Share capital

6 Months Ended

May 31, 2014

Share capital [Text Block]

6       Share capital

Authorized:
   unlimited common shares, no par value

in thousands of dollars, except share amounts
	Number of shares	Ascribed value
		$
November 30, 2012	46,665,069	92,168
Exercise of NovaGold Warrants	6,088,262	11,996
Exercise of NovaGold Arrangement Options	52,243	254
Vesting of NovaGold Performance and Deferred Share Units	16,586	32
Vesting of Restricted Share Units	244,496	445
November 30, 2013	53,066,656	104,895
Exercise of NovaGold Arrangement Options	46,929	632
Vesting of NovaGold Performance Share Units	14,166	28
Vesting of Restricted Share Units	425,833	803
Vesting of Deferred Share Units	154,373	282
May 31, 2014, issued and outstanding	53,707,957	106,640

On April 30, 2012 (the “Effective Date”), under the Plan of Arrangement, NovaGold distributed its interest in NovaCopper to the shareholders of NovaGold on the basis that each shareholder received one share in NovaCopper for every six shares of NovaGold held on the record date. NovaCopper committed to issue up to 6,181,352 common shares to satisfy holders of NovaGold warrants (“NovaGold Warrants”), performance share units (“NovaGold PSUs”) and deferred share units (“NovaGold DSUs”) on record as of the close of business April 27, 2012 on the same basis as NovaGold shareholders under the Plan of Arrangement. When a warrant is exercised or a unit becomes vested, NovaCopper has committed to deliver one common share to the holder for every six shares of NovaGold the holder is entitled to receive, rounded down to the nearest whole number. An amount of $12.2 million was recorded in contributed surplus representing a pro-rated amount of the historical NovaGold investment based on the fully diluted number of common shares at the Effective Date.

During the period ended May 31, 2014, the Company issued 14,166 common shares in settlement of NovaGold PSUs which vested on January 29, 2014 (May 31, 2013 – 14,180 common shares).

As of May 31, 2014, 20,685 NovaGold DSUs remain outstanding, which will settle upon the NovaGold directors’ retirement.

(a) Stock options No stock options were granted during the period ended May 31, 2014.

For the six month period ended May 31, 2014, NovaCopper recognized a stock-based compensation charge of $0.02 million for options granted to directors, employees and services providers, net of forfeitures.

A summary of the Company’s stock option plan and changes during the period ended is as follows:

			May 31, 2014
			Weighted average
			exercise price
	Number of options		$
Balance – beginning of period	168,332		1.75
Forfeited	(13,332	)	2.34
Balance – end of period	155,000		1.70

The following table summarizes information about the stock options outstanding at May 31, 2014.

		Stock options - outstanding		Stock options - exercisable
			Weighted		Weighted
	Number of	Weighted	average	Number of	average
	outstanding	average years	exercise price	exercisable	exercise price
Range of price	options	to expiry	$	options	$
$1.63 to $1.83	155,000	3.44	1.70	51,666	1.70
	155,000	3.69	1.70	51,666	1.70

(b) NovaGold Arrangement Options

Under the Plan of Arrangement, holders of NovaGold stock options received one option in NovaCopper for every six options held in NovaGold (“NovaGold Arrangement Options”). The exercise price of the options in NovaCopper was determined based on the relative fair values of NovaCopper and NovaGold based on the volume weighted-average trading prices on the Toronto Stock Exchange for the five trading days commencing on the sixth trading day following the Effective Date. All other terms of the options remained the same. A total of 2,189,040 NovaGold Arrangement options were granted under the Plan of Arrangement on April 30, 2012. No future stock options granted by NovaGold are subject to the Plan of Arrangement.

For the six month period ended May 31, 2014, NovaCopper recognized a stock-based compensation charge of $0.01 million for NovaGold Arrangement Options, net of forfeitures.

A summary of the NovaGold Arrangement Options and changes during the period ended is as follows:

			May 31, 2014
			Weighted average
			exercise price
	Number of options		$
Balance – beginning of period	1,709,503		4.00
Exercised	(212,075	)	1.21
Expired	(472,931	)	2.72
Forfeited	(236,569	)	4.97
Balance – end of period	787,928		5.22

The following table summarizes information about the NovaGold Arrangement Options outstanding at May 31, 2014.

		Stock options - outstanding		Stock options - exercisable
			Weighted		Weighted
	Number of	Weighted	average	Number of	average
	outstanding	average years	exercise price	exercisable	exercise price
Range of price	options	to expiry	$	options	$
$2.00 to $3.99	172,093	1.32	3.29	166,537	3.27
$4.00 to $5.99	399,059	2.39	5.06	339,894	5.24
$6.00 to $7.99	216,776	1.72	7.06	216,776	7.06
	787,928	1.97	5.22	723,207	5.33

(c) Restricted Share Units (“RSUs”) and Deferred Share Units (“DSUs”)

On December 5, 2012, 1,295,500 RSUs were granted to employees and officers vesting equally in thirds on June 5, 2013, December 5, 2013, and December 5, 2014. 750,000 DSUs that were granted to directors vested immediately and are to be paid out at the time of retirement from NovaCopper.

All non-executive directors have elected to receive 50% of their annual retainer in DSUs effective January 1, 2014.

A summary of the Company’s unit plans and changes during the period ended is as follows:

	Number of RSUs		Number of DSUs
Balance – beginning of period	851,673		750,000
Granted	-		22,564
Vested/paid	(425,833	)	(154,373	)
Forfeited	(3,500	)	-
Balance – end of period	422,340		618,191

For the six months ended May 31, 2014, NovaCopper recognized a stock-based compensation charge of $0.2 million for units granted to employees and directors, net of forfeitures.

On May 21, 2014, 78,712 DSUs were redeemed and paid out in common shares upon the resignation of a director.