Note 11 - Capital Stock

9 Months Ended

Apr. 30, 2019

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

NOTE

11

:     CAPITAL STOCK

Equity Financing

On

October 3, 2018,

we completed a public offering of

12,613,049

units at a price of

$1.60

per unit for gross proceeds of

$20,180,878

(the

“October 2018

Offering”). Each unit was comprised of

one

share of the Company and

one

-half of

one

share purchase warrant. Each whole warrant entitles its holder to acquire

one

share at an exercise price of

$2.05

per share, exercisable immediately upon issuance and expiring

30

months from the date of issuance. In connection with the

October 2018

Offering, we also issued compensation share purchase warrants to agents as part of share issuance costs to purchase

756,782

shares of our Company, exercisable at an exercise price of

$2.05

per share and expiring

30

months from the date of issuance.

The shares were valued at the Company’s closing price of

$1.54

per share at

October 3, 2018.

The share purchase warrants were valued using the Black-Scholes option pricing model with the following assumptions:

Expected Risk Free Interest Rate	2.90	%
Expected Annual Volatility	63.30	%
Expected Contractual Life in Years	2.50
Expected Annual Dividend Yield	0.00	%

The net proceeds from the

October 2018

Offering were allocated to the fair values of the shares and share purchase warrants as presented below:

Fair Value of Shares	$	19,424,095
Fair Value of Share Purchase Warrants		3,094,693
Total Fair Value Before Allocation to Net Proceeds	$	22,518,788
Gross Proceeds	$	20,180,878
Share Issuance Costs - Cash		(1,211,667	)
Net Cash Proceeds Received	$	18,969,211
Relative Fair Value Allocation to:
Shares	$	16,362,327
Share Purchase Warrants		2,606,884
	$	18,969,211

Share Transactions

During the

three

months ended

April 30, 2019,

we entered into a Securities Exchange Agreement (the “Securities Exchange Agreement”) with each of Pacific Road Resources Reno Creek Cayco

1

Ltd. (“Cayco

1”

), Pacific Road Resources Reno Creek Cayco

2

Ltd. (“Cayco

2”

), Pacific Road Resources Reno Creek Cayco

3

Ltd. (“Cayco

3”

), Pacific Road Resources Reno Creek Cayco

4

Ltd. (“Cayco

4”

) and Reno Creek Unit Trust (“RCUT”, and together with Cayco

1,

Cayco

2,

Cayco

3

and Cayco

4,

the “Pacific Road Parties”), whereby the Pacific Roads Parties exchanged their collective

11,000,000

outstanding common stock purchase warrants of the Company (the “Warrants”) for an aggregate of

750,000

common shares of the Company (each, a “Share”), with a fair value of

$1.33

per Share (collectively, the “Securities Exchange”). The Warrants, with an exercise price of

$2.30

and expiry date of

August 9, 2022,

were valued at

$0.45

per share using the Barrier Option Pricing Model at the date of issuance on

August 9, 2017

in connection with the acquisition of the Reno Creek Project. The difference between the carrying value of the Warrants of

$4,950,000

and fair value of the shares of

$997,500

was recorded as additional paid in capital and has had

no

impact on the Company’s condensed consolidated Statement of operations and comprehensive loss.

A summary of the share transactions for the

nine

months ended

April 30, 2019

is as follows:

Period / Description	Common		Value per Share				Issuance
	Shares Issued		Low		High		Value
Balance, July 31, 2018		161,175,764
Equity Financing		12,613,049	$	1.60	$	1.60	$	20,180,878
Credit Facility		1,180,328		1.19		1.19		1,400,000
Exchange of Warrants		750,000		1.33		1.33		997,500
Consulting Services		165,404		1.23		1.77		226,539
Warrants Exercised		3,999,881		1.20		1.35		4,822,357
Options Exercised (1)		118,985		0.45		1.32		123,221
Shares Issued Under Stock Incentive Plan		558,875		1.25		1.72		785,117
Balance, April 30, 2019		180,562,286

( 1 ) 151,500 stock options were exercised on a forfeiture basis, resulting in 52,735 net shares being issued.

Share Purchase Warrants

A continuity schedule of outstanding share purchase warrants is as follows:

	Number of Warrants			Weighted Average Exercise Price
Balance, July 31, 2018		30,923,489		$	1.97
Issued		7,063,253			2.05
Exercised		(3,999,881	)		1.21
Expired		(3,542,951	)		2.13
Cancelled		(11,000,000	)		2.30
Balance, April 30, 2019		19,443,910		$	1.94

A summary of share purchase warrants outstanding and exercisable at

April 30, 2019

is as follows:

Weighted Average Exercise Price		Number of Warrants Outstanding		Expiry Date	Weighted Average Remaining Contractual Life (Years)
$	1.35		2,450,000	January 30, 2020		0.75
	1.64		50,000	May 21, 2023		4.06
	2.00		9,571,929	January 20, 2020		0.73
	2.05		7,063,253	April 3, 2021		1.93
	2.30		308,728	August 9, 2022		3.28
$	1.94		19,443,910			1.21

During the

nine

months ended

April 30, 2019,

we received cash proceeds totaling

$4,822,357

from the exercise of

3,999,881

share purchase warrants at a weighted average exercise price of

$1.21

per share.