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Monday, March 2, 2015

Khan Resources Inc.

March 02, 2015 14:53 ET

Khan Announces US$100 Million International Arbitration Award

TORONTO, ONTARIO--(Marketwired - March 2, 2015) - Khan Resources Inc. ("Khan" or the "Company") (CSE:KRI) announces that an international arbitration tribunal, constituted under the UNCITRAL Arbitration Rules, has determined an award of approximately US$100 Million (including interest and costs). The award is given as compensation to Khan for the Government of Mongolia's actions in relation to the cancellation of Khan's uranium licenses in 2009. The award is final and binding and is now due from the Government of Mongolia and Monatom LLC. If settlement is not forthcoming, the Company will initiate collection procedures pursuant to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958), a multilateral treaty to which Mongolia is a signatory.

The award was rendered by an internationally respected Tribunal, chaired by Mr. David A. R. Williams Q.C. (New Zealand) and including Mr. L. Yves Fortier Q.C (Canada) and Mr. Bernard Hanotiau (Belgium). The arbitration was administered by the Permanent Court of Arbitration, located in The Hague, Netherlands. The international arbitration was initiated in January, 2011 pursuant to the Founding Agreement for the joint venture, the Energy Charter Treaty and the Foreign Investment Law of Mongolia. Hearings were held on jurisdictional matters at the International Chamber of Commerce Hearing Centre in Paris in May 2012. The Tribunal's decision on jurisdiction in July 2012 dismissed all of Mongolia's objections to the continuance of the arbitral claim. As a consequence, a full hearing was held in November 2013 again at the ICC Hearing Centre, on the merits of the claim and the damages suffered by Khan. Crowell & Moring LLP, skillfully led by Ian Laird, acted as counsel for Khan in the arbitration.

In respect of the merits of the claim, the Tribunal agreed with virtually all of Khan's arguments and concluded that Mongolia had breached their obligations towards Khan under Mongolia's Foreign Investment Law. As a consequence, Mongolia had also breached the multi-lateral Energy Charter Treaty to which Mongolia is a signatory. In determining the damages to Khan, the Tribunal stated that the Net Present Value approach used in Khan's Feasibility Study and the Company's expert reports was not appropriate. The Tribunal's determination of damages relied primarily on previous offers made for the Dornod asset, the most important of which the Tribunal stated was the offer by CNNC to purchase Khan in February 2010. As a result, the Tribunal stated that the level of damages suffered at July, 2009 (the time of the expropriation) was limited to US$80 Million, plus interest from the time of the award until payment at LIBOR plus 2% (compounded annually). The Tribunal also made a full award of arbitration and counsel costs of US$9.1 Million in favour of Khan.
Mr. Grant Edey, President and CEO of Khan, commented, "We are very pleased with the Tribunal's ruling that the expropriation of the Dornod asset violated Mongolian law. A former Mongolian government illegally expropriated Khan's uranium property without any compensation which is contrary to the rule of law. And while the current Government of Mongolia has taken certain progressive action to diminish the harmful acts of former regimes, western investors and governments will scrutinize the Mongolian government's action in this matter as the rule of law also dictates prompt payment of compensation. Khan intends to continue our vigorous pursuit of obtaining value for our shareholders."

The number of Khan shares on a fully diluted basis stands at 83.3 million or US$1.20 per share. Using the March 2, 2015 US$-Cdn$ exchange rate of 1.2535, the award translates into approximately Cdn$1.50 per share.

Forward-Looking Statements and Information
This press release may contain forward-looking statements and forward-looking information, which are subject to certain risks, uncertainties and assumptions. Forward-looking statements and information are characterized by words such as "will", "plan", "expect", "project", "intend", "believe", "anticipate", "forecast", "schedule", "estimate" and similar expressions, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements and information are not historical facts and are based upon a number of estimates and assumptions and are inherently subject to significant business, social, economic, political, regulatory, competitive and other risks and uncertainties, contingencies and other factors, including the impact of international, Mongolian and Canadian laws, trade agreements, treaties and regulatory requirements on Khan's business, operations and capital structure, regulatory uncertainty and obtaining governmental and regulatory approvals, legislative, political, social, regulatory and economic developments or changes in jurisdictions in which Khan carries on business, the nature and outcome of the international arbitration proceedings (the "International Arbitration") against the Government of Mongolia or the collection of all or part of the award rendered by the tribunal for the International Arbitration proceedings against the Government of Mongolia or any future litigation, arbitration and other legal or regulatory proceedings, changes in market conditions, changes or disruptions in the securities markets and market fluctuations in prices for Khan securities, the existence of third parties interested in purchasing some or all of the common shares or Khan's assets, the method of funding and availability of any potential alternative strategic transactions involving Khan or its assets, including those transactions that may produce strategic value to shareholders, fluctuations in currency exchange rates and interest rates, including fluctuations in the value of the United States dollar and the Canadian dollar relative to the Mongolian tögrög, changes in national and local government legislation, taxation, controls, regulations and political or economic developments in Canada, Bermuda, the Netherlands, Mongolia or the British Virgin Islands and any other jurisdiction in which the Company carries on business, political instability, insurrection, war or terrorism, hostilities and the occurrence of natural disasters; requirements for additional capital; environmental risks, the need to comply with national and international laws, regulations, treaties or other similar requirements. In addition, a number of other factors could cause actual results to differ materially from the results discussed in such statements and information, and there is no assurance that actual results will be consistent with them. Many of these risks, uncertainties and contingencies can affect the Company's actual results, performance, events or achievements and could cause actual performance, actions, events or results to differ materially from those expressed or implied in any forward-looking information. All of the forward-looking information in this press release is qualified by these cautionary statements. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements containing forward-looking information. Accordingly, readers should not place undue reliance on forward-looking information. For further details, reference is made to the risk factors discussed or referred to in Khan's annual and interim management's discussion and analyses and Annual Information Form on file with the Canadian securities regulatory authorities and available on SEDAR at Such forward-looking statements and information are made or given as at the date of this news release, and Khan assumes no obligation to update or revise them, either publicly or otherwise, to reflect new events, information or circumstances, except as may be required under applicable securities law.

Contact Information

  • Grant Edey
    Khan Resources Inc.
    President & CEO
    Office: 416.360.3405

Friday, February 27, 2015

Artha in talks to acquire Cardero Argentina for shares

2015-02-27 20:46 ET - News Release
Also News Release (C-CDU) Cardero Resource Corp
Mr. Todd McMurray of Artha reports

Artha Resources Corp. has entered into negotiations with Cardero Resource Corp. in connection with a proposed arm's-length transaction, whereby Artha will acquire all of Cardero Resource Corp.'s interests in a wholly owned Argentine subsidiary, Cardero Argentina S.A., in exchange for common shares in the capital of Artha. Cardero Argentina's principal assets include the 100-per-cent-owned Organullo gold-silver project located in Salta province, Argentina, the 100-per-cent-owned former-producing Mina Angela gold-silver property located in Chubut province, southern Argentina, and an extensive proprietary exploration data set covering northwestern and west-central Argentina.
The effect of the transaction will be a reverse takeover of Artha by Cardero resulting in Cardero becoming a new control person of Artha, within the meaning of TSX Venture Exchange policies.

The transaction is subject to approval by the TSX-V and shareholders of Artha. Artha expects to hold a special annual and general meeting of shareholders on or about April 30, 2015, for the purpose of obtaining shareholder approval of the transaction. The transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all. Assuming the transaction is completed and approved, changes will be made to the current board of directors and management of Artha.

Artha expects to conduct a private placement offering in connection with the closing of the transaction in the approximate amount of $700,000, which will be directed toward exploration and resource definition at Organullo, as well as general working capital. Upon the closing of the transaction, Artha's material listing property will be the Organullo project.
Charles Straw, Artha's chief executive officer, commented, "I believe this transaction is a great opportunity for existing shareholders of Artha who will be exposed to two quality precious metals assets in Argentina, access to capital to move those projects forward and an extensive exploration database with which to generate new opportunities."
Organullo gold deposit
The Organullo project is a relatively advanced epithermal gold-silver project located close to infrastructure in the mining-friendly province of Salta, northwestern Argentina, with excellent potential for both high-sulphidation-type epithermal high-grade gold, as well as bulk-tonnage lower-grade gold mineralization.
Highlights from the property include:
  • A total of 1,580 surface rock samples collected by previous explorers from an area of approximately eight kilometres by eight kilometres averaging 0.25 gram per tonne gold;
  • Historical reverse circulation drilling highlights including 189 metres of 0.66 g/t gold and 200 metres of 0.66 g/t gold (both intersections from surface) in historical drilling prior to Cardero's ownership of the property;
  • Diamond drilling highlights including 91.65 metres at 0.66 g/t gold;
  • Cardero considering that historical exploration inadequately tested this large, pervasive gold-silver-bearing system;
  • Gold values from 361 rock samples collected by Cardero over eight km of strike averaging 0.48 g/t gold and ranging from below detection to 29.7 g/t gold;
  • Mapping and geochemical analyses conducted by Cardero defining a 2.1-kilometre-by-800-metre zone of hydrothermal alteration indicative of both low- and high-sulphidation-style epithermal gold deposits;
  • Geophysical surveying conducted by Cardero characterized the historical Julio Verne mine and identified similar targets over a five-kilometre strike length.
The sampling and drill data mentioned herein were collected prior to Artha's involvement with the Organullo property. A qualified person for Artha (within the meaning of National Instrument 43-101 of the Canadian Securities Administrators) has not verified the data disclosed, including sampling, analytical and test data underlying the information.
The Fraser Institute Annual Survey of Mining Companies (2014) places Salta province second in all of South America in terms of its investment attractiveness index.
Artha considers the Organullo project to offer excellent drill-ready targets with a focus on delineating both large bulk-tonnage potential, as well as higher-grade zones.
Mina Angela gold deposit
Mina Angela is located in Chubut province in southern Argentina. The property was explored by several companies between 1951 and 1978, and production recommenced in 1978. The underground mine was operated by Cerro Castillo SA until 1992, producing more than 150,000 ounces of gold. The mineralized system remains open at depth. Government records from 1983 until the mine closed in 1992 show mining production was 1.04 million tonnes for this period with average grades of: 4.0 grams per tonne gold, 48.4 g/t silver, 2.0 per cent lead, 0.4 per cent copper and 4.6 per cent zinc. In 1996, Lonrho Mining Ltd. acquired equity in Cerro Castillo and conducted a detailed exploration program in 1997 and 1998, including 3,500 metres of drilling, which targeted anomalies identified using geophysics and soil geochemistry. Exploration by Lonrho in 1998 discovered a new vein system: the Sahuel prospect. Geophysics indicate the vein has a potential strike length of 1.6 kilometres. Significant drill intercepts include 1.36 metres of 40.65 g/t gold and two metres of 6.69 g/t gold. Lonrho estimated the downdip extension of ore at Mina Angela to extend for another 150 metres, at Mina Camila for about 250 metres and at Sahuel for 400 metres.
Cardero acquired the property in 2004 and entered into a joint venture with Hochschild Mining PLC in 2005. Hochschild entered into a feasibility study to restart mining, and as part of this process, it paid the final $350,000 option payment to secure 100 per cent. Hochschild withdrew in 2009 due to the global economic crisis.
Despite past production, the property remains largely underexplored. There is high potential for extension of ore reserves along the downdip extensions of the vein systems at Mina Angela, Mina Camila and the Sahuel prospects. There are several additional identified targets with the opportunity for new discoveries. The property is ideally located, with proximity to national transportation infrastructure.
The technical information in this news release has been reviewed and approved by Mr. Straw, BSc, a director and chief executive officer of the company, a qualified person for the purpose of National Instrument 43-101.
We seek Safe Harbor.