IMO, a very astute and positive transaction. While under the...

IMO, a very astute and positive transaction.

While under the stewardship of SER the market appeared to ascribe little to no value to these projects after the early DD program . These logistically remote, under-cover projects represented a level of operational complexity and financial commitment beyond that of a company of SERs size, as reflected by the issues faced during the DD campaign. Maybe in the hands of an ET focused explorer with slightly more funding the potential of these projects can be unlocked.

SERs short term exploration commitments and carrying costs have now been significantly reduced, and, as already pointed out by@samstunning we maintain considerable exposure to any early exploration success across MDI's exploration portfolio. Shares (after escrow) have the liquidity to be monetized at short notice, unlike an NSR.

I feel that SER has alternative projects that are potentially more attractive risk-rewards prospects than the ET projects, short-term catalysts being drilling at Canobie and South Cobar.


However I do question :


a. As the transaction consideration is entirely in the shares, together with current shareholding interests in RML and Ionic, and the contingent final milestone payment from Vox on the sale of the Uley Graphite Royalty, this represents a significant portion of SERs value tied to relatively high risk investments

b. With more than 10% ownership of MDI and with technical and operational experience in the ET projects, it is surprising that SER did not receive a BoD seat. Maybe MDI is looking at further ET transactions with some of the larger (than SER) tenement holders? Although a positive spin to this is we are not limited by blackout periods on potential share sales and may suggest an early exit after escrow.

c. What is our priority, company-making project? From this week's investor presentation, the lead project is Myall Creek. A project which SER have a 20% interest in and FMG have only a $1.5m earn-in commitment. It is followed by the Cowal Projects which are under option agreement (100% and no NSR) to Evolution. It is only when we get to page 8 that we see Canobie and page 10 South Cobar. I am surprised that these projects and their forthcoming drilling programs are buried so far in. Why lead off with projects in the presentation that have so little wealth creation potential for SER and whose catalyst are not near term? Does this suggest further project transactions?