Other liabilities

9 Months Ended

Aug. 31, 2013

Other liabilities [Text Block]

7     Other liabilities

The Company has adopted a Restricted Share Unit Plan (“RSU Plan”) to provide long-term incentives to employees. The RSU Plan may be settled in cash and/or common shares, at the Company’s election, with each Restricted Share Unit (“RSU”) entitling the holder to receive one common share.

Under Accounting Standards Codification (“ASC”) 718, the units are measured at fair value at the time of grant and recognized over the service period as stock-based compensation expense using the graded attribution method. The RSU Plan allows for the units to be settled in cash or common shares, at the Company’s election. At the current time, the Company is restricted from delivering common shares in full to officers as a result of the insider participation limit under the RSU Plan and therefore may settle with a combination of cash and shares. As such, the Company recognizes units granted to officers under the RSU plans as a liability, marked-to-market at each period end until the time of vesting.

On December 5, 2012, 1,000,000 RSUs were granted to officers vesting equally in thirds on June 5, 2013, December 5, 2013, and December 5, 2014.

A summary of the Company’s RSUs granted to officers and changes during the period ended is as follows:

	August 31, 2013
	Number of RSUs
Balance – beginning of period	-
Granted	1,000,000
Vested	(333,331	)
Balance – end of period	666,669

The fair value of the units recognized in the period has been estimated using the quoted market price of the Company’s shares at period end.

For the nine months ended August 31, 2013, NovaCopper recognized a stock-based compensation charge of $1.3 million for RSUs granted to officers. On June 5, 2013, 333,333 RSUs vested to officers and were settled through the issuance of 150,000 common shares and $0.3 million in cash. The RSUs vesting on December 5, 2013 are classified as a current liability of $0.5 million and the RSUs vesting on December 5, 2014 are classified as a long-term liability of $0.2 million.