| STOCK-BASED COMPENSATION [Text Block] | 6.
STOCK-BASED COMPENSATION
Stock-based compensation includes grants of stock options and purchase warrants to eligible directors, employees and consultants as determined by the Board of Directors.
Stock option plans
Stock warrants
Valuation of awards
1.
Service-based;
2.
Performance-based; and
3.
Market-based.
The Company used the following assumptions to estimate the fair values of the options granted for the years ended:
December 31, December 31,
2015 2014
Dividend yield
-
-
Expected volatility
71.55
-
165.7%
74.95
–
120.64%
Risk-free interest rate
0.02
–
1.32%
0.11
–
2.00%
Expected life (years)
0.10
–
4.25
1.0
–
7.89
Inputs used in these models are determined as follows:
1.
The expected life represents the weighted-average period the awards are expected to remain outstanding and is a derived output of the option pricing models. The expected life is impacted by all of the underlying assumptions and calibration of the Company’s models.
2.
The requisite service period for market-based stock option awards is a derived output of the hybrid Monte Carlo-Trinomial Lattice model.
3.
Volatility is based on the average historical volatility levels of a representative peer group or the Company’s common stock depending on the life of the options.
4.
The risk-free interest rate is based on the implied yield available on U.S. Treasury zero- coupon issues over the equivalent contractual lives of the options. During the year ended December 31, 2015, the Company’s stock based compensation activity was as follows:
a)
On December 18, 2015, the Company’s Board of Directors unilaterally determined to amend
650,531
stock options by extending their expiration dates. The options were granted at various dates between March 8, 2010 and July 22, 2010 and have a weighted average exercise price of $0.64
per share. The expiration dates of all of the options were extended to December 31, 2016. In all other respects, the terms and conditions of the extended options remain the same. No additional expense was recognized as a result of the modification.
b)
On April 1, 2015, the Company granted non-qualified stock options to certain executive officers under the Plan for an aggregate of
400,000
shares of common stock at an exercise price of $0.40
per option. The options vest upon completion of defined events and milestones. The performance targets were not met by December 31, 2015 and the options expired.
c)
On April 1, 2015, the Company granted non-qualified stock options to certain executive officers under the Plan for an aggregate of
400,000
shares of common stock at an exercise price of $0.40
per option. The options vest upon the Company’s stock price achieving defined targets. The options expire on the fifth anniversary of the date that they vest, but in no event later than the tenth anniversary of the agreement. Each of the options will automatically vest and become exercisable upon the occurrence of a change in control.
d)
On April 1, 2015, the Company granted non-qualified stock options to the Company’s independent directors and certain executive officers under the Plan for an aggregate of
2,700,000
shares of common stock at an exercise price of $0.40
per option. The options vest
25% each on April 1, 2015, June 30, 2015, September 30, 2015 and December 31, 2015. The options expire on the fifth anniversary of the date that they vest. The options will automatically vest and become exercisable upon the occurrence of a change in control.
e)
On February 25, 2015, the Company’s Board of Directors unilaterally determined to amend
650,531
stock options by extending their expiration dates. The options were granted at various dates between March 8, 2010 and July 22, 2010 and have a weighted average exercise price of $0.64
per share. The expiration dates of all of the options were extended to December 31, 2015. In all other respects, the terms and conditions of the extended options remain the same. The modification resulted in additional compensation expense of $25,387.
During the year ended December 31, 2014, the Company’s stock based compensation activity was as follows:
a)
On December 22, 2014, the Company extended the expiration date of
50,000
stock options issued to a director. The expiration date was extended from December 30, 2014 to June 29, 2015. All other terms were unchanged. The modification did not result in any additional expense.
b)
On September 11, 2014, the Company granted non-qualified stock options to certain employees under the Plan for an aggregate of
130,000
shares of common stock at an exercise price of $0.24
per option. The options vest upon completion of defined events and milestones. The options expire on the fifth anniversary of the date that they vest, but in no event later than the tenth anniversary of the agreement. Each of the options will automatically vest and become exercisable upon the occurrence of a change in control.
c)
On January 17, 2014, the Company granted non-qualified stock options to certain executive officers under the Plan for an aggregate of
325,000
shares of common stock at an exercise price of $0.28
per option. The options vest upon completion of defined events and milestones. The options expire on the fifth anniversary of the date that they vest, but in no event later than the tenth anniversary of the agreement. Each of the options will automatically vest and become exercisable upon the occurrence of a change in control.
d)
On January 17, 2014, the Company granted non-qualified stock options to certain executive officers under the Plan for an aggregate of
325,000
shares of common stock at an exercise price of $0.28
per option. The options vest upon the Company’s stock price achieving defined targets. The options expire on the fifth anniversary of the date that they vest, but in no event later than the tenth anniversary of the agreement. Each of the options will automatically vest and become exercisable upon the occurrence of a change in control.
e)
On January 17, 2014, the Company granted non-qualified stock options to the Company’s independent directors and certain executive officers under the Plan for an aggregate of
1,250,000
shares of common stock at an exercise price of $0.28
per option. The options vest
25% each on March 31, 2014, June 30, 2014, September 30, 2014 and December 31, 2014. The options expire on the fifth anniversary of the date that they vest. The options will automatically vest and become exercisable upon the occurrence of a change in control.
The total expense related to the granting, vesting and modification of all stock-based compensation awards was $500,194
and $297,079
for the years ended December 31, 2015 and 2014, respectively. Such expenses are included in general and administrative expense and mineral exploration and evaluation expense.
For the year ended December 31, 2015, the Company received $10,000
from the exercise of stock options; the related tax benefit amounted to $13,300
and the intrinsic value was $38,000. For the year ended December 31, 2014, the Company received $9,000
from the exercise of stock options; the related tax benefit amounted to $11,900
and the intrinsic value was $34,000.
The following table summarizes the Company’s stock-based compensation activity for the years ended December 31, 2015 and 2014:
Weighted
Weighted
Average
Average
Remaining
Grant
Weighted
Contractual
Aggregate
Number of
Date Fair
Average
Life
Intrinsic
Shares
Value
Exercise Price
(Years)
Value
Outstanding, December 31, 2013
15,312,197
$
0.35
$
0.62
3.13
Options/warrants granted
2,030,000
0.11
0.28
6.37
Options/warrants expired
(107,500
)
0.25
2.67
-
Options/warrants exercised
(180,000
)
0.38
0.05
-
Outstanding, December 31, 2014
17,054,697
0.32
0.58
3.17
Options/warrants granted
3,500,000
0.15
0.40
5.69
Options/warrants expired
(512,500
)
0.19
0.49
-
Options/warrants exercised
(200,000
)
0.38
0.05
-
Outstanding, December 31, 2015
19,842,197
$
0.30
$
0.56
2.90
$
333,000
Exercisable, December 31, 2015
15,612,197
$
0.30
$
0.53
2.11
$
333,000
Aggregate intrinsic value represents the value of the Company’s closing stock price on the last trading day of the year ended in excess of the weighted-average exercise price multiplied by the number of options outstanding or exercisable. The following table summarizes the changes of the Company’s stock-based compensation awards subject to vesting for the year ended December 31, 2015:
Weighted Average
Number of Grant Date
Shares Fair Value
Unvested, December 31, 2014
3,830,000
$
0.28
Granted
3,500,000
0.15
Expired
(400,000
)
0.15
Vested
(2,700,000
)
0.15
Unvested, December 31, 2015
4,230,000
$
0.27
As of December 31, 2015, there was $60,307
of total unrecognized compensation cost related to unvested stock-based compensation awards. The weighted average period over which this cost will be recognized was
1.24
years as of December 31, 2015. |
