Khan strikes peace in Mongolia

Andrew Willis

Robert Friedland isn’t the only Canadian mining executive doing deals in Mongolia, as junior uranium play Khan Resources cut a deal Monday with the state-owned mining developer MonAtom LLC.

TSX-listed Khan (KRI-T0.780.1014.71%), the target of a hostile takeover bid, struck a joint venture with MonAtom that settle ownership issues on a property in northern Mongolia called Dornod, close to the border with Russia. The partnership paves the way for development of a uranium mine. Khan shares are soaring on the news.

Ivanhoe Mines, a Mongolian copper and gold play that features Mr. Friedland as a major shareholder, is currently looking at strategic alternatives after navigating these same regulatory waters.

With the MonAtom deal in place, Khan and its financial advisers at Haywood Securities said Monday in a news release that the company now has a net asset value of $2.52 a share, or well above the 65-cent-a-share hostile offer fired at Khan back in November by a Russian uranium miner named JSC Atomredmetzoloto.

The takeover came after Mongolian politicians rolled out new rules last summer that required government ownership in uranium mining projects.

“The memorandum of understanding with MonAtom offers a going-concern alternative that we hope, by removing regulatory uncertainty, will increase our share price closer to the net asset value,” said James Doak, chairman of the board at Khan, in a news release. Mr. Doak is a former Bay Street energy analyst who moved into money management a decade back.

Source:www.theglobeandmail.com (Globe and Mail, Canadian Newspaper)