Company vows to defend its uranium interests after hiring Washington law firm
Khan Resources Inc. (TSX: T.KRI, Stock Forum) is launching international arbitration proceedings against the government of Mongolia following the alleged illegal expropriation of its licenses in that country and other unfair and discriminatory actions.
The company said it has retained a Washington, D.C. law firm in a bid to recover damages and pursue other remedies.
Khan said it has taken this action in the belief that it has a strong case and intends to seek a substantial damages award, reflecting the significant value that the company has created in the Dornod uranium project as shown by a feasibility study completed in March 2009.
The Dornod property is located in northeastern Mongolia and has been extensively explored and mined by the former Soviet Union from 1988 to 1995. Khan has said it planned to build a “state-of-the art” mining and processing facility at the site in a bid to produce about 3.5 million pounds of uranium oxide annually over a period of 15 years.
“Khan will be looking very closely at all necessary means to defend its interests and see recuperation from those who have caused damage to its rights,’’ said Grant Edy, the company’s newly appointed interim President and Chief Executive Officer.
Edy is replacing Martin Quick, who will retire as President and CEO on June 25 to spend more time with his family. He will, however, remain a director of the company.
The Khan subsidiaries through which the Mongolian licenses are held had previously filed claims in the Mongolian courts, challenging the legal basis for the purported license invalidations by the Nuclear Energy Agency of Mongolia.
Khan said the relevant court has accepted the filing of its claims and proceedings are ongoing.
These developments come after Khan issued a statement on April 13 stating that its 58%-owned Mongolian joint venture subsidiary Central Asian Uranium Co. (CAUC), and wholly-owned Khan Resources had been notified that two separate licenses had been invalidated.
Khan said the violations purport to be based on a failure by CAUC and Khan to address violations of Mongolian law, stemming from a July 2009 report issued by an inspection team appointed by the Mongolian State Specialized Inspection Agency in respect of the mining license.
Khan said CAUC was informed that it had not registered its deposit reserves with the State Integrated Registry for approval by the Minerals Professional Council.
Khan said CAUC had actually submitted the deposit reserves and resource calculation for registration in 2007, but added that the Minerals Professional Council has never held the requisite meeting to consider the calculation and prepare the requisite report.
