7.	LIABILITIES SUBJECT TO COMPROMISE

Under bankruptcy laws, actions by creditors to collect amounts owed prior to the petition date are stayed and certain other prepetition contractual obligations may not be enforced against the Company. Liabilities subject to compromise refer to the Company's estimate of known or potential prepetition claims to be resolved in connection with entering into creditor protection. Such claims remain subject to future adjustments, and payment terms for liabilities subject to compromise will be established as part of a Court-approved plan for restructuring the Company's affairs. Although prepetition claims are generally stayed under CCAA protection, the Company is permitted to undertake certain actions designed to stabilize its operations including, among other things, payment of employee wages and benefits, payments to suppliers for goods and services received after the petition date and retention of professionals.

FASB ASC 852 Reorganizations requires prepetition liabilities that are subject to compromise to be reported at the amounts expected to be allowed, even if they may be settled for lesser amounts. Substantially all unsecured liabilities as at the Petition Date of November 29, 2011 have been classified as liabilities subject to compromise. Future adjustments impacting amounts classified as liabilities subject to compromise depend on Court actions, further developments with respect to disputed claims, determinations of the secured status of certain claims, values of any collateral securing such claims, or other events.

Liabilities subject to compromise amounted to $25.2 million at January 31, 2012 and consisted of operational and corporate obligations incurred prior to November 29, 2011, including the Company's obligations with respect to asset retirement related to the reclamation of access roads on relinquished properties as well as the re-abandonment of a certain number of core holes at Axe Lake. These obligations are considered to be subject to compromise as they relate to the re-abandonment of early exploration holes or reclamation obligations on properties that are no longer held by the Company.

Liabilities subject to compromise consist of the following:

	January 31, 2012		April 30, 2011
	(in thousands)		(in thousands)

Accounts payable	$	1,568	$	-
Accrued liabilities		924		-
Asset retirement obligation (Note 8)		23,283		-
Total liabilities subject to compromise	$	25,775	$	-