This should kick the SP up to 50c once the deal is confimed might be worth a punt in the am volume should be interesting to watch tomorrow.
Cheers Hotlegs
Legal deal to get ball rolling on Oakajee
by: Andrew Burrell From:The Australian December 22, 201112:00AM
MURCHISON Metals appears poised to settle a long-running legal brawl with Chameleon Mining for about $25 million by tomorrow's deadline, paving the way for Japan's Mitsubishi to seize control of the $5.9 billion Oakajee port and rail project in Western Australia.
Chameleon yesterday went into a trading halt and told the Australian Securities Exchange it was considering an offer from Murchison to settle the Federal Court proceedings.
The Sydney-based explorer, which is backed by Perth mining identity Tony Sage and rugby league great Ben Elias, said it expected to announce its decision on the offer by tomorrow morning.
Sources said the settlement offer was for about $25m, the upper limit allowed under a deal signed between Murchison and Mitsubishi last month.
Chameleon has long claimed it is entitled to a share in Murchison's Jack Hills project in WA's Mid-West region due to a series of transactions in the early 2000s.
The Federal Court dismissed most of Chameleon's claim in October but ordered Murchison to pay Chameleon about $430,000. Chameleon has appealed against that judgment.
But the tiddler emerged as an unlikely kingmaker to Mitsubishi's takeover of Oakajee last month when the Japanese company demanded the litigation be settled before it agreed to pay $325m for Murchison's 50 per cent interest in Oakajee Port & Rail and the Jack Hills mine.
Murchison agreed to sell its assets after admitting in July that it could not fund its share of the two projects, which combined are worth $10bn.
Mitsubishi already owns 50 per cent of Oakajee Port & Rail and Jack Hills.
Under the deal, Murchison can walk away from the sale agreement if the Chameleon litigation cannot be settled for less than $25m by December 23.
The sale, due to be finalised by February, is expected to allow the Oakajee infrastructure to be built as a combined Japanese-Chinese project, assuming Mitsubishi can entice a cautious Beijing to invest.
The transaction also depends on Foreign Investment Review Board approval, but this is not expected to be a hurdle.
The construction of a deepwater port at Oakajee and associated rail network would open up the Mid-West region after decades of stalled plans to export iron ore from the region's mines.
Murchison was not in a trading halt yesterday after advising the market of the Chameleon settlement deadline last month.
Shares in the miner rose 1c yesterday to 39c.
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MMX Price at posting:
39.0¢ Sentiment: None Disclosure: Not Held
