Chameleon finds $1.7m to continue Murchison legal...

Chameleon finds $1.7m to continue Murchison legal battle

CHAMELEON Mining is expected to make today's deadline to pay court-ordered security costs of $1.7 million as it lifts the stakes in its legal battle with Murchison Metals.

Chameleon was given until today to lodge the money with the Federal Court in the form of a bank guarantee to cover costs relating to its lawsuit against Murchison, which centres on the rights to the Jack Hills and Weld Range projects in the West Australian Mid West region.

Chameleon director and former champion rugby league footballer Ben Elias declined to comment about the court case or who had put up the money, given that Chameleon has $1.1 million in the bank and the legal bunfight is shaping very much as a David and Goliath battle.

His only comment was that it had come from a "public figure" and that Chameleon was looking forward to having its claims tested in separate court actions in both the Supreme and Federal courts.

Mr Elias, who joined the Chameleon board in February, has been a successful businessman since he quit rugby league in 1994.

His interests have extended to mobile phone dealerships and property, where he is also a business partner of billionaire Richard Pratt.

Chameleon relisted late last year after a three-year absence from the Australian Securities Exchange after it collapsed in controversial circumstances with claims of unpaid debts and missing money.

Chameleon alleges it helped fund the purchase of the Jack Hills and Weld Range projects by Murchison's predecessor in 2004 and that the assets were held in a "constructive trust" for Chameleon.

In particular, Chameleon is seeking a 5 per cent stake in the assets, which are among Australia's best untapped iron ore deposits.

Murchison has filed a cross-claim against Chameleon seeking about $75,000. Both parties have filed claims against former Murchison directors Greg Barnes and Phillip Grimaldi.

Lawyers for Chameleon are expected to fly overseas to obtain affidavits from various former directors, which would become key to its claims.

Murchison is jointly developing the projects with Japanese industry giant Mitsubishi through a special vehicle called Crosslands. Mitsubishi is expected to pay Murchison 50 per cent of the value of the Jack Hills project once the bankable feasibility study is completed for the second stage of development.

A spokesman for Murchison said the company had always believed Chameleon's claims were baseless.

"Given our strong view that Chameleon will lose this action, Murchison is pleased that it will receive security for its costs and looks forward to having the matter heard as early as possible," the spokesman said.

"Murchison remains of the view that that there is no sustainable basis for the Chameleon claim so far as it constitutes a claim for an interest in the Jack Hills and Weld Range projects and/or Murchison's shares in Crosslands."