Licensing dispute remains unresolved

Mongolia’s courts will try to avoid going to international arbitration for resolution
The dispute between Mongolia’s Nuclear Energy Agency (NEA) and Candian-owned Khan resources over its Dornod mining and exploration licences continues with NEA’s latest revocation of the Company’s licences.
Both parties issued statements within a day of each other with different interpretations of NEA actions making the future for Khan resources and its licenses unclear. On November 11, the Nuclear Energy agency published a statement.
‘This statement is issued in connection with false information deliberately and repeatedly released to the media and the internet by “Khan Resources” LLC and “Central Asian Uranium” LLC, on the licenses that they possessed, court decisions, as well as the activities of the regulatory body, which carries out its activities in accordance with relevant legislation. Nuclear Energy Agency revoked the licenses 9282X of “Khan Resources” LLC, and 237A of “Central Asian Uranium” LLC in connection with the repeated violation of the Law of Mongolia on Minerals, the Law of Mongolia on Subsoil, the Law of Mongolia on Special Protected Area, the Law of Mongolia on Licensing and other laws and regulation, as well as inaction to correct the violations. In accordance with the Law of Mongolia on Enforcement Procedure of the Nuclear Energy Law the licenses was not renewed.
Disputes concerning the above mentioned licenses not solved conclusively by the court; moreover on November 13, 2010 the Administrative Appellate Court of the Supreme Court made some correction in the primary court decision and ruled that the decision taken by the Director General of the Nuclear Energy Agency in 2009, over the license 237A is valid.
However, “Khan Resources” LLC and “Central Asian Uranium” LLC release false information about the court’s decision, in order to conceal their violation, therefore the Agency regrets that the above mentioned companies intentionally taking fraudulent acts against the public and shareholders, and disrespect the Mongolian legislation by not complying requirements provided by the law.
Therefore, the Agency officially announces that it is impossible to renew the licenses of these companies.’
On November 12, Khan Resources replied Khan to the NEA Published Statements Concerning its Licenses with the following: Khan Resources Inc. announced on November 12 ,that the Mongolian Nuclear Energy Agency (the “NEA”) has published a notice in certain Mongolian newspapers that it does not intend to reinstate Khan’s exploration license 9282X and mining license 237A (the “Licenses”) held through its subsidiaries Khan Resources LLC and Central Asian Uranium Company, LLC, respectively.
While the NEA has not officially replied directly to Khan’s requests for the NEA’s determination of Khan’s applications to re-register the Licences under the Nuclear Energy Law, which were filed a year ago, these published reports suggest that the NEA has officially determined that “it is impossible” for the NEA to reinstate the Licenses on the basis of alleged violations of certain Mongolian laws. Khan continues to believe that there exists no legal basis for the NEA to refuse to reinstate and re-register its Licenses.
Khan intends to challenge the NEA’s actions through all legally available means and intends to pursue all available remedies to vigorously defend its and its subsidiaries’ rights and interests, including by proceeding to international arbitration.
Khan Resources Inc. (TSX:KRI) is a Canadian company engaged in the acquisition, exploration and development of uranium properties. Its current activities are focused on the Dornod area in northeastern Mongolia. Khan holds interests in the Main Dornod Property and in the Additional Dornod Property. Khan’s website is
source: The Mongol Messenger newspaper


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