Dornod Uranium Project 2009 Presentation - KHAN · PDF fileDornod Uranium Project 2009...

© 2009 Khan Resources Inc.

Dornod Uranium Project

2009 Presentation

June 2009

© 2009 Khan Resources Inc. 2

Confidentiality and Forward-Looking Statements

This presentation contains “forward-looking statements”, within the meaning of the United States Private Securities Litigation Reform Act of 1995 and similar Canadian

legislation, concerning the business, operations and financial performance and condition of Khan Resources Inc. (“Khan”). Forward-looking statements include, but are

not limited to, statements with respect to the future price of uranium, the estimation of mineral resources, the realization of mineral resources estimates, the timing and

amount of estimated future production, costs of completing recommended work programs, capital expenditures, costs and timing of the development of the deposits,

success of exploration activities, permitting time lines, ability to continue as a going concern, competition, currency exchange rate fluctuations, requirements for additional

capital, government regulation of mining operations, environmental risks, outcome of legal proceedings, political instability, unanticipated reclamation expenses, title

disputes or claims and limitations on insurance coverage. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such

as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or

variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-

looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or

achievements of Khan to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: general business,

economic, competitive, political and social uncertainties; risks related to international operations; actual results of current exploration activities; actual results of

reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of uranium, grade or recovery

rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; delays in obtaining

governmental approvals or financing or in the completion of development or construction activities, as well as those in the NI 43-101 report by Aker Solutions, dated April

22, 2009, and the Annual Information Form (AIF) dated as of December 12, 2008. Although Khan has attempted to identify important factors that could cause actual

results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or

intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in

such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Khan does not undertake to update any forward-looking

statements that are incorporated by reference herein, except in accordance with applicable securities laws.

Disclosure with respect to mineral resources contained in this presentation have been prepared in accordance with National Instrument 43-101 of the Canadian

Securities Administrators. Readers should refer to the NI 43-101 report by Aker Solutions, dated April 22, 2009 all of which are available at www.sedar.com, for this

detailed information, which is subject to the qualifications and notes set forth therein.

Cautionary Note to United States Investors Concerning Estimates of Measured, Indicated and Inferred Resources: This presentation uses the terms “Measured”,

“Indicated” and “Inferred” Resources. United States investors are advised that while such terms are recognized and required by Canadian regulations, the United States

Securities and Exchange Commission does not recognize them. “Inferred Mineral Resources” have a great amount of uncertainty as to their existence, and as to their

economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian

rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume

that all or any part of Inferred Mineral Resources will ever be converted into Measured or Indicated Resources or into Mineral Reserves. United States

investors are also cautioned not to assume that all or any part of an Inferred Mineral Resource exists, or is economically or legally mineable.

2

http://www.sedar.com/






The Dornod deposit is an advanced development project with over US$150M invested by previous Russian owners

700+ drill holes, 20,000m of lateral developments, and 3 concrete lined shafts (including one production shaft)

64.3M lbs U308 indicated resource of which 52.9M is in the probable reserve category. Plus potential to increase through exploration

Company is focused on bringing the Dornod project to production in approximately 3 - 4 years, producing an average of 3 million lbs U308 over a 15-year mine life

A Definitive Feasibility Study has now been completed with robust results including an after tax IRR of 29.1%, and NPV of US$288 million at 10%

First class management team and board of directors

Company in good cash position with a low burn rate

Seeking other advanced uranium projects in other parts of world

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Summary


Mongolia


Dornod Property Plan View


Tailings Management Area

DEPOSITED TAILINGS

LEGEND:

RESIDUE POND

WATER COLLECTION POND

MINING LICENCE BOUNDARY

SPIGOT CONNECTION

SPIGOT DISCHARGE


3D Mine Model – Orebody No. 7

ELEV (Z)

EAST (X)

NORTH (Y)


Longitudinal Projection Looking North


Looking North

Mineralized horizon (>0.10% U)

Mineralized horizon (0.02 to 0.10% U)

Cross Section, Deposit #7


Long Hole Stoping (Down holes)


Ramp and Trackless Drift Configuration


Isometric Mining Method


Dornod Plan View


3D View Open Pit

OREBODY #2


Russians identified more than

75M lbs in the immediate

vicinity

Priority targets are:

Deposits #5, #4, #6

Areas between #2 and #7

Map Area

Exploration Plans


Dornod Uranium Property, MongoliaNI 43-101 Compliant Resources/Reserves

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LocationCut-Off

(% U3O8)Category Tonnes

(in millions)% U3O8

Lbs U3O8(in millions)

No. 2 0.025 Indicated 10.95 0.065 15.7

No. 7 0.04 Indicated 14.36 0.154 48.6

TOTAL Indicated 25.31 0.116 64.3

No. 2 0.025 Inferred 2.18 0.05 2.4

Scott Wilson RPA Resource Estimate

Resource

No. 2 0.028 Probable 7.4 0.074 12.1

No. 7 0.061 Probable 10.6 0.174 40.8

TOTAL Probable 18.0 0.133 52.9

Reserve*

*Reserve numbers are a subset of Resource numbers


Main Property – CAUC * %

Khan Resources Inc. 58

Mongolian government 21

Priargunsky Mining (Russia) 21

100

Additional Property *** %

Khan Resources Inc. 100

* Central Asian Uranium Corp. (the square box area)

*** The triangular area

Ownership of Dornod Properties


Complete the Dornod power line and settling pond in the summer of 2009

Seek a strategic partner to assist in the development of the Dornod deposit

Negotiate Investment Agreement with Mongolian government at earliest possible time

Acquire advanced uranium projects in other parts of the world

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Planning for 2009


New Power Line

This Project will be complete by August 2009, so that main-

line power will be available for the camp and de-watering

of the mine


Mine Dewatering Settling Pond

This Project will be complete by June 2009, for collecting

and treatment of the mine water during and after mine

development


Project Plan

2008 2009 2010 2011 2012

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Investment Agreement

Environmental Impact

Assessment

Feasibility Study

Permitting

Engineering

Procurement

Construction

Commissioning

Production

© 2008 Khan Resources Inc.

Project Plan

2008 2009 2010 2011 2012

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Investment Agreement

Environmental Impact

Assessment

Feasibility Study

Permitting

Engineering

Procurement

Construction

Commissioning

Production


Company Statistics(As of June 4, 2009)

Outstanding Shares – 54.0 million

Fully Diluted Shares – 59.2 million

Share Price Range (last 52 weeks) – CDN$0.145 to CDN$1.38

Cash On Hand – US$18.1 million

No of Employees – Canada - 5, Mongolia - 14

Market Capitalization per lb U3O8 – CDN $0.49

Major Shareholder – Laramide Resources Ltd – 12%

& JCS Compass Asset Mgmt. – 10.5%

Note - Financial Year Ends Sept 30

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Definitive Feasibility Study Results

Based on a milling rate of 3,500 tpd the mine will produce an average

of 3.0 million lbs of U3O8/yr over a 15 year life.

The project assumes a U3O8 price of $65 per lb and an initial capital

cost of US$333 million which generates a net cash flow of US$909

million.

The project has an IRR of 29.1% and an NPV of US$288 million,

assuming a 10% discount.

Initial capital cost is US$333 million

The operating cost is US$58.26 per tonne or US$23.22 per lb U3O8

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Expenditure Forecast for 2009

October 1, 2008 to

September 30, 2009

Dornod Uranium Project

Mongolian Operations

Exploration/Definition Drilling

Environmental Impact Assessment

Power Line & Settling Pond

Feasibility Study

Camp

Plant and Equipment

General Corporate

US$M

1.0

0.4

0.5

3.4

2.2

0.1

0.1

2.0

Total 9.7

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Comparable Companiesas at June 4, 2009

Company

Share of

Uranium Market

Number of Market Reserves and Capitalization

Price Shares Capitalization Resources per lb U3O8

Company Symbol C$ Outstanding C$ lbs U3O8 C$

(mm) (mm) (mm)

Producers

Cameco Corporation CCO 30.13 392.5 11,825 906.6 13.04

Uranium One Inc. UUU 1.87 469.6 878 474.5 1.85

Paladin Energy Ltd. PDN 4.59 623.5 2,862 221.0 12.95

Weighted Average 9.72

Development

Laramide Resources Ltd. LAM 1.96 67.5 132 55.7 2.38

Ur-Energy Inc. URE 1.15 93.9 108 24.9 4.34

Western Prospector Group Ltd. WNP 0.33 54.3 18 20.1 0.89

Weighted Average 2.56

Khan Resources Inc. KRI 0.42 54.0 22 46.0 0.49


Strong foreign investment trend in Mongolia supported by US, World Bank, IMF, EBRD etc.

Large presence by western mining companies, e.g., Centerra Corp., Ivanhoe Mines, Western Prospector, Denison, Areva (Cogema)

Mining is the single largest industry

Proximity to China & Russia provides a natural market for producers

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Mongolia


Political Situation

70 years of domination by the USSR – 1921 to 1991

Achieved independence in 1991 and has been a fledging

democracy since that time

General Election in June’08 for 76 seats

MPRP – 44; DP – 26; Other – 6

Clear majority for MPRP but coalition gov. formed

Chief of State – President T. Elbegdorj (elected in May

2009) reinforces democratic ideals

Head of Government – Prime Minister S. Bayar (since

November 2007)


Martin Quick, P. Eng., President, CEO and Director, has 44 years of mine operations and engineering experience and was previously President and COO of Power Resources Inc, Cameco Corp’s wholly owned US uranium mining subsidiary. Mr. Quick has extensive corporate and operating experience with a number of large and junior mining companies covering a wide array of minerals.

Paul D. Caldwell, B.A., CFO and Corporate Secretary, has over 28 years of corporate finance-related business experience with a number of companies, including Glencairn Gold Corp as Controller, and Black Hawk Mining Inc. as CFO and Corporate Secretary.

Enkhbayar “Eric” Ochirbal, B.A. MBA, Executive Director and Country Manager, has over 23 years experience as a successful businessman in Mongolia, and in addition has been a key foreign policy advisor to the Office of the Prime Minister of Mongolia.

Jamsrandorj“Jam” Galsan, B. Geo., Dr. Sc., Chief Geologist, has over 27 years in government and private business in the Ministry of Geology and Minerals (Chief Geologist), Ovoot (General Director/Chief Geologist); BHP Biliton (Senior Geologist) and Geominerals (General Director) with varied experience in exploration, licensing and permitting in Mongolia.

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Management


James B. C. Doak, Chairman, has over 25 years experience as an economist and chartered financial analyst. He is a director of PetroKazakhstan Inc. and a former Director of Superior Propane Inc. and Spar Aerospace Inc. He has held senior positions at ScotiaMcLeod Inc., First Marathon Securities Ltd., and McLeod Young Weir Ltd.

Hon. Robert P. Kaplan, Director, has over 40 years experience as a lawyer, businessman, and elected politician. He was a Federal Member of Parliament and Cabinet Minister in the Trudeau and Turner governments.

Peter Hooper, Director, a senior mining executive who has provided consulting engineering services to projects throughout the world. He currently President and CEO of Kilo Goldmines Inc

Jean-Pierre Chauvin, Director, is President & COO of GlobeStar Mining Corp., and has over 30 years experience in the mining and construction industries.

Grant A. Edey, Director, has over 31 years of financial experience primarily in the mining industry. Until recently he was CFO of IAMGOLD Corp., and prior to this was VP-Finance and CFO of Repadre Capital Corp.

Stephen Harapiak, Director, has an impressive 49 year career in the mining industry, including leadership positions with Noranda, Davy (now Kvaerner), Potash Corporation, as well as international resource projects in Russia, and more recently in project work with the International Finance Corporation of the World Bank. He is also a past president of the Canadian Institute of Mining and Metallurgy.

David McAusland, Director, is a graduate of the Faculty of Law of McGill University. In his distinguished career he became the managing partner of a prominent Montreal law firm where he served as its Managing Partner while maintaining a leading practice in the field of corporate and securities law, and mergers and acquisitions. More recently he served as the Executive Vice-President, Corporate Development and Chief Legal Officer of Alcan Inc. until its sale to Rio Tinto plc.

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Directors


Thank You

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