ASSET RETIREMENT OBLIGATIONS

12 Months Ended

Jul. 31, 2014

ASSET RETIREMENT OBLIGATIONS [Text Block]

NOTE 9: ASSET RETIREMENT OBLIGATIONS

The Company's asset retirement obligations ("ARO") relates to site restoration and reclamation for the Hobson Processing Facility, Palangana Mine and Mt. Lucas assumed as part of the STMV Acquisition.

		July 31, 2014			July 31, 2013
Opening balance	$	4,078,080		$	3,112,374
Revision in estimate of asset retirement obligations		(381,197	)		435,758
Additions of asset retirement obligations		-			435,004
Liabilities settled with cash		(23,382	)		(109,916	)
Accretion		294,088			204,860
		3,967,589			4,078,080
Less: current portion of asset retirement obligations		(198,816	)		(836,073	)
Long-term asset retirement obligations	$	3,768,773		$	3,242,007

		July 31, 2014		July 31, 2013
Undiscounted amount of estimated cash flows	$	6,382,549	$	5,975,265
Payable in years		2.5 to 12		2.5 to 12
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 Fiscal 2014, the Company settled asset retirement obligations of $12,146 with cash of $13,551. In connection with the release of the Mount Lucas Project to the unrestricted use, the Company derecognized the remaining ARO liabilities of $11,236 associated with the Mount Lucas Project. As a result, the Company recognized a gain on settlement of asset retirement obligations of $9,831.

During Fiscal 2013, the Company settled asset retirement obligations of $109,916 (Fiscal 2012: $619,772) with cash of $142,305 (Fiscal 2012: $1,064,220). As a result, the Company recognized a loss on settlement of asset retirement obligations of $32,389 (Fiscal 2012: $444,448).

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

Fiscal 2015	$	198,816
Fiscal 2016		340,827
Fiscal 2017		1,082,173
Fiscal 2018		635,932
Fiscal 2019		-
Remaining balance		4,124,801
	$	6,382,549