SHAREHOLDERS' EQUITY

6 Months Ended

Jun. 30, 2013

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY

NOTE 7   SHAREHOLDERS’ EQUITY

During the six months ended June 30, 2013, 47.6 million exchangeable shares were converted into common stock.  At June 30, 2013, total outstanding exchangeable shares not exchanged and not owned by the Company or its subsidiaries totaled 35.8 million.

During the six months ended June 30, 2013, the Company issued 48,000 shares of common stock upon exercise of stock options under the Equity Incentive Plan at a weighted average exercise price of $1.97 per share for proceeds of $94,720.  During the same period, the Company issued the final installment of 41,500 shares of common stock as payment for mining concessions in Mexico.  In addition, the Company issued 1 million shares of common stock in January 2013, which was previously recorded as a liability of $3.8 million as at December 31, 2012, as part of the litigation settlement agreement with TNR Gold Corp. dated November 2012 with respect to the Los Azules Copper Project.  The issuance of the shares resulted in the elimination of the liability in the first quarter of 2013.