Asset Retirement Obligations

9 Months Ended

Aug. 31, 2011

Asset Retirement Obligations [Text Block]

11.

Asset Retirement Obligations

Asset retirement obligations relate to the closure and reclamation of the Grant Mill Tailings Pond and the Mill complex, and to the reclamation work associated with the Nolan Gold Project consisting of dismantling and removal of site structures and equipment, and reshaping and re-vegetating the disturbed areas. The Company has no assets legally restricted for purposes of settling asset retirement obligations. A summary of assets retirement obligation for the nine months ended August 31, 2011, and for the fiscal year ended November 30, 2010, is as follows:

		Grant			Nolan
		Mine			Project			Total
Balance as of November 30, 2009	$	368,884		$	171,523		$	540,407
Accretion expense		18,444			8,576			27,020
Liabilities settled		(1,511	)		(900	)		(2,411	)
Balance as of November 30, 2010	$	385,817		$	179,199		$	565,016
Accretion expense		14,469			6,720			21,189
Liabilities settled		–			–			–
Balance as of August 31, 2011	$	400,286		$	185,919		$	586,205

a)	Grant Mine
	The Grant Mine is not an active mine and related assets were written off as impaired effective December 1, 2001. The retirement obligations associated with the Grant Mine involves the decommissioning of the Grant Mill Tailings Pond and the Mill complex that was built in the early 1980s and no longer used after 1989.
	The Company has retained a geotechnical and environmental consulting firm to assist with a preliminary report for the closure of the tailings pond. The preliminary report is part of the closure plan, and further reclamation work involves another closure phase that needs permits and/or approval by the State of Alaska regulatory agencies.
	The Company believes that the estimated fair value of the cost of reclamation at this time will approximate the accrued obligations plus 5% accretion expense per annum until reclaimed. During the nine months ended August 31, 2011, the Company recorded $14,469 (2010 - $13,833) accretion expense.

b)	Nolan Gold Project
	The retirement obligations associated with the Nolan mineral properties are associated with the reclamation of disturbed land resulting from normal operations and are not the result of improper operations of an asset such as environmental remediation liabilities. The Nolan mineral properties are on Federal mining claims and thus are under the active supervision of the Bureau of Land Management.
	As of August 31, 2011, and November 30, 2010, the Company is obligated to reclaim 21 acres at Nolan Creek. These 21 acres are areas essential for the Company’s operations and consist of the camp area, equipment storage area, processing area, explosives storage area, and the portal area, as well as the roads and core storage area.
	The Company believes that the remaining accrued obligations plus 5% accretion expense per annum until the remaining 21 acres are reclaimed is sufficient to cover the cost of reclamation. During the nine months ended August 31, 2011, the Company recorded $6,720 (2010 - $6,432) accretion expense