Toronto junior Khan Resources focus of China-Russia fight for Mongolian uranium

After nearly losing its license to Mongolian politics to its current status as the sought-after prize in a tug-of-war between China and Russia, Khan Resources is experiencing one heck of a year.

RENO, NV - 

With the announcement that uranium explorer Khan Resources hopes to sell all of its shares to China's largest provider of nuclear power, the recent long nightmare surrounding the company's ability to continue to conduct business in Mongolia may be finally coming to a close.

But, Russia's largest uranium producer isn't about to give up on Russia's lengthy battle with the Chinese to control Mongolia's mineral wealth.

In less than a year, Toronto based Khan (TSX: KRI) found one of its mining licenses had been suspended on its flagship project, the Dornod uranium project.  To compound matters, Dornod is the prize being sought after in a tug-of-war between Russian and Chinese state companies.

Last July Khan received notice from the Mineral Resources Authority of Mongolia that the mining license of its joint venture company Central Asia Uranium was being suspended for three months for alleged violations.

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 tonnes.

By December Khan found itself the target of an unsolicited bid by Russian state uranium miner ARMZ, the world's fifth largest uranium producer, which had offered to buy Khan for $33 million in cash. Khan rejected the bid.

By January 14^th, the CAUC mining license suspension was lifted by the Mongolian government. Its reinstatement was a prerequisite to re-registration of the license under the county's new Nuclear Energy Law.

On Monday Khan announced that China National Nuclear Corporation (CNCC) has emerged as its white knight with a friendly C$56.5 million offer as Russian mega-miner ARMZ's bid was scheduled to expire at 5 p.m. CNNC is China's official agent is seeking off-shore uranium sources, and also is China's largest operator of nuclear plants. CNCC has already acquired Western Prospector Group for its Mongolian holdings.

 However, ARMZ wasn't to be bested by the Chinese and extended its deadline to acquire Khan.

CNNC offered C96-cents per share in comparison to ARMZ's C65-cents per share. In a news release, Kan CEO Martin Quick pronounced the Chinese offer "far superior" to the Russian bid.  Khan also has given CNCC the right to match any superior offer by another bidder.

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