14. CAPITAL STOCK
Authorized
As at December 31, 2017, the authorized share capital of the Company was an unlimited number of common and preferred shares without par value.
Common Shares
During the years ended December 31, 2017, 2016, and 2015, the Company:
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Completed a non-brokered private placement raising $7,000,000 by the issuance of 5,000,000 units at a price of $1.40 per Unit. Each Unit was comprised of one common share and one-half of one non-transferable common share purchase warrant. Each whole warrant entitles the holder to purchase an additional common share for $2.00 until April 12, 2019. |
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The Company incurred share issue costs totaling $438,018. Included in this amount was 246,604 Units ( 6% of the Units sold to investors introduced by finders) valued at $345,246 and $92,772 in cash. The units paid as finders fees included the same terms as the private placement Units. |
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The gross proceeds of the private placement were allocated using a residual value method with respect to the measurement of shares and warrants issued as private placement units. This resulted in $6,200,000 recorded as share capital and $800,000 being allocated to reserves. For the finders fees paid in Units, $305,789 was allocated to capital and $39,457 was allocated to reserves . |
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Issued 75,000 (2016 - 165,000 ; 2015 - nil) shares valued at $85,700 (2016 - $127,800 ; 2015 - $Nil) pursuant to the exercise of stock options. |
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Issued 68,873 shares valued at $79,190 pursuant to employment and consulting agreements, of which the full amount has been included in exploration expenditures. Included in commitment to issue shares is $23,825 for accruals in exploration expenditures for shares approved to be issued pursuant to an employment and consulting agreement for shares issued in January 2018. |
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Issued 245,000 (2016 - 140,000 ; 2015 – 163,000) shares valued at $279,300 (2016 - $166,600 ; 2015 – $233,950) pursuant to an incentive stock grant program to employees of the Company. The shares issued for 2016 and 2015 were applied against commitment to issue as they related to prior period accruals. |
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Issued nil (2016 - 250,000 ; 2015 – nil) shares valued at $Nil (2016 - $145,000 ; 2015 - $Nil) pursuant to a purchase agreement for the Maggie Creek and Afgan royalties (Note 10). |
Stock Options
The Company adopted a stock option plan (the “Plan”) pursuant to the policies of the TSX-V. The maximum number of shares that may be reserved for issuance under the plan is limited to 10% of the issued common shares of the Company at any time. The vesting terms are determined at the time of the grant, subject to the terms of the plan.
During the years ended December 31, 2017, 2016, and 2015, the change in stock options outstanding is as follows:
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Weighted Average | |||||
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Number | Exercise Price | ||||
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Balance as at December 31, 2014 |
5,493,200 | $ | 2.03 | |||
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Granted |
1,341,500 | 0.66 | ||||
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Expired |
(1,406,200 | ) | 2.12 | |||
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Balance as at December 31, 2015 |
5,428,500 | 1.67 | ||||
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Granted |
1,277,500 | 1.30 | ||||
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Exercised |
(165,000 | ) | 0.77 | |||
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Expired |
(1,729,500 | ) | 2.66 | |||
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Balance as at December 31, 2016 |
4,811,500 | 1.24 | ||||
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Granted |
1,472,500 | 1.20 | ||||
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Exercised |
(75,000 | ) | 1.14 | |||
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Expired |
(961,500 | ) | 1.97 | |||
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Balance as at December 31, 2017 |
5,247,500 | 1.10 | ||||
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Number of options exercisable as at December 31, 2017 |
5,235,000 | $ | 1.10 |
The following table summarizes information about the stock options which were outstanding and exercisable at December 31, 2017:
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Date Granted |
Number of Options | Exercisable | Exercise Price $ | Expiry Date | ||||||||
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April 25, 2014 |
1,290,500 | 1,290,500 | 1.20 | April 25, 2019 | ||||||||
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June 26, 2014 |
17,500 | 17,500 | 0.88 | June 26, 2019 | ||||||||
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December 22, 2014 |
60,000 | 60,000 | 0.87 | December 22, 2019 | ||||||||
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June 8, 2015 |
1,167,500 | 1,167,500 | 0.66 | June 8, 2020 | ||||||||
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October 18, 2016 |
1,239,500 | 1,239,500 | 1.30 | October 18, 2021 | ||||||||
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August 28, 2017* |
1,472,500 | 1,460,000 | 1.20 | August 28, 2022 | ||||||||
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Total |
5,247,500 | 5,235,000 |
* 25,000 Options granted for investor relations services vest 25% every 3 months from the date of grant.
The weighted average remaining useful life of stock options is 3.10 years (2016 – 2.92 years; 2015 – 3.56 years).
Restricted share units
In 2017, the Company introduced a long-term restricted share unit plan (“RSUs”). The RSU’s entitle employees, directors, or officers to common shares of the Company upon vesting based on vesting terms determined by the Company’s Board of Directors at the time of grant.
| Expiry Date | December 31, 2016 | Granted | Vested | Expired/Cancelled | December 31, 2017 | ||||||||||
| December 31, 2019 | - | 312,500 | - | - | 312,500 |
The total RSU share-based expense recognized in the consolidated statements of comprehensive loss was $27,575 for the year ended December 31, 2017. The RSU’s had a a fair value of $1.01 per unit on grant date.
Share-based Payments
During the year ended December 31, 2017, the Company recorded aggregate share-based payments of $1,415,639 (2016 - $970,796 ; 2015 - $542,513) as they relate to the fair value of stock options granted or vested during the period, fair value of incentive stock grants, the fair value of RSU’s vested during the period, and the accrual for the fair value of stock granted. Share-based payments for the years ended December 31, 2017, 2016, and 2015 are allocated to expense accounts as follow:
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General and | ||||||||
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Administrative | Exploration | |||||||
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Year ended December 31, 2017 |
Expenses | Expenditures | Total | ||||||
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Shares issued for services |
$ | 85,500 | $ | 272,990 | $ | 358,490 | |||
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Commitment to issue shares |
- | 23,825 | 23,825 | ||||||
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RSU's vested |
27,575 | - | 27,575 | ||||||
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Fair value of stock options granted |
562,979 | 442,770 | 1,005,749 | ||||||
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$ | 676,054 | $ | 739,585 | $ | 1,415,639 |
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General and | ||||||||
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Administrative | Exploration | |||||||
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Year ended December 31, 2016 |
Expenses | Expenditures | Total | ||||||
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Commitment to issue shares |
$ | 27,462 | $ | - | $ | 27,462 | |||
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Fair value of stock options granted |
440,477 | 502,857 | 943,334 | ||||||
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$ | 467,939 | $ | 502,857 | $ | 970,796 |
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General and | ||||||||
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Administrative | Exploration | |||||||
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Year ended December 31, 2015 |
Expenses | Expenditures | Total | ||||||
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Commitment to issue shares |
$ | 100,233 | $ | (34,144 | ) | $ | 66,089 | ||
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Fair value of stock options granted |
369,883 | 106,541 | 476,424 | ||||||
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$ | 100,233 | $ | (34,144 | ) | $ | 542,513 |
The weighted average fair value of the stock options granted during the year ended December 31, 2017 was $0.70 per stock option (2016 - $0.74 ; 2015 - $0.36) . The fair value of stock options granted was estimated using the Black-Scholes option pricing model with weighted average assumptions as follows:
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Year ended | Year ended | Year ended | ||||||
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December 31, 2017 | December 31, 2016 | December 31, 2015 | ||||||
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Risk free interest rate |
1.53% | 0.73% | 1.02% | ||||||
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Expected life (years) |
5 | 5 | 5 | ||||||
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Expected volatility |
70.81% | 69.80% | 62.33% | ||||||
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Dividend yield |
- | - | - |
Warrants
During the years ended December 31, 2017, 2016, and 2015, the change in warrants outstanding is as follow:
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Weighted Average | |||||
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Number | Exercise Price | ||||
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Balance as at December 31, 2014 |
9,175,533 | $ | 4.56 | |||
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Expired |
(9,175,533 | ) | 4.56 | |||
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Balance as at December 31, 2015 and 2016 |
- | - | ||||
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Issued |
2,623,306 | 2.00 | ||||
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Balance as at December 31, 2017 |
2,623,306 | $ | 2.00 |
The following table summarizes information about the warrants which were outstanding and exercisable at December 31, 2017:
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Number of Warrants | Exercise Price | Expiry Date | ||||||
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Private placement, April 12, 2017 |
2,500,004 | $ | 2.00 | April 12, 2019 | |||||
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Finders warrants, April 12, 2017 |
123,302 | $ | 2.00 | April 12, 2019 | |||||
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Total |
2,623,306 |