10. Share capital

a. Authorized

Authorized share capital consists of an unlimited number of common shares.

	September 30,		December 31,
	2018		2017

Issued
43,094,657 (2017: 41,496,950) common shares	$	212,498	$	207,012

b. Stock option plan

The number of shares reserved for issuance under the Company’s stock option plan is limited to 10% of the number of common shares which are issued and outstanding on the date of a particular grant of options. Under the plan, the Board of Directors determines the term of a stock option to a maximum of 10 years, the period of time during which the options may vest and become exercisable as well as the option exercise price which shall not be less than the closing price of the Company’s share on the Toronto Stock Exchange on the date immediately preceding the date of grant. The Compensation Committee determines and makes recommendations to the Board of Directors as to the recipients of, and nature and size of, share-based compensation awards in compliance with applicable securities law, stock exchange and other regulatory requirements.

A summary of changes in the Company’s outstanding stock options is presented below:

				September 30,					December 31,
				2018					2017
				Weighted					Weighted
				average					average
				exercise					exercise
	Number			price		Number			price
	(thousands)			CAD		(thousands)			CAD

Balance, beginning of period		2,316		$	3.06		1,771		$	4.64
Granted		1,395			4.61		1,058			3.86
Exercised		(471	)		2.29		(261	)		3.22
Expired		(120	)		5.14		(252	)		17.31
Balance, end of period		3,120		$	3.79		2,316		$	3.06

The following table summarizes information on stock options outstanding and exercisable as at September 30, 2018:

	Weighted
	average				Weighted				Weighted
	remaining				average				average
Exercise	contractual				exercise				exercise
price	life		Outstanding		price		Exercisable		price
CAD	(years)		(thousands)		CAD		(thousands)		CAD

2.00 to 3.00		0.40		691	$	2.04		691	$	2.04
3.01 to 4.00		1.32		1,025		3.85		683		3.85
4.01 to 5.00		2.26		1,364		4.58		462		4.58
5.01 to 6.00		2.32		40		5.55		13		5.55
				3,120	$	3.79		1,849	$	3.37

c. Share-based payments

The weighted average fair value at grant date of the Company’s stock options granted during the nine-month period ended September 30, 2018 was $1.50 (2017: $1.58).

The Company used the Black-Scholes Option Pricing Model to estimate fair value using the following weighted-average assumptions:

	Three-month		Three-month			Nine-month			Nine-month
	period ended		period ended			period ended			period ended
	September 30,		September 30,			September 30,			September 30,
	2018		2017			2018			2017

Expected share price volatility ⁽¹⁾		-		81	%		59	%		83	%
Risk free interest rate		-		1.30	%		1.74	%		0.87	%
Expected life		-	3 years			3 years			3 years
Expected forfeiture rate		-		3.67	%		3.36	%		4.18	%
Expected dividend yield		-		0	%		0	%		0	%

Share-based payments included in cost of sales	$	-	$	-		$	-		$	-
Share-based payments included in general and
administrative expenses		334		278			1,711			1,241
Total share-based payments	$	334	$	278		$	1,711		$	1,241

(1)	Expected volatility has been based on historical volatility of the Company’s publicly traded shares.

d. Warrants

The warrants that are issued and outstanding as at September 30, 2018 are as follows:

Number of	Exercise	Issuance	Expiry
warrants	price (CAD)	date	date
799,065	4.68	Jul 2016	Jun 14, 2021
1,447,426	4.68	Jun 2016	Jun 9, 2021
1,537,355	1.20	Feb 2016	Feb 10, 2019
307,777	1.20	Nov 2015	Nov 10, 2018
4,091,623

e. Restricted Share Units:

The Company has a Restricted Share Unit Plan under which eligible directors, officers and key employees of the Company are entitled to receive awards of restricted share units. Each restricted share unit is equivalent in value to the fair market value of a common share of the Company on the date of grant with the value of each cash settled award charged to compensation expense over the period of vesting. At each reporting date, the compensation expense and associated liability (which is included in trade and other payables and other long-term liabilities in the consolidated statement of financial position) are adjusted to reflect changes in market value. As at September 30, 2018, 86,692 (December 31, 2017: 208,722) restricted share units are outstanding at an aggregate value of $0.2 million (December 31, 2017: $0.8 million).

f. Deferred Share Units:

The Company has a Deferred Share Unit Plan under which eligible directors of the Company are entitled to receive awards of deferred share units on a quarterly basis as payment for 20% to 100% of their director fees earned. Deferred share units are settled in either cash or common shares at the Company’s discretion when the director leaves the Company’s Board of Directors. The Company recognizes a cost in director fees and a corresponding increase in equity reserve upon issuance of deferred share units. As at September 30, 2018, 314,029 (December 31, 2017: 286,920) deferred share units are issued and outstanding.