On Friday Khan Resources Inc. filed its financial statements and management’s discussion and analysis for the three months ended December 31, 2013.
Khan has launched a 326 million USD international arbitration action against Mongolia for the illegal expropriation of its asset in January 2011. The international arbitration action is currently in process. “Khan is well funded and will continue with this legal action to recover value for its shareholders from this illegal expropriation,” said the company.
Reporting on the progress of the hearing, Khan said, “The hearing by the International Arbitration Tribunal on merits and quantum was held and completed between November 11 and November 15, 2013. Arguments were heard by the tribunal from Khan and from the Government of Mongolia on the merits of the case and the damages incurred by Khan due to the illegal expropriation in 2009 of the mining and exploration licenses for the Dornod uranium project in northeastern Mongolia. At the completion of the hearing, the tribunal asked for the submission of two post-hearing briefs before rendering their decision. The first post-hearing brief was submitted on February 5, 2014 and the second will be submitted on April 11, 2014. After receipt of the final brief, it is expected that the Tribunal will then formulate and render their decision. The amount of damages sought by Khan currently exceeds 326 million USD.”
Khan Resources Inc., and its predecessor companies, have been involved in the development of the Dornod uranium property in Mongolia since 1995. Khan says it completed a full definitive feasibility study on the property in the spring of 2009, which demonstrated highly positive economics for the project.
However, in January 2009, Mongolia and Russia had announced their intention to form a new Mongolian-Russian joint venture to replace Khan in mining the Dornod property. In July 2009, the Government of Mongolia promulgated its Nuclear Energy law, which among other items, provided the state with 51 percent of the Dornod property without compensation to prior owners.
In 2010, the government did not reissue Khan the required licenses for the Dornod property which effectively resulted in 100 percent expropriation of the asset without any compensation.
Currently, Khan holds 15.5 million common shares of Macusani Yellowcake Inc.
which represents 9.7 percent of the 159.5 million Macusani outstanding common shares. The value of the company’s investment in Macusani as of December 31, 2013 was 1,319,000 USD, an increase of 155,000 USD from its value at September 30, 2013.
Khan reported that its Mongolian subsidiaries were closed on September 30, 2013 and all Mongolian tangible assets were retired. On October 17, 2013 and December 4, 2013, the company sold the remaining assets at or associated with the Dornod site. These sales were completed for gross proceeds of 47,000 USD. The windup of these entities is expected to be completed in the second quarter, the company reported.
The following table summarizes financial results of Khan for the three months ended December 31, 2013 and 2012.
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