Khan Resources has sent an open letter to Z. Enkhbold to give its version of certain conclusions and recommendations recently made by the working group led by the MP. The company notes that the license it holds in the Dornod uranium district was not included in the list of licenses whose legality was sought to be investigated. Reiterating that the company has been fully cooperating with Government officials, Khan says it would be pleased to provide all relevant documents to the working group if asked to do so. The company says it is difficult to understand why only it should be investigated when there are two other partners in the joint venture.

The letter details the course of events that led to the conclusion of a Memorandum of Understanding on January 22 between MonAtom LLC, the representative of the Mongolian Government, and Khan, “whereby Khan agreed to transfer 51% of the shares of Khan Resources Co., Ltd to MonAtom free of charge”, in “clear acknowledgment by Khan of the Mongolian right to own a majority of the Dornod uranium deposit and thereby comply with the Nuclear Energy law”.  The Russian partner (ARMZ) in CAUC “did not respond to this request and abstained from voting”.

Khan says “ARMZ did not obtain any approval from the NEA” when it made a hostile take-over bid to purchase all of the common outstanding shares of Khan Resources. The NEA broke its silence only when it issued a statement “a day before the expiration of the ARMZ take-over bid” saying that the MoU had “violated Mongolian laws and should not be implemented”. Khan says “this would have led to a drop of the share price of KRI, and would have allowed” ARMZ to purchase them for low value.  

The letter expresses surprise and disappointment that the ARMZ has made “speculative and unsubstantiated comments” and has been “releasing information about actions that have not taken place and appears to be telling the Government of Mongolia what to do and what not to do”. Explaining how shares are sol;d in a market economy, the letter says, “Obtaining prior approval from the NEA of a deal which is not yet complete and one in which we cannot predict, does not make any sense to us. More importantly we cannot find any regulations demanding such approval before the deal is completed.” 

The letter says “the claim by certain NEA officials that Khan ‘violated’ the law, and did not get the Dornod uranium deposit reserve approved, is simply not true and is completely misleading”. It details how time and again Khan “has been asking to conclude the Dornod deposit pre-mining agreement since 2007 in accordance with the new Mineral Law requirements, but Government agencies would simply ask it to wait”.  

The letter concludes by appealing “to all parties to study the facts, and to present to the public accurate and objective information, and then to make decisions in conformity with the laws and regulations”.