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 12, 2020, the Company issued 500,000 stock options to one of the consultants of the Company with an exercise price of $0.05 vested immediately, expiring November 12, 2025.

The fair value of the options granted was estimated on the date of the grant using the Black-Scholes options pricing model, with the following weighted average assumptions:

Expected dividend yield	0.00%
Expected stock volatility	149%
Risk-free interest rate	0.40%
Expected life of options (years)	5.00
Expected forfeiture rate	0.00%
Grant date fair value per option	$0.03

During the three-month period ended November 30, 2020, the Company recorded $15,450 (November 30, 2019 - $Nil) as stock based compensation expenses and a total of 1,100,000 stock options expired without being exercised (November 30, 2019 - 1,000,000).

A summary of the changes in stock options for the three months ended November 30, 2020 is presented below:

				Options Outstanding
				Weighted Average
	Number of Shares			Exercise Price
Balance, August 31, 2019	8,320,000		$	0.07
Expired	(1,000,000	)		0.10
Issued	2,000,000			0.02
Balance, August 31, 2020	9,320,000		$	0.06
Expired	(1,100,000	)		0.05
Issued	500,000			0.05
Balance, November 30, 2020	8,720,000		$	0.06

The Company has the following options outstanding and exercisable:

November 30, 2020
	Options outstanding and exercisable
	Number	Remaining
Exercise prices	of shares	contractual life
$0.05	500,000	5.00 years
$0.07	550,000	2.48 years
$0.06	535,000	2.45 years
$0.05	800,000	1.91 years
$0.10	500,000	1.42 years
$0.02	2,000,000*	1.24 years
$0.07	1,500,000	1.17 years
$0.07	1,535,000	1.14 years
$0.07	800,000	0.80 years

$0.06	8,720,000	1.95 years

*As at November 30, 2020 the market price of the Company's common shares was $0.0327 per share. A total of 2,000,000 incentive stock options, exercisable at $0.02, were in the money with an intrinsic value of $25,400.

August 31, 2020

	Options outstanding and exercisable
	Number	Remaining
Exercise prices	of shares	contractual life
$0.07	550,000	2.73 years
$0.06	535,000	2.70 years
$0.05	800,000	2.16 years
$0.10	500,000	1.67 years
$0.02	2,000,000	1.49 years
$0.07	1,500,000	1.42 years
$0.07	1,535,000	1.39 years
$0.07	800,000	1.05 years
$0.05	1,100,000	0.15 years

$0.06	9,320,000	1.48 years

Warrants

During the period ended November 30, 2020 there were no warrants issued.

A summary of warrants as at November 30, 2020 and August 31, 2020 is as follows:

				Warrants Outstanding
				Weighted Average
	Number of warrants			Exercise Price
Balance, August 31, 2019	26,141,459		$	0.06
Expired	(12,904,590	)		0.07
Balance, August 31, 2020 and November 30, 2020	13,236,869		$	0.05

Number Outstanding¹	Exercise Price	Expiry 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
13,236,869

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