Mineral Properties

9 Months Ended

Oct. 31, 2011

Extractive Industries

Mineral Industries Disclosures [Text Block]

(2)        Mineral Properties

On February 27, 2009, the Company completed the purchase of Tournigan USA, Inc. which was formerly a wholly owned subsidiary of Tournigan Energy Ltd. The prime asset in Tournigan USA, Inc. is its portfolio of mineral claims and leases currently covering in excess of 18,000 acres in Wyoming, South Dakota and Arizona that cover some of the most prospective uranium-bearing geology in the United States. Under terms of the agreement, Tournigan Energy Ltd retains a 30% carried interest in respect of each property in Tournigan USA, Inc up to the completion of a feasibility study for any project encompassing any such property. Upon completion of a feasibility study, the 30% carried interest will convert into a 30% working interest in the Project or Tournigan Energy Ltd will have the option to dilute down to a 5% net profits interest.

The Company delivered a promissory note in the amount of $325,327 to Tournigan Energy Ltd. This note represented the amount paid by Tournigan Energy for the then current year’s Federal mineral claim maintenance fees along with working capital adjustments on the closing date. In addition to this note, the Company agreed to secure the release of reclamation bonds in the amount of $930,000 less any applicable reclamation costs. As of October 31, 2011, the deposit for reclamation bonds has been reduced to $50,000.

Both the promissory note to Tournigan Energy Ltd and the release of the reclamation bonds were unsecured, non-interest-bearing and were due August 31, 2009. The due date of the promissory note was extended to December 15, 2009. In a further agreement dated December 14, 2009, Tournigan Energy agreed to reduce the promissory note to $100,000 with payment of this amount on December 15, 2009. This payment was made by Fischer-Watt and the promissory note was extinguished.

Tournigan Energy also extended the repayment date of the first $530,000 of the reclamation bonds to December 15, 2009 and the repayment of the remaining $400,000, less the cost of the reclamation work, to September 30, 2010. Tournigan Energy agreed to accept a payment of $100,000 on December 15, 2009 as part payment of the $530,000 installment of the reclamation bond due on that date. The balance of $400,000, less the cost of reclamation work was to be paid from one half of subsequent equity share issues of Fischer-Watt until paid in full. The $100,000 payment was made to Tournigan Energy as scheduled.

On December 22, 2010, Fischer-Watt repaid Tournigan Energy a further $130,000.

At April 30, 2011, after completion of reclamation, the balance due to Tournigan Energy was $600,000. This amount was to be repaid from one-half of the proceeds (net of issuance costs) of all equity share issues of Fischer-Watt until Tournigan Energy has been paid in full.

On July 13, 2011, the Company renegotiated its debt and property interests with Tournigan Energy concerning its uranium properties in the western United States. Tournigan Energy has agreed to defer receipt of its debt and property interests by converting these Company liabilities to a two percent (2%) net smelter return (“NSR”) royalty interest on uranium properties within the Company’s current areas of work.

Under the terms of its existing agreement with Tournigan Energy, the Company had the following obligations:

a) $600,000 remained owing to Tournigan Energy, payable from fifty percent (50%) of the proceeds of future equity financings;

b) Tournigan Energy retained a 30% carried interest on the Company’s uranium properties in Wyoming, South Dakota and Arizona through to feasibility on any project on these properties;

c) After completion of feasibility on a project, Tournigan Energy could elect to convert its interest to a 30% contributory working interest in the project, or its interest would be diluted to a five percent (5%) net profits interest.

Under the renegotiated terms, Tournigan Energy has:

a) Forgiven the $600,000 payable by the Company;

b) Converted its interests in the Company’s properties to a two percent (2%) NSR royalty up to a maximum of $10,000,000;

c) The Company is entitled to buy back up to one-half of this royalty for $3,000,000 at any time up to July 13, 2016, and thereby reduce the remaining royalty to a one percent (1%) NSR royalty capped at $5,000,000;

d) The NSR royalty will apply to any uranium production by the Company in the Wyoming counties of Carbon, Fremont, Sublette and Sweetwater, and the South Dakota county of Fall River. These are all areas where the Company currently holds uranium property interests.

This transaction has been approved by the TSX-V exchange, as Tournigan Energy is listed in Toronto on the TSX Venture Exchange.

Peter Bojtos, President, CEO and Chairman of the Board of Fischer-Watt declared his interest in this transaction since he is also a director of Tournigan Energy.

The transaction described above relating to the acquisition of TUSA was accounted for as a business combination in accordance with SFAS No. 141R (ASC Topic 805). A summary of the transaction is presented below:

Fair value of net tangible assets acquired:
	Cash	$       12,829
	Accrued interests receivable	3,202
	Restricted deposits	930,000
	Accounts payable	(204)
	Asset retirement obligation	(52,000)
	Acquired net assets (100%)	893,827
Purchase Price:
	Promissory note payable	$    325,327
	Due to Tournigan Energy, net	878,000
	Total	$ 1,203,327
	Mineral rights	$    309,500

Subsequent to the acquisition of TUSA, the Company evaluated its new holdings, and determined that the carrying value of the mineral rights exceeded their net realizable value. Accordingly, the Company recorded an impairment charge of $309,500 for the year ended January 31, 2010.