ASSET RETIREMENT OBLIGATIONS

9 Months Ended

Apr. 30, 2016

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement Obligation Disclosure [Text Block]

NOTE 9: ASSET RETIREMENT OBLIGATIONS

The Company’s asset retirement obligations relate to future remediation and decommissioning activities at the Palangana Mine and Hobson Processing Facility.

Balance, July 31, 2015	$	3,926,846
Revision in estimate of asset retirement obligations		(209,168)
Accretion		214,395
Balance, April 30, 2016	$	3,932,073

During the nine months ended April 30, 2016, the ARO for 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 associated with the Palangana Mine were reduced by $209,168, the corresponding mineral rights and properties were reduced by $24,787, and a credit amount of re-valuation of ARO totaling $184,381 was recognized as a result of a downward adjustment to fully depleted underlying mineral rights and properties, which was recorded against the mineral property expenditures for the Palangana Mine.

 

The estimated amounts and timing of cash flows and assumptions used for ARO estimates are as follows:

	April 30, 2016			July 31, 2015
Undiscounted amount of estimated cash flows	$	6,650,255		$	6,600,868
Payable in years		2.1 to 15			2.5 to 15
Inflation rate		0.90% to 2.25	%		2.02% to 2.25	%
Discount rate		5.15% to 8.00	%		6.56% to 8.00	%

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

Fiscal 2016	$	-
Fiscal 2017		139,052
Fiscal 2018		414,058
Fiscal 2019		667,984
Fiscal 2020		620,673
Remaining balance		4,808,488
	$	6,650,255