potentially significant upside, page-8

Hi Raider,
Your guess is as good as mine, but SER has been reduced to a one trick pony now the O&G plays have been finished with and sold off. And exploration on Cultana and Myall Creek has been unfruitful to say the least, with it now being dragged further down by the lack of cash held by its JV partner Kingston resources, to continue drilling there. Geez, what was that recent tiny placement that Kingston issues all about? Must be desperate to make a placement for a few tens of thousands of dollars? From memory we are still waiting on release of some drilling data from the earlier round at Myall Creek that was abandoned early due to onset of rain. That was well over a year ago now and no sign of that drilling being completed or the results of the first two cores being released. That suggests that they were duds, just like the Cultana cores.

My guess is that in the current environment they (or Kingston)cannot raise extra exploration funds by placements that will upset us all by the dilution it causes. Especially the dilution of the value of VXL shares that, as we know, is not currently reflected in the SP, and indeed will be valued at a lot more if things go as planned. So why dilute now when you would lose all the holders future gains via VXL?

It looks like they will end up selling in two years or so to fund further exploration (if indeed they decide to continue to be an exploration company) without the need for dilution. Luckily our MD and our dear Anthony R hold lots of shares in SER as well as Kingston, so are unlikely to act out of impatience to get on with more drilling via a diluting placement. I certainly think two years to collect the rock chip and related evidence to underpin a further drilling campaign at Cultana or Myall Creek (if it is at all warranted)is time well spent, if it means they have a better chance of finding more than last time! Also, given that both these chaps must be big holders of VXL shares via their initial holding in SER/Valence etc, I'd imagine that whoever SER eventually sells its VXL holding to it would be in the best interests of VXL shareholders as well as SER.