Asset Retirement Obligations

12 Months Ended

Sep. 30, 2011

Asset Retirement Obligations

Asset Retirement Obligation Disclosure [Text Block]

NOTE 11 – ASSET RETIREMENT OBLIGATION:

During the year ended September 30, 2011, the Company established an asset retirement obligation (“ARO”) in the amount of $110,000 for its exploration program at the Lookout Mountain Project.  The ARO resulted from the reclamation and remediation requirements of the United States Bureau of Land Management as outlined in the Company’s permit to carry out the exploration program.  Estimated reclamation costs at the Lookout Mountain Project were discounted using a credit adjusted risk-free interest rate of 5% from the time the Company expects to pay the retirement obligation to the time it incurred the obligation, which is estimated at 10 years. 

The Company also had an ARO associated with the underground exploration program at the Butte Highlands Gold Project being performed by BHJV (see Note 5).  The ARO resulted from the reclamation and remediation requirements of the Montana Department of Environmental Quality as outlined in the Company’s permit to carry out the exploration program.  During the year ended September 30, 2011, the Company’s exploration permit was transferred to BHJV as the operator of the Butte Highlands Gold Project, thus relieving the Company of its reclamation and remediation obligations.  Therefore, the ARO of $250,089 and the related asset, along with accumulated accretion expense of $12,504 associated with the Butte Highlands exploration program, were removed from the Company’s financial statements during the year ended September 30, 2011.

The following table summarizes activity in the Company’s ARO:

	Year ended    September 30,
		2011		2010
Beginning balance	$	259,467	$	-
Obligations incurred		110,000		250,089
Obligations released		(250,089)
Revision of previous accretion expense		(12,504)		-
Accretion expense		7,251		9,378
Ending balance	$	114,125	$	259,467