DEF 14A of International Tower Hill Mines LTD
Filed Apr 16, 2025 · FY20240001104659-25-035566
PROPOSAL ONE – ELECTION OF DIRECTORS
PROPOSAL ONE – ELECTION OF DIRECTORS The directors of the Company are elected at each annual general meeting of shareholders to hold office until the next annual general meeting of shareholders or until their successors are duly elected or appointed, unless their office is earlier vacated in accordance with the Business Corporations Act (British Columbia) (“BCBCA”). Since the 2024 Annual General Meeting of Shareholders, no fees have been paid to any third party to identify or evaluate a potential director nominee. Information concerning the nominees for election as directors is set forth below under “Directors and Officers – Nominees for the Board.” In the absence of instructions to the contrary, the Common Shares represented by proxies will be voted FOR each of the nominees listed below. Management does not contemplate that any of the nominees will be unable to serve as a director. All nominees are current directors of the Company.
DIRECTORS AND OFFICERS
DIRECTORS AND OFFICERS The following table sets forth certain information with respect to current directors and executive officers of the Company as of April 16, 2025.
DIRECTORS AND OFFICERS
| Name and Residence | Age | Position | Director Since | Current or Former Public Company Directorships | Stock Exchange | | Anton Drescher British Columbia, Canada | 68 | Director | October 1, 1991 | CENTR Brands Corp. (current) Oculus Inc. (current) Xiana Mining Inc. (current) ZEB Nickel Corp. (formerly Blue Rhino Capital Corp.) (former) Corvus Gold Inc (former) Lamaska Capital Corp. (former) | CSE TSXV, OTC Bulletin Board TSXV (suspended) TSXV TSX, Nasdaq TSXV | | Stuart Harshaw Ontario, Canada | 57 | Director | April 1, 2018 | Nickel Creek Platinum Corp. (current) Platinum Group Metals Ltd. (current) Constantine Metal Resources Ltd. (former) FPX Nickel Corp. (former) | TSX TSX, NYSE American TSXV TSXV | | Marcelo Kim New York, USA | 38 | Director (Chair) | December 28, 2016 | Perpetua Resources Corp. (formerly Midas Gold Corp.) (current) | TSX, Nasdaq | | Tully, Edel Dublin, Ireland | 45 | Director | June 18, 2023 | N/A | N/A | | Thomas Weng New Jersey, USA | 56 | Director (Lead Independent Director) | August 5, 2013 | Hycroft Mining Holding Corp. (chair) (current) Jaguar Mining Inc. (current) | Nasdaq TSX | | Karl Hanneman Alaska, USA | 67 | Director & CEO | May 30, 2018 | Northrim BanCorp, Inc. (current) Gatos Silver, Inc. (former) | Nasdaq NYSE, TSX | | David Cross British Columbia, Canada | 49 | CFO | N/A | Aloro Mining Corp. (current) New Target Mining Corp. (current) Advantage Lithium Corp. (former) Victory Resources Corp. (former) | TSXV TSXV TSXV CSE |
DIRECTORS AND OFFICERS
Nominees for the Board: The directors of the Company are elected at each annual general meeting of shareholders and hold office until the next annual general meeting of shareholders or until their successors are duly elected or appointed, unless their office is earlier vacated in accordance with the BCBCA. The following is a brief biographical description of each director nominee, which includes a discussion of the skills and attributes of each director nominee, and that, in part, led the Corporate Governance and Nominating Committee (“CGNC”) to conclude that each respective director should serve, or continue to serve, as applicable, as a member of the Board. Pursuant to an Investor Rights Agreement dated December 28, 2016 between Paulson & Co. Inc. (“Paulson”) and the Company (“IRA”), the Company has agreed with Paulson that, so long as Paulson, together with its affiliates, owns in the aggregate 20% or more of the issued and outstanding Common Shares, Paulson is entitled to designate two nominees for election to the Board. Paulson and its affiliates currently own 70,239,388 Common Shares in the aggregate, representing approximately 33.8% of the currently outstanding Common Shares, and Paulson is therefore entitled to nominate two persons for election to the Board. Paulson has determined to nominate Marcelo Kim, the current Chair of the Board, for re-election to the Board. Anton Drescher – Mr. Drescher has been a Chartered Professional Accountant, Certified Management Accountant since 1981. He is currently involved with three public companies in addition to International Tower Hill Mines Ltd., including as: a director (since 1996) and Chief Financial Officer (since 2012) of Xiana Mining Inc., a public mineral exploration company currently suspended from listing on the TSXV; the Chief Financial Officer and director (since 1994) of Oculus Inc. (formerly Oculus VisionTech Inc.), a public company involved in data privacy and security listed on the TSXV and the OTC Bulletin Board; a director (since 2014) of CENTR Brands Corp., a public company listed on the CSE; a former director (from 2020 - 2023) of ZEB Nickel Corp. (formerly Blue Rhino Capital Corp.), a public company listed on the TSXV. Mr. Drescher is a former director (2010 - 2022) of Corvus Gold Inc., a mineral exploration company previously listed on the TSX and Nasdaq, and a former director (from 2019 - 2021) of Lamaska Capital Corp., a public company listed on the TSXV. Mr. Drescher is also the President (since 1979) of Westpoint Management Consultants Limited, a private company engaged in tax and accounting consulting for business reorganizations, and the President (since 1998) of Harbour Pacific Capital Corp., a private company involved in regulatory filings for businesses in Canada. The CGNC recommended that the Company nominate Mr. Drescher for re-election to the Board due to his significant financial and accounting experience, together with his director experience with other mining and mineral exploration companies. Karl Hanneman – Mr. Hanneman has been the Chief Executive Officer of the Company since January 31, 2017 and a director since May 30, 2018. Prior to that he was the Chief Operating Officer of the Company since March 26, 2015 and was, prior to that, the General Manager for the Company. Mr. Hanneman has been with the Company since May 2010, during which time he was responsible for assembling the Alaska team and served as General Manager of the Company’s Livengood Gold Project (the “Livengood Gold Project”). Mr. Hanneman has more than 40 years of Alaska-based mining industry experience including 12 years for Teck Resources Limited, where he served as Alaska Regional Manager throughout the period of underground exploration, feasibility study, project design, and permitting at the Pogo Mine, and then as Director, Corporate Affairs, Alaska for Teck, serving as the senior corporate representative in Alaska supporting both the Red Dog and Pogo Mines. Mr. Hanneman has been involved in industry leadership positions throughout his career as President, Council of Alaska Producers; President, Alaska Miners Association; Governor’s appointee to the Alaska Minerals Commission; Director, Resource Development Council; and Director, Fairbanks Chamber of Commerce. Mr. Hanneman is a director of Northrim BanCorp, Inc. (since 2014) and a former director of Gatos Silver, Inc. (2020-2025). Mr. Hanneman has a Bachelor of Science Degree in Mining Engineering, magna cum laude, from the University of Alaska. The CGNC recommended that the Company nominate Mr. Hanneman for re-election to the Board due to his knowledge of the Company and the Livengood Gold Project and his extensive experience with other mining and mineral exploration companies. Stuart Harshaw – Mr. Harshaw is a seasoned mining executive with over 30 years’ experience. Mr. Harshaw is currently President and CEO of Nickel Creek Platinum (since 2020), a junior mining company with a nickel-copper-PGM property in the Yukon, Canada. Mr. Harshaw currently works as President of Stuart Harshaw Consulting since January 2018 and previously worked as Vice-President Ontario Operations with Vale (from January 2016 – October 2017) where he was responsible for the Base Metal operations in Ontario, which includes 6 mines, a mill, smelter, nickel refinery, cobalt refinery, precious metal refinery and hydroelectric production facilities. Previously, he was Vice-President, Marketing & Sales, Base Metals for Vale International, where he was responsible for the marketing and sales of base metals in the Asia Pacific region and the management of nickel refineries in Asia, specifically in Japan, China, Taiwan, and a joint venture in Korea. Mr. Harshaw earned a Bachelor of Science in Metallurgical Engineering from Queen’s University and an MBA from Laurentian University. The CGNC recommended that the Company nominate Mr. Harshaw for election to the Board due to his extensive executive experience and experience with other mining and mineral exploration companies. Marcelo Kim – Mr. Kim has been a Partner at Paulson since 2011, where he oversees natural resource investments, specializing in gold, base metals, bulk commodities, and oil & gas. Prior to that, commencing in 2009, he was a generalist analyst covering event arbitrage investment opportunities across broad sectors and capital structures. Mr. Kim is chairman of the board of Perpetua Resources. He graduated from Yale University, where he received his Bachelor of Arts in Economics with honors. Mr. Kim has served as Chair of the Board since his appointment in December 2016 and is nominated for election to the Board by Paulson under the IRA. Mr. Kim’s extensive experience in the gold industry and position with Paulson, the Company’s largest shareholder, enable him to provide valuable counsel to the Company. Edel Tully – Dr. Tully is a business leader with 20 years of experience in the precious metals market. She is currently the Director of Financial Services at the London Bullion Market Association (LBMA), a position that she has held since October 2020. Prior to her time at LBMA, Dr. Tully spent 10 years at UBS where she was most recently Managing Director, Global Head Precious Metal Sales and prior to that as Head of Precious Metals Research. Before UBS, Dr. Tully was Head of Precious Metals Research at Mitsui and Co. Precious Metals, Inc. Dr. Tully has a PhD from Trinity College Dublin (2006), awarded for her thesis “A Tripartite Investigation of the Gold Market: Pricing Influences, Intraday Patterns and Daily Seasonality”. She has been a frequent conference speaker and media guest and is highly respected as a precious metals industry expert. The CGNC recommended that the Company nominate Dr. Tully for re-election to the Board due to her extensive gold market experience.
DIRECTORS AND OFFICERS
Thomas Weng – Mr. Weng has more than 30 years of experience in the financial services sector. Mr. Weng is currently Co-Founding Partner with Alta Capital Partners, a provider of advisory and consulting services (since February 2011). From February 2007 to January 2011, Mr. Weng was a Managing Director at Deutsche Bank and Head of Equity Capital Markets for Metals and Mining throughout the Americas and Latin America, across all industry segments. Prior to 2007, Mr. Weng held various senior positions at Pacific Partners, an alternative investment firm, Morgan Stanley and Bear Stearns. Mr. Weng graduated from Boston University with a Bachelor of Arts in Economics. Mr. Weng has served on the Board since August 2013. The CGNC recommended Mr. Weng for re-election to the Board due to his significant financial experience together with his advisory experience in the metals and mining space. Executive Officers: The executive officers of the Company are appointed by and serve at the pleasure of the Board and hold office until the expiration of their employment agreement, if such officer has entered into an employment agreement with the Company or one of its affiliates, or their earlier death, retirement, resignation, or removal. The following is a brief biographical description of each current executive officer of the Company. Karl Hanneman, Chief Executive Officer – See “Directors and Officers – Nominees for the Board” above. David Cross, CPA, Chief Financial Officer – Mr. Cross has been the Chief Financial Officer of the Company (the “CFO”) since May 11, 2015. Mr. Cross is a partner in the firm of Cross Davis & Company, LLP, Chartered Professional Accountants (“Cross Davis”), an accounting firm focused on providing accounting, management services and guidance related to accounting policies, corporate governance and financial regulatory requirements for publicly listed companies reporting under both IFRS and US GAAP. Cross Davis provides corporate accounting support to the Company under a consulting agreement. Mr. Cross began his accounting career at a Chartered Accountant firm in 1997 and obtained his CPA, CGA designation in 2004. Mr. Cross’ past experience consists of officer, director, and senior management positions, including five years at Davidson & Company LLP, where he spent time as a Manager, a member of their Technical Accounting Committee and a member of their IFRS Committee.
Compensation Committee
| (f) to review, on an annual basis, the salary, bonus, and other benefits, direct and indirect, of the CEO and make recommendations in respect thereof for approval by the Board, provided that such Board approval will include the approval of a majority of directors that are “independent” of the Company within the meaning of all applicable legal and regulatory requirements (except in circumstances, and only to the extent, permitted by all applicable legal and regulatory requirements); |
Compensation Committee
| (i) executive compensation, contracts, stock plans or other incentive plans; and |
Compensation Committee
| (i) to review any proposed amendments to the Stock Option Plan or the DSU Plan and report to the Board thereon; |
Compensation Committee
| (j) to review and make recommendations to the Board concerning the CEO’s recommendations for stock option or DSU grants to directors, senior officers, employees and consultants of the Company and its affiliates under the Stock Option Plan or the DSU Plan; |
Compensation Committee
| (n) to periodically review the adequacy and form of the compensation of directors and to ensure that the compensation realistically reflects the responsibilities and risks involved in being an effective director, and to report and make recommendations to the Board accordingly; |
Executive Compensation Strategy, Philosophy and Principles
Executive Compensation Strategy, Philosophy and Principles The Company’s executive compensation strategy is designed to attract, retain, and motivate an experienced and effective key management team. The strategy focuses on creating strong links between pay and performance and aligning the interests of executives, shareholders, and other stakeholders. The executive officers of the Company are compensated in a manner consistent with Compensation Committee’s subjective view of their respective contributions to the overall benefit of the Company, considering the criteria set out below. The determination of executive compensation amount and award is based on a combination of factors, including, but not limited to, information provided to the Compensation Committee by compensation consultants (if utilized), the Compensation Committee’s subjective assessment as to market conditions, information with respect to the compensation of peer group entities (if a peer group is determined), internal policies and practices and the discretion of the Compensation Committee in consideration of their compensation-related experience. The compensation program for each of the executive officers is comprised of a base salary and stock options, and may include an annual cash incentive bonus, if deemed appropriate by the Compensation Committee. In the case of a mineral exploration company with a significant asset in the development stage such as the Company, the Compensation Committee considers the following aspects to be of primary importance in assessing the performance of executive officers:
Elements of Compensation
Elements of Compensation Base Salaries Base salaries are targeted at levels that the Compensation Committee believes, based on the experience of the members of the Compensation Committee, to be generally competitive with the base salaries paid by mining companies of a comparable size and state of development to the Company. Base salaries are initially set through negotiation at the time of hire. Salary for individual executives is generally assessed based on years of experience, potential, performance, business circumstances, market demands or other factors specific to the executive role. Base salaries are reviewed annually by the Compensation Committee to determine if adjustments are appropriate or required, based on the Compensation Committee’s subjective assessment of corporate and individual performance over the previous year and considering the market conditions for the gold industry, changes in the Company’s organization, inflation, and changes in responsibilities and retention requirements. On March 12, 2018, the Board approved recommendations by management to reduce corporate overhead costs, including a reduction in CEO salary by 50% to reflect an approximate 50% reduction in the effort needed to perform CEO duties, which reduction remained in place during Fiscal Year 2024. The Compensation Committee typically, in consultation with the CEO, makes recommendations to the Board regarding the base salaries for executive officers of the Company other than the CEO. The Compensation Committee is responsible for recommending the salary level of the CEO to the Board for approval. Annual Incentives (Short-Term Incentives) While the Company had previously implemented a formal Annual Incentive Compensation Plan, the change in the focus of the Company towards the optimization program with respect to the Company’s S-K 1300 Technical Report Summary, and the significant reduction in field work and preparation for permitting and simplification of corporate objectives has meant that the Compensation Committee has adopted an informal and subjective approach to annual incentives, which are generally in the form of cash bonuses, when and if appropriate in the opinion of the Compensation Committee. Equity-Based Incentive Plans 2006 Incentive Stock Option Plan The 2006 Incentive Stock Option Plan (the “Stock Option Plan”) is designed to align the interests of executives and those of shareholders through the opportunity of share ownership. The Stock Option Plan was approved by shareholders of the Company in September 2006, and subsequently re-approved by the shareholders of the Company in November 2007, October 2008, and October 2009. The Stock Option Plan was subsequently amended and approved by shareholders in September 2012 and May 2015 and re-approved by shareholders of the Company in May 2018, May 2021, and May 2024. Recommendations for the grant of incentive stock options are initially made by the CEO to the Compensation Committee, which is responsible for reviewing and considering any such recommended grants and thereafter recommending the grant thereof (subject to any changes determined appropriate by the Compensation Committee, including declining to recommend some or all such grants, or amending the proposed terms thereof) to the Board, which then makes the actual grants. Stock option allocations are made at the discretion of the Compensation Committee, considering the Company’s performance and an employee’s individual performance. While the Compensation Committee aims to have individuals with similar levels of responsibility holding approximately equivalent numbers of options, additional grants may be allocated to those executives believed by the Compensation Committee to be able to affect the success of the Company more directly. In addition, ranges are proposed for each organizational level of the Company, taking into consideration the number of shares available for option. In Fiscal Year 2024, the Company granted 150,000 incentive stock options to Mr. Karl Hanneman having an exercise price of C$0.94 per share. The options vested one-third on the grant date (May 29, 2024), and will continue to vest one-third on May 29, 2025, and one-third on May 29, 2026, with an expiry date of May 29, 2030. For a general description of the terms and conditions of the Stock Option Plan, see “Securities Authorized for Issuance Under Equity Compensation Plans – Stock Option Plan – General Description of the Stock Option Plan” on page 35. Deferred Share Unit Incentive Plan The Company adopted the Deferred Share Unit Incentive Plan (the “DSU Plan”) on April 4, 2017. The DSU Plan was subsequently approved by the shareholders of the Company at the Company’s annual general and special meeting of shareholders on May 24, 2017 and was re-approved by the shareholders of the Company in May 2021 and May 2024. The purpose of the DSU Plan is to allow the Company to grant deferred share units (“DSUs”), each of which is equivalent in value to a Common Share, to directors, officers and employees of the Company and its subsidiaries (“Eligible Persons”) in recognition of their contributions and to provide for an incentive for their continuing relationship with the Company. The granting of such DSUs is intended to promote a greater alignment of the interests of Eligible Persons with the interests of shareholders. All directors, other than those nominated for election by Paulson, are entitled to participate in the Company’s DSU Plan. During the year ended December 31, 2024, the Company granted each of the members of the Board (other than directors nominated for election by Paulson) 88,298 DSUs for a total of 441,490 DSUs with a grant date fair value of C$0.94 per DSU, representing C$83,000 per Director or C$415,000 in the aggregate. Each DSU vested immediately upon being granted, but the underlying Common Shares are not issuable until the director ceases to serve as a director. For a general description of the terms and conditions of the DSU Plan, see “Securities Authorized for Issuance Under Equity Compensation Plans – DSU Plan – General Description of the DSU Plan” on page 38. Benefit, Perquisites and Pension Programs Other Benefits and Perquisites The Company’s wholly owned U.S. subsidiary, Tower Hill Mines (US) LLC (“Tower US”), which employs all personnel, has a benefit program in place, including medical and dental benefits and basic life insurance, which applies to all permanent employees of Tower US. The Company believes that such a plan is an important consideration in attracting the necessary personnel. Executive Retirement Plan The Company does not have a defined benefit pension plan for any of its executive officers or other employees. However, through Tower US, the Company makes contributions to a 401(k) plan on behalf of each of Tower US’s employees, including executive officers, equal to 3% of their base salaries up to the contribution limit as prescribed by the U.S. Internal Revenue Service. In Fiscal Year 2024, contributions totaling $5,063 were made by Tower US on behalf of the named executive officers.
Compensation Risk Management
Compensation Risk Management The Board annually reviews and approves the Company’s strategic plan, considering business opportunities, level of risks consistent with the Company’s risk appetite, cost implications, health, safety and environmental standards and alignment with the objectives at the Company’s Livengood Gold Project in Alaska. At the present, these objectives are focused primarily on completing the ongoing project optimization work plan and maintaining the baseline environmental data collection program, as required to support future permitting. In the Compensation Committee’s view, this focus in and of itself provides a lower risk profile and reduces the risk that compensation matters will not be consistent with prudent risk-taking. The reduction in short-term incentives, such as cash bonuses, coupled with the continued use and emphasis on share-based compensation through longer term incentive stock options with deferred vesting provisions is a measure of time risk, focusing on longer-term performance. The Board’s review of the Company’s compensation practices considers the business risk thereof to the Company in the context of the mineral resource industry. The Board reviews and approves annual corporate objectives in the context of approved annual budgets and maintains a formal system of corporate and financial authority levels to ensure compliance with the approved budget.
Summary Compensation Table
Summary Compensation Table The following table sets forth the compensation for each named executive officer (“NEO”) during the years ended December 31, 2024 and 2023.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Option Awards(1) ($) | All Other Compensation ($) | Total Compensation ($) | | Karl Hanneman, | 2024 | 166,100 | 71,128 | 65,565(2) | 302,793 | | CEO | 2023 | 160,710 | 47,075 | 66,282(3) | 274,067 | | David Cross | 2024 | 50,040 | 7,113 | - | 57,153 | | CFO | 2023 | 53,352 | 4,708 | - | 58,060 |
Summary Compensation Table
| (1) Amounts represent the grant date fair value of option awards. The grant date fair value of option awards was calculated in accordance with Financial Accounting Standards Board Codification Topic 718. See Note 7 – Share Capital within the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the years ended December 31, 2024 and December 31, 2023, respectively, for a discussion of valuation assumptions for the option awards. Canadian dollar amounts were translated to U.S. dollars using the exchange rate on the date of grant. |
Summary Compensation Table
| (2) Amount represents contributions to the Company’s 401(k) plan of $4,983 and $60,582, representing the fair value of the date of grant of 88,298 DSUs issued to Mr. Hanneman as a director of the Company on May 29, 2024. |
Summary Compensation Table
| (3) Amount represents contributions to the Company’s 401(k) plan of $4,821 and $61,461, representing the fair value of the date of grant of 131,746 DSUs issued to Mr. Hanneman as a director of the Company on May 23, 2023. |
Summary Compensation Table
The total compensation for NEOs increased 8% between 2023 and 2024. Cash compensation for NEOs (salary and bonus) increased 1% between 2023 and 2024 as a result of translating Canadian dollar amounts to U.S. dollars. In May 2023 and May 2024, options were granted to the CEO and to the CFO as incentive compensation. The Company’s overall compensation to NEOs has been generally aligned to the progress made on advancing the Livengood Gold Project. The CEO has achieved substantially all performance objectives established by the Board while making progress in the optimization of the Livengood Gold Project. Such optimization, while significantly benefiting the Company and the Livengood Gold Project and positioning it for potential advantage in a rising gold market, does not necessarily translate into share price performance, which tends to be related to current gold prices.
Pay versus Performance
Pay versus Performance As required by Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive “compensation actually paid” (as defined by SEC rules) and certain financial performance metrics of the Company for the last three fiscal years. In determining the “compensation actually paid” to our named executive officers, we are required to make various adjustments to amounts that have been previously reported in the Summary Compensation Table (“SCT”) in previous years, as the SEC’s valuation methods for this section differ from those required in the SCT. The table below summarizes compensation values both as previously reported in our SCT, as well as the adjusted values required in this section for the 2022, 2023, and 2024 calendar years. The Compensation Committee did not consider the pay versus performance disclosure when making its incentive compensation decisions. The following table sets for the information concerning the compensation of our principal executive officer, or “PEO”, and the compensation of our other NEO for each of the years ending December 31, 2024, 2023, and 2022, as such compensation relates to our financial performance for each such year. The PEO for each of the years presented within the following tables was Karl L. Hanneman, Chief Executive Officer and Director. The other NEO for each of the years presented was David A. Cross, Chief Financial Officer.
Pay versus Performance
| Year | SCT Total for PEO | Compensation Actually Paid to PEO(1) | Average SCT Total for Non-PEO NEO | Average Compensation Actually Paid to Non-PEO NEO(2) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return(3) | Net Loss (Dollars in thousands) | | 2024 | $302,793 | $181,332 | $57,153 | $54,530 | $63.01 | $3,599 | | 2023 | $274,067 | $177,331 | $58,060 | $57,198 | $80.82 | $3,398 | | 2022 | $293,117 | $85,874 | $62,376 | $59,599 | $58.90 | $3,042 |
Pay versus Performance
| (1) The dollar amounts reported for the PEO under “Compensation Actually Paid” represent the amount of “Compensation Actually Paid” to the PEO, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to the PEO during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the adjustments in the table below were made to the PEO’s total compensation for each year to determine the compensation actually paid: |
Pay versus Performance
| Reconciliation of PEO SCT Total and Compensation Actually Paid | 2024 | 2023 | 2022 | | Total Compensation as reported in SCT | $302,793 | $274,067 | $293,117 | | Fair value of equity awards granted during year as reported in SCT | (71,128) | (47,075) | (70,176) | | Fair value of equity compensation granted in current year – value at end of year-end (options) | 29,190 | 45,366 | 38,761 | | Change in fair value from end of prior year to vesting date for awards made in prior years that vested during current year | 15,714 | (8,730) | (4,586) | | Change in fair value from end of prior year to end of current year for awards made in prior years that were unvested at end of current year | - | 1,824 | (7,880) | | Fair value of awards forfeited in current year determined at end of prior year | (73,930) | (103,362) | (137,279) | | Fair value of all other compensation as reported in SCT | (65,565) | (66,282) | (69,324) | | Fair value of other compensation (401k match) | 4,983 | 4,821 | 4,609 | | Fair value of equity compensation granted in current year – value at end of year-end (DSUs) | 39,275 | 76,702 | 38,632 | | Compensation Actually Paid | $181,332 | $177,331 | $85,874 |
Pay versus Performance
| (2) The dollar amounts reported for the NEO under “Compensation Actually Paid’ represent the amount of “Compensation Actually Paid” to the NEO, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to the NEO during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the adjustments in the table below were made to the NEO’s total compensation for each year to determine the compensation actually paid: |
Pay versus Performance
| Reconciliation of NEO SCT Total and Compensation Actually Paid | 2024 | 2023 | 2022 | | Total Compensation as reported in SCT | $57,153 | $58,060 | $62,376 | | Fair value of equity awards granted during year as reported in SCT | (7,113) | (4,708) | (7,018) | | Fair value of equity compensation granted in current year – value at end of year-end (options) | 2,919 | 4,537 | 3,876 | | Change in fair value from end of prior year to vesting date for awards made in prior years that vested during current year | 1,571 | (873) | 1,153 | | Change in fair value from end of prior year to end of current year for awards made in prior years that were unvested at end of current year | - | 182 | (788) | | Fair value of awards forfeited in current year determined at end of prior year | - | - | - | | Compensation Actually Paid | $54,530 | $57,198 | $59,599 |
Pay versus Performance
| (3) For purposes of calculating the cumulative total shareholder return, the measurement period is the market close on the last trading day of 2021, through and including the end of the year for which cumulative total shareholder return is being calculated. |
Analysis of the Information Presented in the Pay Versus Performance Tables
Analysis of the Information Presented in the Pay Versus Performance Tables Because we are not a production stage mining company, we did not have any revenue from continuing operations during the periods presented. Consequently, we have not historically focused on net income (loss) as a performance measure for our executive compensation programs. Our net loss was approximately $3.0 million, $3.4 million, and $3.6 million for the years 2022, 2023, and 2024, respectively. During the same periods, the compensation actually paid for our PEO was $85,874 in 2022, and increased to $177,331 and $181,332, in 2023 and 2024, respectively. Compensation actually paid for our other NEO remained essentially unchanged, going from $59,599 in 2022 to $57,198 in 2023, and then to $54,530 in 2024. The following graph shows the compensation actually paid to Mr. Hanneman and the amount of compensation actually paid to Mr. Cross during the periods presented and total shareholder return over those periods. Total Shareholder return was negative during 2022, 2023, and 2024. Mr. Hanneman’s compensation actually paid increased in 2023 and remained approximately flat in 2024 and the amount of compensation actually paid to Mr. Cross remained approximately flat. We utilize performance measures to align executive compensation with performance, but those tend not to be financial performance measures, such as total shareholder return. For example, as described in more detail above in the section “Executive Compensation – Compensation Discussion and Analysis,” our named executive officers are eligible to receive short term bonuses which are designed to provide appropriate incentives to our executives to achieve defined annual individual and corporate goals. Additionally, we believe stock options and DSUs, which are an integral part of our executive compensation program, are closely related to the Company’s performance, although not directly tied to total shareholder return, because their value is directly correlated to the market price of our Common Shares and requires that the executive officer continues in our employment over the vesting period. As such, these stock option awards and DSU grants strongly align our executive officers’ interests with those of our Shareholders by providing a continuing financial incentive to maximize long-term value for our Shareholders and by encouraging our executive officers to continue in our employment for the long-term.
Outstanding Equity Awards
Outstanding Equity Awards The following table sets forth the option-based awards granted to the NEOs that were outstanding as at December 31, 2024 (based on vesting as it existed at December 31, 2024):
Outstanding Equity Awards
| Outstanding Equity Awards at 2024 Fiscal Year End | | | | | | | Name | Number of Securities Underlying Unexercised Options # Exercisable | Number of Securities Underlying Unexercised Options # Unexercisable | Option Exercise Price (C$) | Option Grant Date | Option Expiration Date | | Karl Hanneman CEO/Director | 250,000 150,000 150,000 150,000 150,000 100,000 50,000 | - - - - - 50,000 100,000 | 1.35 0.85 0.92 1.31 0.92 0.63 0.94 | October 23, 2017 August 8, 2019 May 27, 2020 May 25, 2021 May 24, 2022 May 23, 2023 May 29, 2024 | February 1, 2025 August 8, 2025 May 27, 2026 May 25, 2027 May 24, 2028 May 23, 2029 May 29, 2030 | | David Cross CFO | 30,000 15,000 15,000 10,000 5,000 | - - - 5,000 10,000 | 0.92 1.31 0.92 0.63 0.94 | May 27, 2020 May 25, 2021 May 24, 2022 May 23, 2023 May 29, 2024 | May 27, 2026 May 25, 2027 May 24, 2028 May 23, 2029 May 29,2030 |
Outstanding Equity Awards
Except as otherwise noted, the Company has not granted any share-based awards to NEOs, and there are no estimated future payouts under non-equity or equity incentive plan awards. Each option vests one-third upon grant and one-third on each of the first anniversary and the second anniversary of the grant date. None of the NEOs exercised option-based awards during the year ended December 31, 2024.
David Cross (CFO)
| Name | Salary ($) | Bonus ($) | Stock Option Awards | All Other Compensation ($) | | Total ($) | | | Karl Hanneman, CEO | 170,000 | 170,000 | - | | 58,000(1) | | 398,000 | | David Cross, CFO | N/A | N/A | - | C$ | 18,000(2) | C$ | 18,000 |
Director Compensation
Director Compensation The Board has approved the payment of annual retainer fees to the non-management directors of the Company in recognition of the fact that service as a director in an active resource exploration and development company such as the Company requires a significant commitment of time and effort and the assumption of increasing liability. As part of the Company’s effort to reduce corporate overhead costs beginning in 2018, the annual retainer for non-Paulson and non-management directors was reduced to C$10,000 in 2018. The Company currently compensates management directors through DSU grants exclusively. Pursuant to the IRA, the directors who are nominees of Paulson are not entitled to receive any salary or other compensation (including directors’ fees) for their service as directors. Accordingly, Mr. Kim (Chair) receives no compensation for serving on the Board. All directors, other than those nominated by Paulson, are entitled to participate in the Company’s DSU Plan. During the year ended December 31, 2024, the Company granted each of the members of the Board (other than directors nominated for election by Paulson) 88,298 DSUs for a total of 441,490 DSUs with a grant date fair value of C$0.94 per DSU, representing C$83,000 per director or C$415,000 in the aggregate. Each DSU vested immediately upon being granted, but the underlying Common Shares are not issuable until the director ceases to serve as a director. For a general description of the terms and conditions of the DSU Plan, see “Securities Authorized for Issuance Under Equity Compensation Plans – DSU Plan – General Description of the DSU Plan” on page 38. The Company reimburses all directors (including Paulson nominees) for their actual out-of-pocket costs incurred in attending Board and Board committee meetings. In addition, all directors have the benefit of customary directors’ and officers’ liability insurance providing coverage in amounts and terms satisfactory to Paulson. In addition, the Company is required to enter into indemnity agreements with each such director substantially in a form agreed by Paulson.
Director Compensation Table
Director Compensation Table The following table discloses all amounts of compensation provided to the Company’s non-management directors for the Company’s most recently completed financial year.
Director Compensation Table
| Name | Fees Earned or Paid in Cash ($) | All Other Compensation ($)(1) | Total ($) | | Anton Drescher | 7,318 | 60,582 | 67,900 | | Stuart Harshaw | 7,318 | 60,582 | 67,900 | | Marcelo Kim(2) | - | - | - | | Edel Tully | 7,318 | 60,582 | 67,900 | | Thomas Weng | 7,318 | 60,582 | 67,900 |
Director Compensation Table
| (1) Each director, other than the Paulson nominee, received 88,298 DSUs having a fair value on the date of grant of $60,582. |
Director Compensation Table
| (2) As a nominee of Paulson under the IRA, Mr. Kim is not entitled to receive any compensation for acting as a director of the Company. |