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Solitario Exploration & Royalty Corp
Symbol SLR
Shares Issued 34,194,958
Close 2012-01-03 C$ 1.41
Market Cap C$ 48,214,891
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Solitario drills 26.85 m of 13.45% Zn+Pb at Bongara

2012-01-04 09:22 ET - News Release

Mr. Chris Herald reports

SOLITARIO REPORTS OUTSTANDING SURFACE AND UNDERGROUND DRILLING

Solitario Exploration & Royalty Corp. has released outstanding drilling results on its high-grade Bongara zinc joint venture project in Peru. Included in these results are underground drill holes V-240 which intersected 26.85 metres grading 13.45 per cent zinc plus lead and V-244 which intersected 32.1 metres grading 11.4 per cent zinc plus lead, and surface drill holes V-234 which intersected 5.9 metres grading 24.1 per cent zinc plus lead and drill hole V-235 which intersected 7.2 metres grading 14.9 per cent zinc plus lead. Significant silver values were also encountered in these holes.

Exploration drilling

The 2011 program was managed and entirely financed by Solitario's joint venture partner, Votorantim Metais. The Bongara project hosts the high-grade Florida Canyon zinc deposit where zinc mineralization has been intersected over a four-square-kilometre area. The deposit is open to expansion in all directions. During the fourth quarter of 2011, Votorantim added two underground core rigs and another surface core rig, bringing the total rig count to four.

Solitario has received assay results from 18 surface holes and five underground drill holes, with assays from many additional holes pending. Fourteen of the 18 holes intersected strong mineralized intervals. Surface drilling reported in this release is focused on the Karen-Milagros zone located in the northern part of the Florida Canyon mineralized system. All underground drilling is being conducted in the San Jorge zone situated in the southwestern part of Florida Canyon. All underground drill holes reported in this release were fan drilled from underground drill station No. 4.

Chris Herald, president and chief executive officer of Solitario, commented: "The Bongara project has advanced to a new and exciting stage with the onset of detailed underground drilling, augmenting the continuation of surface exploration. Drilling results continue to come in strong, adding both new resources and increasing the confidence level of existing resources. Votorantim will be advancing the project through prefeasibility by the end of 2012, including additional surface and underground drilling."

The 12 best intercepts from the first 23 holes drilled in 2011 are shown in the attached table.

Drill hole         Intercept*       Zinc        Lead  Zinc plus lead     Silver
No.                       (m)         (%)         (%)             (%)      (g/t)

V-223 (S)                3.8        9.92        1.94           11.86      15.06
V-224 (S)                6.2        7.60        0.18            7.78       5.40
V-225 (S)                6.7        6.51        0.20            6.71       4.00
V-227 (S)                7.7        6.27        0.53            6.80       7.37
                         6.0       12.58        2.85           15.43      22.18
V-234 (S)                5.9       18.21        5.89           24.10      40.42
V-235 (S)                7.2       10.84        4.06           14.90      34.35
V-238 (S)                4.3        8.08        1.30            9.38      16.17
                         4.7        7.06        0.56            7.62       3.74
V-240 (U)              26.85       13.20        0.25           13.45      16.39
V-241 (U)               3.30       13.31        1.17           14.48      40.52
V-244 (U)              32.10        9.64        1.76           11.40      18.80

* True thickness has not been estimated for each individual intercept, 
  but in most cases represents at least 75 per cent of true thickness.
(S) refers to surface drill hole.
(U) refers to underground drill hole.

A complete listing of recent assay results are appended at the end of this news release and simplified drill hole maps can be accessed at the Solitario website. Additional project information can also be found at the Solitario website.

The drill hole information contained within this release is reported under a quality control program reviewed by Walt Hunt, chief operating officer for Solitario, who is a qualified person as defined by National Instrument 43-101. Samples are derived from 50-per-cent splits of HQ and NQ (2.5-inch and 1.9-inch) diameter core. Samples are then shipped via secured third party land and air transportation companies, and analyzed by ALS Chemex Inc. in North Vancouver, Canada, an ISO 9002-registered company.

Road construction and underground tunnelling

In addition to surface and underground core drilling, Votorantim has now completed 15 kilometres of road construction and is targeting an additional five kilometres of construction during the next several months. During 2011, Votorantim also completed 590 metres of underground tunnelling and development of eight underground drill stations to conduct detailed drilling of a portion of the San Jorge zone. Approximately 14,500 metres of drilling are planned from these drill stations over the next several months. To date, about 6,000 metres of underground drilling has been completed. Assay results for much of this drilling are pending.

Bongara agreement with Votorantim Metais

Votorantim Metais can earn up to a 70-per-cent interest in the project by committing to place the project into production based upon a positive feasibility study. After earning 70 per cent, Votorantim Metais has further agreed to finance Solitario's 30-per-cent participating interest for construction. Solitario will repay the loan facility through its cash flow distributions.

About Votorantim Metais

Votorantim Metais belongs to a privately held Brazilian business conglomerate that is a leader in every market segment in which it operates, including cement, pulp and paper, metals, chemicals, orange juice, and finance. The metals business division accounted for 29 per cent of revenues from production of zinc, nickel, steel and aluminum. Votorantim Metais is the world's fifth-largest primary zinc producer with three operating zinc smelters and two operating zinc mines. It owns the Cajamarquilla zinc smelter and is the majority shareholder of Milpo, both located in Peru. Votorantim Metais also has operations in the United States and China.

                                            
                  BONGARA 2011 SURFACE DRILLING RESULTS                                               
                                                                                    
Hole No.       From           To     Interval          Mineralization (assay results)
                 (m)          (m)          (m)

V-223        244.60       248.40         3.80       9.92% Zn, 1.94% Pb, 15.06 g/t Ag
V-224        139.10       145.30         6.20        7.60% Zn, 0.18% Pb, 5.40 g/t Ag
             242.50       248.70         6.20       4.64% Zn, 2.43% Pb, 13.83 g/t Ag
             294.90       297.90         3.00        6.84% Zn, 0.06% Pb, 1.70 g/t Ag
V-225        251.80       252.50         0.70        4.21% Zn, 1.08% Pb, 5.30 g/t Ag
             264.50       271.20         6.70        6.51% Zn, 0.20% Pb, 4.00 g/t Ag
             292.50       297.50         5.00        2.54% Zn, 3.10% Pb, 2.48 g/t Ag
V-226        Trace mineralization
V-227        286.00       293.70         7.70        6.27% Zn, 0.53% Pb, 7.37 g/t Ag
             296.70       297.40         0.70        5.72% Zn, 0.04% Pb, 1.00 g/t Ag
             301.70       307.70         6.00      12.58% Zn, 2.85% Pb, 22.18 g/t Ag
V-228        272.60       273.80         1.20       3.50% Zn, 0,76% Pb, 4.486 g/t Ag
V-229        290.00       291.60         1.60        0.83% Zn, 0.90% Pb, 3.38 g/t Ag
V-230        Hole aborted due to cave
V-231        Hole aborted due to cave
V-232        347.60       349.30         1.70        7.43% Zn, 0.09% Pb, 2.62 g/t Ag
             353.70       355.40         2.30        3.30% Zn, 0.28% Pb, 1.93 g/t Ag
V-233        357.40       359.40         2.00        1.95% Zn, 0.49% Pb, 3.23 g/t Ag
             353.70       392.10         0.70        6.71% Zn, 0.11% Pb, 1.40 g/t Ag
V-234        350.50       356.30         5.90      18.21% Zn, 5.89% Pb, 40.42 g/t Ag
             370.20       373.00         2.80       6.57% Zn, 1.58% Pb, 10.37 g/t Ag
V-235        337.20       339.90         2.70       10.91% Zn, 1.62% Pb, 9.56 g/t Ag
             361.20       364.90         3.70        3.23% Zn, 0.05% Pb, 1.08 g/t Ag
             369.50       376.70         7.20      10.84% Zn, 4.06% Pb, 34.35 g/t Ag
V-236        370.10       370.80         0.70        9.73% Zn, 0.70% Pb, 4.70 g/t Ag
             374.30       377.80         3.50        8.09% Zn, 0.07% Pb, 1.97 g/t Ag
V-237        382.60       385.30         2.70       10.55% Zn, 0.38% Pb, 5.16 g/t Ag
V-238         88.50       92.80          4.30       8.08% Zn, 1.30% Pb, 16.17 g/t Ag
             229.90       232.60         2.70        1.41% Zn, 1.07% Pb, 7.69 g/t Ag
             369.10       373.80         4.70        7.06% Zn, 0.56% Pb, 3.74 g/t Ag
V-239        356.50       357.50         1.00        1.82% Zn, 0.06% Pb, 0.33 g/t Ag
             365.50       366.50         1.00        5.28% Zn, 0.23% Pb, 0.95 g/t Ag
V-247        378.10       382.10         4.00        3.85% Zn, 0.32% Pb, 2.40 g/t Ag
                                                                                           
                BONGARA 2011 UNDERGROUND DRILLING RESULTS                                                   
                                                                                            
Hole No.              From          To      Interval          Mineralization (assay results)
                        (m)         (m)           (m)

V-240                60.00       86.85         26.85       13.20% Zn, 0.25% Pb, 16.39 g/t Ag 
(Drill station 4)                                                                           
V-241                58.60       61.90          3.30       13.31% Zn, 1.17% Pb, 40.52 g/t Ag 
(Drill station 4)    71.40       72.90          1.50      38.99% Zn, 0.01% Pb, 113.00 g/t Ag
                     76.60       76.90          0.30       12.05% Zn, 0.00% Pb, 30.20 g/t Ag 
V-242                55.20       55.70          0.50       25.30% Zn, 6.29% Pb, 57.50 g/t Ag 
(Drill station 4)                                                                           
V-243                Trace mineralization       
(Drill station 4)                                                                           
V-244                71.00       103.1         31.10        9.64% Zn, 1.76% Pb, 18.80 g/t Ag 
(Drill station 4)   105.30       107.1          1.80         2.28% Zn, 0.28% Pb, 4.84 g/t Ag  

We seek Safe Harbor.

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