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Khan Resources offer to buy Western Prospector would create major uranium company in Mongolia |
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Wednesday, 14 May 2008 |
 Khan Resources (TSX: T.KRI)
is seeking to create a major uranium mining company in Mongolia with
its move to buy out competing WNP. As of Tuesday, Khan has offered the
equivalent of 66 cents per share.
Observers believe a combined
merger of the two smaller companies would create a company with extensive
reserves and exploration potential as well as no debt along with cash
reserves of more than more than $60 million.
Observers believe there is
some risk because of the political uncertainties of Mongolia nationalizing
its mining sector. At the same time, with rising demand for uranium,
increased profits seem inevitable.
Speaking of the merger, CEO
of Khan Resources, Martin Quick, said, "This is a natural combination
of two companies working towards the same goals in the same area. Western
Prospector shareholders benefit by getting access to a rich and advanced
Uranium deposit that can quickly be brought into production and by receiving
a premium to their stock price. Khan shareholders benefit from an extensive
exploration potential and by becoming more attractive to the Mongolian
government as a mid-tier near-term producer."
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