MINERAL RIGHTS AND PROPERTIES

9 Months Ended

Apr. 30, 2014

MINERAL RIGHTS AND PROPERTIES [Text Block]

NOTE 4: MINERAL RIGHTS AND PROPERTIES

Mineral Rights

At April 30, 2014, the Company had mineral rights in the States of Arizona, Colorado, New Mexico, Texas and Wyoming and Paraguay. These mineral rights were acquired through staking and purchase, lease or option agreements and are subject to varying royalty interests, some of which are indexed to the sale price of uranium. At April 30, 2014, annual maintenance payments of approximately $1,336,000 are required to maintain these mineral rights.

Mineral rights and property acquisition costs consist of the following:

		April 30, 2014			July 31, 2013
Mineral Rights and Properties, Unproven
Palangana Mine	$	6,664,260		$	7,045,457
Goliad Project		8,689,127			8,689,127
Burke Hollow Project		1,313,250			1,313,250
Channen Project		-			428,164
Salvo Project		364,710			363,645
Nichols Project		154,774			154,774
Anderson Project		9,154,268			9,154,268
Workman Creek Project		1,372,008			1,287,158
Los Cuatros Project		257,250			257,250
Slick Rock Project		171,271			163,213
Todilto Project		166,720			166,720
Yuty Project		11,947,144			11,947,144
Coronel Oviedo Project		1,133,412			1,133,412
Other Property Acquisitions		1,080,934			1,067,148
		42,469,128			43,170,730
Accumulated Depletion		(3,209,016	)		(2,278,053	)
		39,260,112			40,892,677
Databases		2,405,038			2,345,038
Accumulated Amortization		(1,867,341	)		(1,685,011	)
		537,697			660,027
Land Use Agreements		390,155			390,155
Accumulated Amortization		(186,266	)		(157,007	)
		203,889			233,148
	$	40,001,698		$	41,785,852

During the three months ended April 30, 2014, the Company abandoned the Channen Project located in Texas with acquisition costs of $428,164, resulting in the recognition of an impairment loss of $428,164. During the nine months ended April 30, 2014, the Company abandoned a mineral property located in Colorado with acquisition costs of $28,891, resulting in the recognition of total impairment loss of $457,055. No impairment loss was recorded for the three and nine months ended April 30, 2013.

During the nine months ended April 30, 2014, the asset retirement obligations (ARO) of the Palangana Mine were revised due to changes in the estimated timing of restoration and reclamation of the Palangana Mine. As a result, ARO liabilities and the corresponding mineral rights and properties associated with the Palangana Mine were reduced by $381,197.

The Company has not established proven or probable reserves, as defined by the SEC under Industry Guide 7, through the completion of a final or bankable feasibility study for any of its mineral projects. The Company has established the existence of mineralized materials for certain uranium projects, including the Palangana Mine. Since the Company commenced uranium extraction at the Palangana Mine without having established proven or probable reserves, there may be greater inherent uncertainty as to whether or not any mineralized material can be economically extracted as originally planned and anticipated.

No revenues were generated from the sale of U₃O₈ during the nine months ended April 30, 2014. The Palangana Mine has been the Company's sole source for the U₃O₈ sold to generate its revenues during Fiscal 2013 and 2012, with no revenues generated prior to Fiscal 2012. The economic viability of the Company's mining activities, including the expected duration and profitability of the Palangana Mine and of any future satellite ISR mines, such as the Goliad Project, located within the South Texas Uranium Belt, has many risks and uncertainties. These include, but are not limited to: (i) a significant, prolonged decrease in the market price of uranium; (ii) difficulty in marketing and/or selling uranium concentrates; (iii) significantly higher than expected capital costs to construct the mine and/or processing plant; (iv) significantly higher than expected extraction costs; (v) significantly lower than expected uranium extraction; (vi) significant delays, reductions or stoppages of uranium extraction activities; and (vii) the introduction of significantly more stringent regulatory laws and regulations. The Company's mining activities may change as a result of any one or more of these risks and uncertainties and there is no assurance that any ore body that we extract mineralized materials from will result in profitable mining activities.

Mineral property expenditures incurred by major projects are as follows:

		Three Months Ended April 30,				Nine Months Ended April 30,
		2014		2013		2014		2013
Mineral Property Expenditures
Palangana Mine	$	668,307	$	756,414	$	1,975,766	$	3,724,668
Goliad Project		419,278		145,390		1,591,309		369,375
Burke Hollow Project		750,907		572,578		1,348,976		1,894,411
Channen Project		219		29,983		728		805,791
Anderson Project		45,290		-		172,975		74,924
Workman Creek Project		1,440		-		31,651		32,640
Slick Rock Project		10,309		29,910		61,320		116,762
Yuty Project		148,248		26,831		228,997		134,791
Coronel Oviedo Project		457,527		88,210		601,723		433,802
Other Mineral Property Expenditures		237,824		177,831		898,067		522,532
	$	2,739,349	$	1,827,147	$	6,911,512	$	8,109,696