Signed in July 2011, the agreement valued the graphite property at C$70m ($69.9m) and the transaction has now been terminated citing unavailability of funds.
Further, the terms of the agreement included the issuance of 33% or more of Mega share capital reflecting the property’s value to SER shareholders as well as a 1.5% royalty on future sales revenues and a cash payment of $1m.
Macquarie Capital Canada, which acted as the deal’s financial advisor, urged MEGA and SER to alter the terms to enable more flexibility in funding and valuation requirements due to weak global markets.
SER failed to commission a current feasibility study or final metallurgical test work while the value of the property remained the same.
Mega Graphite would however continue with its operations agreement at the Uley property.
