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| SHARE CAPITAL | 6. SHARE CAPITAL Authorized The Company’s authorized share capital consists of an unlimited number of common shares, no par value. At December 31, 2025 and June 30, 2026, there were 207,885,473 and 261,637,473 shares issued and outstanding, respectively. Share issuances During the six months ended June 30, 2026, the Company issued 33,672,000 common shares pursuant to a $74,751,840 public offering at a price of $2.22 per common share, which included 4,392,000 common shares issued pursuant to the full exercise by the underwriters of their option to purchase additional common shares in connection with the offering. The Company also issued 18,018,018 common shares pursuant to a $40,000,000 non-brokered private placement at a price of $2.22 per common share, and an additional 1,501,982 common shares pursuant to a subsequent $3,334,400 non-brokered private placement at a price of $2.22 per common share, both to an existing major shareholder of the Company. During the six months ended June 30, 2026, the Company issued 560,000 common shares pursuant to the exercise of stock options for total proceeds of $267,795 and transferred related contributed surplus of $128,189 to share capital. Stock options The Company adopted an incentive stock option plan in 2006, as amended September 19, 2012, and reapproved by the Company’s shareholders on May 28, 2015, May 30, 2018, May 25, 2021, and May 29, 2024 (the “Stock Option Plan”). The essential elements of the Stock Option Plan provide that the aggregate number of common shares of the Company that may be issued pursuant to options granted under the Stock Option Plan and any other share-based compensation arrangements may not exceed 10% of the number of issued shares of the Company at the time of the granting of options. Options granted under the Stock Option Plan will have a maximum term of ten years. The exercise price of options granted under the Stock Option Plan shall be fixed in compliance with the applicable provisions of the Toronto Stock Exchange (“TSX”) Company Manual in force at the time of grant and, in any event, shall not be less than the closing price of the Company’s common shares on the TSX on the trading day immediately preceding the day on which the option is granted, or such other price as may be agreed to by the Company and accepted by the TSX. Options granted under the Stock Option Plan vest immediately, unless otherwise determined by the Board at the date of grant. A summary of the options outstanding under the Stock Option Plan as of June 30, 2026 and December 31, 2025 is presented below:
The weighted average remaining life of options outstanding at June 30, 2026 was 1.8 years. Further details regarding stock options outstanding as at June 30, 2026 and December 31, 2025 are presented below:
*Expiry date automatically extended to August 28, 2026, the tenth business day following the end of a normally scheduled quarterly blackout period imposed on the holders of the stock options, pursuant to the terms of the Stock Option Plan. A summary of the non-vested options as of June 30, 2026 and changes during the six months ended June 30, 2026 is as follows:
At June 30, 2026, there was unrecognized compensation expense of C$387,623 related to non-vested options outstanding. The cost is expected to be recognized over a weighted-average remaining period of approximately 1.4 years. Deferred Share Unit Incentive Plan On April 4, 2017, the Company adopted a Deferred Share Unit Plan (the “DSU Plan”). The DSU Plan was approved by the Company’s shareholders on May 24, 2017 and reapproved by the Company’s shareholders on May 27, 2020, May 25, 2021, and May 29, 2024. The maximum aggregate number of common shares that may be issued under the DSU Plan and the Stock Option Plan is 10% of the number of issued and outstanding common shares (on a non-diluted basis). During the three months ended March 31, 2026, the Company granted a total of 41,503 DSUs to three members of the Board pursuant to the DSU Plan. The DSUs granted had a grant date fair value (defined as the weighted average of the prices at which the common shares traded on the exchange with the most volume for the five trading days immediately preceding the grant) of C$3.44 per DSU, representing C$142,770 in the aggregate. During the three months ended June 30, 2026, the Company (i) granted each of the members of the Board (other than the director nominated for election by Paulson & Co. Inc.) 36,135 DSUs and (ii) granted the Lead Independent Director an additional 6,230 DSUs, for an aggregate total of 223,040 DSUs with a grant date fair value (defined as the weighted average of the prices at which the common shares traded on the exchange with the most volume for the five trading days immediately preceding the grant) of C$3.33 per DSU, representing C$120,330 per director, plus an additional C$20,743 for the Lead Independent Director, or C$742,723 in the aggregate. During the year ended December 31, 2025, in accordance with the DSU Plan, the Company granted each of the members of the Board (other than the director nominated for election by Paulson & Co. Inc.) 66,400 DSUs for a total of 332,000 DSUs with a grant date fair value (defined as the weighted average of the prices at which the common shares traded on the exchange with the most volume for the five trading days immediately preceding the grant) of C$1.25 per DSU, representing C$83,000 per director or C$415,000 in the aggregate. Each DSU entitles the holder to receive one common share of the Company’s stock without the payment of any consideration. The DSUs vest immediately upon being granted, but the common shares underlying the DSUs are not deliverable to the grantee until the grantee is no longer serving on the Board. DSUs outstanding as at June 30, 2026 and December 31, 2025 are as follows:
Share-based payments During the six months ended June 30, 2026, 240,000 stock options were granted under the Stock Option Plan and 264,543 DSUs were granted for common shares of the Company under the DSU Plan. Share-based payment compensation for the six months ended June 30, 2026 totalled $865,942 ($199,621 related to stock options and $666,321 related to DSUs). Of the total expense for the period ended June 30, 2026, $678,797 was included in consulting fees ($12,476 related to stock options and $666,321 related to DSUs), $12,476 related to stock options was included in investor relations, and $174,669 related to stock options was included in wages and benefits in the statement of operations and comprehensive loss. During the six months ended June 30, 2025, 240,000 stock options were granted under the Stock Option Plan and 332,000 DSUs were granted for common shares of the Company under the DSU Plan. Share-based payment compensation for the six months ended June 30, 2025 totalled $509,981 ($172,547 related to stock options and $337,434 related to DSUs). Of the total expense for the period ended June 30, 2025, $430,979 was included in consulting fees ($93,545 related to stock options and $337,434 related to DSUs), $5,267 related to stock options was included in investor relations, and $73,735 related to stock options was included in wages and benefits in the statement of operations and comprehensive loss.
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