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## COMMANDER RESOURCES LTD. 

(An Exploration Stage Company) Notes to Financial Statements For the Years Ended December 31, 2012 and 2011 (Expressed in Canadian dollars) 

## 14. Share Capital (Continued) 

## (c) Stock options (Continued) 

A summary of the Company’s outstanding stock options as at December 31, 2012 and 2011 are as follows: 

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As of December 31, 2012, among the 9,739,500 outstanding options, 9,277,000 options were exercisable with a weighted average exercise price of $0.19 and a weighted average remaining contractual life of 2.41 years. During the year ended December 31, 2012, 52,500 stock options forfeited and 2,514,000 stock options expired unexercised. 

As of December 31, 2011, among the 10,071,000 outstanding options, 10,051,000 options were exercisable with a weighted average exercise price of $0.25 and a weighted average remaining contractual life of 2.50 years. During the year ended December 31, 2011, 1,151,500 stock options expired unexercised. 

The fair value of each option granted is estimated at the time of the grant using the Black-Scholes option pricing model with weighted average assumptions for the grants for the years ended December 31, 2012 and 2011 as follows: 

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The Company has estimated the forfeiture rate to be 0.00%. 

Expected volatility was determined based on the historical movements in the closing price of the Company’s stocks for a length of time to the expected life of each option. 

