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Chameleon Mining prepares for battle

FORMER rugby league star Ben Elias is in for one of the toughest but potentially most lucrative battles of his life today.

He and fellow directors of Chameleon Mining will lay claim to much of Murchison Metals mining sites at Jack Hills and Weld Range, valued at an estimated $2.5 billion.

The mediation process begins today in Sydney when the two companies sit down to try and thrash out a settlement for two separate but linked cases.

Chameleon's case centres around the alleged use of Chameleon funds and shares to acquire the Jack Hills and Weld Range mining leases, while the other case put by former Chameleon directors Siew Hong Koh and David Evans essentially says that Murchison owes them a 5 per cent direct interest in the two mining assets.

Fantastic as the claims may seem, they stem back to a time when they say Murchison was struggling to raise money to buy their now hugely valuable mining leases.

Chameleon has been preparing its case for more than a year and while its directors say Murchison has been trying to 'exhaust us out of funds', the mining minnow could be in line for a payout of hundreds of millions of dollars if successful.

If they're right, and the matter gets to court, legal experts say that there is a better than 50 per cent chance that the tiny company will receive a substantial payout.

Anthony Karam, director of Chameleon, says he would not have pursued the claim unless he was satisfied they could win in court.

"We have astonished our lawyers with the amount of evidence that we have. We can prove that Murchison was issued shares in Chameleon for no consideration - a highly unusual situation - and that was done systematically," he says.

"And our contention is that Murchison used some of these assets to fund the purchase of the mine leases. We have the actual cheques made out to the original vendors of the mining leases."

Despite repeated statements from Murchison that there is no case to answer, it has a star team of top lawyers ready to fight the claim while Chameleon is represented by Tony Hartnell, one of Sydney's top lawyers.

Although the press coverage about Chameleon's claim has been a little dismissive, such cases, where companies or individuals are promised or given substantial stakes in a firm in exchange for help in getting the company up and running, are not unheard of.

Ask Anita Roddick, who sold half of her business for 4,000 pounds to Ian McGlinn, a local garage owner, back when she had just one store and was desperate for money to expand.


He now lives off the dividends in the Mediterranean, unable to sell because of the gargantuan capital gains tax bill he would receive.