SHAREHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2013

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY

NOTE 7   SHAREHOLDERS’ EQUITY

During the nine months ended September 30, 2013, 49.9 million exchangeable shares were converted into common stock.  At September 30, 2013, total outstanding exchangeable shares not exchanged and not owned by the Company or its subsidiaries totaled 33.5 million.

During the nine months ended September 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. The Company also issued 45,000 shares of common stock upon exercise of certain stock options the Company assumed as part of the Minera Andes Inc. acquisition, at a weighted average exercise price of C$1.80 per share for proceeds of $76,926. 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. effective 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.

During the third quarter of 2013, the Company entered into an agreement with one of its mining contractors to settle parts of its expected future account payable with shares of common stock of the Company, up to a maximum of 2,500,000 common shares. The term of the agreement is six (6) months; provided, however, that the term may be extended by the parties. The number of shares to be issued will be determined monthly, based on the amount payable by the Company for services rendered above a certain production threshold, using the closing price quoted on active markets at the end of every month. As at September 30, 2013, the Company has agreed to issue approximately 15,800 common shares under this agreement. The fair value of this liability is included in accounts payable and accrued liabilities on the consolidated balance sheet as at September 30, 2013. The shares will be issued in the fourth quarter of 2013.