwood
Director
(604) 488-1104
Trey Wasser
President & CEO
(972) 803-3087

For further information, please contact Ely Gold & Minerals Inc. at 604-488-1104.

E-mail: [email protected]; Website: www.elygoldandminerals.com

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.