Mongolia has invalidated the uranium exploration licenses of two units of Khan Resources.
Mongolia's Nuclear Energy Agency has cancelled the uranium licence of the company's two subsidiaries citing the violation of a rule which states companies holding licences must notify the government about any ownership change within a stipulated time.
In February, Khan Resources agreed to be acquired by China National Nuclear Corp.
The company said licences have been cancelled for its 58%-owned subsidiary Central Asian Uranium and 100%-owned Khan Resources.
Khan Resources said it will challenge the decision through legal means and also pursue international arbitration to protect its rights.
Central Asian Uranium held a licence for the Dornod project which has uranium reserves of about 22,000t.