Capital Stock

12 Months Ended

Dec. 31, 2019

Stockholders' Equity Note [Abstract]

Capital Stock

Authorized:

Unlimited number of common shares without par value

Unlimited number of preferred shares without par value

Issued:

Common Shares	Year ended					Year ended
	December 31, 2019					December 31, 2018
	Number		Amount			Number*			Amount
			$’000						$’000
Balance, beginning of year		254,355,192		$	301		25,436,715,471			$	31,868
Share reorganization		-			-		(25,182,360,279	)			(31,567	)
Share issued in reverse acquisition (note 26)		63,588,798			2,287		-				-
Balance, end of year		317,943,990		$	2,588		254,355,192			$	301

*The comparative share capital amounts for the year ended December 31, 2018 have been retroactively adjusted to reflect the legal capital of the Patagonia Gold Corp. (accounting acquiree). These amounts have been multiplied by 10.76 to reflect the shares issued to Patagonia Gold PLC in the reverse acquisition transaction.

Preferred shares are non-redeemable and non-transferrable with discretionary dividends and hence are classified as equity. Preferred shares shall be issued at a price of $0.30 per share and will not have voting rights. As of December 31, 2019, there were no preferred shares issued by the Company (2018 - nil).

Share reorganization

On 9 May 2018, Patagonia Gold PLC undertook a capital reorganisation of the Company's existing ordinary share capital, reducing the number of existing ordinary shares in issue (the “Existing Ordinary Shares”) by a factor of 100.

The capital reorganisation consisted of: the sub-division of each Existing Ordinary Share of £1 pence each into one Interim Ordinary Share of £0.01 pence and one Deferred Share of £0.99 pence; followed by the consolidation of every 100 Interim Ordinary Shares into one new ordinary share of £1 pence (the “New Ordinary Shares”); the sale of all fractional entitlements arising on consolidation; and the buy-back of all of the Company’s Deferred Shares of £0.99 pence each and subsequent cancellation of these shares. As result of the capital reorganisation Patagonia Gold has in issue £254,355,192* of New Ordinary Shares of £1 pence each in nominal value. The difference between the nominal value of the share capital prior to the capital reorganisation and the nominal value of share capital after it was recognised within a capital redemption reserve.

Shares issued in reverse acquisition

On July 24, 2019, Hunt concluded an agreement with PGP on the terms of a recommended share for share exchange offer to be made by Hunt for all the issued shares of common stock of PGP in exchange for the common shares of Hunt Mining on the basis of 10.76 Hunt Shares for each PGP Share. Hunt issued 254,355,192 common shares to the shareholders of PGP representing an ownership interest of approximately 80% in Hunt in exchange for all of the issued and outstanding shares of PGP (Note 26).

Stock options

Under the Company’s share option plan, and in accordance with TSX Venture Exchange requirements, the number of common shares reserved for issuance under the option plan shall not exceed 10% of the issued and outstanding common shares of the Company, have a maximum term of 5 years and vest at the discretion of the Board of Directors. In connection with the foregoing, the number of common shares reserved for issuance to: (a) any individual director or officer will not exceed 5% of the issued and outstanding common shares; and (b) all consultants will not exceed 2% of the issued and outstanding common shares.

All equity-settled share-based payments are ultimately recognized as an expense in the statement of operations and comprehensive income/(loss) with a corresponding credit to “Additional Paid in Capital”. If vesting periods or other non-market vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options expected to vest. Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognized in the current period. No adjustment is made to any expense recognized in prior periods if share options ultimately exercised are different to that estimated on vesting.

	December 31, 2019					December 31, 2018
	Number of options			Weighted Average Price (CAD)		Number of options			Weighted Average Price (CAD)
Balance, beginning of year		1,706,830		$	13.896		171,808,000		$	0.139
After Share reorganization		-		$	-		1,718,080		$	13.903
Granted		7,650,000		$	0.065		-		$	-
Expiration of stock options		(1,706,830	)	$	13.896		(11,250	)	$	13.886
Balance, end of year		7,650,000		$	0.065		1,706,830		$	13.896

	Range of Exercise prices (CAD)			Number outstanding		Weighted average life (years)		Weighted average exercise price (CAD)			Number exercisable on December 31, 2018
Stock options		$	0.065		7,650,000		4.74		$	0.065		7,650,000

On May 29, 2019, all outstanding stock option holders consented to the cancellation of their outstanding stock options.

On September 25, 2019, the Company granted 7,650,000 options to directors, officers, and employees with an exercise price of CAD $0.065 and an expiry date of September 25, 2024. The stock options vest one year after the date of grant. The fair value of the options on grant date was estimated to be $456 and the Company recognized an expense of $127 during the year. The fair value of the options were calculated using the Black-Scholes option pricing model and using the following assumptions:

	Year ended
	December 31, 2019
Discount rate	1.46%
Expected volatility	253.14%
Expected life (years)	5
Expected dividend yield	0%
Forfeiture rate	0%
Stock price	CAD$ 0.06

Warrants

_____________

There are no warrants outstanding at 31 December 2019 as they expired without being exercised during the previous year at the end of their four-year term.