Khan Resources Inc. (TSX:KRI) stock fell 23.4 per cent Tuesday following a warning by company officials that the unsettled political climate in Mongolia could put in doubt its continuing majority ownership in the Dornod uranium project.
The company's shares fell 51 cents, or 23.4 per cent, to trade at $1.67 on the Toronto Stock Exchange Tuesday.
Khan currently owns 69 percent of the Dornod uranium property. However, Mongolia has previously defined Dornod as a “strategic property.” Under Mongolian law, the government could seize a 50 percent ownership in the mine.
"It is not certain whether or on what terms Mongolia would seek to acquire additional equity in the property, or the amount of such additional equity," Khan said in a written statement.
"While there can be no assurance that Khan will not be affected by political developments, Khan is confident that both the Dornod mining license, and the Dornod exploration license have been validly issued and are in good legal standing."
The company said it does not know whether incoming Prime Minister Bayar Sanj will seek to take over part ownership in the uranium mine. Bayar Sanj will be formally elected by parliament as Prime Minister on November 22.
Khan officials said on Monday that it was watching out for the possibility that its stake could be reviewed following the November 22 election of Bayar Sanj.
"This momentous election, together with the upcoming general election in June 2008, will almost certainly mean political change in Mongolia," Khan said.
Thursday, 29 November 2007