Khan says Mongolia still wants foreign funds

Khan Resources (KRI-T) says everything is fine for foreign investors in Mongolia.

Market confidence in the, at times, mercurial Mongolian government, was dealt another blow this week when Hong-Kong investment group Tinpo said it wanted to back out of its deal for Vancouver-based Western Prospector Group (WNP-V, WEPGF-O).

Tinpo said the reason for the withdrawal of its $74 million offer was its learning of a resolution presented to the government some six months earlier that urged for the nationalization of the country’s uranium industry.

Khan’s president and chief executive, Martin Quick, says he had not heard of this resolution and called Kinpo’s withdrawal suspicious given recent pro-foreign investment comments made by the Mongolian President Nambaryn Enkhbayar.

The president told listeners on Oct. 1 that Mongolia needed foreign dollars to develop deposits, introduce advanced technology and provide qualified experts.

“There is no other way than for all parties concerned to accept market principles of allowing the investors to own more than 51% of the deposit,” the president is reported as saying.

Khan is showing its faith in the political situation in the country by putting US$5 million into the development of a power line and a sedimentation pond for its Dornod Uranium.

“Khan Resources has a strong financial position and a world-class uranium deposit. Therefore, regardless of market conditions, we feel that the Company is significantly undervalued,” Quick said in a release.

In Toronto on Oct. 3, Khan shares closed at 37 on a volume of roughly 313,000 shares.