MINCO GOLD CORP (ifrs-full:DisclosureOfClassesOfShareCapitalExplanatory)

10.

Share capital

Common shares

Authorized: 100,000,000 common shares without par value

Stock options

Minco Gold may grant options to its directors, officers, employees and consultants under its stock option plan (the “Stock Option Plan”). The Company’s board of directors grants such options for periods of up to five years, with vesting periods determined at its sole discretion and at prices equal to or greater than the closing market price on the day preceding the date the options are granted. These options are equity-settled.

The current Stock Option Plan that was adopted and approved on June 27, 2017 provides that options may be granted to directors, employees and consultants or any of its affiliates of the Company on terms determined within the limitations set out in the Option Plan. The Company has implemented a fixed plan whereby it has reserved 10,152,976 shares for issuance under the Plan.

During the year ended December 31, 2017, the Company granted stock options to employees, consultants and directors for the purchase of 2,400,000 common shares at an exercise price ranged from $0.19 to $0.24 per common share. These options vest over an 18-month period from the issue date and will expire on five years after issuance if unexercised. A continuity of options is as follow:

	Number outstanding		Weighted average exercise price
			$
January 1, 2016		6,589,834		0.72
Exercised		(152,000)		0.26
Forfeited		(72,000)		0.47
Expired		(1,122,500)		2.17
Balance, December 31, 2016		5,243,334		0.43
Granted		2,400,000		0.23
Forfeited		(10,000)		0.26
Expired		(2,255,000)		0.57
Balance, December 31, 2017		5,378,334		0.28

The Company charged $308,803, $100,693, and $80,248 share-based compensation for 2017, 2016, and 2015 respectively. As at December 31, 2017, there was $80,708(2016 - $6,662) of unrecognized compensation cost relating to unvested stock options.

Options outstanding							Options exercisable
Range of exercise prices	Number outstanding		Weighted average remaining contractual life (years)		Weighted average exercise price		Number exercisable		Weighted average exercise price
$					$				$
0.18 – 0.24		3,403,334		3.76		0.23		1,669,996		0.24
0.25 – 0.42		885,000		1.05		0.26		885,000		0.26
0.43 – 0.46		1,090,000		0.04		0.46		1,090,000		0.46
		5,378,334		2.56		0.31		3,664,996		0.34

The Company uses the Black-Scholes option pricing model to determine the fair value of the options with the following assumptions:

	2017			2016		2015
Risk-free interest rate		0.78% - 1.74	%		-		0.78% - 1.68	%
Dividend yield		0	%		-		0	%
Volatility		97	%		-		86	%
Forfeiture rate		21	%		-		23	%
Estimated expected lives		5 years			-		5 years

Option pricing models require the use of subjective estimates and assumptions including the expected stock price volatility. The stock price volatility is calculated based on the Company’s historical volatility. Changes in the underlying assumptions can materially affect the fair value estimates.

MINCO GOLD CORP | CIK:0001020825 |

ifrs-full:DisclosureOfClassesOfShareCapitalExplanatory