Vancouver-based Western Prospector said it was informed late Tuesday that Tinpo was withdrawing the offer of $1.34 per Western Prospector share because it had learned of an "unpublished document which indicated that the Government of Mongolia may be considering the nationalization of the uranium industry in Mongolia."

Tinpo said in a separate announcement that Mongolia's National Security Council passed the resolution "some months before the offer instructing the government to explore the full nationalization of the uranium industry in Mongolia."

Western Prospector owns the Gurvanbulag uranium deposit in the central Asian country's Saddle Hills district.

Tinpo's offer had been scheduled to expire Sept. 30. The company said it had only learned of the NSC resolution on Sept. 29. It added that it was withdrawing the offer in occordance with terms of the offer but remained interested in Western Prospector.

However, Western Prospector disagreed with Tinpo's position.

"Western is of the view that Tinpo has no right, contractual or otherwise, to withdraw the offer or to fail in any other respect to perform its obligation," the company said in a release.

The company "intends to pursue vigorously all of its rights and remedies against Tinpo... and any others who act jointly... in breaching any of its obligations under the offer or the agreements."

Trading of Western Prospector shares were halted Wednesday, before the markets opened, The stock closed Tuesday at $1.30 on the TSX Venture Exchange, down a penny.