MMX 0.00% 4.7¢ murchison metals ltd

chameleon mining secures $6m settlement

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    BIG DEAL !!!


    Chameleon Mining secures $6m settlement

    Rebecca Urban From: The Australian December 24, 2009


    CHAMELEON Mining has secured a preliminary victory in its legal bid for a slice of Murchison Metals' lucrative mining tenements, securing $6 million to settle an accompanying claim against its former managing director.
    Shares in the mining tiddler jumped 10 per cent to 2.3c yesterday on news that it had settled its legal action against Perth businessman Greg Barnes, which was heard in the Federal Court earlier this year.

    Barnes, along with former Murchison director Phillip Grimaldi, were co-respondents in Chameleon's case against Murchison, the owner of the Jack Hills iron ore tenements in Western Australia.

    Chameleon has alleged that Barnes and Mr Grimaldi breached their directors' duties by using the company's capital to partly fund the purchase of the tenements, now estimated to be worth about $800m, for Murchison in 2004.

    The settlement, which follows Barnes' recent conviction in the District Court of NSW on two counts of providing false and misleading information to the Australian Securities Exchange, is not expected to affect Chameleon's case against Murchison or Mr Grimaldi, a former owner of the Sydney Swans Football Club.

    A spokesman for Barnes, who is appealing the criminal conviction, confirmed that a settlement had been reached with Chameleon.

    "He is pleased to put this chapter behind him and get on with more positive activities," the spokesman said. In return for the $6m payment, Chameleon has agreed to discontinue its proceedings against Barnes and his private company, Pinnacle Nominees.

    Chameleon chairman, former rugby league player Benny Elias, welcomed the development yesterday.

    "All I can say is we've always been focused on the big case, but wins like these along the way are very encouraging," Mr Elias said.

    In July, the company received a windfall when two former directors, David Evans and Siew Hong Koh, reached a $5.5m out-of-court settlement in a separate action against Murchison. Chameleon had an 80 per cent interest in that case.

    A spokesman for Murchison said the Barnes settlement had "no material impact whatsoever" on the company's defence of the claims brought by Chameleon.

    "From a Murchison perspective, we are pleased with the way the trial has progressed," he said. "The parties will make their closing submissions in February."
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