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To the Shareholders:

          The Annual Meeting of the Shareholders of Solitario Resources Corporation (the "Company") will be held at 4251 Kipling Street, Suite 390, Wheat Ridge, CO 80033, on Thursday, June 14, 2007 at 10:00 a.m., Mountain Daylight Time (the "Annual Meeting"), for the following purposes:

          The Board of Directors has fixed the close of business on April 25, 2007 as the record date for the determination of shareholders entitled to notice of, and to vote at, the Annual Meeting. The approximate date of the mailing of this Proxy Statement and the enclosed form of proxy is May 2, 2007. A complete list of stockholders will be available for examination at the Annual Meeting and at our offices at 4251 Kipling Street, Suite 390, Wheat Ridge, CO 80033, for a period of ten days prior to the Annual Meeting.

          Your attention is directed to the accompanying Proxy Statement. To constitute a quorum for the conduct of business at the Annual Meeting, it is necessary that holders of a majority of all outstanding shares entitled to vote at the meeting be present in person or be represented by proxy. To assure representation at the Annual Meeting, you are urged to date and sign the enclosed proxy and return it promptly in the enclosed envelope.

                                                                                                                           By Order of the Board of Directors

                                                                                                                           James R. Maronick
                                                                                                                           Secretary

April 27, 2007
Wheat Ridge, Colorado

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          This Proxy Statement (the "2007 Proxy Statement") is furnished in connection with the solicitation by the Board of Directors of Solitario Resources Corporation, a Colorado corporation ("Solitario" or the "Company"), of proxies in the accompanying form for use at the Annual Meeting of Shareholders to be held on Thursday, June 14, 2007, and any adjournment or postponement of such meeting (the "Annual Meeting"). The Annual Meeting will be held at 10:00 a.m., Mountain Daylight Time, at 4251 Kipling Street, Suite 390, Wheat Ridge, CO 80033.

          Proxies are solicited so that each shareholder may have an opportunity to vote. These proxies will enable shareholders to vote on all matters that are scheduled to come before the meeting. When proxies are returned properly executed, the shares represented thereby will be voted in accordance with the shareholders' directions. Shareholders are urged to specify their choices by marking the appropriate boxes on the enclosed proxy card; if no choice has been specified, the shares will be voted as recommended by the Board of Directors of Solitario (the "Board"). Means have been provided whereby a shareholder may withhold his vote for any Director. The proxy cards also confer discretionary authority to vote the shares authorized to be voted thereby on any matter that was not known on the date of the Proxy Statement but may properly be presented for action at the meeting.

          You are asked to sign, date, and return the accompanying proxy card regardless of whether or not you plan to attend the meeting. Any shareholder returning a proxy has the power to revoke it at any time before shares represented by the proxy are voted at the meeting. Any shares represented by an unrevoked proxy will be voted unless the shareholder attends the meeting and votes in person. A shareholder's right to revoke his or her proxy is not limited by or subject to compliance with a specified formal procedure, but written notice should be given to the Corporate Secretary of Solitario at or before the meeting.

          The expense of printing and mailing proxy material will be borne by Solitario. In addition to the solicitation of proxies by mail, solicitation may be made by certain Directors, officers, and other employees of Solitario in person or by telephone or other means of electronic communication. No additional compensation will be paid for such solicitation.

          Arrangements will also be made with brokerage firms and other custodians, nominees, and fiduciaries to forward proxy solicitation material to certain beneficial owners of Solitario's Common Stock and Solitario will reimburse such brokerage firms, custodians, nominees, fiduciaries for reasonable out-of-pocket expenses incurred by them in connection therewith.

          The holders of Solitario's $.01 par value Common Shares (the "Common Stock") at the close of business on April 25, 2007, the record date, are entitled to vote at the Annual Meeting. On April 25, 2007 there were 29,606,992 shares of Common Stock outstanding. Each share of Common Stock entitles its holder to one vote. The presence in person or by proxy of holders of record of a majority of the outstanding shares of Common Stock is required to constitute a quorum for the transaction of business at the meeting. If a quorum is present at the meeting the six nominees for election as Directors who receive the greatest number of votes cast for election of directors at the meeting by the shares present in person or represented by proxy at the meeting and entitled to vote shall be elected Directors. Shares held by persons who abstain from voting on the election of Directors and broker non-votes will not be counted in the election. Shares held by persons abstaining will be counted in determining whether a quorum is present for the purpose of voting on the proposal but broker non-votes will not be counted for this purpose.

          The Board currently consists of six Directors. The Directors elected at the Annual Meeting will serve until the next Annual Meeting of Shareholders and until their successors are elected and qualified. Unless the vote is withheld by the shareholder, the proxies solicited by the Board will be voted for the re-election of all the current Directors. The six nominees who receive the most votes will be elected. If a shareholder does not vote for a nominee or indicates to "withhold" authority to vote for a nominee on the proxy card, that shareholder's vote will not count either for or against the nominee. Solitario's current nominees for election as Directors are:

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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF THE NOMINEES LISTED ABOVE.

          It is intended that votes will be cast pursuant to the enclosed proxy for the election of Directors from the foregoing nominees. If any nominee shall not be a candidate for election as a Director at the meeting, it is intended that votes will be cast pursuant to the enclosed proxy for such substitute nominees as may be nominated by the existing Directors. No circumstances are presently known which would render any nominee named herein unavailable.

          During the fiscal year ended December 31, 2006, there were three meetings of the Board. Each of the incumbent Directors attended all of the meetings of the Board held while they served as a Director. Each of the incumbent Directors attended all meetings held by committees of the Board on which they served except Mr. Labadie missed one of the five audit committee meetings held during 2006. All of the references to meetings exclude actions taken by written consent. Board members are not required to attend annual meetings of shareholders. Mr. Herald attended the annual meeting of shareholders held on June 27, 2006.

          The primary purposes of the Nominating Committee are to (a) identify individuals qualified to become Board members, and select or recommend director nominees; (b) develop and recommend to the Board corporate governance principles applicable to the Corporation; (c) lead the Board in its annual review of the Board's performance; and (d) recommend to the Board director nominees for each committee.

          Pursuant to Article II Section 11 of our Bylaws, candidates for election as directors at any meeting of shareholders may be made (a) by, or at the direction of, a majority of the Board of Directors or (b) by any shareholder entitled to vote at such a meeting. The board makes no distinction in evaluating candidates who come to their attention directly or who are nominated by any shareholder. The Nominating Committee does not have specific minimum qualifications that a candidate must possess for consideration. In order to qualify for consideration at a shareholder meeting, shareholder nominations must be in writing addressed to the Secretary of Solitario Resources Corporation not less than 60 days nor more than 90 days prior to the date of a scheduled shareholders' meeting; provided, however, that if less than 70 days notice or prior public disclosure of the scheduled date of such a meeting is given or made, notice of a shareholder nomination must be delivered or received not later than the close of business on the 10^th day following the earlier of the day on which such notice of the date of the scheduled meeting was mailed or the day on which such public disclosure was made.

          Such shareholder's notice shall set forth (a) as to each person whom the shareholder proposes to nominate for election or re-election as a director and as to the shareholder giving the notice (i) the name, age, business address and residence address of such person, (ii) the principal occupation or employment of such person, (iii) the class and number of shares of stock of the Company which are beneficially owned by such person of the date of such shareholder notice and (iv) any other information relating to such person that is required to be disclosed in solicitations of proxies with respect to nominees for election as directors, pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, and (b) as to the shareholder giving the notice (i) the name and address, as they appear on the Company's books, of such shareholder and any other shareholders known by such shareholder to be supporting such nominees and (ii) the class and number of shares of stock of the Company which are beneficially owned by such shareholder on the date of such shareholder notice and by any other shareholders known by such shareholder to be supporting such nominees on the date of such shareholder notice.

          The Board of Directors may reject any shareholder nomination not timely made in accordance with the requirements of Article II Section 11 of Solitario's Bylaws. Furthermore, if the Board of Directors determines that the information provided in a shareholder's notice does not satisfy the informational requirements of Article II Section 11 of the Bylaws in any material respect, the Secretary will promptly notify such shareholder of the deficiency in the notice. The shareholder will then have an opportunity to cure the deficiency by providing additional information to the Secretary within such period of time, not to exceed 5 days from the date such deficiency notice is given to the shareholder, as the Board of Directors shall reasonably determine. If the deficiency is not cured within such time period, or if the Board of Directors reasonably determines that the additional information provided by the shareholder, together with information previously provided, does not satisfy the requirements of Article II Section 11 of the Company's Bylaws in any material respect, then the Board of Directors may reject such shareholder's nomination. The Secretary of the Company shall notify a shareholder in writing whether his or her nomination has been made in accordance with the time and information requirements of the Company's Bylaws. Notwithstanding the procedure set forth above, if the Board of Directors does not make a determination as to the validity of any shareholder

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nominations, the presiding officer of the meeting of the shareholders shall determine and declare at the meeting whether a nomination was made in accordance with the terms of the Company's Bylaws and shall accept or reject the nomination accordingly. Audit Committee

          The Audit Committee consists of Mr. Hainey, Mr. Harris and Mr. Labadie, each of whom is independent in accordance with the definition of the AMEX listing standards. The Board of Directors has determined that Mr. Hainey is an audit committee financial expert as defined by the SEC. Following the election of Directors at the Annual meeting, the Board expects to reappoint Mr. Harris, Mr. Hainey and Mr. Labadie to the Audit Committee to serve until the next annual meeting. The Audit Committee acts under a written charter adopted and approved by the Board of Directors on July 26, 2006, a current copy of which is available on the Company website at www.solitarioresources.com. The Audit Committee reviews Solitario's financial reporting process on behalf of the Board of Directors. Management has the primary responsibility for the financial statements and the reporting processes, including the system of internal controls. The audit committee met five times during the year ended December 31, 2006.

          In performing its duties the Audit Committee reviewed and discussed the audited financial statements contained in the 2006 Annual Report on Form 10-K with management and Solitario's independent registered public accountant, Ehrhardt Keefe Steiner & Hottman PC ("Ehrhardt"). The Audit Committee met with Ehrhardt, and discussed all issues deemed to be significant by Ehrhardt, including any matters required by Rule 2-07 of Regulation S-X, "Communication with Audit Committees" and Statement of Auditing Standard No. 61, as amended, ("Communications with Audit Committees") and without management present, discussed and reviewed the results of the independent auditor's examination of the financial statements. In addition, in accordance with Independence Standards Board Standard No. 1, "Independence Discussions with Audit Committees" as amended or supplemented, the Audit Committee discussed with Ehrhardt its independence from Solitario and its management, and has received the written disclosures and letter from Ehrhardt that stated it is independent of Solitario within the meaning of US securities laws.

          In reliance on the reviews and discussions outlined above, the Audit Committee recommended to the Board of Directors that Solitario include the audited financial statements in its Annual Report under Form 10-K, filed with the SEC, for the year ended December 31, 2006.

               AUDIT COMMITTEE
               John Hainey, Chairman
               Leonard Harris
               Brian Labadie

          The primary purposes of the Compensation Committee are to a) review from time to time and approve the overall management evaluation and compensation policies of Solitario; b) review and approve goals and objectives relevant to the compensation of the executive officers, including the chief executive officer, of Solitario and evaluate the performance of the Solitario's executive officers of Solitario; c) set the compensation of the executive officers of Solitario, in light of the Compensation Committee's review; d) review, approve and periodically evaluate Solitario's compensation and other benefit plans, including incentive compensation and equity-based plans and programs for non-employee directors, executive officers and senior management, and make recommendations as necessary; e) review and approve any amendments and modifications to any such plan or program requiring approval of the Board of Directors, subject to applicable regulatory and shareholder approval requirements; f) review and approve the granting of options, restricted stock, stock appreciation rights and other equity-based grants to Solitario's non-employee directors, executive officers and senior management consistent with the Corporation's incentive compensation plans and programs and compensation and retention strategy, subject to ratification by the Board of Directors; g) review and approve plans of the Company for management development and senior managerial succession; h) oversee compliance with the applicable compensation reporting requirements of the Securities and Exchange Commission and i) conduct an annual performance self-evaluation of the Committee and prepare an annual report thereon to the Board of Directors. The Compensation Committee has not engaged compensation consultants but has the authority to do so under the Compensation Committee charter.

          The scope and authority of the Compensation Committee, including the role of executive officers and compensation consultants in determining or recommending the amount and form of compensation and the ability of the Compensation Committee to delegate authority, are more fully described in the Compensation Discussion and Analysis section of this proxy as well as the Compensation Committee charter.

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Compensation Committee Interlocks and Insider Participation

          Mr. Labadie, Mr. Hainey and Mr. Harris are the members of the Compensation Committee and are independent in accordance with the definition of the AMEX listing standards. No member of the Compensation Committee is currently or has ever been an officer or employee of Solitario or had a relationship required to be disclosed with Solitario pursuant to Item 404 of the SEC's regulation S-K. As discussed in "Certain Relationships and Related Transactions," Mr. Labadie was

a member of the Board of Directors of Crown and Solitario from June 26, 2006 until August 31, 2006, when he resigned as a director of Crown upon completion of the Crown-Kinross merger. Mr. Labadie had no interest in any transactions between Crown and Solitario, other than his position as a director of both companies.

          The Compensation Committee has reviewed and discussed the section entitled "Compensation Discussion and Analysis" with management and based on such review and discussions has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement for filing with the SEC.

               COMPENSATION COMMITTEE
               Brian Labadie, Chairman
               Leonard Harris
               John Hainey

          Section 16(a) of the Securities Exchange Act of 1934 requires Solitario's Directors and executive officers, and persons who own more than ten percent of a registered class of Solitario's equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities of Solitario. Officers, Directors, greater than ten percent shareholders are required by SEC regulation to furnish Solitario with copies of all Section 16(a) forms they file. To Solitario's knowledge, based solely on review of the copies of such reports furnished to Solitario and written representations that no other reports were required, during the fiscal year ended December 31, 2005, the following failed to meet Section 16(a) filing requirements applicable to officers, Directors, and greater than ten percent beneficial owners: John Hainey filed two reports late, covering three transactions; Leonard Harris filed one report late covering one transaction; Mark Jones filed three reports late, covering eight transactions; Chris Herald filed one report late covering one transaction; Walter Hunt filed two reports late, covering two transactions; James Maronick filed two reports late covering two transactions.

          Solitario endeavors to keep all shareholders well informed as to financial performance of the Company, primarily by means of its annual and quarterly reports and by press releases. The Board of Directors and management of Solitario are receptive to shareholder feedback in any form. It is Solitario's policy to receive and respond promptly to shareholder inquiries while being guided by legal requirements as well as the Company's policies with respect to confidentiality and disclosure requirements. Shareholders wishing to send communications to the Board of Directors should write to either the Chairman of the Board of Directors or to the Secretary of the Company at the following address: Solitario Resources Corporation, 4251 Kipling St., Suite 390, Wheat Ridge, CO 80033. All such communication shall state the type and amount of the Company's securities held by the shareholder and shall clearly state the communication is intended to be shared with or directed only to the Board of Directors, or if applicable, with a specific committee of the Board of Directors. The Chairman of the Board of Directors or the Secretary of the Company, as applicable, will forward such communication to the members of the Board of Directors or specific committee of the Board of Directors.

Indemnification of Directors

          Our Articles of Incorporation authorize our Board of Directors to the fullest extent permitted by Colorado law as now or hereafter in effect, to indemnify any Director of Solitario. The Board of Directors shall be entitled to determine the terms of such indemnification, including advance of expenses, and to give effect thereto through the adoption of Bylaws, approval of agreements, or by any other manner approved by the Board of Directors. Any amendment to or repeal of the authorization of indemnification contained in our Articles of Incorporation shall not adversely affect any right of a Director of Solitario there under with respect to any right to indemnification that arises prior to such amendment.

          Solitario adopted the Solitario Resources Corporation Code of Business Conduct and Ethics including its Code of Ethics for the Chief Executive Officer and Senior Financial Officer (the "Code of Ethics") on June 27, 2006, a copy of which may be found on our website at www.solitarioresources.com and on SEDAR at www.sedar.com. Any person who wishes to receive a copy of the Code of Ethics may do so at no charge by written request to Investor Relations, Solitario Resources, 4251 Kipling St, Suite 390, Wheat Ridge, CO 80033.

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          The Solitario Resources Corporation 2006 Stock Option Incentive Plan (the "2006 Plan") was approved by shareholders and became effective June 27, 2006. Under the terms of the 2006 Plan, up to 2,800,000 shares (which represents 9.5% of the current number of issued and outstanding shares as of April 25, 2007) may be issued pursuant to options granted by the Board of Directors under the 2006 Plan to directors, officers, employees and consultants with an exercise price that is not less than the market price of Solitario's common stock. The 2006 Plan currently defines the market price as the volume weighted average trading price of such shares traded on The Toronto Stock Exchange for the five trading days immediately preceding the date on which the option is granted by the Board.           

          On March 4, 1994, our Board of Directors adopted the 1994 Stock Option Plan (the "1994 Plan") that authorized the issuance of up to 1,100,000 of our shares under the Plan. The shareholders approved subsequent amendments to the 1994 Plan to increase the authorized shares under the 1994 Plan to 3,736,000 shares. As of April 25, 2007, we have granted options for 110,000 shares that remain unexercised at Cdn$0.81 per share, which expire August 14, 2008. The 1994 Plan had a ten year life which expired in March 2004 and there are no shares available for grant under the 1994 Plan.

          The total number of Solitario shares of common stock available for issue from the exercise of all outstanding options from both the 1994 Plan and the 2006 Plan as of April 25, 2007 is 1,705,000 shares, which represents 5.8% of the 29,606,992 shares of Solitario common stock outstanding on that date.

          The 2006 Plan currently has a general amendment provision, allowing the Board of Directors to suspend, terminate or to make amendments to the 2006 Plan, subject to Toronto Stock Exchange (the "TSX") and regulatory approval. Subsequent to the adoption of the 2006 Plan, the TSX announced that by June 30, 2007, each listed issuer should formulate detailed amendment provisions (the "Amendment Provisions") in its security-based compensation arrangements. The Amendment Provisions must clearly distinguish between the type of amendments that require shareholder approval and those which can be made by the board of directors, without shareholder approval. Failing the inclusion of the Amendment Provisions, all future amendments (no matter how immaterial) would require shareholder approval. All amendments would continue to be subject to any required regulatory review or approval.

          In addition, the 2006 Plan currently (i) makes no allowance for the expiration of options during a blackout period, (ii) defines the market price as the volume weighted five day average trading price as quoted on the TSX for the five days prior to the date of grant, which is inconsistent with the financial reporting rules of the SEC, (iii) defines a consultant in a way which is inconsistent with the requirements of Form S-8 promulgated by the SEC; and (iv) is ambiguous regarding the ability of the Board of Directors to make certain adjustments in the event of a change in structure or capital of the Company.

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          In light of the above, shareholders are being asked to consider and, if thought advisable, to approve the Option Plan Resolution, the text of which is set out below, approving amendments to the 2006 Plan to (i) reflect the new regulatory requirements for the Amendment Provisions; (ii) provide for an automatic ten business day extension after the end of a blackout period if the term of such option would otherwise have expired during a Company-imposed blackout period, (iii) modify the definition of market price to be consistent with the financial reporting rules of the SEC; (iv) modify the definition of a consultant under the 2006 Plan to be consistent with the requirements of From S-8 promulgated by the SEC by specifically excluding persons from the definition of consultant who provide services in connection with the offer or sale of securities in a capital-raising transaction and persons who directly or indirectly promote or maintain a market for the Company's securities; and (v) clarify and require certain adjustments in the event of a change in structure or capital of the Company. These proposed amendments are subject to shareholder approval and approval of the TSX. Conditional approval of the TSX for these amendments was obtained on April 27, 2007.

          The text of the 2006 Plan in its entirety, prior to these proposed amendments, was attached to Solitario's 2006 Definitive Proxy Statement on Schedule 14A as Appendix A filed with the SEC on May 10, 2006. It may be viewed on the SEC's website at http://www.sec.gov.

          The new amendment procedures state the type of modifications to the 2006 Plan that may be made by the Board of Directors without shareholder approval and modifications that must specifically be approved by the holders of a majority of the Common Shares.

          Section 10 of the 2006 Plan is proposed to be replaced in its entirety by the following in order to accomplish this goal:

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In no event may the Board extend the term of any option beyond 10 years from the date of the granting of such option or extend the period during which options may be granted in accordance with Section 7(a) of the 2006 Plan.

          The nature of the Company's business may give rise to periods during which directors, officers, employees are precluded from trading in the securities of the Company in accordance with the Solitario's Insider Trading Policy. These periods are referred to herein as "blackout periods". In accordance with the TSX Staff Notice, the Board has determined that it would be preferable where an option would otherwise expire during a black-out period or within 10 business days thereafter, to allow the option to continue to be exercisable until the 10th business day after the expiry of the blackout period.

          Therefore, Section 8(e) of the 2006 Plan is proposed to be replaced in its entirety by the following to accomplish this goal:

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          The 2006 Plan is proposed to be amended by modifying the term "market price" in Section 8(b) to mean the closing market price in Canadian dollars on the TSX on the date of the granting of such option. Previously the market price was the market price in Canadian dollars on the TSX at the time of granting of such option measured as the volume weighted average trading price of the Common Shares, calculated by dividing the total value by the total volume of such shares traded on the TSX for the five trading days immediately preceding the effective date on which the option was granted. The purpose of this change is to conform with financial reporting rules of the SEC to eliminate the possibility of being required to report intrinsic value of options granted under the 2006 Plan in the event that the closing price of our stock as quoted on the TSX on the date of grant is lower than the five-day weighted average of the closing prices.

          Therefore, Section 8(b) of the 2006 Plan is proposed to be replaced in its entirety by the following to accomplish this goal:

          The current definition of "consultant" in the 2006 Plan is not consistent Form S-8 promulgated by the SEC, which does not allow a consultant to be a person who provides services that are in connection with the offer or sale of securities in a capital-raising transaction nor a person who directly or indirectly promotes or maintains a market for the Company's securities.

          Therefore, Section 1(e) of the definitions of the 2006 Plan is proposed to be replaced in its entirety by the following to accomplish this goal:

          In addition, the 2006 Plan is proposed to be amended to add clarifying language to Section 9 to make it clear that the 2006 Plan requires the Board to make certain adjustments in the event of a change in the structure or capital of the Company. The language in the 2006 Plan is currently ambiguous and could be interpreted to give the Board of Directors the authority to either make adjustments or not in their sole discretion.

          Therefore, Section 9 of the 2006 Plan is proposed to be replaced in its entirety by the following to accomplish this goal:

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          The title of the 2006 Plan, if the resolution is approved, is proposed to be changed from "The Solitario Resources Corporation 2006 Stock Option Incentive Plan" to "The Solitario Resources Corporation 2006 Stock Option Incentive Plan (as amended)." This will avoid confusion with the existing 2006 Plan.

          The full text of the 2006 Plan as amended (if approved) is set out in Appendix A hereto.

          The Board has determined the amendments to the 2006 Plan to be appropriate and in the best interests of the Corporation, as they will enable amendments to the 2006 Plan to be made on a timely and expeditious basis (other than those requiring shareholder approval) and are consistent with the TSX and SEC regulatory requirements.

The Option Plan Resolution requires the approval of a simple majority of the votes cast at the Meeting, in person or by proxy, in order to be adopted. The amendment must also receive the approval of the TSX in order to be effective.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR, WITH OR WITHOUT VARIATION, THE OPTION PLAN RESOLUTION SET FORTH BELOW UNDER THE CAPTION "TEXT OF THE OPTION PLAN RESOLUTION."

Be it Resolved That:

          (1)     The amendments to the Company's 2006 Plan, all as described under the heading "Approval of Amendments to the 2006 Option Plan" in the definitive Proxy Statement of the Company dated April 27, 2007, are hereby approved; and

          (2)     any proper officer of the Company is hereby authorized and directed to do and perform all things, including the execution of documents, which may be necessary or desirable to give effect to the foregoing resolution.

          Other than options granted pursuant to the 2006 Plan, our Directors have not been compensated during 2006 in their capacities as Directors.

          The following table summarized the compensation paid to non-employee directors for the fiscal year ended December 31, 2006:

(2)   On September 1, 2006 Solitario entered into a two-year consulting agreement with Mr. Jones. Under the agreement, Mr. Jones will advise the Company on matters of strategic direction, planning and identification of corporate opportunities. In consideration for his services, Mr. Jones has been paid a one-time lump sum payment of $160,000 in cash, plus he is entitled to receive, pre-approved, documented expenses incurred in performance of the consulting services. We have charged $27,000 for consulting expense related to the agreement, which is included in general and administrative expense for the year ended December 31, 2006.

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          Christopher E. Herald    See Directors biographies above

          Walter H. Hunt (56) has been Vice President - Operations and President - South American Operations of Solitario since June 1999. He also served as Vice President - Peru Operations from July 1994 until June 1999. Mr. Hunt has also been Vice President - Operations of Crown since 1994. Mr. Hunt has over 20 years of exploration, development and operational experience with Anaconda Minerals, Noranda and Echo Bay Mines where he served as Superintendent, Technical Services and Chief Geologist at Echo Bay's Kettle River Operations. Mr. Hunt received his M.S. degree in Geology from the Colorado School of Mines and a B.S. degree from Furman University.

          James R. Maronick (51) has served as Chief Financial Officer of Solitario and Chief Financial Officer of Crown since June 1999 and served as Vice President - Finance and Secretary/Treasurer and Vice President - Finance and Secretary/Treasurer of Crown since September 1997. Prior to that, Mr. Maronick served as Vice President - Finance and Secretary/Treasurer of Consolidated Nevada Gold Fields Corporation from November 1994 to September 1997. Mr. Maronick graduated with honors from the University of Notre Dame in 1977 with a BA in accounting and received his Masters degree in Finance with highest honors from the University of Denver in 1986.

          The following discussion provides information regarding the compensation program for Solitario's Named Executive Officers for 2006.

          This is accomplished in two ways; first, through the award of stock options in an amount and at a price that encourages our Named Executives to promote the long-term growth and performance of Solitario in terms of the value of the Company which is ultimately reflected in the price of our stock as quoted on the TSX and the AMEX. Second, this is also reflected in terms of cash compensation in the form of cash bonuses. These bonuses are entirely set by the Compensation Committee, in their sole discretion, in a range of zero to 100% of base salary. The extent to which bonuses are paid depends entirely on the extent to which the Solitario has met its exploration, budget and shareholder goals, set by the Committee. The Named Executives became employees of Solitario on September 1, 2006 and full-year goals were not set at that time. The full implementation of bonus payments is planned for 2007.

Solitario's compensation program for Named Executive Officers should enable the Company to compete for the best executive talent available.

          The Compensation Committee believes shareholders are best served when the Company can attract and retain the highest caliber executives appropriate for a firm of our size and complexity. This is done with competitive and fair compensation packages. Our Named Executive Officers have served Solitario (through the Management Services Agreement with Crown Resources) for many years, however they only became employees of Solitario on September 1, 2006 and the initial compensation was primarily based upon their existing compensation of Crown. The Compensation Committee also reviewed published compensation surveys and the published compensation packages of our peer companies (the "Peer Group Companies") for which Solitario competes for executive talent. These Peer Group Companies included the following companies:

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          The Compensation Committee provides base salary that is commensurate with that of our Peer Group Companies. The Compensation Committee fixed the Base Salary for 2006 (which commenced on September 1, 2006, when all of the Named Executive Officers became employees of Solitario) during its meeting in the summer of 2006. For the base salary to be paid in 2007 and future years, the base salary was fixed by the Compensation Committee at its meeting in the fall of 2006 and is effective as of January 1 of the following year. Increases or decreases in base salary are dependent on the Compensation Committee's evaluation of each individual Named Executive Officer performance, the effect of the above Peer group review, and the performance of the entire Company relative to the goals and objectives of the Company discussed above. No Named Executive Officers have minimum base salary payments pursuant to any employment or other agreements. The Compensation Committee has authority from the Board of Directors to set the base salary at any amount it believes is appropriate.

          The Compensation Committee provided bonuses of 10% of annualized base salary for 2006, which were paid in January of 2007, based upon an analysis of the success of the Company during the year then ended. In the future, the Compensation Committee intends to provide bonuses, in their sole discretion, based upon their evaluation of the individual Named Executive Officer in light of the following parameters:

          In establishing its goals for any particular year, the Compensation Committee strives to ensure that the goals provide both an incentive and an attainable goal that provides shareholders with the opportunity for return on their investment while minimizing corporate and shareholder risk to the extent possible. These specific goals are confidential, but generally include the negotiation and signing of joint ventures on our existing properties, specified exploration success, both on our own and through joint ventures, acquisition of additional exploration properties, training and retaining employees, financial reporting and disclosure, and shareholder return.

          The only equity compensation our Named Executive Officers receive is in the form of stock options pursuant to the 2006 Plan, priced at the current market value of our publicly traded stock (as defined) in the 2006 Plan. The Compensation Committee believes that a substantial portion of our Named Executive Officers compensation should be performance based. The Compensation Committee also believes that our compensation policies should be fair to our shareholders, and be focused on our long-term viability. The Compensation Committee believes the granting of stock options from the 2006 Plan aligns the interests of the Named Executive Officers and our shareholders and provides the incentive to manage the Company from the perspective of an owner of the Company. In addition, the Compensation Committee believes the vesting terms of the stock options granted from the 2006 Plan, discussed below, provides a that a significant portion of the compensation will be received at a future date.

          The amount of all individual grants and the grant date of the Options are determined each year at the summer meeting of the Compensation Committee, usually after the completion of the annual meeting of shareholders. All grants are as of the date of the approval by the Compensation Committee (or the full Board, if requested by the Compensation Committee) at the market value (as defined) on the date of grant. All grants from the 2006 Plan vest 25% on the date of grant and the remaining options vest at 25% per year on the anniversary of the grant over a three-year period

          The Compensation Committee has complete discretion in allocating total compensation between the key elements of compensation discussed above. The Compensation Committee has not developed a set formula (such as fair value of equity compensation to equal 50% of base salary) to allocate the elements of compensation to each individual Named Executive Officer.

          None of our Named Executive Officers have ongoing employment agreements other than individual Change in Control Severance Benefits Agreements, discussed below.

          The Compensation Committee and Solitario consider it essential to the best interest of its stockholders to foster the continuous employment of key management personnel. In this regard, the Compensation Committee and Board of Directors recognize that, as is the case with many publicly held corporations and their subsidiaries, the possibility of a change in control may exist and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its stockholders.

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          Accordingly, on March 14, 2007, the Compensation Committee approved separate Change in Control Severance Benefits Agreements (the "CIC") for Mr. Herald, Mr. Maronick and Mr. Hunt, our Named Executive Officers. Each CIC provides for the payment of severance benefits at any time for a period of three years upon the change in control of Solitario (as defined in the CIC) equal to 2.5 times the base salary of the Named Executive Officer. In addition any unvested stock options held by the Named Executive Officer will vest upon the change in control. The CIC provides an additional gross up for any taxes due as a result of Excise Tax, as defined by Section 4999 of the Internal Revenue Service Code of 1986 (the "Code").

          Generally, the CIC defines a "change in control" as (i) a person acquiring more than 50% of the outstanding stock of the Company, (ii) the shareholders of the Company approving a merger or acquisition whereby more than 50% of the outstanding shares held prior to the vote will be held by a new person or corporation, (iii) the shareholders of the Company approving the sale or disposition of substantially all of the company's assets or (iv) the shareholders of the Company approving a plan of liquidation or dissolution of the Company.

          The change in control benefits are to be paid after a change in control if the Named Executive Officer terminates his employment for "good reason," or is terminated by the Corporation, other than for "cause," or upon the death of the Named Executive Officer. "Good reason" is generally defined as a reduction in the compensation, level of responsibility or forced relocation, among other things. "Cause" is generally defined in the CIC as the conviction of a felony, gross and willful failure to perform assigned duties, and dishonest conduct that is intentional and materially injurious to the Company.

          Under Section 162(m) of the Code, the Company generally receives a tax deduction for compensation on payments which total less than $1,000,000 paid to our Named Executive Officers, unless that compensation is performance based. We do not believe the total non-performance based compensation for any of our Named Executive Officers will exceed $1,000,000 during 2007 or the foreseeable future.

          Solitario has not established formal stock ownership guidelines for our Named Executive Officers. The Company's Insider Trading Policy prohibits the Named Executive Officers, as well as other insiders, who may have access to material inside information, from purchasing, selling, entering into short sale transactions, engaging in hedging or offsetting transactions regarding Solitario's common stock during periods where such persons have access to material inside information.

Role of the Chief Executive Officer in Compensation Decisions

          The Chief Executive Officer annually reviews the performance of all other Named Executive Officers. The performance of the Chief Executive Officer is reviewed by the Chairman of the Compensation Committee. The conclusions and recommendations, which include salary, bonus and equity grants, if any, are presented to the Compensation Committee, which has absolute discretion in modifying or applying any of the recommendations for the Named Executive Officers. The Compensation Committee presents its conclusions and recommendation the Board of Directors for their input and review.

(1)     Mr. Herald and Mr. Maronick became employees of Solitario for the first time on September 1, 2006. Prior to that Solitario's United States-based Named Executive Officers were employees of Crown. Solitario was provided management services from Crown pursuant to the Management Services Agreement, discussed below under "Certain Relationships and Related Transactions." Mr. Hunt was based in Lima, Peru and was paid by Solitario beginning on January 1, 2006 and throughout the entire year ended December 31, 2006.

(2)     Mr. Herald, Mr. Maronick and Mr. Hunt were granted 325,000, 200,000 and 200,000 options, respectively on June 27, 2006. The options were granted at the same time and with the same terms as the options described above under "Compensation of Directors."

(3)     Mr. Herald received a 401(K) match of $7,479 during 2006.

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(1) These options were granted to Mr. Herald, Mr. Maronick and Mr. Hunt pursuant to our 2006 Option Plan and had fair values on the date of grant of $498,000, $245,000 and $245,000, respectively. The options were granted with the same terms and conditions as all other options granted on that date and the fair value was determined as described above under "Compensation of Directors."

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          As noted under "Compensation Discussion and Analysis" in this Proxy, the Company entered into certain change in control agreements on March 14, 2007 with the following Named Executive Officers: Christopher E. Herald, James R. Maronick and Walter H. Hunt. The terms of the change in control agreements are more fully described under "Change In Control Agreements in the "Compensation Discussion and Analysis" section of this Proxy. Described below are the potential payments to each Named Executive Officer in the event of a change in control as defined in the CIC.

          To our knowledge, as of April 25, 2007, no person beneficially owns, directly or indirectly, or exercises control or direction over, more than five percent of our issued and outstanding common stock with the exception of Newmont Mining Corporation of Canada Limited ("Newmont") and Sprott Securities, Inc., which directly own 2,700,000 and 4,486,800 shares respectively, representing 9.1 percent and 15.2 percent, respectively, of our issued and outstanding common stock.

          The following table sets forth, as of April 25, 2006, the beneficial ownership of our outstanding common stock by each of our shareholders owning more than five percent, our Directors, nominees for Director, each Named Executive Officer and all of our executive officers and Directors as a group. Unless otherwise indicated, the persons listed in the table below have sole voting and investment powers with respect to the shares indicated.

*     Indicates holdings of less than 1%.

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          Crown provided management and technical services to Solitario under a management and technical services agreement originally signed in April 1994 and modified in April 1999, December 2000 and July 2002. The agreement was terminated on August 31, 2006 upon the completion of the Crown - Kinross merger. Under the modified agreement we were billed by Crown for services at 25% of Crown's corporate administrative costs for executive and technical salaries, benefits and expenses, 50% of Crown's corporate administrative costs for financial management and reporting salaries, benefits, expenses and 75% of Crown's corporate administrative costs for investor relations salaries, benefits and expenses. In addition, we reimbursed Crown for direct out-of-pocket expenses. These allocations were based upon the estimated time and expenses spent by Crown management and employees on both Crown activities and Solitario activities. Our management believed these allocations were reasonable and the allocations were periodically reviewed by our management and approved by independent Board members of both Crown and Solitario. Management service fees were billed monthly, due on receipt and are generally paid within thirty days. Management service fees incurred by Solitario were $232,000, $423,000 and $390,000 for the years ended December 31, 2006, 2005 and 2004, respectively.

          On July 26, 2004, Crown completed a spin-off of our shares to its shareholders, whereby each Crown shareholder received 0.2169 shares of our common stock for each Crown share they owned. As part of the spin-off, Crown retained 998,306 of our shares for the benefit of Crown's warrant holders who would receive those shares when the warrant holders

exercise their warrants. Subsequent to the spin-off, through August 31, 2006 when the Crown - Kinross merger was completed, Crown distributed 995,229 of these retained shares upon exercise of its warrants and at December 31, 2006 the remaining 3,077 shares of our stock became the property of Kinross which is not a related party to Solitario. As part of the spin-off we received 1,317,142 shares of our own common stock, which were retired on August 11, 2004, and have the status of authorized but unissued shares of common stock.

          Christopher E. Herald, and Mark E. Jones, III were directors of both Crown and Solitario until August 31, 2006 when they resigned as directors of Crown upon the completion of the Crown - Kinross merger. Stephen Webster and Brian Labadie were directors of both Crown and Solitario from June 27, 2006 to August 31, 2006, when they resigned as directors of Crown upon the completion of the Crown - Kinross merger. Christopher E. Herald, James R. Maronick and Walter H. Hunt were officers of both Crown and Solitario until August 31, 2006 when they resigned as officers of Crown upon the completion of the Crown - Kinross merger.

          On September 1, 2006, we entered into a consulting agreement with Mark E. Jones, III, a director and vice-chairman of our Board of Directors. The consulting agreement has a two-year term. Under the agreement, Mr. Jones will advise the Company on matters of strategic direction, planning, and identification of corporate opportunities, when and as requested by the Solitario. In consideration for the services to be performed, Mr. Jones has been paid a one time lump sum payment of $160,000, plus he is entitled to receive pre-approved, documented expenses incurred in performance of the consulting services. We have charged $27,000 for consulting expense, related to the agreement, included in general and administrative expense for the year ended December 31, 2006.

          On July 24, 2006, we exercised a warrant to purchase 500,000 shares of TNR Gold Corp. ("TNR") common stock by paying $70,000. We recorded the cash paid and the fair value of the warrant on the date of exercise of $12,000 as marketable equity securities. We received this warrant in July 2004 when we exchanged 500,000 shares of TNR Gold Corp ("TNR") common stock for 500,000 shares of TNR common stock that were not available to be publicly traded in Canada until November 28, 2004 and a warrant to purchase an additional 500,000 shares of TNR common stock for Cdn$0.16 per share for a period of two years. The 2004 transaction was accounted for as a sale of our previously owned TNR shares and an acquisition of the new TNR shares and warrants. The TNR shares are classified as marketable equity securities held for sale. As of December 31, 2006, we do not own warrants for the purchase of TNR shares. Previous to their exercise, the TNR warrants were recorded at fair market value based upon quoted prices and classified as derivative instruments. As of April 25, 2007 we own 1,000,000 shares of TNR with a fair value of $214,000 based upon the quoted market price of TNR. We recorded a loss on derivative instruments of $5,000, $20,000 and $38,000 for the decrease in the value of its warrants during the years ended December 31, 2006, 2005 and 2004, respectively. Christopher E. Herald, our CEO, is a member of the Board of Directors of TNR.

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          We entered into a Voting Agreement dated as of April 15, 2002 among Zoloto Investors, LP ("Zoloto") and Crown. Zoloto and Solitario were both shareholders of Crown (the "Signing Shareholders"). Pursuant to the Voting Agreement, Zoloto and Solitario agreed that each would vote its owned shares during the term of the Voting Agreement for the election of three designees of Zoloto and one designee of ours (the "Designee Directors") to the Board of Directors of Crown. The Signing Shareholders agreed that any shares received by either Signing Shareholder would be subject to the Voting Agreement during its term and any successor, assignee or transferee of shares from either Signing Shareholder would be subject to the terms of the Voting Agreement during its term. The Voting Agreement terminated on June 25, 2006.

         Prior to the completion of the Crown - Kinross merger, we entered into a stockholder and voting agreement with Kinross, along with several Crown directors, Crown executive officers and entities affiliated with these directors and officers (collectively the "Signatories"), pursuant to which the Signatories voted all of the shares of Crown common stock owned by them in favor of the approval of the Crown - Kinross merger. On August 31, 2006, the shareholders of Crown approved the Crown - Kinross merger and all of Crown's common shares were converted to Kinross shares and the stockholder and voting agreement terminated.

          The Company may enter into transactions with certain "related persons." Related persons include the Company's executive officers, directors, 5% or more beneficial owners of the Company's common stock, immediate family members of these persons and entities in which one of these persons has a direct or indirect material interest. These transactions are referred to as "related party transactions." All of the above related party transactions were approved according to the following related party transaction policy requirements.

          The Related Party Transaction policy has been formally adopted by the Board of Directors.

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          The following table summarizes the aggregate fees billed to Solitario by Ehrhardt Keefe Steiner & Hottman PC for the fiscal years ended December 31, 2006 and 2005.

          On an annual basis the Audit Committee approves the proposed audit services and the fees related thereto by our independent auditors in advance of the year of service in accordance with the pre-approval policy adopted by the Audit Committee. The Audit Committee pre-approval policy requires that the Audit Committee determine that proposed services and related fees are required and reasonable under the circumstances. The Audit Committee considered whether the provision of non-audit services is compatible with maintaining the principal accountant's independence and has determined that the provision is compatible.

          Our shareholders are asked to ratify the selection of Ehrhardt Keefe Steiner & Hottman PC as our independent registered public accounting firm and to continue as such for fiscal year 2007. Representatives of Ehrhardt Keefe Steiner & Hottman PC are expected to be present at the Annual Meeting of Shareholders, to make a statement and to respond to appropriate questions.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE SELECTION OF EHRHARDT KEEFE STEINER & HOTTMAN PC AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.

          The reports of the Compensation Committee, Audit Committee and Nominating Committee and the information under the heading "Performance Graph" shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933 or the Exchange Act of 1934, except to the extent we specifically incorporate this information by reference, and shall not otherwise be deemed filed under the Securities Act or the Exchange Act.

          The information with respect to Item 10, "Directors, Executive Officers and Corporate Governance", part (b) "Executive Officers" in the Solitario Resources Corporation 2006 Annual Report on Form 10-K filed on February 28, 2007 (the "2006 10-K") required by Item 401 of Regulation S-K can be found under the following Section of this 2007 Proxy Statement:

          The information with respect to Item 11, "Executive Compensation" in the 2006 10-K required by Item 402 of Regulation S-K can be found under the following Sections of this 2007 Proxy Statement:

          The information with respect to Item 11, "Executive Compensation" in the 2006 10-K required by Item 407(e)(4) and Item 407(e)(5) of Regulation S-K can be found under the following Section of this 2007 Proxy Statement:

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1.   "Election of Directors"

           The information with respect to Item 12, "Security Ownership of Certain Beneficial Owners and Related Stockholder Matters" in the 2006 10-K required by Item 201(d) of Regulation S-K can be found under the following Section of this 2007 Proxy Statement:

    2.   "Compensation Plans"

          The information with respect to Item 13, "Certain Relationships and Related Transactions, and Director Independence" in the 2006 10-K required by Item 407(a) of Regulation S-K can be found under the following Section of this 2007 Proxy Statement:

     1.   "Election of Directors"

          Shareholder proposals intended to be included in Solitario's Proxy Statement for the 2008 Annual Meeting of Shareholders must be received by Solitario prior to January 31, 2008 in order for the proposal to be considered for inclusion in the proxy statement and form of proxy relating to the 2008 annual meeting. If the date of next year's annual meeting is changed by more than 30 days from June 14, 2008, the deadline will be a reasonable time before we print and mail our proxy materials. However, we are not required to include in our proxy statement and form of proxy for the 2008 annual meeting any stockholder proposal that does not meet all of the requirements for inclusion established by the SEC in effect at the time the proposal is received. In order for any stockholder proposal that is not included in such proxy statement and form of proxy to be brought before the 2008 annual meeting, such proposal must be received by the Secretary of Solitario at our principal executive offices at 4251 Kipling Street, Suite 390, Wheat Ridge, CO 80033 not less than 60 days nor more than 90 days before the annual meeting; however, if less than 70 days' notice or public disclosure of the date of the 2008 meeting is given, the written notice must be delivered to the Corporate Secretary no later than the close of business on the 10^th day after notice of the meeting was mailed or notice was publicly disclosed, whichever is earlier. The notice must contain certain information as to the proposal and the shareholder, including the share ownership of the shareholder and any financial interest in the proposal. If a timely proposal is received, the Board may exercise any discretion authority granted by the proxies to be solicited on behalf of the Board in connection with the 2008 annual meeting.

          Under Solitario's Bylaws, shareholders seeking to propose business to be conducted at the 2008 Annual Meeting must give written notice to the Corporate Secretary of Solitario not less than 60 days nor more than 90 days before the annual meeting; however, if less than 70 days' notice or public disclosure of the date of the 2008 meeting is given, the written notice must be delivered to the Corporate Secretary no later than the close of business on the 10^th day after notice of the meeting was mailed or notice was publicly disclosed, whichever is earlier. The notice must contain certain information as to the proposal and the shareholder, including the share ownership of the shareholder and any financial interest in the proposal. Any proposal not made in compliance with the Bylaws may be rejected by the Board.

          No shareholder proposals for the 2007 Annual Meeting had been received by Solitario prior to the date of this Proxy Statement.

          Solitario knows of no other business to be presented at the meeting. If any other business properly comes before the meeting, it is intended that the shares represented by proxies will be voted with respect thereto in accordance with the best judgment of the person named in the accompanying form of proxy.

By Order of the Board of Directors         
James R. Maronick                     
Secretary                             

April 27, 2007
Wheat Ridge, Colorado

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Appendix A
SOLITARIO RESOURCES CORPORATION
2006 Stock Option Incentive Plan
(As Amended)

Solitario Resources Corporation (the "Company") established the Solitario Resources Corporation 2006 Stock Option Incentive Plan (the "2006 Plan") for the benefit of the respective directors, officers and full-time employees and consultants of the Company and its subsidiaries. This Solitario Resources Corporation 2006 Stock Option Incentive Plan (As Amended) (the "Amended 2006 Plan") is intended to comply with new rules promulgated by the TSX with respect to amendment procedures in security based compensation arrangements.

As used herein, the following terms shall have the following meanings:

The purpose of the Amended 2006 Plan is to provide the Company and its subsidiaries with a share-related mechanism designed to develop and increase the interest in the growth and development of the Company and its subsidiaries of those of the respective directors, officers, full-time employees and Consultants of the Company and its subsidiaries as may from time to time be granted options under the Amended 2006 Plan by providing to them the opportunity to acquire a proprietary interest in the Company through the purchase of Common Shares.

The Amended 2006 Plan is subject to and is conditional upon: (a) the approval of the Amended 2006 Plan by The TSX and any other stock exchange on which the Common Shares of the Company may be posted and listed for trading; and (b) the approval of the Amended 2006 Plan by the shareholders of the Company given by the affirmative vote of a majority of the votes cast at a meeting of shareholders.

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4.          Administration

The Amended 2006 Plan will be administered by the board of directors of the Company (the "Board"). Subject to the provisions of the Amended 2006 Plan, the Board is authorized in its sole discretion to make such determinations under, and such interpretations of, and to take such steps and actions in connection with the proper administration of the Amended 2006 Plan and to impose, amend or revoke such rules and regulations concerning the granting of options pursuant to the Amended 2006 Plan as it, in its sole discretion, may deem necessary or advisable. No member of the Board will be liable for any action or determination taken or made in good faith with respect to the Amended 2006 Plan or any options granted thereunder and each such member shall be entitled to indemnification by the Company with respect to any such action or determination in the manner provided for by the Board. Any determination approved by a majority of the members of the Board will be deemed to be a determination of that matter by the Board. Members of the Board may be granted options under the Amended 2006 Plan.

With respect to options granted to Reporting Persons and Named Executives, the Amended 2006 Plan may (but need not) be administered so as to permit such options to qualify for the exemption set forth in Rule 16b-3 promulgated under the Exchange Act ("Rule 16b-3") and to qualify as performance-based compensation under Section 162(m) of the Code.

The Board may appoint (but is not required to) appoint a committee of the Board to administer the Amended 2006 Plan. If a committee of the Board has been appointed to administer the Amended 2006 Plan, such committee shall continue to serve in its designated capacity until otherwise directed by the Board. From time to time the Board may increase the size of any committee and appoint additional members thereof, remove members (with or without cause) and appoint new members in substitution therefore, fill vacancies (however caused) and remove all members of a committee and thereafter directly administer the Amended 2006 Plan, all to the extent permitted by law and permitted or required by Rule 16b-3 and Section 162(m) of the Code.

Options shall not be granted under the Amended 2006 Plan with respect to any class of shares in the capital of the Company other than Common Shares. The aggregate number of Common Shares issuable pursuant to options under the Amended 2006 Plan shall not exceed 2,800,000 Common Shares or such greater number as may be approved from time to time by the shareholders of the Company. All options granted under the Amended 2006 Plan will conform to all applicable provisions prescribed by the Amended 2006 Plan and to such specific terms and conditions as may be determined by the Board at the time of making each such grant. The granting of any option must, in order to become effective and binding on the Company, be authorized or approved by the Board. Common Shares in respect of which an option is granted under the Amended 2006 Plan, but not exercised prior to the termination of such option, whether through lapse of time or otherwise, shall be available for options thereafter granted by the Board under the Amended 2006 Plan. All Common Shares issued pursuant to the due exercise of options granted under the Amended 2006 Plan will be so issued as fully paid and non-assessable shares.

The persons who will be eligible to be granted options pursuant to the Amended 2006 Plan ("Eligible Participants") will be such directors, officers and full-time employees and Consultants (however any options granted to Consultants may not be an Incentive Stock Option) of the Company or its subsidiaries as the Board shall from time to time determine in its sole discretion. In determining the options to be granted to Eligible Participants under the Amended 2006 Plan, the Board will give due consideration to the value of each such person's present potential contribution to the Company's (or any subsidiary of the Company's) success and to the recommendation if any in that regard of the compensation committee, if any, of the Board.

Subject to the provisions herein set forth and after reviewing any recommendations from time to time made by the compensation committee, if any, of the Board, the Board shall, in its sole discretion, select the Eligible Participants to whom options under the Amended 2006 Plan may be granted (herein sometimes referred to as the "Optionees"), the number of Common Shares to be optioned to each of them, the date or dates on which such options should be granted and the terms and conditions within the limits prescribed in Section 8 hereof attaching to each such option. The Board shall only grant options within the following limits:

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The granting of an option under the Amended 2006 Plan to an Eligible Participant shall neither entitle nor preclude such Eligible Participant from being subsequently granted one or more additional options to purchase Common Shares under the Amended 2006 Plan.

The terms and conditions of each option granted under the Amended 2006 Plan shall be set forth in an option agreement (an "Option Agreement") to be entered into between the Company and each Optionee, such agreement to be in such form as may from time to time be approved by the Board. The Option Agreement shall include the following terms and conditions as well as such other terms and conditions not inconsistent with the Amended 2006 Plan as may be deemed advisable by the Board:

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Subject to any required action by the shareholders of the Company, the number of Common Shares covered by each outstanding option, and the number of Common Shares which have been authorized for issuance under the Amended 2006 Plan but as to which no options have yet been granted or which have been returned to the Amended 2006 Plan, the exercise or purchase price of each such outstanding option, as well as any other terms that the Board determines require adjustment shall be proportionately adjusted for (i) any increase or decrease in the number of issued Common Shares resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Shares, or (ii) any other increase or decrease in the number of issued Common Shares effected without receipt of consideration by the Company; provided, however that conversion of any convertible securities of the Company shall not be deemed to have been effected without receipt of consideration. The Board shall make the appropriate adjustments to (i) the maximum number Common Shares issuable under the Amended 2006 Plan; and (ii) the number of securities and the exercise price per Common Share in effect under each outstanding option in order to prevent the dilution or enlargement of benefits thereunder; provided, however, that the number of Common Shares subject to any option shall always be a whole number and the Board shall make such adjustments as are necessary to ensure any adjustments do not result in the issuance of any fractional Common Shares upon exercise of any option. Such adjustment shall be made by the Board and its determination shall be final, binding and conclusive. Any such adjustments shall be subject to the approval thereof by such stock exchanges on which the Common Shares are then listed for trading.

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Nothing contained in the Amended 2006 Plan nor in any option granted thereunder shall be deemed to give any Optionee any interest or title in or to any shares of the Company or any rights as a shareholder of the Company or any other legal or equitable right against the Company whatsoever other than as set forth in the Amended 2006 Plan and pursuant to the exercise of any option.

The Amended 2006 Plan does not give any optionee or any employee of the Company or any of its subsidiaries the right or obligation to or to continue to serve as a director, officer or full-time employee, as the case may be, of the Company or any of its subsidiaries. The awarding of options to any Eligible Participant is a matter to be determined solely in the discretion of the Board. The Amended 2006 Plan shall not in any way fetter, limit, obligate, restrict or constrain the Board with regard to the allotment or issue of any shares or any other securities in the capital of the Company or any of its subsidiaries other than as specifically provided for in the Amended 2006 Plan.

No fractional Common Shares shall be issued upon the exercise of options granted under the Amended 2006 Plan and, accordingly, if an Optionee would otherwise become entitled to a fractional Common Share upon the exercise of an option, such Optionee shall only have the right to purchase the next lowest whole number of Common Shares and no payment or other adjustment shall be made with respect to the fractional interest so disregarded.

The Company and every Optionee shall be bound by the terms and conditions of the Amended 2006 Plan.

If any provision of the Amended 2006 Plan or any agreement entered into pursuant to the Amended 2006 Plan contravenes any law or any order, policy, by-law or regulation of any regulatory body or stock exchange having authority over the Company or the Amended 2006 Plan, then such provision shall be deemed to be amended to the extent required to bring such provision into compliance therewith.

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