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Note 6 - Share Capital
 12 Months Ended
May 31, 2019
Notes to Financial Statements  
Share-based Payment Arrangement [Text Block]
6.
SHARE CAPITAL
 
Authorized
 
Unlimited common shares without par value.
 
Share issuances
 
During the year ended
May 31, 2019:
 
a) On
June 7, 2018,
the Company closed a private placement equity financing and issued
1,730,770
common shares at a price of
$2.60
per common share for gross proceeds of
$4,500,002.
The Company paid an additional
$14,605
in share issuance costs.
 
b) On
November 26, 2018,
the Company issued
25,000
common shares in connection with the lease on the Mayflower property (note
5a
)(ii)(
1
)), with a fair value of
$59,500.
The Company paid
$6,212
in share issuance costs.
 
c) In
November 2018,
the Company issued
4,036,900
common shares on the exercise of
4,036,900
stock options at an exercise price of
$0.86
per stock option for net proceeds of
$3,453,924.
 
d) On
December 20, 2018,
the Company closed a private placement equity financing and issued
800,000
common shares at a price of
$2.60
per common share for gross proceeds of
$2,080,000.
The Company paid an additional
$10,242
in share issuance costs.
 
e) In
April 2019,
the Company issued
615,000
common shares on the exercise of
615,000
stock options at an exercise price of
$1.40
per stock option for net proceeds of
$861,000.
 
During the year ended
May 31, 2018:
 
a) On
June 9, 2017,
the Company issued
1,000,000
common shares in connection with the acquisition of the Mother Lode Property (note
5b
)), with a fair value of
$810,000.
The Company paid an additional
$7,703
in share issuance costs.
 
b) On
July 6, 2017,
the Company closed a non-brokered private placement equity financing and issued
6,200,000
common shares at a price of
$0.75
per common share for gross proceeds of
$4,650,000.
In connection with the financing, the Company paid an additional
$14,788
in share issuance costs.
 
c) On
November 30, 2017,
the Company issued
25,000
common shares in connection with the lease on the Mayflower property (note
5a
)(ii)(
1
)), with a fair value of
$37,000.
 
d) An aggregate of
256,660
common shares were issued on exercise of
256,660
stock options for gross proceeds of
$169,863.
 
e) On
December 7, 2017,
the Company closed a non-brokered private placement equity financing and issued
2,829,130
common shares at a price of
$1.15
per common share for gross proceeds of
$3,253,499,
and
1,574,803
common shares at a price of
$1.27
per common share for gross proceeds of
$2,000,000.
In connection with the financing, the Company paid an additional
$84,857
in share issuance costs.
 
Stock options
 
Stock options awarded to employees and non-employees by the Company are measured and recognized in the Consolidated Statement of Operations and Comprehensive Loss over the vesting period.
 
The Company has adopted an incentive stock option plan,
first
adopted in
2010
and then amended in
2013
(the “Amended
2010
Plan”). The essential elements of the Amended
2010
Plan provide that the aggregate number of common shares of the Company’s share capital that
may
be made issuable pursuant to options granted under the Amended
2010
Plan (together with any other shares which
may
be issued under other share compensation plans of the Company)
may
not
exceed
10%
of the number of issued shares of the Company at the time of the granting of the options. Options granted under the Amended
2010
Plan will have a maximum term of
ten
years. The exercise price of options granted under the Amended
2010
Plan will
not
be less than the greater of the market price of the common shares (as defined by TSX, currently defined as the
5
day volume weighted average price for the
5
trading days immediately preceding the date of grant) or the closing market price of the Company’s common shares for the trading day immediately preceding the date of grant), or such other price as
may
be agreed to by the Company and accepted by the TSX. Options granted under the Amended
2010
Plan vest immediately, unless otherwise determined by the directors at the date of grant.
 
A summary of the status of the stock option plan as of
May 31, 2019,
and
2018,
and changes during the years are presented below:
 
    2019   2018
    Number of
Options		   Weighted
Average
Exercise
Price		   Number of
Options		   Weighted
Average
Exercise
Price
                 
Balance, beginning of the year    
9,861,900
     $
0.85
      
8,846,900
     $
0.87
  
Granted    
4,920,000
      
2.06
      
1,840,000
      
0.77
  
Exercised    
(4,651,900
 )    
(0.93
 )    
(256,660
 )    
(0.66
 )
Forfeited    
(130,000
 )    
(1.81
 )    
(568,340
 )    
(0.93
 )
                                 
Balance, end of the year    
10,000,000
     $
1.40
      
9,861,900
     $
0.85
  
 
The weighted average remaining contractual life of options outstanding at
May 31, 2019
was
3.25
years (
2018
–
1.74
years).
 
Stock options outstanding are as follows:
 
    2019   2018
Expiry Date   Exercise
Price		  
Number
of
Options
  
Exercisable
at Year-
End
   Exercise
Price		   Number of
Options		   Exercisable
at Year-
End
                         
September 19, 2017*   $
0.96
      
–
      
–
     $
0.96
      
1,966,900
      
1,966,900
  
August 16, 2018*   $
0.76
      
–
      
–
     $
0.76
      
2,095,000
      
2,095,000
  
September 8, 2019   $
1.40
      
635,000
      
635,000
     $
1.40
      
1,250,000
      
1,250,000
  
September 9, 2020   $
0.46
      
620,000
      
620,000
     $
0.46
      
625,000
      
625,000
  
November 13, 2020   $
0.49
      
1,000,000
      
1,000,000
     $
0.49
      
1,000,000
      
1,000,000
  
September 15, 2021   $
0.91
      
1,085,000
      
1,085,000
     $
0.91
      
1,085,000
      
722,610
  
July 31, 2022   $
0.77
      
1,840,000
      
612,720
     $
0.77
      
1,840,000
      
–
  
November 19, 2023   $
2.06
      
4,420,000
      
–
     $
–
      
–
      
–
  
April 9, 2024   $
2.04
      
400,000
      
–
     $
–
      
–
      
–
  
                                                 
     
 
      
10,000,000
      
3,952,720
      
 
      
9,861,900
      
7,659,510
  
 
*The Company’s share trading policy (the “Policy”) requires that all restricted persons and others who are subject to the Policy refrain from conducting any transactions involving the purchase or sale of the Company’s securities, during the period in any quarter commencing
30
days prior to the scheduled issuance of the next quarter or year-end public disclosure of the financial results as well as when there is material data on hand. In accordance with the terms of the Amended
2010
Plan, if stock options are set to expire during a restricted period and are
not
exercised prior to any such restriction, they will
not
expire but instead will be available for exercise for
ten
days after such restrictions are lifted.
 
The Company uses the fair value method for determining stock-based compensation for all options granted during the years. The fair value of options granted was
$7,442,708
(
2018
-
$951,067
), determined using the Black-Scholes option pricing model based on the following weighted average assumptions:
 
For the year ended May 31,   2019   2018
         
Risk-free interest rate    
2.22
 %    
1.65
 %
Expected life of options (in years)    
5
      
5
  
Annualized volatility    
73.88
 %    
79.14
 %
Dividend yield    
0
 %    
0
 %
Exercise price   $
2.06
     $
0.77
  
                 
Fair value per share   $
1.51
     $
0.52
  
 
Annualized volatility was determined by reference to historic volatility of the Company.
 
Stock-based compensation has been allocated to the same expenses as cash compensation paid to the same employees or consultants, as follows:
 
For the year ended May 31,   2019   2018
         
Consulting fees   $
728,748
     $
306,510
  
Exploration expenditures – Geological/geophysical    
140,318
      
55,464
  
Investor relations    
218,853
      
92,351
  
Professional fees    
12,051
      
7,332
  
Wages and benefits    
533,987
      
211,576
  
                 
    $
1,633,957
     $
673,233