for what it's worth ...

Some more quick, approximate maths (using Canadian dollars) trying to gain some perspective on "the deal" ?

SER has 333,522,499 shares (for expediency let?s call it 333.6million and forget the outstanding options). These 333.6million will account for 80% of the SER component of the 33% of Mega Graphite shares in its IPO. SER the company?s 20% will be the equivalent of 83.4million shares. Add 333.6million and 83.4million and SER (shareholders and the company) will collectively hold about 417million shares.

If SER?s 417million = 33%, then 100% of Mega Graphite shares = approx 1263.64million. SER?s 33% is valued at $70million, therefore Mega should be expecting its overall starting market cap to be about $212million (inferring they currently value their existing projects at about $142million).

The Canadian market tends to frown upon stocks with large amounts of ?paper?, so let?s assume (for the sake of argument) that Mega reduces the amount of shares for its offer on a 10:1 basis and starts its IPO with 126.364million shares. This would mean Mega shares would need an approximate share price of between $1.67 and $1.68 to maintain the overall $212million value that Mega apparently expects after acquiring SER's Uley graphite.

By comparison, Northern Graphite (NGC) have 30.94 million shares, their share price finished Friday night at $1.16 (market cap $35.89million). Their 12-month High is $1.55 and low 86c. Focus Minerals (FMS) have 82.16million shares, finished Friday at $1.01 (market cap $82.98million, high $1.78, low 8.5c).

It isn't clear what Mega calculate resources at their other graphite projects to be, but it is highly likely (given plans for an Adelaide plant by mid-2012)) that Uley - which they see as potentially "one of the largest flake graphite operations in the world" - will be first to produce and is seen as Mega Graphite's initial cash cow.

A visit to the Stockhouse.ca website would allow those interested to gauge and compare where NGC and FMS are positioned in the race to production and what their respective potential graphite resources are.

Everyone will draw their own conclusions as to whether the Mega deal is reasonable. My quick and simplistic calculations suggest to me that, given SER shareholders and the company will be able to benefit from any future increase in Mega's share price, the deal IS sound.

Inevitably, there are "howevers" though. For instance:

1. It would be interesting to know the costs and time involved for SER to forget Mega and go it alone on Uley.

2. How much is the Uley resource worth on current and projected graphite prices?

3. Could SER hope in the current economic climate to raise the cash to go it alone?

4. Will Mega Graphite be taken over or absorbed by another company before the October deadline? And how would that affect the value of the deal for SER shareholders?

5. Will any arrangements be made for Mega to also be listed on the ASX? Or, failing that, will any mechanism be set up to make it easier for SER shareholders to buy and sell on whichever Canadian stock exchange Mega is listed on?

Some of the above points were touched upon by posters in recent weeks before the deal was confirmed. Hopefully, these and other questions will be covered in the information we eventually receive from SER before being asked to vote.

Meanwhile, the Aussie market hasn't exactly reacted excitedly so far to SER's announcement - maybe because it doesn't see the deal as being particularly good; maybe because investors don't see the need to rush in and are awaiting more detailed info; possibly because there has been meagre publicity; probably because markets are being hurt by the debt debate debacle in the US.

Whatever, I'm sitting pat until we receive some more detailed info from management. Hopefully, that will be sooner rather than later.

Sunman