Khan Resources Inc. has announced
that the dispute period for the August 2, 2010 decision by the Mongolian
Capital City Administrative Court in favor of Khan”s subsidiary, Khan Resources
LLC (Khan Mongolia) has now expired. The court ruling declared that the
Mongolia Nuclear Energy Agency”s (NEA) decision to invalidate Khan Mongolia”s
exploration license covering part of the Dornod uranium property was illegal
and invalid.

The Company noted that the NEA, by
contrast, had elected on August 9, 2010 to appeal the court”s decision on July
19, 2010 in favor of Khan”s 58% owned joint venture subsidiary Central Asian
Uranium Company LLC (CAUC). This ruling also declared that the NEA”s decision
to invalidate CAUC”s mining license covering the remaining part of the Dornod
uranium property was illegal and invalid. This appeal is expected to be
heard in late September.

Grant Edey, President and CEO of
Khan, said “the decision by the NEA not to appeal the Khan Mongolia court
ruling was unexpected, but we are encouraged that they have chosen not to
challenge the decision. We hope that the NEA will now also choose not to pursue
the CAUC appeal and that we can resolve our dispute on the Dornod mining and
exploration licenses cooperatively”.

Khan intends to continue to defend
its rights and interests in Mongolia. In addition to challenging NEA”s
appeal of the CAUC court ruling, Khan has filed with the Ontario Superior Court
of Justice a $300 million lawsuit against Atomredmetzoloto JSC (ARMZ) and its
affiliate JSC Priargunsky Industry Mining and Chemical Union for damages
suffered by Khan due to ARMZ”s continuing efforts to secure Khan”s rights to
the Dornod uranium project.