Stock Based Compensation

6 Months Ended

Jun. 30, 2012

Stock Based Compensation [Abstract]

STOCK BASED COMPENSATION

6. STOCK BASED COMPENSATION

Stock options

The Company adopted a stock option plan which was amended in June 2007, 2008 and 2009 (the “Company Option Plan”), under which 18,700,000 Company shares were reserved for issuance upon exercise of options granted under the Company Option Plan. The Company Option Plan is intended to provide a means whereby the Company and its subsidiaries can attract, motivate and retain key employees, consultants, and service providers who can contribute materially to the Company’s growth and success, and to facilitate the acquisition of shares of the Company’s common stock. The Company Option Plan provides for incentive stock options meeting the requirements of Section 422 of the Internal Revenue Code and nonqualified stock options that do not meet the requirements for incentive stock options. The Company Option Plan requires the option exercise price per share purchasable under the option to be equal to the greater of the closing price of the Company’s common shares on the Toronto Stock Exchange the day before or date of grant for all nonqualified stock options and incentive stock options. The Company has historically issued new shares when share-based awards are exercised.

The following table and related information summarizes the Company’s stock options and the stock option activity for the six months ended June 30, 2012:

	Options Outstanding							Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (000’s)
	Options Available for  Grant		Number Outstanding			Weighted Average Exercise  Price per Share*
Available and outstanding at December 31, 2011		5,130,390		13,569,610		$	0.81
Granted		—		—			—
Exercised		181,848		(181,848	)		0.20
Forfeited		18,000		(18,000	)		0.57
Expired		500,000		(500,000	)		0.71
Available and outstanding at June 30, 2012		5,830,238		12,869,762		$	0.82		5.12	$	76
Exercisable at June 30, 2012				12,581,762		$	0.83		5.04	$	76
Vested or expected to vest at June 30, 2012				12,869,762		$	0.82		5.12	$	76

* Some of the options are granted with Canadian dollar exercise prices, and the weighted average prices reflect the U.S. dollar equivalent prices.

The following stock option grants were issued by the Company during the six months ended June 30, 2012 and 2011 respectively:

• The Company granted no options under the Company Option Plan in 2012 [2011—1,720,000]. The Company recorded compensation expense of $53 relating to vesting of previous grants [2011—$431]. As of June 30, 2012, there was $34 of total unrecognized compensation expense related to non-vested stock based compensation granted under the Company Option Plan which is expected to be recognized over a weighted average period of 0.6 years.

• The weighted-average fair value per share of options granted under the Company’s Options Plan during 2011 was $0.40. The total intrinsic value of share options exercised was $0 [2011—$81]. The total cash received from the exercise of stock options was $36 [2011—$10].

The fair value of all stock options granted during the six months ended June 30, 2012 and 2011 was estimated at the date of grant using a Black-Scholes option pricing model with the following assumptions:

	2012		2011
Expected dividend		—	0.0%
Risk-free interest rate		—	1.9%-2.6%
Expected volatility*		—	67.0%-67.7%
Expected life (in years)		—	5.5

* For the six months ended June 30, 2011, volatility was estimated based on combining the Company’s historical volatility with the historical volatilities of certain other comparable exploration stage mining companies.

The Company estimates expected forfeitures at the grant date and compensation expense is recorded only for those awards expected to vest. The estimate of expected forfeitures is reevaluated at the balance sheet date.

Option pricing models require the input of highly subjective assumptions, particularly as to the expected price volatility of the market value of the underlying stock. Changes in these assumptions can materially affect the fair value estimate and therefore it is management’s view that the existing models do not necessarily provide a single reliable measure of the fair value of the Company’s equity instruments.

Stock awards

The Company adopted the 2010 Company Stock Award Plan (the “Stock Award Plan”) that was approved in June 2010. The Common Stock that may be issued pursuant to Stock Awards shall not exceed 2,000,000 shares of Common Stock. The Common Stock subject to the Stock Award Plan shall be authorized and unissued stock. Stock Awards may be granted to Employees, Directors, Officers and Consultants. Stock Awards may be granted as Restricted Stock Awards or Restricted Stock Units. During the six months ended June 30, 2012, we did not grant any Restricted Stock Awards. During the six months ended June 30, 2011, we granted 210,000 Restricted Stock Awards to certain members of the executive management team and the Board of Directors. The Restricted Stock Awards vest 40% on the grant date (January 21, 2011), 30% on the 1^st anniversary of the grant date, and 30% on the 2^nd anniversary of the grant date. For the six months ended June 30, 2012, the Company recognized compensation expense of $16 [2011—$87] related to the Restricted Stock Awards. Also during the six months ended June 30, 2012, we did not grant any Restricted Stock Units. During the six months ended June 30, 2011, we issued 180,000 Restricted Stock Units to certain members of the Board of Directors. The Restricted Stock Units vested on the first anniversary of the grant date. The shares will be issued to the recipient on the earlier of their termination date or on the third anniversary of the grant date. During the six months ended June 30, 2012, 100,000 shares were issued to two members of the Board of Directors who resigned in the first quarter. For the six months ended June 30, 2012, the Company recognized compensation expense of $6 [2011—$55] related to the Restricted Stock Units.