STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2017

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

NOTE 9   STOCK-BASED COMPENSATION

During the nine months ended September 30, 2017, 0.4 million stock options were granted to certain employees at a weighted average exercise price of $2.78 per share, which includes 0.1 million options issued as part of exchange of each option to purchase a common share of Lexam for a replacement option entitling the holder to acquire 0.056 share of the Company’s common stock.  See Note 15 Acquisition of Lexam.  In comparison, during the nine months ended September 30, 2016, 0.6 million stock options were granted to certain employees at a weighted average exercise price of $3.99 per share. The options vest equally over a three-year period (subject to acceleration of vesting in certain events) if the individual remains affiliated with the Company and are exercisable for a period of 5 years from the date of issue.

The principal assumptions used in applying the Black-Scholes option pricing model for these awards were as follows:

	Three months ended  September 30,				Nine months ended September 30,
	2017		2016		2017		2016
Risk-free interest rate	1.46	%	1.15	%	1.49	%	1.15	%
Dividend yield	0.36	%	0.25	%	0.34	%	0.25	%
Volatility factor of the expected market price of common stock	72	%	74	%	73	%	74	%
Weighted-average expected life of option	3.5 years		5 years		3.5 years		5 years
Weighted-average grant date fair value	1.40		2.36		1.52		2.36

During the three and nine months ended September 30, 2017, the Company recorded stock option expense of $0.3 million and $1.1 million respectively.  This compares to $0.3 million and $0.8 million for the three and nine months ended September 30, 2016.