28/09/2009 - 10:36

Murchison, Chameleon set for round two

28/09/2009 - 10:36

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The second legal showdown between Murchison Metals and Chameleon Mining is due to start tomorrow over key Mid West iron ore tenements valued at up to $1.5 billion.

Murchison, Chameleon set for round two

The second legal showdown between Murchison Metals and Chameleon Mining is due to start tomorrow over key Mid West iron ore tenements valued at up to $1.5 billion.

Chameleon is claiming it is entitled to half of Murchison's Jack Hill's tenements, which contain an iron ore operation, on the alleged premise that past Murchison director Phillip Grimaldi had used money from Chameleon to buy the tenements in 2004.

Gregory Barnes, a former Chameleon director, has also been named as a defendant in the legal action.

Chameleon has alleged both Messrs Grimaldi and Barnes had breached their duties in 2004 when Murchison used around $500,000 of Chameleon's cash and assets to help pay for the tenements, then valued at $1.1 million.

The tenements have become more valuable as a result of Murchison's mine operation, which is operated by half-owned subsidiary Crosslands Resources.

In a statement today, Murchison executive chairman Paul Kopejtka said the company was pleased the matter would finally be heard.

"Since Chameleon brought these proceedings almost 2 years ago, Murchison has been very keen to have the matter heard and dealt with so the Company could concentrate fully on its iron ore and infrastructure assets," Mr Kopejtka said.

"While the claims made by Chameleon relate to a period of time before the current board and management of Murchison became involved with the Company, we look forward to a successful outcome in the proceedings."

The trial is set for four weeks.

In July, both parties reached settlement on round one of proceedings minutes before the deadline.

Under that settlement deal, Murchison agreed to issue 3.5 million shares, a cash payment of $350,000 and payment of legal costs. Chameleon had then said the total value of the settlement was more than $7 million.

The litigation, funded by Chameleon, was brought by former directors David Evans and Siew Hong Koh against Murchison.

The directors claimed both had a 5 per cent interest in the Jack Hills iron ore tenements and were owed a quantity of shares in a deal done five years ago with the then Murchison board, which did not contain any of the present members.

Chameleon has previously said that the "value of the direct interest claimed in the Koh & Evans proceedings ranges between $150,000,000 and $250,000,000".

It was not disclosed how much Messrs Evans and Koh received.

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