Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 29, 2017 | Jun. 30, 2016 | |
Document And Entity Information | |||
Entity Registrant Name | Rare Element Resources Ltd | ||
Entity Central Index Key | 1,419,806 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 4,707,995 | ||
Entity Common Stock, Shares Outstanding | 52,941,880 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 927 | $ 3,881 |
Prepaid expenses | 81 | 172 |
Total Current Assets | 1,008 | 4,053 |
Equipment, net | 106 | 227 |
Investment in land | 600 | 980 |
Mineral properties | 0 | 27 |
Total Assets | 1,714 | 5,287 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued liabilities | 65 | 909 |
Asset retirement obligation | 152 | 152 |
Total Current Liabilities | 217 | 1,061 |
Asset retirement obligation | 205 | 205 |
Repurchase option | 600 | 0 |
Total Liabilities | 1,022 | 1,266 |
Commitments and Contingencies | ||
SHAREHOLDERS' EQUITY: | ||
Common shares, no par value – unlimited shares authorized; shares outstanding December 31, 2016 and 2015 – 52,941,880 | 103,640 | 103,640 |
Additional paid in capital | 23,626 | 23,529 |
Accumulated deficit | (126,574) | (123,148) |
Total Shareholders' Equity | 692 | 4,021 |
Total Liabilities and Shareholders' Equity | $ 1,714 | $ 5,287 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Financial Position [Abstract] | ||
Common Stock, Par Value | $ 0 | $ 0 |
Common Stock, Shares Authorized | Unlimited | Unlimited |
Common Stock, Shares Outstanding | 52,941,880 | 52,941,880 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Operating income and (expenses): | ||
Exploration and evaluation | $ (394) | $ (5,070) |
Corporate administration | (2,606) | (4,042) |
Depreciation | (38) | (118) |
Impairment of land and mineral property | (407) | 0 |
Total operating expenses | (3,445) | (9,230) |
Non-operating income and (expenses): | ||
Interest income | 0 | 28 |
Loss on currency translation | 0 | (476) |
Other income | 19 | 0 |
Gain/(loss) on derivatives | 0 | 0 |
Total non-operating expenses | 19 | (448) |
Net loss | $ 3,426 | $ 9,678 |
LOSS PER SHARE – BASIC AND DILUTED | $ (0.07) | $ (0.19) |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING | 52,491,880 | 51,234,725 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss for the period | $ (3,426) | $ (9,678) |
Adjustments to reconcile loss for the period to net cash and cash equivalents used in operations: | ||
Depreciation | 38 | 118 |
Asset retirement obligation | 0 | (9) |
Impairment of land and mineral property | (407) | 0 |
Unrealized (gain)/loss on derivatives | 0 | 0 |
Stock-based compensation | 97 | 254 |
Adjustments Total | (2,884) | (9,315) |
Changes in working capital: | ||
Prepaid expenses and other | 91 | 170 |
Accounts payable and accrued liabilities | (844) | (190) |
Net cash and cash equivalents used in operating activities | (3,637) | (9,335) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from sale of equipment | 88 | 0 |
Net cash and cash equivalents provided by (used in) investing activities | 88 | 0 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Share issuance, net | 0 | 3,077 |
Repurchase option | 595 | 0 |
Net cash and cash equivalents provided by (used in) financing activities | 595 | 3,077 |
Decrease in cash and cash equivalents | (2,954) | (6,258) |
Cash and cash equivalents - beginning of the period | 3,881 | 10,139 |
Cash and cash equivalents - end of the period | $ 927 | $ 3,881 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid in Capital | Accumulated Deficit | Total |
Beginning Balance, Amount at Dec. 31, 2014 | $ 100,652 | $ 23,186 | $ (113,470) | $ 10,368 |
Beginning Balance, Shares at Dec. 31, 2014 | 47,707,216 | |||
Shares issued For private placement, Shares | 5,230,770 | |||
Shares issued For private placement, Amount | $ 2,985 | 91 | 3,076 | |
Exercise of options, Shares | 3,894 | |||
Exercise of options, Amount | $ 3 | (2) | 1 | |
Stock-based compensation | 254 | 254 | ||
Net loss for the period | (9,678) | 9,678 | ||
Ending Balance, Amount at Dec. 31, 2015 | $ 103,640 | 23,529 | (123,148) | 4,021 |
Ending Balance, Shares at Dec. 31, 2015 | 52,941,880 | |||
Stock-based compensation | 97 | 97 | ||
Net loss for the period | (3,426) | 3,426 | ||
Ending Balance, Amount at Dec. 31, 2016 | $ 103,640 | $ 23,626 | $ (126,574) | $ 692 |
Ending Balance, Shares at Dec. 31, 2016 | 52,941,880 |
1. NATURE OF OPERATIONS
1. NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | Rare Element Resources Ltd. ( “we,” “us,” “Rare Element” or the “Company”) was incorporated under the laws of the Province of British Columbia, Canada, on June 3, 1999. Rare Element has historically been focused on advancing the Bear Lodge REE Project and the Sundance Gold Project both located near the town of Sundance in northeast Wyoming. The Bear Lodge REE Project consists of several large disseminated REE deposits and a proposed hydrometallurgical plant to be located near Upton, Wyoming. The Sundance Gold Project contains an inferred mineral resource primarily composed of three main gold targets within the area of the Bear Lodge Property. Based upon prior economic conditions for gold, no drilling or exploration on the Sundance Gold Project has been conducted since the end of 2011. The Company previously announced extensive cost cutting measures and the placement of the Bear Lodge REE Project on care-and-maintenance to enable us to move the Bear Lodge REE Project forward when market conditions improve. In the interim, we have been and will continue pursuing potential financings and strategic alternatives such as off-take agreements, joint ventures and the potential sale of various assets, including all or part of the Bear Lodge REE Project or the Sundance Gold Project. We continue to pursue opportunities to further reduce corporate and administration costs, including outsourcing of certain additional administrative functions. More recently, with gold markets improving, the Company has turned its attention to the gold potential of the Bear Lodge Property. The area with gold potential is mostly separate from the known rare earth deposits, including the Bull Hill deposit. However, there may be significant gold occurrences in some of the identified satellite rare earth deposits. Only further exploration will define the extent of overlapping occurrences, if any. Several parties have expressed an interest in exploring the gold potential of the Bear Lodge Property, and the Company is currently considering alternative proposals. The financial statements have been prepared on a going concern basis, which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception and further losses are anticipated in the development of its business, raising substantial doubt about the Company’s ability to continue as a going concern within one year from the filing date of these financial statements. The ability to continue as a going concern is dependent upon the Company obtaining the necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs with existing cash on hand, asset sales, strategic alliances and potential issuances of common stock. There can be no assurance that we will be able to raise the necessary financing or complete a strategic transaction on acceptable terms or at all. In order to continue as a going concern and/or preserve shareholder value, we may have to liquidate our assets. If the Company decides to sell part or all of its assets, the sale proceeds may be less than the value at which those assets are carried on our consolidated financial statements. As a result, investors may lose part or all of their investment. |
2. BASIS OF PRESENTATION
2. BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2016 | |
Basis Of Presentation | |
BASIS OF PRESENTATION | Principles of consolidation These consolidated financial statements have been prepared in accordance with U.S. GAAP and are inclusive of the accounts of Rare Element Resources Ltd. and its directly and indirectly held wholly owned subsidiaries, which consist of its wholly owned subsidiary Rare Element Holdings Ltd. (“Holdings”) and Holdings’ wholly owned subsidiary, Rare Element Resources, Inc. Certain comparative figures have been reclassified to conform to the financial statement presentation adopted for the current year. Rare Element Resources Ltd. was incorporated under the laws of the Province of British Columbia on June 3, 1999. Recent Accounting Pronouncements In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-15, “Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”). ASU 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. The amendments in this ASU are effective for reporting periods ending after December 15, 2016, with early adoption permitted. We adopted ASU 2014-15 as of December 31, 2016 and have made the required disclosures in the notes to our consolidated financial statements, as necessary. |
3. SUMMARY OF SIGNIFICANT ACCOU
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. The amounts which involve significant estimates include asset retirement obligations, stock-based compensation, derivative liabilities, and impairments. Cash and cash equivalents Cash and cash equivalents consist of cash and liquid investments with an original maturity of three months or less. At December 31, 2016 and 2015, cash and cash equivalents consisted of $927 and $3,881, respectively, of funds held in bank accounts with financial institutions in both Canada and the United States. Mineral properties Mineral property acquisition costs, including indirectly related acquisition costs, are capitalized when incurred. Acquisition costs include cash consideration and the fair market value of common shares issued as consideration. Properties acquired under option agreements, whereby payments are made at the sole discretion of the Company, are capitalized as mineral property acquisition costs at such time as the payments are made. Exploration costs are expensed as incurred. When it is determined that a mining deposit can be economically and legally extracted or produced based on established proven and probable reserves under SEC Industry Guide 7, development costs related to such reserves and incurred after such determination will be considered for capitalization. The establishment of proven and probable reserves is based on results of feasibility studies, which indicate whether a property is economically feasible. Upon commencement of commercial production, capitalized costs will be amortized over their estimated useful lives or units of production, whichever is a more reliable measure. Capitalized amounts relating to a property that is abandoned or otherwise considered uneconomic for the foreseeable future will be written off. Asset retirement obligations Our mining and exploration activities are subject to various laws and regulations, including legal and contractual obligations to reclaim, remediate, or otherwise restore properties at the time the property is removed from service. Asset retirement obligations are recognized when incurred and recorded as liabilities at fair value. The reclamation obligation is based on when spending for an existing disturbance will occur. We reclaim the disturbance from our exploration programs on an ongoing basis; therefore, the portion of our asset retirement obligation corresponding to our exploration programs will be settled in the near term and is classified as a current liability. The remaining reclamation associated with environmental monitoring programs is classified as a long-term liability; however, because we have not declared proven and probable reserves under SEC Industry Guide 7, the timing of these reclamation activities is uncertain. The fair value of the outstanding liability at the end of the period approximates the cost of the asset retirement obligation. For exploration stage properties that do not qualify for asset capitalization, the costs associated with the obligation are charged to operations. For development and production stage properties, the costs are added to the capitalized costs of the property and amortized using the units-of-production method. We review, on a quarterly basis, unless otherwise deemed necessary, the asset retirement obligation in connection with the Bear Lodge Property. Asset retirement obligations are secured by surety bonds held for the benefit of the state of Wyoming in amounts determined by applicable federal and state regulatory agencies. Changes in our asset retirement obligations are summarized in the following table: Year ended December 31, 2016 2015 Balance, beginning of period $ 357 $ 366 Additions – 16 Releases – (25) Balance, end of period $ 357 $ 357 Common shares Common shares issued for non-monetary consideration are recorded at fair market value based upon the trading price of our shares on the share issuance date. Common shares issued for monetary consideration are recorded at the amount received, less issuance costs. Depreciation Depreciation is based on the straight-line method. We depreciate computer equipment, furniture and fixtures and geological equipment over a period of three years. We depreciate vehicles over a period of five years. Stock-based compensation The fair value of stock-based compensation awards issued to employees and directors of the Company is measured at the date of grant and amortized over the requisite service period, which is generally the vesting period. The Company uses the Black-Scholes option valuation model to calculate the fair value of awards granted. The fair value of stock-based compensation awards issued to non-employees is determined on the measurement date of such awards. The measurement date is typically the vesting date. Upon vesting, the fair value of share-based compensation awards issued to non-employees is calculated using the Black-Scholes option valuation model, and the amount is recorded as an expense with a corresponding increase in additional paid-in-capital. When a stock-based compensation award is exercised and the resulting common shares are issued, the fair value of such award as determined on the date of grant or date of vesting (in the case of a non-employee exercise) is transferred to common shares. In the case of a share-based compensation award that is either cancelled or forfeited prior to vesting, the amortized expense associated with the unvested awards is reversed. Income taxes The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under the asset and liability method, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized if it is more likely than not that the entire or some portion of the deferred tax asset will not be recognized. Loss per share The loss per share is computed using the weighted average number of shares outstanding during the period. To calculate diluted loss per share, the Company uses the treasury stock method and the if-converted method. Diluted loss per share is not presented, as the effect on the basic loss per share would be anti-dilutive. At December 31, 2016 and 2015, we had 6,571,824 and 8,928,181 of potentially dilutive securities, respectively. Fair value of financial instruments Our financial instruments may at times consist of cash and cash equivalents, short-term investments, accounts receivable, restricted cash, accounts payable and accrued liabilities. U.S. GAAP defines fair value as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price) and establishes a fair-value hierarchy that prioritizes the inputs used to measure fair value using the following definitions (from highest to lowest priority): · Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. · Level 2 — Observable inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means. · Level 3 — Prices or valuation techniques requiring inputs that are both significant to the fair-value measurement and unobservable. The Company continually monitors its cash positions with, and the credit quality of, the financial institutions with which it invests. The Company maintains balances in various U.S. financial institutions in excess of U.S. federally insured limits. The following table presents information about financial instruments recognized at fair value on a recurring basis as of December 31, 2016 and 2015, and indicates the fair value hierarchy: December 31, 2016 December 31, 2015 Level 1 Level 2 Total Level 1 Level 2 Total Assets Cash and cash equivalents $ 927 $ – $ 927 $ 3,881 $ – $ 3,881 Total financial assets $ 927 $ – $ 927 $ 3,881 $ – $ 3,881 Liabilities Accounts payable and accrued liabilities $ 65 $ – $ 65 $ 909 $ – $ 909 Repurchase option 600 – 600 – – – Asset retirement obligation – 357 357 – 357 357 Total financial liabilities $ 665 $ 357 $ 1,022 $ 909 $ 357 $ 1,266 |
4. MINERAL PROPERTIES
4. MINERAL PROPERTIES | 12 Months Ended |
Dec. 31, 2016 | |
Extractive Industries [Abstract] | |
MINERAL PROPERTIES | The amounts shown represent acquisition costs, net of impairment charges, and do not necessarily represent present or future values as these are entirely dependent upon the economic recovery of future ore reserves. A summary of current property interests is as follows: Bear Lodge Property, Wyoming, USA The Company, through our indirectly held, wholly owned subsidiary, Rare Element Resources, Inc., holds a 100% interest in 499 unpatented mining claims located on land administered by the USFS and a repurchase option (see Note 5 for discussion) on approximately 640 acres (257 hectares) of fee property, together which contain (1) the Bear Lodge REE Project that contains REE mineralization; and (2) the Sundance Gold Project that contains gold mineralization. The property is situated in the Bear Lodge Mountains of Crook County, in northeast Wyoming. As the Bear Lodge property is on care -and-maintenance, we have recorded an impairment charge of $27 for the year ended December 31, 2016 to reduce the capitalized acquisition costs to zero. |
5. EQUIPMENT AND LAND
5. EQUIPMENT AND LAND | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
EQUIPMENT AND LAND | At December 31, 2016 and 2015, equipment consisted of the following: December 31, 2016 December 31, 2015 Cost Accumulated depreciation Net book value Cost Accumulated depreciation Net book value Computer equipment $ 61 $ 61 $ – $ 186 $ 178 $ 8 Furniture 13 13 – 106 72 34 Geological equipment 437 344 93 488 371 117 Vehicles 87 74 13 221 153 68 $ 598 $ 492 $ 106 $ 1,001 $ 774 $ 227 Depreciation expense for the year ended December 31, 2016 and 2015 was $38 and $118, respectively. We evaluate the recoverability of the carrying value of equipment when events and circumstances indicate that such assets might be impaired. On April 29, 2013, we completed a land acquisition from the state of Wyoming in conjunction with a third-party land exchange, resulting in approximately 640 acres being owned by the Company and subject to a royalty retained by the state of Wyoming. The royalty is a non-participating interest at the royalty rate commensurate with the state or federal royalty rate, whichever is higher, for any such mineral(s), at the time of development. The property is immediately adjacent to our mine site, and the cash consideration paid was $980. On October 26, 2016, we sold the approximately 640 acres of non-core real property to Whitelaw Creek LLC, a Wyoming limited liability company (“Whitelaw Creek”), for net proceeds of $595 in cash (the “Land Sale”). We have the right to repurchase the land (i) for $900 within three years following the Land Sale or (ii) for $1,000 after the third anniversary following the Land Sale but on or before the fifth anniversary of the Land Sale, in each case subject to certain adjustments (the “Repurchase Price”). Payment of the Repurchase Price may be made, at Whitelaw Creek’s option, in the form of cash, common shares of the Company, or a combination of cash and common shares of the Company. Payment of any common shares of the Company is subject to a beneficial ownership limitation for Whitelaw Creek and its affiliates collectively of 9.9% of the then-current total number of outstanding common shares of the Company, and in no event may the portion of the Repurchase Price paid in common shares of the Company exceed 5 million shares. Valuation of the common shares of the Company for purposes of payment of the Repurchase Price is based on the 10-day volume-weighted average closing price of such shares as of the closing date of the Land Sale, subject to certain conditions. As a result, we reduced the carrying value of the land by $380 to $600. For accounting purposes, we are utilizing the profit-sharing method for real estate transactions under U.S. GAAP as it is unlikely we will repurchase the land given our current financial condition. Under this method, we have classified our value in the land as an asset on our Consolidated Balance Sheet titled “Investment in land” and the value of the Repurchase Price as a liability on o Consolidated Balance Sheet titled “Repurchase option”. |
6. ADDITIONAL PAID IN CAPITAL
6. ADDITIONAL PAID IN CAPITAL | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
ADDITIONAL PAID IN CAPITAL | Stock-based compensation We have options outstanding and exercisable that were issued under the . The terms of the RSOP were approved by our shareholders at the annual meeting of shareholders on December 2, 2011. The RSOP established the maximum number of common shares which may be issued under the RSOP as a variable amount equal to 10% of the issued and outstanding common shares on a non-diluted basis. Under the RSOP, our Board of Directors may from time to time grant stock options to individual eligible directors, officers, employees or consultants. The maximum term of any stock option is 10 years. The exercise price of a stock option is not less than the closing price on the last trading day preceding the grant date. The Board retains the discretion to impose vesting periods on any options granted The fair value of stock option awards granted to directors, officers, employees and/or consultants of the Company are estimated on the grant date using the Black-Scholes option pricing model and the closing price of our common shares on the grant date. The significant assumptions used to estimate the fair value of stock option awards using the Black-Scholes model are as follows: For the years ended December 31, 2016 2015 Risk-free interest rate 1.9% 1.0 – 1.1% Expected volatility 91 – 109% 73 – 80% Expected dividend yield Nil Nil Expected term in years 5.0 3.4 – 3.5 Estimated forfeiture rate nil% 3.4 – 3.6% The following table summarizes stock option activity for each of the years ended December 31, 2016 and 2015: For the years ended December 31, 2016 2015 Number of Stock Options Weighted Average Exercise Price Number of Stock Options Weighted Average Exercise Price Outstanding, beginning of period 4,578,700 $4.61 4,345,500 $5.16 Granted 1,600,000 0.04 999,000 0.45 Exercised – – (12,600) 0.32 Cancelled/Expired (2,483,800) 6.12 (753,200) 3.17 Outstanding, end of period 3,694,900 $0.94 4,578,700 $3.99 Exercisable, end of period 3,232,400 $1.06 3,896,500 $4.61 Weighted-average fair value per share of options granted during period $0.03 $0.24 A summary of stock option activity as of December 31, 2016 and changes during the year then ended are presented below. Non-vested Stock Options Number Outstanding Weighted Average Grant Date Fair Value Non-vested at December 31, 2015 682,200 $ 0.25 Granted 1,600,000 Vested (1,819,700) Non-vested at December 31, 2016 462,500 $ 0.03 The stock-based compensation cost recognized in our consolidated statements of operations and comprehensive loss for the years ended December 31, 2016 and 2015 was $97 and $254, respectively. As of December 31, 2016, there was $21 of unrecognized compensation cost related to 725,000 unvested stock options. This cost is expected to be recognized over a weighted-average remaining period of approximately 0.5 years. At December 31, 2016, the intrinsic value of outstanding and exercisable stock options was $32 and $17, respectively. Warrants Each outstanding warrant is exercisable for one of the Company’s common shares and was issued to investors in connection with the registered direct offering of the Company that closed on April 29, 2015. In addition, the Company issued warrants to a placement agent in connection with the offering, under the same terms as those issued to investors. The exercise price and exercise period of the warrants are outlined below: Financing Investor Warrants Placement Agent Warrants Total Warrants Exercise Price per Share Expiration Date April 29, 2015 offering 2,615,385 261,539 2,876,924 $0.85 4/29/18 The value of the warrants issued to the placement agent (non-employee) for its services in connection with the April 29, 2015 offering was offset against the proceeds of the financing. The Company used a Black-Scholes model with inputs including a market price of the Company’s common shares of $0.72, an exercise price of $0.85 per share, a three-year term, volatility of 81.0%, a risk-free rate of 0.91% and no assumed dividends. The value of the warrants issued to the placement agent for its services in connection with the April 29, 2015 offering was estimated at $91. On September 27, 2016, 1,472,557 warrants that were issued as part of the September 27, 2013 registered direct offering of the Company expired unexercised. The following table summarizes activity for warrants for the years ended December 31, 2016 and 2015: For the year ended December 31, For the year ended December 31, 2015 2016 Number of Options and Warrants Weighted-Average Exercise Price (USD$) Number of Options and Warrants Weighted-Average Exercise Price (USD$) Outstanding, beginning of period 4,349,481 $ 1.97 1,472,557 $ 4.15 Granted – – 2,876,924 0.85 Expired 1,472,557 4.15 – – Outstanding, end of period 2,876,924 $ 0.85 4,349,481 $ 1.97 |
7. INCOME TAX
7. INCOME TAX | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX | We recognize future tax assets and liabilities for each tax jurisdiction based on the difference between the financial reporting and tax bases of assets and liabilities using the enacted tax rates expected to be in effect when the taxes are paid or recovered. A valuation allowance is provided against net future tax assets for which we do not consider the realization of such assets to meet the required “more likely than not” standard. Our future tax assets and liabilities at December 31, 2016 and 2015 include the following components: As of December 31, As of December 31, 2016 2015 Deferred tax assets: Current: Accrued vacation $ 10 $ 26 Reclamation provision 52 52 62 78 Non-current: Noncapital loss carryforwards, Canada 2,671 2,640 Capital loss carryforwards, Canada 7 7 Net operating loss carryforwards, U.S. 17,743 14,784 Mineral properties 11,076 13,017 Reclamation provision 70 70 Equipment 254 131 Share based compensation 1,032 3,362 Research and development 2,358 2,358 35,211 36,369 Deferred tax assets 35,273 36,447 Valuation allowance (35,273) (36,447) Net $ - $ - Deferred tax liabilities: Non-Current: Other - - Deferred tax liabilities - - Net deferred tax asset/(liability) - - The composition of our valuation allowance by tax jurisdiction is summarized as follows: As of December 31, 2016 2015 Canada $ 3,186 $ 3,148 United States 32,087 33,299 Total valuation allowance $ 35,273 $ 36,447 The valuation allowance decreased $1,174 from the period ended December 31, 2015 to the calendar year ended December 31, 2016. This was the result of an increase in the net deferred tax assets, primarily net operating loss (“NOL”) carryforwards, equity compensation for U.S. residents, exploration spending on mineral properties, research and experimental spending, and change in tax rates. Because we are unable to determine whether it is more likely than not that the net deferred tax assets will be realized, we continue to record a 100% valuation against the net deferred tax assets. At December 31, 2016, we had U.S. NOL carryforwards of approximately $52,186, which expire from 2018 to 2036. In addition, we had Canadian non-capital loss carryforwards of approximately CDN$10,941, which expire from 2017 to 2036. As of December 31, 2016, there were Canadian capital loss carryforwards of CDN$59. A full valuation allowance has been recorded against the tax effected U.S. and Canadian loss carryforwards as we do not consider realization of such assets to meet the required “more likely than not” standard. Section 382 of the Internal Revenue Code could apply and limit our ability to utilize a portion of the U.S. NOL carryforwards. No Section 382 study has been completed; therefore, the actual usage of U.S. NOL carryforwards has not been determined. Deferred tax assets relating to equity compensation have been reduced to reflect tax deductions in excess of previously recorded tax benefits through the year ended December 31, 2015. Our NOL carryforwards referenced above at December 31, 2016 and 2015 include $538 of income tax deductions in excess of previously recorded tax benefits. Although these additional tax deductions are reflected in the NOL carryforwards referenced above, the related tax benefit of $140 will not be recognized until the deductions reduce taxes payable. Accordingly, since the tax benefit does not reduce our current taxes payable for the periods ending December 31, 2016 or 2015, these tax benefits are not reflected in the deferred tax assets presented above. The tax benefit of these excess deductions will be reflected as a credit to additional paid-in capital when recognized. For financial reporting purposes, income/(loss) from continuing operations before income taxes consists of the following components: For the years ended December 31, 2016 2015 Canada $ (38) $ (617) United States (3,388) (9,061) $ (3,426) $ (9,678) A reconciliation of expected income tax on net income at statutory rates is as follows: As of December 31, As of December 31, 2016 2015 Net income (loss) $ (3,426) $ (9,678) Statutory tax rate 26.00% 26.00% Tax expense (recovery) at statutory rate (891) (2,516) Foreign tax rates (266) (591) Change in tax rates 548 166 Share issuance costs amortization (21) (103) Stock-based compensation 1,807 569 Nondeductible expenses – 17 Prior year true-up for loss carryovers 4 43 Prior year true-up for property basis adjustments (7) - Change in valuation allowance (1,174) 2,415 Income tax expense (recovery) $ - $ - We do not have any unrecognized income tax benefits. Should we incur interest and penalties relating to tax uncertainties, such amounts would be classified as a component of the interest expense and operating expense, respectively. Rare Element and its wholly owned subsidiary, Rare Element Holdings Ltd., file income tax returns in the Canadian federal jurisdiction and provincial jurisdictions, and its wholly owned subsidiary, Rare Element Resources, Inc., files in the U.S. federal jurisdiction and various state jurisdictions. The years still open for audit are generally the current year plus the previous three. However, because we have NOLs carrying forward, certain items attributable to closed tax years are still subject to adjustment by applicable taxing authorities through an adjustment to tax losses carried forward to open years. |
8. COMMITMENTS AND CONTINGENCIE
8. COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Potential environmental contingency Our exploration and development activities are subject to various federal and state laws and regulations governing the protection of the environment. These laws and regulations are continually changing and generally have become more restrictive. The Company conducts its operations to protect public health and the environment and believes its operations are materially in compliance with all applicable laws and regulations. We have made, and expect to make in the future, expenditures to comply with such laws and regulations. The ultimate amount of reclamation and other future site-restoration costs to be incurred for existing mining interests is uncertain. |
9. SUPPLEMENTAL DISCLOSURE WITH
9. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS | 12 Months Ended |
Dec. 31, 2016 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS | During the years ended December 31, 2016 and 2015, the Company received interest of $nil and $35, respectively. |
10. SEGMENT INFORMATION
10. SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | The Company operates in a single reportable operating segment, being the exploration of mineral properties. |
3. SUMMARY OF SIGNIFICANT ACC17
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Use of estimates | The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. The amounts which involve significant estimates include asset retirement obligations, stock-based compensation, derivative liabilities, and impairments. |
Cash and cash equivalents | Cash and cash equivalents consist of cash and liquid investments with an original maturity of three months or less. At December 31, 2016 and 2015, cash and cash equivalents consisted of $927 and $3,881, respectively, of funds held in bank accounts with financial institutions in both Canada and the United States. |
Mineral properties | Mineral property acquisition costs, including indirectly related acquisition costs, are capitalized when incurred. Acquisition costs include cash consideration and the fair market value of common shares issued as consideration. Properties acquired under option agreements, whereby payments are made at the sole discretion of the Company, are capitalized as mineral property acquisition costs at such time as the payments are made. Exploration costs are expensed as incurred. When it is determined that a mining deposit can be economically and legally extracted or produced based on established proven and probable reserves under SEC Industry Guide 7, development costs related to such reserves and incurred after such determination will be considered for capitalization. The establishment of proven and probable reserves is based on results of feasibility studies, which indicate whether a property is economically feasible. Upon commencement of commercial production, capitalized costs will be amortized over their estimated useful lives or units of production, whichever is a more reliable measure. Capitalized amounts relating to a property that is abandoned or otherwise considered uneconomic for the foreseeable future will be written off. |
Asset retirement obligations | Our mining and exploration activities are subject to various laws and regulations, including legal and contractual obligations to reclaim, remediate, or otherwise restore properties at the time the property is removed from service. Asset retirement obligations are recognized when incurred and recorded as liabilities at fair value. The reclamation obligation is based on when spending for an existing disturbance will occur. We reclaim the disturbance from our exploration programs on an ongoing basis; therefore, the portion of our asset retirement obligation corresponding to our exploration programs will be settled in the near term and is classified as a current liability. The remaining reclamation associated with environmental monitoring programs is classified as a long-term liability; however, because we have not declared proven and probable reserves under SEC Industry Guide 7, the timing of these reclamation activities is uncertain. The fair value of the outstanding liability at the end of the period approximates the cost of the asset retirement obligation. For exploration stage properties that do not qualify for asset capitalization, the costs associated with the obligation are charged to operations. For development and production stage properties, the costs are added to the capitalized costs of the property and amortized using the units-of-production method. We review, on a quarterly basis, unless otherwise deemed necessary, the asset retirement obligation in connection with the Bear Lodge Property. Asset retirement obligations are secured by surety bonds held for the benefit of the state of Wyoming in amounts determined by applicable federal and state regulatory agencies. Changes in our asset retirement obligations are summarized in the following table: Year ended December 31, 2016 2015 Balance, beginning of period $ 357 $ 366 Additions – 16 Releases – (25) Balance, end of period $ 357 $ 357 |
Common shares | Common shares issued for non-monetary consideration are recorded at fair market value based upon the trading price of our shares on the share issuance date. Common shares issued for monetary consideration are recorded at the amount received, less issuance costs. |
Depreciation | Depreciation is based on the straight-line method. We depreciate computer equipment, furniture and fixtures and geological equipment over a period of three years. We depreciate vehicles over a period of five years. |
Stock-based compensation | The fair value of stock-based compensation awards issued to employees and directors of the Company is measured at the date of grant and amortized over the requisite service period, which is generally the vesting period. The Company uses the Black-Scholes option valuation model to calculate the fair value of awards granted. The fair value of stock-based compensation awards issued to non-employees is determined on the measurement date of such awards. The measurement date is typically the vesting date. Upon vesting, the fair value of share-based compensation awards issued to non-employees is calculated using the Black-Scholes option valuation model, and the amount is recorded as an expense with a corresponding increase in additional paid-in-capital. When a stock-based compensation award is exercised and the resulting common shares are issued, the fair value of such award as determined on the date of grant or date of vesting (in the case of a non-employee exercise) is transferred to common shares. In the case of a share-based compensation award that is either cancelled or forfeited prior to vesting, the amortized expense associated with the unvested awards is reversed. |
Income taxes | The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under the asset and liability method, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized if it is more likely than not that the entire or some portion of the deferred tax asset will not be recognized. |
Loss per share | The loss per share is computed using the weighted average number of shares outstanding during the period. To calculate diluted loss per share, the Company uses the treasury stock method and the if-converted method. Diluted loss per share is not presented, as the effect on the basic loss per share would be anti-dilutive. At December 31, 2016 and 2015, we had 6,571,824 and 8,928,181 of potentially dilutive securities, respectively. |
Fair value of financial instruments | Our financial instruments may at times consist of cash and cash equivalents, short-term investments, accounts receivable, restricted cash, accounts payable and accrued liabilities. U.S. GAAP defines fair value as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price) and establishes a fair-value hierarchy that prioritizes the inputs used to measure fair value using the following definitions (from highest to lowest priority): · Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. · Level 2 — Observable inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means. · Level 3 — Prices or valuation techniques requiring inputs that are both significant to the fair-value measurement and unobservable. The Company continually monitors its cash positions with, and the credit quality of, the financial institutions with which it invests. The Company maintains balances in various U.S. financial institutions in excess of U.S. federally insured limits. The following table presents information about financial instruments recognized at fair value on a recurring basis as of December 31, 2016 and 2015, and indicates the fair value hierarchy: December 31, 2016 December 31, 2015 Level 1 Level 2 Total Level 1 Level 2 Total Assets Cash and cash equivalents $ 927 $ – $ 927 $ 3,881 $ – $ 3,881 Total financial assets $ 927 $ – $ 927 $ 3,881 $ – $ 3,881 Liabilities Accounts payable and accrued liabilities $ 65 $ – $ 65 $ 909 $ – $ 909 Repurchase option 600 – 600 – – – Asset retirement obligation – 357 357 – 357 357 Total financial liabilities $ 665 $ 357 $ 1,022 $ 909 $ 357 $ 1,266 |
3. SUMMARY OF SIGNIFICANT ACC18
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Current and non-current asset retirement obligations | Year ended December 31, 2016 2015 Balance, beginning of period $ 357 $ 366 Additions – 16 Releases – (25) Balance, end of period $ 357 $ 357 |
Financial instruments recognized at fair value on a recurring basis | December 31, 2016 December 31, 2015 Level 1 Level 2 Total Level 1 Level 2 Total Assets Cash and cash equivalents $ 927 $ – $ 927 $ 3,881 $ – $ 3,881 Total financial assets $ 927 $ – $ 927 $ 3,881 $ – $ 3,881 Liabilities Accounts payable and accrued liabilities $ 65 $ – $ 65 $ 909 $ – $ 909 Repurchase option 600 – 600 – – – Asset retirement obligation – 357 357 – 357 357 Total financial liabilities $ 665 $ 357 $ 1,022 $ 909 $ 357 $ 1,266 |
5. EQUIPMENT AND LAND (Tables)
5. EQUIPMENT AND LAND (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF EQUIPMENT AND LAND | December 31, 2016 December 31, 2015 Cost Accumulated depreciation Net book value Cost Accumulated depreciation Net book value Computer equipment $ 61 $ 61 $ – $ 186 $ 178 $ 8 Furniture 13 13 – 106 72 34 Geological equipment 437 344 93 488 371 117 Vehicles 87 74 13 221 153 68 $ 598 $ 492 $ 106 $ 1,001 $ 774 $ 227 |
6. ADDITIONAL PAID-IN CAPITAL (
6. ADDITIONAL PAID-IN CAPITAL (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Additional Paid in Capital [Abstract] | |
Fair value assumptions | For the years ended December 31, 2016 2015 Risk-free interest rate 1.9% 1.0 – 1.1% Expected volatility 91 – 109% 73 – 80% Expected dividend yield Nil Nil Expected term in years 5.0 3.4 – 3.5 Estimated forfeiture rate nil% 3.4 – 3.6% |
Stock option activity | For the years ended December 31, 2016 2015 Number of Stock Options Weighted Average Exercise Price Number of Stock Options Weighted Average Exercise Price Outstanding, beginning of period 4,578,700 $4.61 4,345,500 $5.16 Granted 1,600,000 0.04 999,000 0.45 Exercised – – (12,600) 0.32 Cancelled/Expired (2,483,800) 6.12 (753,200) 3.17 Outstanding, end of period 3,694,900 $0.94 4,578,700 $3.99 Exercisable, end of period 3,232,400 $1.06 3,896,500 $4.61 Weighted-average fair value per share of options granted during period $0.03 $0.24 |
Non-vested Stock option activity | Non-vested Stock Options Number Outstanding Weighted Average Grant Date Fair Value Non-vested at December 31, 2015 682,200 $ 0.25 Granted 1,600,000 Vested (1,819,700) Non-vested at December 31, 2016 462,500 $ 0.03 |
Exercise price and exercise period | Financing Investor Warrants Placement Agent Warrants Total Warrants Exercise Price per Share Expiration Date April 29, 2015 offering 2,615,385 261,539 2,876,924 $0.85 4/29/18 |
Options and warrants | For the year ended December 31, For the year ended December 31, 2015 2016 Number of Options and Warrants Weighted-Average Exercise Price (USD$) Number of Options and Warrants Weighted-Average Exercise Price (USD$) Outstanding, beginning of period 4,349,481 $ 1.97 1,472,557 $ 4.15 Granted – – 2,876,924 0.85 Expired 1,472,557 4.15 – – Outstanding, end of period 2,876,924 $ 0.85 4,349,481 $ 1.97 |
7. INCOME TAX (Tables)
7. INCOME TAX (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Deferred tax assets and liabilities | As of December 31, As of December 31, 2016 2015 Deferred tax assets: Current: Accrued vacation $ 10 $ 26 Reclamation provision 52 52 62 78 Non-current: Noncapital loss carryforwards, Canada 2,671 2,640 Capital loss carryforwards, Canada 7 7 Net operating loss carryforwards, U.S. 17,743 14,784 Mineral properties 11,076 13,017 Reclamation provision 70 70 Equipment 254 131 Share based compensation 1,032 3,362 Research and development 2,358 2,358 35,211 36,369 Deferred tax assets 35,273 36,447 Valuation allowance (35,273) (36,447) Net $ - $ - Deferred tax liabilities: Non-Current: Other - - Deferred tax liabilities - - Net deferred tax asset/(liability) - - |
Valuation allowance by tax jurisdiction | As of December 31, 2016 2015 Canada $ 3,186 $ 3,148 United States 32,087 33,299 Total valuation allowance $ 35,273 $ 36,447 |
Income/(loss) from continuing operations before income taxes | For the years ended December 31, 2016 2015 Canada $ (38) $ (617) United States (3,388) (9,061) $ (3,426) $ (9,678) |
Income tax reconciliation | As of December 31, As of December 31, 2016 2015 Net income (loss) $ (3,426) $ (9,678) Statutory tax rate 26.00% 26.00% Tax expense (recovery) at statutory rate (891) (2,516) Foreign tax rates (266) (591) Change in tax rates 548 166 Share issuance costs amortization (21) (103) Stock-based compensation 1,807 569 Nondeductible expenses – 17 Prior year true-up for loss carryovers 4 43 Prior year true-up for property basis adjustments (7) - Change in valuation allowance (1,174) 2,415 Income tax expense (recovery) $ - $ - |
3. SUMMARY OF SIGNIFICANT ACC22
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Asset Retirement Obligation [Abstract] | ||
Balance, beginning of period | $ 357 | $ 366 |
Additions | 0 | 16 |
Releases | 0 | (25) |
Balance, end of period | $ 357 | $ 357 |
3. SUMMARY OF SIGNIFICANT ACC23
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Assets | |||
Cash and cash equivalents | $ 927 | $ 3,881 | $ 10,139 |
Total financial assets | 927 | 3,881 | |
Liabilities | |||
Accounts payable and other accrued liabilities | 65 | 909 | |
Repurchase option | 600 | 0 | |
Asset retirement obligation | 357 | 357 | $ 366 |
Total financial assets and liabilities | 1,022 | 5,147 | |
Level 1 | |||
Assets | |||
Cash and cash equivalents | 927 | 3,881 | |
Total financial assets | 927 | 3,881 | |
Liabilities | |||
Accounts payable and other accrued liabilities | 65 | 909 | |
Repurchase option | 600 | ||
Asset retirement obligation | 0 | 0 | |
Total financial assets and liabilities | 665 | 4,790 | |
Level 2 | |||
Assets | |||
Cash and cash equivalents | 0 | 0 | |
Total financial assets | 0 | 0 | |
Liabilities | |||
Accounts payable and other accrued liabilities | 0 | 0 | |
Repurchase option | 0 | ||
Asset retirement obligation | 357 | 357 | |
Total financial assets and liabilities | $ 357 | $ 357 |
3. SUMMARY OF SIGNIFICANT ACC24
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | |||
Cash and cash equivalents | $ 927 | $ 3,881 | $ 10,139 |
Potentially dilutive securities | 6,571,824 | 8,928,181 |
5. EQUIPMENT AND LAND (Details)
5. EQUIPMENT AND LAND (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Cost | $ 598 | $ 1,001 |
Accumulated depreciation | 492 | 774 |
Net book value | 106 | 227 |
Computer equipment | ||
Cost | 61 | 186 |
Accumulated depreciation | 61 | 178 |
Net book value | 0 | 8 |
Furniture | ||
Cost | 13 | 106 |
Accumulated depreciation | 13 | 72 |
Net book value | 0 | 34 |
Geological equipment | ||
Cost | 437 | 488 |
Accumulated depreciation | 344 | 371 |
Net book value | 93 | 117 |
Vehicles | ||
Cost | 87 | 221 |
Accumulated depreciation | 74 | 153 |
Net book value | $ 13 | $ 68 |
5. EQUIPMENT AND LAND (Details
5. EQUIPMENT AND LAND (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 38 | $ 118 |
6. ADDITIONAL PAID-IN CAPITAL27
6. ADDITIONAL PAID-IN CAPITAL (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Directors, Officers or Employees | ||
Risk free interest rate, minimum | 1.90% | |
Expected volatiility, minimum | 91.00% | 73.00% |
Expected volatiility, maximum | 109.00% | 80.00% |
Expected dividend yield | 0.00% | 0.00% |
Expected term in years | 5 years | |
Estimated forfeiture rate | 0.00% | |
Directors, Officers or Employees | Minimum [Member] | ||
Risk free interest rate, minimum | 1.00% | |
Expected term in years | 3 years 4 months 24 days | |
Estimated forfeiture rate | 3.40% | |
Directors, Officers or Employees | Maximum [Member] | ||
Risk free interest rate, minimum | 1.10% | |
Expected term in years | 3 years 6 months | |
Estimated forfeiture rate | 3.60% | |
Consultants | ||
Expected volatiility, minimum | 0.00% | 0.00% |
Expected volatiility, maximum | 0.00% | 0.00% |
Expected dividend yield | 0.00% | 0.00% |
Estimated forfeiture rate | 0.00% | 0.00% |
6. ADDITIONAL PAID-IN CAPITAL28
6. ADDITIONAL PAID-IN CAPITAL (Details 1) - Stock Option [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Options | ||
Number of Options Outstanding, Beginning | 4,578,700 | 4,345,500 |
Number of Options Granted | 1,600,000 | 999,000 |
Number of Options Exercised | 0 | (12,600) |
Number of Options Cancelled/Forfeited/Expired | (2,483,800) | (753,200) |
Number of Options Outstanding, Ending | 3,694,900 | 4,578,700 |
Number of Options Exercisable | 3,232,400 | 3,896,500 |
Weighted Average Exercise Price | ||
Weighted Average Exercise Price Outstanding, Beginning | $ 4.61 | $ 5.16 |
Weighted Average Exercise Price Granted | 0.04 | 0.45 |
Weighted Average Exercise Price Exercised | 0 | 0.32 |
Weighted Average Exercise Price Cancelled/Forfeited/Expired | 6.12 | 3.17 |
Weighted Average Exercise Price Outstanding, Ending | 0.94 | 4.61 |
Weighted Average Exercise Price Exercisable | 1.06 | 4.61 |
Weighted-average fair value per share of options granted during the period | $ 0.03 | $ 0.24 |
6. ADDITIONAL PAID-IN CAPITAL29
6. ADDITIONAL PAID-IN CAPITAL (Details 2) | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Number Outstanding | |
Non-vested at December 31, 2015 | 682,200 |
Granted | 1,600,000 |
Vested | (1,819,700) |
Non-vested at December 31, 2016 | 462,500 |
Weighted Average Grant Date Fair Value | |
Non-vested at December 31, 2015 | $ / shares | $ 0.25 |
Non-vested at December 31, 2016 | $ / shares | $ 0.03 |
6. ADDITIONAL PAID-IN CAPITAL30
6. ADDITIONAL PAID-IN CAPITAL (Details 3) | 1 Months Ended |
Apr. 29, 2015$ / sharesshares | |
Total Warrants | 2,876,924 |
Exercise Price | $ / shares | $ 0.85 |
Expiration Date | Apr. 29, 2018 |
Investor Warrants | |
Total Warrants | 2,615,385 |
Placement Agent Warrants | |
Total Warrants | 261,539 |
6. ADDITIONAL PAID-IN CAPITAL31
6. ADDITIONAL PAID-IN CAPITAL (Details 4) - Option and Warrants [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Options | ||
Number of Options Outstanding, Beginning | 4,349,481 | 1,472,557 |
Number of Options Granted | 0 | 2,876,924 |
Number of Options Expired | 1,472,557 | 0 |
Number of Options Outstanding, Ending | 2,876,924 | 4,349,481 |
Weighted Average Exercise Price | ||
Weighted Average Exercise Price Outstanding, Beginning | $ 1.97 | $ 4.15 |
Weighted Average Exercise Price Granted | 0 | 0.85 |
Weighted Average Exercise Price Exercised | 0 | |
Weighted Average Exercise Price Expired | 4.15 | 0 |
Weighted Average Exercise Price Outstanding, Ending | $ 0.85 | $ 1.97 |
6. ADDITIONAL PAID IN CAPITAL
6. ADDITIONAL PAID IN CAPITAL (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Additional Paid in Capital [Abstract] | ||
Stock-based compensation cost | $ 97 | $ 254 |
Unvested stock options | 462,500 | 682,200 |
Unrecognized compensation cost | $ 21 | |
Period for recognition of compensation cost | 6 months | |
Total intrinsic value of options exercised | $ 32 | $ 17 |
7. INCOME TAX (Details)
7. INCOME TAX (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current: | ||
Accrued vacation | $ 10 | $ 26 |
Reclamation provision | 52 | 52 |
Total Deferred tax assets current | 62 | 78 |
Non-Current: | ||
Net operating loss carryforwards, US | 17,743 | 14,784 |
Mineral properties | 11,076 | 13,017 |
Reclamation provision | 70 | 70 |
Equipment | 254 | 131 |
Share based compensation | 1,032 | 3,362 |
Research and development | 2,358 | 2,358 |
Total Deferred tax assets non-current | 35,211 | 36,369 |
Deferred tax assets | 35,273 | 36,447 |
Valuation allowance | (35,273) | (36,447) |
Net | 0 | 0 |
Deferred tax liabilities Non-Current: | ||
Other | 0 | 0 |
Deferred tax liabilities | 0 | 0 |
Net deferred tax asset/(liability) | 0 | 0 |
Canada | ||
Non-Current: | ||
Noncapital loss carryforwards, Canada | 2,671 | 2,640 |
Capital loss, carryforwards, Canada | 7 | 7 |
US | ||
Non-Current: | ||
Net operating loss carryforwards, US | $ 17,743 | $ 14,784 |
7. INCOME TAX (Details 1)
7. INCOME TAX (Details 1) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
Canada | $ 3,186 | $ 3,148 |
United States | 32,087 | 33,299 |
Total valuation allowance | $ 35,273 | $ 36,447 |
7. INCOME TAX (Details 2)
7. INCOME TAX (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest [Abstract] | ||
Canada | $ (38) | $ (617) |
United States | (3,388) | (9,061) |
Net loss | $ 3,426 | $ 9,678 |
7. INCOME TAX (Details 3)
7. INCOME TAX (Details 3) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Net income (loss) | $ 3,426 | $ 9,678 |
Statutory tax rate | 26.00% | 26.00% |
Tax expense (recovery) at statutoy rate | $ (891) | $ (2,516) |
Foreign tax rates | (266) | (591) |
Change in tax rates | 548 | 166 |
Share issuance costs amortization | (21) | (103) |
Stock based compensation | 1,807 | 569 |
Nondeductible expenses | 0 | 17 |
Prior year true-up for loss carryovers | 4 | 43 |
Prior year true-up for property basis adjustments | (7) | 0 |
Change in valuation allowance | (1,174) | 2,415 |
Income tax expense (recovery) | $ 0 | $ 0 |
7. INCOME TAX (Details Narrativ
7. INCOME TAX (Details Narrative) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Decrease in valuation allowance | $ (1,174) |
Net operating loss carryforwards | 52,186 |
Tax deductions in excess of previous tax benefits | 538 |
Tax benefit related to net operating loss carryforward | 140 |
Canadian Dollars | |
Capital carryforward | $ 59 |
9. SUPPLEMENTAL DISCLOSURE WI38
9. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Other Information | ||
Interest received | $ 0 | $ 35 |