Khan’s Board Recommends CNNC All-Cash Buyout

The board of Khan Resources (KRI-T) is urging shareholders to accept a 96¢ per share all-cash takeover offer from CNNC Overseas Uranium Holding, a subsidiary of China National Nuc lear Corp., China’s leading uranium development and nuclear fuel company.

The CNNC offer represents a premium of 118.2% to Khan’s closing share price on Nov. 26, 2009, the last trading day prior to the announcement that Atomredmetzoloto JSC (ARMZ) was making an unsolicited takeover offer of 65¢ per share.

Khan noted that its financial advisor, Haywood Securities, believes CNNC’s offer “is fair, from a financial point of view.”

CNNC’s offer also has fewer conditions and is more likely to be completed than ARMZ’s offer.

“The board of directors and the special committee have considered a variety of strategic alternatives and the CNNC offer is the most attractive alternative available,” the company outlined in a press release.

CNNC’s offer gives shareholders immediate liquidity. And Khan’s share price has been hit by the regulatory challenges and uncertainty in Mongolia.

Khan’s directors and executive officers have all agreed to tender their shares, which collectively make up about 6% of the company’s shares.

Nevertheless, the board has kept its ability to respond to superior proposals.

Khan’s Dornod property, the site of a former Russian open-pit uranium mine in northeastern Mongolia, is licenced for mining and exploration.

Dornod has a NI 43-101 indicated resource of 25.3 million tonnes at an average grade of 0.116% U₃0₈ for 64.3 million lbs. of U₃0₈ and an inferred resource of 2.2 million tonnes at an average grade of 0.050% U₃0₈ for 2.4 million lbs. U₃0₈.