8.	SHARE CAPITAL

(a)

Issued and outstanding

The Company is authorized to issue an unlimited number of common shares without par value.

As at

December 31, 2018,

there were

85,539,476

shares outstanding (

December 31, 2017:

85,478,790

November 28, 2017,

the Company closed a non-brokered private placement offering and issued

4,599,641

common shares at

$10.47

per share, for gross proceeds of

$48,158.

The Company paid legal and filing costs of

$223

resulting in net proceeds of

$47,935.

During the year ended

December 31 2018,

stock options were exercised for cash and

135,000

stock options were exercised under a less dilutive cashless exercise provision of the plan, whereby

58,191

shares were issued in settlement of the stock options and the remaining

76,809

options were cancelled.

During the year ended

December 31, 2017,

45,400

stock options were exercised for cash proceeds of

$283.

An additional

225,000

stock options were exercised under a less dilutive cashless exercise provision of the plan, whereby

127,845

shares were issued in settlement of the stock options and the remaining

97,155

options were cancelled.

During the year ended

December 31, 2018,

2,495

restricted share units were converted into shares.

During the year ended

December 31, 2017,

682

restricted share units and

1,018

performance share units were converted into shares.

(b)

Stock options

The Company

may

enter into Incentive Stock Option Agreements with officers, employees, and consultants. On

June 15, 2017,

the Shareholders re-approved the Company’s rolling Stock Option Plan (the “Plan”). The maximum number of common shares that

may

be issuable under the Plan is set at

of the number of issued and outstanding common shares on a non-diluted basis at any time, provided that the number of common shares issued or issuable under the combined Plan and Share Unit Plan (

Note

(c)

) shall

not

exceed

of the issued and outstanding common shares of the Company on a non-diluted basis. Options granted under the Plan have a maximum term of

years. As at

December 31, 2018,

there were

1,734,294

stock options outstanding under the Plan and

400,000

inducement options outstanding outside of the Plan.

Stock option grants are recommended for approval to the Board of Directors by the Compensation Committee consisting of

three

independent members of the Board of Directors. At the time of a stock option grant, the exercise price of each option is set and in accordance with the Plan, cannot be lower than the market value of the common shares at the date of grant.

The following table summarizes the Company’s option activity for the year:

	Year ended December 31, 2018			Weighted average exercise price (C$/option)	Year ended December 31, 2017			Weighted average exercise price (C$/option)

Outstanding, beginning of year	2,269,294		$	9.50	2,254,172		$	8.71
Granted	–			–	285,522			13.91
Exercised for cash	–			–	(45,400	)		8.19
Exercised cashless	(135,000	)		7.94	(225,000	)		7.46

Outstanding, end of year	2,134,294		$	9.59	2,269,294		$	9.50

Although

stock options were granted during the year ended

December 31, 2018 (

December 31, 2017:

285,522

stock options were granted with a weighted average grant date fair value of

$1,070

$3.75

per option), the Board of Directors approved in

2018

a designated value of

$967

of options to be granted subsequent to year end.

The following table summarizes the Company’s stock options outstanding and exercisable as at

December 31, 2018:

	Exercise price ($C/option)			Number outstanding	Number exercisable	Weighted average remaining contractual life (years)
(1)		5.35		400,000	400,000	0.25
		5.86		380,000	380,000	0.25
		9.16		21,666	21,666	1.70
		9.28		368,333	368,333	1.93
		10.02		187,500	187,500	1.48
		10.04		263,500	263,500	0.50
		13.91		285,522	95,174	3.93
		17.55		227,773	151,849	2.93
	C$5.35	-	C$17.55	2,134,294	1,868,022	1.47

(

)

Inducement options issued outside the Company's Plan as an incentive to attract senior officers for employment.

During the year ended

December 31, 2018,

the Company recorded share based payment expense of

$904

(

December 31, 2017:

$893

) relating to stock options vested to employees and consultants in the year.

(c)

Restricted and performance share units

June 15, 2017,

the Shareholders re-approved a share unit plan (the “Share Unit Plan”) for the benefit of the Company’s officers, employees and consultants. The Share Unit Plan provides for the issuance of common shares from treasury, in the form of Restricted Share Units (“RSUs”) and Performance Share Units (“PSUs”). The maximum number of common shares that

may

be issuable under the Share Unit Plan is set at

1.5%

of the number of issued and outstanding common shares on a non-diluted basis, provided that the number of common shares issued or issuable under the combined Share Unit Plan and Stock Option Plan (

Note

(b)

) shall

not

exceed

of the issued and outstanding common shares on a non-diluted basis. RSUs and PSUs granted under the Share Unit Plan have a term of

years unless otherwise specified by the Board, and each unit entitles the participant to receive

one

common share of the Company subject to vesting criteria, and in the case of PSUs, performance criteria.

In the year ended

December 31, 2018,

RSUs were granted (

December 31, 2017:

nil

) and

2,495

RSUs were converted and settled in common shares (

December 31, 2017:

682

). As at

December 31, 2018,

there were

43,343

RSUs issued and outstanding under the Share Unit Plan, all of which had vested and are convertible into common shares of the Company.

In the year ended

December 31, 2018,

although

PSUs were granted (

December 31, 2017:

88,665

) the Board of Directors approved a designated dollar amount of

$886

to be granted subsequent to year end.

PSUs were converted and settled in common shares in the year ended

December 31, 2018 (

December 31, 2017:

1,018

) and

40,946

PSUs previously issued (

December 31, 2017:

nil

) were forfeited as the Company failed to meet a performance factor within the performance period. The Company reversed the previously recognized share-based payment expense in relation to the forfeited PSUs in the amount of

$284.

As at

December 31, 2018,

there were

186,904

PSUs issued and outstanding under the Share Unit Plan, of which

29,154

had vested and are convertible into common shares of the Company. Included in the PSUs at

December 31, 2018,

are

157,750

PSUs with vesting conditions subject to a market share price performance factor measured over a

three

-year performance period, resulting in a PSU payout range from

nil

PSUs to

200%

315,500

PSUs. The Company estimates the fair value of the PSUs on grant date using the Monte Carlo simulation model.

The Company recognized a share-based payment expense of

$319

(

December 31, 2017:

$411

) relating to RSUs and PSUs vesting in the year.

(d)

Deferred share units

June 15, 2017,

the Shareholders re-approved a Deferred Share Unit Plan (the “DSU Plan”) for the benefit of the Company’s non-executive directors. The DSU Plan provides for the issuance of common shares from treasury, in the form of Deferred Share Units (“DSUs”). Directors

may

also elect to receive all or a portion of their annual retainer and meeting fees in the form of DSUs. DSUs

may

be settled in cash or in common shares issued from treasury, as determined by the Board at the time of the grant. The maximum number of common shares that

may

be issuable under the DSU Plan is set at

1.0%

of the number of issued and outstanding common shares on a non-diluted basis.

Although

DSUs were granted during the year ended

December 31, 2018 (

December 31, 2017:

66,325

DSUs were granted under the plan and

13,109

DSUs were granted to directors who elected to received their retainer and meeting fees in the form of DSUs rather than cash), the Company has recorded a liability and share based payment expense in respect of

$770

2018

DSUs to be granted subsequent to year end. An additional DSU share-based payment expense of

$116

was recognized in the year ended

December 31, 2018

with respect to Directors who elected to receive all or a portion of their annual retainer and meeting fees in the form of DSUs (

December 31, 2017:

$964

of combined DSU share based payment expense).

Under the DSU plan,

common shares are to be issued, or cash payments made to, or in respect of a participant in the DSU Plan prior to such eligible participant’s termination date. As at

December 31, 2018,

there are

452,739

DSUs issued and outstanding under the DSU Plan, all of which have vested.

As at

December 31, 2018,

there are

2,417,280

common shares issuable under the combined share compensation arrangements referred to above (the Plan, the Share Unit Plan and the DSU Plan) representing

2.83%

of the issued and outstanding common shares on a non-diluted basis, and there are

2,715,089

share-based awards available for grant under these combined share compensation arrangements.