Khan Files Formal Claim Against ARMZ

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TORONTO, ONTARIO--(Marketwire - Aug. 20, 2010) - Khan Resources Inc. (TSX:KRI) ("Khan") announced today that it has filed a statement of claim against Atomredmetzoloto JSC ("ARMZ") and its affiliate JSC Priargunsky Industry Mining and Chemical Union ("JSC PIMCU") with the Ontario Superior Court of Justice.


The claim has been brought by Khan and certain of its subsidiaries, and seeks damages from ARMZ and its affiliate in the total amount of CDN$300,000,000, including equitable compensation resulting from their breach of fiduciary duties as one of Khan's joint venture partners and a shareholder of Central Asian Uranium Company, LLC ("CAUC"), general damages resulting from their unlawful interference with the plaintiffs' economic relations, general damages resulting from their deliberately causing damage to Khan's and its subsidiaries' rights, business reputation and property and aggravated, exemplary and punitive damages.


The statement of claim alleges, among other things, that the harmful conduct of ARMZ and it affiliates, namely in seeking to establish a joint venture with the Government of Mongolia over the Dornod uranium region without regard to Khan's rights and interests, impugning the legitimacy of Khan's interests in Mongolia, interfering with its economic relations with MonAtom LLC (Khan's other joint venture partner in CAUC and the Mongolian state-owned entity with which Khan sought to pursue a strategic transaction), and interfering with the competing and superior take-over bid by CNNC Overseas Uranium Holding Ltd., all with the goal of eliminating Khan's interests in Mongolia, has caused Khan, its subsidiaries and its shareholders substantial damage.


Mr. Grant Edey, President and Chief Executive Officer of Khan stated, "Khan has been carefully evaluating the ongoing conduct of ARMZ and its affiliates and determined that it had no choice but to pursue a formal claim in order to try to protect Khan's rights and interests and seek compensation for the significant damage we believe Khan has suffered." Mr. Edey added, "ARMZ has made no secret of its desire to acquire control of the Dornod uranium property in Mongolia." In the Statement of Claim, Khan alleges that, having failed to acquire Khan through its hostile take-over bid, ARMZ and its affiliates have embarked on a course of conduct intended to eliminate Khan's mining and exploration licenses so as to enable them to proceed with their joint venture with the Mongolian Government, without any regard to, and to the detriment of, Khan's rights and interests.


Khan intends to continue to vigorously defend its rights and interests, including pursuing all available rights and remedies in Canada, Mongolia and elsewhere.


Khan Resources Inc. (TSX:KRI) is a Canadian company engaged in the acquisition, exploration and development of uranium properties. Its current activities are focused on the Dornod area in northeastern Mongolia. Khan holds interests in the Main Dornod Property and in the Additional Dornod Property. Khan's website is www.khanresources.com.


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