Khan Resources Inc., through a subsidiary, owns 58% of the Dornod property.

The Uranium story on the Dornod property starts in 1988. Two separate deposits were developed and shipped ore until 1995, making the value of the property a known quantity. No new exploration is necessary. The underground mining operation will use proven technology and production will be able to result in a low unit cost.

The Dornod property covers 261 hectares in Mongolia which sits between two of the world’s largest Uranium markets; Russia and China. Although the rail lines that once existed were dismantled when the Russian government left the area, the beds for the tracks are still there and will not be overly difficult to rebuild.

On December 30, 2004, Khan received a final NI 43-101 Report prepared by Roscoe Postle Associates Inc. ("RPA") confirming the value of the Dornod property.

Management of Khan plans on developing a producing uranium mine at Dornod that will include on-site a modern “state-of-the-art” milling and processing facility. These facilities are projected to produce approximately 4 - 5 million lbs. of "U308", i.e. Yellowcake, annually, over a mine life of 10 years.

The combination of the access to hungry markets, the low cost of production and the surety of the Uranium deposits make Dornod a tremendous opportunity.

Highlights of the RPA report

Two uranium deposits are hosted by Paleozoic sandstones, siltstones and conglomerates on the Dornod Property. Based on our review of past exploration and production data RPA concludes that:

1. Both deposits are situated within the inner Mineral License which covers an area of 261 ha.

2. At the No. 2 deposit, a significant Mineral Resources has been estimated from 450 diamond drill holes.

3. At the 0.236% U3O8 cut-off grade and 1 m minimum vertical thickness of mineralization, the No. 2 deposit contains some 296,000 tonnes of Inferred Mineral Resources at an average grade of 0.302% U3O8.

4. At the No. 7 deposit, a significant amount of surface and underground exploration has outlined a higher grade deposit.

5. At the 0.236% U3O8 cut-off grade and 5 m minimum vertical thickness of mineralization, the No. 7 deposit contains some 2.9 million tonnes of Inferred Mineral Resources at an average grade of 0.381% U3O8.

6. Normally, based on the close drill hole spacing, most (if not all) of these resources would be classified as Indicated Mineral Resources. Because of the absence of actual drill core at the present time, however, RPA has classified them into Inferred Mineral Resources. Upon completion of the recommended confirmation drilling program, these resources would likely be upgraded into Measured and Indicated Mineral Resources.

7. Several additional uranium deposits and showings have been discovered in the general Dornod area. Four of these deposits (No. 2A, 5, 8 and 9) - in addition to the No. 2 and 7 deposits - are situated in the area of the present property (Mineral Licence U27).

8. There is a halo of lower-grade mineralization around the deposit at the 0.236% U3O8 cut-off grade used for this study. At the 0.118% U3O8 cut-off grade, RPA estimates that there are additional resources in the order of 2.7 million tonnes at an average grade of 0.163% U3O8 contained within the No. 7 deposit. At the present time, RPA also considers these to consist of Inferred Mineral Resources.

9. Past exploration work has been carried out in a systematic manner and well documented. These data are acceptable to estimate Mineral Resources and, upon completion of a Prefeasibility study, Mineral Reserves may be estimated.

10. Results of diamond drilling completed to date indicate that the trend of uranium mineralization at the No. 2 deposit continues along strike to the south, towards the No. 7 deposit, which is situated about 1 km south of the No. 2 deposit.

For the full RPA report click here.