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Stock Options

12 Months Ended

Apr. 30, 2016

NOTE 8 - STOCK OPTIONS

Options issued for mining interest

In consideration for mining interests (see Note 4), the Company is obligated to issue stock options to purchase shares of the Company’s common stock based on "fair market price" which for financial statement purposes is considered to be the closing price of the Company's common stock on the issue dates.

The Company has estimated the fair value of these option grants using the Black-Scholes model with the following information and range of assumptions:

	For the year ended
	April 30, 2016		April 30, 2015
Options issued		25,000		25,000
Exercise price	$	0.06	$	0.12
Volatility		359.7%		312.3%
Expected term (years)		10		10
Risk free rate		1.94%		1.77%

The following is a summary of the Company’s options issued and outstanding in conjunction with certain mining interest agreements on properties for the years ended April 30, 2016 and April 30, 2015, respectively:

	For the year ended April 30, 2016				For the year ended April 30, 2015
		Options	Price (a)		Options		Price (a)
Beginning balance		350,000	$	0.34		325,000	$	0.36
Issued		25,000		0.06		25,000		0.12
Exercised		-		-		-
Expired		-		-		-
Ending balance		375,000	$	0.32		350,000	$	0.34

^(a) Weighted average exercise price.

Fair value of the option grants for mining interests for the years ended April 30, 2016 and 2015, was $1,500 and $3,000, respectively. These costs were capitalized as Mining Interest (Note 4).

Options issued for consulting services

As per an agreement fully executed on October 3, 2012, in consideration for consulting and advisory services rendered, the Company is obligated to issue a total of 1,000 stock options based on 5 day variable weighted-average price (VWAP) at the end of each month of the associated consulting contract. The stock options have a term of 1 year. The consultant options vest on the first day of the following month of service and are exercisable for a period of six months following the termination of the agreement. The Company has estimated the fair value of these option grants using the Black-Scholes model with the following information and range of assumptions:

	For the years ended
	April 30, 2016		April 30, 2015
Options issued		12,000		12,000
Weighted average exercise price	$	0.08	$	0.19
Weighted average volatility		241.6% to 465.2%		223.1% to 279.4%
Expected term (years)		1		1
Risk free rate		0.25% to 0.68%		0.10% to 0.27%

The following is a summary of the Company’s options issued and outstanding associated with the consulting agreement:

	For the year ended April 30, 2016				For the year ended April 30, 2015
		Options	Price (a)		Options		Price (a)
Beginning balance		12,000	$	0.19		12,000	$	0.34
Issued		12,000		0.08		12,000		0.19
Exercised		-				-
Expired		(12,000)		(0.19)		(12,000)		(0.34)
Ending balance		12,000	$	0.08		12,000	$	0.19

^(a) Weighted average exercise price.

Total charged against operations under the option grants for consulting services was $$1,503 and $1,803, for the years ended April 30, 2016 and 2015, respectively. These costs are classified as management and administrative expense.

Options issued under the 2011 Stock Option/Restricted Plan

The Company established the 2011 Stock Option/Restricted Stock Plan. The Stock Option Plan is administered by the Board of Directors and provides for the grant of stock options to eligible individual including directors, executive officers and advisors that have furnished bona fide services to the Company not related to the sale of securities in a capital-raising transaction.

The Stock Option Plan has a fixed maximum percentage of 10% of the Company's outstanding shares that are eligible for the plan pool, whereby the number of Shares under the plan increases automatically increases as the total number of shares outstanding increase. The number of shares subject to the Stock Option Plan and any outstanding awards will be adjusted appropriately by the Board of Directors if the Company's common stock is affected through a reorganization, merger, consolidation, recapitalization, restructuring, reclassification dividend (other than quarterly cash dividends) or other distribution, stock split, spin-off or sale of substantially all of the Company's assets.

The Stock Option plan also has terms and conditions, including without limitations that the exercise price for stock options granted under the Stock Option Plan must equal the stock's fair market value, based on the closing price per share of common stock, at the time the stock option is granted. The fair value of each option award is estimated on the date of grant utilizing the Black-Scholes model and commonly utilized assumptions associated with the Black-Scholes methodology. Options granted under the Plan have a ten-year maximum term and varying vesting periods as determined by the Board.

The following is a summary of the Company’s options issued and outstanding in conjunction with the Company’s Stock Option Plan:

	For the year ended April 30, 2016				For the year ended April 30, 2015
		Options	Price (a)		Options		Price (a)
Beginning balance		2,696,667	$	0.37		3,235,000	$	0.38
Issued		-		-		-		-
Exercised		-		-		-		-
Forfeited		-		-		(538,333)		(0.46)
Ending balance		2,696,667	$	0.37		2,696,667	$	0.37

^(a) Weighted average exercise price.

The following table summarizes additional information about the options under the Company’s Stock Option Plan as of April 30, 2016:

	Options outstanding and exercisable
Date of Grant	Number	Price (a)	Remaining term (b)

May 27, 2011	200,000	$ 0.90	5.08
May 22, 2012	146,667	0.78	5.90
June 18, 2012	1,350,000	0.30	6.14
May 22, 2013	650,000	0.29	7.07
February 13, 2014	350,000	0.28	7.80
Total options	2,696,667	$ 0.37	6.47

(a)

Weighted average exercise price per shares

(b)

Weighted average remaining contractual term in years.

The total value of the Plan stock option awards is expensed ratably over the vesting period of the employees receiving the awards. As of April 30, 2016, there was no unrecognized compensation cost related to stock-based options and awards.

Total compensation charged against operations under the plan for employees and advisors was $102,490 for the year ended April 30, 2015. These costs were classified under management and administrative expense. No options were issued during the year ended April 30, 2016.

Summary:

The following is a summary of the Company’s stock options outstanding and exercisable:

	Options	Weighted average exercise price		Expiration date

Options issued for mining interests	375,000	$	0.32	April 11, 2019 through January 15, 2025
Options issued for consulting services	12,000		0.08	May 1, 2016 through April 1, 2017
Options issued under Stock Option Plan	2,696,667		0.37	May 30, 2021 through February 13, 2024
Total outstanding and exercisable	3,083,667	$	0.36

The aggregate intrinsic value of all options vested and exercisable at April 30, 2016, was $76 based on the Company's closing price of $0.06 per common share at April 30, 2016. The Company's current policy is to issue new shares to satisfy option exercises.