Source: Khan Resources                    Date: 12 August, 2010

The Nuclear Energy Agency (NEA) has chosen to appeal an administrative court`s verdict on July 19 that the NEA's decision to invalidate the mining license held by Khan`s joint venture unit, Central Asian Uranium Co (CAUC), was illegal and invalid. "We are very disappointed that the NEA has chosen to appeal a very clear and definitive ruling of the court. We trust the court will deal with the matter quickly and uphold the ruling in favor of CAUC," said Mr. Grant Edey, president and CEO of Khan Resources.

CAUC is a joint venture between Khan, the Russian company Priargunsky and the government of Mongolia. Their chief license is for Khan's Dornod uranium deposit, a former Russian open-pit uranium mine in north eastern Mongolia. It is believed to have resources of 22,000 tons. In April, the NEA canceled the mining and exploration licenses of two of Khan's units claiming specific violations, prompting the Canadian company to challenge the decision in Mongolian courts. It is now unclear whether Khan will continue the process of re-registering its licenses for both its units in the country, as stated previously.

The Dornod deposit was coincidentally also the highly sought-after prize of a takeover battle  last year for Khan between Russian state uranium miner ARMZ, the world`s fifth largest uranium producer, and the China National Nuclear Corporation (CNCC), China`s official agent seeking offshore uranium sources.