Shareholders' Equity |
4.Shareholders’ Equity | ● | Unlimited number of common shares without par value. |
| ● | Unlimited number of first preferred shares without par value. |
| ● | Unlimited number of second preferred shares without par value. |
On May 12, 2023, the Company entered into the Sales Agreement providing for the sale by the Company, from time to time, of the Company's common shares having an aggregate gross offering price of up to $20 million (the “ATM Offering”). The Company expects to raise relatively small amounts of capital from time to time through the ATM Offering for general corporate purposes, which may include, among other things, general corporate, legal and ASAOC expenses. As of June 30, 2023, no common shares have been sold under this agreement. | c. | Share based compensation |
Share based compensation was recognized in the unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2023 and 2022 as follows: | | | | | | | | | | | | | | | Three months ended June 30, | | Six months ended June 30, | | | 2023 | | 2022 | | 2023 | | 2022 | Exploration | | $ | 442,549 | | $ | 396,951 | | $ | 815,236 | | $ | 632,639 | Corporate salaries and benefits | | | 282,606 | | | 338,638 | | | 529,576 | | | 513,018 | Directors’ fees | | | 59,127 | | | 90,811 | | | 280,297 | | | 356,992 | Total | | $ | 784,282 | | $ | 826,400 | | $ | 1,625,109 | | $ | 1,502,649 |
Share purchase options A summary of share purchase option activity within the Company’s share-based compensation plan (the “Plan”) for the year ended December 31, 2022 and six months ended June 30, 2023 is as follows: | | | | | | | | Number of | | Weighted Average | | | Options | | Exercise Price (C$) | Balance December 31, 2021 | | 2,497,150 | | $ | 9.15 | Options expired | | (305,000) | | | 8.71 | Options cancelled or forfeited | | (246,500) | | | 9.11 | Balance December 31, 2022 | | 1,945,650 | | $ | 9.23 | Options exercised | | (25,000) | | | 4.40 | Options cancelled or forfeited | | (6,000) | | | 9.93 | Options expired | | (148,900) | | | 6.19 | Balance June 30, 2023 | | 1,765,750 | | $ | 9.55 |
During the three and six months ended June 30, 2023 and 2022, the Company’s total share based compensation from options was $83,722 (2022: $296,360) and $164,042 (2022: $549,260), respectively. No options were granted during the six months ended June 30, 2023 nor 2022. During the three and six months ended June 30, 2023, the intrinsic value of share purchase options exercised was $18,124 and $30,594, respectively. An analysis of outstanding share purchase options as of June 30, 2023 is as follows: | | | | | | | | | | | | | | | | | Options Outstanding | | Options Exercisable | Range of Exercise | | | | | | | Remaining | | | | | | | Remaining | Prices (C$) | | Number | | Price (C$)1 | | Life2 | | Number | | Price (C$)1 | | Life2 | $3.50 - $5.90 | | 45,000 | | | 3.50 | | 1.72 | | 45,000 | | | 3.50 | | 1.72 | $5.91 - $7.20 | | 428,875 | | | 6.26 | | 1.47 | | 428,875 | | | 6.26 | | 1.47 | $7.21 - $9.70 | | 520,375 | | | 9.45 | | 1.01 | | 420,375 | | | 9.53 | | 0.61 | $9.71 - $11.80 | | 771,500 | | | 11.80 | | 2.56 | | 578,625 | | | 11.80 | | 2.56 | $3.50 - $11.80 | | 1,765,750 | | | 9.55 | | 1.82 | | 1,472,875 | | | 9.29 | | 1.66 |
| 1 | Weighted Average Exercise Price (C$) |
| 2 | Weighted Average Remaining Contractual Life (Years) |
As of June 30, 2023, all unvested options are expected to vest and unvested compensation of $168,364 will be recognized. The weighted average remaining amortization period of vested options is 0.5 years. As of June 30, 2023, the intrinsic value of outstanding and exercisable share purchase options is $46,169 and $46,169, respectively. Restricted Share Units The following table summarizes activity for restricted share units (“RSUs”) awarded under the Plan that vest over the required service period of the participant. | | | | | | | | | | Weighted Average | | | Share | | Grant Date | | | Units | | Fair Value | Unvested, December 31, 2021 | | 42,334 | | $ | 5.66 | Granted | | 370,098 | | | 4.04 | Distributed (vested) | | (36,168) | | | 5.00 | Cancelled | | (4,308) | | | 4.03 | Unvested, December 31, 2022 | | 371,956 | | $ | 4.13 | Granted | | 370,039 | | | 3.42 | Distributed (vested) | | (121,340) | | | 4.04 | Cancelled | | (4,453) | | | 3.77 | Unvested, June 30, 2023 | | 616,202 | | $ | 3.72 |
During the six months ended June 30, 2023, the Company awarded 370,039 RSUs (2022: 370,098 RSUs) with a weighted average grant date fair value of $3.42 per RSU (2022: $4.04) or approximately $1.3 million in total (2022: $1.5 million). During the three and six months ended June 30, 2023 and 2022, the Company has recognized $350,791 (2022: $321,516)and $650,419 (2022: $432,256), respectively, in compensation expense related to RSUs and expects to record an additional $1.4 million in compensation expense over the next 1.57 years. The unvested units of June 30, 2023 are scheduled to vest as follows: | | | Remainder of 2023 | | 21,166 | 2024 | | 243,658 | 2025 | | 228,660 | 2026 | | 122,718 | Total | | 616,202 |
Unvested units will be forfeited by participants upon termination of employment in advance of vesting, with the exception of termination due to retirement if certain criteria are met. Performance Share Units The following table summarizes activity for performance share units (“PSUs”) and market-based performance share units (“MPSUs”) awarded under the Plan: | | | | | | | | | | Weighted Average | | | Share | | Grant Date | | | Units | | Fair Value | Unvested, December 31, 2021 | | 10,750 | | $ | 5.66 | Granted | | 267,451 | | | 6.73 | Distributed | | (3,750) | | | 3.42 | Cancelled | | (11,185) | | | 5.83 | Unvested, December 31, 2022 | | 263,266 | | $ | 6.77 | Granted | | 281,035 | | | 5.97 | Distributed | | (7,250) | | | 2.02 | Cancelled | | (1,619) | | | 6.60 | Unvested, June 30, 2023 | | 535,432 | | $ | 6.41 |
During the three and six months ended June 30, 2023 and 2022, the Company has recognized $287,579 (2022: $161,320) and $508,137 (2022: $216,986), respectively, in compensation expense related to PSUs and MPSUs and expects to record an additional $2.4 million in compensation expense over the next 2.2 years. The unvested units of June 30, 2023 are scheduled to vest as follows: | | | Remainder of 2023 | | 7,500 | 2024 | | 3,500 | 2025 | | 247,524 | 2026 | | 276,908 | Total | | 535,432 |
PSUs: These PSUs vest upon completion of the performance period and specific performance conditions set forth for each individual grant for individually defined reporting and operating measurement objectives. The Company determines the factor to be applied to that target number of PSUs, with such percentage based on level of achievement of the performance conditions. Upon the achievement of the conditions, any unvested PSUs become fully vested. During the six months ended June 30, 2023, the Company awarded 3,500 PSUs (2022: 7,500 PSUs) that had a weighted average grant date fair value of $4.79 (2022: $4.03), or $16,765 (2022: $30,225) in total. Market-based PSUs: During the six months ended June 30, 2023 and 2022, the Company granted MPSUs where vesting is based on the Company’s cumulative total shareholder return (“TSR”) as compared to the constituents that comprise the VanEck Junior Gold Miners ETF (“GDXJ Index”) a group of similar junior gold mining companies, over a three year period (the “Performance Period”). The ultimate number of MPSUs that vest may range from 0% to 200% of the original target number of shares depending on the relative achievement of the TSR performance measure at the end of the Performance Period. Because the number of MPSUs that are earned will be based on the Company’s TSR over the Performance Period, the MPSUs are considered subject to a market condition. Compensation cost is recognized ratably over the Performance Period regardless as to whether the market condition is actually satisfied; however, the compensation cost will reverse if an employee terminates prior to satisfying the requisite service period. During the six months ended June 30, 2023, the Company awarded 277,535 MPSUs (2022: 249,533 MPSUs) that had a weighted grant date fair value of $5.98 (2022: $6.99) per MPSU or approximately $1.65 million (2022: $1.75 million) in total. The grant date fair value of MPSUs was estimated using a Monte Carlo simulation model. Assumptions and estimates utilized in the model include expected volatilities of the Corporation’s share price and the GDXJ Index, the Company’s risk-free interest rate and expected dividends. The probabilities of the actual number of MPSUs expected to vest and resultant actual number of common shares expected to be awarded are reflected in the grant date fair values of the various MPSU awards. The per MPSU grant date fair value for the market condition was based on the following variables: | | | | | | | | | | | 2023 | | | 2022 | | Grant date fair value | | $ | 5.98 | | $ | 6.99 | | Risk-free interest rate | | | 4.15 | % | | 1.61 | % | Expected term (in years) | | | 3.0 | | | 3.0 | | Expected share price volatility | | | 65.74 | % | | 63.35 | % | Expected dividend yield | | | — | | | — | |
The expected volatility utilized is based on the historical volatilities of the Corporation’s common shares and the GDXJ Index in order to model the stock price movements. The volatility used was calculated over the most recent three year period. The risk-free interest rates used are based on the implied yield available on a U.S. Treasury zero-coupon bill with a term equivalent to the Performance Period. The expected dividend yield of zero was used since it is the mathematical equivalent to reinvesting dividends in each issuing entity over the Performance Period. Deferred Share Units The following table summarizes activity for deferred share units (“DSUs”) awarded under the Plan: | | | | | | | | | | Weighted Average | | | Share | | Grant Date | | | Units | | Fair Value | Outstanding, December 31, 2021 | | 29,213 | | $ | 5.39 | Granted | | 116,462 | | | 3.42 | Outstanding, December 31, 2022 | | 145,675 | | | 3.82 | Granted | | 83,098 | | | 3.64 | Outstanding, June 30, 2023 | | 228,773 | | $ | 3.75 |
Under the Plan, the Company may issue DSUs to non-employee directors. During the three and six months ended June 30, 2023, 16,023 (2022: 14,261) and 83,098 (2022: 76,930) share units, respectively with a fair value of $62,190 (2022: $47,204) and $302,511 (2022: $304,147) were granted to the non-employee directors and the related compensation expense was charged to directors’ fees in the unaudited condensed consolidated statements of operations. There was a total of 200,000 warrants outstanding as of December 31, 2022 that expired on May 9, 2023.
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