NOTE

STOCK-BASED COMPENSATION

Stock Options

July 31, 2019,

we had

one

stock option plan, the

2019

Stock Incentive Plan (the

“2019

Plan”), which superseded and replaced the Company’s

2018

Stock Incentive Plan (collectively the “Stock Incentive Plan”), such that

further shares are issuable under the prior plan.

During Fiscal

2019,

we granted stock options under the Stock Incentive Plan to certain of our directors, officers, employees and consultants to purchase an aggregate of

2,006,350

(Fiscal

2018:

4,083,000;

and Fiscal

2017:

672,500

) shares of the Company. The expected life of the stock options granted in Fiscal

2019

was estimated at

3.7

years based on the historical life of the options. The stock options granted in Fiscal

2018

and Fiscal

2017

were estimated using the simplified method due to a lack of historical life information on issuance pertaining to the stock options with

five

year term. Under the simplified method, the expected life was determined using the mid-point of the average vesting date and the end of the contractual term.

The fair value of these stock options was estimated at the date of grant, using the Black-Scholes Option Valuation Model, with the following weighted average assumptions:

	Year Ended July 31,
	2019		2018		2017
Expected Risk Free Interest Rate		1.86%		2.24%		1.28%
Expected Volatility		65.62%		67.60%		82.40%
Expected Life in Years		4.9		3.1		2.9
Expected Dividend Yield		0%		0%		0%
Weighted-Average Grant Date Fair Value		$0.53		$0.68		$0.77

The majority of the stock options granted in Fiscal

2019

have a term of

years, whereas the options granted during Fiscal

2018

and Fiscal

2017

have a term of

five

years. These options are subject to a

month vesting provision whereby, at the end of each of the

first

three

and

six

months after the grant date

12.5%

of the total stock options become exercisable, and whereby at the end of each of the

12,

and

months after the grant date

25%

of the total stock options become exercisable.

A continuity schedule of outstanding stock options at

July 31, 2019,

and the changes during the periods, is as follows:

	Number of Stock Options			Weighted Average Exercise Price
Balance, July 31, 2016		12,105,858		$	1.34
Granted		672,500			1.11
Exercised		(412,134	)		0.56
Expired		(100,724	)		4.35
Forfeited		(5,000	)		0.93
Balance, July 31, 2017		12,260,500			1.33
Granted		4,083,000			1.40
Exercised		(1,365,625	)		0.70
Forfeited		(66,250	)		1.24
Balance, July 31, 2018		14,911,625			1.41
Granted		2,006,350			0.97
Exercised		(259,625	)		1.12
Forfeited/cancelled		(910,000	)		2.41
Expired		(10,000	)		1.50
Balance, July 31, 2019		15,738,350		$	1.30

The table below sets forth the number of shares issued and cash received upon exercise of the stock options:

	Year Ended July 31,
	2019		2018		2017
Number of Shares Issued Upon Exercise of Options		125,879		1,094,589		264,727
Number of Options Exercised on Forfeiture Basis		193,375		580,625		309,634
Number of Net Shares Issued		59,629		309,589		162,227
Number of Options Exercised on Cash Basis		66,250		785,000		102,500
Cash Received from Exercise of Stock Options	$	72,363	$	530,050	$	56,925
Total Intrinsic Value of Options Exercised	$	134,174	$	1,049,694	$	232,205

A continuity schedule of outstanding non-vested stock options at

July 31, 2019,

and the changes during the periods, is as follows:

	Number of Unvested Stock Options			Weighted Average Grant-Date Fair Value
Balance, July 31, 2016		2,323,000		$	0.51
Granted		672,500			0.77
Vested		(2,224,750	)		0.56
Forfeited		(5,000	)		0.49
Balance, July 31, 2017		765,750			0.58
Granted		4,083,000			0.68
Vested		(1,303,000	)		0.65
Forfeited		(66,250	)		0.62
Balance, July 31, 2018		3,479,500		$	0.68
Granted		2,006,350			0.53
Vested		(2,055,250	)		0.68
Forfeited		(120,000	)		0.67
Balance, July 31, 2019		3,310,600		$	0.59

July 31, 2019,

the aggregate intrinsic value of all outstanding stock options granted under the Stock Incentive Plan was estimated at

$182,339

(vested:

$91,712

and unvested:

$90,628

July 31, 2019,

the unrecognized compensation cost related to non-vested stock options granted under the Stock Incentive Plan was

$1,288,825

expected to be recognized over

1.11

years.

A summary of stock options outstanding and exercisable at

July 31, 2019

is as follows:

			Options Outstanding						Options Exercisable
Range of Exercise Prices			Outstanding at July 31, 2019		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Exercisable at July 31, 2019		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)
$0.93	to	$0.99		3,643,100	$	0.94		6.07		1,766,750	$	0.94		1.90
$1.00	to	$1.49		9,465,000		1.28		0.97		8,989,000		1.28		0.85
$1.50	to	$3.75		2,630,250		1.86		3.29		1,672,000		2.06		2.89
				15,738,350	$	1.30		2.54		12,427,750	$	1.34		1.27

Subsequent to

July 31, 2019,

the Company paid Fiscal

2019

bonuses to certain of our directors, officers, employees and consultants, which were paid in the form of cash, compensation shares (the “Bonus Shares”) and stock options. The Bonus Shares were issued and the stock options were granted under the Company’s Stock Incentive Plan. The cash bonus of

$659,000

and withholding amounts associated with the Bonus Shares were included in accounts payable and accrued liabilities, and

188,914

Bonus Shares with a fair value of

$187,100

was reported as share issuance obligations on the Company’s consolidated balance sheet as at

July 31, 2019.

The stock options to purchase

597,650

shares of the Company are exercisable at

$0.91

per share vesting over a period of

months with a term of

years.

Subsequent to

July 31, 2019,

stock options to purchase an aggregate of

5,990,000

shares of the Company with a weighted average exercise price of

$1.34

per share, expired unexercised.

Restricted Stock Units

During Fiscal

2019,

the Company granted an aggregate of

465,000

RSUs with a fair value of

$0.9421

per share, determined using the share price at the date of grant, to certain directors and officers of the Company under the Stock Incentive Plan. These RSUs have a vesting period of

three

years from the grant date such that

one

third

of the RSUs will vest, and

one

third

of the resulting RSU shares will be issued, at a deemed issuance price of

$0.9421

per RSU share, at the end of each of the first,

second

and

third

year, respectively, from the date of grant.

During Fiscal

2019,

RSU shares were vested and

amortization was recorded as the amount was immaterial. At

July 31, 2019

outstanding unvested RSUs totaled

465,000.

Performance Based Restricted Stock Units

During Fiscal

2019,

the Company granted an aggregate of

445,000

PRSUs to the Company’s executive officers. These PRSUs shall vest based on certain performance goals measured on the Company’s share price relative to the Global

Uranium ETF. On each anniversary from the grant date over the next

three

years (the “Performance Period”), depending on the performance, the percentage eligible to vest at end of each anniversary would range from

200%

of the PRSU. The vested PRSUs will accrue annually and will

not

settle until the end of the Performance Period. Each unit of vested PRSU converts into

one

common share of the Company at the end of the

three

years Performance Period. There are

cash settlement alternatives. The PRSUs carry neither rights to dividends nor voting rights. The Company accounts for the PRSU as an equity-settled plan.

These PRSUs have a market condition considered in the determination of the fair value such that the ultimate number of units that vest will be determined in part by total shareholder relative to a group of peer companies. The fair value of these PRSUs was estimated at

$1.15

per share at the date of grant using a Monte Carlo simulation model with the following principal assumptions:

Expected Risk Free Interest Rate	1.99%	to	2.20%
Expected Volatility	56.74%	to	61.75%
Expected Dividend Yield		0%
Expected Life in Years		3
Correlation		57.10%

During Fiscal

2019,

PRSUs were vested and

amortization was recorded as the amount was immaterial. At

July 31, 2019,

outstanding unvested PRSUs totaled

445,000.

Stock

Based Compensation

A summary of stock-based compensation expense for Fiscal

2019,

Fiscal

2018

and Fiscal

2017

is as follows:

	Year Ended July 31,
	2019		2018			2017
Stock-Based Compensation for Consultants
Common stock issued for consulting services	$	644,307	$	740,640		$	1,184,660
Amortization of stock option expenses		153,549		582,842			469,815
		797,856		1,323,482			1,654,475
Stock-Based Compensation for Management
Common stock issued to management		269,688		702,505			686,584
Amortization of stock option expenses		516,266		284,556			473,811
		785,954		987,061			1,160,395
Stock-Based Compensation for Employees
Common stock issued to employees		674,488		773,899			584,837
Amortization of stock option expenses		689,743		547,231			369,663
		1,364,231		1,321,130			954,500

Settlement of share issuance obligation		-		(127,615	)		-
	$	2,948,041	$	3,504,058		$	3,769,370