The UB Post-Leading English News

The request for postponement was made by the NEA to allow it to change its legal representative and constitutes the second time the NEA has asked for a postponement of the hearings. On July 19, 2010, the court did rule in favor of Khan’s 58-percent-owned joint-venture subsidiary, Central Asian Uranium Company LLC (CAUC), that a similar decision by the NEA to invalidate CAUC’s mining license was itself invalid and illegal. The NEA has the right to appeal the court’s decision on CAUC’s claim within two weeks of the date of the decision.

As previously announced in Stockwatch in April 13, 2010, both CAUC and Khan Mongolia received notices from the NEA purporting to invalidate their licenses relating to the Dornod uranium project, effective as of Oct. 8, 2009, allegedly based on unspecified violations of Mongolian law. Subsequently, each of CAUC and Khan Mongolia filed and has since been pursuing separate formal claims in the court challenging the legal basis for the NEA’s notices asserting, among other things, that the NEA had no legal authority to make a decision to invalidate the licenses and that the NEA’s purported decision to do so violated the provisions of Mongolian law and was, therefore, invalid.

Grant Edey, president and chief executive officer of Khan, commented: “We are disappointed in the NEA’s request to again postpone the court case. We were hopeful that a favorable decision for Khan Mongolia, coupled with Monday’s favorable decision for CAUC, would allow us to move forward on a co-operative basis with the government of Mongolia and its agencies to renew our licenses and continue the development of the Dornod uranium project.”

Khan continues to believe that it and its Mongolian subsidiaries have always operated in compliance with applicable Mongolian laws. An appeal of the court decision on CAUC by the NEA will be vigorously challenged by Khan through all legally available means.