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The government of Mongolia signaled on Monday it will not abide by an international tribunal’s order to pay more than US$100 million to Canadian uranium explorer Khan Resources Inc., whose chairman died suddenly while in the country meeting with officials over repayment plans last week.
“The Mongolian government, in order to protect its own interests, will work for the invalidation of the arbitration award,” a statement by the justice minister, dated Monday, said.
The move comes just days after Jim Doak, Khan’s chairman and a well-known figure in Canada’s financial industry, died in Ulan Bator from reasons deemed to be natural causes on April 23, a day after talks between the two sides ended.
Grant Edey, Khan’s CEO, said in an e-mail that the meeting was short because the two sides “remained apart in their respective positions” and the company is confident the award will be upheld.
An international tribunal ordered Mongolia to pay about $100 million to Khan last month as compensation for having canceled its licenses to mine the Dornod uranium project in 2009 and instead granting the rights to Russia’s ARMZ.
Toronto-based Khan said in an April 24 statement that it had hired a “specialist” to assist in collecting the award, which then totaled US$104 million, including interest.
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