ASSET RETIREMENT OBLIGATIONS

9 Months Ended

Apr. 30, 2013

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.

		April 30, 2013			July 31, 2012
Opening balance	$	3,112,374		$	3,027,803
Additions of asset retirement obligations		435,004			567,069
Liabilities settled with cash		(79,999	)		(619,772	)
Accretion		149,117			137,274
		3,616,496			3,112,374
Less: current portion of asset retirement obligations		(53,299	)		(133,298	)
Long-term asset retirement obligations	$	3,563,197		$	2,979,076

		April 30, 2013		July 31, 2012
Undiscounted amount of estimated cash flows	$	4,106,195	$	3,662,233
Payable in years		1.8 to 6.8		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 and nine months ended April 30, 2013, the Company settled asset retirement obligations of $26,575 and $79,999 with cash payments totaling $28,453 and $112,388, respectively. As a result, a loss on settlement of asset retirement obligations of $1,878 and $32,389 was recorded on the condensed consolidated statements of operations.

During the three and nine months ended April 30, 2012, the Company settled asset retirement obligations of $278,210 and $737,130 with cash. No loss on settlement of assets retirement obligations was recorded.

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

Undiscounted estimated cash flow for the next five years
July 31, 2013	$	53,299
July 31, 2014		640,714
July 31, 2015		623,964
July 31, 2016		598,202
July 31, 2017		-
Remaining balance		2,190,016
	$	4,106,195