SHAREHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2015

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY

NOTE 10 SHAREHOLDERS’ EQUITY

During the year ended December 31, 2015, there were no exercises of stock options under the Equity Incentive Plan.  This compares to approximately 1,499,300shares of common stock issued during 2014 upon exercise at a weighted average exercise price of $1.29 per share, for proceeds of $1.9 million.   During the year ended December 31, 2014 the Company also issued 198,000 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$1.96 per share for proceeds of $0.4million.

During the year ended December  31, 2015, the Company issued 430,295 shares of common stock as part of an agreement with one of its mining contractors to settle parts of its accounts payable for services rendered above a defined tonnage threshold. The fair value of the common stock at the time of issuance was $0.4 million. The agreement with this mining contractor expired and was renegotiated during the year and under the revised agreement, the Company can no longer make share payments and instead is required to pay in cash.

On June 18, 2015, the Board of Directors declared an annual return of capital distribution of $0.01 per share of common stock, payable semi-annually.  The first semi-annual return of capital distribution payment of $0.005 was paid on August 17, 2015 to shareholders of record as of the close of business on July 31, 2015. The aggregate total semi-annual return of capital distribution paid was $1.5 million.  Return of capital distribution is paid to holders of the Company’s common stock and exchangeable shares. 

Subsequent to December 31, 2015, the Company paid aggregate total of $1.5 million as a result of the second semi-annual return of capital distribution made on February 12, 2016.

During the year ended December 31, 2015,  4.3 million (2014 – 3.7 million) exchangeable shares were converted into common stock. At December 31, 2015, the total outstanding exchangeable shares not exchanged and not owned by the Company or its subsidiaries totaled 24.2 million (2014 – 28.5 million). These exchangeable shares were initially issued by the Company in connection with the acquisition of Minera Andes. The exchangeable shares, by virtue of the redemption and exchange rights attached to them and the provisions of certain voting and support agreements, provide the holders with economic and voting rights that are, as nearly as practicable, equivalent to those of a holder of common stock of the Company. Accordingly, remaining exchangeable shares are included as part of the consolidated share capital of the Company.

On October 1, 2015, the Board of Directors approved a share repurchase program authorizing the Company to purchase up to 15,000,000 shares of its common stock over a twelve month period, with an authorized maximum of $15.0 million to be spent on the repurchases. Under the program, purchases of common stock may be made from time-to-time in the open market, subject to compliance with applicable U.S. and Canadian laws. The timing and amounts of any purchase are based on market conditions and other factors including share price, regulatory requirements and capital availability.  Further, the repurchase program may be suspended, discontinued or modified at any time, at the discretion of the Board of Directors.  As of December 31, 2015 the Company had repurchased 1,896,442 shares of common stock at a total cost of $1.8 million, which have been cancelled.

On October 16, 2014, the Company terminated the Back-In Right Option entered into with TNR Gold Corp (“TNR”) in November 2012.   In exchange for the termination of the Back-In Right Option, the Company issued 850,000 shares of common stock to TNR, and granted a 0.4% net smelter royalty (“NSR”) on the Los Azules project. The value of the 850,000 shares of $1.4 million was recorded as Exploration Costs in the Statement of Operations and Comprehensive Loss for the year ended December 31, 2014.