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## 12. Share Capital 

## a. Authorized 

Unlimited common shares without par value 

## b. Issued and outstanding 

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(i) On September 25, 2009, the Company issued 475,000 common shares valued at $0.26 per share to settle a debt owing to Avocet in the amount of $122,788. The Company incurred transaction costs in the amount of $1,073 for filling fees related to the transaction. 

 (ii) On September 13, 2010, the Company issued 14,000,000 common shares valued at $0.24 per share for a total value of $3,406,900 to acquire the Famehub Properties (note 9(c)). The shares were subject to a four months hold period, which expired on January 13, 2011. 

## c. Warrants 

The continuity of share purchase warrants is as follows: 

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On August 11, 2010, the Company issued 5,000,000 common share purchase warrants in conjunction with the Gold Forward Sale (note 11(b)). Each share purchase warrant is exercisable at $0.48 per share, expiring five years from the date of issuance of the Notes. The warrants must be either exercised or otherwise expire on a pro-rata basis within 30 days of the delivery of gold by the Company. 

On February 3, 2011, the TSX Venture Exchange (TSXV) consented to extend the term of 68,055,000 common share purchase warrants for 12 months, from an expiry date of July 21, 2011 to an expiry date of July 21, 2012. All other terms of those warrants remain intact including the exercise price. As of the date of the Company's application to the TSXV, 2,680,000 of these warrants have been exercised, leaving 67,440,000 warrants unexercised. An incremental fair value of $2,953,678 was recognized against retained earnings and contributed surplus for the warrant extension. The fair value of the extended warrants was estimated using the Black-Scholes option pricing model with the following assumptions: risk free rate of 1.33%, volatility of 53.24%, expected life of 1.46 years and no expected dividends. The fair value of the warrants prior to extension was estimated using the Black-Scholes option pricing model with the following assumptions: risk free rate of 1.07%, volatility of 57.82%, expected life of 0.46 years and no expected dividends. 

