Khan's white knight launches formal offer, ARMZ backs off

By: Liezel Hill
TORONTO (miningweekly.com) - China National Nuclear Corporation (CNNC) has launched its offer to buy TSX-listed uranium junior Khan Resources, the Canadian firm announced on Friday.

CNNC is offering C$0,96 a share for Khan, which has recommended that shareholders accept the offer.

Khan's flagship asset is a stake in the Dornod uranium project, in Mongolia.

The company has been defending itself against a hostile takeover bid by Russia's Atomredmetzoloto, but the Russian company announced on Friday it would allow its C$0,65 a share offer to expire on March 1.

ARMZ said the decision not to increase or extend its offer was a response to uncertainty over licensing and ownership of the Dornod uranium property.

A working group established by the Security and Foreign Policy Standing Committee of the Mongolian Parliament said this week that a number of uranium licenses in Dornod province, including licenses pertaining for the Dornod property, should be invalidated based on infringements of Mongolian law.

"In light of the announcement by the working group of the Mongolian Parliament, ARMZ has determined that continuing our offer at the current time is not prudent," director-general Vadim Zhivov said in a statement.

CNNC's offer for Khan requires approval by at least two-thirds of Khan's shareholders.

Shares in Khan fell 13,6% on Friday, to C$0,89 apiece by 14:33 in Toronto.

Source:www.miningweekly.com