COMMANDER RESOURCES LTD.  (An Exploration Stage Company)  Notes to Financial Statements  For the Years Ended December 31, 2012 and 2011  (Expressed in Canadian dollars)  13. Income Taxes (Continued) The Company recognizes tax benefits on losses or other deductible amounts where the probable criteria for the  recognition of such deferred tax assets have been met. Consequently the Company has deductible temporary differences  and unused tax losses of $399,303 (2011 - $399,303) for which no deferred tax asset is recognized as it is not probable  that the deferred tax asset will be realized in the future.  The Company’s deferred income tax liability arises primarily from the renunciation of mineral exploration costs on flow- through shares issued to investors. Flow-through shares entitle a company that incurs certain resource expenditures in  Canada to renounce them for tax purposes allowing the expenditures to be deducted for income tax purposes by the  investors who purchased the shares. During December 31, 2011, the Company renounced $2,040,008 in flow-through expenditures. As at December 31,  2012, there were no (2011 - $309,940) flow-through proceeds remaining to be expended. Unlimited common shares without par value  On June 20, 2112, 150,000 common shares were issued for the acquisition of the Glenmorangie property  (Note 9(b)).  In May 2011, the Company completed a private placement and issued 8,500,032 units at a price of $0.24 per unit,  for gross proceeds of $2,040,008 and share issuance costs of $85,291. Each unit consists of one flow-through  common share and one-half of one non-flow-through share purchase warrant. Each whole non-flow-through share  purchase warrant entitles the holder to purchase one common share at a price of $0.30, expiring in May 2013. The  Company allocated $1,473,623 to common shares, $221,086 to warrants and the remainder of $345,299 was  recognized as a liability. The flow-through shares were recognized based on the quoted price of the existing shares  on the date of the issuance. The difference between the quoted price and the flow-through share price, net of the fair  valued warrants, was recognized as a liability.  On June 20, 2011, 150,000 shares were issued for the acquisition of the Glenmorangie property in connection with  the option agreement.  On July 12, 2011, 300,000 shares were issued for the acquisition of the Stump Lake property in connection with the  option agreement.  Options to purchase common shares have been granted to directors, employees and consultants at exercise prices  determined by reference to the market value on the date of the grant. Under the Company’s stock option plan, the  Company may grant stock options for the purchase of up to 18,000,000 common shares. Vesting of stock options is  made at the discretion of the Board of Directors at the time the options are granted. - 28 -  (c) Stock options  2011  2012  (b) Shares issued (a) Authorized  14. Share Capital 