MINERAL RIGHTS AND PROPERTIES

6 Months Ended

Jan. 31, 2015

MINERAL RIGHTS AND PROPERTIES [Text Block]

NOTE 4: MINERAL RIGHTS AND PROPERTIES

Mineral Rights

At January 31, 2015, the Company had mineral rights in the States of Arizona, Colorado, New Mexico, Texas and Wyoming and the Republic of 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 January 31, 2015, annual maintenance payments of approximately $1,060,000 are required to maintain these mineral rights.

Mineral rights and property acquisition costs consisted of the following:

		January 31, 2015		July 31, 2014
Mineral Rights and Properties, Unproven
Palangana Mine	$	6,587,135	$	6,664,260
Goliad Project		8,689,127		8,689,127
Burke Hollow Project		1,495,750		1,495,750
Longhorn Project		116,870		116,870
Salvo Project		364,710		364,710
Nichols Project		154,774		154,774
Anderson Project		9,154,268		9,154,268
Workman Creek Project		1,422,008		1,372,008
Los Cuatros Project		257,250		257,250
Slick Rock Project		661,271		661,271
Yuty Project		11,947,144		11,947,144
Coronel Oviedo Project		1,133,412		1,133,412
Other Property Acquisitions		285,739		262,115
		42,269,458		42,272,959
Accumulated Depletion		( 3,784,481)		( 3,454,533)
		38,484,977		38,818,426
Databases		2,405,038		2,405,038
Accumulated Amortization		( 2,052,021)		( 1,928,901)
		353,017		476,137
Land Use Agreements		390,155		390,155
Accumulated Amortization		( 215,525)		( 196,019)
		174,630		194,136
	$	39,012,624	$	39,488,699

During the three months ended January 31, 2015, 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 $77,125.

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 uranium concentrates during the six months ended January 31, 2015 or Fiscal 2014. Historically, the Palangana Mine has been the Company’s sole source for uranium concentrates 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 and Burke Hollow Projects, 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 were as follows:

		Three Months Ended January 31,				Six Months Ended January 31,
		2015		2014		2015		2014
Mineral Property Expenditures
Palangana Mine	$	688,196	$	635,877	$	1,120,856	$	1,307,459
Goliad Project		20,036		1,027,060		54,293		1,172,031
Burke Hollow Project		159,981		423,771		1,140,548		598,069
Longhorn Project		19,477		20,456		30,723		28,700
Salvo Project		2,039		227		22,839		1,016
Anderson Project		29,250		43,524		123,422		127,685
Workman Creek Project		-		1,240		31,300		30,211
Slick Rock Project		-		1,986		49,784		51,011
Yuty Project		40,872		62,924		259,761		80,749
Coronel Oviedo Project		151,178		60,045		295,762		144,196
Other Mineral Property Expenditures		143,239		306,910		385,111		631,036
	$	1,254,268	$	2,584,020	$	3,514,399	$	4,172,163