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Share Option and Warrant Reserves
 6 Months Ended
Jun. 30, 2022
Share Option and Warrant Reserves  
Share Option and Warrant Reserves

Note 10: Share option and warrant reserves

 

(a) Share-based compensation expense

 

The Company uses the fair value method of accounting for all share-based payments to directors, officers, employees, and other service providers. During the three and six months ended June 30, 2022 and 2021, the share-based compensation expense was as follows:

 

 

 

Three months ended

June 30

 

 

Six months ended

June 30

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Recognized in net loss (earnings) and included in:

 

 

 

 

 

 

 

 

 

 

 

 

Exploration and evaluation costs

 

$195

 

 

$142

 

 

$327

 

 

$349

 

Fees, salaries and other employee benefits

 

 

433

 

 

 

478

 

 

 

800

 

 

 

1,184

 

Total share-based compensation expense

 

$628

 

 

$620

 

 

$1,127

 

 

$1,533

 

During the three and six months ended June 30, 2022, the Company granted 1,685,000 and 3,430,000 share options, respectively (three and six months ended June 30, 2021 – 130,000 and 130,000, respectively) to directors, officers, employees, and certain consultants who provide certain on-going services to the Company, representative of employee services. The weighted average fair value per option of these share options for the three and six months ended June 30, 2022 was calculated as $0.48 and $0.46, respectively, using the Black-Scholes option valuation model at the grant date.

 

The fair value of the share-based options granted during the three and six months ended June 30, 2022 was based on the following weighted average assumptions:

 

 

 

Three months ended

June 30

 

 

Six months ended

June 30

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Risk-free interest rate

 

 

2.79%

 

 

1.01%

 

 

2.20%

 

 

1.01%

Expected dividend yield

 

Nil

 

 

Nil

 

 

Nil

 

 

Nil

 

Share price volatility

 

 

67%

 

 

68%

 

 

67%

 

 

68%

Expected forfeiture rate

 

 

15%

 

 

0%

 

 

5%

 

 

0%

Expected life in years

 

 

5.0

 

 

 

4.9

 

 

 

5.0

 

 

 

4.9

 

 

The risk-free interest rate assumption is based on the Government of Canada benchmark bond yields and treasury bills with a remaining term that approximates the expected life of the share-based options. The expected volatility assumption is based on the historical and implied volatility of the Company’s common shares. The expected forfeiture rate and the expected life in years are based on historical trends.

 

(b) Share option plan

 

The Company maintains a rolling share option plan providing for the issuance of share options up to 10% of the Company’s issued and outstanding common shares at the time of the grant. The Company may grant share options from time to time to its directors, officers, employees, and other service providers. The share options typically vest as to 25% on the date of the grant and 12.5% every three months thereafter for a total vesting period of 18 months. 

  

The number of share options issued and outstanding and the weighted average exercise price were as follows:

 

 

 

Number of

share options

 

 

Weighted

average

exercise price

($/option)

 

Outstanding, December 31, 2020

 

 

8,141,004

 

 

$2.67

 

Granted

 

 

1,405,000

 

 

 

1.03

 

Exercised

 

 

(5,834)

 

 

0.86

 

Expired

 

 

(1,685,048)

 

 

3.62

 

Forfeited

 

 

(1,103,125)

 

 

2.04

 

Outstanding, December 31, 2021

 

 

6,751,997

 

 

$2.00

 

Granted

 

 

3,430,000

 

 

 

1.00

 

Expired

 

 

(511,972)

 

 

4.93

 

Forfeited

 

 

(633,436)

 

 

1.89

 

Outstanding, June 30, 2022

 

 

9,036,589

 

 

$1.46

 

As at June 30, 2022, the number of share options outstanding was as follows:

 

 

 

 

Options outstanding

 

 

Options exercisable

 

Exercise price ($/option)

 

 

Number of shares

 

 

Weighted average exercise price ($/option)

 

 

Weighted average remaining life (years)

 

 

Number of shares

 

 

Weighted average exercise price ($/option)

 

 

Weighted average remaining life (years)

 

$0.56 – $1.95

 

 

 

6,185,969

 

 

 

1.12

 

 

 

3.97

 

 

 

3,140,970

 

 

 

1.22

 

 

 

3.39

 

$2.05 – $3.26

 

 

 

2,847,703

 

 

 

2.19

 

 

 

3.06

 

 

 

2,847,703

 

 

 

2.19

 

 

 

3.06

 

$8.23

 

 

 

2,917

 

 

 

8.23

 

 

 

0.20

 

 

 

2,917

 

 

 

8.23

 

 

 

0.20

 

 

 

 

 

9,036,589

 

 

 

1.46

 

 

 

3.68

 

 

 

5,991,590

 

 

 

1.68

 

 

 

3.23

 

 

(c) Share purchase warrants

 

The number of share purchase warrants outstanding at June 30, 2022 was as follows:

 

 

 

Warrants

outstanding

 

 

Weighted average

exercise price

 ($/share)

 

Outstanding at December 31, 2020

 

 

1,626,740

 

 

$1.66

 

Issued

 

 

7,461,450

 

 

 

1.20

 

Exercised

 

 

(101,042)

 

 

1.46

 

Expired

 

 

(775,695)

 

 

1.42

 

Outstanding at December 31, 2021

 

 

8,211,453

 

 

$1.27

 

Expired

 

 

(412,190)

 

 

1.11

 

Outstanding at June 30, 2022

 

 

7,799,263

 

 

$1.28

 

 

The following table reflects the warrants issued and outstanding as of June 30, 2022:

 

Expiry date

 

Warrants

outstanding

 

 

Exercise price ($/share)

 

September 12, 2022

 

 

337,813

 

 

 

2.96

 

October 6, 2024

 

 

5,085,670

 

 

 

1.20

 

October 12, 2024

 

 

2,375,780

 

 

 

1.20

 

Total

 

 

7,799,263

 

 

 

1.28