6.	Share capital

Authorized:

unlimited common shares, no par value

in thousands of dollars, except share amounts

			Ascribed value
	Number of shares		$
November 30, 2015		104,796,421		136,040
Exercise of options		162,854		65
Restricted Share Units		108,399		34
Deferred Share Units		218,795		218
November 30, 2016		105,286,469		136,357
Exercise of options		58,822		23
Restricted Share Units		209,198		83
May 31, 2017, issued and outstanding		105,554,489		136,463

On April 30, 2012, under the NovaGold Arrangement, Trilogy committed to issue common shares, once vested, to satisfy holders of deferred share units (“NovaGold DSUs”) on record as of the close of business April 27, 2012. When vested, Trilogy 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. As of May 31, 2017, 20,685 NovaGold DSUs remain outstanding representing a right to receive 3,447 Common Shares in Trilogy, which will settle upon certain directors retiring from NovaGold’s board.

(a)	Stock options

During the period ended May 31, 2017, 1,695,000 options (May 31, 2016 – 1,785,000 options) at a weighted-average exercise price of CAD$0.72 (May 31, 2016 – CAD$0.44) were granted to employees, consultants and directors exercisable for a period of five years with various vesting terms between nil and two years. The weighted-average fair value attributable to options granted in the period was $0.22.

For the six month period ended May 31, 2017, Trilogy recognized a stock-based compensation charge of $0.27 million (May 31, 2016– $0.25 million) for options granted to directors, employees and service providers, net of forfeitures.

The fair value of the stock options recognized in the period has been estimated using the Black-Scholes option pricing model.

Assumptions used in the pricing model for the period are as provided below.

	May 31, 2017
Risk-free interest rates		0.89	%
Exercise price		CDN$0.72
Expected life		3.0 years
Expected volatility		74.3	%
Expected dividends		Nil

As of May 31, 2017, there were 1,405,843 non-vested options outstanding with a weighted average exercise price of $0.45; the non-vested stock option expense not yet recognized was $0.1 million. This expense is expected to be recognized over the next two years.

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

			May 31, 2017
			Weighted average
			exercise price
	Number of options		$
Balance – beginning of period		6,049,433		0.50
Granted		1,695,000		0.53
Exercised		(175,938)		0.34
Forfeited		(149,169)		0.41
Balance – end of period		7,419,326		0.51

The following table summarizes information about the stock options outstanding at May 31, 2017.

	Outstanding						Exercisable				Unvested
					Weighted				Weighted
			Weighted		average				average
	Number of		average		exercise		Number of		exercise		Number of
Range of	outstanding		years to		price		exercisable		price		unvested
price	options		expiry		$		options		$		options
$0.33 to $0.50		4,427,660		3.21		0.38		3,748,490		0.39		679,170
$0.51 to $1.00		2,936,666		3.55		0.69		2,209,993		0.75		726,673
$1.01 to $1.47		55,000		0.92		1.47		55,000		1.47		-
		7,419,326		3.33		0.51		6,013,483		0.53		1,405,843

The aggregate intrinsic value of vested share options (the market value less the exercise price) at May 31, 2017 was $1.2 million (May 31, 2016 - $0.78 million) and the aggregate intrinsic value of exercised options for the six months ended May 31, 2017 was $0.03 million (May 31, 2016 - $0.03 million).

(b)

NovaGold Arrangement Options

Under the NovaGold Arrangement, holders of NovaGold stock options received one option in Trilogy for every six options held in NovaGold (“NovaGold Arrangement Options”). All NovaGold Arrangement Options remaining expired during the six months ended May 31, 2017.

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

			May 31, 2017
			Weighted average
			exercise price
	Number of options		$
Balance – beginning of period		312,195		4.26
Expired		(312,195)		4.26
Balance – end of period		-		-

(c)	Restricted Share Units and Deferred Share Units

The Company has a Restricted Share Unit Plan (“RSU Plan”) and a Non-Executive Director Deferred Share Unit Plan (“DSU Plan”) to provide long-term incentives to employees, officers and directors. The RSU Plan and DSU Plan may be settled in cash and/or Common Shares at the Company’s election with each RSU and DSU entitling the holder to receive one common share of the Company or equivalent value. All units are accounted for as equity-settled awards.

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		400,001		925,390
Granted		600,000		72,241
Vested/paid		(399,999)		-
Balance – end of period		600,002		997,631

For the six months ended May 31, 2017, Trilogy recognized a stock-based compensation charge of $0.30 million (May 31, 2016- $0.15 million), net of forfeitures.

On December 15, 2016, 600,000 RSUs were granted to officers vesting one third immediately, one third on the first anniversary of the grant date, and one third on the second anniversary. On December 23, 2016, 399,999 RSUs vested and were settled through the issuance of 209,198 shares and a cash payment of $90,000 to cover tax withholdings.

(d)	Share Purchase Warrants

A summary of the Company’s warrants and changes during the three months ended May 31, 2017 is as follows:

					Weighted
			Weighted		average exercise
	Number of		average years to		price
	Warrants		expiry		$
Balance – beginning of period		6,521,740		2.35		1.60
Balance – end of period		6,521,740		2.35		1.60