ASSET RETIREMENT OBLIGATIONS

3 Months Ended

Oct. 31, 2012

ASSET RETIREMENT OBLIGATIONS [Text Block]

NOTE 9:              ASSET RETIREMENT OBLIGATIONS

The Company's asset retirement obligations ("ARO") relates to site restoration for the Hobson Processing Facility, Palangana Mine and Mt. Lucas.

		October 31, 2012			July 31, 2012
Opening balance	$	3,112,374		$	3,027,803
Revision in estimate of asset retirement obligations		-			567,069
Liabilities settled with cash		(36,141	)		(619,772	)
Accretion		45,502			137,274
		3,121,735			3,112,374
Less: current portion of asset retirement obligations		(97,157	)		(133,298	)
Long-term asset retirement obligations	$	3,024,578		$	2,979,076

		October 31, 2012		July 31, 2012
Undiscounted amount of estimated cash flows	$	3,626,092	$	3,662,233
Payable in years		2.3 to 7.3		2.5 to 7.5
Inflation rate		1.56% to 2.43%		1.56% to 2.43%
Discount rate		5.00% to 10.50%		5.00% to 10.50%

During the three months ended October 31, 2012, the Company settled asset retirement obligations of $36,141 with cash payments totaling $44,713. As a result, a loss on settlement of asset retirement obligations of $8,572 was recorded on the condensed consolidated statements of operations.

The undiscounted amounts of estimated cash flows for the next five years and beyond are as follows:

July 31, 2013	$	97,157
July 31, 2014		640,714
July 31, 2015		623,964
July 31, 2016		74,241
July 31, 2017		-
Remaining balance		2,190,016
	$	3,626,092