On December 22, 2010, Solitario Exploration & Royalty Corp. ("Solitario") and DHI Minerals (U.S.) Ltd. ("DHI US"), a wholly owned US subsidiary of Ely Gold & Minerals Inc. ("Ely"), signed the Limited Liability Company Operating Agreement of Mt. Hamilton LLC (the "Agreement") for Mt. Hamilton LLC, a Colorado limited liability company (the "Company") which now holds the Mt. Hamilton project assets. As previously announced, Solitario contributed its initial investment to the Company by making a $300,000 advance royalty payment to the owners of the property subject to the Mt. Hamilton lease. Per the terms of the Agreement, DHI US has contributed all of its interests in the Mt. Hamilton project to the Company for a 90% initial interest in the Company and Solitario has a 10% initial interest in the Company by virtue of its initial $300,000 contribution. The Mt. Hamilton project is an advanced gold project where over 314 drill holes have defined the Centennial gold deposit. Under the Agreement, Solitario may earn up to an 80% interest in the project by completing various staged commitments.

As part of the Agreement, in addition to its $300,000 initial payment, made in November 2010, Solitario is committed to spend $1.0 million on exploration and feasibility work at Mt. Hamilton by August of 2011. After completing these initial commitments, Solitario may elect to terminate its interest in the Company at any time, in which case it would have no further earn-in obligations on the project.

To earn its full 80% interest in the Company pursuant to the Agreement and fulfill other commitments pursuant to the binding letter of intent entered into August 26, 2010, Solitario is further required to:

The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the Agreement, which is filed as Exhibit 99.2 hereto and incorporated into this report by reference.