Using some back of the napkin calculations I get something like:

Current market caps - SGR $373,400,000 x 0.145 = $54,143,000

KER $1,300,000,000 x 0.025 = $32,500,000

Combined total market cap of $ 86,643,000

the merger has KER shares exchanged for SGR shares so around 5.8 KER for 1 SGR share adding 1,300,000,000 /5.8 = 224, 137,931 shares to the merged company for a total

597,537,931 shares priced at 0.145 and a total market cap of $86,643,000

I believe new rules allow share consolidations up to 10 to 1 without shareholder approval so if that came into the mix the merged company would have, if I round everything off a little

60,000,000 shares at say $1.50 for a market cap of $90,000,000

So this would be an approximate present case scenario for the merger at current valuations for the two companies.

How management can increase value would then be the challenge and remains to be seen . SGR ceo Greg Gibson was CEO of KER and in the interview shortly after his appointment at SGR said he felt SGR should be 50,000 to 60,000 oz. per year producer and that he would look to add other distressed assets and grow from there. So presumably he has good knowledge KER and thinks by merging he can get the growth he speaks of. The question for us as investors is, will it work out the way they think it will and will share value increase or not. The answers are likely many months away. So while I admire the effort of the new CEO to follow through on his ideas the risk at this point is too high for me to put my hard earned capital back in to SGR from which I foolishly took about a 70% loss the first time around. I do hope this company can rise from the ashes and they do seem to be trying in what has been a difficult period for the whole sector. If the new management has a greater focus on profitability and generating free cash flow than the previous one and was to demonstrate this that would greatly help in generating renewed interest.

GLTA