Toronto-based Khan Resources will start international
arbitration over the cancellation of its uranium licenses in that country. The
uranium developer, which also announced on Tuesday that CEO Martin Quick
would retire, said it had retained Washington DC-based law firm
Crowell & Moring to start arbitration proceedings.

“Khan believes that it
has a strong case and intends to seek a substantial damages award that reflect
the significant value that Khan has created in the Dornod uranium
project,” it said in a statement.

The Mongolian Nuclear Energy
Agency (NEA) notified Khan in April that the uranium-mining license and
exploration license for its operations had been invalidated. The mining license
is held by 58%-owned Khan subsidiary Central Asian Uranium Company (CAUC), and
the exploration license belonged to Khan Mongolia. Both permits were supposedly
invalidated with effect from October 8.

Khan is the biggest
shareholder in CAUC, which owns the Dornod uranium project, while the Mongolian
and Russian governments each own 21% to make up the balance.

Khan said that the definitive
feasibility study for the Dornod project estimated an after-tax value of USD276
million, of which USD189.3-million was attributable to Khan. The company”s
subsidiaries, CAUC and Khan Mongolia, previously filed claims in the Mongolian
courts challenging the legal basis for the invalidations by the NEA. The
proceedings were still ongoing.

“Khan will be looking
very closely at all necessary means to defend its interests and seek
recuperation from those who have caused damage to its rights,” said Grant Edey, who was appointed as interim CEO

 Quick would retire to pursue personal
interests and spend more time with his family, but would remain a director of
the company. “Quick was originally planning to retire at the end of last
year but, at my request, agreed to stay on to continue providing leadership and
direction during the recent takeover bids by ARMZ and CNNC and in our pursuit
of other strategic opportunities,” commented chairperson James Doak.