Subiaco-based Summit Resources will pay French nuclear company Areva $4.5 million to settle legal action over the uranium marketing rights to the Valhalla/Skal deposit in Mt Isa.
The settlement brings to a close a two-year legal battle between Summit and Areva, which was spawn during the takeover tussle of Summit in 2007 that resulted in Paladin Energy gaining an 81.8 per cent control of the Subiaco-based company.
During the takeover battle, Areva also snared a 10.5 per cent interest in Summit after the latter dropped an alliance agreement struck earlier in the year that allowed the French company to market two-thirds of the uranium from the Valhalla/Skal uranium deposit.
However the legal battle between the parties started later in 2007 after Areva chose to intervene in separate legal proceedings between Summit and Resolute Mining and Mt Isa Uranium, which had a week earlier been settled.
The Summit-Resolute/Mt Isa Uranium proceedings centred on an alleged breach of confidentiality based on a joint venture agreement.
Today, Summit announced it would raise $8.1 million through a rights issue, which will partly cover the legal settlement and also further exploration work under the Isa Uranium Joint Venture.
Under the settlement deal, Areva's application to intervene in the proceedings will be dismissed, Areva and Summit will provide broad released to one another and Areva's existing rights under the alliance will be transferred to Paladin.
Summit will pay Areva $4.5 million, which includes the $2.5 million break fee that was agreed upon in 2007 when the alliance agreement was struck.
Summit's rights issue is fully underwritten by Patersons Securities.
