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SHAREHOLDERS' EQUITY | 3 Months Ended
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Mar. 31, 2018
SHAREHOLDERS' EQUITY |
SHAREHOLDERS' EQUITY | NOTE 8 SHAREHOLDERS’ EQUITY Stock options During the three months ended March 31, 2018, 35,199 shares of common stock were issued upon exercise of stock options under the Equity Incentive Plan, at the weighted average exercise price of $1.15 per share for proceeds of $0.1 million. This compares to 20,000 shares of common stock issued upon exercise of stock options (at the weighted average exercise price of $2.34 per share for proceeds of $0.1 million) during the same period of 2017 under the Equity Incentive Plan. Shareholders’ distributions During the three months ended March 31, 2018, the Company paid a semi-annual shareholders’ distribution of $0.005 (March 31, 2017 - $0.005) per share of common stock, for a total of $1.7 million (March 31, 2017 - $1.5 million). Equity Issuances On April 26, 2017, the Company issued 12,687,035 shares of common stock in consideration for the acquisition of 100% of the issued and outstanding common shares of Lexam VG Gold (“Lexam”) by way of an Arrangement Agreement dated February 13, 2017 and related Plan of Arrangement (the “Arrangement”). Pursuant to the Arrangement, each common share of Lexam was exchanged for 0.056 of a common share of the Company and each option to purchase a common share of Lexam was exchanged for a replacement option entitling the holder to acquire 0.056 share of the Company’s common stock. Separately, on September 22, 2017, the Company issued 20,700,000 shares of common stock and 10,350,000 warrants in a public offering for net proceeds of $43.2 million, after deducting issuance costs of $3.4 million. Each share of common stock sold entitled the holder to receive one-half of a warrant, and each whole warrant entitles the holder to purchase one share of common stock at a price of $2.70. Warrants are exercisable at any time prior to September 28, 2018, after which the warrants will expire and be of no value. The Company concluded that both common stock and warrants are equity-linked financial instruments and should be accounted for permanently in the Shareholder’s Equity section in the Consolidated Balance Sheet, with no requirement to subsequently revalue any of the instruments. Based on the relative fair values, the Company allocated $39.4 million to common stock and $3.8 million to warrants, net of issuance costs. The Company used the Black-Scholes pricing model to determine the fair value of warrants using the following assumptions:
Risk-free interest rate |  | 1.56 | %
Dividend yield |  | 0.36 | %
Volatility factor of the expected market price of common stock |  | 71 | %
Weighted-average expected life |  | 53 weeks |
Weighted-average grant date fair value | $ | 0.40 |
All 10,350,000 warrants remain outstanding and unexercised as of March 31, 2018. Flow-through shares On December 19, 2017, the Company issued 4,000,000 flow-through common shares (within the meaning of subsection 66(15) of the Income Tax Act (Canada)) priced at $2.50 per share for total proceeds of $10 million. The purpose of the offering was to fund exploration activities on the Company’s properties in the Timmins region of Canada. The total proceeds were allocated between the sale of tax benefits and the sale of common shares. Upon issuance, the Company recorded a liability for the flow-through premium received in the amount of $1.6 million, which was accounted for as a reduction to the proceeds of sale. The obligation is fulfilled when eligible expenditures are incurred. As at March 31, 2018, the Company reduced the flow-through premium by $0.6 million to $1 million to reflect the effect of the cost incurred to date. The reduction of the flow-through premium was recognized in income and mining tax recovery on the statement of operations. The proceeds of the flow-through shares offering are shown as Restricted cash on the Consolidated Balance Sheet. During the three months ended March 31, 2018, $1.2 million of the restricted cash was spent for Timmins exploration activities as intended, reducing the restricted cash to $8.8 million.

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
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