Subsequent Events

9 Months Ended

Sep. 30, 2017

17.

Subsequent Events

On October 20, 2017, the Company granted 1,204,999 options to certain directors and employees of Golden Queen. The options are exercisable at a price of $0.29 for a period of five years from the date of grant. 401,666 options vest on October 20, 2018; 401,666 options vest on October 20, 2019; and 401,667 options vest on October 20, 2020.

On November 10, 2017, the Company and the Clay Group agreed to amend the November 2016 Loan by reducing the quarterly principal payments that commence the first quarter of 2018 from $2.5 million to $1.0 million and increasing the annual interest rate from 8% to 10% effective January 1, 2018. As well, all interest payments in 2017 that were deferred at the Company’s option along with a $2.5 million principal payment and a $0.40 amendment fee are payable on January 1, 2018. At the Company’s option, interest and principal payments due on January 1, 2018 can be delayed until February 15, 2018 to accommodate delays in the Offering process.

On November 13, 2017, the Company filed a preliminary prospectus with the securities regulatory authorities in each of the provinces and territories of Canada in connection with qualifying an offering of the Company (the “Offering"), in connection with a marketed offering of common shares in the capital of the Company for aggregate gross proceeds of $25 million. Closing of the Offering is subject to receipt of applicable regulatory approvals including approval of the Toronto Stock Exchange. The net proceeds of the Offering will be used to reduce the corporate debt, purchase additional equipment for the mine and general corporate and working capital purposes.