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Note 3.      Arbitral Award Settlement and Associated Mining Data Sale: In October 2009, we initiated a claim (the "Brisas Arbitration") under the additional facility rules of the International Centre for the Settlement of Investment Disputes ("ICSID") of the World Bank to obtain compensation for the losses caused by the actions of Venezuela that terminated the Brisas Project in violation of the terms of the Treaty between the Government of Canada and the Government of Venezuela for the Promotion and Protection of Investments (the "Canada-Venezuela BIT"). (Gold Reserve Inc. v. Bolivarian Republic of Venezuela (ICSID Case No. ARB(AF)/09/1)). In September 2014, the ICSID Tribunal unanimously awarded us an Arbitral Award (the "Award") totaling (i) $713 million in damages, plus (ii) pre-award interest from April 2008 through the date of the Award based on the U.S. Government Treasury Bill Rate, compounded annually totaling, as of the date of the Award, approximately $22.3 million and (iii) $5 million for legal costs and expenses, for a total of $740.3 million. The Award (less legal costs and expenses) accrues post-award interest at a rate of LIBOR plus 2%, compounded annually, which at the date of the original Settlement Agreement approximated $29.4 million. Since the Award was issued, we have pursued enforcement and collection of the Award in France, England, Luxembourg and the United States. On July 17, 2016, we signed a settlement agreement with Venezuela (the "Settlement Agreement") which contemplated payment of the Award (including accrued interest) of approximately $770 million in respect of the Brisas project and the acquisition of our Mining Data by Venezuela for $240 million, the first payment being due on or before October 31, 2016. Pursuant to the terms of the Settlement Agreement, we temporarily suspended the legal enforcement of the Award preserving our ability to resume enforcement and collection of Award via the courts, in the event we ultimately do not receive the agreed upon payments contemplated in the Settlement Agreement, as amended. In early November 2016, and again in early December 2016, the parties executed addendums to the Settlement Agreement whereby the parties agreed to revise the payment schedule under which Venezuela would make payments related to the Award and Mining Data as follows: $300 million on or before December 15, 2016; $469.7 million on or before January 3, 2017; $50 million on or before January 31, 2017; $100 million on or before February 28, 2017 and $90 million on or before June 30, 2017. The payments for the Award and Mining Data continue to be contingent upon Venezuela obtaining the necessary financing, which has not occurred and, as a result, as of the date of this report no payments have been made by Venezuela. At the passing of the last agreed upon payment date, the Board of Directors chose to not formally terminate the Settlement Agreement as a result of the delay in the initial agreed upon payment(s), but instead instructed management to continue all efforts to work with Venezuela to complete the terms of the Settlement Agreement. Management has recently proposed a third addendum to the Settlement Agreement, whereby the parties would agree, among other things, to revise the previously proposed payment schedule.     In October 2014 and January 2015, respectively, Venezuela filed annulment applications before the Paris Court of Appeal (the "Court") regarding the Award and the December 15, 2014 arbitral decision dismissing its request for rectification. During the same period, the Company applied to the Court for exequatur of the Award, which entails recognition and enforcement of the Award in France. The Court issued the exequatur on January 29, 2015 declaring the Award to be recognized and enforceable in France. On February 7, 2017, the Court rejected all of Venezuela's previous annulment arguments and issued a judgment dismissing the applications filed by Venezuela pending before the French courts in relation to the Award. In addition to the Award remaining enforceable in France, the Court ordered Venezuela to pay an amount of €150,000 for our legal fees and costs. Venezuela can consider appealing the judgment before the French Cour de cassation, which is the court of final resort in the French judicial system. Obligations related to the collection of the Award We have outstanding CVRs which entitle each holder that participated in the note restructuring completed in 2012 to receive, net of certain deductions (including income tax calculation and the payment of our then current obligations), a pro rata portion of a maximum aggregate amount of 5.468% calculated on the proceeds actually received by us with respect to the Award and/or the disposition of the Mining Data related to the development of the Brisas Project. The Board of Directors (the "Board") approved a Bonus Pool Plan (the "Bonus Plan") in May 2012, which is intended to compensate the participants, including executive officers, employees, directors and consultants, for their past and future contributions including their past efforts related to the development of the Brisas Project, execution of the Brisas Arbitration and the collection of an award and/or sale of the Mining Data. The bonus pool under the Bonus Plan is comprised of the gross proceeds collected or the fair value of any consideration realized (calculated  on substantially the same terms as the CVR) related to such transactions less applicable taxes multiplied by 1% of the first $200 million and 5% thereafter. The Bonus Plan is administered by a committee of independent directors who selected the individual participants in the Bonus Plan and fixed the relative percentage of the total pool to be distributed to each participant. Participation in the Bonus Plan by existing participants is fully vested, subject to voluntary termination of employment or termination for cause. The Company maintains the Gold Reserve Director and Employee Retention Plan (See Note 10). Each unit (the "Retention Units") granted to a participant entitles such person to receive a cash payment equal to the fair market value of one Gold Reserve Class A common share: (1) on the date the unit was granted or (2) on the date any such participant becomes entitled to payment, whichever is greater. Units previously granted under the plan become fully vested upon: (1) collection of Award proceeds from the ICSID arbitration process and/or sale of mining data totaling at least $200 million and we agree to distribute a substantial majority of the proceeds to our shareholders or, (2) the event of a change of control. We currently do not accrue a liability for the Bonus or Retention Plan as events required for payment under the Plans have not yet occurred. Upon payment of the Award or receipt of proceeds from the disposition of the Mining Data, subject to certain limitations, we are obligated to make an offer to existing holders to redeem the 2018 Notes at a price equal to 120% of the principal amount of 2018 Notes then outstanding. See "Description of Capital Structure". Our current plan is to distribute to our shareholders, in the most cost efficient manner, a substantial majority of any net proceeds, subject to applicable regulatory requirements regarding capital and reserves for operating expenses, accounts payable and income taxes, and any obligations arising as a result of the collection of the Award and/or sale of the Mining Data. Such obligations include payments pursuant to the terms of the Convertible Notes (if not otherwise converted), Interest Notes, CVRs, Bonus Plan and Retention Plan (all as defined herein), contingent legal fees of approximately $1.8 million which will become payable upon the collection of the Award or undertakings made to a court of law.   Note 10.    Stock Based Compensation Plans: Equity Incentive Plans On June 27, 2012, the shareholders approved the 2012 Equity Incentive Plan (the "2012 Plan") to replace our previous equity incentive plans. In 2014, the Board amended and restated the 2012 Plan changing the maximum number of Class A common shares issuable under options granted under the 2012 Plan from a "rolling" 10% of the outstanding Class A common shares to a fixed number of 7,550,000 Class A common shares. On September 19, 2016, the Board approved an amendment and restatement of the 2012 Plan to increase the maximum number of shares issuable thereunder to 8,750,000, representing less than 10% of the issued and outstanding Class A Common Shares of the Company at such date. Such amendment was approved by the TSX Venture Exchange ("TSXV") on October 6, 2016. As of December 31, 2016, there were 5,393,000 options available for grant. Grants are made for terms of up to ten years with vesting periods as required by the TSXV and as may be determined by a committee of the Board established pursuant to the 2012 Plan.   Share option transactions for the years ended December 31, 2016 and 2015 are as follows: <div align="center"> <table border="0" cellpadding="0" cellspacing="0" width="539" style="border-collapse:collapse;margin-left:80.3pt;width:468.700012pt;"> <tr> <td valign="top" width="33%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td colspan="2" valign="bottom" width="31%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 2016 </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td colspan="2" valign="bottom" width="31%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 2015 </td> </tr> <tr style="height:37.75pt;"> <td valign="top" width="33%" style="height:37.75pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="16%" style="border-bottom:solid windowtext 1.0pt;height:37.75pt;padding:0in 5.4pt 0in 5.4pt;"> Shares </td> <td valign="bottom" width="15%" style="border-bottom:solid windowtext 1.0pt;border-top:solid windowtext 1.0pt;height:37.75pt;padding:0in 5.4pt 0in 5.4pt;"> Weighted Average Exercise Price </td> <td valign="top" width="5%" style="height:37.75pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="16%" style="border-bottom:solid windowtext 1.0pt;height:37.75pt;padding:0in 5.4pt 0in 5.4pt;"> Shares </td> <td valign="bottom" width="15%" style="border-bottom:solid windowtext 1.0pt;border-top:solid windowtext 1.0pt;height:37.75pt;padding:0in 5.4pt 0in 5.4pt;"> Weighted Average Exercise Price </td> </tr> <tr> <td valign="top" width="33%" style="padding:0in 5.4pt 0in 5.4pt;"> Options outstanding - beginning of year </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 5,643,500 </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> $ 2.43 </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 5,698,000 </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> $ 2.31 </td> </tr> <tr> <td valign="top" width="33%" style="padding:0in 5.4pt 0in 5.4pt;"> Options exercised </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> (2,286,500) </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 1.83 </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> (369,500) </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 1.84 </td> </tr> <tr> <td valign="top" width="33%" style="padding:0in 5.4pt 0in 5.4pt;"> Options granted </td> <td valign="bottom" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> - </td> <td valign="top" width="15%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> - </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 315,000 </td> <td valign="bottom" width="15%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 3.90 </td> </tr> <tr> <td valign="top" width="33%" style="padding:0in 5.4pt 0in 5.4pt;"> Options outstanding - end of year </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 3,357,000 </td> <td valign="top" width="15%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $ 2.84 </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 5,643,500 </td> <td valign="top" width="15%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $ 2.43 </td> </tr> <tr> <td valign="top" width="33%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">   </td> </tr> <tr> <td valign="top" width="33%" style="padding:0in 5.4pt 0in 5.4pt;"> Options exercisable - end of year </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 3,357,000 </td> <td valign="top" width="15%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $ 2.84 </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 5,593,500 </td> <td valign="top" width="15%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $ 2.42 </td> </tr> <tr> <td valign="top" width="33%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> </tr> </table> </div>   The following table relates to stock options at December 31, 2016:   <div align="left"><table border="0" cellpadding="0" cellspacing="0" width="642" style="border-collapse:collapse;margin-left:5.4pt;width:589.499939pt;"> <tr style="page-break-inside:avoid;"> <td valign="bottom" width="11%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td colspan="4" valign="bottom" width="42%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Outstanding Options </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td colspan="4" valign="bottom" width="42%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Exercisable Options </td> </tr> <tr style="page-break-inside:avoid;"> <td valign="bottom" width="11%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Exercise Price </td> <td valign="bottom" width="10%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Number </td> <td valign="bottom" width="10%" style="border-bottom:solid windowtext 1.0pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Weighted Average Exercise Price </td> <td valign="bottom" width="11%" style="border-bottom:solid windowtext 1.0pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Aggregate Intrinsic Value </td> <td valign="bottom" width="11%" style="border-bottom:solid windowtext 1.0pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Weighted Average Remaining Contractual Term (Years) </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="11%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Number </td> <td valign="bottom" width="10%" style="border-bottom:solid windowtext 1.0pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Weighted Average Exercise Price </td> <td valign="bottom" width="10%" style="border-bottom:solid windowtext 1.0pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Aggregate Intrinsic Value </td> <td valign="bottom" width="11%" style="border-bottom:solid windowtext 1.0pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Weighted Average Remaining Contractual Term (Years) </td> </tr> <tr style="page-break-inside:avoid;"> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> $1.92 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> 875,000 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> $1.92 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> $1,968,750 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 4.44 </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 875,000 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> $1.92 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> $1,968,750 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 4.44 </td> </tr> <tr style="page-break-inside:avoid;"> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> $2.89 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> 1,607,000 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> $2.89 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 2,056,960 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 0.08 </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 1,607,000 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> $2.89 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> 2,056,960 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 0.08 </td> </tr> <tr style="page-break-inside:avoid;"> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> $3.00 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> 250,000 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> $3.00 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 292,500 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 1.44 </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 250,000 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> $3.00 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> 292,500 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 1.44 </td> </tr> <tr style="page-break-inside:avoid;"> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> $3.89 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> 100,000 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> $3.89 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 28,000 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 3.21 </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 100,000 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> $3.89 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> 28,000 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 3.21 </td> </tr> <tr style="page-break-inside:avoid;"> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> $3.91 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> 215,000 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> $3.91 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 55,900 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 8.49 </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 215,000 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> $3.91 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> 55,900 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 8.49 </td> </tr> <tr style="page-break-inside:avoid;"> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> $4.02 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> 310,000 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> $4.02 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 46,500 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 7.56 </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 310,000 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> $4.02 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> 46,500 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 7.56 </td> </tr> <tr style="page-break-inside:avoid;"> <td valign="top" width="11%" style="border-bottom:double windowtext 2pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $1.92 - $4.02 </td> <td valign="top" width="10%" style="border-bottom:double windowtext 2pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 3,357,000 </td> <td valign="top" width="10%" style="border-bottom:double windowtext 2pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $2.84 </td> <td valign="top" width="11%" style="border-bottom:double windowtext 2pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $4,448,610 </td> <td valign="top" width="11%" style="border-bottom:double windowtext 2pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 2.64 </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="11%" style="border-bottom:double windowtext 2pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 3,357,000 </td> <td valign="top" width="10%" style="border-bottom:double windowtext 2pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $2.84 </td> <td valign="top" width="10%" style="border-bottom:double windowtext 2pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $4,448,610 </td> <td valign="top" width="11%" style="border-bottom:double windowtext 2pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 2.64 </td> </tr> </table></div> During the years ended December 31, 2016 and 2015, the Company granted nil and 0.32 million options, respectively. In 2016 and 2015, approximately 2.3 million and 0.4 million outstanding options were exercised, respectively for net proceeds to the Company of approximately $4.2 million and $0.7 million, respectively. The Company recorded non-cash compensation expense during 2016 and 2015 of $0.02 million and $0.3 million, respectively, for stock options granted in 2015 and prior periods. The weighted average fair value of the options granted in 2015 was calculated as $0.85. The fair value of options granted was determined using the Black-Scholes model based on the following weighted average assumptions: <div align="left"><table border="0" cellpadding="0" cellspacing="0" style="border-collapse:collapse;margin-left:.5in;width:408.599976pt;"> <tr> <td valign="top" width="58%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="14%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="14%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="14%" style="border-bottom:solid windowtext 1.0pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 2015 </td> </tr> <tr> <td valign="top" width="58%" style="padding:0in 5.4pt 0in 5.4pt;"> Risk free interest rate </td> <td valign="bottom" width="14%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="14%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="14%" style="padding:0in 5.4pt 0in 5.4pt;"> 0.66% </td> </tr> <tr> <td valign="top" width="58%" style="padding:0in 5.4pt 0in 5.4pt;"> Expected term </td> <td valign="bottom" width="14%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="14%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="14%" style="padding:0in 5.4pt 0in 5.4pt;"> 2.0 years </td> </tr> <tr> <td valign="top" width="58%" style="padding:0in 5.4pt 0in 5.4pt;"> Expected volatility </td> <td valign="bottom" width="14%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="14%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="14%" style="padding:0in 5.4pt 0in 5.4pt;"> 38% </td> </tr> <tr> <td valign="top" width="58%" style="padding:0in 5.4pt 0in 5.4pt;"> Dividend yield </td> <td valign="bottom" width="14%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="14%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="14%" style="padding:0in 5.4pt 0in 5.4pt;"> nil </td> </tr> </table></div> The risk free interest rate is based on the US Treasury rate on the date of grant for a period equal to the expected term of the option. The expected term is based on historical exercise experience and projected post-vesting behavior. The expected volatility is based on historical volatility of our common stock over a period equal to the expected term of the option. Retention Plan and Change of Control Agreements The Company maintains the Gold Reserve Director and Employee Retention Plan.  Each unit (the "Retention Units") granted to a participant entitles such person to receive a cash payment equal to the fair market value of one Gold Reserve Class A common share: (1) on the date the unit was granted or (2) on the date any such participant becomes entitled to payment, whichever is greater. Units previously granted under the plan become fully vested upon: (1) collection of Award proceeds from the ICSID arbitration process and/or sale of mining data totaling at least $200 million and we agree to distribute a substantial majority of the proceeds to its shareholders or, (2) the event of a change of control.  A “Change of Control”, as it relates to the Retention Plan, means one or more of the following: the acquisition by any individual, entity or group, of beneficial ownership of the Company of 25 percent of the voting power of the outstanding Common Shares; a change in the composition of the Board that causes less than a majority of the current directors of the Board to be members of the incoming board; solicitation of proxies or consents by or on behalf of a person other than the board; reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company; liquidation or dissolution of the Company; or any other event the Board reasonably determines constitutes a Change of Control. As of December 31, 2016 an aggregate of 1,457,500 unvested units have been granted to directors and executive officers of the Company and 315,000 units have been granted to other employees.  The Company currently does not accrue a liability for these units as events required for vesting of the units have not yet occurred. The minimum value of these units, based on the grant date value of the Class A common shares, was approximately $7.8 million. The Company also maintains change of control agreements with certain officers and employees. As of December 31, 2016, the amount payable under these agreements in the event of a change of control, including unvested retention units, was approximately $16.0 million.

Note 13.    Income Tax:   Income tax expense differs from the amount that would result from applying Canadian tax rates to net loss before taxes. These differences result from the items noted below: <div align="left"><table border="0" cellpadding="0" cellspacing="0" style="border-collapse:collapse;margin-left:.5in;width:419.399994pt;"> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="7%" style="border-bottom:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;"> 2016 </td> <td valign="top" width="7%" style="border-bottom:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;"> 2015 </td> </tr> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;"> Income tax benefit based on Canadian tax rates </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 5,386,423 </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 4,533,974 </td> </tr> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;"> Increase (decrease) due to: </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> </tr> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;">  Different tax rates on foreign subsidiaries </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 248,385 </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 222,999 </td> </tr> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;">  Non-deductible expenses </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> (1,040,629) </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> (1,712,121) </td> </tr> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;">  Change in valuation allowance and other </td> <td valign="top" width="7%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> (4,594,179) </td> <td valign="top" width="7%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> (3,044,852) </td> </tr> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="7%" style="border-bottom:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;"> -  </td> <td valign="top" width="7%" style="border-bottom:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;"> - </td> </tr> </table></div>                                                                                                                                 No current income tax has been recorded by us for each of the two years ended December 31, 2016. We have recorded a valuation allowance to reflect the estimated amount of the future tax assets which may not be realized, principally due to the uncertainty of utilization of net operating losses and other carry forwards prior to expiration. The valuation allowance for future tax assets may be reduced in the near term if our estimate of future taxable income changes. The components of the Canadian and U.S. future income tax assets as of December 31, 2016 and 2015 were as follows:   <div align="left"><table border="0" cellpadding="0" cellspacing="0" style="border-collapse:collapse;margin-left:.5in;width:419.399994pt;"> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td colspan="4" valign="top" width="46%" style="border-bottom:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;"> Future Tax Asset </td> </tr> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="7%" style="border-bottom:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.5pt;border-top:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;"> 2016 </td> <td valign="top" width="7%" style="border-bottom:solid windowtext 1.5pt;border-top:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.5pt;border-top:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;"> 2015 </td> </tr> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;"> Net operating loss carry forwards </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 46,962,497 </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 40,779,302 </td> </tr> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;"> Property, Plant and Equipment </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 3,227,610 </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 3,087,432 </td> </tr> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;"> Capital loss carry forwards </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 15,411 </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 1,116,595 </td> </tr> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;"> Other </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 330,882 </td> <td valign="top" width="7%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 325,467 </td> </tr> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 50,536,400 </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 45,308,796 </td> </tr> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;"> Valuation allowance </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> (50,536,400) </td> <td valign="top" width="7%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> (45,308,796) </td> </tr> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;"> Net deferred tax asset </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">                   - </td> <td valign="top" width="7%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> - </td> </tr> </table></div>     At December 31, 2016, we had the following U.S. and Canadian tax loss carry forwards:   <div align="left"><table border="0" cellpadding="0" cellspacing="0" style="border-collapse:collapse;margin-left:.5in;width:444.850006pt;"> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> U.S. </td> <td valign="top" width="6%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Canadian </td> <td valign="bottom" width="12%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Expires </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 1,386,674 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="bottom" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> - </td> <td valign="bottom" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2018 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 1,621,230 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> - </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2019 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 665,664 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> - </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2020 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 896,833 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> - </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2021 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 1,435,774 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> - </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2022 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 1,806,275 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> - </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2023 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 2,386,407 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> - </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2024 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 3,680,288 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> - </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2025 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 4,622,825 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 1,946,470 </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2026 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 6,033,603 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 3,612,395 </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2027 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 4,360,823 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 13,768,805 </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2028 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 1,769,963 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 13,048,798 </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2029 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 2,159,079 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 16,121,064 </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2030 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 3,216,024 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 18,051,860 </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2031 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 3,041,866 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 5,237,048 </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2032 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 5,532,290 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 6,734,675 </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2033 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 1,933,918 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 9,702,739 </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2034 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 2,099,507 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 12,593,389 </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2035 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 3,770,594 </td> <td valign="top" width="6%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 15,742,039 </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2036 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="top" width="15%" style="border-bottom:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;"> 52,419,637 </td> <td valign="top" width="6%" style="border-bottom:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;"> 116,559,282 </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> </tr> </table></div>               <div style="page:WordSection5;">   </div>

Gold Reserve Inc. ("Gold Reserve", the "Company", "we", "us", or "our") is engaged in the business of acquiring, exploring and developing mining projects. We are an exploration stage company incorporated in 1998 under the laws of the Yukon Territory, Canada and continued to Alberta, Canada in September 2014. Gold Reserve Inc. is the successor issuer to Gold Reserve Corporation which was incorporated in 1956. A significant portion of our activities relate to enforcement and collection efforts associated with the September 2014 Award in connection with Venezuela's seizure of our mining project known as the Brisas Project, the execution of the August 2016 Settlement Agreement and more recently the November 4, 2016 amended Settlement Agreement (the "Settlement Agreement") with Venezuela in regards to the payment of the Award and the acquisition of our Mining Data (See Note 3, Arbitral Award Settlement and Associated Mining Data Sale). In February 1999 each Gold Reserve Corporation shareholder exchanged their shares for an equal number of Gold Reserve Inc. Class A common shares except in the case of certain U.S. holders who for tax reasons elected to receive equity units which were comprised of one Gold Reserve Inc. Class B common share and one Gold Reserve Corporation Class B common share and substantially equivalent to one Class A common share of Gold Reserve Inc. As of December 31, 2015, all equity units had been converted to Class A common shares. Basis of Presentation and Principles of Consolidation. These audited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles. The statements include the accounts of the Company, Gold Reserve Corporation, two Barbadian subsidiaries formed to hold our interest in and operate the Mixed Company as defined herein and several dormant subsidiaries domiciled in Venezuela, Canada and Barbados which were previously formed to hold our interest in our foreign subsidiaries or for future transactions. The Mixed Company is beneficially owned 55% by Venezuela and 45% by Gold Reserve. All subsidiaries are wholly owned. All intercompany accounts and transactions have been eliminated on consolidation. Our policy is to consolidate those subsidiaries where control exists. We have only one operating segment, the exploration and development of mineral properties. Cash and Cash Equivalents. We consider short-term, highly liquid investments purchased with an original maturity of three months or less to be cash equivalents for purposes of reporting cash equivalents and cash flows. The cost of these investments approximates fair value.  We manage the exposure of our cash and cash equivalents to credit risk by diversifying our holdings into major Canadian and U.S. financial institutions. Exploration and Development Costs. Exploration costs incurred in locating areas of potential mineralization or evaluating properties or working interests with specific areas of potential mineralization are expensed as incurred. Development costs of proven mining properties not yet producing are capitalized at cost and classified as capitalized exploration costs under property, plant and equipment. Mineral property holding costs are charged to operations during the period if no significant exploration or development activities are being conducted on the related properties. Upon commencement of production, capitalized exploration and development costs would be amortized based on the estimated proven and probable reserves benefited. Mineral properties determined to be impaired or that are abandoned are written-down to the estimated fair value. Carrying values do not necessarily reflect present or future values. Property, Plant and Equipment. Included in property, plant and equipment is certain equipment, the carrying value of which has been adjusted, as a result of impairment tests, to its estimated fair value of $11.7 million and it is not being depreciated as it is not yet available for its intended use. The ultimate recoverable value of this equipment may be different than management's current estimate. We have additional property, plant and equipment which are recorded at cost less impairment charges and accumulated depreciation. Replacement costs and major improvements are capitalized. Maintenance and repairs are charged to expense as incurred. The cost and accumulated depreciation of assets retired or sold are removed from the accounts and any resulting gain or loss is reflected in operations. Furniture and office equipment is depreciated using the straight-line method over 5 to 10 years. The remaining property, plant and equipment are fully depreciated. Impairment of Long Lived Assets. We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. If the sum of the expected future net cash flows to be generated from the use or eventual disposition of a long-lived asset (undiscounted and without interest charges) is less than the carrying amount of the asset, an impairment loss is recognized based on a determination of the asset's fair value. Fair value is generally determined by discounting estimated cash flows based on market participant expectations of those future cash flows, or applying a market approach that uses market prices and other relevant information generated by market transactions involving comparable assets. Foreign Currency. The U.S. dollar is our (and our foreign subsidiaries') functional currency. Monetary assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the rates of exchange in effect at the balance sheet dates. Non-monetary assets and liabilities are translated at historical rates and revenue and expense items are translated at average exchange rates during the reporting period, except for depreciation which is translated at historical rates. Translation gains and losses are included in the statement of operations. Stock Based Compensation. We maintain the 2012 Equity Incentive Plan (the "2012 Plan") which provides for the grant of stock options to purchase our Class A common shares. We use the fair value method of accounting for stock options. The fair value of options granted to employees is computed using the Black-Scholes method as described in Note 10 and is expensed over the vesting period of the option. For non-employees, the fair value of stock based compensation is recorded as an expense over the vesting period or upon completion of performance. Consideration paid for shares on exercise of share options, in addition to the fair value attributable to stock options granted, is credited to capital stock. We also maintain the Gold Reserve Director and Employee Retention Plan (the "Retention Plan"). Each Unit (each, a "Retention Unit") granted under the Retention Plan to a participant entitles such person to receive a cash payment equal to the fair market value of one Class A common Share (1) on the date the Retention Unit was granted or (2) on the date any such participant becomes entitled to payment, whichever is greater. We will not accrue a liability for these Retention Units until and unless events required for vesting of the units occur.  Stock options and Retention Units granted under the respective plans become fully vested and exercisable upon a change of control. Income Taxes. We use the liability method of accounting for income taxes. Deferred tax assets and liabilities are determined based on the differences between the tax basis of assets and liabilities and those amounts reported in the financial statements. The deferred tax assets or liabilities are calculated using the enacted tax rates expected to apply in the periods in which the differences are expected to be settled. Deferred tax assets are recognized to the extent that they are considered more likely than not to be realized. Use of Estimates. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Net Loss Per Share. Net loss per share is computed by dividing net loss by the combined weighted average number of Class A common shares and equity units outstanding during each year. In periods in which a loss is incurred, the effect of potential issuances of shares under options and convertible notes would be anti-dilutive, and therefore basic and diluted losses per share are the same. Convertible Notes. Convertible notes are initially recorded at estimated fair value and subsequently measured at amortized cost. The fair value is allocated between the equity and debt component parts based on their respective fair values at the time of issuance and recorded net of transaction costs. The equity portion of the convertible notes is estimated using the residual value method. The fair value of the debt component is accreted to the face value of the convertible notes using the effective interest rate method over the contractual life of the convertible notes, with the resulting charge recorded as interest expense. Financial Instruments. Marketable equity securities are classified as available for sale with any unrealized gain or loss recorded in other comprehensive income. If a decline in fair value of a security is determined to be other than temporary, an impairment loss is recognized. Cash and cash equivalents, deposits and advances are accounted for at cost which approximates fair value. Accounts payable, convertible notes and interest notes are recorded at amortized cost. Amortized cost of accounts payable approximates fair value. Contingent Value Rights. Contingent value rights ("CVRs") are obligations arising from the disposition of a portion of the rights to future proceeds of the Award against Venezuela and/or the sale of the Brisas Project technical mining data (the "Mining Data") that we compiled. Warrants. Common share purchase warrants ("Warrants") issued by us entitle the holder to acquire our Class A common shares at a specific price within a certain time period. The fair value of warrants issued is calculated using the Black-Scholes method.   Note 4.      Cash and Cash Equivalents: <table border="1" cellpadding="0" cellspacing="0" width="96%" style="border:none;border-collapse:collapse;margin-left:9.0pt;"> <tr style="page-break-inside:avoid;"> <td valign="top" width="42%" style="padding:0in 0in 0in 0in;">   </td> <td valign="top" width="2%" style="padding:0in 0in 0in 0in;">   </td> <td valign="top" width="12%" style="padding:0in 0in 0in 0in;">   </td> <td valign="top" width="2%" style="padding:0in 0in 0in 0in;">   </td> <td valign="top" width="4%" style="padding:0in 0in 0in 0in;">   </td> <td valign="top" width="4%" style="padding:0in 0in 0in 0in;">   </td> <td valign="top" width="16%" style="padding:0in 0in 0in 0in;"> December 31, </td> <td valign="top" width="2%" style="padding:0in 0in 0in 0in;">   </td> <td valign="top" width="16%" style="padding:0in 0in 0in 0in;"> December 31, </td> </tr> <tr style="page-break-inside:avoid;"> <td valign="top" width="42%" style="padding:0in 0in 0in 0in;">   </td> <td valign="top" width="2%" style="padding:0in 0in 0in 0in;">   </td> <td valign="top" width="12%" style="padding:0in 0in 0in 0in;">   </td> <td valign="top" width="2%" style="padding:0in 0in 0in 0in;">   </td> <td valign="top" width="4%" style="padding:0in 0in 0in 0in;">   </td> <td valign="top" width="4%" style="border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;"> 2016 </td> <td valign="top" width="2%" style="border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;"> 2015 </td> </tr> <tr style="page-break-inside:avoid;"> <td valign="top" width="42%" style="padding:0in 0in 0in 0in;"> Bank deposits </td> <td valign="top" width="2%" style="padding:0in 0in 0in 0in;">   </td> <td valign="top" width="12%" style="padding:0in 0in 0in 0in;">   </td> <td valign="top" width="2%" style="padding:0in 0in 0in 0in;">   </td> <td valign="top" width="4%" style="padding:0in 0in 0in 0in;">   </td> <td valign="top" width="4%" style="padding:0in 0in 0in 0in;"> $ </td> <td valign="bottom" width="16%" style="padding:0in 0in 0in 0in;"> 1,122,542 </td> <td valign="bottom" width="2%" style="padding:0in 0in 0in 0in;"> $ </td> <td valign="bottom" width="16%" style="padding:0in 0in 0in 0in;"> 9,278,730 </td> </tr> <tr style="page-break-inside:avoid;"> <td valign="top" width="42%" style="padding:0in 0in 0in 0in;"> Money market funds </td> <td valign="top" width="2%" style="padding:0in 0in 0in 0in;">   </td> <td valign="top" width="12%" style="padding:0in 0in 0in 0in;">   </td> <td valign="top" width="2%" style="padding:0in 0in 0in 0in;">   </td> <td valign="top" width="4%" style="padding:0in 0in 0in 0in;">   </td> <td valign="top" width="4%" style="border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;">   </td> <td valign="bottom" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;"> 34,624,507 </td> <td valign="bottom" width="2%" style="border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;">   </td> <td valign="bottom" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;"> 72,162 </td> </tr> <tr style="height:13.95pt;page-break-inside:avoid;"> <td valign="bottom" width="42%" style="height:13.95pt;padding:0in 0in 0in 0in;"> Total </td> <td valign="bottom" width="2%" style="height:13.95pt;padding:0in 0in 0in 0in;">   </td> <td valign="bottom" width="12%" style="height:13.95pt;padding:0in 0in 0in 0in;">   </td> <td valign="bottom" width="2%" style="height:13.95pt;padding:0in 0in 0in 0in;">   </td> <td valign="bottom" width="4%" style="height:13.95pt;padding:0in 0in 0in 0in;">   </td> <td valign="bottom" width="4%" style="border-bottom:solid windowtext 1.5pt;height:13.95pt;padding:0in 0in 0in 0in;"> $ </td> <td valign="bottom" width="16%" style="border-bottom:solid windowtext 1.5pt;height:13.95pt;padding:0in 0in 0in 0in;"> 35,747,049 </td> <td valign="bottom" width="2%" style="border-bottom:solid windowtext 1.5pt;height:13.95pt;padding:0in 0in 0in 0in;"> $ </td> <td valign="bottom" width="16%" style="border-bottom:solid windowtext 1.5pt;height:13.95pt;padding:0in 0in 0in 0in;"> 9,350,892 </td> </tr> </table>

Accounting Standards Codification ("ASC") 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: Level 1 inputs are quoted prices in active markets for identical assets or liabilities, Level 2 inputs are inputs other than quoted prices included within Level 1 that are directly or indirectly observable for the asset or liability and Level 3 inputs are unobservable inputs for the asset or liability that reflect the entity's own assumptions. The most observable level 2 inputs used for the convertible notes include the volume weighted average trading price of our common stock and the most recent observable trading history of the 2022 Notes (as defined in Note 11).   <table border="0" cellpadding="0" cellspacing="0" width="619" style="border-collapse:collapse;width:539.999939pt;"> <tr> <td valign="top" width="29%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="5%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="21%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Fair value December 31, 2016 </td> <td valign="top" width="5%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="17%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Level 1 </td> <td valign="top" width="5%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="18%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Level 2 </td> </tr> <tr> <td valign="top" width="29%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Marketable securities </td> <td valign="top" width="5%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="top" width="21%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 541,216 </td> <td valign="top" width="5%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="top" width="17%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 541,216 </td> <td valign="top" width="5%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="top" width="18%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> - </td> </tr> <tr> <td valign="top" width="29%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Convertible notes and interest notes </td> <td valign="top" width="5%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="top" width="21%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 77,164,724 </td> <td valign="top" width="5%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="top" width="17%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> - </td> <td valign="top" width="5%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="top" width="18%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 77,164,724 </td> </tr> <tr> <td valign="top" width="29%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="21%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="17%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="18%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> </tr> <tr> <td valign="top" width="29%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="5%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="21%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Fair value December 31, 2015 </td> <td valign="top" width="5%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="17%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Level 1 </td> <td valign="top" width="5%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="18%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Level 2 </td> </tr> <tr> <td valign="top" width="29%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Marketable securities </td> <td valign="top" width="5%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="top" width="21%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 180,986 </td> <td valign="top" width="5%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="top" width="17%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 180,986 </td> <td valign="top" width="5%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="top" width="18%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> - </td> </tr> <tr> <td valign="top" width="29%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Convertible notes and interest notes </td> <td valign="top" width="5%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="top" width="21%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 50,268,471 </td> <td valign="top" width="5%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="top" width="17%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> - </td> <td valign="top" width="5%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="top" width="18%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 50,268,471 </td> </tr> </table>

Share option transactions for the years ended December 31, 2016 and 2015 are as follows: <table border="0" cellpadding="0" cellspacing="0" width="539" style="border-collapse:collapse;margin-left:80.3pt;width:468.700012pt;"> <tr> <td valign="top" width="33%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td colspan="2" valign="bottom" width="31%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 2016 </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td colspan="2" valign="bottom" width="31%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 2015 </td> </tr> <tr style="height:37.75pt;"> <td valign="top" width="33%" style="height:37.75pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="16%" style="border-bottom:solid windowtext 1.0pt;height:37.75pt;padding:0in 5.4pt 0in 5.4pt;"> Shares </td> <td valign="bottom" width="15%" style="border-bottom:solid windowtext 1.0pt;border-top:solid windowtext 1.0pt;height:37.75pt;padding:0in 5.4pt 0in 5.4pt;"> Weighted Average Exercise Price </td> <td valign="top" width="5%" style="height:37.75pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="16%" style="border-bottom:solid windowtext 1.0pt;height:37.75pt;padding:0in 5.4pt 0in 5.4pt;"> Shares </td> <td valign="bottom" width="15%" style="border-bottom:solid windowtext 1.0pt;border-top:solid windowtext 1.0pt;height:37.75pt;padding:0in 5.4pt 0in 5.4pt;"> Weighted Average Exercise Price </td> </tr> <tr> <td valign="top" width="33%" style="padding:0in 5.4pt 0in 5.4pt;"> Options outstanding - beginning of year </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 5,643,500 </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> $ 2.43 </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 5,698,000 </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> $ 2.31 </td> </tr> <tr> <td valign="top" width="33%" style="padding:0in 5.4pt 0in 5.4pt;"> Options exercised </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> (2,286,500) </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 1.83 </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> (369,500) </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 1.84 </td> </tr> <tr> <td valign="top" width="33%" style="padding:0in 5.4pt 0in 5.4pt;"> Options granted </td> <td valign="bottom" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> - </td> <td valign="top" width="15%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> - </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 315,000 </td> <td valign="bottom" width="15%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 3.90 </td> </tr> <tr> <td valign="top" width="33%" style="padding:0in 5.4pt 0in 5.4pt;"> Options outstanding - end of year </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 3,357,000 </td> <td valign="top" width="15%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $ 2.84 </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 5,643,500 </td> <td valign="top" width="15%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $ 2.43 </td> </tr> <tr> <td valign="top" width="33%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">   </td> </tr> <tr> <td valign="top" width="33%" style="padding:0in 5.4pt 0in 5.4pt;"> Options exercisable - end of year </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 3,357,000 </td> <td valign="top" width="15%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $ 2.84 </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 5,593,500 </td> <td valign="top" width="15%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $ 2.42 </td> </tr> <tr> <td valign="top" width="33%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> </tr> </table> The following table relates to stock options at December 31, 2016:   <table border="0" cellpadding="0" cellspacing="0" width="642" style="border-collapse:collapse;margin-left:5.4pt;width:589.499939pt;"> <tr style="page-break-inside:avoid;"> <td valign="bottom" width="11%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td colspan="4" valign="bottom" width="42%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Outstanding Options </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td colspan="4" valign="bottom" width="42%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Exercisable Options </td> </tr> <tr style="page-break-inside:avoid;"> <td valign="bottom" width="11%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Exercise Price </td> <td valign="bottom" width="10%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Number </td> <td valign="bottom" width="10%" style="border-bottom:solid windowtext 1.0pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Weighted Average Exercise Price </td> <td valign="bottom" width="11%" style="border-bottom:solid windowtext 1.0pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Aggregate Intrinsic Value </td> <td valign="bottom" width="11%" style="border-bottom:solid windowtext 1.0pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Weighted Average Remaining Contractual Term (Years) </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="11%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Number </td> <td valign="bottom" width="10%" style="border-bottom:solid windowtext 1.0pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Weighted Average Exercise Price </td> <td valign="bottom" width="10%" style="border-bottom:solid windowtext 1.0pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Aggregate Intrinsic Value </td> <td valign="bottom" width="11%" style="border-bottom:solid windowtext 1.0pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Weighted Average Remaining Contractual Term (Years) </td> </tr> <tr style="page-break-inside:avoid;"> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> $1.92 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> 875,000 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> $1.92 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> $1,968,750 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 4.44 </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 875,000 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> $1.92 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> $1,968,750 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 4.44 </td> </tr> <tr style="page-break-inside:avoid;"> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> $2.89 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> 1,607,000 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> $2.89 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 2,056,960 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 0.08 </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 1,607,000 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> $2.89 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> 2,056,960 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 0.08 </td> </tr> <tr style="page-break-inside:avoid;"> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> $3.00 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> 250,000 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> $3.00 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 292,500 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 1.44 </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 250,000 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> $3.00 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> 292,500 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 1.44 </td> </tr> <tr style="page-break-inside:avoid;"> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> $3.89 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> 100,000 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> $3.89 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 28,000 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 3.21 </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 100,000 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> $3.89 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> 28,000 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 3.21 </td> </tr> <tr style="page-break-inside:avoid;"> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> $3.91 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> 215,000 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> $3.91 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 55,900 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 8.49 </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 215,000 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> $3.91 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> 55,900 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 8.49 </td> </tr> <tr style="page-break-inside:avoid;"> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> $4.02 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> 310,000 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> $4.02 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 46,500 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 7.56 </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 310,000 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> $4.02 </td> <td valign="top" width="10%" style="padding:0in 5.4pt 0in 5.4pt;"> 46,500 </td> <td valign="top" width="11%" style="padding:0in 5.4pt 0in 5.4pt;"> 7.56 </td> </tr> <tr style="page-break-inside:avoid;"> <td valign="top" width="11%" style="border-bottom:double windowtext 2pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $1.92 - $4.02 </td> <td valign="top" width="10%" style="border-bottom:double windowtext 2pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 3,357,000 </td> <td valign="top" width="10%" style="border-bottom:double windowtext 2pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $2.84 </td> <td valign="top" width="11%" style="border-bottom:double windowtext 2pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $4,448,610 </td> <td valign="top" width="11%" style="border-bottom:double windowtext 2pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 2.64 </td> <td valign="top" width="5%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="11%" style="border-bottom:double windowtext 2pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 3,357,000 </td> <td valign="top" width="10%" style="border-bottom:double windowtext 2pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $2.84 </td> <td valign="top" width="10%" style="border-bottom:double windowtext 2pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $4,448,610 </td> <td valign="top" width="11%" style="border-bottom:double windowtext 2pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 2.64 </td> </tr> </table> The weighted average fair value of the options granted in 2015 was calculated as $0.85. The fair value of options granted was determined using the Black-Scholes model based on the following weighted average assumptions: <table border="0" cellpadding="0" cellspacing="0" style="border-collapse:collapse;margin-left:.5in;width:408.599976pt;"> <tr> <td valign="top" width="58%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="14%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="14%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="14%" style="border-bottom:solid windowtext 1.0pt;border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 2015 </td> </tr> <tr> <td valign="top" width="58%" style="padding:0in 5.4pt 0in 5.4pt;"> Risk free interest rate </td> <td valign="bottom" width="14%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="14%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="14%" style="padding:0in 5.4pt 0in 5.4pt;"> 0.66% </td> </tr> <tr> <td valign="top" width="58%" style="padding:0in 5.4pt 0in 5.4pt;"> Expected term </td> <td valign="bottom" width="14%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="14%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="14%" style="padding:0in 5.4pt 0in 5.4pt;"> 2.0 years </td> </tr> <tr> <td valign="top" width="58%" style="padding:0in 5.4pt 0in 5.4pt;"> Expected volatility </td> <td valign="bottom" width="14%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="14%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="14%" style="padding:0in 5.4pt 0in 5.4pt;"> 38% </td> </tr> <tr> <td valign="top" width="58%" style="padding:0in 5.4pt 0in 5.4pt;"> Dividend yield </td> <td valign="bottom" width="14%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="14%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="bottom" width="14%" style="padding:0in 5.4pt 0in 5.4pt;"> nil </td> </tr> </table> Income tax expense differs from the amount that would result from applying Canadian tax rates to net loss before taxes. These differences result from the items noted below: <table border="0" cellpadding="0" cellspacing="0" style="border-collapse:collapse;margin-left:.5in;width:419.399994pt;"> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="7%" style="border-bottom:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;"> 2016 </td> <td valign="top" width="7%" style="border-bottom:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;"> 2015 </td> </tr> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;"> Income tax benefit based on Canadian tax rates </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 5,386,423 </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 4,533,974 </td> </tr> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;"> Increase (decrease) due to: </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> </tr> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;">  Different tax rates on foreign subsidiaries </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 248,385 </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 222,999 </td> </tr> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;">  Non-deductible expenses </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> (1,040,629) </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> (1,712,121) </td> </tr> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;">  Change in valuation allowance and other </td> <td valign="top" width="7%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> (4,594,179) </td> <td valign="top" width="7%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> (3,044,852) </td> </tr> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="7%" style="border-bottom:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;"> -  </td> <td valign="top" width="7%" style="border-bottom:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;"> - </td> </tr> </table> No current income tax has been recorded by us for each of the two years ended December 31, 2016. We have recorded a valuation allowance to reflect the estimated amount of the future tax assets which may not be realized, principally due to the uncertainty of utilization of net operating losses and other carry forwards prior to expiration. The valuation allowance for future tax assets may be reduced in the near term if our estimate of future taxable income changes. The components of the Canadian and U.S. future income tax assets as of December 31, 2016 and 2015 were as follows:   <table border="0" cellpadding="0" cellspacing="0" style="border-collapse:collapse;margin-left:.5in;width:419.399994pt;"> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td colspan="4" valign="top" width="46%" style="border-bottom:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;"> Future Tax Asset </td> </tr> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="7%" style="border-bottom:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.5pt;border-top:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;"> 2016 </td> <td valign="top" width="7%" style="border-bottom:solid windowtext 1.5pt;border-top:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.5pt;border-top:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;"> 2015 </td> </tr> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;"> Net operating loss carry forwards </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 46,962,497 </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 40,779,302 </td> </tr> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;"> Property, Plant and Equipment </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 3,227,610 </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 3,087,432 </td> </tr> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;"> Capital loss carry forwards </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 15,411 </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 1,116,595 </td> </tr> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;"> Other </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 330,882 </td> <td valign="top" width="7%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 325,467 </td> </tr> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 50,536,400 </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 45,308,796 </td> </tr> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;"> Valuation allowance </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> (50,536,400) </td> <td valign="top" width="7%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> (45,308,796) </td> </tr> <tr> <td valign="top" width="54%" style="padding:0in 5.4pt 0in 5.4pt;"> Net deferred tax asset </td> <td valign="top" width="7%" style="padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">                   - </td> <td valign="top" width="7%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> - </td> </tr> </table> At December 31, 2016, we had the following U.S. and Canadian tax loss carry forwards:   <table border="0" cellpadding="0" cellspacing="0" style="border-collapse:collapse;margin-left:.5in;width:444.850006pt;"> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> U.S. </td> <td valign="top" width="6%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Canadian </td> <td valign="bottom" width="12%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> Expires </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 1,386,674 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="bottom" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> - </td> <td valign="bottom" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2018 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 1,621,230 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> - </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2019 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 665,664 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> - </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2020 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 896,833 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> - </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2021 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 1,435,774 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> - </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2022 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 1,806,275 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> - </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2023 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 2,386,407 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> - </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2024 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 3,680,288 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> - </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2025 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 4,622,825 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 1,946,470 </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2026 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 6,033,603 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 3,612,395 </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2027 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 4,360,823 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 13,768,805 </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2028 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 1,769,963 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 13,048,798 </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2029 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 2,159,079 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 16,121,064 </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2030 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 3,216,024 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 18,051,860 </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2031 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 3,041,866 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 5,237,048 </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2032 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 5,532,290 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 6,734,675 </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2033 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 1,933,918 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 9,702,739 </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2034 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="padding:0in 5.4pt 0in 5.4pt;"> 2,099,507 </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="padding:0in 5.4pt 0in 5.4pt;"> 12,593,389 </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2035 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="15%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 3,770,594 </td> <td valign="top" width="6%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;"> 15,742,039 </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;"> 2036 </td> </tr> <tr> <td valign="top" width="45%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> <td valign="top" width="6%" style="padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="top" width="15%" style="border-bottom:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;"> 52,419,637 </td> <td valign="top" width="6%" style="border-bottom:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;"> $ </td> <td valign="top" width="16%" style="border-bottom:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt;"> 116,559,282 </td> <td valign="top" width="12%" style="padding:0in 5.4pt 0in 5.4pt;">   </td> </tr> </table> 0.55 0.45 11700000 713000000 22300000 5000000 740300000 0.02 29400000 770000000 240000000 150000 0.05468 0.01 0.05 1800000

1122542

9278730

34624507 72162 35747049 9350892 180986 175541 -96

-60

-13769 -46629 374155 52074

541216

180986

98043 111908 541216 180986 541216 180986 77164724 50268471 77164724 50268471 11677534 12234092 0 0 11677534 12234092

519832

-500870 -495325 18962 24507

41190

-41190 -41190 0 0 350000 0 0 0 350000 0 12588556 12795114 -542060 -536515 12046496 12258599 350000 0.03 0.01 4000000 600000 174432 9432 0.55 0.45 1600000 163000 150000

3357000

5643500

5698000

2.84 2.43 2.31

-2286500

-369500

1.83 1.84 315000 3.90

3357000

5593500

2.84 2.42 875000 1.92 1968750 P4Y161D 875000 1.92 1968750 P4Y161D 1607000 2.89 2056960 P29D 1607000 2.89 2056960 P29D 250000 3.00 292500 P1Y161D 250000 3.00 292500 P1Y161D 100000 3.89 28000 P3Y77D 100000 3.89 28000 P3Y77D 215000 3.91 55900 P8Y179D 215000 3.91 55900 P8Y179D 310000 4.02 46500 P7Y204D 310000 4.02 46500 P7Y204D 3357000 2.84 4448610 P2Y234D 3357000 2.84 4448610 P2Y234D 0.0066 P2Y 0.38 0.00 7600000 8800000 5400000 P10Y 0 320000 2300000 400000 4200000 700000 20000 300000 0.85 1.5 0.3 7800000 16000000 During the fourth quarter of 2015, we issued approximately $13.4 million aggregate principal amount of new 11% Senior Secured Convertible Notes due December 31, 2018 (the "New Notes") and modified, amended and extended the maturity date of approximately $43.7 million aggregate principal amount of previously outstanding convertible notes, interest notes and accrued interest from December 31, 2015 to December 31, 2018 (the “Modified Notes and, together with the New Notes, the "2018 Convertible Notes"). The New Notes are comprised of approximately $12.3 million aggregate principal amount of 2018 Convertible Notes, issued with an original issue discount of 2.5% of the principal amount, and approximately $1.1 million of additional 2018 Convertible Notes representing 2.5% of the extended principal and interest amount due to the note holders as a restructuring fee.The total cost of the new issuance and restructuring of the 2018 Convertible Notes was approximately $2.4 million, which includes approximately $1.4 million of extension and issuance fees that were expensed and approximately $1.0 million associated with legal and associated transactional fees that were capitalized. Approximately $30.7 million aggregate principal amount of the Modified Notes and $10.7 million aggregate principal amount, respectively, of the New Notes were issued to related parties which exercised control or direction over more than 10% of our Class A common shares prior to the transactions and as a result, those portions of the transactions were considered to be related party transactions. 0.05468 0.11 333.3333 3 1000000 0.055 7.54 36800000 1000000 6200000 The 2018 Notes are secured by substantially all of our assets and are subject to certain terms including: (1) the Award and the Mining Data, or any payments made thereon, may not be pledged without consent of holders comprising at least 75% in aggregate principal amount of outstanding 2018 Notes; (2) subject to certain exceptions, we may not incur any additional indebtedness without consent of holders comprising at least 75% in aggregate principal amount of the outstanding 2018 Notes; (3) the Company may not engage in any future financings whether by private placement or otherwise, without the consent of the Majority Holders which expires upon the earliest of (i) a substantial majority of the Awards proceeds being distributed to the shareholders and (ii) December 31, 2016. Thereafter, to the extent the 2018 Notes remain outstanding, each holder of the Secured Notes will have the right to participate, on a pro-rata basis based on the amount of equity it holds, including Class A common shares issuable upon conversion of convertible securities, in any future equity (or equity-linked) or debt financing; (4) the 2018 Notes shall be redeemable on a pro-rata basis, by us at the note holders’ option, for an amount of cash equal to 120% of the outstanding principal balance upon (a) the issuance of a final Arbitration Award, with respect to which enforcement has not been stayed and no annulment proceeding is pending, or (b) our receipt of proceeds from the sale of the Mining Data; provided we shall only be obligated to make a redemption to the extent net cash proceeds received are in excess of $20,000,000, net of taxes and $13,500,000 to fund professional fees and expenses and accrued and unpaid prospective operating expenses; (5) capital expenditures (including exploration and related activities) shall not exceed an aggregate of $500,000 in any 12-month period without the prior consent of holders of a majority in the aggregate principal amount of the outstanding 2018 Notes; (6) subject to certain exceptions, we shall not incur, create or suffer to exist any liens securing indebtedness without consent of holders comprising at least 75% in aggregate principal amount of the outstanding 2018 Notes; and (7) we shall not agree with any holder of the 2018 Notes to any amendment or modification to any terms of any security issued under the indenture governing the 2018 Notes, provide any fees or other compensation whether in cash or in-kind to any holder of such securities, or engage in the repurchase, redemption or other defeasance of any such security without offering such terms, compensation or defeasance to all holders of the 2018 Notes on an equitable and pro-rata basis. 0.27 18200000 500000 7200000 3.00 2400000 50900000 6200000 34300000 8562500 4.00 2300000 400000 4200000 700000 5386423 4533974 248385 222999 -1040629 -1712121 -4594179 -3044852 46962497 40779302 3227610 3087432 15411 1116595 330882 325467 50536400 45308796

-50536400

-45308796

1386674 1621230 665664 896833 1435774 1806275 2386407 3680288 4622825 1946470 6033603 3612395 4360823 13768805 1769963 13048798 2159079 16121064 3216024 18051860 3041866 5237048 5532290 6734675 1933918 9702739 2099507 12593389 3770594 15742039 52419637 116559282 0 0