STOCK OPTIONS AND WARRANTS

9 Months Ended

May 31, 2019

STOCK OPTIONS AND WARRANTS [Text Block]

8.	STOCK OPTIONS AND WARRANTS
	Stock Options
	On July 15, 2014, the shareholders approved and adopted at the Annual General Meeting the Company’s 2014 Stock Option Plan. On April 14, 2011, the shareholders approved and adopted at the Annual General Meeting to consolidate the Company’s 2007 Equity compensation plan and the Company’s 2010 Equity Compensation Plan into a new Company 2011 Stock Option Plan. The purpose of these Plans is to advance the interests of the Corporation, through the grant of Options, by providing an incentive mechanism to foster the interest of eligible persons in the success of the Corporation and its affiliates; encouraging eligible persons to remain with the Corporation or its affiliates; and attracting new Directors, Officers, Employees and Consultants.
	On November 1, 2017, the Company granted 800,000 stock options to a director and consultant of the Company with an exercise price of $0.05, expiring November 2, 2022.
	On May 11, 2018, the Company granted 535,000 stock options to a director and consultant of the Company with an exercise price of $0.06, expiring May 11, 2023.
	On May 22, 2018, the Company granted 550,000 stock options to consultants of the Company with an exercise price of $0.07, expiring May 22, 2023.
	For the nine month period ended May 31, 2019, the Company recorded $Nil (May 31, 2018 – $89,596) stock based compensation expenses.
	A summary of the changes in stock options for the nine month period ended May 31, 2019 is presented below:

				Options Outstanding
				Weighted Average
	Number of Shares			Exercise Price
Balance, August 31, 2017	7,295,000		$	0.07
Granted	1,885,000			0.06
Exercised	(610,000	)		0.05
Balance, August 31, 2018	8,570,000		$	0.07
Granted	-			-
Expired	(250,000	)		0.06
Balance, May 31, 2019	8,320,000		$	0.07

The fair value of options granted has been estimated as of the date of the grant by using the Black-Scholes option pricing model with the following assumptions:

	May 31, 2019	May 31, 2018
Expected volatility	-	204%
Risk-free interest rate	-	1.93%
Expected life	-	5.00 years
Dividend yield	-	0.00%
Estimated fair value per option	-	$0.05

The Company has the following options outstanding and exercisable.

May 31, 2019

	Options outstanding and
	exercisable
	Number	Remaining
Exercise prices	of shares	contractual
		life
$0.07	550,000	3.98 years
$0.06	535,000	3.95 years
$0.05	800,000	3.41 years
$0.10	500,000	2.92 years
$0.07	1,500,000	2.67 years
$0.07	1,535,000	2.64 years
$0.07	800,000	2.31 years
$0.05	1,100,000	1.40 years
$0.10	1,000,000	0.43 years
	8,320,000	2.63 years

*The aggregate intrinsic value for options outstanding and exercisable as at May 31, 2019 was $Nil.

August 31, 2018

	Options outstanding and
	exercisable
	Number	Remaining
Exercise prices	of shares	contractual
		life
$0.07	550,000	4.73 years
$0.06	535,000	4.70 years
$0.05	800,000	4.16 years
$0.10	500,000	3.67 years
$0.07	1,500,000	3.42 years
$0.07	1,535,000	3.39 years
$0.07	800,000	3.05 years
$0.05	1,100,000	2.15 years
$0.10	1,000,000	1.18 years
$0.06	250,000	0.18 years
	8,570,000	2.88 years

Warrants

During the year ended August 31, 2018, the Company issued 16,781,900 warrants attached to units in private placements and 922,690 broker warrants in connection with the private placements, see Note 7 for disclosure of the terms of the warrants. The fair value of the brokers warrants was $27,791, recorded as share issuance costs off-setting the gross proceeds of private placements in additional-paid-in-capital, and was calculated using the Black Scholes option pricing model, with the following weighted average assumptions: expected volatility 152%, risk-free interest rate: 2.10%, expected life: 2.43 years, dividend yield: 0.00% .

During the nine month period ended May 31, 2019, the Company issued 7,731,769 warrants attached to units in private placements and 705,100 broker warrants in connection with the private placements. The fair value of the brokers warrants was $12,861, recorded as share issuance costs off-setting the gross proceeds of private placements in additional-paid-in-capital, and was calculated using the Black Scholes option pricing model, with the following weighted average assumptions: expected volatility 150%, risk-free interest rate: 2.38%, expected life: 3.71 years, dividend yield: 0.00% .

A summary of the changes in stock options for the nine month period ended May 31, 2019 is presented below:

				Warrants Outstanding
				Weighted Average
	Number of warrants			Exercise Price
Balance, August 31, 2017	39,191,810		$	0.09
Expired	(16,107,340	)		0.12
Issued	17,704,590			0.06
Exercised	(50,000	)		0.07
Balance, August 31, 2018	40,739,060		$	0.06
Expired	(19,781,137	)		0.07
Issued	8,436,869			0.04
Balance, May 31, 2019	29,394,792		$	0.05

Number		Exercise	Expiry
Outstanding1		Price	Date
6,009,369	$	0.040	March 27, 2023
2,427,500	$	0.050	September 21, 2021
4,800,000	$	0.050	August 31, 2021
2,540,000	$	0.075	May 25, 2020
1,891,590	$	0.075	May 11, 2020
1,688,600	$	0.060	January 12, 2020
4,184,400	$	0.060	December 8, 2019
2,600,000	$	0.060	November 1, 2019
3,253,333	$	0.050 and $0.10 after 18 months	June 8, 2019
29,394,792

¹Each warrant entitles a holder to purchase one common share.