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Murchison Metals updates Chameleon Mining litigation

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Murchison Metals (ASX: MMX) has reported that the Federal Court hearing of the appeals relating to the proceedings commenced by Chameleon Mining (ASX: CHM) against Murchison, Crosslands Resources and other parties concluded on 17 August.

The Court reserved its decision.

The appeals and cross-appeals relate to the decision on 20 October 2010, which dismissed Chameleon’s claim that it was entitled to an interest in either the Jack Hills project and/or Murchison’s shares in Crosslands Resources.

The effect of the orders made by Justice Jacobson (which were the subject of the appeals) was that:

- Murchison was liable to pay Chameleon a portion of the profit it received as a consequence of the investment of $277,840 in Crosslands from 24 July 2004 to October 2010. Murchison notes that it has not been paid any dividends as a consequence of its investment in Crosslands.

As an alternative, Chameleon was entitled, at its election, to equitable compensation of $277,840 from Murchison plus interest at commercial rates on a compounding basis.

- Crosslands was liable to pay Chameleon the profit obtained by it from the use of $152,750 on the same basis as Murchison. Murchison notes that the project operated at a loss over the relevant period.

As an alternative, Chameleon was entitled, at its election, to equitable compensation of $152,750 from Crosslands plus interest at commercial rates on a compounding basis.

- Murchison is not liable to Chameleon with respect to 10 million Crosslands shares held by Murchison (over which Chameleon had claimed a constructive trust) nor was Murchison liable for the profits made by another defendant in the proceedings from the sale of 10 million Murchison shares.

- There was no entitlement on the part of Chameleon to claim to any future income or profits from the Jack Hills project.

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