Khan Resources has lodged 500 pages of documentation to support its $300 million damages claim against the Mongolian Government over alleged collusion regarding the takeover of a uranium resource.
The action was given approval by an international arbitration panel in July 2012 after the Canadian uranium company was forced to suspend the lawsuit in April because of appeals by Atomredmetzoloto JSC (ARMZ) and the Mongolian government. Khan cites the two were colluding on a takeover of its Dornod uranium property in northeast Mongolia.
The action has now progressed to the quantum and damages phase, and Khan has submitted seven volumes of documentation in support of its claim to the tribunal. Khan’s claim for damages totals US$326 million, including interest from the July 2009 date of the expropriation of the Dornod deposit by the Mongolian Government.
The documentation includes two independent valuation reports - one by Raymond James and another by Berkeley Research Group. Also included is a report by an independent legal expert on Mongolian law in support of Khan’s claim.
The Government of Mongolia has until April 5, 2013 to formulate its response to the claim and then Khan will have until June 28, 2013 to respond to the Government’s defence. The tribunal will meet from November 11 through to November 15 to hear the claim and its ruling is expected early in 2014.
Khan’s president Grant Edey says, “While the process of International Arbitration is long - we initiated our suit in January 2011 - we remain confident in a favourable outcome and that we will receive value for our investments in Mongolia. Khan intends to pursue the judgement and collection of the damage award, to the limit of international law.”
Khan and ARMZ, through their subsidiaries, became joint venture partners in 1995 to undertake exploration and development of the Dornod uranium property, one of the most significant and strategic undeveloped uranium resources of its kind in the world.
Since acquiring the mining licence in 2003 Khan has spent $21 million to develop and explore the property, establish power, build a permanent camp, conduct a definitive feasibility study and various NI 43-101 instruments, while ARMZ has contributed virtually nothing. The property is estimated to have an annual production rate of 3.5 million pounds of uranium oxide over a 15 year mine life.