Update on Merger with Polymetals - Notice of Meeting

ASX ANNOUNCEMENT / MEDIA RELEASE
Friday, 28 June 2013
Merger Progress
Southern Cross Goldfields and Polymetals Mining
Southern Cross Goldfields General Meeting
Following the ASX Announcement of 21 June 2013, Southern Cross Goldfields Ltd ACN 124 374 321 (SXG)
(ASX: SXG) provides a further update on the proposed merger with Polymetals Mining Limited ACN 075 664 961
(Polymetals) (ASX: PLY) announced on 8 April 2013.
The proposed merger (Merger) will be effected via a scheme of arrangement between Polymetals and
Polymetals Shareholders (Scheme), as outlined in the Scheme Booklet lodged with the ASX on 21 June.
The Scheme is conditional upon SXG shareholder approval of a resolution to recognise that associates of Mr
David Sproule, the current Non-Executive Chairman of Polymetals, will obtain an interest of approximately 26%
in SXG under the Merger as a result of their existing interest of approximately 51% in Polymetals (Sproule
Interest Resolution). SXG Shares will be issued to the Sproule Interests under the Merger on the same basis
and terms as all other Polymetals Shareholders.
Approval of the Sproule Interest Resolution by SXG Shareholders is therefore required in order for the
Scheme to proceed.
SXG Directors have recommended unanimously in favour of the Merger and, in the absence of an SXG
Superior Proposal (as that term is defined in the Scheme Implementation Agreement), recommend that
SXG shareholders vote in favour of the Sproule Interest Resolution to enable the merger to proceed. SXG
Directors intend to vote their SXG Shares in favour of the Sproule Interest Resolution.
The Independent Expert, BDO Corporate Finance Pty Ltd (BDO), considers that the issue of new SXG
shares to associates of Mr Sproule is integral to the merger and is fair and reasonable to SXG
shareholders. A full copy of the BDO Independent Expert’s Report accompanies the Notice of Meeting.
SXG Shareholders are encouraged to vote either by attending the SXG General Meeting in person, or by lodging
a proxy by the times specified in the Notice of Meeting and proxy form which will be mailed to SXG shareholders
today.
The SXG General Meeting will be held at 10.00am Perth time on Tuesday 30 July 2013 at the Celtic Club, 48
Ord Street, West Perth, WA 6005.

Important Dates
Other important indicative dates and indicative timing in relation to the approval and implementation of the
Scheme are set out below.
Event
Date
SXG General Meeting 10.00am (Perth time) on Tuesday, 30 July 2013
Polymetals’ General Meeting 10.00am (Brisbane time) on Wednesday, 31 July 2013
Polymetals’ Scheme Meeting 10.30am (Brisbane time) on Wednesday, 31 July 2013
Second Court Hearing to approve the Scheme Monday, 5 August 2013
Effective Date Tuesday, 6 August 2013
Record Date Tuesday, 13 August 2013
Implementation Date Tuesday, 20 August 2013
The above timetable is indicative only and the actual timetable will depend on many factors. These factors include the Court approval
process and the time at which the conditions precedent to the Scheme are satisfied or waived (as applicable). These times and dates may
vary without directly notifying shareholders, subject to the approval of such variation by ASX, the Court and Polymetals. Any variation to
the timetable will be announced to the ASX and will be published on the SXG website.
For further information, please contact:
- ENDS -
Glenn Jardine, Managing Director – Southern Cross Goldfields Ltd
Telephone: +61 8 9215 7600, email: glennj@scross.com.au
Refer to www.scross.com.au
Frank Terranova, Managing Director – Polymetals Mining Ltd
Telephone: + 61 7 3289 3313, email: fterranova@polymetals.com
Refer to www.polymetals.com.au
For media inquiries, please contact:
Nicholas Read – Read Corporate
Telephone: +61 8 9388 1474, Mobile: 0419 929 046, email: nicholas@readcorporate.com.au

ABN 71 124 374 321
U16,162 Colin St, West Perth WA 6005
PO Box 708, West Perth WA 6872
Phone +61 8 9215 7600
Fax +61 8 9485 1283
28 June 2013
Dear Shareholder,
Proposed Merger of SXG and Polymetals Mining
Merger of equals to create a strong and diversified Australian gold company
Your vote is important to ensure that the merger proceeds
I am writing to you ahead of a number of important developments for Southern Cross Goldfields (“SXG” or “the
Company”) as we proceed to implement the proposed merger with Polymetals Mining (“Polymetals”)
announced on 8 April 2013 and create a diversified Australian gold company (“Merged Group”).
The merger is being implemented under a Scheme of Arrangement (“Scheme”) whereby SXG will offer 11
SXG shares for every 1 Polymetals share on issue. Details of the merger, which is scheduled to be completed
by August 2013, are provided in the enclosed Notice of Meeting and Explanatory Memorandum.
The Board of SXG believes that the proposed merger is compelling, providing shareholders with the
opportunity to participate in the combination of two asset-rich companies to create a merged entity with a
diversified gold production profile, a strengthened capital base and increased operational and managerial
experience and expertise. The Merged Group will have:
a combined JORC-compliant Mineral Resource inventory of 1.63Moz of gold and JORC- compliant Ore
Reserves of 254,400oz of gold;
a near-term production profile of 69,000oz per annum from SXG’s Marda Gold Project in WA and
Polymetals’ Mt Boppy Project in NSW (both 100% owned);
a significant exploration portfolio with approximately 5,000 km 2 of landholdings;
a pro-forma combined market capitalization of $26.5 million based on the share prices of both
companies immediately prior to the announcement of the merger; and
combined pro-forma cash reserves of $13.2 million as at 31 March 2013 prior to the announcement of
the merger.
At the same time, the Merged Group will be able to realize synergies arising from the consolidation of
corporate overheads and exploration activities and will have a greater market presence and ability to fund the
development of its key projects.
In the current challenging equity market environment for junior and mid-tier resource companies, SXG’s Board
believes that the Merged Group will be able to achieve critical mass in terms of assets and market recognition
that would not otherwise be achievable. It will also be well placed to achieve further growth by participating in
logical future industry consolidation.
The enclosed investor presentation highlights the key attributes of the Merged Group.

30 July Shareholder Meeting – Your Vote is Important
The Scheme – which will involve SXG issuing a total of 458,537,981 new SXG shares to Polymetals
shareholders – is subject to a number of conditions, including the approval by SXG shareholders of
Resolution 1 in the enclosed Notice of Meeting, approval of the merger by Polymetals shareholders and the
satisfaction of other conditions precedent including court approval.
If the merger proceeds, Polymetals shareholders will hold approximately 52.9 per cent of the Merged Group, of
which interests associated with Polymetals’ non-executive Chairman and largest shareholder, Mr David
Sproule (“Sproule Interests”), will comprise approximately 26.17 per cent of the Merged Group as a result of
the Sproule Interests’ current shareholding in Polymetals. Existing SXG shareholders will hold approximately
47.1% of SXG post-merger.
The SXG shares to be issued to the Sproule Interests under the merger will be issued on the same basis and
terms as to all other Polymetals shareholders.
Following consultation between SXG and ASIC, SXG’s Board has decided that SXG shareholders should be
given the opportunity to consider the effect of the acquisition by the Sproule Interests of a substantial interest in
the Merged Group, if the Scheme is implemented.
This approval is being sought from shareholders at a general meeting which has been convened for 30 July
2013. Enclosed with the Notice of Meeting is an Independent Expert’s Report, which concludes that the issue
of SXG shares to the Sproule Interests (as a consequence of which the Sproule Interests will obtain a relevant
interest in SXG of approximately 26.17%) is fair and reasonable to SXG shareholders (see below).
The Notice of Meeting also includes two resolutions relating to the ratification of the issue of SXG shares as
part of a placement undertaken in October 2012 and the issue of options to RMB Australia Holdings Limited in
March 2013 in relation to the loan facility for the acquisition of the Sandstone Gold Project. These two
resolutions are unrelated to the merger with Polymetals.
Your vote is important as the merger with Polymetals can only proceed if SXG shareholders approve
the resolution for the issue of new SXG shares to the Sproule Interests.
Your Board strongly believes that the merger is in the best interests of SXG shareholders, particularly given
that current market conditions make it very difficult for junior resource companies to raise capital to progress
their projects. Should the merger not proceed, your Directors are of the view that SXG’s ability to develop its
flagship asset, the Marda Gold Project, would be negatively impacted.
The Independent Expert concludes the transaction is fair and reasonable to SXG shareholders
The Independent Expert, BDO Corporate Finance Pty Ltd, considers that the issue of new SXG shares to the
Sproule interests is integral to the merger and is fair and reasonable to SXG shareholders. BDO has
concluded that the key advantages of approving the transaction are:
1. The Merged Group will be of significantly larger scale than the existing SXG – with a combined
potential production profile of 69,000oz per annum and a bigger and more diversified asset portfolio.
2. The Scheme is a merger of two similar sized entities with equal Board representation in the Merged
Group – shareholders of each company will emerge with holdings of similar weighting to the current
market capitalisation of the two companies and with a Board drawn equally from the two companies.

3. Access to the cash reserves of Polymetals – the significant cash reserves of Polymetals will be
available to the Merged Group to provide funding certainty for the Marda Gold Project and to allow
immediate pursuit of those development projects prioritised by the Directors.
4. Potential for synergies – combining the companies should allow efficiencies to be realized in terms of
consolidating Western Australian-based activities and corporate and administrative costs, resulting in
annualized savings estimated at $1.95 million.
5. Strong more diversified development pipeline – in addition to the advanced Marda and Mt Boppy
projects, both SXG and Polymetals have a portfolio of potential projects giving the directors significant
choice in the projects to be prioritized.
6. Shareholders will benefit from increased market relevance and liquidity of shares – the Merged
Group will have a more significant market presence and there is likely to be greater liquidity, making it
easier for shareholders to realize the value of their shares should they choose to sell.
7. Technical expertise associated with the Sproule Interests – David Sproule, Polymetals’ current nonexecutive
Chairman, will bring technical expertise to the Merged Group including expertise in refurbishing
and reconstructing small gold plants and operating small gold plants. The Sproule Interests also bring with
them a committed vision for growing small companies as well as cash reserves.
8. Diversified and larger group of assets – the Merged Group will hold a larger pool of assets, providing the
Company with greater flexibility and more options to divest or develop a number of projects.
Your Directors believe that the proposed merger with Polymetals provides the best possible pathway for SXG
to develop and realize value for shareholders from its advanced Marda Gold Project and surrounding
exploration package, while also giving it exposure to Polymetals’ assets including the Mt Boppy Project.
I am excited about the opportunities that lie ahead for the Merged Group and believe that the merger will
unlock significant long-term value for shareholders. I look forward to your support at the upcoming general
meeting.
Your Directors will be available from 12pm to 5pm on 17 July 2013 to discuss by phone this important phase in
the progression of your company ahead of the general meeting on 30 July, and invite you to call them on (08)
9215 7600.
In the meantime, if you have any queries about the merger or about the general meeting, I encourage you to
contact our Managing Director, Glenn Jardine, or Chief Financial Officer, Stephen Jones on (08) 9215 7600.
Yours sincerely
Samantha Tough
Non-executive Chairman
Southern Cross Goldfields Ltd

ASX Code:
Investor Presentation June 2013

Disclaimer and Important Notice
• This presentation has been prepared by Southern Cross Goldfields Limited (“SXG” or the “Company”). It should not be considered as
an offer or invitation to subscribe for or purchase any securities in the Company or as an inducement to make an offer or invitation with
respect to those securities. No agreement to subscribe for securities in the Company will be entered into on the basis of this
presentation.
• You should consider all the Company’s announcements and reports lodged with the ASX before making any investment decisions.
• This presentation contains forecasts and forward looking information. These are not a guarantee of future performance and involve
unknown risks and uncertainties. Actual results and developments will almost certainly differ materially from those expressed or
implied. SXG has not audited nor investigated the accuracy or completeness of the information, statements and opinions contained in
this presentation. Accordingly, to the maximum extent permitted by applicable laws, SXG makes no representation and can give no
assurance, guarantee or warranty, express or implied, as to, and take no responsibility and assume no liability for, the authenticity,
validity, accuracy, suitability or completeness of, or any errors in or omission, from any information, statement or opinion contained in
this presentation.
• You should not act or refrain from acting based on this presentation. This presentation does not purport to be all inclusive or to contain
all information which its recipients may require in order to make an informed assessment of the Company’s prospects. You should
conduct your own investigation and perform your own analysis in order to satisfy yourself as to the accuracy and completeness of the
information, statements and opinions contained in this presentation before making any investment decision.

Introduction – The New Environment
• A rapidly changing landscape for gold companies following the recent price correction....
Producers aiming to
drive down costs
Exploration & CAPEX
budgets being cut
Greater transparency
on reporting of costs
Market now conducive
to M&A
Sensible business
combinations being
proactively pursued
Costs falling rapidly
Overheated
construction market
rapidly cooling
Companies that
survive will be very
well placed, especially
those with cash, low
CAPEX/OPEX, grade
• The medium-term outlook for gold remains positive due to:
• Continued quantitative easing (QE) in the US and stimulus measures in Europe
• Global currency devaluation strategies
• Gold and silver continue to provide the ultimate hedge against inflation

SXG – Well Placed
•
•
•
• Rare greenfields WA gold project
• Regionally significant
• Well advanced
• Demonstrated exploration upside
•
•
•

Gold Resource Growth
• Gold resource inventory has grown substantially over the past five years through acquisition,
consolidation, exploration....and now corporate activity with Polymetals Mining.
2,000,000
1,800,000
Measured Indicated Inferred
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
2009 2010 2011 2012 2013 (target)

SXG and PLY - Key Merger Metrics
1) Based on Mt Boppy’s LOM production of 68koz divided by the 2 year mine life
2) Based on Marda’s average LOM production
3) On the basis of PLY 75% earn-in at Turner River and 100% of Mt. Boppy
4) As at 31 March 2013 and excluding any transaction costs
5) Assumes various change of control scheme implementation adjustments. The net impact increases PLY shares by 3,399,652 to 41,685,271
6) Assumes an exchange ratio of 11 Southern Cross shares for every one Polymetals share.

SXG and PLY – Merger Benefits
•
• Improved financing and transactional capability for growth.
• Improved future production platform.
•
• Exploration, project development, divestment or combination of all three activities.
•
• Board and management capabilities are complimentary and relevant.
• Consolidated corporate overheads.
• Establishes project pipeline.

Indicative Merger Timetable
• SXG shareholder meeting
• Polymetals shareholder meeting
• Second Court hearing
• Implementation date

A Recommended Merger of Equals
• Polymetals unanimous Board recommendation
• 11 SXG shares for every 1 PLY share
• Scheme of Arrangement (“Scheme”) under Australian law between PLY and its shareholders
• PLY Directors to vote their own holdings in favour of the Scheme, in the absence of a superior proposal
• PLY shareholders to hold 52.9% of the combined entity post-merger, with SXG shareholders to own 47.1%
• Pipeline of gold projects with potential to produce up to 69koz pa from 2014
• Chairman – Samantha Tough (SXG)
• Non-Executive Directors – David Sproule (PLY), John Rowe (SXG), Graham Brock (SXG), Jon Parker (PLY),
Frank Terranova (PLY)
• Chief Executive Officer – Glenn Jardine (SXG)
• Consolidated pro-forma
• Cash of $13M before transaction costs (as at 31 March 2013)
• Debt of $7.0M (as at 31 March 2013)
• Market capitalisation of ~$26.5M (as at 3 April, 2013)
• Key conditions include:
• Approval by PLY shareholders
• Approval by SXG shareholders
• Court approval
• Certain regulatory approvals including Takeovers Act approval in Australia
• Merger of Equals
announced 8 April 2013
• Strong board and
management with
experience in driving
assets though to
production
• Strong capital base and
balance sheet with
increased funding ability

A Diversified Portfolio of Australian Gold Assets
–
–
–
–
–
–
(1) Resources are inclusive of Ore Reserves

WA Gold Assets – Marda and Sandstone
• SXG is planning to develop a in
WA based on the Marda and Sandstone assets:
• Marda Project – Feasibility Study complete:
• 546koz JORC resource
• Greenfields gold project – proposed 480ktpa plant
• Targeting 50,000ozpa
• Outstanding exploration growth potential
• Sandstone Project – recent acquisition from Troy Resources
(ASX: TRY)
• 720koz JORC resource
• 600ktpa gold plant and 100-person camp
• Short- and long-term production optionality

Marda Project
• Rare greenfields gold project in Australia.
• Targeting 50,000ozpa.
• Sandstone gold plant and camp acquired from Troy
Resources in 2012 to be relocated to Marda.
• Well advanced project:
• Positive Feasibility Study completed May 2012;
• Sandstone acquisition announced August 2012;
• Indicative term sheets received from financiers;
• Environmental approvals in progress.
• Low Capex, High operating margins.
• Outstanding exploration upside.
• Underexplored Evanston Shear zone at Marda ideal for new
gold discoveries

Marda – Significant Exploration Upside
• SXG’s 2,920km 2 gold tenements and rights dominates the belt
• Various mineralisation styles present including BIF, porphyry
• Evanston Shear from King Brown to north of Evanston ~30km
• Opportunity for King Brown and Golden Orb repeats
• Outstanding potential for new discoveries and additional
resources, justifying a well-funded exploration push
• Systematic geochemical program now delivering numerous
exciting targets along the Evanston Shear (e.g. White Pointer,
Thresher) and will continue to do so
• Covered structural targets to be tested with RAB drilling

Northern Gold Corridor Targets – Drill-Ready
• Thresher prospect – new untested - +40ppb anomaly over 800m,
+100ppb gold anomaly over 400m.
• Reef prospect – 3.0 g/t Au in auger drilling 400m north of Vector
Resources’ Gwendolyn Deposit (~200,000oz) – +40ppb anomalies
over 500m strike.
• Lancelot prospect – 2.1 g/t Au in auger drilling immediately south of
historic results including 4m @ 17.36 g/t Au and 5m @ 6.13 g/t Au.
• Broadbent’s project –initial SXG auger drilling has identified +
500ppb Au in soils.
• Stream of targets will be generated in the coming months between
Lancelot and Gwendolyn for follow-up testing.

Evanston Shear Targets – Drill-Ready
• Gold corridor open to the south of Gwendolyn to be tested
with ongoing auger geochemical drilling
• Evanston Shear is also open north and south of Red
Boomerang. “Covered” contacts to be followed up with RAB
• White Pointer - geochemical anomaly +100ppb Au over
1,200 metres - untested
• Red Boomerang – porphyry hosted mineralisation
• Potential for large scale deposit in this area

WA Gold Assets - Turner River
• Project acquired by Polymetals in September 2012
• Polymetals earning 75%, with De Grey Mining (ASX: DEG)
retaining 25%
--------------------------------------------------
• Highly prospective area for gold and base metals
• Early stage gold development project with good metallurgy
• Excellent infrastructure
• Established gold and base metal resources
• Extensive geological database

NSW Gold Assets - Canbelego
• Cobar-style mineralisation in the Lachlan Fold Belt
• Active mineral field with +5Moz produced from the
region
• Major mines in the region include CSA (Cobar), Tritton,
Girilambone, Northparkes
• Recent discoveries include Mallee Bull/May Day (Peel
Resources)
• PLY has been operating there since 1992 – produced
67koz from open pit operations (2002-2005)
3D map from
presentation
Zoom into
next slide
• 204km 2 of highly prospective tenements with +20 prospects including historic mines
• Major exploration focus within tenements surrounding the Mt Boppy Gold Mine (historic production: 490koz)
• PLY has been exploring for more “Mt Boppy-style” projects

Mt Boppy – A Near-Term Production Opportunity
• Redevelopment opportunity at Mt Boppy gold mine
• ~70,000oz recovered gold to be mined from open pit
• EIS completed
• Approvals pending to facilitate early gold production
• Start-up time and cost advantage via existing 150ktpa plant and
on-site camp
• Redevelopment work required includes:
• Increasing plant capacity to 300ktpa
• New mobile crusher and 1,300kW ball mill, flotation circuit
• New cyanide destruction circuit, reagent area, tailings storage facility

SXG – Compelling Investment Opportunity
• Merger with Polymetals on track for completion in August 2013
• Near-term gold production – clear pathway to development
• Outstanding potential to expand production through exploration success
• Strong news flow from project enhancements, exploration success and business
development activities
• Outstanding regional exploration portfolio
• Strong combined management team with strong track record in developing, operating and
optimising gold projects

ASX Code:
Investor Presentation June 2013 – Additional Slides

Pro Forma Gold Resource Table
Measured Indicated Inferred Total Resources
kt g/t Au koz kt g/t Au koz kt g/t Au koz kt g/t Au koz
Canbelego (1) 39 6.4 8 646 4.0 84 82 3.9 10 766 4.1 102
Turner River Gold JV (Earning
In) 2)
Combined Polymetals
Project Total (3)
2,669 1.8 157 1,145 1.3 47 2,936 1.5 141 6,750 1.6 345
2,707 1.9 165 1,791 2.28 131 3,018 1.6 151 7,516 1.9 448
Marda (4) 2,796 2.3 204 2,640 1.8 155 3,052 1.9 188 8,487 2.0 546
Sandstone (4) 1,932 2.4 146 12,586 1.4 574 14,518 1.5 720
Combined Southern Cross
Total
Polymetals / Southern
Cross Total (5)
2,796 2.3 204 4,572 2.1 301 15,638 1.5 762 23,005 1.7 1,266
5,503 2.1 368 6,362 2.1 433 18,655 1.5 914 30,521 1.8 1,714
Polymetals Share / Southern
Cross Total (6)
4,836 2.1 329 6,076 2.2 421 17,921 1.5 878 28,833 1.8 1,627
(1) Mt Boppy; 2.5g/t cut-off; Boppy Sth: 1.0g/t cut-off
(2) Polymetals has a entered into an agreement with De Grey Mining to earn a 75% interest in the Turner River Gold Project
(3) Total includes 100% Turner River Resources
(4) Refer Competent Persons Statement
(5) Figures may not add due to rounding. Includes 100% Turner River JV Resources
(6) Figures may not add due to rounding. Includes 75%Turner River JV Resources

Pro Forma Gold Reserve Statement
Proved Probable Total
kt Au g/t oz kt Au g/t oz kt Au g/t oz
Marda(1) 1,900 2.4 149,200 300 2.7 29,300 2,300 2.4 178,500
Mt Boppy 42 5.6 7,636 507 4.2 68,312 549 4.3 75,945
Polymetals / SXG Total (1) 1,942 2.5 156,836 807 3.8 97,612 2,849 2.8 254,449
(1) Note: Rounding conforming to JORC to appropriate levels of precision may cause minor computational errors.

Competent Person’s Statements
compiled by:
‣ in respect of Ore Reserves at the Marda Gold Project, Mr Denis Grubic, a Member of the Australasian Institute of Mining and Metallurgy and an independent
consultant employed by Rock Team Pty Ltd, who has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and
ian Code for Reporting of Exploration
‣ in respect of Mineral Resources at the Marda
Exploration Manager, who has sufficient experience which is relevant to the type of deposit under consideration and to the activity which he is undertaking to qualify
ral
‣ in respect of Mineral Resources at the Sandstone Project, Mr David Otterman, a Fellow of the Australasian Institute of Mining and Metallurgy, Chartered Professional
(Geology) and an independent consultant, who has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to
Code for Reporting of Exploration
‣ Each of Messrs Grubic, Simmons and Otterman consents to the inclusion in this Explanatory Memorandum of the statements based on his information in the form
and context in which they appear.
The Information in this Presentation that relates to Polymetals
‣ in respect of Ore Reserves at the Mt Boppy Project, Messrs Sean Buxton and Andrew Lawry, Members of the Australasian Institute of Mining and Metallurgy and
former employees of Polymetals, who have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the
Code for Reporting of Exploration
‣ in respect of Mineral Resources at the Mt Boppy Project and Turner River Project, Mt Troy Lowien, a Member of the Australasian Institute of Mining and Metallurgy
and a Polymetals employee, who has sufficient experience which is relevant to the type of deposit under consideration and to the activity which he is undertaking to
ts, Mineral Resources and Ore
‣ Each of Messrs Buxton, Lawry and Lowien consents to the inclusion in this Explanatory Memorandum of the statements based on his information in the form and
context in which they appear.

ABN 71 124 374 321
U16,162 Colin St, West Perth WA 6005
PO Box 708, West Perth WA 6872
Phone +61 8 9215 7600
Fax +61 8 9485 1283
Southern Cross Goldfields Ltd
ACN 124 374 321
Notice of General Meeting
and Explanatory Memorandum
General Meeting to be held at
The Celtic Club
48 Ord Street, West Perth WA
on Tuesday, 30 July 2013
at 10.00am WST
The Notice of General Meeting, Explanatory Memorandum and Proxy Form should be read in their
entirety. If you are in doubt as to how you should vote, you should seek advice from your accountant,
solicitor or other professional adviser prior to voting.
The Independent Expert has concluded that the transaction the subject of Resolution 1 of the General
Meeting is both fair and reasonable to Non-associated Shareholders. Shareholders should refer to
the Independent Expert’s Report for further discussion about Resolution 1. The Independent Expert’s
Report is enclosed with this Notice of General Meeting.

Contents
Notice of General Meeting 3
Proxy appointment, voting and Meeting instructions 5
Explanatory Memorandum 6
Schedule 1: Information about the Merged Group 23
Schedule 2: Terms & conditions of SXG Options 33
Schedule 3: Competent persons’ statement 36
Glossary of terms used in Notice of Meeting 37
Annexure A: Independent Expert’s Report
Annexure B: Technical Specialist’s Report
Proxy Form
Key dates
Event
Date
Snapshot date for eligibility to vote Sunday, 28 July 2013
Last day for receipt of Proxy Forms* Sunday, 28 July 2013
SXG General Meeting Tuesday, 30 July 2013
Meeting of Polymetals Shareholders to approve the Scheme** Wednesday, 31 July 2013
Scheme Implementation Date** Tuesday, 20 August 2013
* Proxy Forms received after 10.00am WST on this date will be disregarded.
** These dates are indicative only and are subject to change.

- 3 -
Notice of General Meeting
Notice is hereby given that a General Meeting of Southern Cross Goldfields Ltd ACN
124 374 321 (SXG or Company) will be held at the Celtic Club, 48 Ord Street, West Perth
WA at 10.00am WST on Tuesday, 30 July 2013.
The Explanatory Memorandum, which accompanies and forms part of this Notice, and the
accompanying Annexures describe the various matters to be considered.
Terms used in this Notice will, unless the context otherwise requires, have the same
meaning given to them in the Glossary set out in the Explanatory Memorandum.
Business
Resolution 1 – Approval, as a result of the Merger with Polymetals, of the issue
of New SXG Shares to the Sproule Interests
To consider and, if thought fit, to pass, with or without amendment, the following resolution
as an ordinary resolution:
“That for the purposes of item 7 of section 611 of the Corporations Act and for all other
purposes, approval, as a result of the Merger with Polymetals, is given for the issue of
227,031,189 New SXG Shares to the Sproule Interests, pursuant to which the Sproule
Interests will obtain a relevant interest in SXG Shares in the Company in excess of the
threshold set out in section 606(1) of the Corporations Act.”
Independent Expert’s Report: SXG Shareholders should carefully consider the Independent Expert’s Report
prepared by BDO Corporate Finance for the purposes of the SXG Shareholder approval required for this
Resolution 1 in accordance with item 7 of section 611 of the Corporations Act and which comments on the
fairness and reasonableness of the proposed issue of New SXG Shares by the Sproule Interests. The
Independent Expert concludes that the proposal the subject of Resolution 1 is fair and reasonable to
Non-associated Shareholders.
Voting exclusion: In accordance with item 7 of section 611 of the Corporations Act, the Company will disregard
any votes cast on Resolution 1 by the Sproule Interests and their Associates. However, the Company need not
disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the
directions on the proxy form, or it is cast by the person chairing the General Meeting as proxy for a person who is
entitled to vote, in accordance with the direction on the proxy form to vote as the proxy decides.
Resolution 2 – Ratification of issue of Placement Shares
To consider and, if thought fit, to pass, with or without amendment, the following resolution
as an ordinary resolution:
“That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, SXG Shareholders
approve and ratify the previous issue of 1,323,769 Placement Shares at an issue price of
$0.045 per Placement Share by the Company in October 2012, on the terms and conditions
referred to in the Explanatory Memorandum.
Voting exclusion: In accordance with Listing Rule 14.11, the Company will disregard any votes cast on
Resolution 2 by those persons who were issued SXG Shares and any Associates of those persons. However, the
Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in
accordance with the directions on the proxy form, or it is cast by the person chairing the Meeting as proxy for a
person who is entitled to vote, in accordance with the direction on the proxy form to vote as the proxy decides.

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Resolution 3 – Ratification of issue of SXG Options to RMB
To consider and, if thought fit, to pass, with or without amendment, the following resolution
as an ordinary resolution:
“That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, SXG Shareholders
approve and ratify the previous issue of 34,255,319 SXG Options to RMB Australia Holdings
Limited by the Company in March 2013, on the terms and conditions referred to in the
Explanatory Memorandum.”
Voting exclusion: In accordance with Listing Rule 14.11, the Company will disregard any votes cast on
Resolution 3 by RMB and any Associates of RMB. However, the Company need not disregard a vote if it is cast
by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form, or
it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with the
direction on the proxy form to vote as the proxy decides.
By order of the Board
Dennis Wilkins
Company Secretary
28 June 2013

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Proxy appointment, voting and Meeting instructions
Lodgement of a Proxy Form
The Proxy Form (and any power of attorney or other authority, if any, under which it is signed) must be received
at an address given below by 10.00am WST on Sunday, 28 July 2013 being not later than 48 hours before the
commencement of the General Meeting. Any Proxy Form received after that time will not be valid.
Proxy Forms may be lodged:
By hand or post:
By fax:
Appointment of a proxy
Computershare Investor Services Pty Ltd
GPO Box 212
Melbourne VIC 3001
1800 783 447 (within Australia) of +61 3 9473 2555 (outside Australia)
An SXG Shareholder entitled to attend and vote at the General Meeting is entitled to appoint a proxy. The proxy
may, but need not be, an SXG Shareholder.
If you wish to appoint the Chairman as your proxy, mark the appropriate box on the Proxy Form. If the person
you wish to appoint as your proxy is someone other than the Chairman please write the name of that person. If
you leave this section blank, or your named proxy does not attend the Meeting, the Chairman will be your proxy.
You are entitled to appoint up to two persons as proxies to attend the General Meeting and vote on a poll. If you
wish to appoint a second proxy, an additional Proxy Form may be obtained by telephoning Computershare on
1300 764 223 (within Australia) or +61 3 9415 4319 (outside Australia), or you may photocopy the Proxy Form.
To appoint a second proxy you must on each Proxy Form state (in the appropriate box) the percentage of your
voting rights which are the subject of the relevant proxy. If both Proxy Forms do not specify that percentage, each
proxy may exercise half your votes. Fractions of votes will be disregarded.
Corporate SXG Shareholders
Corporate SXG Shareholders should comply with the execution requirements set out on the proxy form or
otherwise with the provisions of section 127 of the Corporations Act. Section 127 of the Corporations Act
provides that a company may execute a document without using its common seal if the document is signed by:
• two directors of the company;
• a director and a company secretary of the company; or
• for a proprietary company that has a sole director who is also the sole company secretary – that director.
Votes on Resolutions
You may direct your proxy how to vote on a Resolution by placing a mark in one of the boxes opposite the
Resolution. All your shareholding will be voted in accordance with such a direction unless you indicate only a
portion of voting rights are to be voted on the Resolutions by inserting the percentage or number of SXG Shares
you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on the Resolutions, your
proxy may vote as he or she chooses. If you mark more than one box on a Resolution your vote on the
Resolution will be invalid.
Chairman voting undirected proxies
The Chairman will vote undirected proxies on, and in favour of, all of the proposed resolutions.
Voting entitlement (snapshot date)
For the purposes of determining voting and attendance entitlements at the General Meeting, SXG Shares will be
taken to be held by the persons who are registered as holding the SXG Shares at 10.00 WST on Sunday,
28 July 2013. Accordingly, transactions registered after that time will be disregarded in determining entitlements
to attend and vote at the General Meeting.
Corporate representatives
A corporation may elect to appoint an individual to act as its representative in accordance with section 250D of
the Corporations Act, in which case the Company will require a certificate of appointment of the corporate
representative executed in accordance with the Corporations Act. The certificate of appointment must be lodged
with the Company and/or the Company's share registry before the General Meeting or at the registration desk on
the day of the General Meeting.

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Explanatory Memorandum
This Explanatory Memorandum has been prepared for the information of SXG Shareholders in
relation to the business to be conducted at the General Meeting.
The purpose of this Explanatory Memorandum is to provide SXG Shareholders with all information
known to the Company which is material to a decision on how to vote on the Resolutions in the
accompanying Notice of Meeting.
This Explanatory Memorandum should be read in conjunction with the Notice of Meeting, the
Independent Expert’s Report and the Technical Specialist’s Report. Capitalised terms in this
Explanatory Memorandum are defined in the Glossary.
1. Resolution 1 – Approval, as a result of the Merger with Polymetals, of the
issue of New SXG Shares to the Sproule Interests
1.1 Introduction and background to the Merger
The Company has entered into an agreement for a proposed merger with Polymetals
Mining Limited (Merger) by way of a scheme of arrangement between Polymetals and
Polymetals Shareholders (Scheme).
Under the Merger it is proposed that SXG will acquire all of the Polymetals Shares from
Polymetals Shareholders (so that Polymetals becomes a wholly owned subsidiary of SXG)
and SXG will issue to Polymetals Shareholders 11 New SXG Shares for every 1 Polymetals
Share held.
The Sproule Interests are Polymetals largest shareholders, collectively holding a relevant
interest in approximately 49.51% 1 of the issued capital of Polymetals. As a result of the
Merger, the Company will issue 227,031,189 New SXG Shares to the Sproule Interests on
the same basis and terms as all other Polymetals Shareholders, which will represent
approximately 26.17% of the issued capital of the Company post merger.
Following consultation with ASIC, the Directors have convened the Meeting to approve the
issue of New SXG Shares to the Sproule Interests, which as a result of the Merger will
obtain an interest in SXG in excess of 20% (and thus require SXG Shareholder approval in
accordance with item 7 of section 611 of the Corporations Act).
Implementation of the Merger is dependent on SXG Shareholders approving Resolution 1.
If Resolution 1 is not passed, a condition of the Scheme will not be satisfied and the Merger
as proposed will not occur.
The Directors consider the Merger to be in the best interests of the Company and
unanimously recommend you vote in favour of Resolution 1.
The Merger is also subject to the approval of the Scheme by Polymetals Shareholders and
the Court.
The Directors are pleased to provide SXG Shareholders with an opportunity to vote on an
important matter in the development of the Company.
1 This percentage holding is comprised of the Sproule Interests’ holdings in Polymetals as at the date of the Notice, plus
the Polymetals Shares to be issued to Meadowhead Investments as the Indemnity Consideration, subject to the approval
of Polymetals Shareholders and implementation of the Scheme.

- 7 -
1.2 Rationale for the Merger
The Merger has been proposed as a “merger of equals” and brings together two highly
complementary companies to create a significant gold exploration and development
company.
The Directors’ key reasons for proposing the Merger and for recommending that SXG
Shareholders vote in favour of Resolution 1 are as follows:
The Merger provides an opportunity to create a diversified Australian gold and base
metals company with potential for annual production of 69,000 ounces of gold and a
pipeline of development assets.
The combination of the Company and Polymetals broadens and strengthens the capital
base through the creation of a superior balance sheet, improving funding capability.
The Merged Group will own a significant exploration portfolio with 4,930 km 2
landholdings in highly prospective locations across Australia.
of
The Merger will generate synergies resulting from the consolidation of corporate
overheads and exploration activities.
The Merger combines capable and experienced boards and management with a proven
track record in driving development assets through to production.
The Merged Group will have a cash balance of $13.2M (pro forma 31 March 2013)
which will enable the Merged Group to continue to advance the Marda Gold Project
towards development.
These reasons are explained in further detail in Section 1.10, together with possible
reasons not to vote in favour of Resolution 1.
1.3 Summary of effect of Merger
If the Merger proceeds, the Merged Group will have the following key characteristics, based
on information current as at the Announcement Date (unless otherwise stated):
SXG Polymetals Merged Group
Shares on issue
(million)
408.9 41.7 6 867.5
Market
12.7 13.8 26.5
capitalisation ($m) 1
Cash ($m) 2 3.4 9.8 13.2
Debt ($m) 2 7.0 0.0 7.0
Ore Reserves (oz.) 3 178,500 75,945 254,449
Mineral Resources 1,266,000 361,000 1,627,000
(oz.) 4
Potential annual
35,000 34,000 69,000
production (oz.) 5
Notes:
1. Based on the share prices as at 3 April 2013 (the Business Day prior to a trading halt by both companies).
2. Based on the cash and debt of each company at the end of March 2013.
3. The estimates reflect the total Ore Reserves of the Company and Polymetals as reported to ASX on
10 May 2012 and 29 January 2013 respectively.

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4. The estimates reflect the total Mineral Resources of the Company and Polymetals as reported to ASX on
10 May 2012 and 29 January 2013 respectively, excluding those of Polymetals’ White Dam Project interest
(since divested), and the Turner River base metals Mineral Resource.
5. As reported by the Company and Polymetals to ASX on 10 May 2012 and 29 January 2013 respectively.
6. Polymetals Shares on issue as at the Scheme Implementation Date.
1.4 Overview of Merged Group
If Resolution 1 is approved by SXG Shareholders and the Scheme is approved by
Polymetals Shareholders and the Court:
• The Company will issue a total of 458,537,981 New SXG Shares to the Polymetals
Shareholders to acquire their Polymetals Shares, on the basis of 11 New SXG
Shares for every 1 Polymetals Share on issue.
• Polymetals will become a wholly owned subsidiary of the Company.
• Existing SXG Shareholders will hold approximately 47.1% of the Merged Group and
Polymetals Shareholders will hold approximately 52.9% of the Merged Group.
• The Board of SXG will comprise existing SXG Directors Samantha Tough, John
Rowe and Graham Brock, and Polymetals Directors David Sproule, Jon Parker and
Frank Terranova.
• The Company’s Chairman, Ms Samantha Tough, will continue as the Chairman of
the Merged Group.
• The Company’s Managing Director, Glenn Jardine, will continue as the Chief
Executive Officer of the Merged Group.
• The Company will retain its focus on developing its Marda Gold Project.
• The Company will remain headquartered in Perth, Western Australia.
For detailed information in respect of the Merged Group’s proposed capital structure,
financial position and mining and exploration projects, please refer to the following
documents:
Where Document Information relating to…
Schedule 1 of this
Explanatory Memorandum
Information about the
Merged Group
• proposed intentions, activities and strategic direction of
the Merged Group;
• the Merged Group’s Mineral Resources and Ore
Reserves;
• the Merged Group’s directors and senior management;
• the capital structure and ownership of the Merged Group;
and
• pro forma historical financial information.
Annexure A Independent Expert’s Report • profiles of SXG and Polymetals;
Annexure B
Technical Specialist’s
Report
• an analysis of the economic and industry context of the
Merger;
• valuations of SXG and the Merged Group; and
• an assessment as to whether the issue of Shares to the
Sproule Interests is fair and reasonable for SXG
Shareholders.
• the mineral assets of the Merged Group;
• valuation methods and macroeconomic factors; and
• technical details of the Merged Group’s projects
(including geology, exploration, mining, ore reserves,
metallurgy, processing operations, and environment).

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1.5 Implementation of the Merger
Implementation of the Merger is dependent on a number of approvals and conditions being
satisfied, including:
(a)
(b)
SXG Shareholders approving Resolution 1 contained in the Notice;
Polymetals obtaining Polymetals Shareholder approval for:
(i)
(ii)
the cancellation of Polymetals Shares issued under the Loan Funded Share
Plan, whereby eligible employees of Polymetals were invited to apply to
acquire Polymetals Shares and for a loan to finance the acquisition of the
Polymetals Shares; and
the issue of 1,939,508 Polymetals Shares and the payment of $300,000 to
Meadowhead Investments as the Indemnity Consideration in return for the
indemnity provided to Polymetals by Meadowhead Investments in respect of
the Peak Litigation (Meadowhead Indemnity) – see Section 1.13 of this
Explanatory Memorandum for further details;
(c)
(d)
(e)
Polymetals Shareholders approving the Scheme;
Court approval of the Scheme; and
the satisfaction or waiver of a number of conditions precedent comprising the
Scheme Conditions.
1.6 Regulatory purpose for Resolution 1
If the Merger is implemented, interests associated with Polymetals’ Chairman,
Mr David Sproule (the Sproule Interests) will collectively be issued New SXG Shares on
the same basis and terms as all other Polymetals Shareholders comprising an interest of
approximately 26.17% of the expanded issued capital of SXG as a result of the Sproule
Interests holding of 49.5% in Polymetals prior to the Merger.
Several relatives of David Sproule also own Polymetals Shares. As at the date of this
Notice, David Sproule’s relatives together held 4,504,470 Polymetals Shares, equating to
11.77% of Polymetals’ issued capital. In accordance with the Corporations Act, these
relatives are not Associates of David Sproule, and their interests in SXG post-Merger are
not included in the Sproule Interests’ holdings in the expanded issued capital of SXG
referred to above.
Following consultation with ASIC, it has been determined that it is appropriate for SXG
Shareholders to vote on the proposed issue to the Sproule Interests of New SXG Shares
under the Merger which will comprise more than 20% of the total SXG Shares on issue
after completion of the Merger.
SXG Shareholders are not required by law or the Listing Rules of ASX to approve the
Merger or the issue of all New SXG Shares proposed to be issued under the Merger.
Instead, the specific regulatory purpose of Resolution 1 is to obtain SXG Shareholder
approval for the issue of New SXG Shares to the Sproule Interests on implementation of
the Merger.
However it is important to note that if SXG Shareholder approval of Resolution 1 is not
obtained, then the Merger will not proceed. Effectively therefore SXG Shareholders have
an opportunity to determine an important step in the development of the Company.

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The Sproule Interests are Polymetals largest shareholders, collectively holding a relevant
interest in approximately 49.5% of the issued capital of Polymetals. On successful
implementation of the Scheme, the Company will issue 227,031,189 New SXG Shares to
the Sproule Interests, representing approximately 26.17% of the expanded issued capital of
the Company.
If Resolution 1 is passed the Sproule Interests will, by the issue to them of New SXG
Shares as the Scheme Consideration which they are entitled to receive as Polymetals
Shareholders and on the same basis and terms as all other Polymetals Shareholders, be
deemed to have “acquired” (within the meaning of the Corporations Act) a “relevant
interest” in more than 20% of the total SXG Shares on issue.
It is important to note that the Sproule Interests will receive the same consideration under
the Merger as all other Polymetals Shareholders.
Implementation of the Merger is dependent on SXG Shareholders approving Resolution 1.
If Resolution 1 is not passed, a condition of the Scheme will not be satisfied and the Merger
as proposed will not occur.
The Directors consider the Merger to be in the best interests of the Company and
unanimously recommend you vote in favour of Resolution 1.
Further information about the Sproule Interests is set out in Section 1.14.
Mr David Sproule is the non-executive Chairman of Polymetals and if the Merger is
implemented it is proposed that he would be appointed as a non-executive Director of the
Company. Further details of Mr Sproule’s experience and background are set out in
Section 3 of Schedule 1.
As at the date of the Notice of Meeting, the Sproule Interests do not hold any SXG Shares
and, in any event, the Sproule Interests are not entitled to vote on Resolution 1.
As a matter of compliance with the Corporations Act and the Listing Rules, the Merger itself
is not subject to any particular Listing Rules requirements.
1.7 Independent Expert’s Report
To ensure SXG Shareholders are provided with all material information about Resolution 1
relevant to their decision and to satisfy regulatory requirements, the Directors
commissioned BDO Corporate Finance (WA) Pty Ltd to provide an independent expert’s
report on the proposed issue of New SXG Shares to the Sproule Interests under the terms
of the Merger, particularly whether the issue of New SXG Shares to the Sproule Interests is
fair and reasonable to the SXG Shareholders who are not associated with the Sproule
Interests.
The Independent Expert’s Report contains an assessment of the advantages and
disadvantages of the issue of SXG Shares to the Sproule Interests upon implementation of
the Scheme (Transaction) if Resolution 1 is approved.
The Independent Expert has concluded that the Transaction is fair and reasonable to
Non-associated Shareholders.
The Independent Expert's Report is enclosed with this Notice of Meeting and it is
recommended that SXG Shareholders read the Independent Expert’s Report in full.
1.8 Other alternatives and consequences if Resolution 1 is not approved
In the current challenging equity market environment for junior and mid-tier resource
companies, the Board believes that the Merged Group will be able to achieve critical mass

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in terms of assets and market recognition that would not otherwise be achievable. The
Merged Group will have flexibility in respect of the combined asset base.
Your Board strongly believes that the Merger is in the best interests of SXG Shareholders,
particularly given current market conditions, which make it very difficult for junior resource
companies to raise capital and to progress their assets through exploration and project
development.
Should the Merger not proceed, the Directors are of the view that SXG’s ability as a
stand-alone company to progress its exploration projects and to develop its flagship asset,
the Marda Gold Project, would be negatively impacted.
1.9 Directors’ recommendation
The Directors unanimously recommend that SXG Shareholders vote in favour of Resolution
1 to enable the Merger to be implemented.
The Directors consider that the Merger is in the best interests of the Company in the
absence of a Superior Proposal.
The Directors’ reasons for their recommendation are outlined in this Explanatory
Memorandum, particularly at Section 1.10.
Based on the information available, including that contained in this Explanatory
Memorandum and the Independent Expert's Report, the Directors consider the advantages
of the Merger and Shareholder approval of Resolution 1 outweigh any perceived
disadvantages. (Refer to Sections 1.10 and 1.11 for further information on the perceived
advantages and possible disadvantages.)
In the absence of a Superior Proposal, each Director intends to vote all SXG Shares held or
controlled by that Director in favour of Resolution 1.
1.10 Advantages of the Merger and reasons to vote for Resolution 1
Shareholder approval of Resolution 1 is necessary for the issue of New SXG Shares to the
Sproule Interests under the Merger and is therefore necessary to enable the Merger to
proceed.
The Directors consider that there are several reasons why SXG Shareholders should vote
in favour of Resolution 1.
(a)
The Merger provides an opportunity to create a diversified Australian gold and base
metals company with potential annual production of 69,000 ounces of gold
As shareholders of the Merged Group, SXG Shareholders are expected to benefit
from being part of a larger, more diversified Australian gold and base metals
company with exploration tenements of approximately 4,930 km 2 that contain a
JORC compliant Mineral Resource totalling 1.63 million ounces of gold and JORC
compliant Ore Reserves totalling 254,400 ounces of gold.
The Merged Group will have a diversified risk profile spread across assets in two
States with projects spanning development, scoping study and exploration stages.
The Merged Group’s strong emerging pipeline of near-term production assets
include the Marda Project in Western Australia and the Mt Boppy Project in New
South Wales, which combined have the potential to support a near-term production
profile of up to 69,000 ounces of gold per annum at a competitive forecast cash
cost.
(b)
The combination of the Company and Polymetals broadens the capital base and
strengthens the balance sheet which improves funding capability

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The Merged Group will have increased scale and liquidity as an Australian gold and
base metals company, a strengthened capital base and improved ability to access
the capital markets. It will also have greater visibility and investor relevance, which
when combined with a strong balance sheet including approximately $13 million in
cash, enhances the ability to accelerate the development of projects within its
growth pipeline.
With a combined market capitalisation of approximately $26.5 million and existing
cash reserves, the Merged Group is better placed to fund the development of the
Marda Project. SXG Shareholders will benefit from the anticipated near-term
development of the Marda Project and enhanced potential to fund future project
development of the Mt Boppy Project than would be the case if the Company
remained a stand-alone company.
(c)
The Merged Group will own a significant exploration portfolio with 4,930 km2 of
landholdings in highly prospective locations across Australia
The Merged Group has exploration upside within an extensive portfolio covering
4,930 km 2 within highly prospective mineral provinces. The Merged Group will hold
4,720 km 2 of tenements in Western Australia in the Southern Cross and Sandstone
Greenstone Belts (which host the Marda and Sandstone Projects) and the Pilbara
region (which hosts the Turner River Projects) and 210km 2 in the Lachlan Fold Belt
in New South Wales (which hosts the Mt Boppy Project).
(d)
The Merger will generate synergies resulting from the consolidation of corporate
overheads and exploration activities
The Directors believe the Merger will provide SXG Shareholders with access to
synergies as a result of consolidating the corporate and administrative overheads of
both companies as well as the streamlining of exploration activities, particularly in
Western Australia.
(e)
The Merger combines capable and experienced boards and management with a
proven track record in driving development assets through to production
The Merger will combine the expertise and technical, industry, commercial,
development and operating skills of both sets of boards and management, to
successfully deliver the Merged Group’s plan of bringing the Marda and Mt Boppy
Projects into production. There will be equal Merged Group board representation
from the Company and Polymetals, with the Company’s current chairman,
Samantha Tough, as chairman of the Merged Group.
Both the Company and Polymetals have management with extensive mining,
development and exploration experience with a successful track record of driving
development assets through to production. Senior management will benefit from the
collective skills and experience of the Merged Group workforce, enabling the
deployment of the most qualified personnel and operational and technical skills
across the two companies’ portfolio of assets.
1.11 Possible reasons to vote against Resolution 1 and potential disadvantages of the
issue of New SXG Shares to the Sproule Interests
The Directors are of the view that the Merger is in the best interests of the Company and
therefore unanimously recommend that SXG Shareholders vote in favour of Resolution 1.
To ensure SXG Shareholders are appropriately informed on the decision they are required
to make, outlined below are some matters which might constitute reasons to vote against
Resolution 1.

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(a)
You may not agree with the recommendations of the Directors
In concluding that the issue of New SXG Shares to the Sproule Interests is in the
best interests of the Company, the Directors are making judgements based on
future trading conditions and events which are not predictable with certainty and
which may prove to be inaccurate (either positively or negatively). SXG
Shareholders may hold a different view from, and are not obliged to follow the
recommendation of, the Directors.
(b)
You may not agree with the conclusions of the Independent Expert
In concluding that the issue of New SXG Shares to the Sproule Interests is fair and
reasonable to Non-associated Shareholders, the Independent Expert is making
judgements based on future trading conditions and events which are not predictable
with certainty and which may prove to be inaccurate (either positively or negatively).
SXG Shareholders may hold a different view from, and may not agree with, the
Independent Expert’s conclusions.
(c)
There will be a change in the risk profile of, and risks of investment in, SXG
If the Scheme completes, Polymetals will become a wholly owned subsidiary of
SXG. As a result, SXG Shareholders will be exposed to:
(i)
(ii)
new risks relating to Polymetals (including, but not limited to, risks specific to
Polymetals set out in Section 1.15; and
certain additional risks related to the integration of Polymetals and its
operations with the Company and its operations (which are also set out in
Section 1.15).
The Company and Polymetals are both early stage precious and base metals
explorers and developers, and the risks to Polymetals are substantially similar to the
risks to the Company as a stand-alone entity.
Further details of the risks which are applicable to both businesses and which the
Merged Group will be subject to following implementation of the Scheme are set out
in Section 1.15.
(d)
There are risks in integrating the respective businesses of the Company and
Polymetals
The long-term success of the Merged Group will depend, amongst other things, on
the success of management in integrating the respective businesses and the
strength of management of the Company and Polymetals. There is no guarantee
that the businesses of the Company and Polymetals will be able to be integrated
successfully, or synergies realised.
There is a risk that the integration of the businesses of the Company and Polymetals
may take longer than expected and that anticipated synergies, efficiencies and
benefits of that integration may be less than estimated. These risks include possible
differences in the management culture of the two groups, inability to achieve
synergy benefits and cost savings, and the potential loss of key personnel.
Please refer to Section 1.15 for further information about risks.

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(e)
You may prefer the Company to be exposed to the opportunity for increased value
by remaining as an independent company
You may believe that the Company will deliver greater returns to SXG Shareholders
over the long term by remaining an independent company.
(f)
There will be a new substantial SXG Shareholder
As a consequence of the issue of the Scheme Consideration on successful
implementation of the Merger, the Sproule Interests and each of its members will
have voting power in the Company of approximately 26.17%. However, the
Directors consider that the Merger brings into the Company a major shareholder
aligned with and supportive of the Company’s strategic direction.
1.12 Information about Polymetals
Polymetals is an ASX-listed Australian mining company, with a 26 year history of
developing precious and base metal producing assets. Polymetals listed on the ASX in
April 2011.
Polymetals’ existing assets include the Mt Boppy Gold Project in New South Wales and
Turner River Project in Western Australia.
Capital structure and ownership of Polymetals
As at the Scheme Implementation Date, it is expected Polymetals will have 41,685,271
Polymetals Shares on issue.
As at the Scheme Implementation Date, it is expected that Polymetals will have the
following significant shareholders (being the top 5 shareholdings):
Name
Number of Polymetals
Shares held
% held of issued
ordinary capital
Meadowhead Investments, an
Associate of Mr David Sproule, the
Chairman of Polymetals
Mrs Jane Christine Sproule, the
spouse of Mr David Sproule
12,143,564 1 29.13
8,390,635 20.13
Richlark Pty Ltd 2 4,231,189 11.06
Washington H Soul Pattinson and
Company Limited
2,000,000 4.80
Mrs Elaine Clare Lawry 1,637,226 3.93
Notes:
1. This number represents Meadowhead Investments’ holding of Polymetals Shares inclusive of the Indemnity
Consideration.
2. Richlark Pty Ltd is trustee for various entities associated with relatives of David Sproule, who collectively
hold 11.77% of Polymetals’ issued capital. Those relatives of David Sproule are not Associates of
David Sproule for the purposes of the Corporations Act.
Further information about Polymetals
Further information about Polymetals is contained in:
(a) the Independent Expert’s Report at Annexure A;

- 15 -
(b)
the Technical Specialist’s Report at Annexure B; and
The Annexures include information about:
(a)
(b)
Polymetals’ projects, mineral resources and ore reserves; and
Polymetals assets, liabilities and financial position.
1.13 Litigation
Polymetals is currently subject to litigation in the Supreme Court of New South Wales
brought by Peak Gold Mines Pty Ltd (Peak) on 6 July 2009 seeking damages of
$5,240,984. Peak alleges Polymetals made a number of misleading and deceptive
statements pursuant to section 72 of the Fair Trading Act 1987 (NSW) in relation to a joint
venture agreement between Polymetals and Peak dated 16 August 2006 (Peak JVA). The
Peak JVA concerns the development of the Mt Boppy Project held by Polymetals’
wholly-owned subsidiary, Polymetals (Mt Boppy) Pty Ltd.
The damages being sought by Peak are for:
• monies paid to Polymetals;
• GST on monies paid to Polymetals; and
• monies expended on salaries to staff engaged to further the site and costs associated
with improving the mine site,
all in relation to the Peak JVA.
Polymetals denies that there were any misrepresentations and has filed a counterclaim
against Peak. Under the counterclaim, Polymetals is seeking damages of $2,600,000 plus
interest for Peak’s breach of the Peak JVA for Peak’s failure to purchase gold products from
the Mt Boppy Project during the term of the Peak JVA.
As the Peak Litigation was brought against Polymetals prior to its listing on the ASX in 2011
(IPO), the pre-IPO Polymetals Shareholders created the PMG Unit Trust and collectively
contributed $4 million to the PMG Unit Trust. The PMG Unit Trust granted Polymetals an
indemnity against the Peak Litigation (and other litigation that has subsequently been
settled) (limited to the cash in the PMG Unit Trust) to the extent that the Peak Litigation was
determined or settled unfavourably against Polymetals (PMG Indemnity).
As at 23 May 2013, the PMG Unit Trust balance was $3.7 million. The PMG Unit Trust
meets the costs of the Peak Litigation under the terms of the PMG Indemnity.
In order to mitigate the potential risk of the Merged Group to the Peak Litigation,
Polymetals and SXG have agreed, as a Scheme Condition, that Meadowhead
Investments will grant a full indemnity in respect of the Peak Litigation.
Meadowhead Investments has agreed to grant the Meadowhead Indemnity in
exchange for the Indemnity Consideration.
The Meadowhead Indemnity is subordinate to the PMG Indemnity.
Following the implementation of the Scheme, Meadowhead Investments’ major asset will
be its SXG Shares and its ability to meet the Meadowhead Indemnity will be dependent
upon the value of those SXG Shares. To the extent that there is insufficient value in the
SXG Shares held by Meadowhead Investments to fulfil Meadowhead Investments’
obligations under the Meadowhead Indemnity, unless Meadowhead has access to other
assets at the relevant time, SXG will bear that residual exposure.

- 16 -
The Meadowhead Indemnity is not secured against any assets of Meadowhead
Investments.
The provision of the Meadowhead Indemnity is a Scheme Condition under the Scheme
Implementation Agreement.
The Indemnity Consideration is:
(a)
(b)
the issue of 1,939,058 Polymetals Shares; and
$300,000 cash,
payable to Meadowhead on the Effective Date, or in any event within one month from the
date of the general meeting of Polymetals Shareholders to be held on 31 July 2013.
As Polymetals and Meadowhead Investments are related parties because of their common
director, Mr David Sproule, the issue of the Indemnity Consideration to Meadowhead
Investments requires the approval of Polymetals Shareholders.
1.14 Regulatory information relevant to Resolution 1
Consultation with ASIC
In accordance with ASIC Regulatory Guide 60, the Company and Polymetals have
consulted ASIC regarding the Scheme (given the Sproule Interests will obtain voting power
in the Company of more than 20% post-Merger) to consider whether the issue of New SXG
Shares to the Sproule Interests as Scheme Consideration might result in a change in
control of the Company, or have an effect on control of the Company, and therefore require
SXG Shareholder approval.
In light of that consultation, the Company has determined that SXG Shareholders should be
given the opportunity to consider the effect of the issue to the Sproule Interests of a
substantial interest in the Company, if the Scheme is implemented.
Listing Rules requirements
Although the Company proposes to issue in excess of 15% of its issued share capital,
Listing Rule 7.1 does not apply to the issue of New SXG Shares under Resolution 1 on the
basis that:
(a)
(b)
an issue of securities approved for the purposes of Item 7 of section 611 of the
Corporations Act is an exception to this rule (Exception 16, Listing Rule 7.2); and
an issue of securities approved for the purposes of Item 17 of section 611 of the
Corporations Act (i.e. an issue that results from an arrangement approved by the
Court under Part 5.1 of the Corporations Act) is an exception to this rule (Exception
5, Listing Rule 7.2).
Corporations Act requirements
The following paragraphs set out information required to be provided to SXG Shareholders
under item 7 of section 611 of the Corporations Act and ASIC Regulatory Guide 74.
SXG Shareholders are also referred to the Independent Expert’s Report accompanying this
Explanatory Memorandum.

- 17 -
(a)
Identity of the person receiving the New SXG Shares to be issued, its Associates
and any other persons obtaining a relevant interest
The New SXG Shares issued as a result of the payment of the Scheme
Consideration will be issued to the Sproule Interests, being:
(i)
(ii)
(iii)
Meadowhead Investments – 133,579,204 New SXG Shares;
Jane Christine Sproule – 92,296,985 New SXG Shares;
David & Jane Sproule – 1,155,000 New SXG Shares; and
New SXG Shares will also be issued to other Polymetals Shareholders which are
entities associated with relatives of David Sproule and Jane Sproule, but are not
Associates of the Sproule Interests. Those entities and their post-Merger interests
in SXG are as follows:
(iv)
(v)
(vi)
(vii)
Richlark Pty Ltd (as trustee for HL Sproule Family Trust) – 21,484,749 New
SXG Shares;
Richlark Pty Ltd (as trustee for RJ Sproule Family Trust) – 12,529,165 New
SXG Shares;
Richlark Pty Ltd (as trustee for Akers Family Trust) – 12,529,165 New SXG
Shares; and
H L & G E Sproule Pty Ltd – 3,006,091 New
SXG Shares.
(b)
Increase in the Sproule Interests’ voting power in the Company resulting from the
issue of New SXG Shares
As at the date of this Notice, the Sproule Interests do not have a relevant interest in
any SXG Shares and the current voting power in the Company of the Sproule
Interests is nil.
As a consequence of the issue of the Scheme Consideration on successful
implementation of the Merger, the Sproule Interests and each of its members will
have voting power in the Company of approximately 26.17%.
(c)
Reasons for the proposed issue of New SXG Shares
The Board considers that, for the reasons set out in paragraphs 1.9 and 1.10 of this
Explanatory Memorandum, it is in the interests of SXG Shareholders to undertake
the Merger. To do so, the Company proposes to issue the New SXG Shares to the
Sproule Interests in accordance with its obligations to pay the Scheme
Consideration to Polymetals Shareholders on the Scheme Implementation Date.
(d)
Timing of the issue of New SXG Shares
The terms of the Scheme require that New SXG Shares will be issued within
21 days of Court approval being obtained, being the Scheme Implementation Date.
(e)
Material terms of the issue of New SXG Shares to the Sproule Interests
Subject to SXG Shareholder approval of Resolution 1 and implementation of the
Scheme, the Company will issue 227,031,189 New SXG Shares to the Sproule
Interests on the basis of 11 New SXG Shares for every 1 Polymetals Share held by
the Sproule Interests in accordance with the terms of the Scheme.

- 18 -
Implementation of the Scheme is dependent on a number of conditions, including:
(i)
(ii)
SXG Shareholders approving Resolution 1 contained in the Notice;
Polymetals obtaining shareholder approval for:
A. the cancellation of the Loan Funded Shares; and
B. the issue of the Indemnity Consideration; and
(iii)
the satisfaction or waiver of a number of conditions precedent comprising the
Scheme Conditions.
(f)
Sproule Interests’ intentions regarding the future of the Company
The Sproule Interests have advised the Board that they have no intention of:
(i)
(ii)
(iii)
(iv)
(v)
requesting the Merged Group to change its strategic direction or operational
priorities, or to change its business;
seeking to inject capital into the entity;
seeking to change the Merged Group’s proposed employment arrangements;
seeking to acquire any of the Merged Group’s assets or otherwise redeploy
the assets of the Merged Group; or
using its increased voting power to attempt to secure additional Board
positions or vary the current balance of nominee and independent directors.
(g)
Sproule Interests’ intentions regarding the financial or dividend distribution policies
of the Company
The Sproule Interests have advised the Board that they have no intention of seeking
to change the financial or dividend distribution policies of the Company.
(h)
Appointment of Mr David Sproule as a Director
(i)
(ii)
(iii)
(iv)
If SXG Shareholders approve Resolution 1, and the Scheme is approved by
Polymetals Shareholders and the Court, the Company proposes to appoint
Mr David Sproule as a Director.
Mr Sproule founded Polymetals and has over twenty five years of experience
in the mining industry encompassing project generation and assessment,
development, operational management and corporate experience. Further
details of Mr Sproule’s background and experience is set out in Section 3.
Mr Sproule is a director of Meadowhead Investments, Richlark Pty Ltd
(Richlark) and H L & G E Sproule Pty Ltd. Jane Christine Sproule is Mr
Sproule’s wife. Richlark is the trustee for various trusts of which related
parties of Mr Sproule are beneficiaries. Mr Sproule does not have a relevant
interest in any Shares held by Richlark as trustee.
Mr Sproule has indicated that he understands and agrees with the Sproule
Interests’ intentions regarding the future of the Company as set out in
Section 1.14(f) above.

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(i)
Other matters
The Directors further note that implementation of the Scheme is conditional on SXG
Shareholder approval of Resolution 1.
1.15 Key risks of the Merged Group, if the Scheme is implemented
If the Scheme is implemented, Polymetals will become a wholly-owned subsidiary of SXG
and SXG Shareholders will be exposed to the risks associated with the Company acquiring
ownership and control of Polymetals and Polymetals’ assets and operations as a result of
the Merger.
Risks that may impact the financial and operational performance of the Merged Group are
outlined below.
These risks:
(a)
(b)
are not, and should not be relied on as, or considered to be, an exhaustive list of the
risks that SXG Shareholders may face or be exposed to if the Merger is successful;
and
are general in nature and regard has not been had to the individual circumstances,
including the investment objective, financial situation, tax position or particular needs
of SXG Shareholders.
Additional risks and uncertainties that SXG is currently unaware of, or that SXG currently
considers to be immaterial, may also become important factors that can adversely affect the
Merged Group’s operating and financial performance in the future.
(a)
Sale of SXG Shares by Polymetals Shareholders issued as Scheme Consideration
Polymetals Shareholders will receive a specified number of New SXG Shares based
on their holdings in Polymetals as at the Record Date. Some of the Polymetals
Shareholders may not wish to hold their allotment of New SXG Shares and may
choose to sell them on ASX.
The SXG share price on ASX may be adversely affected in the short term if a
significant number of Polymetals Shareholders sell their allotment of New SXG
Shares soon after implementation of the Scheme.
(b)
Integration risks and realisation of anticipated synergies
The long-term success of the Merged Group will depend, amongst other things, on
the success of management in integrating the respective businesses and the
strength of management of the Merged Group. The Merger between SXG and
Polymetals to form the Merged Group involves the integration of businesses and
operations that have previously operated as independent entities. There is no
guarantee that the businesses of the Merged Group will be able to be integrated
successfully, without unexpected delays or incurring additional costs.
Further, as discussed in Section 1.11, while SXG and Polymetals expect that value
can be added to the Merged Group through the realisation of synergies, there is a
risk that implementation of the Merger may not result in realisation of the synergies
expected due to:
(i)
unexpected delays, challenges, liabilities and costs in relation, but not
limited, to integrating operating and management systems; and

- 20 -
(ii)
possible differences in the management culture of the two groups leading to
the loss of key employees of SXG and Polymetals.
If the integration is not achieved in an orderly fashion and within a reasonable time
period, the full benefits, cost savings and other expected synergies, efficiencies and
benefits may be achieved only in part, or not at all. This could adversely impact the
Merged Group’s financial performance and position, and the future prospects of the
Merged Group.
This risk of integration is mitigated due to the scale of each respective organisation.
Each of SXG’s three non-executive directors is proposed to remain on the Board
post-Merger. SXG’s personnel comprises only five full time employees, who it is
proposed will remain with the Company.
(c)
Exposure to Polymetals assets
SXG Shareholders will become exposed to Polymetals’ existing asset portfolio
which carries specific risks which may differ to SXG’s existing assets. Polymetals’
portfolio is comprised of development and exploration stage assets, including the
development stage Mt Boppy Project. The development of the Mt Boppy Project
has additional inherent risks which SXG Shareholders will become exposed to if the
Scheme is implemented. However, these risks are largely the same as those that
SXG Shareholders are currently facing with the development of the Marda Project
and Sandstone Project, and as such, the impact of these risks will likely be reduced
as a result of more diversified operations.
(d)
Accounting risk
In accounting for the Merger, the Merged Group will need to perform a fair value
assessment of all of Polymetals’ assets, liabilities and contingent liabilities, which
will include the identification and valuation of mineral rights and intangible assets.
As a result of this fair value assessment, the Merged Group’s depreciation and
amortisation charges may be greater than the depreciation and amortisation
charges of SXG and Polymetals as separate businesses and to that extent may
reduce the future earnings of the Merged Group.
To the extent goodwill is recognised in respect of accounting for the Merger, it will
be subject to annual impairment testing. In the event that the recoverable amount of
goodwill is impaired, this will result in a charge against future earnings.
The Merged Group will be subject to the usual business risk that there may be
changes in accounting policies which may have an adverse impact on the Merged
Group.
The impact of changes to Australian International Financial Reporting Standards
could adversely affect the Merged Group’s reported earnings performance in any
given period and its financial position from time to time.
2. Resolution 2 – Ratification of issue of Placement Shares
Introduction
As announced to ASX on 25 October 2012, the Company has raised $1.5 million through a
share placement to long term institutional investors and cornerstone investors (Placement).
Of the 35,555,556 SXG Shares issued pursuant to the Placement, 34,231,787 SXG Shares
were issued under the shortfall arrangements arising from the Company’s rights issue in
September 2012. The balance of the Placement, being 1,323,769 SXG Shares
(Placement Shares), were issued under the Company’s “15% capacity” pursuant to Listing
Rule 7.1.

- 21 -
The purpose of Resolution 2 is to seek SXG Shareholder ratification for the issue of the
Placement Shares.
Listing Rules information requirements
Listing Rule 7.1 provides that prior approval of shareholders is required for an issue of
securities if the securities will, when aggregated with the securities issued by a company
during the previous 12 months, exceed 15% of the number of securities on issue at the
commencement of that 12 month period.
Listing Rule 7.4 states that an issue by a company of securities made without approval
under Listing Rule 7.1 is treated as having been made with approval for the purpose of
Listing Rule 7.1 if the issue did not breach Listing Rule 7.1 and the company’s members
subsequently approve it.
Under Resolution 2, the Company seeks Shareholder approval for, and ratification of, the
issue of the Placement Shares so as to restore the Company’s capacity under Listing Rule
7.1 to issue further securities representing up to 15% of the Company’s issued capital in the
next 12 months.
For the purposes of the information requirements of Listing Rule 7.5, the following matters
are noted:
(a) the Company issued 1,323,769 Placement Shares on 24 October 2012;
(b)
(c)
(d)
the Placement Shares were issued at an issue price of A$0.045 per Placement
Share;
all Placement Shares issued rank equally with all other SXG Shares on issue;
the Placement Shares were issued and allotted to long term institutional investors
and cornerstone investors;
(e) the issue of the Placement Shares raised $59,569.60;
(f)
(g)
none of the persons to whom Placement Shares have been issued were, at the time
of issue of the Placement Shares, a Director, an Associate of a Director or a Related
Party of the Company; and
an appropriate voting exclusion statement is included in the Notice.
Directors’ recommendation
The Directors unanimously recommend that SXG Shareholders vote in favour of
Resolution 2.
3. Resolution 3 – Ratification of issue of SXG Options to RMB
Introduction
As announced to ASX on 27 March 2013, the Company issued 34,255,319 SXG Options as
part of the consideration for the acquisition of the Sandstone project.
The purpose of Resolution 3 is to seek SXG Shareholder ratification for the issue of the
SXG Options.

Listing Rules information requirements
- 22 -
Listing Rule 7.1 provides that prior approval of shareholders is required for an issue of
securities if the securities will, when aggregated with the securities issued by a company
during the previous 12 months, exceed 15% of the number of securities on issue at the
commencement of that 12 month period.
Listing Rule 7.4 states that an issue by a company of securities made without approval
under Listing Rule 7.1 is treated as having been made with approval for the purpose of
Listing Rule 7.1 if the issue did not breach Listing Rule 7.1 and the company’s members
subsequently approve it.
Under Resolution 3, the Company seeks Shareholder approval for, and ratification of, the
issue of the Placement Shares so as to restore the Company’s capacity under Listing Rule
7.1 to issue further securities representing up to 15% of the Company’s issued capital in the
next 12 months.
For the purposes of the information requirements of Listing Rule 7.5, the following matters
are noted:
(a) the Company issued 34,255,319 SXG Options on 27 March 2013;
(b)
(c)
(d)
(e)
(f)
(g)
the SXG Options were issued as part consideration for a facility agreement entered
into with RMB Australia Holdings Limited for the purpose of funding the acquisition
of the Sandstone project;
the full terms and conditions of the SXG Options are set out in Schedule 2 to this
Explanatory Statement;
the SXG Options were issued to RMB;
the placement of the SXG Options did not raise any funds, however a total of
A$1,610,000 will be raised if all SXG Options are exercised at A$0.047 each;
none of the persons to whom SXG Options have been issued were, at the time of
issue of the SXG Options, a Director, an Associate of a Director or a Related Party
of the Company; and
an appropriate voting exclusion statement is included in the Notice.
Directors’ recommendation
The Directors unanimously recommend that SXG Shareholders vote in favour of
Resolution 3.

- 23 -
Schedule 1 – Information about the Merged Group
1. Proposed activities and strategic direction of the Merged Group
The Merged Group will own 100% of the Marda Gold Project and the Mt Boppy Gold
Project, and have a significant portfolio of exploration tenements in Australia. If the Merger
proceeds, the primary intention of the Merged Group is to progress regulatory approvals
and financing for the development of the Marda Gold Project.
It is anticipated that these approvals will be gained in the third quarter of 2013, with project
construction activity to commence immediately thereafter. Production from the Marda Gold
Project is expected to commence in the second half of 2014.
The Mt Boppy Project will be prioritised for development as sufficient cash reserves
become available and in consideration of other opportunities for gold or base metals
production within the Merged Group.
Decisions relating to these activities will be made by the Board in light of material
information and circumstances available at the relevant time. As such these are current
intentions only and may change as new information arises or circumstances dictate.
2. Mineral Resources and Ore Reserves of the Merged Group
The tables below display the Mineral Resources and Ore Reserves of the Merged Group.
Combined SXG and Polymetals JORC Measured, Indicated and Inferred Mineral Resource Statement
Measured Indicated Inferred Total Resources
kt
g/t
Au
koz
kt
g/t
Au
koz
kt
g/t
Au
koz
kt
g/t
Au
koz
Canbelego (1) 39 6.4 8 646 4.0 84 82 3.9 10 766 4.1 102
Turner River Gold
2) 2,669 1.8 157 1,145 1.3 47 2,936 1.5 141 6,750 1.6 345
JV (Earning In)
Combined
Polymetals
2,707 1.9 165 1,791 2.28 131 3,018 1.6 151 7,516 1.9 448
Project Total (3)
Marda (4) 2,796 2.3 204 2,640 1.8 155 3,052 1.9 188 8,487 2.0 546
Sandstone (4) 1,932 2.4 146 12,586 1.4 574 14,518 1.5 720
Combined SXG
Total
2,796 2.3 204 4,572 2.1 301 15,638 1.5 762 23,005 1.7 1,266
Polymetals / SXG
(5) 5,503 2.1 368 6,362 2.1 433 18,655 1.5 914 30,521 1.8 1,714
Total
Polymetals Share
(6) 4,836 2.1 329 6,076 2.2 421 17,921 1.5 878 28,833 1.8 1,627
/ SXG Total
(1) Mt Boppy; 2.5g/t cut-off; Boppy Sth: 1.0g/t cut-off.
(2) 100% Project Total - Polymetals has a 75% interest in the Turner River Gold Project.
(3) Total includes 100% of Turner River Resources of which Polymetals has a 75% interest.

- 24 -
(4) Marda and Sandstone; 1.0 g/t Au cut-off grade.
(5) Figures may not add due to rounding. Includes 100% of Turner River JV Resources.
(6) Figures may not add due to rounding. Includes 75% of Turner River JV Resources.
Turner River Base Metals Project JV JORC Resource Summary (1.0%Zn cut-off grade) – Polymetals Earning
75%
Deposit
Resource
Category
kt
Zinc
Zn%
Silver
Ag g/t
Lead
Pb %
Gold
Au g/t
Discovery Inferred 1,116 2.6 94 1.0 0.9
Orchard Tank Inferred 1,492 2.7 84 1.1 0.6
Total (1) Inferred 2,608 2.7 89 1.1 0.7
(1) Total includes 100% of Turner River Project Resources.
Combined SXG and Polymetals JORC Proved and Probable Ore Reserve Statement
Proved Probable Total
kt
Au
g/t
oz
kt
Au
g/t
oz
kt
Au
g/t
oz
Marda(1) 1,937 2.4 149,200 340 2.7 29,100 2,277 2.4 178,500
Mt Boppy 42 5.6 7,636 507 4.2 68,312 549 4.3 75,945
Polymetals /
SXG Total (1) 1,979 2.5 156,836 847 3.8 97,412 2,826 2.8 254,445
(1) Note: Rounding conforming to JORC to appropriate levels of precision may cause minor computational errors.
3. Merged Group Board
The Merged Group will comprise six non-executive directors, with three from each of
Polymetals and SXG.
Director
Samantha Tough
(Non-Executive
Chairman)
Biography
Samantha Tough is currently a professional company director with over 12 years’
experience on a number of public and private boards. She is presently Chairman of
Southern Cross Goldfields Ltd; the Chairman of Structerre Pty Ltd (largest
engineering service company in WA in residential and small commercial); the
Chairman of RemCo Ltd (overseas gas retail networks in WA); the Chairman of
Aerison Pty Ltd (supplier of products and services to the mining, mineral
processing, oil and natural gas production and manufacturing industries) and a
Non-Executive Director of Strike Resources Ltd. Samantha’s previous board
positions include Non-Executive Director of Murchison Metals Ltd; Executive
Chairman of Advanced Well Technologies Pty Ltd (engineering services to oil and
gas and CSM); member of the Curtin University Investment Committee and various
subsidiary boards of Woodside Energy Ltd.
In addition to her board experience, Samantha has senior executive management
experience in oil and gas including General Manager, North West Shelf for

- 25 -
Woodside Energy Ltd and Director of Strategy for Hardman Resources Ltd.
Samantha has recently worked with the Commonwealth Bank as Senior Advisor to
the Natural Resources Group (oil, gas, metals and mining) and was Director of the
Pilbara Power Project on behalf of the Premier’s Office working with industry and
government to find a workable solution to the power needs of the Pilbara region.
Samantha also worked in the venture capital industry for a number of years
focussed on young companies and assisting them through various phases of
growth.
Graham Brock
(Non-Executive
Director)
Graham Brock is a metallurgist and has worked in the minerals industry for over 40
years on a diverse mix of commodities including gold, nickel, tin, copper, zinc,
silver, magnetite and graphite. In the last 25 years Graham has worked in the field
of project development from conceptual studies through to construction and has
successfully evaluated, built and commissioned several gold, nickel and tin projects
including Wheal Jane tin, Mt Keith nickel, Black Swan nickel, Golden Crown gold,
Waihi gold, Wirralie gold, Salsigne gold, Lake Johnson nickel and Westonia gold.
Graham graduated from the Royal School of Mines (RSM), London in 1968 with a
BSc Eng and Associateship of RSM. Graham is a Fellow of the AusIMM and has
worked in Australia, UK, Fiji and USA. He has held positions as General Manager
Projects for LionOre; Group Metallurgist and Director Technology for MPI Mines
and Group Metallurgist for Australian Consolidated Minerals.
Jon Parker (Non-
Executive Director)
Jon Parker has had 30 years in commercial, development and strategy roles,
preceded by 10 years in technical roles.
Jon held executive roles within Rio Tinto for 26 years in management and
executive roles in iron ore, energy, kaolin and aluminium. This was followed by 4.5
years as Managing Director with Felix Resources Limited and, more recently, as
Managing Director of Norton Gold Fields Limited for 2 years until January 2010.
Jon has a degree in Physical Chemistry (Hons) (Sydney) and a Graduate Diploma
Business Administration (Curtin) complemented by management programs in
Australia (Mt Eliza) and the US (Columbia).
John Rowe (Non-
Executive Director)
John Rowe holds a BSc (Hons) in Mining Geology from the Royal School of Mines,
Imperial College, London University and has had a distinguished career over a 40
year period in the mining industry.
John is the principal of John Rowe and Associates which provides geological and
business development advice to the mining industry and is a non-executive
Director of Panoramic Resources Ltd and Evolution Mining Limited. During his
period as Chairman of Catalpa Resources (former name for Evolution Mining) in
2008/2009, Catalpa finalised the bankable feasibility study and completed debt and
equity funding for the 100,000oz/year Edna May Gold Project at Westonia. Prior to
establishing John Rowe and Associates in 2006, John spent 13 years with MPI
Mines / Lion Ore Australia in various group executive roles including Executive
General Manager Mineral Inventory and Group Executive – Acquisitions &
Resource Management. John’s role at MPI Mines included responsibility for all
geological activities including exploration, mine geology and project evaluation.
This included involvement in the development and production of the high grade
Silver Swan nickel sulphide project as well as the 100,000oz/year Stawell Gold
Mine in Victoria. He had a short period with R&I Gold Bank in the technical division
before joining MPI Mines in 1993.

- 26 -
David Sproule (Non-
Executive Director)
David Sproule founded Polymetals and has over twenty five years of experience in
the mining industry encompassing project generation and assessment,
development, operational management and corporate experience.
In 1986, during his final year at the Western Australian School of Mines, David
registered Meerschaum Gold which subsequently became Polymetals. Whilst
overseas as a recipient of an inaugural bursary offered to two Australian graduates
by the West German company Metallgesellschaft AG, David consolidated his view
that there was enormous opportunity within the Australian resources industry for a
young entrepreneur. Returning to Australia, David spent his early years contracting
his services on process plant construction moving to minority equity/ joint venture
interests and management of various gold projects within the Eastern Goldfields of
Western Australia.
Following several years contracting in Tanzania, David raised $600,000 from family
and friends to purchase the Mt Boppy plant and tenements, the platform used to
develop Polymetals’ first wholly-owned operation re-treating a silver/gold tailing
transported to the site. A Metallurgical Engineer, David was Managing Director
until December 2007 when he was appointed Chairman. David is the principal
shareholder of Polymetals Mining Limited.
Frank Terranova
(Non-Executive
Director)
Frank Terranova joined Polymetals as Chief Executive Officer in September 2012
and was appointed to the Polymetals Board as Managing Director in February
2013. He is a senior executive with experience across the international resources
sector.
Frank’s most recent position was as Managing Director and CEO with Allied Gold
Mining PLC, where he presided over its successful +$500m M&A transaction with
St Barbara Mines (ASX:SBM). Frank had a major role in the strategic and
operational development of Allied Gold over the past four years.
Frank is a Chartered Accountant with extensive experience in corporate finance
and financial risk management and has held senior positions for various ASX listed
corporations, predominately within the mining, agriculture and manufacturing
sectors.
4. Merged Group senior management
The Merged Group’s will comprise SXG’s Glenn Jardine and Stephen Jones.
Senior management
Glenn Jardine (Chief
Executive Officer)
Biography
Glenn Jardine is a mining engineer with a Bachelor of Engineering (Mining) from
the University of Queensland. Glenn’s senior management experience
commenced as Project Manager and General Manager of the Henty gold mine in
Tasmania for Goldfields Ltd. He joined LionOre Australia from Goldfields in 1998.
While with LionOre Australia his responsibilities included Project Manager of the
Emily Ann and Maggie Hays nickel mines, General Manager – New Business,
Chief Operating Officer and then Managing Director of LionOre Australia in 2006.
During this period LionOre’s production in Australia grew from a zero base to
having 3 nickel production centres (Lake Johnston, Black Swan, Waterloo) and
one gold mine (Thunderbox). Prior to joining SXG, he worked with Apex Minerals
until mid-2009 as a consultant and then Operations Director to successfully recommission
the Wiluna gold mine and plant.
Since joining SXG in 2010, SXG has conducted exploration and corporate
transactions increasing SXG’s resource base from 0.3 to 1.3 million ounces and
has also completed a positive feasibility study into SXG’s greenfields gold projects
at Marda.

- 27 -
Stephen Jones
(Chief Financial
Officer)
Stephen Jones has more than 15 years’ experience in a range of entities with
operations in Australia, the Americas and Africa. Stephen has worked in corporate
administration, finance management and project development roles for companies
involved in exploration, project evaluation and development and operations in a
range of minerals including iron ore, coal, gold and base metals.
5. Intentions in relation to SXG, Polymetals and the Merged Group
If the Merger is implemented:
• SXG will continue as an ASX listed entity;
• Polymetals will become a wholly owned subsidiary of the Company; and
• the board of SXG will be reconstituted so that it comprises the persons as set out in
Section 3.
If the Scheme is implemented, it is intended that:
• Polymetals will apply for removal from the official list of ASX; and
• as Polymetals will be a wholly owned subsidiary of the Company, the board of
Polymetals will be reconstituted so that it comprises persons nominated by the Board.
It is intended that the Merged Group rationalise administrative functions, with the closure
and sale of the Polymetals office in Queensland and relocation of relevant activity and
information to the Company’s Perth office. This will result in some redundancies within the
Polymetals group.
It is not expected that there will be any payment of a dividend by the Merged Group in the
short term. It is the intention of the Merged Group to consider the payment of future
dividends having due regard to the Merged Group’s profits, financial position and future
capital requirements.
6. Capital structure and ownership of the Merged Group
Polymetals Shareholders will receive 11 New SXG Shares for each Polymetals Share they
own as at the Record Date. Based on Polymetals’ current issued share capital, if the
Scheme is implemented, SXG will issue approximately 458,537,981 New SXG Shares to
Polymetals Shareholders.
As a result, the number of SXG Shares on issue will increase from 408,912,834 (being the
number currently on issue) to 867,450,815 on an undiluted basis.
New SXG Shares to be
issued
Cumulative total of SXG
Shares on issue
As at the date of the Scheme
Booklet
To be issued as Scheme
Consideration
Not applicable 408,912,834
458,537,981 867,450,815
If the Scheme is implemented, Polymetals Shareholders will collectively hold approximately
52.9% of the shares in the Merged Group, with SXG Shareholders collectively holding the
remaining 47.1%.

- 28 -
There will be two substantial shareholders in the Merged Group which, together with D & J
Sproule and E Sproule, are the Sproule Interests:
Name
Number of fully paid
ordinary shares held
% held of issued ordinary
capital
Meadowhead Investments 133,579,204 15.40%
Mrs Jane Christine Sproule* 92,296,985 10.64%
*David and Jane Sproule will also hold jointly an additional 1,155,000 SXG Shares,
equating to 0.13% of the issued capital of the Merged Group.
Meadowhead Investments and Jane Sproule are Associates and are related parties of
David Sproule. The holdings set out in the table above do not include the relevant interests
held by relatives of David Sproule who are not Associates of Meadowhead Investments or
Jane Sproule.
7. Pro forma historical financial information
(a)
Historical financial profile of the Merged Group
The Merged Group pro forma historical financial information provided in this
Explanatory Memorandum comprises a pro forma consolidated statement of
financial position as at 31 December 2012 which is based upon:
• the Company’s audited consolidated statement of financial position as at
31 December 2012; and
• the Polymetals audited consolidated statement of financial position as at
31 December 2012,
(collectively the Historical Financial Information); and
• relevant pro forma adjustments required to present SXG Shareholders with an
indication of the profile of the Merged Group, (collectively the Pro Forma
Financial Information).
(b)
Basis of preparation
The Pro Forma Financial Information is provided for illustrative purposes and is
prepared on the assumption that the Merger had occurred on 31 March 2013. The
Merged Group financial statements are based on the Company’s and Polymetals’
financial statements as at 31 December 2012 which were audited by Stantons
International and Deloitte Touche Tohmatsu respectively.
The Pro Forma Financial Information:
• has been prepared in accordance with the recognition and measurement
principles of AASBs, together with pro forma adjustments to reflect the Merger;
• has been presented in an abbreviated form and does not include all disclosures
required by the Australian Accounting Standards applicable to annual financial
reports prepared in accordance with the Corporations Act; in particular it does
not include the notes to and forming part of the financial statements of the
Company and Polymetals; and
• has been prepared on the basis of historical cost, except for available-for-sale
financial assets which are measured at fair value.

- 29 -
In accordance with ASIC Class Order 98/100, amounts in the Pro Forma Financial
Information are rounded off to the nearest thousand dollars, unless otherwise
indicated. All amounts are presented in Australian dollars, unless otherwise noted.
(c)
Pro forma adjustments
Australian Accounting Standards require the Merger to be accounted for as an “in
substance acquisition”, with the Company deemed to be the acquirer.
Acquisition accounting will be applied in accordance with AASB 3: Business
Combinations. The value of the acquisition consideration will be measured based
on the value of SXG Shares at close of trading on the Scheme Implementation Date.
For the purposes of the Pro Forma Financial Information, a value of $0.026 per SXG
Share has been assumed, being the closing price of SXG Shares on 5 April 2013
(being the last trading price before the execution of the Scheme Implementation
Agreement and the announcement of the Merger). Consequently, the value of the
acquisition consideration for accounting purposes may differ from the amount
assumed in the Pro Forma Financial Information.
The following pro forma adjustments to the Historical Financial Information have
been made in order to present the Pro Forma Financial Information:
• the acquisition and funding of the Sandstone Gold Project assets by the
Company;
• the divestment of its 50% interest in the White Dam gold project and associated
Drew Hill exploration tenements by Polymetals in May 2013;
• the acquisition of Polymetals by the Company through the issue of 11 New SXG
Shares for each Polymetals Share, being 458,537,981New SXG Shares in total;
• the cancellation of 914,407 Polymetals Shares currently on issue under
Polymetals’ “loan funded share scheme”;
• the issue of 2,375,000 Polymetals Shares upon the vesting of performance
rights under Polymetals’ performance rights plan as a result of the Scheme;
• the issue of 1,939,058 Polymetals Shares to Meadowhead Investments in
consideration for Meadowhead Investments granting the Meadowhead
Indemnity;
• the inclusion of transaction costs totalling approximately $1.5 million associated
with the Merger, thus reducing the overall cash balance of the Merged Group;
and
• the inclusion of other costs of operating SXG and Polymetals from
31 December 2012 to 31 March 2013, totalling $3.5 million.
(d)
Pro Forma Financial Information
This paragraph contains the Pro Forma Financial Information for the Merged Group,
reflecting the combined businesses of the Company and Polymetals. The Pro
Forma Financial Information is presented to provide SXG Shareholders with an
indication of the Merged Group statement of financial position as if the Merger
occurred as at 31 March 2013.

- 30 -
SXG as at
31/12/12
PLY as at
31/12/12
(i)
Purchase and
funding of
Sandstone by
SXG
(ii)
Sale of
White Dam
by PLY
(iii)
Transaction
costs and
other
adjustments
Notes
Merged
Group as at
31/03/13
ASSETS
$'000 $'000 $'000 $'000 $'000 $'000
Current Assets
Cash and cash equivalents 4,073 11,016 1,731 1,437 (5,300) (a) 12,957
Trade and other receivables 185 752 - (166) - 771
Inventories 668 - (650) - 18
Other financial assets - 708 - (9) - 699
Total Current Assets 4,258 13,144 - - - 14,445
Non-Current Assets
Receivables - bonds 101 - 2,719 - - 2,820
Property, plant and equipment 227 3,455 2,013 (183) - 5,512
Tenement acquisition costs 3,332 17,421 1,640 (2,840) (10,987) (b) 8,566
Capitalised mining development costs - 1,338 - (801) - 537
Other financial assets - 1,031 - (800) - 231
Total Non-Current Assets 3,660 23,245 - - - 17,666
TOTAL ASSETS 7,918 36,389 - - - 32,111
LIABILITIES
Current Liabilities
Trade and other payables 1,843 2,604 - (870) - 3,577
Current tax liabilities - 112 - - - 112
Provisions 81 1,256 1,000 (662) - 1,675
Other current liabilities - 1,063 7,000 - - 8,063
Total Current Liabilities 1,924 5,035 - - - 13,427
Non Current Liabilities
Deferred tax liabilities - 4,682 - (885) (3,797) (c ) -
Deferred tax assets (1,968) - 370 1,598 (c ) -
Provisions 16 480 - - - 496
Other non-current liabilities - 877 - - - 877
Total Non-Current Liabilities 16 4,071 - - - 1,373
TOTAL LIABILITIES 1,940 9,106 - - - 14,800
- - - -
NET ASSETS 5,978 27,283 - - - 17,311
Equity
Issued capital 30,381 8,302 - - (8,302) (d)
11,922 (e ) 42,303
Reserves 3,168 456 493 - (456) (d) 3,661
Accumulated losses (27,571) 18,525 (390) (1,965) (17,252) (d) (28,653)
TOTAL EQUITY 5,978 27,283 - - - 17,311
(e)
Notes to Pro Forma Financial Information
(i)
Purchase and funding of Sandstone Gold Project by SXG
On 14 August 2012 SXG announced that it had reached agreement to
acquire the Sandstone Gold Project from Troy Resources. On 26 March
2013 the purchase of the Sandstone Gold Project was completed after
securing a $7 million bank loan from RMB (the RMB Facility). The
acquisition included the following elements:
• a cash payment of $2.281 million to Troy Resources, assumption of
environmental liabilities valued at $1 million and the issue of 43.665

- 31 -
million SXG Options which had a calculated value of $0.372 million giving
total acquisition cost for accounting purposes of $3.653 million. This
acquisition price is recorded as $2.013 million to property, plant and
equipment and $1.640 million to tenements;
• a deposit of $2.719 million to cash back environmental bonds relating to
previous activities on the Sandstone Gold Project;
• recording a liability of $1 million for the existing environmental liabilities
assumed;
• recording a liability of $7 million for the loan from RMB; and
• recording additional reserves of $0.493 million being the calculated value
of options issued as follows: options issued to Troy Resources $0.372
million, options issued to RMB $0.11 million, options issued to PCF
Capital Group Pty Limited $0.011 million.
(ii)
Sale of White Dam and Drew Hill by Polymetals
On 27 May 2013 Polymetals announced the sale of its interests in the Drew
Hill and White Dam operations. The sale included the following elements:
• receipt of cash of $1.437 million from Exco Resources Limited (Exco) as
consideration;
• addition of $0.275 million to property, plant and equipment to reflect
additional consideration being the receipt of Exco’s 50% share of the
White Dam mine camp; and
• disposal of current and non-current assets and liabilities as shown
above.
(iii)
Transaction costs and other adjustments
(a)
(b)
(c)
transaction costs of $1.5 million, payment to Meadowhead
Investments of $0.3 million and combined SXG and Polymetals cash
outflows of $3.5 million during the quarter from 31 December 2012 to
31 March 2013 have been deducted from the 31 December 2012
cash balance;
Polymetals accounting policy is to capitalise the costs of exploration
evaluation and development (EE&D) expenditure as well as tenement
acquisition costs. The accounting policy of SXG is to capitalise
tenement acquisition costs but expense EE&D costs as they are
incurred. This adjustment reflects the expensing of the previously
capitalised EE&D costs of Polymetals to align with the SXG
accounting policy;
as an operating and cash producing company Polymetals has
previously recorded deferred liabilities (DTLs) and deferred tax assets
(DTAs) (including carried forward tax losses). With the sale of White
Dam (Polymetals only operating asset) and no future operations that
are virtually certain of realising taxable income the merged entity will
not record DTLs and DTAs. This adjustment removes all DTLs and
DTAs from the merged entity balance sheets;

- 32 -
(d)
(e)
the elimination of Polymetals contributed equity of $8.302 million,
reserves of $0.456 million and accumulated gains of $17.252 million;
and
the value of the consideration paid to Polymetals Shareholders for
their Polymetals Shares under the Scheme is based on the SXG
Share price of $0.026 per SXG Share (being the ASX closing price of
SXG Shares on 5 April 2013) of $11.922 million. The actual value of
the consideration paid will depend on the actual SXG Share price at
close of trading on ASX on the Implementation Date.

- 33 -
Schedule 2 – Terms & Conditions of SXG Options
Terms used and not defined in these terms and conditions have the same meanings as in the
facility agreement dated 22 March 2013 between the Company (as Borrower), RMB Australia
Holdings Limited (as Financier) and RMB Resources Limited (as Agent) (Facility Agreement).
The SXG Options are issued on the terms set out below:
1. No consideration is payable for the issue of the SXG Options.
2. The exercise price payable by the SXG Optionholder on the exercise of the SXG Options is
$0.047c per SXG Option (Exercise Price).
3. SXG Options that have not been exercised in accordance with these terms will lapse at
5.00pm on the day which is 2 years after the date on which those SXG Options have been
issued under the Facility Agreement, being 21 March 2015 (Expiry Date).
4. In relation to an SXG Option, the SXG Optionholder may, subject to paragraphs 5 to 8
(inclusive), exercise that SXG Option at any time before 5:00pm (Melbourne time) on the
Expiry Date (Exercise Period).
5. If the SXG Optionholder proposes to give the Borrower a notice of exercise, it must first
give the Borrower prior notice (Consultation Notice) and must consult with the Borrower
regarding the proposed notice of exercise in accordance with paragraphs 6 to 8 (inclusive)
before it can give the notice of exercise.
6. If at the time the Borrower receives the Consultation Notice there is excluded information
(as defined in section 708A(7) of the Corporations Act) in respect of the Borrower
(Excluded Information), the Borrower must, within 2 Business Days from receipt of the
Consultation Notice, advise the SXG Optionholder that there is Excluded Information and
the SXG Optionholder must, subject to paragraph 7, consult with the Borrower regarding
the proposed exercise of notice for a period of 15 Business Days.
7. If at the time the Borrower receives the Consultation Notice or at any time during the
consultation period referred to in paragraph 6 there is no Excluded Information, the
Borrower must, within 2 Business days from receipt of the Consultation Notice, advise the
SXG Optionholder accordingly and the SXG Optionholder may then give the proposed
notice of exercise on the next Business Day.
8. If after giving a Consultation Notice the SXG Optionholder does not give a notice of
exercise within 2 Business Days of the expiry of the periods referred to in paragraphs 6 or 7
(as applicable), the SXG Optionholder must again comply with paragraph 5 before giving a
notice of exercise.
9. Subject to paragraphs 5 to 8 (inclusive), the SXG Options are exercisable by lodging with
the Company during the Exercise Period:
(a)
(b)
(c)
a written notice of exercise of SXG Options specifying the number of SXG Options
being exercised (Exercise Notice);
a cheque, or other evidence satisfactory to the Company of payment of the Exercise
Price for the number of SXG Options being exercised; and
the certificate for those SXG Options, for cancellation by the Company,
provided that, unless the Borrower agrees otherwise, no more than 3 Exercise Notices may
be given in respect of all the options issued pursuant to clause 7 of the Facility Agreement.

- 34 -
10. Within 2 Business Days of receipt of an Exercise Notice accompanied by the Exercise Price
the Company will allot the number of SXG Shares specified in the Exercise Notice to the
relevant SXG Optionholder. Within 5 Business Days of the issue of SXG Shares, the
Company will:
(a)
(b)
(c)
(d)
procure that the relevant SXG Optionholder is issued a CHESS holding statement or
issuer sponsored holding statement in respect of the allotted SXG Shares;
lodge with ASX a notice in accordance with section 708A(5) and (6) of the
Corporations Act in relation to the issue of the SXG Shares or, if the Company is
unable to comply with each of the obligations required to issue such a notice, lodge
a disclosure document complying with part 6D.2 of the Corporations Act within a
further 30 Business Days;
cancel the certificate for the SXG Options being exercised; and
if applicable, issue a new certificate for any unexercised SXG Options to the
relevant SXG Optionholder.
11. The Company will not apply for official quotation by ASX of the SXG Options.
12. The Company must apply for official quotation on the ASX of any SXG Shares issued on
exercise of an SXG Option, immediately upon, and in any event no later than 2 Business
Days after, the SXG Shares are issued and allotted. When issued on exercise of an SXG
Option, any SXG Shares must be of the same class, and rank equally with, other SXG
Shares on issue as at that date.
13. In the event of any reconstruction (including consolidation, subdivision, reduction or return)
of the issued capital of the Company after the issue of SXG Options but before the expiry or
exercise of any SXG Options, the number of SXG Options to which the SXG Optionholder
is entitled or the Exercise Price of the SXG Options or both will be reconstructed (as
appropriate) in accordance with the ASX Listing Rules. For the avoidance of doubt, the
rights of an SXG Optionholder may be changed to the extent (but only to the extent)
necessary to comply with the ASX Listing Rules applying to a reorganisation of capital at
the time of the reorganisation.
14. There are no participating rights or entitlements inherent in the SXG Options and the SXG
Optionholder will not be entitled to participate in new issues of capital offered to SXG
Shareholders during the currency of the SXG Options until those SXG Options are
exercised and SXG Shares are allotted and issued in accordance with the Facility
Agreement and these terms and conditions. However, the Company will ensure that for the
purpose of determining entitlements to any issue of capital of that kind, the Company will
give the SXG Optionholder 10 Trading Days’ notice of any new issue of capital before the
record date for determining entitlements to the issue of capital in accordance with the ASX
Listing Rules. This will give the SXG Optionholder the opportunity to exercise that portion of
the SXG Options which the SXG Optionholder is entitled to exercise before the record date
for determining entitlements to participate in any issue of capital.
15. If, after the issue of the SXG Options but before the expiry of any SXG Options, the
Company makes an issue of SXG Shares to the holders of SXG Shares by way of
capitalisation of profits or reserves (bonus issue) other than in lieu of a dividend payment,
then on exercise of the SXG Options, the SXG Optionholder will be entitled to have issued
to it (in addition to the SXG Shares which the SXG Optionholder is otherwise entitled to be
issued on exercise of the SXG Options) additional SXG Shares in the Company. The
number of additional SXG Shares is the number of SXG Shares which would have been
issued to the SXG Optionholder under the bonus issue (Bonus SXG Shares) if on the date
on which entitlements for the bonus issue were calculated, it had been registered as the
holder of the number of SXG Shares as if immediately before that date it had exercised its
SXG Options and been issued the SXG Shares. The Bonus SXG Shares will be paid up by

- 35 -
the Company out of profits or reserves (as the case may be) in the same manner as was
applied in relation to other SXG Shares allotted upon exercise of the SXG Options.
16. Subject to paragraph 17, the SXG Optionholder is entitled to sell, assign or transfer all or
any part of the SXG Options (and if in part, in minimum transfer amounts of 500,000 SXG
Options) to any person or persons provided that the transferee of the SXG Options is a
person to whom an offer of SXG Options may be made without a disclosure document in
accordance with Chapter 6D of the Corporations Act.
17. An SXG Optionholder will have the right to attend, but (subject to the Corporations Act) not
to vote at, general meetings of SXG Shareholders.

- 36 -
Schedule 3 – Competent persons’ statement
The Information in this Explanatory Memorandum that relates to the Company’s Ore
Reserves and Mineral Resources is based on information compiled by:
(a)
(b)
(c)
in respect of Ore Reserves at the Marda Gold Project, Mr Denis Grubic, a Member of
the Australasian Institute of Mining and Metallurgy and an independent consultant
employed by Rock Team Pty Ltd, who has sufficient experience which is relevant to
the style of mineralisation and type of deposit under consideration and to the activity
which he is undertaking to qualify him as a Competent Person as defined in the 2004
Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves’;
in respect of Mineral Resources at the Marda Gold Project, Mr Richard Simmons, a
Member of the Australasian Institute of Mining and Metallurgy and SXG’s Exploration
Manager, who has sufficient experience which is relevant to the type of deposit under
consideration and to the activity which he is undertaking to qualify him as a
Competent Person as defined in the 2004 Edition of the ‘Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves’; and
in respect of Mineral Resources at the Sandstone Project, Mr David Otterman, a
Fellow of the Australasian Institute of Mining and Metallurgy, Chartered Professional
(Geology) and an independent consultant, who has sufficient experience which is
relevant to the style of mineralisation and type of deposit under consideration and to
the activity which he is undertaking to qualify him as a Competent Person as defined
in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves’.
Each of Messrs Grubic, Simmons and Otterman consents to the inclusion in this Explanatory
Memorandum of the statements based on his information in the form and context in which
they appear.
The Information in this Explanatory Memorandum that relates to Polymetals’ Ore Reserves
or Mineral Resources is based on information compiled by:
(a)
(b)
in respect of Ore Reserves at the Mt Boppy Project, Messrs Sean Buxton and Andrew
Lawry, Members of the Australasian Institute of Mining and Metallurgy and former
employees of Polymetals, who have sufficient experience which is relevant to the
style of mineralisation and type of deposit under consideration and to the activity
which they are undertaking to qualify them as Competent Persons as defined in the
2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves’; and
in respect of Mineral Resources at the Mt Boppy Project and Turner River Project, Mt
Troy Lowien, a Member of the Australasian Institute of Mining and Metallurgy and a
Polymetals employee, who has sufficient experience which is relevant to the type of
deposit under consideration and to the activity which he is undertaking to qualify him
as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves’.
Each of Messrs Buxton, Lawry and Lowien consents to the inclusion in this Explanatory
Memorandum of the statements based on his information in the form and context in which
they appear.

- 37 -
Glossary
In this Explanatory Memorandum, the following terms have the following meaning unless the
context otherwise requires:
A$ Australian dollars.
Announcement Date
ASIC
Associate
ASX
Board
Business Day
Chairman
The date of the announcement that the Company and
Polymetals had entered into the Scheme Implementation
Agreement, being 8 April 2013.
The Australian Securities and Investments Commission.
Has the meaning given to that term by sections 10 to 17 of the
Corporations Act.
ASX Limited ACN 008 624 691 and its Related Bodies
Corporate, or the financial market known as the Australian
Securities Exchange, as the context requires.
The board of Directors.
A day in Brisbane, Australia that is not a Saturday, Sunday or
public holiday and on which banks and ASX are open for
trading.
The chairman of the Meeting.
Company or SXG Southern Cross Goldfields Ltd ACN 124 374 321.
Company Secretary
Constitution
Corporations Act
Court
Deed Poll
Director
Explanatory
Memorandum
General Meeting or
Meeting
Glossary
Indemnity Consideration
The joint company secretaries of the Company at the time of
the Meeting, Mr Dennis Wilkins and Ms Fiona Lawe Davies.
The constitution of the Company.
Corporations Act 2001 (Cth).
The Federal Court of Australia, Brisbane Registry.
The deed poll executed by the Company whereby the
Company agrees to issue the Scheme Consideration on the
Scheme Implementation Date.
A director of the Company.
This explanatory memorandum which accompanies and forms
part of the Notice of Meeting.
The general meeting of SXG Shareholders, or any meeting
adjourned thereof, convened by the Notice.
This glossary of terms.
1,939,058 Polymetals Shares and $300,000 to Meadowhead
Investments as consideration for the provision of the
Meadowhead Indemnity.

- 38 -
Independent Expert or
BDO Corporate Finance
Independent Expert’s
Report
BDO Corporate Finance (WA) Pty Ltd ACN 124 031 045.
The report at Annexure A to this Notice of Meeting prepared by
the Independent Expert.
JORC Code, 2004 Edition The Australasian Joint Ore Reserves Committee’s 2004 edition
of the “Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves”.
JORC Code, 2012 Edition The Australasian Joint Ore Reserves Committee’s 2012 edition
of the “Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves”.
Listing Rules
The listing rules of ASX.
Loan Funded Share Plan Polymetals’ long term incentive scheme under which 914,407
Polymetals Shares have been issued.
Meadowhead Indemnity
Meadowhead
Investments
Merger
Merged Group
A full indemnity issued by Meadowhead Investments in favour
of Polymetals in relation to any costs that may arise out of the
Peak Litigation.
Meadowhead Investments Pty Ltd ACN 003 122 870.
The proposed merger by scheme of arrangement between
Polymetals and the Polymetals Shareholders whereby the
Company will acquire all of the issued share capital of
Polymetals and Polymetals will become a wholly owned
subsidiary of the Company, to be implemented in accordance
with the Scheme Implementation Agreement.
The Company and its subsidiaries (including Polymetals)
following implementation of the Scheme.
Mineral Resource (a) In respect of the Company, as defined by the JORC
Code, 2004 Edition; and
(b)
In respect of Polymetals, as defined by the JORC Code,
2012 Edition.
New SXG Shares
Non-associated
Shareholders
Notice or Notice of
Meeting
SXG Shares to be issued on successful completion of the
Scheme.
SXG Shareholders other than the Sproule Interests.
The notice of General Meeting which accompanies this
Explanatory Memorandum.
Ore Reserve (a) In respect of the Company, as defined by the JORC
Code, 2004 Edition; and
(b)
In respect of Polymetals, as defined by the JORC Code,
2012 Edition.

- 39 -
Peak Litigation The litigation brought by Peak Gold Mines Pty Ltd ACN 001
533 777 against Polymetals in the Supreme Court of New
South Wales.
Placement
Placement Share
The placement of 1,323,769 SXG Shares at an issue price of
A$0.045, as set out in the Explanatory Memorandum.
An SXG Share issued pursuant to the Placement.
Polymetals Polymetals Mining Limited ACN 075 664 961.
Polymetals Share
Polymetals Shareholder
Proxy Form
Record Date
Register
Related Body Corporate
Resolution
RMB
Scheme
Scheme Booklet
Scheme Conditions
Scheme Consideration
Scheme Implementation
Agreement
Scheme Implementation
Date
Scheme Share
Scheme Shareholder
A fully paid ordinary share in the capital of Polymetals.
A holder of Polymetals Shares.
The proxy form accompanying the Notice of Meeting.
5:00pm on the fifth Business Day (or such other Business Day
as the parties agree in writing) following the day of the coming
into effect, under section 411(10) of the Corporations Act, of the
orders of the Court made under section 411(4)(b) of the
Corporations Act in relation to the Scheme.
Polymetals’ register of Polymetals Shareholders, kept in
accordance with the Corporations Act.
Has the same meaning as given to that term in the
Corporations Act.
A resolution set out in the Notice.
RMB Australia Holdings Limited.
The proposed scheme of arrangement pursuant to Part 5.1 of
the Corporations Act between Polymetals and Polymetals
Shareholders.
The document sent to Polymetals Shareholders providing
details of the Scheme.
The conditions precedent the satisfaction or waiver of which
must be achieved for implementation of the Scheme to occur.
In respect of each Scheme Share held by a Scheme
Shareholder as at the Record Date, 11 New SXG Shares.
The scheme implementation agreement between the Company
and Polymetals dated 7 April 2013.
The date on which all Polymetals Shares held by Scheme
Shareholders will be transferred to the Company.
A Polymetals Share held by a Scheme Shareholder as at the
Record Date.
A holder of Polymetals Shares recorded in the Register as at
the Record Date.

- 40 -
Sproule Interests (a) Meadowhead Investments – 12,143,564 Polymetals
Shares;
(b) Jane Christine Sproule – 8,390,635 Polymetals Shares;
(c) David & Jane Sproule – 60,000 Polymetals Shares; and
(d) Elizabeth Sproule - 45,000 Polymetals Shares.
Superior Proposal
A bona fide proposal or offer (which relates to the proposed
acquisition of 100% of SXG Shares) which a majority of the
Board (except any Director who is required to abstain due to a
conflict of interest or duty), acting reasonably and in good faith
and supported by advice from SXG’s legal and corporate
advisers, determine is:
(a) reasonably capable of being valued, taking into account all
aspects of the proposal and the person making it;
(b) reasonably capable of being completed in a timely manner
taking into account all aspects of the proposal; and
(c) is more favourable to SXG Shareholders than the Merger,
taking into account all of the terms and conditions of the
proposal.
SXG Option
SXG Share
SXG Shareholder
An option to acquire an SXG Share.
A fully paid ordinary share in the capital of the Company.
A holder of SXG Shares.
Technical Specialist AMC Consultants Pty Ltd ACN 008 129 164.
Technical Specialist’s
Report
WST
The valuation report at Annexure B to this Notice of Meeting
prepared by the Technical Specialist.
Western Standard Time, being the time in Perth, Western
Australia.

- 41 -
Annexure A
Refer enclosed Independent Expert’s Report

SOUTHERN CROSS GOLDFIELDS LTD
Independent Expert’s Report
Opinion: The Transaction is fair & reasonable
to SXG shareholders
21 June 2013

Financial Services Guide
21 June 2013
BDO Corporate Finance (WA) Pty Ltd ABN 27 124 031 045 (“we” or “us” or “ours” as appropriate) has
been engaged by Southern Cross Goldfields Limited (“SXG”) to provide an independent expert’s report
on the proposal to issue SXG shares to Polymetals Mining Limited (“PLY”) shareholders as a result of
the merger of the two companies under a Scheme of Arrangement. You will be provided with a copy
of our report as a retail client because you are a shareholder of SXG.
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Guide (“FSG”). This FSG is designed to help retail clients make a decision as to their use of the
general financial product advice and to ensure that we comply with our obligations as financial
services licensees.
This FSG includes information about:
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The services we are authorised to provide under our Australian Financial Services Licence, Licence
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association of separate entities (each of which has appointed BDO (Australia) Limited ACN 050 110 275
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We only provide general financial product advice, not personal financial product advice. Our report
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BDO CORPORATE FINANCE (WA) PTY LTD

Financial Services Guide
Page 2
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Contact details
You may contact us using the details set out on page 1 of the accompanying report.

TABLE OF CONTENTS
1. Introduction 1
2. Summary and Opinion 2
3. Scope of the Report 5
4. Outline of the Transaction 6
5. Profile of Southern Cross Goldfields Limited 9
6. Profile of Polymetals Mining Limited 17
7. Economic analysis 23
8. Industry analysis 23
9. Valuation approach adopted 26
10. Valuation of SXG 31
11. Valuation of the Merged Entity 53
12. Is the Transaction fair 72
13. Is the Transaction reasonable 72
14. Conclusion 75
15. Sources of information 76
16. Independence 76
17. Qualifications 77
18. Disclaimers and consents 77
Appendix 1 – Glossary of Terms 79
Appendix 2 – Valuation Methodologies 82
Appendix 3 – Discount Rates 84
Appendix 4 – Technical Specialist Valuation – AMC Consultants 92

21 June 2013
The Directors
Southern Cross Goldfields Limited
PO Box 708
West Perth WA 6872
Dear Sirs
INDEPENDENT EXPERT’S REPORT
1. Introduction
On 8 April 2013, Southern Cross Goldfields Limited (“SXG” or the “Company”) and Polymetals Mining
Limited (“PLY”) announced that they had agreed to merge the two companies (the “Merger” resulting in
the “Merged Entity”) by way of a scheme of arrangement under which SXG will offer 11 SXG shares for
every one PLY share on issue (“The Scheme”).
An outline of the Scheme is presented in Section 4 with a discussion of the merits of the Scheme included
in Sections 11, 12, 13 and 14. Whilst this report does not address the benefits of the Merger itself an
understanding of the process of the Scheme and the merits of the Merger is important in assessing the
matters to be discussed in this report.
PLY’s largest shareholder, Meadowhead Investments and Mr & Mrs D Sproule (together the “Sproule
Interests”) collectively holds 48.8% of the issued capital of PLY. On successful implementation of the
Scheme, SXG will issue 458,537,981 new shares to PLY shareholders including 227,031,189 SXG shares to
the Sproule Interests, representing 26.17% of the issued capital of the Merged Entity.
Under the terms of the Merger and as a result of the implementation of the Scheme, SXG shares will be
issued to the Sproule Interests (“the Transaction”) which will result in the Sproule Interests holding more
than 20% of the issued capital in the Merged Entity. As such, the approval of SXG shareholders is required
under item 7 of section 611 of the Corporations Act.
We note that Transaction is integral to the Merger as the implementation of the Scheme is conditional on
the Transaction being approved by SXG shareholders, the Scheme being approved by PLY shareholders and
the court and the other conditions of the Scheme being satisfied. The Transaction itself will not occur
unless the Scheme is approved and implemented.
BDO Corporate Finance (WA) Pty Ltd ABN 27 124 031 045 AFS Licence No 316158 is a member of a national association of independent entities which are all members of BDO
(Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Corporate Finance (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International
Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under
Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

2. Summary and Opinion
2.1 Purpose of the report
The directors of SXG have requested that BDO Corporate Finance (WA) Pty Ltd (“BDO”) prepare an
independent expert’s report (“our Report”) to express an opinion as to whether or not the Transaction is
fair and reasonable to the non-associated shareholders of SXG (“Shareholders”).
Our Report is prepared pursuant to section 611 of the Corporations Act and is to be included in the
Explanatory Memorandum for SXG in order to assist the Shareholders in their decision whether to approve
the Transaction.
2.2 Approach
Our Report has been prepared having regard to Australian Securities and Investments Commission (“ASIC”)
Regulatory Guide 111 (“RG 111”), ‘Content of Expert’s Reports’ and Regulatory Guide 112 (“RG 112”)
‘Independence of Experts’.
In arriving at our opinion, we have assessed the terms of the Transaction as outlined in the body of this
report. We have considered:
• How the value of an SXG share on a control basis prior to the Transaction compares to the value of a
share in the Merged Entity on a minority basis following the Transaction;
• Other factors which we consider to be relevant to the Shareholders in their assessment of the
Transaction; and
• The position of Shareholders should the Transaction not proceed, either because the Scheme is not
approved or the Transaction is not approved.
2.3 Opinion
We have considered the terms of the Transaction as outlined in the body of this report and have
concluded that the Transaction is fair and reasonable to Shareholders.
2.4 Fairness
In Section 12 we determined how the value of an SXG share on a control basis prior to the Transaction
compares to the value of a share in the Merged Entity on a minority basis following the Transaction, as
detailed hereunder.
Ref
Low
$
Midpoint
$
High
$
Value of an SXG share prior to the Transaction (control basis) 10.4 0.031 0.038 0.044
Value of a share in the Merged Entity (minority interest basis) 11.3 0.032 0.038 0.045
The above valuation ranges are graphically presented below:
2

Value of an SXG share prior to the
Transaction (control basis)
Value of a share in the Merged Entity
(minority interest basis)
$0.02 $0.03 $0.04 $0.05
The above pricing indicates that, as the value of an SXG share on a control basis prior to the Transaction
is equivalent to the value of a share in the merged entity on a minority basis, the Transaction is fair for
Shareholders.
For the information of Shareholders we have also provided a comparison on a ‘like for like’ basis on a
minority basis. We have therefore also calculated the value of an SXG share prior to the Transaction
excluding a premium for control. To do this we have deducted a minority interest discount of 20% - 26%
and the resulting value range is shown in the table and graph below:
Value of an SXG share prior to the Transaction (minority interest
basis)
Value of a share in the Merged Entity (minority interest basis)
Low Preferred High
$ $ $
0.023 0.029 0.035
0.032 0.038 0.045
Value of an SXG share prior to the Transaction
(minority interest basis)
Value of a share in the Merged Entity
(minority interest basis)
$0.02 $0.03 $0.04 $0.05
2.5 Reasonableness
We have considered the analysis in Section 13 of this report, in terms of both:
• advantages and disadvantages of the Transaction; and
• other considerations, including the position of Shareholders if the Transaction does not proceed
and the consequences of not approving the Transaction.
In our opinion, the position of Shareholders if the Transaction is approved is more advantageous than the
position if the Transaction is not approved. Accordingly, in the absence of any other relevant information,
we believe that the Transaction is reasonable for Shareholders.
3

The respective advantages and disadvantages in relation to the Transaction and Merger are summarised
below:
ADVANTAGES AND DISADVANTAGES
Section Advantages Section Disadvantages
13.4 The Transaction is fair. 13.5 There will be a new substantial SXG
shareholder
13.4 The Proposed Merged Entity will be of
a significantly larger scale than the
existing SXG
13.4 The Scheme is a merger of two
similar sized entities with equal
Board representation in the Merged
Entity
13.5 Dilution of existing shareholders’
interests
13.5 SXG Shareholders will be exposed to the
risk of PLY’s assets
13.4 Access to the cash reserves of PLY
13.4 Potential for synergies
13.4 Stronger more diversified
development pipeline
13.4 Shareholders may benefit from
increased market relevance and
liquidity of shares
13.4 The Merged Entity may benefit from
the expertise of the Sproule Interest
13.4 The Merged Entity will hold a larger
pool of assets giving the Merged
Entity greater flexibility to divest or
develop a number of projects
Other key matters we have considered include:
Section
Description
13.1 Alternate proposals
13.2 Practical level of control
13.3 Consequences of not approving the Transaction
4

3. Scope of the Report
3.1 Purpose of the Report
Section 606 of the Corporations Act Regulations prohibits the acquisition of shares by a party if that
acquisition will result in that person (or someone else) holding an interest in 20% or more of the issued
shares of a public company, unless a full takeover offer is made to all shareholders.
However, item 7 of Section 611 permits such an acquisition if the shareholders of that entity have agreed
to the issue of such shares. This agreement must be by resolution passed at a general meeting at which
no votes are cast in favour of the resolution by any party who is associated with the party acquiring the
shares, or by the party acquiring the shares. Section 611 states that shareholders of the company must be
given all information that is material to the decision on how to vote at the meeting.
Whilst the Scheme may be characterised as a merger of equals, we consider the Transaction to be a
control transaction as it will result in the Sproule Interests holding approximately 26% of the issued capital
in the Merged Entity. No other shareholder will have an interest in the Merged Entity greater than 5%.
Regulatory Guide 74 issued by ASIC deals with "Acquisitions Agreed to by Shareholders". It states that the
obligation to supply shareholders with all information that is material can be satisfied by the nonassociated
directors of SXG, by either:
• undertaking a detailed examination of the Transaction themselves, if they consider that they have
sufficient expertise; or
• by commissioning an Independent Expert's Report.
The directors of SXG have commissioned this Independent Expert's Report to satisfy this obligation.
3.2 Regulatory guidance
Neither the Listing Rules nor the Corporations Act defines the meaning of “fair and reasonable”. In
determining whether the Transaction is fair and reasonable, we have had regard to the views expressed by
ASIC in RG 111. This regulatory guide provides guidance as to what matters an independent expert should
consider to assist security holders to make informed decisions about transactions.
This regulatory guide suggests that where the transaction is a control transaction, the expert should focus
on the substance of the control transaction rather than the legal mechanism to affect it. RG 111 suggests
that where a transaction is a control transaction, it should be analysed on a basis consistent with a
takeover bid.
In our opinion, the Transaction is a control transaction as defined by RG 111 and we have therefore
assessed the Transaction as a control transaction to consider whether, in our opinion, it is fair and
reasonable to Shareholders.
3.3 Adopted basis of evaluation
RG 111 states that a transaction is fair if the value of the offer price or consideration is greater than the
value of the securities subject of the offer. This comparison should be made assuming a knowledgeable
and willing, but not anxious, buyer and a knowledgeable and willing, but not anxious, seller acting at
arm’s length. When considering the value of the securities subject of the offer in a control transaction
the expert should consider this value inclusive of a control premium. Further to this, RG 111 states that
a transaction is reasonable if it is fair. It might also be reasonable if despite being ‘not fair’ the expert
5

elieves that there are sufficient reasons for security holders to accept the offer in the absence of any
higher bid.
Having regard to the above, BDO has completed this comparison in two parts:
• A comparison between the value of an SXG share on a control basis prior to the Transaction and the
value of a share in the Merged Entity on a minority basis following the Transaction (fairness – see
Section 12 “Is the Transaction Fair”); and
• An investigation into other significant factors to which Shareholders might give consideration, prior to
approving the Transaction, after reference to the value derived above (reasonableness – see Section
13 “Is the Transaction Reasonable”).
This assignment is a Valuation Engagement as defined by Accounting Professional & Ethical Standards
Board professional standard APES 225 ‘Valuation Services’ (“APES 225”).
A Valuation Engagement is defined by APES 225 as follows:
“an Engagement or Assignment to perform a Valuation and provide a Valuation Report where the Valuer
is free to employ the Valuation Approaches, Valuation Methods, and Valuation Procedures that a
reasonable and informed third party would perform taking into consideration all the specific facts and
circumstances of the Engagement or Assignment available to the Valuer at that time.”
This Valuation Engagement has been undertaken in accordance with the requirements set out in APES 225.
4. Outline of the Transaction
Announcement
On 8 April 2013 Southern Cross Goldfields and Polymetals Mining Limited announced that they had entered
into an agreement to combine the two companies.
The Merger will be implemented as a ‘merger of equals’ through a scheme of arrangement under which
SXG will offer 11 SXG shares for every one PLY share on issue.
Following the Transaction SXG shareholders will hold approximately 47% of the shares in the Merged Entity
and PLY will hold approximately 53% of the shares in the Merged Entity.
The Merger will create a merged entity with a diversified Australian gold and base metals portfolio
including the Marda Project in Western Australia and the Mt Boppy Project in New South Wales.
Board and Management
The Board of the proposed Merged Entity will consist of six directors, of whom three will be current
directors of SXG and three will be current directors of PLY. The Chairperson will be Samantha Tough
(current Chairperson of SXG) and Glenn Jardine (current Managing Director of SXG) will be the Chief
Executive Officer.
Conditions Precedent
Implementation of the Scheme is dependent on a number of conditions, including:
• SXG Shareholders approving the Transaction;
• Polymetals obtaining Polymetals’ shareholder approval for:
6

o
o
a selective capital reduction of the Loan Funded Shares, being PLY shares issued under
PLY’s long term incentive schemes; and
the issue of the Indemnity Consideration, being 1,939,058 PLY shares and $300,000 cash to
Meadowhead Investments Pty Ltd (“Meadowhead”) as consideration for the provision of
the Meadowhead Indemnity. Where Meadowhead Indemnity is defined as: a full indemnity
granted by Meadowhead in favour of PLY in relation to any costs that may arise out of the
Peak Litigation. Peak Litigation: the litigation brought by Peak Gold Mines Pty Ltd against
PLY, in the Supreme Court of New South Wales;
• the satisfaction or waiver of a number of conditions precedent comprising the Scheme Conditions.
See the attached Notice of Meeting and the Scheme Implementation Agreement released to the ASX on 8
April 2013 for the full conditions.
Capital Structure
The Scheme will result in existing PLY shareholders acquiring 458,537,981 SXG shares, representing
approximately 53% of the proposed Merged Entity.
The following table shows the capital structure of the Merged Entity with the Sproule Interests holding
approximately 26% of SXG.
Existing SXG shareholders will hold approximately 47% of the issued capital in the Merged Entity.
Following the Scheme becoming effective but prior to the issue of SXG shares, PLY will:
- cancel or buy-back 914,407 PLY shares currently on issue under the PLY Loan Fund Share Scheme;
- issue 2,375,000 shares upon the vesting of performance rights under the PLY Performance Rights
Plan as a result of the Scheme; and
- issue 1,939,058 shares to Meadowhead Investments Pty Ltd (“Meadowhead”) in consideration for
Meadowhead granting the Polymetals Indemnity.
7

Existing SXG
PLY
Capital structure of the Merged Entity
shareholders shareholders* Sproule Interest Total
Current number of PLY shares on issue - 19,585,479 18,700,141 38,285,620
Adjustments per the SIA
Loan funded shares to be bought back by PLY and cancelled - (914,407) - 0
Issue of shares upon the vesting of PLY performance rights - 2,375,000 - 2,375,000
Issue of shares in consideration for granting the PLY Indemnity - - 1,939,058 1,939,058
Total PLY shares on issue following the SIA adjustments - 21,046,072 20,639,199 41,685,271
% holding in PLY 0.00% 50.49% 49.51% 100.00%
Ratio for new SXG shares to be issued 11:01
Number of new SXG shares to be issued - 231,506,792 227,031,189 458,537,981
Existing SXG shares on issue 408,912,834 - - -
Shares in the Merged Entity 408,912,834 231,506,792 227,031,189 867,450,815
% holding in the Merged Entity 47.14% 26.69% 26.17% 100.00%
Equity interest held by SXG shareholders 47.1%
Equity interest held by existing PLY shareholders 52.9%
Total 100.00%
* Excludes the Sproule Interest
8

5. Profile of Southern Cross Goldfields Limited
5.1 History
SXG was incorporated on 12 March 2007 and was listed on the ASX on 20 March 2008. The Company is
involved in the exploration and production of gold projects in Western Australia. SXG also has interests in
base metals and a nickel project through an agreement with Western Areas NL. The flagship project for
SXG is the Marda Gold Project.
During December 2012, SXG acquired the Sandstone Gold Project assets from Troy Resources Limited.
In August 2012, SXG raised $5.2 million following a 2 for 5 renounceable rights issue at $0.045 per share.
The current Board of Directors of SXG comprises:
• Samantha Tough – Non-Executive Chairman
• Glenn Jardine – Managing Director
• Graham Brock – Non-Executive Director
• John Rowe – Non-Executive Director
5.2 Projects
Marda Gold Project
The Marda Gold Project is located 450 km north-east of Perth in Western Australia and is 100% owned by
SXG. SXG has tenement holdings covering more than 2,900km 2 and JORC compliant measured resources of
2.8Mt, indicated resources of 2.6Mt and inferred resources of 3.1Mt for approximately 720,000oz of gold.
The SXG tenements comprise:
• 26 mining leases.
• 91 exploration licences.
• 92 prospecting licences.
• 1 general purpose leases.
• 11 miscellaneous licences.
• 2 retention leases.
A feasibility study was completed on the project in 2012.
Marda comprises two areas: Northern Deposits and Southern Deposits. The Northern Deposits include the
Marda Central deposits, the Red Legs and Die Hardy Deposits, King Brown and Golden Orb. The Southern
Deposits comprise Battler and British Hill.
In August 2011, SXG entered into an option agreement with Barranco Resources NL (“Barranco”) to
acquire the Red Legs and Die Hardy deposits. If SXG elects to exercise the option, it will pay $0.5 million
in cash and issue 20 million SXG shares to Barranco. The option expires in August 2013 and SXG have
advised us that they intend on exercising the option.
9

Sandstone Exploration Potential
In December 2012, SXG entered into an agreement to acquire the Sandstone Project assets from Troy
Resources Limited. The consideration for these assets comprised:
• $5 million cash ($2.7 million of which goes towards the replacement of existing environmental
bonds);
• A 2% net smelter royalty on all non-nickel production from the Sandstone tenements; and
• 43.665 million unlisted options with an exercise price of $0.10 and a term of 5 years.
The cash component of the Sandstone acquisition was financed through a $7 million finance facility from
RMB Australia Holdings Limited.
The Sandstone project tenements are located near the town of Sandstone, approximately 730 kms north
east of Perth.
Included in the Sandstone Project assets are a 600,000 tonnes per annum gold processing plant and a 100
person camp within a 985km 2 exploration portfolio. SXG relocated the Sandstone plant to the Marda Gold
Project. Through the acquisition of the processing plant, SXG’s capital expenditure requirement in
relation to the Marda Project has reduced.
The increased resources acquired from Sandstone result in SXG’s total measured resource of 204,000
ounces, indicated of 301,000 ounces and inferred of 762,000 increasing total resources to 1.27 million
ounces with the total tenement holdings increasing to 3,900km 2 .
Marda Exploration Potential
A review of exploration in 2011 and 2012 indentified high priority targets along the Evanston Shear Zone
and Andromeda Trend.
Exploration in the March 2013 quarter resulted in two new exploration projects being identified, the
Thresher Prospect and the White Pointer Prospect. Thresher is located approximately 60km north of the
proposed gold treatment facility at Marda whilst White Pointer is located 40km north-west of the proposed
facility.
Red Boomerang is a gold exploration target located approximately 500m north-west of previously drilled
sites which had encouraging results.
The Lancelot prospect lies north of the Gwendolyn tenement which is currently being drilled by Vector
Resources. Drilling results reported by Vector in May 2012 included a high grade intercept of 1m @
1,165g/t from 26m which lies within an overall intercept of 5m @ 253.3g/t from 24m. Additional drilling is
planned for this site throughout 2013.
Copper Bore
The Copper Bore project is located approximately 400km north-east of Perth at the northern end of the
Marda region. SXG holds tenement interests for base metals across an area of approximately 2,900km 2 and
in 2012 it announced the discovery of a VMS base metal system at Copper Bore. A follow up drilling
campaign has been planned for 2013 however the Company’s primary focus is the development of the
Marda Gold Project.
10

Western Areas NL Nickel Joint Venture
In August 2011, SXG entered into an agreement with Western Areas NL whereby Western Areas acquired
70% of SXG’s nickel rights across a substantial portion of the Company’s tenements package. Western
Areas acquired this interest for a cash consideration of $1.5 million. The agreement also requires a
minimum funding commitment of $1 million on nickel sulphide exploration during the first year following
completion of the agreement, $250,000 minimum annual expenditure commitments to year five and
$300,000 thereafter.
SXG stated that it undertook this venture so that it could focus on the development of the Marda Gold
Project, but still have the potential to gain from any findings through its remaining 30% interest.
Further, and more detailed, information on SXG’s projects may be found in Appendix 4.
11

5.3 Historical Balance Sheet
Southern Cross Goldfields Limited Unaudited as at Reviewed as at Audited as at Audited as at
31-Mar-13 31-Dec-12 30-Jun-12 30-Jun-11
Statement of Financial Position $ $ $ $
CURRENT ASSETS
Cash and cash equivalents 3,361,085 4,072,745 2,215,018 1,658,993
Trade and other receivables - 185,159 143,263 1,489,428
Other financial assets - - 150,000 -
Prepayments 87,668 - - -
TOTAL CURRENT ASSETS 3,448,753 4,257,904 2,508,281 3,148,421
NON-CURRENT ASSETS
Trade and other receivables 2,825,000 101,000 106,000 106,000
Property, plant and equipment 197,836 227,518 290,256 289,748
Tenement acquisition costs 5,612,873 3,331,873 3,378,222 3,355,775
TOTAL NON-CURRENT ASSETS 8,635,709 3,660,391 3,774,478 3,751,523
TOTAL ASSETS 12,084,462 7,918,295 6,282,759 6,899,944
CURRENT LIABILITIES
Trade and other payables 1,068,971 1,842,991 700,977 1,612,543
Provisions 100,338 81,468 66,889 64,682
Sandstone Acquisition Facility 7,000,000 - - -
TOTAL CURRENT LIABILITIES 8,169,309 1,924,459 767,866 1,677,225
NON-CURRENT LIABILITIES
Provisions - 16,089 14,480 15,523
TOTAL NON-CURRENT LIABILITIES - 16,089 14,480 15,523
TOTAL LIABILITES 8,169,309 1,940,548 782,346 1,692,748
NET ASSETS 3,915,153 5,977,747 5,500,413 5,207,196
EQUITY
Contributed equity 30,381,465 30,381,465 25,539,853 19,805,958
Reserves 3,167,559 3,167,559 3,103,686 2,805,924
Accumulated losses (29,633,872) (27,571,277) (23,143,126) (17,404,686)
TOTAL EQUITY 3,915,153 5,977,747 5,500,413 5,207,196
Source: SXG’s audited annual 2011 and 2012 annual reports, reviewed financial statements for the 6 month period until 31 December
2012 and unaudited management accounts for the nine months period ended 31 March 2013.
12

5.4 Historical Statement of Comprehensive Income
Southern Cross Goldfields Limited
Unaudited for the
nine months
ended 31 M arch
2013
Reviewed for the
half-year ended
31 December 12
Audited for the
year ended 30
June 2012
Audited for the
year ended 30
June 2011
Statement of Comprehensive Income $ $ $ $
Revenue
Gain on sale of tenements 39,228 1,100 1,933,907 1,830,105
Other income 83,705 89,767 203,057 123,349
Expenses
Depreciation (95,874) (66,192) (128,549) (97,192)
Salaries and employee benefits - - (950,299) (363,007)
Exploration (2,392,918) (1,624,064) (5,205,431) (6,335,047)
Pre-development expenditure (2,702,603) (1,577,044) - -
Impairment of exploration expenditure - (66,349) (113,887) (110,478)
Corporate expenses - - (878,063) (591,462)
Administration expenses (1,358,411) (1,121,496) (312,999) (235,583)
Share based payments expense (63,873) (63,873) (286,176) (412,652)
Loss from continuing operations before
income tax (6,490,746) (4,428,151) (5,738,440) (6,191,967)
Income tax expense - - - -
Total comprehensive loss for the
year/period (6,490,746) (4,428,151) (5,738,440) (6,191,967)
Source: SXG’s audited annual 2011 and 2012 annual reports, reviewed financial statements for the 6 month period until
31 December 2012 and unaudited management accounts for the nine months period ended 31 March 2013.
We have not undertaken a review of SXG’s unaudited accounts in accordance with Australian Auditing and
Assurance Standard 2405 “Review of Historical Financial Information” and do not express an opinion on
this financial information. However nothing has come to our attention as a result of our procedures that
would suggest the financial information within the management accounts has not been prepared on a
reasonable basis.
Commentary on financial statements
In the period 30 June 2011 to 31 March 2013, SXG’s net asset position fell by 25% from $5.21 million to
$3.92 million. This has been driven by a $6.48 million increase in total liabilities and partially offset by a
$5.18 million increase in total assets.
The increase in liabilities at 31 March 2013 is due to the negotiation of a $7 million financing facility
provided by RMB Australia Holdings Limited in relation to SXG’s acquisition of the Sandstone Project
assets.
The increase in cash for the period ended 31 December 2012 was driven by a rights issue in August 2012,
the proceeds from which raised $5.2 million; part of the proceeds have been used in the ongoing
operations of the business. The $2.72 million increase in trade and other receivables relates to SXG’s
acquisition of an environmental bond in relation to the Sandstone acquisition. The $2.26 million increase
13

in tenement acquisition costs also relates to the Sandstone acquisition and the related 985km 2 exploration
portfolio acquired through that acquisition.
In the nine months to 31 March 2013, SXG has recorded a loss of $6.49 million which equates to $8.65
million on an annualised basis. This represents a 40% increase in the loss recorded at 30 June 2011 and a
51% increase in the loss recorded for the 30 June 2012 financial year.
The primary reasons for the increase in the loss are a reduction in revenue from the sale of tenements and
an increase in exploration and development expenditure. Gains on the sale of tenements generated $1.83
million in 2011 and $1.93 million in 2012 but only $0.04 million in the nine months to 31 March 2013.
Exploration and pre-development expenditure increased from $6.34 million for the year ended 30 June
2011 to $6.79 million, annualised, for the financial year 2013. This expenditure increase is driven by the
increased activity at the Marda Gold project and following the completion of the definitive feasibility
study in May 2012 the Marda Gold project is moving into a pre-development stage which results in the
segregation of expenses in the profit and loss between exploration and pre-development.
Corporate expenses and salaries and employee benefits expense have been classified as administration
expenses at 31 December 2012 and 31 March 2013.
5.5 Capital Structure
The share structure of SXG as at 30 April 2013 is outlined below:
Number
Total ordinary shares on issue 408,912,834
Top 20 shareholders 157,558,531
Top 20 shareholders - % of shares on issue 38.53%
Source: Computershare
The range of shares held in SXG as at 30 April 2013 is as follows:
Number of Ordinary Number of Ordinary Percentage of Issued
Range of Shares Held
Shareholders
Shares
Shares (%)
1 - 1,000 375 139,399 0.03%
1,001 - 5,000 343 825,574 0.20%
5,001 - 10,000 164 1,308,732 0.32%
10,001 - 100,000 829 36,152,761 8.84%
100,001 - and over 531 370,486,368 90.60%
TOTAL 2,242 408,912,834 100.00%
Source: Computershare
14

The ordinary shares held by the most significant shareholders as at 30 April 2013 are detailed below:
Name
Polaris Metals Pty Ltd & Mineral Resources Limited
Number of Ordinary
Shares Held
36,056,221
Percentage of Issued
Shares (%)
8.82%
Mr Siang Hai Teoh 18,888,867 4.62%
Western Areas NL 14,739,721 3.60%
Strata Drilling WA Pty Ltd 9,500,000 2.32%
Subtotal 79,184,809 19.36%
Others 329,728,025 80.64%
Total ordinary shares on Issue 408,912,834 100.00%
Source: Computershare
15

The current SXG unlisted options on issue are outlined below:
Option Holder Number of options Exercise price
Cash raised if
Vesting Conditions Issue Date Expiry Date Escrowed Until
exercised
Samantha Jane Tough 1,000,000 $0.250 $250,000 No 12/03/2008 12/03/2014 20/03/2010
Samantha Jane Tough 1,000,000 $0.300 $300,000 No 12/03/2008 12/03/2014 20/03/2010
AJ Truelove & BL Bailey ATF Tr 2,000,000 $0.250 $500,000 No 12/03/2008 12/03/2014 20/03/2010
AJ Truelove & BL Bailey ATF Tr 2,000,000 $0.300 $600,000 No 12/03/2008 12/03/2014 20/03/2010
Hazurn Pty Ltd ATF Buchhorn S 1,000,000 $0.250 $250,000 No 12/03/2008 12/03/2014 20/03/2010
Hazurn Pty Ltd ATF Buchhorn S 1,000,000 $0.300 $300,000 No 12/03/2008 12/03/2014 20/03/2010
Goldmark Investments Pty Ltd 1,000,000 $0.250 $250,000 No 12/03/2008 12/03/2014 20/03/2010
Goldmark Investments Pty Ltd 1,000,000 $0.300 $300,000 No 12/03/2008 12/03/2014 20/03/2010
RJ Simmons 500,000 $0.250 $125,000 No 12/03/2008 12/03/2014 N/A
RJ Simmons 500,000 $0.300 $150,000 No 12/03/2008 12/03/2014 N/A
Kalgara Pty Ltd AFT Rosedale S 250,000 $0.250 $62,500 No 12/03/2008 12/03/2014 N/A
Kalgara Pty Ltd AFT Rosedale S 250,000 $0.300 $75,000 No 12/03/2008 12/03/2014 N/A
DH Calvert 250,000 $0.250 $62,500 No 12/03/2008 12/03/2014 N/A
DH Calvert 250,000 $0.300 $75,000 No 12/03/2008 12/03/2014 N/A
Graham Brock 250,000 $0.250 $62,500 No 20/09/2009 12/03/2014 N/A
John Rowe 250,000 $0.250 $62,500 No 18/11/2010 12/03/2014 N/A
Graham Brock 250,000 $0.300 $75,000 No 20/112009 12/03/2014 N/A
John Rowe 250,000 $0.300 $75,000 No 18/11/2010 12/03/2014 N/A
Ken Quirk 25,000 $0.250 $6,250 No 2/07/2008 2/07/2014 N/A
Ken Quirk 25,000 $0.300 $7,500 No 2/07/2008 2/07/2014 N/A
M airi Walsh 100,000 $0.250 $25,000 No 21/07/2009 21/07/2014 N/A
M airi Walsh 100,000 $0.300 $30,000 No 21/07/2009 21/07/2014 N/A
Andrea Jones 1,000,000 $0.100 $100,000 No 1/08/2011 31/07/2014 N/A
Andrea Jones 500,000 $0.200 $100,000 No 1/08/2011 31/07/2014 N/A
Andrea Jones 500,000 $0.250 $125,000 No 1/08/2011 31/07/2014 N/A
RJ Simmons 500,000 $0.100 $50,000 No 1/08/2011 31/07/2014 N/A
CC Joyce 500,000 $0.100 $50,000 No 1/08/2011 31/07/2014 N/A
M Walsh 200,000 $0.100 $20,000 No 1/08/2011 31/07/2014 N/A
Glenn Jardine 2,000,000 $0.200 $400,000 No 18/11/2010 1/10/2014 N/A
Glenn Jardine 1,000,000 $0.250 $250,000 No 18/11/2010 1/10/2014 N/A
Glenn Jardine 1,000,000 $0.300 $300,000 No 18/11/2010 1/10/2014 N/A
Glenn Jardine 1,000,000 $0.400 $400,000 No 18/11/2010 1/10/2014 N/A
Glenn Jardine 1,500,000 $0.100 $150,000 No 20/12/2012 23/11/2017 N/A
Samantha Jane Tough 1,500,000 $0.100 $150,000 No 20/12/2012 23/11/2017 N/A
Lynda Joan Brock 1,000,000 $0.100 $100,000 No 20/12/2012 23/11/2017 N/A
John Rowe 1,000,000 $0.100 $100,000 No 20/12/2012 23/11/2017 N/A
Renaissance 10,000,000 $0.100 $1,000,000 No 25/02/2012 24/02/2015 N/A
Troy 43,665,000 $0.100 $4,366,500 Yes 10/10/2012 10/10/2017 N/A
PCF 2,500,000 $0.100 $250,000 Yes 10/10/2012 10/10/2015 N/A
RM B 34,255,319 $0.047 $1,610,000 No 22/03/2013 21/03/2015 N/A
Total 116,870,319 $13,165,250
Source: SXG Management
We have been advised that there will be no changes to the terms or conditions of the current options on
issue following the implementation of the Scheme.
16

6. Profile of Polymetals Mining Limited
6.1 History
Polymetals Mining Limited is a base and precious metals producer and explorer who listed on the ASX in
May 2011 after the completion of a $7 million IPO (7 million shares at $1 per share). PLY has a number of
projects focusing on various commodities including gold, zinc, copper, uranium, silver, lead, platinum and
iron ore however its flagship project is the Mt Boppy Gold Mine.
The current Board of Directors comprise of PLY is:
• David Sproule – Non-Executive Chairman
• Frank Terranova – Managing Director
• Jon Parker – Non-Executive Director
• David Carland – Non-Executive Director
6.2 Projects
Canbelego - Mt Boppy Gold Mine
Mt Boppy is a long standing gold mine located 46km east of Cobar in NSW. PLY holds approximately 204km 2
of tenements in the Lachlan Ford Belt, a region which has produced in excess of 5 million ounces of gold.
The Mt Boppy mine operated from 1901 to 1923 and produced approximately 417,000 ounces of gold with
a grade of 15 g/t. After sporadic production of 7,000 ounces of gold in the years to 2002, PLY made the
decision to reopen the mine. In the four years to 2005 the mine produced some 68,000 ounces at a grade
of 5.29 g/t.
PLY undertook a definitive feasibility study in 2012 and in January 2013 announced the results of the
study which indicated a $27 million net present value (before tax) and 100% internal rate of return on
the project (the study assumed a gold price for the study of A$1,600). Unit costs of production were
anticipated to be $1,091 per ounce. The expected capital costs for the project were approximately
$26.6 million with approximately 64,630 ounces of gold to be recovered. The mined ore will be processed
at the existing Mt Boppy plant which will be upgraded to treat 300,000 tonnes of ore per annum.
In January 2013, PLY also secured a mining license and environmental protection license over the
Mt Boppy mine. PLY is currently undertaking the process of securing financing for the project with a
number of proposals having already been received.
Resource and reserve estimates at Mt Boppy and Boppy South are shown in the table below:
Measured & indicated Inferred Total
Grade (Au
Ounces (Au
Grade (Au
Ounces (Au
Grade (Au
Ounces (Au
Deposit
Tonnes (Kt)
g/t)
koz) Tonnes (Kt)
g/t)
koz) Tonnes (Kt)
g/t)
koz)
PLY - Mt Boppy &
Boppy South 684 4.2 92 82 3.9 10 766 4.1 102
Exploration around the Mt Boppy region continues with PLY commencing a diamond drilling campaign in
the March 2013 quarter at a cost of approximately $0.3 million.
17

Drew Hill - White Dam Gold Project
On 28 May 2013, PLY announced it had divested its 50% interest in White Dam and associated Drew Hill
exploration tenements to joint venture partner Exco Resources Limited.
The White Dam Gold Project was a 50% joint venture between PLY and Exco Resources Limited, a
subsidiary of ASX-listed, Washington H. Soul Pattinson and Company Limited. White Dam is located in the
Curnamona Province approximately 85km west of Broken Hill. PLY was the operator and manager of the
joint venture which comprises the White Dam Gold Mine and 728km 2 of exploration tenements surrounding
the mine. Washington H. Soul Pattinson and Company Limited holds 2 million shares in PLY.
Turner River (Farm-in)
In September 2012, PLY entered into an agreement with Lansdowne Resources Pty Ltd to acquire 100% of
the shares in that company and the associated rights to earn a 75% interest in the Turner River gold and
base metals projects which were owned by De Grey Mining Ltd. The Turner River projects are located
approximately 60 km south of Port Hedland, Western Australia.
In the March 2013 quarter, PLY completed the $2 million earn-in obligation for the gold project and has
advised De Grey that it will be assuming management of the joint venture in the June quarter. De Grey
will retain its 25% interest in the joint venture.
To date, PLY has spent $0.6 million of the necessary $1.5 million required for an earn-in on the base
metals project.
At March 2013, total resources for the Turner River Gold project were approximately 5.1Mt at 1.6 g/t for
268,000 ounces of gold.
Further, and more detailed, information on PLY’s projects may be found in Appendix 4.
18

6.3 Historical Balance Sheet
Polymetals Mining Limited Unaudited as at Reviewed as at Audited as at Audited as at
31-M ar-13 31-Dec-12 30-Jun-12 30-Jun-11
Statement of Financial Position $'000 $'000 $'000 $'000
CURRENT ASSETS
Cash and cash equivalents 9,654 11,016 12,177 15,971
Receivables 168 752 1,172 1,366
Inventories 18 668 1,967 894
Other financial assets - 637 672 283
Other 1,598 71 159 95
TOTAL CURRENT ASSETS 11,438 13,144 16,147 18,609
NON-CURRENT ASSETS
Receivables 334 - - 334
Property, plant and equipment 2,826 3,455 3,125 2,525
Other financial assets 233 1,031 997 532
Exploration and development costs 15,290 17,421 10,684 2,654
Capitalised mining development costs 537 1,338 1,655 1,813
Available for sale financial assets 316 - - -
TOTAL NON-CURRENT ASSETS 19,536 23,245 16,461 7,858
TOTAL ASSETS 30,974 36,389 32,608 26,467
CURRENT LIABILITIES
Trade and other payables 996 2,604 2,363 2,135
Current tax liabilities 112 112 - 3,033
Deferred tax liability 3,797 - - -
Provisions 979 1,256 1,807 610
Other - 1,063 - -
Deferred consideration 1,941 - - -
TOTAL CURRENT LIABILITIES 7,825 5,035 4,170 5,778
NON-CURRENT LIABILITIES
Deferred tax liabilities - 2,714 2,169 37
Provisions 77 480 412 683
Other - 877 - -
TOTAL NON-CURRENT LIABILITIES 77 4,071 2,581 720
TOTAL LIABILITES 7,902 9,106 6,751 6,498
NET ASSETS 23,072 27,283 25,857 19,969
EQUITY
Contributed equity 8,012 8,302 7,552 7,552
Reserves 337 456 338 116
Accumulated losses 14,723 18,525 17,967 12,301
TOTAL EQUITY 23,072 27,283 25,857 19,969
Source: PLY’s audited annual 2011 and 2012 annual reports, reviewed financial statements for the 6 month period until
31 December 2012 and unaudited management accounts for the nine months period ended 31 March 2013. The balance sheet as
at 31 March 2013 excludes assets and liabilities relating to White Dam and Drew Hill.
19

6.4 Historical Statement of Comprehensive Income
Polymetals Mining Limited
Source: PLY’s audited annual 2011 and 2012 annual reports, reviewed financial statements for the 6 month period until
31 December 2012 and unaudited management accounts for the nine months period ended 31 March 2013.
We have not undertaken a review of Polymetals’ unaudited accounts in accordance with Australian
Auditing and Assurance Standard 2405 “Review of Historical Financial Information” and do not express an
opinion on this financial information. However nothing has come to our attention as a result of our
procedures that would suggest the financial information within the management accounts has not been
prepared on a reasonable basis.
Commentary on financial statements
Unaudited for the
9 months ended
31-M ar-13
Reviewed for the
year ended 31-
half Audited for the Audited for the
Dec-12
year ended 30-
Jun-12
year ended 30-
Statement of Comprehensive Income $'000 $'000 $'000 $'000
Revenue
Revenue 7,680 6,702 14,741 28,180
We note that the balance sheet as at 31 March 2013 excludes assets and liabilities that relate to White
Dam as PLY announced on 28 May 2013 that it had divested its 50% interest in White Dam and associated
Drew Hill exploration tenements. The cash balance has not been adjusted for the consideration to be
received.
In the period 30 June 2011 to 31 March 2013 PLY’s net asset position has strengthened, increasing from
$19.97 million to $23.07 million.
Jun-11
Other income 485 - 1,878 1,959
Expenses
Depreciation (923) (750) (1,305) (3,309)
Salaries and employee benefits (2,266) (1,837) (3,337) (3,930)
Production (2,650) (1,879) (4,927) (7,568)
Impairment of exploration expenditure - - (658)
Royalty expenses (338) (332) (632) (924)
Rehabilitation expense (209) (186) - -
Administration expenses (1,223) (877) (1,834) (2,024)
Gain/(Loss) on derivatives 21 - - 236
Profit from continuing operations before income tax 577 841 4,584 11,962
Income tax expense (295) (283) (936) (3,609)
Profit from continuing operations after income tax 282 558 3,648 8,353
Profit from discontinued operations before income tax
- - 2,018 -
Profit for the year 282 558 5,666 8,353
Other comprehensive income (change in the fair value
of available-for-sale financial assets) - 44 (69) 166
Income tax relating to components of other
comprehensive income - - 21 (50)
Total comprehensive profit for the year 282 602 5,618 8,469
20

Cash and cash equivalents has decreased from $15.97 million at 30 June 2011 to $9.65 million at 31 March
2013. Cash has been used in the continuing development of PLY’s projects including $2 million spent in
relation to the earn-in agreement for the Turner River project and additional spending in relation to the
definitive feasibility study undertaken at Mt Boppy.
The decrease in receivables and inventory between 30 June 2011 and 31 March 2013 is in line with the
cessation of mining operations at White Dam in May 2012. As such, inventory stores are now being utilised
but not replenished which has caused the balance to fall.
Other current assets of $1.59 million at 31 March 2013 relate to deferred tax assets.
Investment in plant and equipment has seen the balance of fixed asset increase since 30 June 2011. This
increase is largely attributable to the $1.14 million increase in constructed assets at White Dam in 2012
when PLY equity increase in White Dam from 25% to 50%.
The largest increase has been in exploration and development costs which have increased from $2.65
million in June 2011 to $15.29 million at March 2013. This primarily relates to the significant investment
in the Mt Boppy project which has included definitive feasibility studies. Significant investments were also
made at PLY’s Drew Hill project.
Current liabilities increased approximately $2.8 million from 31 December 2012 to 31 March 2013
following the recognition of a $4.68 million deferred tax liability relating to the accelerated write offs of
exploration expenditure across all exploration assets and $1.94 million deferred consideration relating to
the farm-in agreement at Turner River.
Deferred consideration comprises $0.75 million payable upon decision to mine at the gold project, $0.75
million payable upon first production at the gold project, $1.0 million upon definition of a 0.75 million
ounce gold equivalent resource in the base metals project and $1.0 million payable upon election of
decision to mine at the base metals project. These amounts have then been probability weighted by PLY
to arrive at the $1.94 million.
At 31 March 2013 non-current liabilities related to provisions for employee benefits.
The contributed equity balance increased to $8.3 million in 2012 following the vesting of performance
rights and then decreased to $8.01 million following PLY’s share buyback under the terms of the Scheme
Implementation Agreement.
The above movements result in PLY’s 31 March 2013 balance sheet having a strong asset base with no
interest bearing debt.
The 2012 financial year saw PLY’s revenue decrease 48% from $28.18 million to $14.74 million. This
decrease was caused by mining of small and tight areas of the Hannaford and Lloyd pits in the White Dam
mine and the subsequent completion of mining at the Hannaford pit in early 2012. This decrease in
revenue resulted in a 56% reduction in profit from continuing operations which fell from $8.35 million to
$5.67 million.
The reduction in profit was partially offset by a $2.02 million profit from discontinued operations which
related to the disposal of PLY’ subsidiary, PLY (WA) Pty Ltd which held the Boorara project.
Depreciation expense for the year ended 30 June 2012 was down 61% compared to 2011 and production
expenses fell 35% as a result of the reduced mining activity in 2012.
21

At 31 March 2013, PLY have recorded revenue of $7.68 million which is approximately $4.5 million down
on 2012 revenue on an annualised basis as a result of the scaling back of mining operations at White Dam
following the cessation of operations in May 2012.
Production expenditure is 28% lower on an annualised basis and this is in line with expectations given the
reduced mining activity at White Dam. The 9% reduction (annualised basis) in salaries and employee
benefits at March 2013 is attributable to PLY electing to outsource some of its administration functions.
6.5 Capital Structure
The share structure of PLY as at 22 May 2013 is outlined below:
Source: Link Market Services
The range of shares held in PLY as at 22 May 2013 is as follows:
Source: Link Market Services
The ordinary shares held by the most significant shareholders as at 22 May 2013 are detailed below. Note
that Meadowhead Investments Pty Ltd and Mrs Jane Christine Sproule are associated:
Source: Link Market Services
Number
Total ordinary shares on issue 38,285,620
Top 20 shareholders 32,168,139
Top 20 shareholders - % of shares on issue 84.02%
Range of Shares Held
1 - 1,000 21 12,875 0.03%
1,001 - 5,000 142 470,517 1.23%
5,001 - 10,000 98 847,506 2.21%
10,001 - 100,000 90 3,129,345 8.17%
100,001 - and over 31 33,825,377 88.35%
TOTAL 382 38,285,620 100.00%
Unmarketable parcel 44 44,025
Name
Number of Ordinary
Shareholders
Number of Ordinary
Number of Ordinary
Shares Held
Shares
Percentage of Issued
Percentage of Issued
Shares (%)
MEADOWHEAD INVESTMENTS PTY LTD 10,204,506 26.65%
MR D SPROULE & MRS J SPROULE & CHILD 8,495,635 22.19%
WASHINGTON H SOUL PATTINSON AND COMPANY LIMITED 2,000,000 5.22%
RICHLARK PTY LTD 1,953,159 5.10%
Subtotal 22,653,300 59.17%
Others 15,632,320 40.83%
Total ordinary shares on Issue 38,285,620 100.00%
Shares (%)
22

7. Economic analysis
Commodity prices have declined from their peaks but, overall, remain at high levels by historical
standards. Inflation has generally moderated over recent months and monetary policy has been eased
further in a number of countries.
Financial conditions internationally are very accommodative. Despite the recent rise in sovereign bond
yields, funding conditions for sovereigns, well-rated corporates and most financial institutions remain very
favourable.
In Australia, growth over the past year has been a bit below trend. The outlook published by the Reserve
Bank of Australia (“RBA”) last month is for a similar performance in the near term and recent data are
consistent with this. The unemployment rate has edged higher over the past year and growth in labour
costs has moderated. Inflation has been consistent with the medium-term target and is expected to
remain so over the next one to two years.
The easing in monetary policy over the past 18 months has supported interest-sensitive areas of spending
and has been reflected in portfolio shifts by savers and higher asset values. Further effects can be
expected over time. The pace of borrowing has thus far remained relatively subdued, though recently
there have been some signs of increased demand for finance by households. The exchange rate has
depreciated since the previous RBA Board meeting, although, as the RBA Board has noted for some time, it
remains high considering the decline in export prices that has taken place over the past year and a half.
Source: www.rba.gov.au Statement by Glenn Stevens, Governor: Monetary Policy Decision 4 June 2013
8. Industry analysis
Gold is both a commodity and an international store of monetary value. Once mined, gold continues to
exist indefinitely, often melted down and recycled to produce alternative or replacement products. This
characteristic means that gold demand is supported by both mine production and gold recycling.
As illustrated in the chart below, gold mine production was approximately 2,842 metric tonnes in 2012 and
gold consumption was 4,484 metric tonnes. Demand for gold has consistently exceeded supply over the
last 10 years, and the escalated level of economic and financial uncertainly during the past three years
has caused investors to move capital from risky assets to gold assets, which are perceived to be a good
store of monetary value. As a result, total gold demand increased by approximately 12% between 2008 and
2012, with demand as a percentage of supply remaining at over 150% for the same period.
23

Gold Demand/Supply Mined
Metric tonnes
5000
4000
3000
2000
1000
0
Gold Supply and Demand
170%
165%
160%
155%
150%
145%
140%
135%
Demand as % Supply
Gold Mine Supply Gold Demand Demand as % Supply
Source: Bloomberg and BDO Analysis
Until the late 1980’s, South Africa produced approximately half of the total gold produced. More recently
however, gold production has become geographically segmented, as shown in the chart below, with
production dominated by China, Australia and the United States.
Production by Country - 2012
16%
China
Australia
34%
10%
United States
Russia
South Africa
4%
4%
7%
8%
7%
10%
Peru
Mexico
Canada
Others
Source: Bloomberg and BDO Analysis
Gold prices
The price of gold fluctuates on a daily basis depending on global demand and supply factors. The price
trend over the last two years is reflective of weak global economic conditions driving demand. As can be
seen in the graph below, the value of gold peaked at US$1,900 per ounce on 5 September 2011. This peak
was largely caused by the recent debt market crisis in Europe, but it was also driven by the Standard and
Poor’s downgrade of the US credit rating. This sent global stock markets tumbling and a flood of investors
towards safer havens such as gold. Prices contracted in December 2011 reaching a low of US$1,545 per
24

ounce; however 2012 a recovery of the gold price with it reaching US$1,790 per ounce on 4 October 2012,
before declining to US$1,675 per ounce at 31 December 2012. Gold price have declined in 2013 which has
seen the price fall below US$1,400 per ounce in April 2013.
Gold prices are forecast to fall over the next three years to below US$1,500 per ounce in 2016.
Nevertheless, growth in global money supply, U.S dollar depreciation and overall uncertainty in global
financial markets may continue to drive investors toward using precious metals as a store of value. This
could be further fuelled by the rapidly increasing appetite for precious metals from China.
2,000
Gold Pricing
1,800
1,600
1,400
US$/Ounce
1,200
1,000
800
600
400
200
-
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Gold spot price Forecast Forward
Source: Bloomberg and BDO Analysis
Recent gold transactions
The emergence of a new generation of mid-tier miners and the resurgent gold price in 2012 drove the
increase in the number of announced gold acquisitions in 2012.
In the last half of 2012, several large deals have been announced to the market involving gold companies:
• On 29 June 2012 it was announced that Allied Gold Mining Plc and St Barbara Ltd had reached an
agreement in which the two companies would merge, worth $594 million. This deal was completed
on 7 September 2012.
• In August 2012, Zijin Mining Group announced that it had made a cash offer to acquire its
remaining 83.02% share in Norton Gold Fields Ltd for $198 million. This deal was completed on
21 August 2012.
• On 6 August 2012, Silver Lake Resources announced it planned to merge with Integra Mining Ltd
in a deal worth $417 million. The merger between Integra and Silver Lake was completed on
11 January 2013.
25

• On 9 August 2012, Regis Resources Limited announced it had executed a letter of agreement to
acquire the McPhillamys Gold Project from joint venture owners, Newmont Exploration Pty Ltd
and Alkane Resources Limited. The consideration to be paid is $150 million to be satisfied by the
issue of Regis shares based on an issue price of $4.20 per share.
• On 19 September 2012, CGA Mining Limited and B2Gold Corp announced they had entered into a
Merger Implementation Agreement to combine the two companies. The transaction was valued at
$939 million.
• On 20 September 2012, Focus Minerals Ltd announced it had entered into an agreement with
Shandong Gold International Mining Corporation Ltd, under which Shandong Gold International
Mining Corporation Ltd agreed to subscribe to new fully paid shares to raise A$225.1 million.
• On 27 September 2012, Noble Mineral Resources Ltd announced that a major non-government
Chinese mining and investment group, Zhongrun, will invest A$84.7 million in Noble Mineral
Resources Ltd via a placement of shares.
• On 28 September 2012, Cortona Resources Ltd and Unity Mining Ltd announced they had agreed to
a merger via a Scheme of Arrangement in which Cortona Resources Limited shareholders will
receive 0.734 Unity Mining Ltd shares for every one share they hold.
• On 24 October 2012, Resolute Mining Ltd announced it executed conditional share sale agreements
to acquire 19.99% of Noble Mineral Resources Ltd, in competition with Zhongrun, in a A$85 million
financing offer.
• On 13 December 2012, Primero Mining Corp, a Canada based mining corporation announced that it
had signed a definite agreement to acquire Cerro Resources, an Australian based mining company
that specialised in global gold and silver exploration in a deal worth $111 million.
9. Valuation approach adopted
There are a number of methodologies which can be used to value a business or the shares in a company.
The principal methodologies which can be used are as follows:
• Capitalisation of future maintainable earnings (“FME”)
• Discounted cash flow (“DCF”)
• Quoted market price basis (“QMP”)
• Net asset value (“NAV”)
• Market based assessment, such as a resource multiple
A summary of each of these methodologies is outlined in Appendix 2.
Different methodologies are appropriate in valuing particular companies, based on the individual
circumstances of that company and available information.
Valuation of Southern Cross Goldfields Limited
In our assessment of the value of SXG, we have chosen to employ the following methodologies:
• Sum of parts method as our primary method, being the NAV methodology incorporating the DCF
methodology to value the Marda Project; and
• QMP approach as our secondary method.
26

• We have also used the resource multiple valuation as a cross-check to our sum-of parts and QMP
valuations.
We have chosen these methodologies for the following reasons:
• Sum-of-parts
The sum of parts method estimates the market value of a company by separately valuing each asset and
liability of the company. The value of each asset may be determined using different methods. As SXG is
a mining and exploration company its core value is in the cash and mineral assets that it holds. The
component parts of SXG are valued using NAV as our primary methodology, complemented by the DCF
methodology in respect of the Marda Project and the technical valuation of the other mineral assets
of SXG.
We have assessed that the most appropriate methodology in valuing the Marda Project is the DCF method
for the following reasons:
• The Marda Project has a declared reserve;
• SXG has completed reliable cash flow forecasts based on the life of mine for the Marda Project;
• The Marda Project is forecast to start producing in 2014; and
• The Marda Project has a finite life and is suited to applying the DCF approach.
We have instructed AMC Consultants Pty Ltd (“AMC”) to provide a technical assessment report to confirm
that SXG has a reasonable basis upon which to base the assumptions and mining inputs used in the cash
flow forecasts of the Marda Project. The technical assessment is in accordance with the Code of
Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent
Expert Reports (“the Valmin Code”) and the Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves (“JORC Code”).
In particular we have instructed AMC to provide an assessment on the following:
• An assessment on the reasonableness of the reserves, resources and life of mine used in the
preparation of the financial model used to value the Marda Project;
• Mining physicals (production schedule, recovery and grade);
• Operating costs; and
• Capital costs (mining capital costs, general and administration, restoration and rehabilitation
provisions).
Under the sum-of-parts methodology, a NAV multiple is applied to the value of the Marda Project under
the DCF approach as gold mining companies often trade at a market capitalisation greater than their DCF
value.
We have also instructed AMC to value SXG’s other mineral assets in accordance with the Valmin Code and
the JORC Code. We are satisfied with the valuation methodologies adopted by AMC which we believe are
in accordance with industry practices and compliant with the requirements of the Valmin Code.
Grant Thornton has been appointed as independent expert to provide an opinion to PLY shareholders on
the Scheme. AMC was initially engaged by Grant Thornton to provide a valuation report on SXG and PLY in
relation to the Scheme. We have subsequently engaged AMC to provide us with substantially the same
27

eport to be used in our report. At the time we engaged AMC, they had commenced preparation of their
report for Grant Thornton but not yet completed it.
We are satisfied with the use of AMC’s report, for the purpose of our report, for the following reasons:
- BDO reviewed and was satisfied with the competence of AMC and its independence from SXG and
PLY;
- BDO reviewed the initial instructions given to AMC by Grant Thornton and were satisfied that the
instructions were substantially the same as those that would have been given by BDO;
- BDO issued its own instructions to AMC in accordance with the Valmin Code and RG 112;
- BDO critically reviewed AMC’s draft report and considers the assumptions and methodologies to
be reasonable and the source data drawn on to be appropriate;
- AMC amended its draft report following BDO’s review;
- AMC did not issue its final report until BDO was satisfied with the content of the report;
- AMC’s report is dated close to the date of our report; and
- Based on our review, we have reasonable grounds for believing the specialist report is not false or
misleading.
A copy of AMC’s report is attached in Appendix 4.
• QMP
SXG is listed on the ASX. This means there is a regulated and observable market where SXG’s shares can
be traded. However, in order for the QMP methodology to be considered appropriate, SXG’s shares should
be liquid and the market should be fully informed as to SXG’s activities. We have considered these factors
in section 11.2.
• Resource multiple: cross-check
As a cross check to our sum-of-parts and QMP valuations, we have analysed the resource multiple observed
for companies listed on the ASX with gold projects as their primary focus.
Note that we have not employed the FME methodology as SXG has made losses over the past few years.
Therefore there are no historic profits that could be used to represent future earnings. This means that
the use of the FME valuation methodology is not appropriate.
Valuation of the Merged Entity
In our assessment of the value of the Merged Entity, we have chosen to employ the sum of parts
methodology.
The Merged Entity is valued by combining the sum of parts value of each company as derived in section
and adjusted for any forecast synergies in the Merged Entity.
Valuation of SXG
We have adopted the DCF value of the Marda Project as set out in section 10.1 and discounted the value
of the cash flows of the project with the forecast discount rate of the Merged Entity. We have adopted
the other assets and liabilities as set out in the sum of parts valuation in section 10.1.
28

Valuation of PLY
In our assessment of the value of PLY, we have chosen to employ the following methodology:
• Sum of parts method as our primary method being essentially the NAV methodology incorporating the
DCF methodology to value the Mt Boppy Project.
We have chosen this methodology for the following reason:
• Sum-of-parts
The sum of parts method estimates the market value of a company by separately valuing each asset and
liability of the company. The value of each asset may be determined using different methods. As PLY is a
mining and exploration company, its core value is in the cash and mineral assets that it holds. The
component parts of PLY are valued using NAV as our primary methodology, complemented by the DCF
methodology in respect of the Mt Boppy Project and the technical specialist valuation of the other mineral
assets of PLY.
We have assessed that the most appropriate methodology in valuing the Mt Boppy Project is the DCF
method for the following reasons:
• PLY has completed cash flow forecasts based on the life of mine for the Mt Boppy Project;
• The Mt Boppy Project is in production and there is historical information available on which to
reasonably base forecasts;
• The majority of the capital expenditure has been incurred at the Mt Boppy Project; and
• The Mt Boppy Project has a finite life and is suited to applying the DCF approach.
We have instructed AMC to provide a technical assessment report to confirm that PLY has a reasonable
basis upon which to base the assumptions and mining inputs used in the cash flow forecasts of the Mt
Boppy Project. The technical assessment is in accordance with the Valmin Code and the JORC Code.
In particular we have instructed AMC to provide an assessment on the following:
• An assessment on the reasonableness of the reserves, resources and life of mine used in the
preparation of the financial model used to value the Mt Boppy Project;
• Mining physicals (production schedule, recovery and grade);
• Operating costs; and
• Capital costs (mining capital costs, general and administration, restoration and rehabilitation
provisions).
Under the sum-of-parts methodology, a NAV multiple is applied to the value of the Mt Boppy Project under
the DCF approach as gold mining companies often trade at a market capitalisation greater than their
DCF value.
We have also instructed AMC to value PLY’s other mineral assets in accordance with the Valmin Code and
the JORC Code. We are satisfied with the valuation methodologies adopted by AMC which we believe are
in accordance with industry practices and compliant with the requirements of the Valmin Code.
Grant Thornton has been appointed as independent expert to provide an opinion to PLY shareholders on
the Scheme. AMC was initially engaged by Grant Thornton to provide a valuation report on SXG and PLY in
relation to the Scheme. We have subsequently engaged AMC to provide us with substantially the same
29

eport to be used in our report. At the time we engaged AMC, they had commenced preparation of their
report for Grant Thornton but not yet completed it.
We are satisfied with the use of AMC’s report, for the purpose of our report, for the following reasons:
- BDO reviewed and was satisfied with the competence of AMC and its independence from SXG and
PLY;
- BDO reviewed the initial instructions given to AMC by Grant Thornton and were satisfied that the
instructions were substantially the same as those that would have been given by BDO;
- BDO issued its own instructions to AMC in accordance with the Valmin Code and RG 112;
- BDO critically reviewed AMC’s draft report and considers the assumptions and methodologies to
be reasonable and the source data drawn on to be appropriate;
- AMC amended its draft report following BDO’s review;
- AMC did not issue its final report until BDO was satisfied with the content of the report;
- AMC’s report is dated close to the date of our report; and
Based on our review, we have reasonable grounds for believing the specialist report is not false or
misleading. A copy of AMC’s report is attached in Appendix 4.
30

10. Valuation of SXG
10.1. Sum-of-parts valuation of SXG
10.1.1. DCF Valuation of the Marda Project
We elected to use the DCF approach in valuing SXG’s Marda Gold Project (“the Marda Project”). The DCF
approach estimates the fair market value by discounting the future cash flows arising from the project to
their net present value. Performing a DCF valuation requires the determination of the following:
• The expected future cash flows that the project is expected to generate; and
• An appropriate discount rate to apply to the cash flows of the project to convert them to present
value equivalent.
A cash flow model for the Marda Project was prepared by SXG (“the Marda Model”). The Marda Model
estimates the future cash flows expected from gold production at the Marda Project based on determined
JORC compliant reserves. The Marda Model depicts forecasts of real, post-tax cash flows over the life of
mine on a monthly basis.
The Marda Model has been adjusted by us to reflect any changes to technical assumptions as a result of
AMC’s review and any changes to the economic and other input assumptions from our research (“the
Adjusted Marda Model”). We have adjusted the Marda Model to reflect cash flows on an annual basis.
The main assumptions underlying the Adjusted Marda Model include:
• Mining and production volumes;
• Commodity prices;
• Operating costs;
• Sustaining capital expenditure;
• Foreign exchange rates;
• Royalties;
• Funding; and
• Discount rate.
Limitations
Since forecasts relate to the future, they may be affected by unforeseen events and they depend, in part,
on the effectiveness of management’s actions in implementing the plans on which the forecasts are based.
Accordingly, actual results may vary materially from the forecasts, as it is often the case that some events
and circumstances frequently do not occur as expected, or are not anticipated, and those differences may
be material.
Revenue assumptions
Revenue has been estimated as the product of annual saleable gold and the forecast gold prices. The
Adjusted Marda Model has been based on forecast real gold prices and exchange rates.
31

Funding assumptions
SXG has received two non-binding indicative debt funding offers to finance the Marda Project. We have
valued the Marda Project on the basis that it will be funded by debt of $32 million and equity of between
$9 million and $11 million. SXG will also refinance the Sandstone Project loan facility to $5 million. We
have assessed this assertion in light of our industry knowledge and the debt funding offers received by SXG
and consider this to be reasonable.
Economic assumptions
Inflation
We have applied an inflation rate to convert the forecast nominal gold prices into real terms.
In our assessment of the inflation rate, we have considered forecasts prepared by economic analysts and
other publicly available information including broker consensus to arrive at our inflation rate assumptions.
From our analysis, target inflation is in the range of 2% to 3% which is consistent with the Reserve Bank of
Australia’s target inflation rate range. We have adopted an inflation rate of 3% to convert the cash flows
expressed in nominal terms to real terms.
Foreign exchange rate
All commodity prices are stated in United States Dollars (“USD”) and the forecasts in the Adjusted Marda
Model are in Australian Dollars (“AUD”). USD to AUD conversions were undertaken using the following
foreign exchange rate assumptions:
2013 2014 2015 2016 2017 2018 2019 2020 2021
Exchange rate
(USD:AUD) 1.00 1.01 0.93 0.90 0.87 0.85 0.84 0.82 0.82
Source: Bloomberg
Royalties and tax
Royalties
The Western Australian State Government royalty is included in the Adjusted Marda Model. This is
calculated as 2.5% of revenue.
Corporate tax
The Adjusted Marda Model assumes a corporate tax rate of 30% over the period of the forecasts, after
taking into account any tax losses carried forward.
DCF Valuation – Discount rate
We have selected a real after tax discount rate of 6.5% to discount the forecasts to their present value.
In selecting this range of discount rates we considered the following:
• The rates of return for comparable listed Australian gold companies;
• The risk profile of SXG as compared to other listed Australian gold companies;
• The current and forecast debt to equity ratio of SXG;
• SXG’s forecast cost of debt as advised by SXG;
32

• AMC’s assessment of the relative risk of the Marda Project compared with the Mt Boppy Project.
Details on our discount rate determination are provided in Appendix 3.
Commodity prices
In obtaining projected gold prices we have considered:
• Historical spot and forward prices from Bloomberg; and
• Most recent Consensus Economics price forecasts.
Based on our analysis, we adopted the following projected gold prices (in real terms):
2013 2014 2015 2016 2017 2018 2019 2020 2021
Gold price
(real) 1,600 1,525 1,420 1,300 1,180 1,185 1,185 1,185 1,185
Source: Consensus Economics & Bloomberg
The Adjusted Marda Model
We undertook the following analysis on the Adjusted Marda Model:
• A review of the mathematical structure and internal consistency;
• Appointed AMC as the technical expert to assess the reasonableness of the resources, capital and
operating cost and other mining inputs used in the preparation of the life of mine;
• Conducted independent research on certain economic and other inputs such as commodity prices,
foreign exchange rates, inflation and discount rate applicable to the future cash flows of the
Marda Project;
• Held discussions with SXG’s management regarding the preparation of the cash flow forecasts in
the Marda Model and its views;
• Adjusted the Marda Model to reflect any changes to the technical assumptions as a result of AMC’s
review and any changes to the economic and other input assumptions from our research; and
• Performed a sensitivity analysis on the value of the Marda Project as a result of flexing selected
assumptions and inputs.
Appointment of a technical expert
AMC, a mining technical specialist was engaged to prepare a report providing an assessment on the
following inputs used in the preparation of the Marda Model;
• The reasonableness of the resources used in the preparation of the Marda Model;
• Mining physicals (life of mine, production schedule, recovery and grade);
• Operating costs (mining operation, surface haulage, processing, accommodation and messing,
royalties and general and administration);
• Capital costs (mining capital costs, processing capital costs, resource definition, general and
administration); and
• Restoration and rehabilitation provisions.
33

AMC modelled two cases for the Marda Project based on different forecasts for mining and processing
tonnages, gold grades and costs.
• Case 1, ore production, is primarily based on the feasibility study scenario using Ore Reserves, and
that part of Minerals Resources included in the mine plan provided to AMC. AMC added additional
ore to the production case in years 5 and 6 of the schedule based on the likelihood of conversion
of near mine Mineral Resources to Ore Reserves and exploration success also contributing to
additional Ore Reserves.
• Case 2, ore production, includes that scheduled in Case 1, with the addition of two years’
production simulated to reflect the likely conversion of additional minerals resources to ore
reserves and the likely success with exploration in the Marda region. AMC has included additional
production to extend the life of mine for two years to reflect further exploration success.
The two cases have been provided as a lower and upper range of likely outcomes for the Marda Project.
For the purposes of our valuation, we have adopted both cases to form the basis for our lower and upper
value ranges of the Marda Project derived from the Adjusted Marda Model.
A copy of AMC’s report is included in Appendix 4.
Mining Physicals
Marda Case 1
Set out below is a summary of the mining and processing activity included in the Adjusted Marda Model.
Marda Project Case 1 Units 31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18 31-Dec-19
Mining
Ore Tonnes Mined t - 163,307 501,732 580,539 540,904 454,567 118,190
Waste Tonnes Mined t - 941,569 3,398,268 3,319,461 3,359,096 3,445,433 548,531
Total Movement t - 1,104,876 3,900,000 3,900,000 3,900,000 3,900,000 666,721
Grade Mined g/t - 2.13 2.66 2.33 2.27 2.07 4.75
Processing
Tonnes Processed t - 96,990 545,000 509,980 546,425 505,000 500,000
Grade Processed g/t - 2.11 2.47 2.39 2.14 2.31 2.31
Contained oz oz - 6,567 43,210 39,246 37,571 37,505 37,134
Recovery % - 94% 94% 94% 95% 95% 95%
Recovered oz oz - 6,173 40,618 36,892 35,692 35,630 35,277
Source: The Adjusted Marda Model
34

600,000
Marda Project (tonnes processed)
500,000
400,000
300,000
200,000
100,000
0
2013 2014 2015 2016 2017 2018 2019
Gold processed (tonnes)
Source: The Adjusted Marda Model
Key aspects of AMC's case 1 model are:
• The mine schedule and processing schedule are essentially based on the 5 year LOM plan provided
in the feasibility study with a limited amount of ore added to the end of the mine life.
• Project development commences in the last quarter of 2013.
• Operating and capital costs are based on those provided in the feasibility study.
• Average unit mining costs of $3.24/t of material moved are used.
• Average processing costs of $30.21/t ore processed are assumed.
• Total ore processed is 2.7 Mt at a head grade of 2.3 g/t.
• AMC adjusted the head grade to reflect a lower grade of diluting material than that assumed in
the feasibility study based on the AMC review of the Resource model, this had the effect of
lowering the head grade from 2.36 g/t to 2.31 g/t over the life of the Project.
• AMC adjusted the metallurgical recovery for the project in the first three years from 95% to 94%
compared to the feasibility study based on AMC’s review of the test work.
• Total gold production of 190 koz of gold.
• Initial capital expenditure of $38.2M based on the feasibility study. This capital is principally
associated with site establishment and relocation and refurbishment of the processing facilities
and camp from Sandstone to Marda.
• Closure costs increased by $1.2M compared to the feasibility study to offset the assumed residual
value of the mining equipment.
Marda Case 2
Set out below is a summary of the mining and processing activity included in the Adjusted Marda Model.
35

Marda Project Case 2 Units 31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18 31-Dec-19 31-Dec-20 31-Dec-21
Mining
Ore Tonnes Mined t - 163,307 501,732 580,539 540,904 454,567 501,732 501,732 118,190
Waste Tonnes Mined t - 941,569 3,398,268 3,319,461 3,359,096 3,445,433 3,398,268 3,398,268 548,531
Total Movement t - 1,104,876 3,900,000 3,900,000 3,900,000 3,900,000 3,900,000 3,900,000 666,721
Grade Mined g/t - 2.13 2.66 2.33 2.27 2.07 2.71 2.36 2.36
Processing
Tonnes Processed t - 96,990 545,000 509,980 546,425 505,000 500,000 500,000 276,679
Grade Processed g/t - 2.11 2.47 2.39 2.14 2.31 2.56 2.31 2.31
Contained oz oz - 6,567 43,210 39,246 37,571 37,505 41,176 37,134 20,548
Recovery % - 94% 94% 94% 95% 95% 93% 92% 92%
Recovered oz oz - 6,173 40,618 36,892 35,692 35,630 38,393 34,163 18,905
Source: The Adjusted Marda Model
600,000
Marda Project (tonnes processed)
500,000
400,000
300,000
200,000
100,000
0
2013 2014 2015 2016 2017 2018 2019 2020 2021
Gold processed (tonnes)
Source: The Adjusted Marda Model
Key aspects of AMC's case 2 model are:
• Assumptions as in case 1 for the first 4 years of production.
• An additional 1 million tonnes of ore at a grade 2.31 g/t is added to the end of the mine life. AMC
has assumed that operating costs are the same as those incurred in year 2014 for the extension
period. The head grade is based on the project average. The 1 Mt represents 50% of the Marda
Inferred Resource converting to Ore Reserves. The average project head grade has been applied.
• Processing recoveries are assumed to be 92% in the extension years to reflect a lower confidence
in the recovery characteristics for this material.
• Total gold production of 246 koz of gold.
36

• A higher capital expenditure over the extension period is assumed compared to case 1 due to costs
that would be associated with starting or extending open pits.
Operating Costs
Operating costs included in the Adjusted Marda Model consist of salaries and labour, reagents and
operating consumables, power, maintenance, general administration and flights and accommodation for
mine staff. The tables below shows the forecast operating costs per annum for the remaining life of mine.
Marda Case 1
Marda Project Case 1 31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18 31-Dec-19
$ $ $ $ $ $ $
Mining - 2,513,978 11,668,042 11,599,472 11,743,251 13,103,516 10,570,702
Mining Equipment Lease Cost - 739,881 3,053,768 3,053,752 3,054,406 434,844 156,388
Processing - 3,187,890 16,204,233 15,434,282 16,235,555 15,324,801 15,545,830
General Administration - 1,033,549 4,176,206 4,186,622 4,257,236 4,364,912 2,308,722
Total Project Cost - 7,475,298 35,102,249 34,274,128 35,290,448 33,228,073 28,581,642
Source: The Adjusted Marda Model
Marda Case 2
Marda Project Case 2
31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18 31-Dec-19 31-Dec-20 31-Dec-21
$ $ $ $ $ $ $ $
Mining - 2,513,978 11,668,042 11,599,472 11,743,251 13,103,516 11,668,042 11,668,042 5,570,702
Mining Equipment Lease - 739,881 3,053,768 3,053,752 3,054,406 434,844 3,053,768 3,053,768 156,388
Processing - 3,187,890 16,204,233 15,434,282 16,235,555 15,324,801 16,204,233 16,204,233 8,545,830
General Administration - 1,033,549 4,176,206 4,186,622 4,257,236 4,364,912 4,176,206 4,176,206 2,308,722
Total Project Cost - 7,475,298 35,102,249 34,274,128 35,290,448 33,228,073 35,102,249 35,102,249 16,581,642
Source: The Adjusted Marda Model
Capital Expenditure
The table below shows the forecast capital costs per annum for the remaining life of mine.
Marda Case 1
Marda Project Case 1 31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18 31-Dec-19
$ $ $ $ $ $ $
Capital Expenditure - 38,155,619 1,761,294 1,407,438 357,438 5,953,438 (881,851)
Source: The Adjusted Marda Model
Marda Case 2
31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18 31-Dec-19 31-Dec-20 31-Dec-21
Marda Project Case 2
$ $ $ $ $ $ $ $
Capital Expenditure - 38,155,619 1,761,294 1,407,438 357,438 5,953,438 2,000,000 2,000,000 (881,581)
Source: The Adjusted Marda Model
Capital expenditure for the Adjusted Marda Model consists of the removal, refurbishment, relocation and
installation of plant and equipment as well as infrastructure items including camp, roads and airstrip,
37

uildings and water supply. The $38.16 million capital expenditure for 2014 mainly relates to plant and
infrastructure costs incurred in establishing the mine for the six months to 31 December 2014. The cash
inflow of $0.88 million for 2019 in Case 1 and 2021 in Case 2 relates to the sale of plant and equipment of
$2.08 million, offset by mine closure costs of $1.2 million.
DCF Valuation – sensitivities
The estimated value of the Marda Project is derived under the DCF approach. Our valuation is most
sensitive to changes in the forecast gold prices and exchange rate. We have therefore included an analysis
to consider the value of the Marda Project under various pricing scenarios and in applying:
• A change of +/- 5% to commodity prices
• A change of +/- 5% to exchange rate
• A change of +/- 5% to recovery percentage
• A change of +/- 5% to operating expense
• A change of +/- 5% to sustaining capital expenditure
• A real discount rate in the range of 5.0% to 8.0%.
The following tables sets out the valuation outcomes from our DCF analysis.
Marda Case 1
Flex NPV ($m) NPV ($m) NPV ($m) NPV ($m) NPV ($m)
Commodity
Price
Sensitivity analysis
Exchange
rates
Recovery
(%)
Operating
costs
Capital
expenditure
-5% 18.18 37.01 17.60 34.26 30.25
-4% 20.19 35.38 19.72 33.24 29.85
-3% 22.20 33.79 21.85 32.16 29.44
-2% 24.21 32.23 23.97 30.85 29.03
-1% 26.21 30.25 26.10 29.54 28.63
0% 28.22 28.22 28.22 28.22 28.22
1% 30.23 26.23 30.35 26.91 27.82
2% 32.17 24.29 32.34 25.59 27.41
3% 33.65 22.37 33.91 24.28 27.00
4% 35.14 20.50 35.48 22.97 26.60
5% 36.62 18.66 37.06 21.65 26.19
Source: BDO Analysis
38

Discount rate NPV ($m)
5.0% 29.93
5.5% 29.34
6.0% 28.77
6.5% 28.22
7.0% 27.69
7.5% 27.17
8.0% 26.67
Source: BDO Analysis
Marda Case 2
Sensitivity analysis
Flex NPV ($m) NPV ($m) NPV ($m) NPV ($m) NPV ($m)
Commodity
Exchange
Recovery
Project
Capital
Price
rates
(%)
costs
expenditure
-5% 25.14 52.56 24.32 46.76 39.17
-4% 27.63 49.21 26.97 44.70 38.64
-3% 30.12 45.92 29.62 42.66 38.12
-2% 32.33 42.72 32.08 40.62 37.59
-1% 34.22 39.60 34.10 38.58 37.07
0% 36.55 36.55 36.55 36.55 36.55
1% 39.57 34.24 39.77 34.84 36.02
2% 42.60 32.41 42.99 33.58 35.50
3% 45.64 30.33 46.24 32.31 35.07
4% 48.70 28.01 49.50 30.90 34.73
5% 51.76 25.74 52.76 29.23 34.38
Source: BDO Analysis
Discount rate NPV ($m)
5.0% 38.97
5.5% 38.13
6.0% 37.33
6.5% 36.55
7.0% 35.79
7.5% 35.07
8.0% 34.36
Source: BDO Analysis
39

Considering the valuation outcomes above, we estimate the fair market value of the Marda Project to be
in the range of $28.22 million to $36.55 million, with a midpoint value of $32.39 million.
10.1.2. Other Exploration Assets
We instructed AMC to provide a market valuation of the major exploration assets of SXG including Copper
Bore and the Evanston Shear Zone.
Marda tenement area
We have instructed AMC to value the Marda tenement area under the Valmin Code which does not host
any Mineral Resources but remains prospective for gold and base metals. AMC has deemed that the most
reliable method to value these resources in using the Comparable Transactions method.
AMC have concluded that the value is between $0.65 million and $1.3 million.
Sandstone
In valuing SXG’s Sandstone Project, AMC has relied on the Comparable Transactions valuation methodology
and the Yardstick valuation methodology. We are satisfied with the valuation methodologies adopted by
AMC which are in accordance with industry practices and compliant with the requirements of the Valmin
Code.
AMC valued the Sandstone Project to be between $3.4 million and $8.3 million. We have adopted the
midpoint value of $5.85 million in our preferred valuation scenario.
SXG has advised us that a potential option to fund the Marda Project would be to sell the Sandstone
tenements. For the purpose of our valuation, we have assumed that the Sandstone tenements are sold at
the values determined by AMC above.
A copy of AMC’s report is attached at Appendix 4.
10.1.3. NAV multiple
The value per share of gold mining companies when valued using the DCF valuation methodology,
including the value of exploration assets, is often lower than the value of the trading price per share.
It is common practice to apply a NAV multiple to the DCF value and value of the exploration assets to
arrive at the value of a company.
Possible reasons for a difference between the value of the mineral assets per share and the traded price
are:
• The potential upside at existing operating or development sites that would allow for an extension
of the life of mine and higher volumes, outside of the announced reserve and resource;
• The potential for actual gold prices exceeding the long-term forecast prices used in the DCF
valuations;
• Gold being perceived as a safe asset investment; and
• The value attributable to the strong management of a company.
40

We have analysed a number of broker reports reporting on ASX listed gold companies with their main
operations in Australia. The broker reports indicated that NAV multiples range between 0.85 and 1.53.
In determining an appropriate NAV multiple to apply to SXG, we have had regard to:
• SXG’s medium-high volatility;
• SXG’s development stage – forecasting to start production in August 2014; and
• The current management team.
Based on the results of our analysis, we consider a NAV multiple of 1.0 to be appropriate for valuing SXG.
10.1.4. Other Assets and Liabilities
Other assets and liabilities represent the assets and liabilities which have not been specifically adjusted.
From review of these other assets and liabilities, outlined in the table below, we do not believe that there
is a material difference between their book value and their fair value unless an adjustment has been
noted below. The table below represents a summary of the assets and liabilities identified:
41

Southern Cross Goldfields Limited
Value of other
assets and
Value of other
assets and
Unaudited as at liabilities as at liabilities as at
31-M ar-13 31-M ar-13 31-M ar-13
Low
High
Statement of Financial Position Note $ $ $
CURRENT ASSETS
Cash and cash equivalents a 3,361,085 13,261,085 20,161,085
Prepayments 87,668 87,668 87,668
TOTAL CURRENT ASSETS 3,448,753 13,348,753 20,248,753
NON-CURRENT ASSETS
Trade and other receivables b 2,825,000 106,000 106,000
Property, plant and equipment c 197,836 - -
Tenement acquisition costs d 5,612,873 - -
TOTAL NON-CURRENT ASSETS 8,635,709 106,000 106,000
TOTAL ASSETS 12,084,462 13,454,753 20,354,753
CURRENT LIABILITIES
Trade and other payables 1,068,971 1,068,971 1,068,971
Provisions 100,338 100,338 100,338
Sandstone Acquisition Facility e 7,000,000 - -
RMB new finance facility e 5,000,000 5,000,000
TOTAL CURRENT LIABILITIES 8,169,309 6,169,309 6,169,309
TOTAL LIABILITES 8,169,309 6,169,309 6,169,309
NET ASSETS 3,915,153 7,285,444 14,185,444
Note a: Cash and cash equivalents
The Marda Project has been funded on the assumption that SXG raises between $9 million and $11 million
in equity funding.
We have considered the discount at which shares and options have been issued by ASX listed mining
companies, with market capitalisation between $5 million and $25 million, when compared with the
companies’ share prices the day prior to the announcement of the placements.
The average discount at which shares were issued by ASX listed metals and mining companies in 2012 with
market capitalisation between $5 million and $25 million was 13.6%. This indicates that any fund raising
on the ASX is likely to be at this level of discount to the prevailing listed market price.
We have based our calculation on the assumption that SXG issues between 333 million and 407 million
shares at $0.027 to raise between $9 million and $11 million. The capital raising price is at a 15% discount
to our preferred value per share of $0.032 under the quoted market price method as set out in section
42

10.2. We consider a discount of 15% to be appropriate given the equity funding required compared to the
current market capitalisation of SXG and our research.
We have valued SXG on the basis that the Sandstone tenements are sold and that any proceeds are used to
fund the Marda Project. We have added back the tenement values of between $3.4 million and $8.3
million as derived by AMC.
The Sandstone facility will be re-financed following the sale of Sandstone to be a new $5 million facility
from RMB Australia Holdings Limited. The net effect on the balance sheet is a reduction of $2 million in
cash. We have adjusted the cash balance for this net effect.
In August 2011, SXG entered into an option agreement with Barranco to acquire the Red Legs and Die
Hardy deposits. The option expires in August 2013 and SXG have advised us that they intend on exercising
the option. The consideration payable to Barranco on the exercise of the option is $0.5 million in cash and
20 million SXG shares. We have deducted $0.5 million from the cash balance.
Note b: Trade and other receivables
Trade and other receivables relate to cash on deposit for environmental bonds. The Sandstone bond of
$2.719m has been deducted on the basis that the Sandstone tenements are sold to fund the Marda
Project.
Note c: Plant and Equipment
Plant and equipment relates to the Marda Project and has been excluded from the other assets and
liabilities as it forms an integral part in the value of that project.
Note d: Tenement acquisition costs
The Company’s tenement acquisition expenditure has been reflected through the DCF valuation under
section 11.1.1 and the other exploration assets valuation under sections 11.1.2 and 11.1.3 and has
therefore been excluded in the valuation of other assets and liabilities.
Note e: Sandstone Acquisition Facility and RMB facility
The Sandstone facility will be re-financed following the sale of Sandstone, and subsequent repayment of
the facility, to be a new $5 million facility from RMB Australia Holdings Limited.
10.1.5. Corporate costs
Low M id High
Equity capital raising $ 9,000,000 $ 10,000,000 $ 11,000,000
Share price $ 0.032 $ 0.032 $ 0.032
Discount 15.0% 15.0% 15.0%
Issue price $ 0.027 $ 0.027 $ 0.027
Shares issued 333,333,334 370,370,371 407,407,408
For the half-year ended 31 December 2012, corporate costs for SXG totalled approximately $1.12 million
and were approximately $2.14 million in the 2012 financial year. SXG has advised us that the forecast
annual corporate costs are $2.25 million.
43

We calculated the corporate costs over the LOM in case 1 and case 2 of the Adjusted Marda Model based
on $2.25 million per annum. The net present value of future corporate costs is between $12.01 million and
$14.69 million.
10.1.6. Transaction costs
Transaction costs in relation to the Scheme and Transaction of $500,000 have been deducted. These costs
will be incurred regardless of whether or not the Transaction is approved.
10.1.7. Shares on Issue
In determining a value per share for SXG, we applied the number of SXG shares on issue at the date of this
report, being 408,912,834 plus the SXG shares that would be issued if the Company were to raise between
$9 million $11 million via equity funding and the shares issued to Barranco on the exercise of the Red Legs
and Die Hardy option.
10.1.8. Sum-of-parts valuation for SXG
We have assessed the control value per share using the sum-of-parts method to be between $0.031 and
$0.044, with a midpoint value of $0.038.
Southern Cross Goldfields Limited Low Preferred High
Summary of assessment Reference $ (millions) $ (millions) $ (millions)
DCF value of the M arda Project 10.1.1 28.22 32.39 36.55
Value of the M arda Project's exploration potential 10.1.2 0.65 0.98 1.30
Value of the Sandstone Project 10.1.2 - - -
Value of mineral assets 28.87 33.37 37.85
NAV multiple 10.1.3 1.00 1.00 1.00
Total value of SXG's mineral assets 28.87 33.37 37.85
Other assets 10.1.4 13.45 16.90 20.35
Other liabilities 10.1.4 (6.17) (6.17) (6.17)
Corporate costs 10.1.5 (12.01) (13.35) (14.69)
Transaction costs 10.1.6 (.50) (.50) (.50)
Value of SXG 23.64 30.25 36.84
Current shares on issue 10.1.7 408,912,834 408,912,834 408,912,834
Shares issued to Barranco Resources 10.1.4 20,000,000 20,000,000 20,000,000
Shares issued through equity funding 10.1.4 333,333,334 370,370,371 407,407,408
Shares on issue following the capital raising 762,246,168 799,283,205 836,320,242
Value of an SXG share on a control basis 0.031 0.038 0.044
We note that we have not diluted for the exercise of any SXG options on issue as they are considered to be
‘out of the money’ based on our assessed value per share above.
44

10.2. Quoted Market Prices for SXG securities
To provide a comparison to the valuation of SXG in Section 11.1, we have also assessed the quoted market
price for an SXG share.
The quoted market value of a company’s shares is reflective of a minority interest. A minority interest is
an interest in a company that is not significant enough for the holder to have an individual influence in the
operations and value of that company.
RG 111.11 suggests that when considering the value of a company’s shares for the purposes of approval
under Item 7 of s611 the expert should consider a premium for control. An acquirer could be expected to
pay a premium for control due to the advantages they will receive should they obtain 100% control of
another company. These advantages include the following:
• control over decision making and strategic direction;
• access to underlying cash flows;
• control over dividend policies; and
• access to potential tax losses.
Whilst the Sproule Interest will not be obtaining 100% of SXG, RG 111 states that the expert should
calculate the value of a target’s shares as if 100% control were being obtained. RG 111.13 states that the
expert can then consider an acquirer’s practical level of control when considering reasonableness.
Reasonableness has been considered in Section 13.
Therefore, our calculation of the quoted market price of an SXG share including a premium for control has
been prepared in two parts. The first part is to calculate the quoted market price on a minority interest
basis. The second part is to add a premium for control to the minority interest value to arrive at a quoted
market price value that includes a premium for control.
Minority interest value
Our analysis of the quoted market price of an SXG share is based on the pricing prior to the announcement
of the Transaction. This is because the value of a share after the announcement may include the effects
of any change in value as a result of the Transaction. However, we have considered the value of an SXG
share following the announcement when we have considered reasonableness in Section 13.
Information on the Scheme and Transaction was announced to the market on 8 April 2013. Therefore, the
following chart provides a summary of the share price movement over the 12 months to 5 April 2013 which
was the last trading day prior to the announcement.
45

SXG share price and trading volume history
Share Price ($)
0.08
0.06
0.04
0.02
0.00
5.0
4.0
3.0
2.0
1.0
-
Volume (millions)
Volume
Closing share price
Source: Bloomberg
The daily closing price of SXG shares for the year to 5 April 2013 has ranged from a low of $0.026 on
5 April 2013 to a high of $0.069 on 23 August 2012.
The largest movements in the SXG share price occurred between 14 August 2012 and 30 August 2012. On
14 August 2012 SXG closed at $0.051 and by 16 August 2012 the share price had reached $0.069. During
this period SXG had announced its acquisition of the Sandstone Gold Project from Troy Resources Limited.
Subsequently the share price declined from a high of $0.069 to a low of $0.046 on 30 August 2012
following the announcement of the rights issue on 24 August 2012.
SXG experienced a spike in trading volume on 22 November 2012 with 4.15 million shares traded on this
day. No announcements were made to the market to support this increase in trading volume, however SXG
announced an update on the status of its projects on 23 November 2012.
46

Over the year to 5 April 2013 a number of announcements were made to the market. The key
announcements are set out below:
Date
Announcement
Closing Share Price
Following
Announcement
Closing Share Price
Three Days After
Announcement
$ (movement) $ (movement)
4/04/2013 Trading Halt 0.026 (16%) 0.026 (-)
27/03/2013 SXG Completes Acquisition of Sandstone Gold Project 0.033 (3%) 0.032 (3%)
28/02/2013 Another Significant New Gold Target Identified at M arda 0.037 (9%) 0.035 (5%)
18/02/2013 New Gold Target Identified North of M arda 0.038 (-) 0.036 (5%)
31/01/2013 Quarterly Activities and Cashflow Report 0.039 (-) 0.039 (-)
10/12/2012 SXG Signs Formal Agreement for Sandstone, Receives Finance 0.043 (2%) 0.040 (7%)
23/11/2012 <strong>Update</strong> on WA Gold Projects 0.043 (7%) 0.043 (-)
31/10/2012 Quarterly Activities and Cashflow Report 0.045 (2%) 0.046 (2%)
24/10/2012 RM B M andated to Finance Sandstone Project Acquisition 0.048 (4%) 0.048 (-)
22/10/2012 Sandstone acquisition and debt funding update 0.046 (5%) 0.049 (7%)
26/09/2012 SXG to progress gold production plans following Rights issue 0.05 (6%) 0.050 (-)
19/09/2012 New Gold Corridor Highlights Growth Potential at M arda 0.048 (2%) 0.053 (10%)
17/09/2012 SXG appoints PCF as debt advisors for WA Gold Projects 0.047 (2%) 0.049 (4%)
24/08/2012 Prospectus 0.064 (7%) 0.054 (16%)
24/08/2012 SXG Rights Issue to Underpin Transition To Gold Production 0.064 (7%) 0.054 (16%)
24/08/2012 Reinstatement to Official Quotation 0.064 (7%) 0.054 (16%)
22/08/2012 Suspension from Official Quotation 0.069 (-) 0.054 (22%)
20/08/2012 Trading Halt 0.069 (-) 0.069 (-)
17/08/2012 M arda Enhancements Provide Compelling Investment Case 0.069 (6%) 0.069 (-)
14/08/2012 SXG to Double Resources and Halve M arda Project Capital
Cost
0.051 (4%) 0.069 (35%)
9/08/2012 New Drill Targets Identified At Copper Bore VMS Project 0.05 (9%) 0.049 (2%)
2/08/2012 M arda Gold Project <strong>Update</strong> 0.045 (13%) 0.045 (-)
25/07/2012 Quarterly Activities and Cashflow Report 0.035 (-) 0.040 (14%)
10/07/2012 COPPER BORE VM S copper gold project exploration update 0.038 (-) 0.038 (-)
28/06/2012 New massive sulphide intersection enhances copper bore 0.036 (3%) 0.037 (3%)
21/06/2012 New discoveries upgrade regional gold potential at Marda 0.04 (5%) 0.040 (-)
10/05/2012 SXG set to open up new WA gold province with M arda gold 0.044 (4%) 0.047 (7%)
30/04/2012 Quarterly Activities and Cashflow Report 0.052 (-) 0.050 (4%)
26/04/2012 SXG extends base metal mineralization at Copper Bore 0.058 (4%) 0.052 (10%)
On 27 March 2013 SXG announced the completion of its acquisition of the Sandstone Gold Project. The
acquisition more than doubled SXG’s gold resource inventory and provided SXG with the plant, camp and
infrastructure required to fast track its transition to gold production. The share price of SXG increased 3%
following this announcement.
47

On 28 February 2013 SXG announced the discovery of a new gold target at its Marda Gold Project. The
market viewed this positively with the share price increasing 9% following the announcement. The market
adjusted its positive reaction to this announcement with the share price declining 5% for the subsequent
three days after the date of the announcement.
On 18 February 2013 SXG announced the identification of a new gold target approximately 60km north of
the gold treatment facility at Marda. The share price was unchanged following this announcement, with
an unexplained 5% decrease in the share price for the three days following the announcement.
On 23 November 2012 SXG announced to the market an update on the status of its Western Australian gold
projects. The major highlights from the announcement related to the progression of the deal with Troy
Resources to acquire the Sandstone Gold Project and the continued auger drilling immediately north of its
Lancelot prospect. Following this announcement the share price of SXG increased 7%.
On 24 August 2012 SXG was reinstated to official quotation after being suspended on 22 August 2012
pending a capital raising announcement. SXG also announced a rights issue, with the accompanying
Prospectus, to raise $5.2 million to fund the transition to production of its Marda Gold Project. Following
this announcement the share price of SXG decreased 7%, and a further 16% in the three days after the
announcement.
On 14 August 2012 SXG announced its acquisition of the Sandstone Gold project from Troy Resources,
which was intended to provide a clear pathway to gold production and significantly reduce plant
construction and scheduling risk for its Marda Gold Project. The market reacted positively to this news
with the share price increasing 4% following the announcement. The share price continued to increase
with the share price increasing 35% in the three days following the announcement.
On 9 August 2012 new drill targets were identified at the Copper Bore VMS Project. The market reacted
positively to this news with the share price increasing 9% following the announcement.
On 2 August 2012 SXG released an update on the Marda Gold Project, with the major highlights including
the progression of discussions with project financiers and a proposed reduction in capital costs of
approximately $51 million. Following this announcement the share price increased 13%.
To provide further analysis of the market prices for an SXG share, we have also considered the volume
weighted average market price for 10, 30, 60 and 90 trading day periods to 7 April 2013.
5-Apr-13 10 Days 30 Days 60 Days 90 Days
Closing Price $0.026
Volume Weighted Average Price $0.032 $0.033 $0.036 $0.038
The above weighted average prices are prior to the date of the announcement of the Transaction, to avoid
the influence of any increase in price of SXG shares that has occurred since the Transaction was
announced.
An analysis of the volume of trading in SXG shares for the twelve months to 5 April 2013 is set out below:
48

This table indicates that SXG’s shares display a low level of liquidity, with 21% of the Company’s current
issued capital being traded in a twelve month period. For the quoted market price methodology to be
reliable there needs to be a ‘deep’ market in the shares. RG 111.69 indicates that a ‘deep’ market should
reflect a liquid and active market. We consider the following characteristics to be representative of a
deep market:
• Regular trading in a company’s securities;
• Approximately 1% of a company’s securities are traded on a weekly basis;
• The spread of a company’s shares must not be so great that a single minority trade can significantly
affect the market capitalisation of a company; and
• There are no significant but unexplained movements in share price.
Share price Share price Cumulative volume As a % of
low high traded Issued capital
1 Trading Day $0.026 $0.026 - 0.00%
10 Trading Days $0.026 $0.035 2,501,413 0.61%
30 Trading Days $0.026 $0.038 6,776,391 1.66%
60 Trading Days $0.026 $0.043 11,601,340 2.84%
90 Trading Days $0.026 $0.044 24,675,336 6.03%
180 Trading Days $0.026 $0.070 71,808,701 17.56%
1 Year $0.026 $0.070 87,769,957 21.46%
A company’s shares should meet all of the above criteria to be considered ‘deep’, however, failure of a
company’s securities to exhibit all of the above characteristics does not necessarily mean that the value
of its shares cannot be considered relevant.
In the case of SXG, we consider the shares to display a low level of liquidity, with less than 3% of issued
capital traded in 60 trading days prior to 5 April 2013.
Our assessment is that a range of values for SXG shares based on market pricing, after disregarding post
announcement pricing, is between $0.026 and $0.038, with a midpoint of $0.032.
49

Control Premium
The concept of a premium for control reflects the additional value that is attached to a controlling
interest. We have reviewed the announced control premiums paid by acquirers of gold mining companies
listed on the ASX since 2006. We have summarised our findings below:
Year
Number of
Transactions
Average Deal Value
(A$m)
Average Control
Premium (%)
2012 9 247.99 34.03
2011 8 1,119.33 22.56
2010 10 1,364.83 56.11
2009 13 128.61 21.39
2008 3 446.27 28.54
2007 10 191.36 29.36
2006 9 62.96 12.99
Median 247.99 28.54
Mean 508.76 29.28
Source: BDO Analysis and Bloomberg
In arriving at an appropriate control premium to apply we note that observed control premiums can vary
due to the:
• Nature and magnitude of non-operating assets;
• Nature and magnitude of discretionary expenses;
• Perceived quality of existing management;
• Nature and magnitude of business opportunities not currently being exploited;
• Ability to integrate the acquiree into the acquirer’s business;
• Level of pre-announcement speculation of the transaction;
• Level of liquidity in the trade of the acquiree’s securities.
Taking the factors above into consideration in a applying a control premium to SXG’s quoted market share
price we believe an appropriate range to be 25% - 35%, with a midpoint value of 30%.
Low Preferred High
Quoted market prices $0.026 $0.032 $0.038
Control premium 25% 30% 35%
Quoted market price including a premium for control $0.033 $0.042 $0.051
50

10.3. Resource multiple valuation cross-check
As a further cross check to our primary and secondary valuations, we have analysed the resource multiple
observed for companies listed on the ASX with gold projects in Australia as their primary focus.
We have calculated SXG’s market capitalisation based on the preferred value per share as derived using
the sum-of-parts method being $0.038 and applied a minority discount. To this value we have added the
current net debt of SXG to arrive at its enterprise value of $15.5 million.
The table below shows that the median enterprise value per unit of inferred, indicated and measured
resource is $53.06 per ounce.
We have also analysed the median enterprise value per unit of inferred, indicated and measured resource
when excluding companies with a market capitalisation above $200 million. We have done this to exclude
companies that are substantially larger than SXG. The median enterprise value per unit of inferred,
indicated and measured resource when excluding the larger companies is $36.00 per ounce.
Resource multiple
Company name
Enterprise
value Resources
EV/resource
multiple
5 April 2013
$m million oz $/oz
Southern Cross Goldfields Limited 15.5 0.5 28.39
Regis Resources Limited* 1,947.9 10.1 192.29
Tanami Gold NL 115.9 3.1 37.07
Evolution M ining Limited* 937.9 7.7 121.81
Silver Lake Resources Limited* 642.6 4.6 140.31
Rand Mining Limited 20.1 0.1 167.17
BCD Resources NL 1.1 0.1 11.56
Kalnorth Gold Mines Limited 40.9 1.2 34.92
Octagonal Resources Limited 11.9 0.2 48.59
Ramelius Resources Limited 56.9 2.8 20.08
Excelsior Gold Limited 66.2 1.2 57.53
Average 83.13
Median 53.06
Average*
Median*
50.66
36.00
* We have excluded companies with a market capitalisation above $200 million
The multiples range between $11.56/ounce and $57.53/ounce when excluding the larger comparable
companies.
51

We note that SXG’s EV/resource multiple of $28.39 per ounce falls within the range of multiples of the
comparable companies which implies that our value derived under the sum-of-parts methodology is
reasonable.
A brief description of the comparable companies is set out below:
Company name
Regis Resources Limited
Tanami Gold NL
Evolution Mining Limited
Silver Lake Resources
Limited
Rand Mining Limited
BCD Resources NL
Kalnorth Gold Mines
Limited
Octagonal Resources
Limited
Ramelius Resources
Limited
Excelsior Gold Limited
Description
Regis Resources Limited is a mineral exploration and gold production company. Regis mines for gold,
nickel and copper and currently has two producing gold mines being the Moolart Well Project and the
Garden Well Project. Both these project are located in Western Australia.
Tanami Gold NL acquires, explores for and produces gold in central Western Australia and the
Northern Territory. The Tanami's prospects include Highland Rocks, the West Australian Joint Venture
and Harts Range.
Evolution Mining Ltd is a gold exploration and production company with operations in Western
Australia and Queensland. Evolution owns the following gold mines - Cracow, Edna May, Mt Rawdon and
Pajingo - and the Mt Carlton development project.
Silver Lake Resources is a mineral exploration and production company currently in the ASX 200. Silver
Lake is focused on gold exploration in Western Australia focussing on Mount Monger, and Murchison
Goldfields and the Great Southern District of Western Australia.
Rand Mining Limited is involved in mineral exploration, development and production activities at its
gold interests in Kalgoorlie. Its main focus is the East Kundana joint venture in Western Australia.
BCD Resources NL is a mining company focusing on gold and copper. It holds interests in copper and
gold projects in Victoria and gold projects in Tasmania.
Kalnorth Gold Mines Limited (formerly Carrick Gold Limited) is a gold exploration and development
company with a portfolio of projects located in Western Australia. It focuses on four main projects:
Lindsay’s, Kalpini, Mt Jewell and Kurnalpi (collectively the LKK Project).
Octagonal Resources is a gold explorer focusing in the Eastern Goldfields Province of the Yilgarn
Craton in Western Australia and the Bendigo Zone of the Lachlan Fold Belt in Victoria.
Ramelius Resources Limited is a gold mining and production which operates two main projects, Wattle
Dam Gold Mine and Mt Magnet Gold Mine, in Western Australia. It also holds a portfolio of exploration
and development projects located in Australia and USA.
Excelsior Gold Limited (formerly Atom Energy Limited) is engaged in the gold exploration and
development. Its main project is the Kalgoorlie North Gold Project, located 45kms north of Kalgoorlie.
10.4. Assessment of SXG’s value
The results of the valuations performed are summarised in the table below:
Low
$
Preferred
$
High
$
Sum-of-parts (Section 10.1) $0.031 $0.038 0.044
Quoted market prices (Section 10.2) $0.033 $0.042 $0.051
We consider that the sum-of-parts methodology to be the most reliable due to the core value of SXG being
in the mineral assets that it holds in its balance sheet, being the Marda and Sandstone Projects. We do not
52

consider the QMP method to be as reliable due to the low level of liquidity over the past 12 months. We
note however that the value per share derived under the QMP method supports the value derived using
the sum-of-parts method.
We have therefore based our valuation of an SXG share primarily on the sum-of-parts methodology and
consider the value of an SXG share prior to the Transaction and including a premium for control to be
between $0.031 and $0.044, with a preferred value of $0.038.
11. Valuation of the Merged Entity
To determine if the Transaction is fair and reasonable it is necessary to conduct a valuation of the Merged
Entity that will result from approval and implementation of the Scheme, including the requirement for
approval of the Transaction by SXG Shareholders.
In our assessment of the value of the Merged Entity, we have chosen to employ the sum of parts
methodology.
The Merged Entity is valued by combining the sum of parts value of each company and adjusted for any
forecast synergies in the Merged Entity.
SXG have advised us that if the Merger proceeds, the primary intention of the Merged Entity is to progress
regulatory approvals and financing for the development of the Marda Project. On that basis, the valuation
of the Merged Entity has been prepared with production at the Mt Boppy Project being delayed by 12
months to 2015 to enable the Merged Entity to focus on bringing the Marda Project into production in
2014. SXG have advised us that the Mt Boppy Project will be prioritised for development as sufficient cash
reserves become available.
11.1. Sum of parts valuation of the Merged Entity
11.1.1. DCF valuation of the Mt Boppy Project
We elected to use the DCF approach in valuing PLY’s Mt Boppy Project (“the Mt Boppy Project”). The DCF
approach estimates the fair market value by discounting the future cash flows arising from the project to
their net present value using the forecast discount rate of the Merged Entity. Performing a DCF valuation
requires the determination of the following:
• The expected future cash flows that the project is expected to generate; and
• An appropriate discount rate to apply to the cash flows of the project to convert them to present
value equivalent.
A cash flow model for the Mt Boppy Project was prepared by PLY (“the Mt Boppy Model”). The Mt Boppy
Model estimates the future cash flows expected from gold production at the Mt Boppy Project based on
determined JORC compliant reserves. The Mt Boppy Model depicts forecasts of real, post-tax cash flows
over the life of mine on a monthly basis.
The Mt Boppy Model has been adjusted by us to reflect any changes to technical assumptions as a result
of AMC’s review and any changes to the economic and other input assumptions from our research (“the
Adjusted Mt Boppy Model”). We have adjusted the Mt Boppy Model to reflect cash flows on an
annual basis.
53

The Adjusted Mt Boppy Model was prepared based on:
• Estimates of production profile, operating costs and sustaining capital expenditure.
The main assumptions underlying the Adjusted Mt Boppy Model include:
• Mining and production volumes;
• Commodity prices;
• Operating costs;
• Sustaining capital expenditure;
• Foreign exchange rates;
• Royalties; and
• Discount rate.
Limitations
Since forecasts relate to the future, they may be affected by unforeseen events and they depend, in part,
on the effectiveness of management’s actions in implementing the plans on which the forecasts are based.
Accordingly, actual results may vary materially from the forecasts, as it is often the case that some events
and circumstances frequently do not occur as expected, or are not anticipated, and those differences may
be material.
Revenue assumptions
Revenue has been estimated as the product of annual saleable gold and the forecast gold prices. The
Adjusted Mt Boppy Model has been based on forecast real gold prices and exchange rates.
Funding assumptions
We have valued the Mt Boppy Project based on SXG’s and PLY’s assessment of the likely funding structure
of the Merged Entity. We have valued the Mt Boppy Project on the basis that it will be funded by the cash
flows generated from the Marda Project and by an equity raising of up to $3 million.
Economic assumptions
Inflation
We have applied an inflation rate to convert the forecast nominal gold prices into real terms.
In our assessment of the inflation rate, we have considered forecasts prepared by economic analysts and
other publicly available information including broker consensus to arrive at our inflation rate assumptions.
From our analysis, target inflation is in the range of 2% to 3% which is consistent with the Reserve Bank of
Australia’s target inflation rate range. We have adopted an inflation rate of 3% to convert the cash flows
expressed in nominal terms to real terms.
Foreign exchange rate
All commodity prices are stated in United States Dollars (“USD”) and the forecasts in the Adjusted Mt
Boppy are in Australian Dollars (“AUD”). USD to AUD conversions were undertaken using the following
foreign exchange rate assumptions:
54

2013 2014 2015 2016 2017 2018
Exchange rate (USD:AUD) 1.00 1.01 0.93 0.90 0.87 0.85
Source: Bloomberg
Royalties and tax
Royalties
The following royalty expenses are included in the Adjusted Mt Boppy Model:
• A 3% royalty payable to Golden Cross Resources Ltd. The 3% is calculated on revenue less refining
costs. We note that PLY has prepaid $333,619 of this royalty.
• A New South Wales royalty of 4% of revenue less deductible expenses is payable by PLY.
Deductible expenses include processing costs, depreciation and 33.33% of onsite administration
costs. The basis for deducting expenses was sourced from “Mining Royalties and Statistics in NSW
Guidelines for Compliance” as provided by PLY management.
• An annual payment of $10,000 to the Ngiyampaa People in accordance with Aboriginal traditional
law and native title rights of the project area.
• A 0.5% Net Smelter Return royalty also payable to the Ngiyampaa People. The 0.5% is calculated
on actual revenue less processing costs, transportation costs and extraction taxes.
Corporate tax
The Adjusted Mt Boppy Model assumes a corporate tax rate of 30% over the period of the forecasts, after
taking into account any tax losses carried forward.
DCF Valuation – Discount rate
We have selected a real after tax discount rate of 6.5% to discount the forecasts to their present value.
The discount rate has been calculated on a Merged Entity basis.
In selecting this range of discount rates we considered the following:
• The rates of return for comparable listed Australian gold companies;
• The risk profile of the Merged Entity as compared to other listed Australian gold companies;
• The current and forecast debt to equity ratio of the Merged Entity;
• Merged Entity’s forecast cost of debt as advised by SXG; and
• AMC’s assessment of the relative risk of the Mt Boppy Project compared with the Marda Project.
Details on our discount rate determination are provided in Appendix 3.
Commodity prices
In obtaining projected gold prices we have considered:
• Historical spot and forward prices from Bloomberg; and
• Most recent Consensus Economics price forecasts.
Based on our analysis, we adopted the following projected gold prices (in real terms):
55

2013 2014 2015 2016 2017 2018
Gold price (real) 1,600 1,525 1,420 1,300 1,180 1,185
Source: Consensus Economics & Bloomberg
The Adjusted Mt Boppy Model
We undertook the following analysis on the Adjusted Mt Boppy Model:
• A review of the mathematical structure and internal consistency;
• Appointed AMC as the technical expert to assess the reasonableness of the resources, capital and
operating costs and other mining inputs used in the preparation of the life of mine;
• Conducted independent research on certain economic and other inputs such as commodity prices,
foreign exchange rates, inflation and discount rate applicable to the future cash flows of the Mt
Boppy Project;
• Held discussions with PLY’s management regarding the preparation of the cash flow forecasts in
the Mt Boppy Model and its views;
• Adjusted the Mt Boppy Model to reflect any changes to the technical assumptions as a result of
AMC’s review and any changes to the economic and other input assumptions from our research;
• We have delayed production by one year to the first quarter of 2015, based on SXG’s advice of the
intentions of the Merged Entity, should the Transaction proceed; and
• Performed a sensitivity analysis on the value of the Mt Boppy Project as a result of flexing
selected assumptions and inputs.
Appointment of a technical expert
AMC, expert technical specialist, was engaged to prepare a report providing an assessment on the
following inputs used in the preparation of the Mt Boppy Model;
• The reasonableness of the resources used in the preparation of the Mt Boppy Model;
• Mining physicals (life of mine, production schedule, recovery and grade);
• Operating costs (mining operation, surface haulage, processing, accommodation and messing,
royalties and general and administration);
• Capital costs (mining capital costs, processing capital costs, resource definition, general and
administration); and
• Restoration and rehabilitation provisions.
AMC modelled two cases for the Mt Boppy Project based on different projections for mining and processing
tonnages, gold grades and costs.
• Case 1, ore production, is primarily based on the pit optimisation study scenario using mainly the
Ore Reserves and a small volume of Inferred Mineral Resource also in the production case as
presented by PLY.
• Case 2, ore production, includes that scheduled in Case 1, with the addition of 35 kt of ore added
to the end of the mine lie to simulate the likely conversion of mineral resources to ore reserves
56

and likely success with exploration in the project area. The Mineral Resources defined at Mt Boppy
outside the development case proposed by PLY are limited.
AMC believes the two production cases provide a low and high value range on the Mineral Resources and
exploration potential for the greater Mt Boppy Project by simulating the range of likely outcomes of the
project.
For the purposes of our valuation, we have adopted both cases to derive our value range of the project.
A copy of AMC’s report is included in Appendix 4.
Mining Physicals
Mt Boppy Case 1
Set out below is a summary of the mining and processing activity included in the Adjusted Mt Boppy
Model.
Mt Boppy Project Case 1
Mining
Units 31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18
Ore Tonnes Mined t - - 136,847 450,164 - -
Waste Tonnes Mined t - - - 925,057 - -
Total Movement t - - 136,847 1,375,221 - -
Grade Mined g/t - - 4.43 4.23 - -
Processing
Tonnes Processed t - - 82,500 300,000 204,511 -
Grade Processed g/t - - 4.21 4.50 3.98 -
Contained oz oz - - 11,160 43,449 26,179 -
Recovery % - - 80% 80% 80% -
Recovered oz oz - - 8,928 34,759 20,943 -
Source: The Adjusted Mt Boppy Model
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
Gold processed (tonnes)
-
2013 2014 2015 2016 2017 2018
Mt Boppy (tonnes processed)
Source: The Adjusted Mt Boppy Model
57

AMC and management of PLY advise that ore is predominantly mined upfront and is stockpiled and
processed over the life of the Project.
Mt Boppy Case 1
Key aspects of AMC's Case 1 model are:
• The mining and processing schedules are based on the LOM plan provided in the feasibility study
and financial model.
• 587 kt of ore at a head grade of 4.28 g/t is mined and processed over a 25 month period. This
represents all of the Ore Reserves and approximately 40 kt of the Inferred Mineral Resource.
• A total of 64 koz of gold are produced.
• AMC increased the estimated mining period by six months to effectively lower the assumed mining
productivities and fast development rates in the supplied model.
• Project commences in the first quarter of 2014. However, SXG advise that production is likely to
be delayed until the first quarter of 2015, therefore we have valued the Mt Boppy Project on this
basis.
• Average unit mining costs of $3.90/t of material moved are used.
• Average processing costs of $33.48/t ore processed.
• AMC added an allowance of $0.7M for additional closure costs.
• AMC added a contingency of $1M to the capital estimate relating to the assumed availability of
second-hand equipment.
Mt Boppy Case 2
Set out below is a summary of the mining and processing activity included in the Adjusted Mt Boppy
Model.
Mt Boppy Project Case 2
Mining
Units 31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18
Ore Tonnes Mined t - - 136,847 450,164 - -
Waste Tonnes Mined t - - 4,753,767 925,057 - -
Total Movement t - - 4,890,614 1,375,221 - -
Grade Mined g/t - - 4.43 4.23 - -
Processing
Tonnes Processed t - - 82,500 300,000 239,500 -
Grade Processed g/t - - 4.21 4.50 3.98 -
Contained oz oz - - 11,160 43,449 30,656 -
Recovery % - - 80% 80% 80% -
Recovered oz oz - - 8,928 34,759 24,525 -
Source: The Adjusted Mt Boppy Model
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350,000
Gold processed (tonnes)
300,000
250,000
200,000
150,000
100,000
50,000
-
2013 2014 2015 2016 2017 2018
Gold processed (tonnes)
Source: The Adjusted Mt Boppy Model
Key aspects of AMC's Case 2 model are:
• Assumptions as in Case 1 initial production period.
• An additional 35 kt of ore at a grade 3.98 g/t is added to the end of the mine life. The tonnage is
based on the assumption that 50% of the remaining resource outside the pit or equivalent
exploration success elsewhere converts to Ore Reserve at the head grade produced at the end of
the mine life. AMC has assumed that operating costs are the same as those incurred in the last
months of the financial model provided and have added these to the schedule.
• AMC notes there is only limited additional Mineral Resource outside the current mine plan
proposed by PLY.
• A total of 68,200 oz of gold are produced.
Operating Costs
Operating costs included in the Adjusted Mt Boppy Model consist of labour, reagents and consumables,
power, maintenance, refining and camp costs.
Mt Boppy Case 1
Mt Boppy Project Case 1
31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18
$ $ $ $
Mining - - 14,918,399 7,926,751 1,590,190 -
Administration - - 2,458,618 2,965,120 2,202,933 69,620
Processing - - 2,626,232 9,516,447 7,336,007 173,465
Total project costs - - 20,003,249 20,408,318 11,129,131 243,085
Source: The Adjusted Mt Boppy Model
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Mt Boppy Case 2
Mt Boppy Project Case 2
31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18
$ $ $ $ $ $
Mining - - 14,918,399 7,926,751 3,734,135 -
Administration - - 2,458,618 2,965,120 1,864,712 338,221
Processing - - 2,626,232 9,516,447 7,350,271 -
Total project costs - - 20,003,249 20,408,318 12,949,118 338,221
Source: The Adjusted Mt Boppy Model
Capital Expenditure
The Capital expenditure required in the Adjusted Mt Boppy Model is based on the assumption that PLY is
to make use of reconditioned plant and equipment. Where possible, the management of PLY obtained
quotes for second hand equipment to justify its capital expenditures assumptions. A contingency
allowance of $1 million has been made in the case of second hand equipment not being available.
Mt Boppy Case 1
31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18
Mt Boppy Project Case 1
$ $ $ $
Capital Expenditure - - 14,718,454 - - 700,000
Mt Boppy Case 2
31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18
Mt Boppy Project Case 2
$ $ $ $ $ $
Capital Expenditure - - 14,718,454 - - 700,000
The $14.72 million outflow in 2015 predominantly relates to plant and infrastructure costs incurred in
redeveloping the Mt Boppy Project. The $0.70 million capital expenditure in 2018 relates to closure costs
estimated by AMC.
DCF Valuation – sensitivities
The estimated value of the Mt Boppy Project is derived under the DCF approach. Our valuation is most
sensitive to changes in the forecast gold prices and exchange rate. We have therefore included an analysis
to consider the value of the Mt Boppy Project under various pricing scenarios and in applying:
• A change of +/- 5% to commodity prices
• A change of +/- 5% to exchange rate
• A change of +/- 5% to recovery percentage
• A change of +/- 5% to operating expense
• A change of +/- 5% to sustaining capital expenditure
• A real discount rate in the range of 5.0% to 8.0%.
The following tables sets out the valuation outcomes from our DCF analysis.
60

Mt Boppy Case 1
Sensitivity analysis
Flex NPV ($m) NPV ($m) NPV ($m) NPV ($m) NPV ($m)
Commodity Exchange Recovery
Capital
Project costs
Price rates (%)
expenditure
-5% 10.71 15.88 9.88 14.86 13.82
-4% 11.38 15.35 10.71 14.56 13.72
-3% 11.93 14.84 11.55 14.26 13.63
-2% 12.40 14.34 12.17 13.96 13.54
-1% 12.88 13.84 12.76 13.66 13.45
0% 13.36 13.36 13.36 13.36 13.36
1% 13.84 12.89 13.96 13.06 13.27
2% 14.32 12.42 14.56 12.76 13.18
3% 14.80 11.97 15.15 12.46 13.09
4% 15.27 11.48 15.75 12.16 13.00
5% 15.75 10.87 16.35 11.86 12.91
Source: BDO Analysis
Discount
rate NPV ($m)
5.0% 14.50
5.5% 14.11
6.0% 13.73
6.5% 13.36
7.0% 13.00
7.5% 12.65
8.0% 12.31
Source: BDO Analysis
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Mt Boppy Case 2
Sensitivity analysis
Flex NPV ($m) NPV ($m) NPV ($m) NPV ($m) NPV ($m)
Commodity Exchange Recovery
Capital
Project costs
Price rates (%)
expenditure
-5% 11.70 16.85 11.07 15.75 14.66
-4% 12.20 16.30 11.70 15.44 14.57
-3% 12.70 15.76 12.32 15.13 14.48
-2% 13.20 15.23 12.95 14.82 14.39
-1% 13.70 14.71 13.58 14.52 14.30
0% 14.21 14.21 14.21 14.21 14.21
1% 14.71 13.71 14.83 13.90 14.12
2% 15.21 13.22 15.46 13.59 14.02
3% 15.71 12.74 16.09 13.28 13.93
4% 16.21 12.28 16.71 12.97 13.84
5% 16.71 11.82 17.34 12.66 13.75
Source: BDO Analysis
Discount
rate NPV ($m)
5.0% 15.40
5.5% 14.99
6.0% 14.59
6.5% 14.21
7.0% 13.83
7.5% 13.46
8.0% 13.11
Source: BDO Analysis
Considering the valuation outcomes above, we estimate the fair market value of the Mt Boppy Project to
be in the range of $13.36 million to $14.21 million, with a midpoint value of $13.79 million.
11.1.2. Value of the resources, not included in the Mt Boppy Model
We have instructed AMC to value all of the resources at the Mt Boppy Project under the Valmin Code that
are not included in the Adjusted Mt Boppy Model. AMC has deemed that the most reliable method to value
these resources in using the Comparable Transaction method.
AMC have concluded that the value of the resources at Mt Boppy and not included in the model is
$0.2 million
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11.1.3. Other Exploration Assets
We instructed AMC to provide a market valuation of the additional exploration assets of PLY.
Turner River base metals project
In valuing PLY’s Turner River base metals project, AMC has relied on the Joint Venture Terms Method with
regard to the farm-in agreement with Lansdowne Resources Pty Ltd (“Lansdowne”) to acquire 100% of the
shares in the company and the associated rights to earn a 75% interest in the Turner River gold and base
metals projects which were owned by De Grey Mining Ltd (“De Grey”). We are satisfied with the valuation
methodologies adopted by AMC which are in accordance with industry practices and compliant with the
requirements of the Valmin Code.
AMC valued PLY’s current beneficial interest of 55% in the Turner River tenements to be between $0.11
million and $0.26 million. We have adopted the midpoint value of $0.19 million in our preferred valuation
scenario.
Turner River gold project tenements
The Turner River gold project was the subject of a farm-in arrangement between Lansdowne and De Grey
whereby Lansdowne could earn a 75% interest in the tenements by spending $2 million over three years.
PLY acquired Lansdowne in September 2012 and completed the farm-in expenditure in March 2013.
Polymetals has completed the farm-in expenditure and holds 75% of the rights in these tenements.
In valuing PLY’s Turner River gold project, AMC has relied on the Yardstick method and Comparable
Transaction method. AMC valued PLY’s current beneficial interest of 75% in the Turner River gold project
to be between $2.1 million and $4.2 million. We have adopted the midpoint value of $3.15 million in our
preferred valuation scenario.
A copy of AMC’s report is attached at Appendix 4.
11.1.4. Other Assets and Liabilities
Other assets and liabilities represent the assets and liabilities which have not been specifically adjusted.
From review of these other assets and liabilities, outlined in the table below, we do not believe that there
is a material difference between their book value and their fair value unless an adjustment has been
noted below. The table below represents a summary of the assets and liabilities identified:
63

Polymetals Mining Limited
Value of other
assets and
Value of other
assets and
Unaudited as at liabilities as at liabilities as at
31-Mar-13 31-Mar-13 31-M ar-13
Low
High
Statement of Financial Position Note $'000 $'000 $'000
CURRENT ASSETS
Cash and cash equivalents a 9,654 12,861 13,469
Receivables 168 168 168
Inventories 18 18 18
Deferred tax asset 1,598 1,598 1,598
TOTAL CURRENT ASSETS 11,438 14,645 15,253
NON-CURRENT ASSETS
Receivables b 334 - -
Property, plant and equipment c 2,826 - -
Other financial assets d 233 - -
Exploration and development costs e 15,290 - -
Capitalised mining development costs e 537 - -
Available for sale financial assets f 316 270 270
TOTAL NON-CURRENT ASSETS 19,536 270 270
TOTAL ASSETS 30,974 14,915 15,523
CURRENT LIABILITIES
Trade and other payables 996 996 996
Current tax liability g 112 - -
Deferred tax liability 3,797 3,797 3,797
Provisions h 979 531 531
Deferred consideration 1,941 - -
TOTAL CURRENT LIABILITIES 7,825 5,324 5,324
NON-CURRENT LIABILITIES
Provisions 77 77 77
TOTAL NON-CURRENT LIABILITIES 77 77 77
TOTAL LIABILITES 7,902 5,401 5,401
NET ASSETS 23,072 9,514 10,122
Note a: Cash and cash equivalents
On 28 May 2013, PLY announced it had divested its 50% interest in White Dam and associated Drew Hill
exploration tenements to joint venture partner Exco Resources Limited. In consideration for these assets,
PLY will receive $1.44 million. We have adjusted the cash balance as at 31 March 2013 to reflect this
64

disposal of assets. PLY advised us that they are in the process of selling the White Dam camp assets. We
have added $550,000 to the cash balance, being the expected sale value.
PLY is in the process of selling its head office premises in Queensland. The property has recently been
independently valued at $860,000 however the Company expects to receive between $1 million and
$2 million. We have valued the property as range of $860,000 to $1.5 million less an assumed 5% selling
costs. We have added this value to the cash balance on the assumption that the property will be sold.
We have deducted $300,000 in relation to the Indemnity Consideration payable by PLY to Meadowhead
under the SIA.
PLY is in the process of lodging its 2012 tax return which will result in a receivable of $700,000, net of the
current tax liability, as a result of a research and development rebate.
Note b: Receivables
Receivables relate to a prepaid royalty in relation to the Mt Boppy Project. We have excluded the royalty
as it has been included in our DCF valuation of the Mt Boppy Project.
Note c: Property, plant and Equipment
Plant and equipment relating to the Mt Boppy Project and has been excluded from the other assets and
liabilities as it forms an integral part in the value of the project.
The remaining plant and equipment relates to head office property and has been excluded from the
balance sheet on the assumption that it is soon to be sold.
Note d: Security deposits
The security deposits are related to Mt Boppy. We have excluded them for our valuation as the Mt Boppy
security deposits are incorporated in the DCF value of the project.
Note e: Exploration and development costs & Capitalised mining development costs
PLY’s exploration and development expenditure has been reflected through the DCF valuation under
sections 11.1.1 and the other exploration assets valuation and has therefore been excluded in the
valuation of other assets and liabilities.
Note f: Available for sale assets
PLY holds 982,000 listed shares in Macphersons Resources Limited. We have valued the shares using a
30 day VWAP as at 5 April 2013, being $0.275 per share.
Note g: Current tax liability
We have excluded the current tax liability on the basis that it will be netted off with the receivable as a
result of a research and development rebate that PLY will receive on lodgement of its 2012 tax return.
Note h: Provisions
Of the total provision, $448,000 relates to a rehabilitation provision at Mt Boppy. We have excluded this
portion of the provision as it is included in our DCF valuation of the Mt Boppy Project.
Note i: Deferred consideration
The deferred consideration relates to potential additional payments to Lansdowne Resources shareholders
if and when development and production milestones are met on the Turner River gold and base metals
65

projects. PLY has discounted the total consideration based on its assessed probability of the liability being
paid.
AMC has valued the Turner River projects based on its current announced resources and stage of
development. We have excluded the liability as we consider AMC’s value to reflect the current value of
the projects and it does not include the potential upside of the project’s value if the milestones were to
be met.
11.1.5. NAV multiple
The value per share of gold mining companies when valued using the DCF valuation methodology,
including the value of exploration assets, is often lower than the value of the trading price per share.
It is common practice to apply a NAV multiple to the DCF value and value of the exploration assets to
arrive at the value of a company.
Possible reasons for a difference between the value of the mineral assets per share and the traded price
are:
• The potential upside at existing operating or development sites that would allow for an extension
of the life of mine and higher volumes, outside of the announced reserve and resource;
• The potential for actual gold prices exceeding the long-term forecast prices used in the DCF
valuations;
• Gold being perceived as a safe asset investment; and
• The value attributable to the strong management of a company.
We have analysed a number of broker reports reporting on ASX listed gold companies with their main
operations in Australia. The broker reports indicated that NAV multiples range between 0.85 and 1.53.
In determining an appropriate NAV multiple to apply to Merged Entity, we have had regard to:
• The funding requirements to realise the value of the Marda and Mt Boppy Projects;
• The volatilities of SXG and PLY prior to the Merger; and
• The proposed management team of the Merged Entity.
Based on the results of our analysis, we consider a NAV multiple of 1.0 to be appropriate for valuing the
Merged Entity.
11.1.6. Sum-of-parts value of the Merged Entity
We have valued the Merged Entity by combining the sum of parts value of each of SXG and PLY as derived
in sections 10.1 for SXG and sections 11.1.1 to 11.1.5 for PLY.
The valuation of the Merged Entity has been prepared on the basis that the Merged Entity will focus its
cash and resources on bringing the Marda Project into production in 2014 followed by the Mt Boppy
Project in 2015. The Marda and Mt Boppy Project cashflows have been discounted using the forecast
discount rate for the Merged Entity of 6.5% as set out in Appendix 3.
66

The projects will be funded with $32 million of new debt funding and up to $3 million in equity funding.
We have adjusted for corporate cost synergies in the Merged Entity forecast to result from the
consolidation of corporate overheads. We note that these synergies would be available to any similar
merger partner.
As required by RG 111.31, our valuation includes a minority discount as existing SXG shareholders will have
a minority interest in the Merged Entity following the Transaction.
We have assessed the value of a share in the Merged Entity on a minority interest basis to be between
$0.032 and $0.045, with a preferred valued of $0.038 as shown in the table below.
67

The Merged Entity - SXG Low Preferred High
Summary of assessment Note $ (millions) $ (millions) $ (millions)
DCF value of the Marda Project 28.22 32.39 36.55
Value of SXG's exploration assets - Marda tenement area 0.65 0.98 1.30
Value of the Sandstone Project - - -
Value of SXG's mineral assets 28.87 33.37 37.85
DCF value of the Mt Boppy Project 13.36 13.79 14.21
Value of the M t Boppy Project's exploration potential 0.20 0.20 0.20
Value of the Turner River base metals project 0.11 0.19 0.26
Value of the Turner River gold project 2.10 3.15 4.20
Value of PLY's mineral assets 15.77 17.32 18.87
Total value of the Merged Entities' minerals assets 44.64 50.69 56.72
NAV multiple 1.00 1.00 1.00
Total value of the Merged Entities' mineral assets 44.64 50.69 56.72
SXG's other assets a 4.45 6.90 9.35
SXG's other liabilities (6.17) (6.17) (6.17)
PLY's other assets 14.92 15.22 15.52
PLY"s other liabilities (5.40) (5.40) (5.40)
Corporate costs of the Merged Entity b (13.03) (14.38) (15.72)
Transaction costs c (1.00) (1.00) (1.00)
Equity funding required d - 1.50 3.00
Value of the Merged Entity 38.41 47.37 56.31
Number of shares on issue in the Merged Entity e 887,450,815 887,450,815 887,450,815
Number of shares issued via equity funding e - 55,555,556 111,111,111
Diluted number of shares on issue 887,450,815 943,006,371 998,561,926
Value of a Merged Entity share on a control basis 0.043 0.050 0.056
Minority discount f -26% -23% -20%
Value of a share in the Merged Entity on a minority
interest basis
0.032 0.038 0.045
Note a: SXG’s other assets
We note that the other assets of SXG exclude the equity raising of between $9 million and $11 million that
was adjusted for in section 10.1. We have addressed the equity funding requirements of the Merged Entity
in note d.
Note b: Corporate costs
We have been advised by SXG that there will be synergy cost savings in the Merged Entity such as a shared
office, one shared Managing Director as well as a reduction in accounting personnel. SXG estimate the
corporate costs of the Merged Entity to be approximately $2.52 million per annum.
68

We calculated the corporate costs over the Marda case 1 and 2 life of mines based on $2.52 million per
annum over the period when both Mt Boppy and Marda are in production and reduced the corporate costs
to $2.25 million per annum following the cessation of the Mt Boppy Project. $2.25 million per annum
represents SXG’s current corporate costs. The net present value is between $13.03 million and $15.72
million.
Note c: Transaction costs
The estimated transaction costs for the Merged Entity in relation to the Scheme and Transaction are
approximately $1 million.
Note d: Equity funding
The projects will be funded with $32 million of new debt funding and up to $3 million in equity funding.
We have considered the discount at which shares and options have been issued by ASX listed mining
companies, with market capitalisation between $5 million and $25 million, when compared with the
companies’ share prices the day prior to the announcement of the placements.
The average discount at which shares were issued by ASX listed metals and mining companies in 2012 with
market capitalisation between $5 million and $25 million was 13.6%. This indicates that any fund raising
on the ASX is likely to be at this level of discount to the prevailing listed market price.
We have based our calculation on the assumption that the Merged Entity issues between nil and 111
million shares at $0.027 to raise up to $3 million. The capital raising price is at a 15% discount to our
preferred value per SXG share of $0.032 under the quoted market price method as set out in section 10.2.
As the Scheme has been structured as a ‘merger of equals’, theoretically, the quoted market price of a
share in the Merged Entity should be similar to the quoted market price of an SXG share prior to the
Scheme. We therefore consider the assessed value per share of an SXG share prior to the Merger using the
QMP method to be a reasonable basis for the equity raising price per share for the Merged Entity.
We consider a discount of 15% to be appropriate given the equity funding required compared to the
estimated market capitalisation of the Merged Entity.
Proposed equity funding Low Mid High
Equity funding required $0 $1,500,000 $3,000,000
Share price - $0.032 $0.032
Discount 15% 15% 15%
Capital raising price per share - $0.027 $0.027
Total merged entity shares issued nil 55,555,556 111,111,111
Note e: Shares on issue
In determining a valuation per share for the Merged Entity, we applied the number of Merged Entity shares
of 867,450,815 as determined in section four of this report together with the 20 million shares that SXG
will issue to Barranco on the exercise of the Red Legs and Die Hardy option and then diluted the number
of shares for the forecast capital raisings required to fund the projects of the Merged Entity as set out in
note d above.
69

Note f: Minority discount
Following the Transaction, SXG shareholders will hold a minority interest in the Merged Entity. We have
therefore applied a minority discount to the value derived under the sum-of-parts method to arrive at a
minority interest value per share as required by RG 111.31.
We have applied the inverse of the control premium of between 25% and 35% as set out in section 10.2 of
this report. The inverse discount is between 20% and 26%.
11.2. Resource multiple cross-check
As a cross check to the sum-of parts valuation, we have analysed the resource multiple observed for
companies listed on the ASX with gold projects in Australia as their primary focus.
We have also analysed the median enterprise value per unit of inferred, indicated and measured resource
when excluding companies with a market capitalisation above $200 million. We have done this to exclude
the companies that are substantially larger than the Merged Entity.
The median enterprise value per unit of inferred, indicated and measured resource when excluding the
larger companies is $36.00 per ounce.
Resource multiple
Company name
Enterprise
value Resources
EV/resource
multiple
5 April 2013
$m million oz $/oz
Regis Resources Limited* 1,947.9 10.1 192.29
Tanami Gold NL 115.9 3.1 37.07
Evolution M ining Limited* 937.9 7.7 121.81
Silver Lake Resources Limited* 642.6 4.6 140.31
Rand Mining Limited 20.1 0.1 167.17
BCD Resources NL 1.1 0.1 11.56
Kalnorth Gold Mines Limited 40.9 1.2 34.92
Octagonal Resources Limited 11.9 0.2 48.59
Ramelius Resources Limited 56.9 2.8 20.08
Excelsior Gold Limited 66.2 1.2 57.53
Average 83.13
Median 53.06
Average*
50.85
Median*
36.00
* We have excluded companies with a market capitalisation above $200 million
70

We have applied the average and median multiples to the resources of the Merged Entity to arrive at an
inferred value per share. Combined, the Merged Entity will have a total of 1.626 million ounces of
measured, indicated and inferred resources.
The inferred value per share using the resource multiple methodology is on a minority interest basis.
Resource
multiple
Merged Entities
measured,
indicated &
inferred
resources (M
oz)
Inferred
Enterprise
Value ($) Net debt ($)
Equity value
($) Shares on issue
Assessed value
per share ($)
Average 50.9 1.626 82,763,400 23,940,000 58,823,400 923,006,371 0.064
Median 36.0 1.626 58,536,000 23,940,000 34,596,000 923,006,371 0.037
11.3. Assessed value of a Merged Entity share
We consider the sum-of-parts methodology to be the most appropriate in our valuation of a share in the
Merged Entity. We consider the value per Merged Entity share on a minority interest basis to be between
$0.032 and $0.045 with a midpoint value of $0.038.
We note that this value is supported by our resource multiple cross-check as the assessed mid-point value
per share falls within the $0.037 to $0.064 range of inferred values under the resource multiple method.
71

12. Is the Transaction fair
In assessing if the Transaction is fair BDO have assumed that approval of the Transaction by SXG will result
in successful implementation of the Scheme and completion of the Merger.
The value of an SXG share on a control basis prior to the Transaction compared to the value of a share in
the Merged Entity on a minority interest basis is shown below:
Ref
Low
$
Midpoint
$
High
$
Value of an SXG share prior to the Transaction (control basis) 10.4 0.031 0.038 0.044
Value of a share in the Merged Entity (minority interest basis) 11.3 0.032 0.038 0.045
We note from the table above that the preferred value of a share in SXG falls within the value range of a
Merged Entity share following the Transaction. Therefore, we consider that the Transaction is fair.
13. Is the Transaction reasonable
In assessing if the Transaction is reasonable BDO have assumed that approval of the Transaction by SXG
will result in successful implementation of the Scheme and completion of the Merger. Failure to approve
the Transaction will result in an inability to successfully implement the Scheme and the Merger will not
occur. There are other requirements for the implementation of the Scheme which if not met will result in
the Transaction not proceeding.
13.1 Alternative Proposals
We are unaware of any alternative proposal that might offer the Shareholders of SXG a premium over the
value ascribed to resulting from the Transaction.
13.2 Practical Level of Control
Post Scheme
If the Transaction is approved then the shareholders of PLY will together hold an interest of approximately
52.9% in SXG as the Proposed Merged Entity.
When shareholders are required to approve an issue that relates to a company there are two types of
approval levels. These are general resolutions and special resolutions. A general resolution requires 50%
of shares to be voted in favour to approve a matter and a special resolution requires 75% of shares on issue
to be voted in favour to approve a matter. If the Scheme is approved then together the existing
shareholders of PLY will be able to block special and general resolutions and pass general resolutions.
The Proposed Merged Entity’s Board will comprise six directors of whom three are from PLY which means
that the PLY sourced directors will make up 50% of the Board.
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Post Transaction
If the Transaction is approved, the Sproule Interests will hold approximately 26% of the issued capital of
the Merged Entity allowing them to block special resolutions. The Sproule Interests will be the largest
shareholder of the Merged Entity. Consequently, a premium for control should be expected in this
Transaction. A single shareholding block of this size may also deter any potential bidders from making a
takeover offer for the Merged Entity, thereby depriving Shareholders from receiving a takeover premium
for their shares.
13.3 Consequences of not Approving the Transaction
Potential decline in share price
We have analysed movements in SXG’s share price since the Transaction was announced. A graph of SXG’s
share price since the announcement is set out below.
SXG share price and trading volume history
Share Price ($)
0.04
0.04
0.03
0.03
0.02
0.02
0.01
0.01
0.00
1.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
-
Volume (millions)
Volume
Closing share price
Source: Bloomberg
On the day of the Scheme was announced on 8 April 2013, SXG shares closed 15% higher at $0.030 and
continued to increase in the days following, closing at $0.034 on 12 April 2013. Since 12 April 2013, the
share price has steadily declined closing at $0.017 on 28 May 2013.
Over the three month period analysed above, SXG’s share price has declined by 51% from $0.035 on 1
March 2013 to $0.017 on 28 May 2013 compared to a 12% decline in the gold spot price over the same
period from approximately US$1,576 per ounce to US$1,390 per ounce.
Given the above analysis it is possible that if the Transaction is not approved then SXG’s share price is
unlikely to decline.
13.4 Advantages of Approving the Transaction
Shareholder approval of the Transaction is a condition precedent of the Scheme and will be an important
factor in determining whether the Merger proceeds. We have considered the following advantages when
assessing whether the Transaction is reasonable.
The Transaction is fair
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As set out in section 12, the Transaction is fair. RG 111 states that an offer is reasonable if it is fair.
The Proposed Merged Entity will be of a significantly larger scale than the existing SXG
It is anticipated that the combined production from the Marda and Mt Boppy Projects could reach 69,000
ounces per annum. The Proposed Merged Entity will create a company with a bigger, more diversified
portfolio of gold and base metals assets.
The larger scale of the Merged Entity may make it easier to raise funds in the future through debt or
equity funding.
The Scheme is a merger of two similar sized entities with equal Board representation in the Merged
Entity
Following the implementation of the Scheme, SXG will hold approximately 47% of the Merged Entity
shares, with PLY shareholders holding the remaining 53% of the shares. This weighting of shares is similar
to size of the companies based on market capitalisation prior to the announcement of the Scheme.
Share price as at
The Board of the proposed Merged Entity will consist of six directors, of whom three will be current
directors of SXG and three will be current directors of PLY. The Chairperson will be Samantha Tough
(current Chairperson of SXG) and Glenn Jardine (current Managing Director of SXG) will be the Chief
Executive Officer.
The Merged Group Board will consist of the following current members of the SXG Board:
• Samantha Tough, as non-executive Chairman;
• John Rowe, as non-executive director; and
• Graham Brock, as non-executive director,
with the addition of the following current members of the PLY Board:
• Frank Terranova, as non-executive director;
• David Sproule, as non-executive director; and
• Jon Parker, as non-executive director.
Access to the cash reserves of PLY
The significant cash reserves of PLY will be available to the combined entity to provide funding certainty
for the Marda Project and to allow immediate pursuit of those development projects prioritised by the
directors (which may be from the existing SXG and PLY portfolios).
Potential for synergies
3 April 2013 Shares on issue
Market
capitalisation
% of combined
market
capitalisation
SXG $0.031 408,912,834 $12,676,298 47.9%
PLY $0.360 38,285,620 $13,782,823 52.1%
Total combined market capitalisation
$26,459,121
Combining the companies should allow efficiencies to be realised in terms of consolidating the Western
Australia based activities and corporate and administrative costs. SXG has advised us that the forecast
74

corporate cost savings of the Merged Entity will be approximately $1.95 million per annum before any tax
shields.
Stronger more diversified development pipeline
In addition to the operating mines at Marda and Mt Boppy, both SXG and PLY have a portfolio of potential
projects giving the directors significant choice in the projects to be prioritised.
Shareholders will benefit from increased market relevance and liquidity of shares
The combined entity will have a more significant market presence and there is likely to be greater
liquidity making it easier for shareholders to realise the value of their shares should they choose to sell.
Technical expertise of the Sproule Interest
David Sproule, PLY’s current non-executive Chairman will bring technical expertise to the Merged Entity
including expertise in refurbishing and reconstructing small gold plants and operating small gold plants.
The Sproule Interests also bring with them a committed vision for growing small companies as well as cash
reserves.
Diversified and larger group of assets
The Merged Entity will hold a larger pool of assets providing the company with greater flexibility and more
options to divest or develop a number of projects.
13.5 Disadvantages of Approving the Transaction
If the Transaction is approved, in our opinion, the potential disadvantages to Shareholders include those
listed below:
There will be a new substantial SXG shareholder
Following the Transaction, the Sproule Interests and its members will have a voting power in the Company
of approximately 26%. A single shareholding block of this size may also deter any potential bidders from
making a takeover offer for the Merged Entity, thereby depriving Shareholders from receiving a takeover
premium for their shares.
Dilution of existing shareholders’ interests
The Transaction (and successful implementation of the Scheme) will see 458,537,981 shares issued to PLY
shareholders which will reduce the combined holding of existing shareholders from 100% to 47.1%
SXG Shareholders will be exposed to the risk of PLY’s assets
Through holding shares in the Merged Entity, SXG shareholders will be exposed to the risks of the Mt Boppy
Project, the Turner River Gold Project and Turner River Base Metals Project.
14. Conclusion
We have considered the terms of the Transaction as outlined in the body of this report and have
concluded that the Transaction is fair and reasonable to the Shareholders of SXG.
75

15. Sources of information
This report has been based on the following information:
• Draft Notice of General Meeting and Explanatory Statement on or about the date of this report;
• Scheme Implementation Agreement;
• Audited financial statements of SXG for the years ended 30 June 2011, 30 June 2012 and half-year
reviewed financial statements for period ended 31 December 2012;
• Unaudited management accounts of SXG for the nine month period ended 31 March 2013;
• Audited financial statements of PLY for the years ended 30 June 2011, 30 June 2012 and half-year
reviewed financial statements for period ended 31 December 2012;
• Unaudited management accounts of PLY for the nine month period ended 31 March 2013;
• Technical Specialist Assessment and Valuation Report of SXG’s and PLY’s mineral assets dated 19 June
2013 performed by AMC Consultants Pty Ltd;
• Share registry information;
• Information in the public domain; and
• Discussions with Directors and Management of SXG and PLY.
16. Independence
BDO Corporate Finance (WA) Pty Ltd is entitled to receive a fee of $50,000 (excluding GST and
reimbursement of out of pocket expenses). Except for this fee, BDO Corporate Finance (WA) Pty Ltd has
not received and will not receive any pecuniary or other benefit whether direct or indirect in connection
with the preparation of this report.
BDO Corporate Finance (WA) Pty Ltd has been indemnified by SXG in respect of any claim arising from BDO
Corporate Finance (WA) Pty Ltd's reliance on information provided by SXG, including the non provision of
material information, in relation to the preparation of this report.
Prior to accepting this engagement BDO Corporate Finance (WA) Pty Ltd has considered its independence
with respect to SXG and PLY and any of their respective associates with reference to ASIC Regulatory
Guide 112 “Independence of Experts”. In BDO Corporate Finance (WA) Pty Ltd’s opinion it is independent
of SXG and PLY.
Neither the two signatories to this report nor BDO Corporate Finance (WA) Pty Ltd, have had within the
past two years, any professional relationship with SXG, other than in connection with the preparation of
this Report.
A draft of this Report was provided to SXG and its advisors for confirmation of the factual accuracy of its
contents. No significant changes were made to this Report as a result of this review.
BDO is the brand name for the BDO International network and for each of the BDO Member firms.
BDO (Australia) Ltd, an Australian company limited by guarantee, is a member of BDO International
Limited, a UK company limited by guarantee, and forms part of the international BDO network of
Independent Member Firms. BDO in Australia, is a national association of separate entities (each of which
has appointed BDO (Australia) Limited ACN 050 110 275 to represent it in BDO International).
76

17. Qualifications
BDO Corporate Finance (WA) Pty Ltd has extensive experience in the provision of corporate finance
advice, particularly in respect of takeovers, mergers and acquisitions.
BDO Corporate Finance (WA) Pty Ltd holds an Australian Financial Services Licence issued by the Australian
Securities and Investment Commission for giving expert reports pursuant to the Listing rules of the ASX
and the Corporations Act.
The persons specifically involved in preparing and reviewing this report were Sherif Andrawes and Adam
Myers of BDO Corporate Finance (WA) Pty Ltd. They have significant experience in the preparation of
independent expert reports, valuations and mergers and acquisitions advice across a wide range of
industries in Australia and were supported by other BDO staff.
Sherif Andrawes is a Fellow of the Institute of Chartered Accountants in England & Wales and a Member of
the Institute of Chartered Accountants in Australia. He has over twenty five years experience working in
the audit and corporate finance fields with BDO and its predecessor firms in London and Perth. He has
been responsible for over 200 public company independent expert’s reports under the Corporations Act or
ASX Listing Rules. These experts’ reports cover a wide range of industries in Australia with a focus on
companies in the natural resources sector. Sherif Andrawes is the Chairman of BDO in Western Australia,
Corporate Finance Practice Group Leader of BDO in Western Australia and the Natural Resources Leader
for BDO in Australia.
Adam Myers is a member of the Australian Institute of Chartered Accountants. Adam’s career spans 15
years in the Audit and Assurance and Corporate Finance areas. Adam has considerable experience in the
preparation of independent expert reports and valuations in general for companies in a wide number of
industry sectors.
18. Disclaimers and consents
This report has been prepared at the request of SXG for inclusion in the Notice of Meeting and Explanatory
Memorandum which will be sent to all SXG Shareholders. SXG engaged BDO Corporate Finance (WA) Pty
Ltd to prepare an independent expert report to consider the proposal for SXG to issue approximately 459
million new ordinary shares to PLY shareholders.
BDO Corporate Finance (WA) Pty Ltd hereby consents to this report accompanying the above Notice of
Meeting and Explanatory Memorandum. Apart from such use, neither the whole nor any part of this
report, nor any reference thereto may be included in or with, or attached to any document, circular
resolution, statement or letter without the prior written consent of BDO Corporate Finance (WA) Pty Ltd.
BDO Corporate Finance (WA) Pty Ltd takes no responsibility for the contents of the Notice of Meeting and
Explanatory Memorandum other than this report.
BDO Corporate Finance (WA) Pty Ltd has not independently verified the information and explanations
supplied to us, nor has it conducted anything in the nature of an audit or review of SXG in accordance with
standards issued by the Auditing and Assurance Standards Board. However, we have no reason to believe
that any of the information or explanations so supplied are false or that material information has been
withheld. It is not the role of BDO Corporate Finance (WA) Pty Ltd acting as an independent expert to
perform any due diligence procedures on behalf of the Company. The Directors of the Company are
77

esponsible for conducting appropriate due diligence in relation to PLY. BDO Corporate Finance (WA) Pty
Ltd provides no warranty as to the adequacy, effectiveness or completeness of the due diligence process.
The opinion of BDO Corporate Finance (WA) Pty Ltd is based on the market, economic and other conditions
prevailing at the date of this Report. Such conditions can change significantly over short periods of time.
With respect to taxation implications it is recommended that individual Shareholders obtain their own
taxation advice, in respect of the Transaction, tailored to their own particular circumstances.
Furthermore, the advice provided in this Report does not constitute legal or taxation advice to the
Shareholders of SXG, or any other party.
BDO Corporate Finance (WA) Pty Ltd has also considered and relied upon technical specialist valuations for
mineral assets held by SXG and PLY.
The valuer engaged for the mineral asset valuation, AMC, possesses the appropriate qualifications and
experience in the industry to make such assessments. The approaches adopted and assumptions made, in
arriving at their valuations are considered appropriate for this report. We have received consent from the
valuer for the use of their valuation report in the preparation of this report and to append a copy of their
report to this Report.
The statements and opinions included in this report are given in good faith and in the belief that they are
not false, misleading or incomplete.
The terms of this engagement are such that BDO Corporate Finance (WA) Pty Ltd has no obligation to
update this report for events occurring subsequent to the date of this Report.
Yours faithfully
BDO CORPORATE FINANCE (WA) PTY LTD
Sherif Andrawes
Director
Adam Myers
Director
78

APPENDIX 1 – GLOSSARY OF TERMS
Reference
The Act
The Adjusted Marda Model
The Adjusted Mt Boppy
Model
AMC
Definition
The Corporations Act
The life of mine DCF Marda Project model prepared by SXG and adjusted by AMC and
BDO
The life of mine DCF Mt Boppy Project model prepared by PLY and adjusted by AMC
and BDO
AMC Consultants Pty Ltd
APES 225 Accounting Professional & Ethical Standards Board professional standard APES 225
‘Valuation Services’
ASIC
ASX
Au
AUD or A$
Barranco
BDO
The Company
DCF
EBIT
EBITDA
FME
Indemnity Consideration
JORC Code
Loan Funded Shares
The Marda Model
Australian Securities and Investments Commission
Australian Securities Exchange
Gold
Australian dollars
Barranco Resources NL
BDO Corporate Finance (WA) Pty Ltd
Southern Cross Goldfields Limited
Discounted Future Cash Flows
Earnings before interest and tax
Earnings before interest, tax, depreciation and amortisation
Future Maintainable Earnings
1,939,058 Polymetals Shares and $300,000 to Meadowhead Investments as
consideration for the provision of the Meadowhead Indemnity
The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves
Polymetals Shares issued under Polymetals’ long term incentive scheme
The life of mine DCF Marda Project model prepared by SXG
79

Meadowhead
Meadowhead Indemnity
The Merger
The Merged Entity
NAV
Our Report
Oz
Peak Litigation
PLY
RBA
Meadowhead Investments Pty Ltd
A full indemnity granted by Meadowhead Investments in favour of Polymetals in
relation to any costs that may arise out of the Peak Litigation
The merger of SXG and PLY by way of a scheme of arrangement
SXG and PLY following the Merger
Net Asset Value
This Independent Expert’s Report prepared by BDO
Ounce
The litigation brought by Peak Gold Mines Pty Ltd against PLY, in the Supreme
Court of New South Wales.
Polymetals Mining Limited
The Reserve Bank of Australia
RG111 Content of expert reports (March 2011)
RG112 Independence of experts (March 2011)
The Transaction
The Scheme
The proposal to issue SXG shares to the Sproule Interests upon implementation of the
Scheme which will result in the Sproule Interests holding approximately 26% of the
issued capital in the Merged Entity (SXG).
A proposed scheme of arrangement pursuant to the Corporations Act between PLY and
PLY shareholders , pursuant to which SXG will issue 11 SXG shares for every 1 PLY
share on issue (if the Scheme is approved and implemented) to effect the Merger.
Scheme Conditions
Shareholders
SIA
Sproule Interests
SXG
USD
the Valmin Code
The conditions precedent the satisfaction or waiver of which must be achieved for
implementation of the Scheme.
Shareholders of SXG not associated with PLY
Scheme Implementation Agreement
PLY’s largest associated shareholders, Meadowhead Investments, Mr D Sproule and
Mrs J Sproule
Southern Cross Goldfields Limited
US dollars
Code for the Technical Assessment and valuation of Mineral Petroleum Assets and
80

Securities for Independent Expert Reports
VWAP
Valuation Engagement
Volume Weighted Average Price
An Engagement or Assignment to perform a Valuation and provide a Valuation Report
where the Valuer is free to employ the Valuation Approaches, Valuation Methods, and
Valuation Procedures that a reasonable and informed third party would perform taking
into consideration all the specific facts and circumstances of the Engagement or
Assignment available to the Valuer at that time.
81

APPENDIX 2 – VALUATION METHODOLOGIES
Methodologies commonly used for valuing assets and businesses are as follows:
1 Net asset value (“NAV”)
Asset based methods estimate the market value of an entity’s securities based on the realisable value of
its identifiable net assets. Asset based methods include:
• Orderly realisation of assets method
• Liquidation of assets method
• Net assets on a going concern method
The orderly realisation of assets method estimates fair market value by determining the amount that
would be distributed to entity holders, after payment of all liabilities including realisation costs and
taxation charges that arise, assuming the entity is wound up in an orderly manner.
The liquidation method is similar to the orderly realisation of assets method except the liquidation
method assumes the assets are sold in a shorter time frame. Since wind up or liquidation of the entity
may not be contemplated, these methods in their strictest form may not be appropriate. The net assets
on a going concern method estimates the market values of the net assets of an entity but does not take
into account any realisation costs.
Net assets on a going concern basis are usually appropriate where the majority of assets consist of cash,
passive investments or projects with a limited life. All assets and liabilities of the entity are valued at
market value under this alternative and this combined market value forms the basis for the entity’s
valuation.
Often the FME and DCF methodologies are used in valuing assets forming part of the overall Net assets on
a going concern basis. This is particularly so for exploration and mining companies where investments are
in finite life producing assets or prospective exploration areas.
These asset based methods ignore the possibility that the entity’s value could exceed the realisable value
of its assets as they do not recognise the value of intangible assets such as management, intellectual
property and goodwill. Asset based methods are appropriate when an entity is not making an adequate
return on its assets, a significant proportion of the entity’s assets are liquid or for asset holding
companies.
2 Quoted Market Price Basis (“QMP”)
A valuation approach that can be used in conjunction with (or as a replacement for) other valuation
methods is the quoted market price of listed securities. Where there is a ready market for securities such
as the ASX, through which shares are traded, recent prices at which shares are bought and sold can be
taken as the market value per share. Such market value includes all factors and influences that impact
upon the ASX. The use of ASX pricing is more relevant where a security displays regular high volume
trading, creating a “deep” market in that security.
3 Capitalisation of future maintainable earnings (“FME”)
This method places a value on the business by estimating the likely FME, capitalised at an appropriate rate
which reflects business outlook, business risk, investor expectations, future growth prospects and other
entity specific factors. This approach relies on the availability and analysis of comparable market data.
82

The FME approach is the most commonly applied valuation technique and is particularly applicable to
profitable businesses with relatively steady growth histories and forecasts, regular capital expenditure
requirements and non-finite lives.
The FME used in the valuation can be based on net profit after tax or alternatives to this such as earnings
before interest and tax (“EBIT”) or earnings before interest, tax, depreciation and amortisation
(“EBITDA”). The capitalisation rate or "earnings multiple" is adjusted to reflect which base is being used
for FME.
4 Discounted future cash flows (“DCF”)
The DCF methodology is based on the generally accepted theory that the value of an asset or business
depends on its future net cash flows, discounted to their present value at an appropriate discount rate
(often called the weighted average cost of capital). This discount rate represents an opportunity cost of
capital reflecting the expected rate of return which investors can obtain from investments having
equivalent risks.
Considerable judgement is required to estimate the future cash flows which must be able to be reliably
estimated for a sufficiently long period to make this valuation methodology appropriate.
A terminal value for the asset or business is calculated at the end of the future cash flow period and this is
also discounted to its present value using the appropriate discount rate.
DCF valuations are particularly applicable to businesses with limited lives, experiencing growth, that are
in a start up phase, or experience irregular cash flows.
5 Market Based Assessment
The market based approach seeks to arrive at a value for a business by reference to comparable
transactions involving the sale of similar businesses. This is based on the premise that companies with
similar characteristics, such as operating in similar industries, command similar values. In performing this
analysis it is important to acknowledge the differences between the comparable companies being analysed
and the company that is being valued and then to reflect these differences in the valuation.
The resource multiple is a market based approach which seeks to arrive at a value for a company by
reference to its total reported resources and to the enterprise value per tonne/lb of the reported
resources of comparable listed companies. The resource multiple represents the value placed on the
resources of comparable companies by a liquid market.
83

APPENDIX 3 – DISCOUNT RATES
SXG
We have derived a discount rate for SXG to apply to the future cash flows of the Marda Project prior to
the Transaction on a stand alone basis as set out below.
Determining the correct discount rate, or cost of capital, for a business requires the identification and
consideration of a number of factors that affect the returns and risks of a business, as well as the
application of widely accepted methodologies for determining the returns of a business.
The discount rate applied to the forecast cash flows from a business represents the financial return that
an investor would require if they were to acquire (or invest in) the business.
The capital asset pricing model (“CAPM”) is commonly used in determining the market rates of return for
equity type investments and project evaluations. In determining a business’ weighted average cost of
capital (“WACC”) the CAPM results are combined with the cost of debt funding. WACC represents the
return required on the business, whilst CAPM provides the required return on an equity investment.
Cost of Equity and Capital Asset Pricing Model
CAPM is based on the theory that a rational investor would price an investment so that the expected
return is equal to the risk free rate of return plus an appropriate premium for risk. CAPM assumes that
there is a positive relationship between risk and return, that is, investors are risk averse and demand a
higher return for accepting a higher level of risk.
CAPM calculates the cost of equity and is calculated as follows:
CAPM
K e = R f + β x (R m – R f )
Where:
K e
R f
R m
R m – R f
β
= expected equity investment return or cost of equity in nominal terms
= risk free rate of return
= expected market return
= market risk premium
= equity beta
The individual components of CAPM are discussed below.
Risk Free Rate (R f )
The risk free rate is normally approximated by reference to a long term government bond with a maturity
equivalent to the timeframe over which the returns from the assets are expected to be received. Having
regard to the period of the operations we have used the current yield to maturity on the 10 year
Commonwealth Government Bond which was 3.27% per annum as at 27 May 2013.
Market Risk Premium (R m – R f )
The market risk premium represents the additional return that investors expect from an investment in a
well-diversified portfolio of assets. It is common to use a historical risk premium, as expectations are not
observable in practice.
We have noted that the current market risk premium is 6%. This has been sourced from Bloomberg. The
market risk premium is derived on the basis of capital weighted average return of all members of the S&P
200 Index minus the risk free rate is dependent on the ten year government bond rates. For the purpose
of our report we have adopted a market risk premium of 6%.
84

Equity Beta
Beta is a measure of the expected correlation of an investment’s return over and above the risk free rate,
relative to the return over and above the risk free rate of the market as a whole. A beta greater than one
implies that an investment’s return will outperform the market’s average return in a rising market and
underperform the market’s average return in a falling market. On the other hand, a beta less than one
implies that the business’ performance compared to that of a business whose beta is greater than one will
provide an inverse relationship in terms of the market’s average return.
Equity betas are normally either an historical beta or an adjusted beta. The historical beta is obtained
from the linear regression of a stock’s historical data and is based on the observed relationship between
the security’s return and the returns on an index. An adjusted beta is calculated based on the assumption
that the relative risk of the past will continue into the future, and hence derived from the historical data.
It is then modified by the assumption that a stock will move towards the market over time, taking into
consideration the industry risk factors which make the operating risk of the investment project greater or
less risky than comparable listed companies when assessing the equity beta for an investment project.
It is important to note that it is not possible to compare the equity betas of different companies without
having regard to their gearing levels. Thus, a more valid analysis of betas can be achieved by “ungearing”
the equity beta (β a ) by applying the following formula:
β a = β / (1+(D/E x (1-t))
In order to assess the appropriate equity beta for the Marda Project we have had regard to the equity
betas of listed companies involved in similar activities in similar industry sectors. The geared betas below
have been calculated against the All Ordinaries Index.
Company Market Capitalisation ($) Geared beta Gross debt/equity Ungeared beta
Rand Mining Ltd 21,294,422 1.28 9% 1.20
BCD Resources NL 4,557,416 0.78 1% 0.77
Kalnorth Gold Mines Limited 23,787,399 0.86 0% 0.86
Octagonal Resources Limited 11,665,280 0.93 0% 0.93
Ramelius Resources Limited 70,927,429 1.06 2% 1.04
Excelsior Gold Limited 55,900,589 1.01 0% 1.01
Tanami Gold NL 48,766,525 1.04 71% 0.69
Mean 0.93
Median 0.93
Source: Bloomberg
Selected Beta (β)
In selecting an appropriate Beta for the Projects, we have considered the similarities between the
Projects and the comparable companies selected above. The comparable similarities and differences
noted are:
• the comparable companies’ mining and exploration assets have varying risk profiles depending on
the maturity of the assets and the stages and location of production; and
• several companies having been producing for a considerable time period.
85

Having regard to the above we consider that an appropriate ungeared beta to apply to the Projects is
between 0.95 and 1.15. We have selected our beta from the top end of the range of comparable company
betas to reflect the higher risk that is associated with SXG not having commenced production. We consider
it reasonable that a forward looking ungeared beta for SXG will reflect that of its peers.
We understand that the current capital structure of SXG reflects approximately 64% debt and 36% equity.
We consider it reasonable to assume that the shareholders of SXG determine their required rate of return,
for a particular project, by viewing the risks associated with the future cash flows of the project. We have
assumed that SXG will obtain both debt and equity funding to advance the Marda Project. The financing of
the Marda Project will render SXG with a capital structure consisting of 73% debt and 27% equity. We have
regeared the project beta to 2.72 to 3.29.
Cost of Equity
On this basis we have assessed the cost of equity to be:
Input
Value Adopted
Risk free rate of return 3. 27% 3.27%
Low
High
Equity market risk premium 6.00% 6.00%
Beta (geared) 2.72 3.29
Cost of Equity 19.58% 23.01%
Weighted Average Cost of Capital
The WACC represents the market return required on the assets of the undertaking by debt and equity
providers. WACC is used to assess the appropriate commercial rate of return on the capital invested in the
business, acknowledging that normally funds invested consist of a mixture of debt and equity funds.
Accordingly, the discount rate should reflect the proportionate levels of debt and equity relative to the
level of security and risk attributable to the investment.
In calculating WACC there are a number of different formulae which are based on the definition of cash
flows (i.e., pre-tax or post-tax), the treatment of the tax benefit arising through the deductibility of
interest expenses (included in either the cash flow or discount rate), and the manner and extent to which
they adjust for the effects of dividend imputation. The commonly used WACC formula is the post-tax
WACC, without adjustment for dividend imputation, which is detailed in the below table.
86

CAPM
WACC = E K e + D K d (1– t)
Where:
K e
K d
T
E
D
E+D
D+E
= expected return or discount rate on equity
= interest rate on debt (pre-tax)
= corporate tax rate
= market value of equity
= market value of debt
(1- t) = tax adjustment
Gearing
Before WACC can be determined, the proportion of funding provided by debt and equity (i.e., gearing
ratio) must be determined. The gearing ratio adopted should represent the level of debt that the asset
can reasonably sustain (i.e., the higher the expected volatility of cash flows, the lower the debt levels
which can be supported). The optimum level of gearing will differentiate between assets and will include:
• the variability in earnings streams;
• working capital requirements;
• the level of investment in tangible assets; and
• the nature and risk profile of the tangible assets.
As described earlier, we understand the capital of structure of SXG to be made up of approximately 73%
debt and 27% equity. We have been informed by the Company that the current anticipated cost of debt is
in the range of 7.5% to 8.0%.
Calculation of WACC
Based on the above inputs we have calculated the real WACC to be between 6.0% and 7.1%.
WACC
Value Adopted
Low
High
Cost of equity, K e 19.6% 23.0%
Cost of debt, K d 7.5% 8.0%
Proportion of equity ((E/(E+D)) 27.3% 27.3%
Proportion of debt ((D/(E+D)) 72.7% 72.7%
Weighted average cost of capital (nominal) 9.2% 10.4%
Weighted average cost of capital (real)* 6.0 7.1
* We have converted the nominal WACC to a real WACC using an inflation rate of 3% as per the following formula:
()
( ) = − 1
Based on the table above our preferred discount rate for the Marda Project is 6.5%.
87

Merged Entity
Determining the correct discount rate, or cost of capital, for a business requires the identification and
consideration of a number of factors that affect the returns and risks of a business, as well as the
application of widely accepted methodologies for determining the returns of a business.
The discount rate applied to the forecast cash flows from a business represents the financial return that
an investor would require if they were to acquire (or invest in) the business.
The capital asset pricing model (“CAPM”) is commonly used in determining the market rates of return for
equity type investments and project evaluations. In determining a business’ weighted average cost of
capital (“WACC”) the CAPM results are combined with the cost of debt funding. WACC represents the
return required on the business, whilst CAPM provides the required return on an equity investment.
Cost of Equity and Capital Asset Pricing Model
CAPM is based on the theory that a rational investor would price an investment so that the expected
return is equal to the risk free rate of return plus an appropriate premium for risk. CAPM assumes that
there is a positive relationship between risk and return, that is, investors are risk averse and demand a
higher return for accepting a higher level of risk.
CAPM calculates the cost of equity and is calculated as follows:
CAPM
K e = R f + β x (R m – R f )
Where:
K e
R f
R m
R m – R f
β
= expected equity investment return or cost of equity in nominal terms
= risk free rate of return
= expected market return
= market risk premium
= equity beta
The individual components of CAPM are discussed below.
Risk Free Rate (R f )
The risk free rate is normally approximated by reference to a long term government bond with a maturity
equivalent to the timeframe over which the returns from the assets are expected to be received. Having
regard to the period of the operations we have used the current yield to maturity on the 10 year
Commonwealth Government Bond which was 3.27% per annum as at 27 May 2013.
Market Risk Premium (R m – R f )
The market risk premium represents the additional return that investors expect from an investment in a
well-diversified portfolio of assets. It is common to use a historical risk premium, as expectations are not
observable in practice.
We have noted that the current market risk premium is 6%. This has been sourced from Bloomberg. The
market risk premium is derived on the basis of capital weighted average return of all members of the S&P
200 Index minus the risk free rate is dependent on the ten year government bond rates. For the purpose
of our report we have adopted a market risk premium of 6%.
Equity Beta
Beta is a measure of the expected correlation of an investment’s return over and above the risk free rate,
relative to the return over and above the risk free rate of the market as a whole. A beta greater than one
implies that an investment’s return will outperform the market’s average return in a rising market and
88

underperform the market’s average return in a falling market. On the other hand, a beta less than one
implies that the business’ performance compared to that of a business whose beta is greater than one will
provide an inverse relationship in terms of the market’s average return.
Equity betas are normally either an historical beta or an adjusted beta. The historical beta is obtained
from the linear regression of a stock’s historical data and is based on the observed relationship between
the security’s return and the returns on an index. An adjusted beta is calculated based on the assumption
that the relative risk of the past will continue into the future, and hence derived from the historical data.
It is then modified by the assumption that a stock will move towards the market over time, taking into
consideration the industry risk factors which make the operating risk of the investment project greater or
less risky than comparable listed companies when assessing the equity beta for an investment project.
It is important to note that it is not possible to compare the equity betas of different companies without
having regard to their gearing levels. Thus, a more valid analysis of betas can be achieved by “ungearing”
the equity beta (β a ) by applying the following formula:
β a = β / (1+(D/E x (1-t))
In order to assess the appropriate equity beta for the Merged Entity we have had regard to the equity
betas of listed companies involved in similar activities in similar industry sectors. The geared betas below
have been calculated against the All Ordinaries Index.
Company Market Capitalisation ($) Geared beta Gross debt/equity Ungeared beta
Polymetals Mining Limited 6,891,412 0.81 0% 0.81
Rand Mining Limited 21,294,422 1.28 9% 1.20
BCD Resources NL 3,622,562 0.78 1% 0.77
Kalnorth Gold Mines Limited 20,389,200 0.86 0% 0.86
Octagonal Resources Limited 10,604,800 0.93 0% 0.93
Ramelius Resources Limited 64,172,432 1.06 2% 1.04
Excelsior Gold Limited 53,830,193 1.01 0% 1.01
Tanami Gold NL 48,766,525 1.04 71% 0.69
Selected Beta (β)
In selecting an appropriate Beta for the Merged Entity, we have considered the similarities between the
projects and the comparable companies selected above. The comparable similarities and differences
noted are:
• the comparable companies’ mining and exploration assets have varying risk profiles depending on
the maturity of the assets and the stages and location of production; and
• several companies having been producing for a considerable time period.
Mean 0.92
Median 0.90
Having regard to the above we consider that an appropriate ungeared beta to apply to the Merged Entity
is between 0.90 and 1.20. We consider it reasonable that a forward looking ungeared beta for the Merged
Entity will reflect that of its peers. The median beta of the comparable companies was selected as the
low end of the beta range. The high end of the beta range of 1.20 was selected to reflect the higher risk
89

associated (relative to the comparable companies) with the Merged Entity as a result of production being
scheduled to commence in 2014.
We have calculated the debt to equity structure of the Merged Entity based on the pre-transaction capital
structures of SXG and PLY and the funding assumptions for the Marda Project and Mt Boppy Project as
outlined in Sections 10.1.1 and 11.1.1 respectively. We have based our discount rate assessment on the
Merged Entity having a capital structure comprising 65% debt and 35% equity.
We consider it reasonable to assume that the shareholders of the Merged Entity will determine their
required rate of return, for a particular project, by viewing the risks associated with the future cash flows
of the project. We have regeared the project beta to 2.06 to 2.75 based on the 65% debt and 35% equity
structure.
Cost of Equity
On this basis we have assessed the cost of equity to be:
Input
Value Adopted
Risk free rate of return 3.27% 3.27%
Low
High
Equity market risk premium 6.00% 6.00%
Beta (geared) 2.06 2.75
Cost of Equity 15.63% 19.75%
Weighted Average Cost of Capital
The WACC represents the market return required on the assets of the undertaking by debt and equity
providers. WACC is used to assess the appropriate commercial rate of return on the capital invested in the
business, acknowledging that normally funds invested consist of a mixture of debt and equity funds.
Accordingly, the discount rate should reflect the proportionate levels of debt and equity relative to the
level of security and risk attributable to the investment.
In calculating WACC there are a number of different formulae which are based on the definition of cash
flows (i.e., pre-tax or post-tax), the treatment of the tax benefit arising through the deductibility of
interest expenses (included in either the cash flow or discount rate), and the manner and extent to which
they adjust for the effects of dividend imputation. The commonly used WACC formula is the post-tax
WACC, without adjustment for dividend imputation, which is detailed in the below table.
CAPM
WACC = E K e + D K d (1– t)
Where:
K e
K d
T
E
D
E+D
D+E
= expected return or discount rate on equity
= interest rate on debt (pre-tax)
= corporate tax rate
= market value of equity
= market value of debt
(1- t) = tax adjustment
90

Gearing
Before WACC can be determined, the proportion of funding provided by debt and equity (i.e., gearing
ratio) must be determined. The gearing ratio adopted should represent the level of debt that the asset
can reasonably sustain (i.e., the higher the expected volatility of cash flows, the lower the debt levels
which can be supported). The optimum level of gearing will differentiate between assets and will include:
• the variability in earnings streams;
• working capital requirements;
• the level of investment in tangible assets; and
• the nature and risk profile of the tangible assets.
As described earlier, we understand the capital of structure of the Merged Entity to be made up of
approximately 65% debt and 35% equity. We have used a cost of debt in the range of 7.50% to 8.50% based
on the indicative debt funding offers received by SXG and PLY.
Calculation of WACC
Based on the above inputs we have calculated the real WACC to be between 5.7% and 7.6% as detailed
below.
WACC
Value Adopted
Low
High
Cost of equity, K e 15.6% 19.8%
Cost of debt, K d 7.50% 8.50%
Proportion of equity ((E/(E+D)) 35.2% 35.2%
Proportion of debt ((D/(E+D)) 64.8% 64.8%
Weighted average cost of capital (nominal) 8.9% 10.8%
Weighted average cost of capital (real)* 5.7% 7.6%
* We have converted the nominal WACC to a real WACC using an inflation rate of 3% as per the following formula:
()
( ) = − 1
Based on the table above our preferred discount rate for the Merged Entity is 6.5%. We note that this is
the same as the discount rate used for SXG.
91

APPENDIX 4 – TECHNICAL SPECIALIST VALUATION – AMC
CONSULTANTS
92

- 42 -
Annexure B
Refer enclosed Technical Specialist’s Report

AMC Consultants Pty Ltd
ABN 58 008 129 164
Ground Floor, 9 Havelock Street
WEST PERTH WA 6005
T +61 8 6330 1100
F +61 8 6330 1199
E amcperth@amcconsultants.com
POLYMETALS MINING LIMITED AND
SOUTHERN CROSS GOLDFIELDS LIMITED
TECHNICAL SPECIALIST'S REPORT
BDO CORPORATE FINANCE (WA) PTY LTD
AMC NUMBER 213052
June 2013
ADELAIDE
+61 8 8201 1800
BRISBANE
+61 7 3839 0099
MELBOURNE
+61 3 8601 3300
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+1 604 669 0044
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+44 1628 778 256
www.amcconsultants.com

BDO CORPORATE FINANCE (WA) PTY LTD
Polymetals Mining Limited and Southern Cross Goldfields Limited
Technical Specialist's Report
19 June 2013
The Directors
BDO Corporate Finance (WA) Pty Ltd
38 Station Street
SUBIACO WA 6008
Dear Sirs
POLYMETALS AND SOUTHERN CROSS GOLDFIELDS
TECHNICAL SPECIALIST'S REPORT
On 8 April 2013, Polymetals Mining Limited (Polymetals) and Southern Cross Goldfields Limited (Southern
Cross) announced, inter alia, that subject to certain conditions:
• Polymetals and Southern Cross have entered into an agreement to combine the two companies
under a merger structured as a Polymetals Scheme of Arrangement (Scheme).
• The merger will be implemented as a "merger of equals" by way of the Scheme under which
Polymetals shareholders will be offered Southern Cross shares.
As advised by Southern Cross, as a result of the Scheme, Southern Cross shares will be issued to
Polymetals' largest shareholder which will result in the shareholder and its associates holding more than
20% of the issued capital in the Merged Entity (Transaction).
The directors of Southern Cross have engaged BDO Corporate Finance (WA) Pty Ltd (BDO) to prepare an
Independent Expert Report (IER) in relation to the Transaction. The IER is to be included with a Notice of
Meeting to be sent to Southern Cross shareholders.
The directors of Southern Cross have also engaged AMC Consultants Pty Ltd (AMC) to provide BDO with a
Technical Specialist's Report (TSR) on the mineral assets of Polymetals and Southern Cross (Assets). The
TSR will be appended to the IER.
In relation to the TSR, BDO has instructed AMC to undertake a technical review and prepare a technical
valuation of the exploration assets and where appropriate to develop production cases for the mineral assets
of Polymetals and Southern Cross.
The scope of the TSR as advised by BDO to AMC includes:
• A description of the mineral assets.
• Examination of geology, Mineral Resources and Ore Reserves, development plans, mining aspects,
processing methods, production schedules, capital costs and operating costs, and exploration
potential for each operation or development project.
• Valuation of the exploration properties to the extent they are not covered by the life-of-mine production
cases for the operations and development projects.
Separately and prior to receiving instruction from BDO, Polymetals has engaged Grant Thornton Corporate
Finance Pty Ltd (Grant Thornton) to prepare an Independent Expert Report in relation to the proposed
merger. AMC was engaged on 18 April 2013 by Polymetals to provide an independent technical specialist's
report under instruction from Grant Thornton on the mineral assets of Polymetals and Southern Cross. BDO
has confirmed that it is satisfied with the instruction provided by Grant Thornton to AMC in relation to the
TSR, and that this instruction satisfies BDO’s requirements in its role as Expert. The technical content of this
TSR is essentially the same as the report provided to Grant Thornton. This TSR has been prepared
specifically for the Transaction.
For each of the operations and development projects reviewed, AMC has provided production cases
including capital and operating cost projections, with pre-tax revenues to BDO to allow BDO to calculate net
present values for the respective projects. AMC believes the production cases are based on reasonable
grounds.
i

BDO CORPORATE FINANCE (WA) PTY LTD
Polymetals Mining Limited and Southern Cross Goldfields Limited
Technical Specialist's Report
In general terms, AMC has modelled two production cases for each operation and development project.
Case 1 is typically based on Ore Reserve (JORC Code 1 defined) estimates and that part of other Mineral
Resources (JORC Code defined) and exploration potential for which AMC judges there is a high confidence
of future conversion to Ore Reserves.
Case 2 typically adds mining and processing tonnages to those of Case 1 which AMC judges to represent
potential further additions to Ore Reserves from existing Mineral Resources and from readily demonstrable
exploration potential, but to a lesser confidence level than in Case 1. Nevertheless, AMC believes that the
Case 2 production cases are also based on reasonable grounds.
The production cases developed by AMC include capital and operating cost schedules based on information
provided by Polymetals and Southern Cross. Those costs do not include off-site costs such as head office or
corporate costs, which are to be considered by BDO.
AMC has provided BDO with valuations of the exploration assets of Polymetals and Southern Cross that are
located remote from their development projects, or have not been considered in production cases.
For exploration assets, it is not possible to project cash flows and/or production estimates with sufficient
confidence to rely on discounted cash flow methodology. AMC has therefore considered other methods to
value the exploration assets. These methods are commonly used in Australia to value exploration projects
and are discussed in this report.
The VALMIN Code 2 defines a Technical Value as an assessment of future net economic benefit. And a Fair
Market Value is defined as one which is based on an adjusted Technical Value, a premium or discount
relating to market, strategic or other considerations. AMC's values of exploration assets are Fair Market
Values. Some of the exploration valuation methods result in a Technical Value, but AMC does not believe it
appropriate at this time to apply a premium or discount to the values determined for those assets to obtain
Fair Market Value.
Polymetals and Southern Cross have provided AMC with information on the status of their material
tenements. Based on that information, AMC has concluded that the material tenements of Polymetals and
Southern Cross are in good standing.
In summary, the range of valuations for the exploration valuations prepared by AMC are:
Polymetals
Tables I shows the exploration values for Polymetals.
Table I
Polymetals – Exploration Values
Location
Low
($M)
High
($M)
Mt Boppy 0.2 0.2
Turner River Gold 2.1 4.2
Turner River Base Metals 0.1 0.3
Total 2.4 4.7
1
2
Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, The JORC Code 2004 Edition,
Effective December 2004, Prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy,
Australian Institute of Geoscientists and Minerals Council of Australia (JORC).
Code for the Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent Expert Reports.
The VALMIN Code 2005 Edition, Prepared by the VALMIN Committee, a joint committee of the Australasian Institute of Mining and
Metallurgy, the Australian Institute of Geoscientists and the Mineral Industry Consultants Association with the participation of the
Australian Securities and Investment Commission, the Australian Stock Exchange Limited, the Minerals Council of Australia, the
Petroleum Exploration Society of Australia, the Securities Association of Australia and representatives from the Australian finance
sector
ii

BDO CORPORATE FINANCE (WA) PTY LTD
Polymetals Mining Limited and Southern Cross Goldfields Limited
Technical Specialist's Report
AMC’s combined value for Polymetals’ exploration projects is $2.4M to $4.7M.
Southern Cross Goldfields
Tables II shows and exploration values for Southern Cross.
Table II
Southern Cross – Exploration Values
Location
Low
($M)
High
($M)
Marda 0.7 1.3
Sandstone 3.4 8.3
Total 4.1 9.6
AMC’s combined value for Southern Cross's exploration projects is $4.1M to $9.6M.
AMC has completed its engagement as a Specialist in accordance with the VALMIN Code to the extent that
the code is relevant to AMC's engagement.
AMC's use, in this report, of the terms Mineral Resources and Ore Reserves is in accordance with the JORC
Code.
Principal sources of information considered by AMC in the preparation of this report are listed in Appendix A.
For the purposes of preparing this report, AMC has visited the Mt Boppy site and has previously visited the
Marda and Turner River sites. AMC has reviewed material technical reports and management information
and held discussions with management staff of Polymetals and Southern Cross. AMC has not audited the
information provided to it, but has aimed to satisfy itself that all of the information has been prepared in
accordance with proper industry standards and is based on data that AMC considers to be of acceptable
quality and reliability. Where AMC has not been so satisfied, AMC has included comment in this report and
made modifications to the estimates and forecasts provided by AMC to BDO.
AMC presents the TSR which follows in the form of:
• Mineral Assets
• Valuation Methods and Macroeconomic Factors
• Polymetals Mining Limited
• Southern Cross Goldfields Limited
• Qualifications.
All monetary figures in this report are expressed in 2013 Australian Dollars ($) or United States Dollars (US$)
unless otherwise noted. Costs are presented on a cash cost basis unless otherwise specified.
For definitions of abbreviations used in this report, refer to Appendix B, and for contributors to this report,
refer to Appendix C.
Yours faithfully
D Varcoe
MAusIMM
Principal Mining Engineer
L Gillett
FAusIMM (CP)
Director
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Technical Specialist's Report
CONTENTS
1 MINERAL ASSETS .................................................................................................................................. 1
1.1 Polymetals Mining Limited ............................................................................................................. 1
1.2 Southern Cross Goldfields Limited ................................................................................................ 1
2 VALUATION METHODS AND MACROECONOMIC FACTORS ............................................................. 3
2.1 Valuation Methods ......................................................................................................................... 3
2.1.1 Operations and Development Projects ........................................................................... 3
2.2 Exploration ..................................................................................................................................... 3
3 POLYMETALS MINING LIMITED ............................................................................................................ 5
3.1 Mt Boppy Gold Project ................................................................................................................... 5
3.1.1 Introduction ..................................................................................................................... 5
3.1.2 Geology ........................................................................................................................... 6
3.1.2.1 Mineral Resources ..................................................................................... 7
3.1.2.2 Exploration ................................................................................................. 8
3.1.3 Mining ............................................................................................................................. 9
3.1.4 Ore Reserves ................................................................................................................ 10
3.1.5 Processing Operations ................................................................................................. 10
3.1.5.1 Proposed Flowsheet ................................................................................ 10
3.1.5.2 Metallurgical Testing ................................................................................ 12
3.1.5.3 Plant Layout ............................................................................................. 12
3.1.5.4 Capital Costs ............................................................................................ 12
3.1.5.5 Operating Costs ....................................................................................... 13
3.1.5.6 Worker's Camps ....................................................................................... 14
3.1.5.7 Water Supply ............................................................................................ 14
3.1.5.8 Power Supply ........................................................................................... 15
3.1.6 Environment .................................................................................................................. 15
3.1.6.1 Overview .................................................................................................. 15
3.1.6.2 Statutory Environmental Approvals .......................................................... 15
3.1.6.3 Biodiversity and Conservation.................................................................. 15
3.1.6.4 Acid and Metalliferous Drainage .............................................................. 15
3.1.6.5 Water Management .................................................................................. 16
3.1.6.6 Closure ..................................................................................................... 16
3.1.7 Project Implementation ................................................................................................. 16
3.1.8 AMC Production Cases ................................................................................................ 17
3.1.9 Opportunities and Risks ................................................................................................ 18
3.2 Turner River ................................................................................................................................. 18
3.2.1 Geology ......................................................................................................................... 20
3.2.2 Turner River Gold Project ............................................................................................. 20
3.2.2.1 Resources ................................................................................................ 21
3.2.2.2 Mining ....................................................................................................... 21
3.2.2.3 Processing ................................................................................................ 22
3.2.2.4 Environmental .......................................................................................... 22
3.2.2.5 Turner River Exploration .......................................................................... 23
3.2.2.6 Turner River Gold Project Valuation ........................................................ 24
3.2.3 Turner River Base Metals Project ................................................................................. 24
3.2.3.1 Geology .................................................................................................... 25
3.2.3.2 Mineral Resources ................................................................................... 26
3.2.3.3 Valuation .................................................................................................. 26
4 SOUTHERN CROSS GOLDFIELDS LIMITED ...................................................................................... 27
4.1 Marda Gold Project ...................................................................................................................... 27
4.1.1 Introduction ................................................................................................................... 27
4.1.2 Geology ......................................................................................................................... 28
4.1.2.1 Northern Deposits .................................................................................... 28
4.1.2.2 Southern Deposits .................................................................................... 29
4.1.3 Resources ..................................................................................................................... 29
4.1.4 Joint Ventures ............................................................................................................... 30
4.1.4.1 Radio Gold Mine ...................................................................................... 30
4.1.4.2 Dulcie Gold Project .................................................................................. 31
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Technical Specialist's Report
4.1.4.3 Western Areas NL (Southern Cross 30% Nickel Interest, 100% Nonnickel
Interest) .......................................................................................... 31
4.1.5 Exploration .................................................................................................................... 31
4.1.5.1 Gold .......................................................................................................... 31
4.1.5.2 Red Boomerang ....................................................................................... 31
4.1.5.3 Lancelot .................................................................................................... 31
4.1.5.4 White Pointer ............................................................................................ 31
4.1.5.5 Thresher ................................................................................................... 31
4.1.5.6 Copper Bore ............................................................................................. 31
4.1.6 Mining ........................................................................................................................... 32
4.1.7 Ore Reserves ................................................................................................................ 32
4.1.8 Metallurgy and Processing ........................................................................................... 33
4.1.8.1 Introduction ............................................................................................... 33
4.1.8.2 Metallurgical Test Work ............................................................................ 33
4.1.8.3 Process Plant ........................................................................................... 34
4.1.8.4 Gold Recovery.......................................................................................... 35
4.1.8.5 Plant Throughput ...................................................................................... 35
4.1.8.6 Capital Estimate Plant and Infrastructure ................................................ 35
4.1.8.7 Operating Cost Estimate .......................................................................... 36
4.1.9 Environment .................................................................................................................. 37
4.1.9.1 Overview .................................................................................................. 37
4.1.9.2 Statutory Environmental Approval............................................................ 37
4.1.10 Flora and Fauna ........................................................................................................... 38
4.1.11 Acid and Metalliferous Drainage ................................................................................... 38
4.1.12 Water Management ...................................................................................................... 39
4.1.13 Rehabilitation and closure ............................................................................................ 39
4.1.14 Project Implementation ................................................................................................. 39
4.1.15 AMC Production Cases ................................................................................................ 39
4.2 Sandstone Project ........................................................................................................................ 41
4.2.1 Geology ......................................................................................................................... 43
4.2.2 Mineral Resources ........................................................................................................ 45
4.2.3 Exploration .................................................................................................................... 47
4.2.4 Valuation ....................................................................................................................... 47
5 QUALIFICATIONS.................................................................................................................................. 48
TABLES
Table I Polymetals – Exploration Values .............................................................................................. ii
Table II Southern Cross – Exploration Values ...................................................................................... iii
Table 1.1 Polymetals Gold Mineral Resources ......................................................................................... 1
Table 1.2 Polymetals Base Metal Inferred Mineral Resources ................................................................. 1
Table 1.3 Polymetals Gold Ore Reserves – Mt Boppy ............................................................................. 1
Table 1.4 Southern Cross Gold Mineral Resources ................................................................................. 2
Table 1.5 Southern Cross Gold Ore Reserves – Marda ........................................................................... 2
Table 3.1 Mt Boppy Mineral Resources at 30 March 2013 (Includes Mt Boppy South) ........................... 7
Table 3.2 Ore Reserves for Mt Boppy .................................................................................................... 10
Table 3.3 Capital Estimate for Mt Boppy Redevelopment ...................................................................... 13
Table 3.4 Basic Design Parameters ....................................................................................................... 14
Table 3.5 Processing Unit Cost .............................................................................................................. 14
Table 3.6 Turner River Gold Project – Mineral Resources at 13 March 2013 ........................................ 21
Table 3.7 Turner River Base Metal Inferred Mineral Resources at 24 April 2013 .................................. 25
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Technical Specialist's Report
Table 4.1 Marda Gold Project – Mineral Resources as at 25 September 2012 ..................................... 29
Table 4.2 Marda Gold Project – Ore Reserves at October 2012 ............................................................ 33
Table 4.3 Mean Comminution Test Parameters ..................................................................................... 34
Table 4.4 Southern Cross Capital Estimate Summary ........................................................................... 36
Table 4.5 Marda Operating Cost Estimate .............................................................................................. 36
Table 4.6 Sandstone Mineral Resources at June 2012 .......................................................................... 46
FIGURES
Figure 3.1 Mt Boppy Project Location ........................................................................................................ 5
Figure 3.2 Canbelego Exploration Licence Location ................................................................................. 6
Figure 3.3 Mt Boppy Geological Domains .................................................................................................. 8
Figure 3.4 Mt Boppy Proposed Flowsheet ............................................................................................... 11
Figure 3.5 Location of Turner River Projects ........................................................................................... 19
Figure 3.6 Location of Turner River Exploration Licence ......................................................................... 20
Figure 3.7 Turner River Base Metal Project Prospect Location ............................................................... 25
Figure 4.1 Location of Marda Gold Project .............................................................................................. 27
Figure 4.2 Sandstone Tenement Location ............................................................................................... 42
Figure 4.3 Sandstone Project Geology .................................................................................................... 43
Figure 4.4 Lord Nelson and Lord Henry Geology .................................................................................... 44
Figure 4.5 Two Mile Hill Geology ............................................................................................................. 45
APPENDICES
APPENDIX A PRINCIPAL SOURCES OF INFORMATION
APPENDIX B ABBREVIATIONS
APPENDIX C REPORT CONTRIBUTORS
APPENDIX D POLYMETALS TENEMENTS
APPENDIX E SOUTHERN CROSS TENEMENTS
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Technical Specialist's Report
1 MINERAL ASSETS
1.1 Polymetals Mining Limited
Polymetals Mining Limited (Polymetals) holds the Mt Boppy Gold Mine located near Canbelego NSW. The
Mt Boppy Gold Mine comprises a Mineral Resource, open pit mine, gold treatment plant and mining and
exploration licences. Polymetals also holds granted prospecting licences, and exploration licences in the
Turner River area approximately 60 km south of Port Hedland in the Pilbara Region of Western Australia.
Polymetals' tenements are listed in Appendix E. Polymetals provided AMC with current information on the
standing of its Western Australian tenements. Based on that information, AMC has assessed Polymetals
Western Australian tenements to be in good standing and in compliance with obligations and commitments
required under the Mining Act 1987. New South Wales tenements EL5842 GL3255 GL5836 GL5848 GL5898
ML311 and MPL240 are all reported as a single group. Following submission of the 2012 report effective
exploration on these tenements has been assessed as satisfactory.
Polymetals has a 50% interest in the Drew Hill Project located in SA. This project consists of the White Dam
gold mine and surrounding exploration tenements. Polymetals announced on 28 May 2013 that agreements
have been signed for the sale of the 50% interest in the Drew Hill project. Consequently this project has not
been reviewed or valued by AMC.
Polymetals has reported Mineral Resources as listed in Table 1.1 and Table 1.2, and Ore Reserves as listed
in Table 1.3.
Table 1.1
Polymetals Gold Mineral Resources
Project Measured Resource Indicated Resource Inferred Resource
Tonnes
(kt)
Grade
(g/t Au)
Tonnes
(kt)
Grade
(g/t Au)
Tonnes
(kt)
Grade
(g/t Au)
Mt Boppy (including Mt Boppy South) 40 6.4 650 4.0 80 3.9
Turner River 2,700 1.8 1,100 1.3 2,900 1.5
Total 2,700 1.9 1,800 2.3 3,000 1.6
Note: Totals may not add due to rounding. Turner River is subject to a farm-in agreement see section 3.2.
Table 1.2
Polymetals Base Metal Inferred Mineral Resources
Project
Tonnes
(kt)
Zn
(%)
Ag
(g/t)
Pb
(%)
Cu
(%)
Au
(g/t)
Turner River 2,600 2.67 89 1.07 0.10 0.70
Table 1.3
Polymetals Gold Ore Reserves – Mt Boppy
Tonnes
(kt)
Proved Probable Total
Grade
(g/t Au)
Contained
Gold
(oz Au)
Tonnes
(kt)
Grade
(g/t Au)
Contained
Gold
(oz Au)
Tonnes
(kt)
Grade
(g/t Au)
Contained
Gold
(oz Au)
40 5.6 7,636 510 4.2 68,312 550 4.3 75,949
Note : Turner River is subject to a farm-in agreement see section 3.2.
1.2 Southern Cross Goldfields Limited
Southern Cross Goldfields Limited (Southern Cross) holds granted mining leases, prospecting licences,
exploration licences, miscellaneous licences, and general purpose and retention leases in the Marda area to
the north of Southern Cross in WA and in the Battler and British Hill areas south of Southern Cross.
Southern Cross also holds the Sandstone project located near the town of Sandstone approximately 730 km
north-east of Perth in the East Murchison Mineral Field, WA. The Sandstone project consists of granted
mining leases, prospecting licences, exploration licences, miscellaneous licences and includes a gold
treatment plant. Southern Cross proposes to relocate the gold treatment plant to the Marda project.
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The Southern Cross tenements are listed in Appendix D. Polymetals provided AMC with current information
on the standing of the Southern Cross tenements at 5 April 2013. Based on that information, AMC has
assessed the majority of Southern Cross’s tenements to be in good standing and in compliance with
obligations and commitments required under the Mining Act 1987. A total of 34 tenements have outstanding
expenditure and/or rent obligations. Two tenements are at risk of being deemed dead as renewal
applications have not been lodged. Southern Cross has reported Mineral Resources as listed in Table 1.4
and Ore Reserves as listed in Table 1.5.
Table 1.4
Southern Cross Gold Mineral Resources
Project Measured Resource Indicated Resource Inferred Resource
Tonnes
(kt)
Grade
(g/t Au)
Tonnes
(kt)
Grade
(g/t Au)
Tonnes
(kt)
Grade
(g/t Au)
Marda 2,796 2.3 2,640 1.8 3,052 1.91
Sandstone - - 1,932 2.3 12,586 1.4
Total 2,796 2.3 4,546 2.0 15,371 1.5
Note : Includes resources, the subject of an option agreement over some of the Marda tenements refer to section 4.1.4.
Table 1.5
Southern Cross Gold Ore Reserves – Marda
Tonnes
(kt)
Proved Probable Total
Grade
(g/t Au)
Contained
Gold
(koz Au)
Tonnes
(kt)
Grade
(g/t Au)
Contained
Gold
(koz Au)
Tonnes
(kt)
Grade
(g/t Au)
Contained
Gold
(koz Au)
1,938 2.4 149.2 340 2.7 29.1 2,278 2.4 178.5
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2 VALUATION METHODS AND MACROECONOMIC FACTORS
2.1 Valuation Methods
The methods used by AMC for valuation of the mineral assets of Polymetals and Southern Cross can be
described as follows.
2.1.1 Operations and Development Projects
Where projections of production physicals and related costs can be reasonably determined for an operation
or development project, it is accepted industry practice to prepare discounted cash flow (DCF) models to
determine net present value (NPV) estimates. Accordingly, for each of the operations and development
projects reviewed for Polymetals and Southern Cross, AMC has prepared production and capital and
operating cost projections ("production cases"). BDO then prepared DCFs based on those projections of
physicals and costs, and macroeconomic inputs.
AMC believes the scenarios are based on reasonable grounds.
2.2 Exploration
The valuation of exploration projects, particularly those for which it is not possible to quantify Mineral
Resources, is very subjective. There are, however, several generally accepted procedures to value
exploration projects and AMC has used such methods as appropriate to arrive at balanced judgments of
value.
Where possible, AMC attempts to use more than one method before selecting the valuation appropriate to
that project. Values are rounded, and outliers in contributing estimates are sometimes excluded.
The Past Expenditure Method
A prospectivity enhancement multiplier (PEM) generally between 0.5 and 3.0 is applied to past expenditure
which AMC judges to be effective in regard to future prospectivity.
The Yardstick Value Method
Rules of thumb or yardstick values can be used for properties where a Mineral Resource has been
quantified. A value per contained metal unit (e.g. ounce of gold or gold equivalent) is assigned to an actual
Mineral Resource or to a preliminary mineralisation estimate.
In considering transactions, AMC has determined ranges that reflect the difference in classification between
Inferred and Indicated Resources and consideration of factors including the size of the deposit, proximity to
existing operations, and known metallurgical issues.
Actual or Comparable Transaction Method
A value is determined by reference to either actual transactions for the property in question (Actual
Transaction method) or to recent transactions for projects considered to be similar to those under review
(Comparable Transaction method). Comparable Transactions are converted to a value per unit area.
Joint Venture Terms Method
Many transactions on exploration tenements are of a farm-in nature and AMC assesses a "cash equivalent"
value for them from the terms of the "deemed expenditure" on the property at the time of the deal discounted
by a time and probability factor for the likelihood that the farm-in will complete its earning requirement. AMC
adjusts the resulting value for any other terms of the joint venture and/or for the results of work carried out
since the commencement of the farm-in.
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Expected Value Method
An Expected Value valuation can be applied where there is sufficient information to enable an indicative NPV
calculation, which takes into account the costs of that ongoing exploration and with a probability/risk factor
for the chances of that exploration being successful.
This method is most relevant when the exploration area is closely associated with an existing mining
operation or development project where a production scenario has been developed.
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3 POLYMETALS MINING LIMITED
3.1 Mt Boppy Gold Project
3.1.1 Introduction
The Mt Boppy Gold Mine Project (Mt Boppy) is located in the Lachlan Fold Belt centred around Canbelego,
located 46 km east of Cobar in New South Wales (Figure 3.1). The region has produced in excess of 5 Moz
of gold.
Figure 3.1
Mt Boppy Project Location
Note: MLA281 is now ML1681
Mt Boppy itself has historical production of 490 koz gold in the period since 1901. Polymetals acquired the
mine in 1993 and operated an open pit and processing operation on the site between 2002 and 2005. A total
of 500 kt of ore was treated through the existing treatment plant. The plant has been on care and
maintenance since 2005.
Polymetals has identified additional Mineral Resources around and below the existing open pit and has
developed a plan to mine a cutback on the open pit. The ore which is predominantly fresh will be treated in
the existing treatment plant following an upgrade to the flowsheet.
AMC conducted a site visit to Mt Boppy in April 2013.
A formal feasibility document has not yet been developed for the Mt Boppy project. AMC understands that
the majority of the design and analytical work required has been completed, however, the lack of
documentation adds a level of risk to the project with possible consequential approvals and financing delays.
The mine and plant are located on mining leases and gold leases that are surrounded by exploration licence
EL 5852 also held by Polymetals. The deposit was discovered in 1896 and mined by underground methods
up to 1923. Exploration was conducted up to the 1960s and exploration drilling by Polymetals since 2003
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identified additional gold mineralisation at depth. Treatment of tailings and open pit mining of oxide
mineralisation was carried out until 2005.
Polymetals acquired the tenements covering the mine in 1992 for $110,000. The adjacent exploration licence
(EL 5842) was acquired in 2008 for $0.5M. The Mt Boppy tenements comprise:
• Four gold leases.
• Two mining leases.
• One mining purpose lease.
• One exploration licence.
The leases (Figure 3.1) cover an area of 0.7 km 2 and the exploration licence (Figure 3.2) covers 204.6 km 2 .
Figure 3.2
Canbelego Exploration Licence Location
3.1.2 Geology
The Mt Boppy deposit is located in the northern part of Devonian Canbelego-Mineral Hill Rift Zone
surrounded by the flanking Kopyje Shelf in the Palaeozoic Lachlan Fold Belt.
Gold mineralisation occurs within both the Ordovician (Girilambone Group) and the Devonian (Baledmund
Formation) rocks. Mineralisation hosted in the Baledmund Formation is characterised by gold with minor
zinc, copper and lead hosted in brecciated and silicified sediments and quartz veining in shear zones. The
shear zones are associated with a west-dipping normal fault which down throws Baledmund Formation rocks
on its western side against Girilambone Group rocks on it eastern side.
The Main Lode, which was mined underground, strikes approximately north-south. The best mineralisation
adjacent to the Main Lode occurs in the Baledmund Formation. The Main Lode stopes are filled with
mineralised material that forms part of the Mineral Resource.
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Within the Mt Boppy pit, the Main Lode is a quartz vein developed along a normal west-dipping fault. The
Main Lode strikes approximately north-south and dips at approximately 80º west; however it shows
considerable variation in strike and dip. These variations appear to be associated with gold mineralisation
development in the wall rock to the lode. The best mineralisation in the wall rocks occurs within the
Baledmund Formation rocks on the western side of the Main Lode where the lode has a shallower dip.
At the northern end of the pit, the Main Lode is truncated at an acute angle by the West Lode fault. The fault
dips to the east and displaces the Girilambone Group phyllite on its western side against the Baledmund
Formation sericitic siltstone on its eastern side. The West Lode is about 1 m to 2 m wide and is largely a fault
breccia clasts of phyllite, sericitic siltstone and quartz.
The mineralisation at Mt Boppy is hosted by brecciated and silicified fine-grained sediments and quartz
veins. The gold mineralisation contains minor zinc, copper and lead. Minor carbonate, siderite and dolomite
alteration is associated with the mineralisation.
3.1.2.1 Mineral Resources
Mount Boppy Mineral Resources are listed in Table 3.1.
Table 3.1
Mt Boppy Mineral Resources at 30 March 2013 (Includes Mt Boppy South)
Measured Resource Indicated Resource Inferred Resource
Tonnes
(kt)
Grade
(g/t)
Tonnes
(kt)
Grade
(g/t)
Tonnes
(kt)
Grade
(g/t)
39 6.4 646 4.0 82 3.9
Drilling at Mt Boppy has been carried out in a number of campaigns and consists of percussion, RC and
diamond drilling in addition to blast hole drilling in the previously mined open pit. Polymetals completed the
most recent drilling programme in 2011 with seven RC drillholes and 18 diamond drillholes completed.
Drillhole collars were surveyed and downhole surveys completed. Drillhole collars from older drilling
programmes were resurveyed. Drill cuttings and core were geologically logged and drill logs are available for
older drillholes.
Samples were analysed for gold by fire assay with AAS finish. The recent programme was supported by
assay quality control protocols.
The resource estimate is based on interpretation of four geological domains (Figure 3.3):
• Historical stopes.
• Low-grade mineralisation on the footwall of the Main Lode structure.
• High-grade mineralisation immediately adjacent to the Main Lode structure on the hangingwall.
• Low-grade mineralisation on the hangingwall to the main lode structure and the high-grade domain.
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Figure 3.3
Mt Boppy Geological Domains
The resource estimate is a conventional block model with grade estimated using ordinary kriging (OK) with
estimation parameters determined from a study of variography. The stope fill was assigned a uniform
average value of 3.6 g/t Au reflecting the mean grade of drillhole samples intersecting the fill.
Bulk densities were assigned based on mean values for oxide, transition and fresh rock. The resource
estimate is classified as Measured, Indicated and Inferred Resources based on confidence in the geological
and grade continuity reflecting drillhole spacing. The Mineral Resources are reported at a 2.5 g/t Au cut-off
grade (COG). The stope fill is classified as Indicated Resource.
The Mt Boppy Mineral Resource has been estimated using accepted industry practice and has been
classified and reported in accordance with the JORC Code 3 . AMC considers it appropriate to assign an
average grade to the stope fill and while it is classified as Indicated Resource, there is greater uncertainty in
local grade estimation in the fill than in the in situ Mineral Resource.
The Boppy South Mineral Resource estimate is based on drilling at about 20 m x 20 m spacing completed by
Polymetals and previous tenement holders. The resource estimate is a conventional block model with grade
estimated using inverse distance squared. The estimate is classified as Indicated and Inferred Resources
based on confidence in the geological and grade continuity reflecting drillhole spacing. The Mineral
Resource is reported at a 1.0 g/t Au COG.
3.1.2.2 Exploration
In addition to resource definition drilling at Mt Boppy, exploration has been carried out on other targets in the
exploration licence both by the previous tenement holder and Polymetals. Polymetals drilled 35 drillholes on
the other targets in 2012.
3
Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, The JORC Code 2004 Edition,
Effective December 2004, Prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy,
Australian Institute of Geoscientists and Minerals Council of Australia (JORC)
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Drilling has been carried out at a number of prospects where gold mineralisation had been identified by
previous exploration. Drilling at most prospects generally failed to identify significant mineralisation to
encourage resource delineation drilling. Drilling at Boppy South (about 950 m south of Mt Boppy) led to the
estimation of a small Mineral Resource.
Reprocessing of induced polarisation data collected by previous tenement holders identified three
chargeability anomalies not previously tested that have been recently drilled, awaiting assay results.
3.1.3 Mining
Mt Boppy was previously mined by open pit methods in the period 2002 to 2005. Polymetals engaged an
independent technical specialist to undertake a pit optimisation and design study on the project in 2012.
Work included a Whittle pit optimisation which developed an optimum pit shell. The shell formed the basis of
a more detailed mine design. The design represents a cutback to the existing pit with a final design depth of
130 m. Measured, Indicated and Inferred Mineral Resources were used in developing the mine plan.
Polymetals personnel developed a mine schedule and a financial model based on the 2012 pit design. AMC
has reviewed the pit design, mine schedule and financial model. Aside from the 2012 report there is no
formal feasibility document describing the project.
Polymetals engaged an independent technical specialist to conduct a geotechnical review of the proposed
Mt Boppy open pit. In AMC’s opinion the geotechnical report is to an acceptable standard. The independent
technical specialist was concerned about the overall safety associated with mining the south-east wall of the
open pit due to the proposed steep overall slope and recommended an additional berm be incorporated into
the design. This advice has not been followed at this stage. Additional monitoring and mapping would be
required in that area with a worst possible outcome of slope failure and ore loss.
The Mineral Resource includes an area of material previously mined by underground methods and now
assumed to be backfilled. The backfill grade is estimated at a constant gold grade of 3.6 g/t Au. There is a
risk this grade is not consistent and that the void is not completely filled. AMC has not discounted this
material in its evaluation
Polymetals engaged independent technical specialist to undertake a hydrogeological review of the proposed
Mt Boppy operation. The report viewed was dated June 2012. In this report a likely pit dewatering volume of
7 L/s to 8 L/s is noted. This is a manageable volume and should not present a significant issue to the
proposed operation. The report also concludes:
• Ponding of water would occur on the tailings storage facility (TSF) and evaporation dam (at the former
TSF location).
• Surplus water in excess of the TSF and evaporation dam storage capacity would not be generated.
• The evaporation dam will be utilised near the maximum operating level (maximising evaporation) for a
period of approximately two years.
• Water in the evaporation dam and TSF will draw down post-closure due to evaporative losses.
In AMC’s opinion the water issues are manageable as described by the hydrogeological review.
Polymetals developed a mining cost model based on a dry hire mining fleet option. Quotes for dry hire of
mining equipment were received from local vendors. The mining fleet consists of 120 t class excavators and
85 tonne haul trucks. The support equipment also supplied on a dry hire basis is suitable for the project. In
reviewing the mine cost and schedule models AMC has formed the opinion that the productivity assumptions
for the mine fleet in the first five months of the operation are overly optimistic. Further, later in the mine
schedule, the vertical advance rate is in AMC’s opinion not achievable. To offset the impact of these
productivity concerns AMC has, in its modelling of the project, added additional mining costs to the schedule
by assuming the mining fleet remains on site for an additional six months. The changes to the mining
schedule described here do not affect the ore supply or processing schedule due to the development of ore
stockpiles.
Due to the use of dry hire mining fleet and the short life of the project there is no capital budgeted for mining
operations. Workshop and site establishment capital is included in the dry hire arrangement.
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3.1.4 Ore Reserves
The pit optimisation report formed the basis for the development of an Ore Reserve statement for the project.
AMC has not reviewed the Ore Reserves however the Ore Reserves quoted are consistent with the study
and the financial modelling.
Table 3.2 shows the estimate Ore Reserves for Mt Boppy.
Table 3.2
Ore Reserves for Mt Boppy
Reserve
Category
Tonnes
(kt)
Gold
Grade
(g/t Au)
Contained
Gold
(oz Au)
Proved 42 5.63 7,600
Probable 507 4.19 68,300
Total 549 4.30 75,900
Key assumptions used for the Ore Reserve calculations include:
• Mining dilution 10%.
• Mine recovery 95%.
• Gold price $1,350/oz.
3.1.5 Processing Operations
Polymetals treated purchased tailings from the Elura Mine from 1993 to 2002, yielding 32 t of silver and
5 koz of gold. From 2002 to 2005, Polymetals operated an open pit mine at Mt Boppy and produced 68 koz
of gold from 500 kt of ore.
The Mt Boppy plant has remained idle since 2005. The overall development concept requires processing for
approximately 24 months of 300 ktpa of ore grading 4.32 g/t Au. The shortness of the overall campaign
presents economic challenges such as the danger of over-capitalisation, and the need to quickly attain
forecast plant performance.
3.1.5.1 Proposed Flowsheet
Polymetals engineers developed the flowsheet shown in Figure 3.4 using experience gained from previous
Mt Boppy operations, at White Dam and elsewhere plus the results of metallurgical test work carried out on
Mt Boppy samples in 2012.
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Figure 3.4 Mt Boppy Proposed Flowsheet
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3.1.5.2 Metallurgical Testing
Testing of ore samples from Mt Boppy was carried out by independent technical specialists 4 and in
September 2012 5 . The second round of testing was undertaken to confirm results obtained in May 2012, as
some confusion remained regarding the representativeness of the material chosen to characterise plant
feed.
A composite sample was subjected to standard Bond ball mill testing. A Bond ball mill work index (BWI)
value of 18.1 kWh/t was obtained. This value is aligned with previous operating experience that the Mt
Boppy fresh ore is hard and abrasive, and has been used in plant design calculations.
Grinding flotation concentrate to a P 80 size of 20 µm rather than 53 µm allowed sufficiently improved
recoveries (80.0% compared to 78.2%) to justify the inclusion of two-stage grinding in the flowsheet to
achieve this fineness.
The carbon-in-leach (CIL) leaching plant configuration was chosen as a result of apparent tie-up of
solubilised gold (preg-robbing) that was seen during the May 2012 testing. The effect was counteracted by
having carbon present in all leach stages.
The test work conducted, flowsheet decisions made, and design data extracted from the tests are, in AMC’s
opinion, reasonable for the scale and short life of the project.
3.1.5.3 Plant Layout
The new plant layout will utilise as much of the existing equipment as possible, in its original location. This
will minimise civil expenses for new foundations. The original grinding mill which will now become the regrind
mill and the lime silo which will all be reused in place.
Some minor work has been completed in preparation for the project. Leach tanks were inspected and found
to be adequate for a 2-year campaign. Tank supports were chipped out of the concrete floor and repaired.
Monolithic concrete blocks will be poured around the supports to protect the steel from further corrosive
damage.
The existing crushing plant is located west of the plant in the area earmarked for ROM ore storage. The
existing equipment will be removed for possible sale. The new, two-stage crushing plant will be leased
equipment operated by Polymetals personnel. The existing dump station and grizzly screen will be reused.
Some minor capital expense has been allowed for the work. Sufficient area exists for anticipated storage of
ROM material ahead of the plant.
All piping and electrical wiring has been removed and new, elevated support racks are in the process of
being constructed for the new plant.
The layout is compact and logical and has been well conceived.
3.1.5.4 Capital Costs
Extensive use has been made of used and reconditioned equipment, with as much engineering and
construction input as possible being provided from within the company. Polymetals' intention is to employ
this strategy in the redevelopment of Mt Boppy.
Polymetals personnel developed the process flowsheet, mass balance algorithms, and Capex estimate of
$13.7M for the project to ±17%. Table 3.3 shows details of the estimate by area. Actual quotations for new or
new-secondhand equipment were obtained wherever possible. Bids were solicited for services, and
4
5
Alan Eslake, “Report M2515 - Metallurgical Characterisation Tests on Mt Boppy Ore Samples”, confidential unpublished report,
May 2012.
Steve Rayner, “Report M2588 - Metallurgical Characterisation of a Mt Boppy Ore Sample”, confidential unpublished report,
September 2012.
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conservative, best-guess estimates for costs of overhaul of existing equipment were used. Estimation errors
have been assigned (e.g. 30% for the Ravensthorpe flotation banks) as there is a degree of uncertainty that
the equipment will be available when the project receives the go-ahead. Preliminary engineering drawings
for the plant were produced by LogiCamms, a small South Australian firm.
The crushing plant and the elution plant and gold room have been included as leased equipment, with the
lease charge included in operating budget. The plant does not contain a gold room or elution circuit therefore
the function of stripping and regenerating carbon will be outsourced. Load-out and receiving facilities have
been designed to permit removal of loaded carbon and return of regenerated carbon by truck-mounted
tanks.
A plant of comparable size and capacity built conventionally using engineering and construction contractors
and new equipment could be expected to cost between $23M and $30M. Successful in-house construction
will depend on Polymetals being able to obtain appropriate equipment for the estimated prices, and being
able to retain the right skills to accomplish construction and commissioning in the allotted time.
AMC notes that some items of capital are estimated on the basis of the availability of secondhand
equipment. A contingency allowance of $1M has been made in case the secondhand equipment is not
available.
AMC notes that in an ASX announcement dated 29 January 2013 Polymetals quoted a capital cost for the
project of $26.6M. Polymetals advised that this was in fact the maximum pre-production negative cash flow.
This is consistent with the financial model reviewed for Mt Boppy project.
Table 3.3
Capital Estimate for Mt Boppy Redevelopment
Area
Capex
(A$)
Estimated
Error
(%)
Contingency
(A$)
Leased
(in Opex)
(A$)
Tailings dam 2,087,947 15 316,442 - -
ROM pad 50,000 25 12,500 - -
3.1.5.5 Operating Costs
Comments
Crusher - - - 266,913 Old crusher to be removed, new equipment to be
leased in Opex
Grinding mills 1,841,775 16 289,095 - Placement of new mill, overhaul and alignment of
existing mill
Leaching plant 1,209,429 17 211,028 - Includes 2 new thickeners, construction and
installation of new MCC, some new agitators,
overhaul of all pumps
Elution, gold room - - - 363,250 Project calls for loaded carbon to be transported
to White Dam for gold recovery
Flotation plant 450,000 30 135,000 - Existing plant (possibly Ravensthorpe) available
for purchase and removal
Reagent mixing 311,150 20 62,230 - -
First fill (carbon, cyanide, 230,760 15 34,614 - -
flotation reagents)
Services (air, water, power) 1,690,369 17 281,001 - Includes new water systems, including an RO
plant
Infrastructure 144,600 25 36,150 - -
Camp 1,060,500 15 159,075 - new camp in Canbelego
Vehicles - - - 737,750 vehicles to be leased
EPCM (provided in-house) 1,465,175 23 330,614 - Salaried positions to be filled in-house where
possible
Owner's cost 1,190,000 10 119,000 - -
TOTAL 11,731,705 1,986,749 1,367,913
TOTAL (incl. Contingency) 13,718,454 17
Basic design parameters for the plant are shown in Table 3.4. The utilisation values of 90% are conservative
and the gold recovery figure of 78% is supported by metallurgical test work.
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Table 3.4
Basic Design Parameters
Parameter Unit Value
Crusher Annual Tonnage t 356,400
Monthly Tonnage t 33,000
Throughput t/h 156.7
Operation Days/week 5
Operation Hours/day 12
Utilisation % 90
Primary Mill Annual Tonnage t 300,000
Monthly Tonnage t 25,000
Throughput t/h 38.1
Operation Days/wk 7
Operation Hours/day 21.6
Utilisation % 90
Bond Ball Mill Wi kWh/t 18.1
Gold Gold Recovery % 80
Gold Production (total project) oz 62,511
Operating costs are summarised in Table 3.5. Key cost contributors, such as labour, power and reagents are
reasonable by industry standards.
Table 3.5
Processing Unit Cost
Cost Element
$/t
Crusher lease 1.76
Reagents/consumables 8.36
Power 7.99
Maintenance 3.89
Labour 10.26
Refining 0.88
Processing Total 33.14
The overall processing unit cost of $33.14/t is reasonable. A comparable gold plant in the area currently
reports an overall processing cost of $35/t.
3.1.5.6 Worker's Camps
Polymetals currently operates a small, serviced camp in Canbelego for company geologists and mine
caretakers. The project had allowed for the relocation of a 60-person, camp from White Dam to Canbelego
for Mt Boppy workers. Due to the imminent sale of the White Dam asset this camp is no longer available.
AMC added a capital cost contingency to address the requirement to purchase a new camp. An appropriate
site has been selected.
A camp for the mining contractor will also be located in Canbelego.
3.1.5.7 Water Supply
Mt Boppy is in a region of very low rainfall (approximately 300 mm per year) therefore the mine must rely on
bore water for processing. The plant requires 450 ML/pa of make-up water, however only 240 ML/pa is
available under the existing permit. Currently the intention is to bridge the shortfall by dewatering the pit.
Polymetals state that the inventory currently in the pit together with future inflow will be adequate for the
2-year life of the mine.
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3.1.5.8 Power Supply
Power will be generated in Cobar and supplied using an existing line and transformer on site. Polymetals has
calculated demand on the basis of 35 kWh/t required by the plant. This value is reasonable, and slightly
conservative. A detailed electrical load survey is currently under way to more accurately forecast expected
demand.
3.1.6 Environment
3.1.6.1 Overview
As a previously-operational mine, Mt Boppy has a recent history of environmental feasibility and
performance, facilitating the obtaining of environmental approvals required for the recommencement of
operations. Moreover, technical environmental challenges are relatively uncontentious, and are considered
to be manageable using established and recognised environmental management strategies. Practicable
environmental management plans have been developed to ensure environmental protection.
Biodiversity and conservation issues are of minor significance, acid and metalliferous drainage is
demonstrably manageable in this dry environment and water supply and management is unlikely to hazard
either other potential users in the area or aquatic ecosystems. The most sensitive environmental issue will
be community relations, reflecting the operation’s close proximity to Canbelego township. Additionally, AMC
was unable to review a closure cost estimate, but believes this liability unlikely to amount to more than
several million dollars.
It is unlikely that the proposed pit-lake closure strategy involves risk of increasing salinity. This issue was
considered by the NSW Office of Water to have been addressed with no issues identified.
3.1.6.2 Statutory Environmental Approvals
Other than planning-law approvals, the most important environmental permit is an Environmental Protection
Licence (EPL). An EPL was applied for in August 2012, and AMC was advised that the EPL was issued in
January 2013.
Permits to abstract groundwater have been obtained from the NSW Office of Water under the provisions of
the Water Management Act. Other, secondary, permits (heritage, dangerous goods etc.) are either in hand
or unlikely to prove problematical, as they are for the most part of a registration, rather than impactassessment,
nature.
There is little likelihood that environmental impacts could trigger the requirements for assessment under the
EPBC Act.
AMC thus considers that statutory approvals are unlikely to delay or constrain project development.
3.1.6.3 Biodiversity and Conservation
No conservation estate property or threatened flora species or vegetation community will be impacted by the
project; in part, this reflects the existence of little remnant native vegetation and its low conservation value
due to past modification by human activities.
There is theoretical potential for 14 conservation-sensitive fauna species to occur in the project area, but
even if they are present the nature and extent of disturbance is small on even a local scale as to make any
impacts of little consequence. A biodiversity offset program is considered unlikely to be necessary, reflecting
the inconsequential impact of the project on the local and regional biodiversity resource.
3.1.6.4 Acid and Metalliferous Drainage
Static (acid-base accounting) has identified around 20% of mine waste to be potentially acid-forming (PAF),
with the remainder non acid-forming (NAF). Little acid-consuming material is considered to exist.
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PAF material is proposed for encapsulation within NAF waste within waste stockpiles, to form a
“store-and-release” cover to provide long-term isolation of PAF material from the oxygen and water
necessary to allow sulphide oxidation and acid drainage. In this relatively dry environment, such a strategy
poses no significant challenge.
While no kinetic (column-leach) test work has apparently been performed on PAF material, the fact that no
acid drainage has been reported in the past indicates a low risk, especially as the proposed mine
development is primarily a cutback and thus unlikely to expose higher-sulphur primary rock.
No near-neutral or mild-acid leaching test work has been conducted on mine waste, but analyses have
demonstrated that there is little enrichment with metals known to pose environmental risk. Circum-neutral
metal enrichment in drainage from final waste stockpiles can therefore be considered to be a small risk,
especially in this dry environment.
3.1.6.5 Water Management
Project water supply will be, as in past operations, from pit dewatering, groundwater and from decant return
from the TSF. The requisite abstraction permits have reportedly been obtained.
Water balance modelling has shown that environmentally undesirable discharge of excess water will not be
required. Should pit dewatering for any significant period provide water volumes in excess of project
demand, temporary storage on the active TSF has been shown to be a viable management strategy.
Groundwater modelling has also shown a very low risk of impact on other users, the nearest of whom is
some 20 km away. Additionally, there are no groundwater-dependent ecosystems that will be impacted by
draw-down resulting from pit dewatering and groundwater abstraction activities.
In the event of lower than expected water supply from the above sources, water rights to up to 250 ML/year
are held by Mt Boppy; the modelled water balance identifies an additional 200 ML/year demand.
3.1.6.6 Closure
Some disturbed areas, especially disused TSFs, have already been capped with inter material, so that only
less expensive surface preparation and revegetation are required in the future.
Closure strategies have been developed for various project areas. These represent current technology and
environmental protection concepts, and can reasonably be expected to meet statutory requirements.
Importantly, the strategies identify the desirability of progressive rehabilitation.
In particular, encapsulation of PAF mine waste is well designed, with this material progressively being placed
within and covered by inert waste to form a “store-and-release” cover.
Post decommissioning, it is proposed that a groundwater-fed lake be allowed to develop in the pit void. While
groundwater salinity is not high (2,000 mg/L to 2,500 mg/L total dissolved solids), there does exist a low risk
that the net evaporative climate of the project area could result in the long term in increasing salinity of the pit
lake.
No estimate of closure costs was provided for this review, but an environmental performance bond
calculation of $0.99M was reviewed. Throughout Australia, bonds are known to cover only a fraction of
actual closure costs – sometimes as little as 30%. AMC has developed an empirical estimate, based on
areas of disturbance and current rehabilitation status, and considers a closure cost of $1.4M to $1.7M to be
realistic. This sum does not include demolition costs, which are frequently offset by salvage revenue. Nor
does it include retrenchment and related costs that are commonly included in accounting-based closure
estimates. AMC made an adjustment to the closure cost in its modelling for Mt Boppy.
3.1.7 Project Implementation
AMC notes that although the majority of the design and analytical work is complete for the assessment of
redeveloping Mt Boppy, a formal feasibility document does not exist. Such a document is likely to be
required for financing. Therefore three to four months should be allowed to complete the documentation and
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financing. A further seven months should be allowed for procurement, construction and commissioning. The
earliest likely start-up date is May 2014.
3.1.8 AMC Production Cases
AMC has modelled two cases for Mt Boppy. The cases are projections of mining and processing tonnages,
gold grades and costs. The cases are provided to BDO for consideration of value.
Polymetals provided AMC with a range of technical information: Mineral Resource models, Ore Reserves,
mine designs and schedules. AMC has prepared its cases based on this information.
Case 1, ore production, is based primarily on the pit optimisation study scenario using mainly the Ore
Reserves and a small volume of Inferred Mineral Resource also in the production case as presented by
Polymetals.
Case 2, ore production, includes that scheduled in Case 1, with the addition of 35 kt or ore added to the end
of the mine life to simulate the likely conversion of Mineral Resources to Ore Reserves and likely success
with exploration in the project area. The Mineral Resources defined at Mt Boppy outside the development
case proposed by Polymetals are limited.
AMC believes that the two production cases described appropriately provide a value range on the Mineral
Resources and exploration potential for the greater Mt Boppy project by simulating the range of likely
outcomes for the project.
Mt Boppy Production Case 1 (Feasibility Case)
Key aspects of AMC's Case 1 model are:
• The mining and processing schedules are based on the LOM plan provided in the feasibility study and
financial model.
• 587 kt of ore at a head grade of 4.28 g/t is mined and processed over a 25 month period. This
represents all of the Ore Reserves and approximately 40 kt of the Inferred Mineral Resource.
• At total of 64 koz of gold are produced.
• AMC increased the estimated mining period by six months to effectively lower the assumed mining
productivities and fast development rates in the supplied model.
• Project commences in May 2014.
• Average unit mining costs of $3.90/t of material moved are used.
• Average processing costs of $33.48/t ore processed.
• AMC added an allowance of $0.7M for additional closure costs.
• AMC added a contingency of $1M to the capital estimate relating to the assumed availability of
secondhand equipment.
Mt Boppy Production Case 2 (Feasibility Case Plus Additional Inventory)
Key aspects of AMC's Case 2 model are:
• Assumptions as in Case 1 initial production period.
• An additional 35 kt of ore at a grade 3.98 g/t is added to the end of the mine life. The tonnage is based
on the assumption that 50% of the remaining resource outside the pit or equivalent exploration
success elsewhere converts to Ore Reserve at the head grade produced at the end of the mine life.
AMC has assumed that operating costs are the same as those incurred in the last months of the
financial model provided and have added these to the schedule.
• AMC notes there is only limited additional Mineral Resource outside the current mine plan proposed
by Polymetals.
• A total of 68,200 oz of gold are produced.
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Exploration Valuation
The exploration licence (EL 5842) adjacent to the Mt Boppy mining leases was acquired in 2008 for $0.5M.
Exploration on the Tenement
Recent drilling at most prospects generally failed to identify significant mineralisation to encourage resource
delineation drilling. Results from other drilling are not yet available.
AMC considers that a unit area value of $1,000/km 2 can be assigned to this tenement indicating a value of
$0.2M.
3.1.9 Opportunities and Risks
AMC considers that additional opportunities that might be available for Mt Boppy include:
• AMC has not considered underground mining of additional resources in its evaluation as no work has
been undertaken in this regard. However, Mineral Resources at Mt Boppy may have a grade that
would support underground mining.
• Overall plant recovery greater than the estimated 80% is achieved.
AMC considers that the following risks apply to Mt Boppy:
• There is a risk that due to geotechnical issues the pit walls may need to be designed at a flatter angle
in the south-east corner of the pit, thus increasing the waste mining requirement.
• The current estimate for mine dewatering volumes is a broad range with upper estimates likely to add
to the operating cost of the project.
• Throughput is not achieved in the upgraded treatment plant.
• The grade and tonnage of the stope backfill material is lower than estimated in the Mineral Resource.
• The existing underground voids cause instability in the open pit final walls.
• Inferred Mineral Resource used to support the feasibility study may be lower in tonnes and grade than
is currently modelled.
3.2 Turner River
The Turner River projects are located approximately 60 km south of Port Hedland in the Pilbara Region of
Western Australia (Figure 3.5).
The gold project is located in the western tenements and includes the Wingina Well deposit. The base
metals project is located in the eastern tenements and covers a 20 km long greenstone belt hosting
polymetallic mineralisation.
AMC personnel visited Turner River during 2012.
The development and evaluation work conducted by Polymetals on the Turner River gold project are
preliminary in nature.
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Figure 3.5
Location of Turner River Projects
Wingina
Well
Tenements covering the Turner River gold and base metals projects are the subject of a farm-out and joint
venture agreement with De Grey Mining Limited. The tenements comprise:
• Seven exploration licences.
• One prospecting licence.
The tenements (Figure 3.6) cover a combined area of 811.7 km 2 and are located in a mineralised district
which includes the Indee Gold Mine, Wodgina Tantalum Project, Lynas Find Gold Project and the
Panorama-Sulphur Springs Base Metal Projects.
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Figure 3.6
Location of Turner River Exploration Licence
3.2.1 Geology
The Turner River Gold projects are in the Archaean-Proterozoic Pilbara Craton. North-east-trending
greenstones (mafic to ultramafic intrusives, intermediate to felsic volcanic, layered mafic to ultramafic
intrusions and sediments (shales, banded ironstones and cherts)) wrap around granitic inliers.
The greenstone succession comprises the Warrawoona Group, the Cleaverville Formation and the De Grey
Group. Warrawoona Group mafic and ultramafic rocks along with minor chert bands are overlain by the
Cleaverville Formation (banded iron formation (BIF), fine grained clastic rocks and felsic volcanics). The
Cleaverville Formation is overlain by the De Grey Group, a widespread succession of turbiditic sediments. In
the project area the De Grey Group comprises the lower Constantine Sandstone and the upper Mallina
Formation.
Northeasterly trending shear zones cut the greenstones. The Mallina, Mount Dove-Tabba Tabba and Mount
Wohler Shear Zones cut through the project area. The deposits and prospects in the project area occur on or
in positions related to these shears.
3.2.2 Turner River Gold Project
Gold mineralisation at Wingina Well is located along the Tabba Tabba Shear Zone and hosted by steeply
south-dipping chert units of the Cleaverville Formation. The chert is up to 50 m wide, deeply weathered to
more than 150 m below surface, and variably brecciated and gossanous. The chert is bounded by a shale
unit to the north and a zone of talc chlorite schist to the south.
The Mt Berghaus deposit is located 10 km north-west of Wingina Well, on the Mallina Shear Zone. Gold
mineralisation is hosted within turbiditic arenites and argillites which are folded into a tight isoclinal plunging
fold. Gold mineralisation appears to occur on the southern limb of an isoclinal fold and is associated with
quartz veining, stockwork and breccia.
The Amanda deposit is located 2 km north-east and along strike of Wingina Well. Gold mineralisation is
hosted within pyritic chert units.
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3.2.2.1 Resources
Mineral Resources for the Turner River Gold Project at 13 March 2013 are listed in Table 3.6. AMC has
independently reported the total tonnes and grade of each Mineral Resource estimate and found no material
differences when compared to the total tonnes and grade reported at 13 March 2013.
Table 3.6 Turner River Gold Project – Mineral Resources at 13 March 2013
Location Cut-off
Measured Indicated Inferred
Grade
(g/t Au)
Tonnes
(kt)
Grade
(g/t Au)
Contained
Gold
(oz Au)
Tonnes
(kt)
Grade
(g/t Au)
Contained
Gold
(oz Au)
Tonnes
(kt)
Grade
(g/t Au)
Contained
Gold
(oz Au)
Wingina Well above ~55 mRL 1 0.5 2,300 1.8 130,000 700 1.1 26,000 100 1.2 5,000
1
2
3
Wingina Well below ~55 mRL 1 1.0 400 2.1 26,000 400 1.6 22,000 1,200 1.5 58,000
Mt Berghaus 2 0.5 - - - - - - 900 1.4 43,000
Amanda 3 0.5 - - - - - - 700 1.6 35,000
Total 2,700 1.8 157,000 1,100 1.3 47,000 2,900 1.5 141,000
As reported by Polymetals Mining Ltd, March 2013. 458 drillholes. Ordinary Kriging.
Resource estimation by Ravensgate, February 2012.125 drillholes. Ordinary Kriging. Verified by Polymetals.
Resource estimation by Ravensgate, March 2012. 248 drillholes. Ordinary Kriging. Verified by Polymetals.
The resource estimates are based mostly on diamond and reverse circulation (RC) drilling. Minor air core
(AC) drilling has been included in the Wingina Well resource.
Drilling completed by Polymetals at Wingina Well in 2012 was carried out using common industry practice
with assay quality control in place. Drillhole collars are surveyed and downhole surveys are carried out.
Details of drilling data quality (sample preparation, assay quality control, drillhole collar and downhole
surveying) for the Amanda and Mt Berghaus resource estimates are very limited.
The interpretations for the resource estimates were developed relying on drillhole logging and based on
lithological control. A nominal lower cut off grade of 0.5 g/t Au was used to interpret the Amanda and Mt
Berghaus mineralisation, and a nominal lower COG of 0.3 g/t Au was used to interpret the Wingina Well
mineralisation.
All of the deposits have a number of mineralised domains. Assays within the domains were composited to
1 m. The influence of statistical outliers on grade estimation was limited through top cutting or by restricting
the distance of influence of the outliers. Grades were estimated into the block models using OK. Estimation
parameters for Wingina Well were determined from a study of variography. Details of variography and
estimation parameters for Amanda and Mt Berghaus are poorly documented.
Densities for Wingina Well were derived from downhole gamma and diamond core measurements and were
assigned by weathering state. Densities for the Wingina Well estimate were 2.1 t/m 3 in oxide, 2.4 t/m 3 in
transitional and 2.6 t/m 3 in fresh rock. Densities for Amanda and Mt Berghaus were selected on the basis of
typical weathering domains within sediment hosted deposits. The method of assignment (by weathering
surface or elevation) was not specified. Densities for the Amanda and Mt Berghaus estimates were 2.4 t/m 3
in oxide, 2.6 t/m 3 in transitional and 2.8 t/m 3 in fresh rock.
Resource estimates were classified as Measured, Indicated or Inferred Resource based on data density and
quality, drill spacing, and geological confidence in resource domain continuity. Mineral Resources are
reported with Ore Reserves excluded.
AMC considers that the Turner River Gold Project Mineral Resource estimates were prepared using
accepted industry practice and have been classified in accordance with the JORC Code.
3.2.2.2 Mining
Polymetals engaged Australian Mine Design and Development Pty Ltd (AMDAD) to undertake a pit
optimisation study for the Turner River Gold project utilising the Mineral Resources at Wingina, Amanda and
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Berghaus deposits. AMC considers the study to be at a scoping level. This is a green-fields project so there
is no historical cost or operating data available.
The Measured, Indicated and Inferred Resources were optimised using Whittle software to generate pit
shells for further evaluation. Two processing scenarios were considered being heap leach and
carbon-in-pulp (CIP). The heap leach project had the best economics due to its lower capital cost. In AMC’s
opinion the mining cost assumptions and other input parameters to the optimisation process are reasonable.
A gold price of $1,600 was assumed.
The pit optimisation process generated two pit shells for the Amanda deposit, one for Wingina and three for
Berghaus. Detailed pit designs and mine scheduling were not undertaken for the project.
Ore Reserves are not reported for the Turner River gold project.
3.2.2.3 Processing
Preliminary spreadsheet modelling was undertaken by Polymetals utilising either heap leach or CIP
processing. Heap leach was the preferred processing route. Limited metallurgical test work was undertaken
to demonstrate the ore is generally amenable to heap leach processing. However, a full programme of test
work would be required to quantitatively establish the parameters required for a heap leach model. These
would include
• ROM ore size distribution for optimal leach solution percolation.
• Leach solution chemistry and addition rates.
• Expected recoveries through time.
Capital and operating costs were developed in-house by Polymetals and are preliminary in nature.
Operating costs were estimated at $14.15/t heap leach and $37/t ore in CIP. Capital costs for the heap leach
option are estimated in the range $20M to $25M. In AMC‘s opinion the operating and capital costs are
reasonable.
3.2.2.4 Environmental
Turner River is a small project for which detailed environmental investigations are yet to be completed.
However, a number of potentially significant environmental issues have been identified. These are discussed
below.
Statutory Approval
The scale and nature of impacts of the project make it likely that environmental assessment will be via the
Mining Proposal process managed by the Department of Mines and Petroleum (DMP). Preliminary
discussions have been held with the DMP on this basis.
A licence issued by the Department of Environment and Conservation (DEC) under Part V of the EP Act will
be required, to cover processing, tailings storage and water discharge aspects.
Project schedule calls for submission of a Mining Proposal in Q1 2014, with final approval in Q4 2014.
Provided the requisite field investigations (see below) are completed by early 2014, this timeline is
considered to be realistic; the DMP claims to complete its assessment of proposals within 30 days of
completion of all material relevant to that assessment.
Water Management
The project is located in a proclaimed groundwater area so that detailed hydrogeological studies will be
required to quantify impacts in terms of both quantity and quality of the groundwater resource. Other projects
in the region have involved comparable scrutiny for the water and environmental regulators, and the small
scale of this project provides some confidence that impacts will be localised and manageable impacts
identified.
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Preliminary studies indicate a requirement to discharge excess pit water to the broader environment.
Depending on quantities involved, discharge proposals will be closely scrutinised by water and
environmental regulators, reflecting a preferred “no discharge” strategy of those regulators.
Stygofauna are known to occur in groundwater in this region, so studies covering several seasons will be
necessary. However, recent experience indicates that, with adequate investigations, manageable impacts
can be shown to be probable.
Conservation and Diversity
No significant flora or vegetation issues are likely to be identified from field studies. Any impacts on
threatened flora species are likely to be insignificant on both local and regional scales.
Rehabilitation and Closure
To facilitate closure and rehabilitation planning, requirements for establishment of analogue sites (to guide
closure prescriptions), soils studies and other investigations have been identified. As part of the Mining
Proposal process, a closure plan will be required at the time of submission of the proposal. The project
poses no obvious major environmental challenges (importantly, sulphur levels in the predominantly oxidised
mine material are reportedly low, with consequent low risks of acid and metalliferous drainage), so technical
closure challenges appear to be unlikely.
3.2.2.5 Turner River Exploration
Mt Berghaus North-east Extended
Lansdowne has tested similar geology to the Mt Berghaus deposit, in what appears to be the extension of
the Mallina Shear, and identified moderate to strong induced polarisation (IP) anomalies overlying magnetic
anomalies.
Edkins and Amanda West
These prospect areas lie between the Wingina Well and Amanda deposits along the Tabba Tabba Shear.
Significant gold intersections from these prospects include 3 m at 29.4 g/t Au from 20 m (Edkins ERC012)
and 7 m at 19.5 g/t Au from 41 m (Amanda West, TRC023).
Brierly Structure
Extensive gold-arsenic anomalism identified by drilling by De Grey Mining coincides with a prominent eastwest
striking structure, the Brierly structure, identified by airborne geophysics. This structure may link the
Mallina and Tabba Tabba Shears.
Approximately 5 m to 15 m of transported cover overlies a sequence of deeply weathered Mallina sediments
and diorite intrusions. A broad geochemical anomaly >200 ppb gold has been identified. Mineralisation is
associated with pyrite and quartz veining.
Lansdowne completed follow-up drilling in 2001 and an IP survey obtained a strengthening anomaly to the
west and south of anomalous drill results.
Kasy Structure
The Kasy structure is a northeast trending structure that runs parallel to the Mt Berghaus mineralised
structure. Interpretation by the Geological Survey of Western Australia (GSWA) indicates that the host rocks
in the area are similar to those in the Mt Berghaus area.
The structure may represent a brittle fault with oblique structures cross-cutting the main feature.
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T1
T1 is located in a favourable structural position within the Mallina Shear system and along strike from Mt
Berghaus near the Mt Dove granitoid. It is characterised by a discrete magnetic high. Limited AC drilling by
De Grey Mining returned best results of 1 m at 10.2 g/t Au and 2 m at 5.22 g/t Au.
3.2.2.6 Turner River Gold Project Valuation
The Turner River gold project was the subject of a farm-in arrangement between Landsdowne Resources
Pty Ltd (Landsdowne) and De Grey Mining Ltd (De Grey) whereby Landsdowne could earn a 75% interest in
the tenements by spending $2M over three years. Polymetals acquired Lansdowne in September 2012 and
completed the farm-in expenditure in March 2013. The joint venture terms valuation method indicates a
value of the vendor’s interest at $0.61M at the time of the agreement, although a payment of $4.1M to the
vendor is required on a decision to mine the Wingina Well Mineral Resource.
Polymetals has completed the farm-in expenditure and holds 75% of the rights in these tenements.
The development and evaluation work conducted by Polymetals on the Turner River gold project are
preliminary in nature and do not support a detailed production scenario and DCF valuation.
AMC examined transactions for tenements containing gold Mineral Resources that occurred between 2010
and 2013. These transactions define a range of yardstick values. Transactions in 2012 and 2013 have
tended to indicate lower values per ounce than in 2010 and 2011. AMC has considered this in developing
ranges of values for tenements containing Measured, Indicated and Inferred Resources as follows:
• Measured Resource: $18/oz to $25/oz.
• Indicated Resource: $11/oz to $18/oz.
• Inferred Resource: $4/oz to $11/oz.
Applying these yardstick values to the Turner River gold project indicates a value of $2.9M to $4.7M for
Polymetals 75% interest using this method. As this is a valuation of the current status of the property AMC
has not factored in production royalties or future payments.
AMC examined a number of transactions that indicate a value per unit area. These transactions indicate a
wide range of values, depending on the tenement location, level of exploration activity and the occurrence of
Mineral Resources. AMC considers a range of $2,000/km 2 to $6,000/km 2 to be appropriate for the Turner
River gold project. This indicates a value of $1.2M to $3.7M for Polymetals 75% interest using this method.
In AMC’s opinion the Turner River project is not sufficiently advanced to allow a DCF evaluation method to
be undertaken.
Considering these methods, AMC values the Turner River gold project tenements between $2.1M and
$4.2M.
3.2.3 Turner River Base Metals Project
The Turner River base metals project is located on two exploration licences covering 95 km 2 located about
60 km south-south-east of Port Hedland. The tenements were the subject of a farm-in arrangement between
Landsdowne (now Polymetals) and De Grey whereby Landsdowne could earn a 75% interest in the
tenements by spending $1.5M over three years.
The Turner River base metal Mineral Resources are listed in Table 3.7.
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Table 3.7 Turner River Base Metal Inferred Mineral Resources at 24 April 2013
Location
Tonnes
(Mt)
Zn
(%)
Ag
(g/t)
Discovery 1.12 2.6 94 1.0 0.1 0.9
Orchard Tank 1.49 2.7 84 1.1 0.1 0.6
Total 2.61 2.7 89 1.1 0.1 0.7
Pb
(%)
Cu
(%)
Au
(g/t)
3.2.3.1 Geology
The Turner River base metal project is located in an Archaean granite-greenstone terrane. Greenstone belt
rocks are comprised of metamorphosed (greenschist facies), mafic to ultramafic intrusive rocks, intermediate
to felsic volcanics, some intrusions and various sedimentary rocks including shale, banded ironstone and
chert. Greenstone belt rocks wrap around granitic inliers. The project is located within the widely mineralised
Mallina Shear.
Outcropping silver-gold-zinc-lead mineralisation considered to be polymetallic volcanogenic massive
sulphide style (VMS) is found in the Tabba Tabba greenstone belt. High-grade mineralisation intersections
have been returned from six outcropping prospects over a 20 km strike length and to depths up to 430 m
below surface. The main prospect locations and drilling highlights are shown in Figure 3.7.
Figure 3.7
Turner River Base Metal Project Prospect Location
The steeply dipping sulphide mineralisation is hosted in foliated, sericite-altered felsic schist that was
originally felsic volcanics.
Exploration and resource definition has concentrated on the Orchard Tank and Discovery prospects and
other prospects along the 20 km long greenstone belt have not been fully investigated. The greenstone belt
has been largely covered with geochemistry, geophysics and shallow RAB and AC drilling.
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3.2.3.2 Mineral Resources
Mineral Resources have been estimated for the Discovery and Orchard Tank deposits and is based on
drilling data collected by De Grey in 2005 and 2006. Drilling is mainly RAB, AC with some RC and is spaced
at about 20 m x 40 m.
The estimate is a conventional block model with grade estimated using OK with estimation parameters
determined from a study of variography. Bulk densities were assigned based on mean values for oxide,
transition and fresh rock.
The estimate has been classified as Inferred Resource reflecting some uncertainty in the historic data. The
Mineral Resources are reported at a 1.0% Zn COG.
The Discovery and Orchard Tank Mineral Resources have been estimated using accepted industry practice
and have been classified and reported in accordance with the JORC Code.
3.2.3.3 Valuation
The Turner River base metals project comprises two exploration licences covering an area of 95 km 2 . The
tenements include a polymetallic Mineral Resource. Yardstick values for polymetallic Mineral Resources are
more difficult to determine than those for gold tenements because of different combinations of metals,
metallurgy, and considerations of location and scale.
The tenements were the subject of a farm-in arrangement between Landsdowne and De Grey whereby
Landsdowne could earn a 75% interest in the tenements by spending $1.5M over three years. The joint
venture terms valuation method indicates a value of the vendor’s interest at $0.35M at the time of the
agreement.
Polymetals has spent about $0.60M on exploration and has a beneficial interest of 55%, although no interest
is earned if the full farm-in expenditure commitment is not met.
The tenements cover an area of 95 km 2 with identified Mineral Resources. AMC considers a range of
$2,000/km 2 to $5,000/km 2 to be appropriate for the Turner River base metals project. The value of the
tenements is in the range $0.11M to $0.26M for Polymetals 55% interest using this method.
Details of exploration expenditure prior to the farm-in were not available to AMC. Valuation using the past
expenditure method was not possible.
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4 SOUTHERN CROSS GOLDFIELDS LIMITED
4.1 Marda Gold Project
4.1.1 Introduction
The Marda Gold Project (Marda) is located in the Shire of Yilgarn in Western Australia and is approximately
400 km north-east of Perth and 150 km north of the town of Southern Cross (Figure 4.1). Southern Cross is
located approximately 400 km east of Perth and 200 km to the west of the mining centre of Kalgoorlie. A
feasibilty study was completed on the project in 2012. This is a green-fields project with no development in
place.
Figure 4.1
Location of Marda Gold Project
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Marda comprises:
• A 500,000 tpa conventional CIP/CIL gold processing facility producing nominally 35,000 oz of gold
per year.
• Up to ten open pit mining operations at Marda and satellite pits.
• Infrastructure, maintenance, and administration facilities.
• Accommodation and airstrip to support a fly-in-fly-out (FIFO) operation.
Mineral Resources total 8.4 Mt at 2.0 g/t with contained metal of 546 koz of gold of which 66% is in the
Measured and Indicated category. The reported Ore Reserve for the Project is 2.3 Mt at a grade of 2.4 g/t
with 178,500 contained ounces of gold.
Additional exploration targets exist adjacent to the project and these areas are subject to current exploration
activities.
A formal feasibility study and supporting documentation exists for the Marda project. AMC visited the site in
2013 as part of a separate review of the feasibility study.
The Southern Cross tenements in the Southern Cross area comprise:
• 26 mining leases.
• 91 exploration licences.
• 92 prospecting licences.
• 1 general purpose leases.
• 11 miscellaneous licences.
• 2 retention leases.
The Southern Cross tenements cover an area of 2,920 km 2 .
4.1.2 Geology
Marda comprises two areas: Northern Deposits and Southern Deposits. The Northern Deposits include the
Marda Central deposits (Dolly Pot, Dugite, Python and Goldstream), the Die Hardy Deposits (Die Hardy and
Red Legs), King Brown and Golden Orb. The Southern Deposits comprise Battler and British Hill.
4.1.2.1 Northern Deposits
The Northern Deposits are located 150 km north of Southern Cross within the Archaean Marda-Diemals
greenstone belt. The Marda-Diemals greenstone belt comprises ultramafic and mafic rocks with overlying
felsics, narrow interflow sediments and BIF. The greenstone belt is divided into two supracrustal successions
divided by an unconformity. The upper Marda Complex comprises thick sequences of rhyolitic and andesitic
volcanic, and associated felsic sediments. The lower succession comprises three associations based on
lithological assemblages. The lower association is dominated by tholeiitic basalt with ultramafic, gabbro and
mafic tuffaceous rocks. The middle association is characterised by the Jackson Range BIF and is dominated
by moderately thick, continuous BIF and chert. The upper association comprises a variety of rock types
including tholeiitic basalt, various chemical sediments and minor clastic and volcanic felsics.
The upper association of the lower succession hosts the Marda Central deposits. The lower association of
the lower succession hosts the King Brown and Golden Orb deposits.
The greenstone belt is surrounded and intruded by granitoids. Younger west-north-west and west-south-west
trending dykes are evident throughout the belt.
The Marda Central deposits comprise a series of discrete gold deposits within a highly deformed segment of
the Marda BIF and locally intercalated with mafic and ultramafic units. The deposits are characterised by
quartz veining accompanied by pyrite, silica and sericite alteration. The structural setting is dominated by
isoclinal folds, low angle shears and late, high angle cross faults.
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The Golden Orb deposit comprises a chert BIF unit enclosed by a sequence of basalt, high magnesium
basalt, ultramafics and minor gabbro. The deposit has been interpreted to have developed in a dilational
position along a strike-slip shear.
The Die Hardy and Red Legs deposits are associated with BIF in conjunction with variably trending shear
zones. Similarly, gold mineralisation at Mt King is interpreted to be concentrated around the intersection of
cross cutting faults and the BIFs.
The King Brown deposit is hosted in highly weathered ultramafic saprolitic clays interspersed with narrow BIF
units.
Complete oxidation extends to between 45 m below surface and 80 m below surface and locally reaches
depths of greater than 100 m.
4.1.2.2 Southern Deposits
Mineralisation at the Battler Deposit is associated with one major easterly-dipping north-trending shear zone
in conjunction with a major north-north-west-trending, steeply east-dipping splay shear zone.
British Hill mineralisation is associated with BIF-hosted quartz veining associated with north-trending,
subvertical shear zones within a mafic-ultramafic greenstone sequence. Three main shears have been
identified.
4.1.3 Resources
Mineral Resources for Marda at 25 September 2012 are listed in Table 4.1. AMC has independently
reviewed the total tonnes and grade of the Marda Central, King Brown, Golden Orb, Barranco Option, British
Hill and Battler Mineral Resource estimates and found no material differences when compared to the total
tonnes and grade reported at 25 September 2012.
Table 4.1 Marda Gold Project – Mineral Resources as at 25 September 2012
1
2
3
4
Location Measured Indicated Inferred
Tonnes
(Mt)
Grade
(g/t Au)
Contained
Gold
(oz Au)
Tonnes
(Mt)
Grade
(g/t Au)
Contained
Gold
(oz Au)
Tonnes
(Mt)
Grade
(g/t Au)
Northern Deposits
Total 2,795,670 2.26 203,446 2,639,664 1.8 155,084 3,051,843 1.9 187,593
Marda Central includes Python, Dolly Pot, Dugite, Goldstream, Cobra, Taipan and Green Tree.
Mt King estimated in 2008 by Hellman and Schofield using multiple indicator kriging with block support adjustment.
Red Legs and Die Hardy deposits are subject to an option agreement.
Contained
Gold
(oz Au)
Marda Central 1 1,918,197 1.91 117,885 161,609 1.61 8,371 326,748 1.71 17,953
King Brown 100,300 4.36 14,060 63,300 2.59 5,274 73,925 2.95 7,012
Golden Orb 415,829 3.01 40,246 102,890 1.97 6,517 175,600 1.79 10,107
Mt King 2 - - - - - - 523,000 3 50,450
Subtotal 2,434,326 2.2 172,191 327,799 1.91 20,162 1,099,273 2.42 85,522
Barranco Option 3 - - - 1,302,243 1.7 71,900 949,576 1.64 50,300
Subtotal 2,434,326 2.2 172,191 1,630,042 1.74 92,062 2,048,849 2.06 135,822
Southern Deposits
Battler 361,344 2.69 31,255 39,300 3.46 4,372 52,087 3.53 5,912
British Hill 4 - - - 970,322 1.88 58,650 950,907 1.5 45,859
Subtotal 361,344 2.69 31,255 1,009,622 1.9 63,022 1,002,994 1.61 51,771
Indicated and Inferred tonnes differ from those announced by Southern Cross on 23 November 2012. Southern
Cross advised the Resource for British Hill was incorrectly reported and the values in the table above are correct and
match those provided by Ravensgate.
The following comments apply to all resources estimated by Ravensgate during 2012. The resource
estimates are based mostly on diamond and RC drilling.
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Drilling completed by Southern Cross Goldfields Limited (Southern Cross) in 2011 was carried out using
common industry practice with assay quality control in place. Drillhole collars are surveyed and downhole
surveys are carried out.
RC sample recovery was observed to be good although diamond core recovery was poor for most of
Northern Deposits except King Brown.
Historic quality control data is incomplete. Extensive validation of historic data was completed by an
independent consultant and Ravensgate accepted the historic data as acceptable to use for the resource
estimates.
The interpretations for the resource estimates were developed relying on drillhole logging and based on
lithological control. A nominal lower COG of 0.5 g/t Au was used to interpret the mineralisation.
All of the deposits have a number of mineralised domains. Assays within the domains were composited to
1 m. The influence of statistical outliers on grade estimation was limited through top-cutting and by restricting
the distance of influence of the outliers. Grades were estimated into the block models using OK. Estimation
parameters for the resource estimates were determined from variography studies.
Bulk density data comprise 532 measurements collected from diamond core. Bulk density values vary
between the deposits, and were applied according to rock type and elevation.
Resource estimates were classified as Measured, Indicated or Inferred Resources based on a confidence
item value calculated from a number of parameters and then used to describe levels of interpolation
confidence. Mineral Resources are reported with Ore Reserves excluded.
The majority of Mineral Resources within a $1,475/oz optimised pit design is classified as Measured. This is
reasonable where drilling data is dense and has been validated, and where there is good continuity of
mineralisation. Where it has not been possible to validate a significant amount of historical drilling data
confidence in the resource estimate is less certain.
The Mt King Mineral Resource was estimated in 2008 by Hellman and Schofield using 23 RC holes drilled at
a nominal 100 mE by 50 mN spacing. Recoverable resources were estimated using multiple indicator kriging
from 2 m composites.
AMC considers that Marda Mineral Resource estimates have been prepared using accepted industry
practice and have been classified in accordance with the JORC Code.
4.1.4 Joint Ventures
In August 2011 Southern Cross entered into an agreement with Barranco Resources NL to acquire the Red
Legs and Die Hardy deposits. The agreement comprises a two year option at a cost to Southern Cross of
$20,000 every six months. If Southern Cross elects to exercise the option it will pay $500,000 in cash and
issue 20 million shares in Southern Cross to Barranco. The agreement covers two retention licences
covering the deposits. Upon exercise, Southern Cross will hold all mineral rights to the retention licences,
including Barranco’s existing royalty over the Mt King deposits (owned by Southern Cross).
4.1.4.1 Radio Gold Mine
In August 2011, Southern Cross reached agreement with Renaissance Minerals Limited to enter into a farmin
agreement for the historic high-grade Radio Gold Mine. The deposit was mined to only 100 m below
surface and produced 71,000 oz (57,000 t at 38.5 g/t Au).
Previous drilling art Radio Gold Mine has been restricted to an area surrounding existing workings.
Extensions to mineralisation may be identified.
Under the agreement Southern Cross will also acquire Renaissance Minerals Limited's Mt Rankin Gold
Project. The tenement package is located immediately along strike of Southern Cross’s existing tenements in
the region and within close proximity to existing gold mining and processing facilities at Marvel Loch and
Westonia..
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4.1.4.2 Dulcie Gold Project
In the March 2012 Quarter Southern Cross entered into a formal sale agreement with a private consortium
for the sale of the Dulcie Gold Project and related tenements for a consideration of $1M in cash plus a 5%
gross royalty on future production. Payments relating to the sale were received in the June 2012 Quarter.
4.1.4.3 Western Areas NL (Southern Cross 30% Nickel Interest, 100% Non-nickel Interest)
In August 2011, Southern Cross entered into an agreement with Western Areas NL whereby Western Areas
NL acquired 70% of Southern Cross’s nickel rights across much of Southern Cross’s tenement package. The
agreement excluded some tenements including the tenements at the Copper Bore Project and the Non-iron
Rights on Radar Iron’s tenement.
Previous exploration undertaken identified multiple nickel sulphide targets, including a 66 km strike length
with known favourable nickel sulphide olivine cumulate host rocks.
4.1.5 Exploration
4.1.5.1 Gold
Review of regional exploration in 2011-2012 identified high priority targets along the Evanston Shear Zone
and Andromeda Trend. Auger drilling tested priority targets identified in the review, particularly a largely
undrilled gold trend extending over a strike length of 30 km.
Southern Cross advises that further auger drilling is currently in progress.
4.1.5.2 Red Boomerang
The Red Boomerang prospect lies along the Evanston Shear Zone. Previous drilling intersected
porphyry-hosted mineralisation including 6 m at 23.8 g/t Au and 11 m at 4.7 g/t Au. Four lines of auger
drilling was conducted over a 2 km strike at 400 m spacing, and defined a +100 ppb Au anomaly extending
over a strike length of 1.3 km.
4.1.5.3 Lancelot
The Lancelot prospect lies along the Evanston Shear Zone, immediately north of the Gwendolyn tenement
(Vector Resources). Auger drilling returned results of up to 3,000 ppb Au. Subsequent auger drilling at 40 m
centres along 200 m to 800 m spaced lines confirm a semi-continuous 5 km long anomaly greater than
40 ppb Au along the main trend between Lancelot and Gwendolyn. These results build on previous RC
drilling which returned results including 4 m at 17.36 g/t Au, 5 m at 6.13 g/t Au, and 4 m at 2.80 g/t Au.
4.1.5.4 White Pointer
The White Pointer prospect is approximately 40 km north-west of the proposed gold treatment facility at
Marda and 500 m north-west of Red Boomerang. A gold anomaly has been defined by auger drilling at 40
centres along 200 m spaced lines. The anomaly is defined by values of +40 ppb Au has been identified over
a strike length of 2.2 km with a +100 ppb Au core over 1 km.
4.1.5.5 Thresher
The Thresher prospect is approximately 60 km north-west of the proposed gold treatment facility at Marda.
This prospect lies close to the Evanston Shear Zone and parallel to an adjacent magnetic unit. A gold
anomaly defined by values of +40 ppb Au has been identified over a strike length of 800 m with a +100 ppb
Au core over 400 m.
4.1.5.6 Copper Bore
Auger drilling was conducted during February 2012 to test for anomalous mineralisation at the Copper Bore
trend and extension of to the south of Southern Gossan. The drilling identified anomalous grades up to 652
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ppm Cu along a 1.3 km strike about 2 km north-west of Southern Gossan. Anomalous gold grades include
250 ppb Au 1.3 km south-east of Southern Gossan and 54 ppb Au west of Southern Gossan.
A downhole electro-magnetic survey was also completed over a 10 km trend between Copper Bore and
Southern Gossan during 2012. Ten drillholes were surveyed. Of 17 anomalies identified. Six of the identified
anomalies are related to base metal sulphide occurrences that have already been drill-tested.
A reconnaissance survey west of the Copper Bore trend identified a wide quartz veined shear zone
characterised by micaceous schist with up to 10% box-work texture after pyrite. The shear zone appears to
strike over 10 km and is up to 50 m wide. Rock chip samples from the shear zone returned a peak result of
3.38 g/t Au from a quartz vein in gabbro. Other exploration targets associated with this shear are thrust-fold
structures, which returned 0.5 g/t Au at two separate outcrops 800 m apart.
4.1.6 Mining
The Marda mining study utilises Mineral Resource estimates undertaken in 2011 and 2012 following the
completion of additional drilling during 2011. Open pit optimisations, designs, and mining schedules have
been developed by Southern Cross and its consultants using these resource model estimates.
Southern Cross proposes mining ten small open pits using a company owned and managed mining fleet and
conventional open pit mining techniques. Mining is planned to commence in the Marda Central, Golden Orb
and King Brown areas before commencing at Red Legs in Year 4, and at the two furthest projects (British Hill
and Battler) in Year 5. The mining sequence is logically based on the higher value and higher confidence pits
early in the schedule with lower value/confidence pits mined at the end of the mine life.
A gold processing plant is planned at Marda with a capacity of 500 ktpa.
Marda comprises shallow open pits ranging in depths of between 45 m and 100 m. The material to be mined
is predominantly oxide mineralisation. The proposed mining fleet comprises a 120 tonne excavator and a
truck fleet of three 40 tonne trucks. Blasting is planned across all materials to assist productivity and to
provide blasthole grade control samples. Southern Cross plans to lease the mining fleet and associated
equipment. Ore haulage from satellite pits will be undertaken using conventional road trains capable of
hauling on public and private roads. Southern Cross plans to lease and operate the road train fleet.
All maintenance facilities and associated services are to be provided by Southern Cross.
The open pit designs incorporate narrow 10 m wide ramps to reduce stripping costs associated with small
pits. The geotechnical studies are preliminary, however they did identify the risk of ramp crest failure. Ramp
crest failure on narrow ramps would interrupt production although the existence of multiple pits and ore
stockpiles offsets this risk to some extent.
The overall mining schedule shows a high rate of vertical development. In AMC’s opinion the mining
schedule will be difficult to achieve. This risk is offset by the availability of multiple pits and ore stockpiles.
Southern Cross added ore dilution and an ore recovery factor to the pit inventory prior to developing the
mine schedule. This is standard industry practice. However, in AMC’s opinion, the 0.7 g/t Au grade assigned
to the diluting material is too high and has adjusted head grades in the cash flow model.
In AMC’s opinion the overall mining costs appear reasonable for Marda.
4.1.7 Ore Reserves
The Ore Reserves for Marda were developed as part of the recent feasibility study. The Ore Reserves are
based on the development of the ten open pit designs using the current Mineral Resource model. Ore
Reserves were calculated at a gold price of $1,475/oz and are shown in Table 4.2. AMC notes that
approximately 4% of the inventory supporting the feasibility study is in the Inferred Mineral Resource
category. This is not a material concern for the project.
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Table 4.2 Marda Gold Project – Ore Reserves at October 2012
Pits Proved Probable Total
Dry
Tonnes
(k/t)
Grade
(g/t Au)
Contained
Gold
(koz Au)
Dry
Tonnes
(k/t)
Grade
(g/t Au)
Contained
Gold
(koz Au)
Dry
Tonnes
(k/t)
Grade
(g/t Au)
Contained
Gold
(koz Au)
Battler 129.6 3.9 16.1 6.0 5.9 1.1 135.6 4.0 17.2
King Brown 84.5 4.7 12.7 12.1 2.9 1.1 96.6 4.5 13.9
Golden Orb 261.5 3.3 27.4 9.3 2.1 0.6 270.8 3.2 28.1
Goldstream 86.3 2.5 6.9 – – – 86.3 2.5 6.9
Python 525.7 2.0 33.5 2.6 1.5 0.1 528.3 2.0 33.6
Dugite 209.6 2.0 13.3 0.2 1.5 – 209.8 2.0 13.3
Dolly Pot 355.6 1.8 20.8 0.3 1.2 – 355.9 1.8 20.8
British Hill – – – 70.0 4.6 10.4 70 4.6 10.4
Die Hardy 214.8 1.6 10.9 154.1 1.7 8.2 368.9 1.6 19.1
Red Legs 70.1 3.4 7.6 85.1 2.8 7.6 155.2 3.1 15.2
Total 1,937.7 2.4 149.2 339.7 2.7 29.1 2,277.4 2.4 178.5
Source: Southern Cross Marda feasibility study
4.1.8 Metallurgy and Processing
4.1.8.1 Introduction
It is proposed that mined ore from Marda will be treated in a nominal 0.5 Mtpa conventional cyanidation
treatment facility employing CIL for gold recovery.
Ore to be fed to the proposed process facility will be sourced from ten discrete gold resources as described
in the geological section of this review. Ore from different resource pits will be blended to suit the
requirements of the processing plant. Metallurgical test work programmes on samples of ore from Marda
have been undertaken over approximately ten years.
During 2012 Southern Cross acquired the Sandstone processing facility. Southern Cross contracted
independent technical specialists to undertake an engineering study to prepare cost estimates for a process
plant installation involving utilisation of the refurbished plant equipment to be relocated from Sandstone to
Marda.
4.1.8.2 Metallurgical Test Work
Historical metallurgical test work undertaken between the 1991 and 2011 programmes showed that tested
samples from the Marda Central deposits were all relatively free milling ores with cyanidation gold
extractions varying between 84% and 97%. Comminution testing of oxide and primary samples indicated that
the ore types tested could be classified as moderate to hard.
A comprehensive programme of metallurgical test work was undertaken in 2012 on samples from the major
ore deposits as part the recent feasibility study. The project assumptions are reasonably based on the test
work results.
In the first year of plant operation ore to be treated will be from the Dugite, King Brown, Goldstream and
Python pits followed by increasing amounts of Python and Golden Orb ore, and then ore from the Redlegs
deposit. In later years ore is mined from Redlegs, Die Hardy, British Hill and Battler deposits. AMC notes that
only limited test work has been conducted on these deposits.
Comminution Testing
Results for key comminution parameters derived from both historical and recent comminution testing are
presented in Table 4.3, together with the proportion of LOM ore tonnes to be treated in the plant. Parameters
tested were Unconfined Compressive Strength (UCS), Crushing Work Index (CWi), Bond Rod Mill Work
Index (RWi), Bond Ball Mill Work Index (BWi), Abrasion Index (Ai) and SAG Mill Competency (SMC).
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Table 4.3
Mean Comminution Test Parameters
1
Deposit
Ore in LOM
Schedule
(%)
UCS
(Mpa)
Mean Test Work Comminution Parameter Value
CWi
(kWh/t)
RWi
(kWh/t)
BWi
(kWh/t)
Golden Orb 11.8 – – – 9.0 1 – –
King Brown 4.1 – – 11.4 9.5 0.02 337
Dolly Pot 15.1 32.4 6.9 18.0 17.2 0.49 57
Python 22.4 15.0 5.9 16.3 17.1 0.48 86
Dugite 8.9 11.0 13.3 17.9 17.7 0.26 71
Goldstream 3.7 11.7 6.6 18.1 17.8 0.38 77
Tested by comparative index only.
Ai
SMC
(A*b)
AMC considers that the results fall within expectations for hardness of the various ore types based on the
geological descriptions and core photos. AMC notes that due to lack of sample availability, the comminution
variability testing for the King Brown and Golden Orb deposits is below what would normally be undertaken
in a definitive study. However, given the size of Marda and the ability to blend from multiple ore sources,
AMC considers that the risks to comminution design and plant throughput are considered to be low.
Gravity and Cyanidation Leaching Tests
Head analyses of the samples tested show generally low levels of elements detrimental to gold recovery by
cyanidation. Some samples were slightly elevated in base metals, but considering the ability to blend with
multiple pits AMC does not consider this is a significant risk to processing.
Gravity and cyanidation testing was undertaken at grind sizes of P80 150 µm and 75 µm to evaluate grind
size dependence.
Key points from a review of the gravity and cyanidation testing as noted by AMC are:
• All samples tested contain a high proportion of gravity gold and therefore justify the inclusion of an
efficient gravity gold recovery circuit.
• Overall recovery results from the combined gravity and cyanidation leaching tests are very satisfactory
with an arithmetic mean result of all samples at around 94%. Goldstream ore results show the lowest
recovery.
• The recovery dependence on grind size for the range tested was generally low with the exception of
Goldstream which showed a 5% to 10% increase in recovery at the finer size. Blends containing
Goldstream ore would therefore benefit from finer grinding.
• The mean gold grade of the tested samples is generally higher than the LOM grades of the equivalent
ore deposit as presented in the feasibility study mine schedule. The biggest deviations are with the
King Brown and Python deposits for which tested samples are around double the scheduled grade.
The high grade of these tested ore samples might overstate potential recovery for these scheduled ore
types, and therefore there is a risk that recovery will be lower than that tested.
• Reagent consumptions are moderate for cyanide and moderate to high for lime.
4.1.8.3 Process Plant
Background Information
Southern Cross acquired the Sandstone processing facility and plans to utilise as much of the plant as
possible for refurbishment and relocation to Marda. The preferred configuration is a single mill option. A used
suitable single stage semi-autogenous (SAG) mill is purchased which is fed with primary crushed ore using
the relocated primary crusher from Sandstone. Southern Cross plans to refurbish, relocate and install
remaining appropriate processing equipment to Marda and upgrade where required.
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Processing Circuit
The key unit operations and equipment utilised for the processing facility are as follows:
• Primary crushing using the existing track-mounted Terex-Pegson jaw crusher relocated from
Sandstone.
• Stacking conveyors relocated from Sandstone which allow stockpiling, or direct feeding the mill via a
feed bin and apron feeder.
• Single stage milling in a proposed 4.27 m diameter SAG mill powered by a 1.25 MW motor. This mill
will need to be sourced externally. Circuit classification using Warman 10" cyclones sourced from
Sandstone.
• Gravity gold recovery using a new Falcon gravity concentrator. Recovery of gravity gold from
concentrate to be undertaken by intensive leaching in a new intensive leach reactor, and subsequent
electrowinning in a new dedicated gravity cell.
• CIL leaching using nine draft tube style mechanically agitated tanks in series. All tanks to be
refurbished and relocated from Sandstone. First tank to be leaching only and remaining eight tanks for
leaching plus adsorption of gold to carbon.
• Recovery of gold from carbon using an integral 1.5 t carbon capacity elution and electrowinning facility
relocated from Sandstone. Carbon reactivation in a new horizontal diesel fired kiln.
• Reagent mixing and distribution systems, water systems, diesel storage all relocated from Sandstone.
4.1.8.4 Gold Recovery
Based on an assessment of test work results of samples from ore sources treated in the first three years,
AMC considers that the mean recovery will be approximately 1% lower than the predicted 95% as presented
in the financial model. It is not possible to make predictions on the later years of the project without additional
test work on samples from these deposits.
4.1.8.5 Plant Throughput
Annual ore throughput in the financial model ramps up to 550 ktpa in the second year of the project which is
higher than the current plant design throughput of 480 ktpa as presented in the most recent engineering
study. The design used a conservative on-line utilisation of 92% and AMC considers that there is potential to
increase availability of the mill above this design figure after commissioning and ramp-up. There is
insufficient comminution test information on ore types to be treated in the later years of the project to make a
throughput prediction.
4.1.8.6 Capital Estimate Plant and Infrastructure
Southern Cross has prepared a capital estimate for plant and infrastructure, based on information provided
by independent technical specialists in November 2012. This estimate was prepared to an accuracy level of
±20% and included a 20% contingency. The Southern Cross capital estimate is presented in Table 4.4. The
costs presented include the removal, refurbishment, relocation and installation of plant and equipment as
well as infrastructure items including camp, roads and airstrip, buildings/work-shops, and water supply. A
preliminary estimate for tailings storage requirements is also included.
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Table 4.4
Southern Cross Capital Estimate Summary
Marda Infrastructure
Cost Centre
Capital Cost
(Single SAG Mill)
($M) 1
Accommodation camp, roads, airstrip, buildings/workshops 8.26
Plant and Equipment
Sandstone equipment refurbishment and relocation 4.59
Additional equipment and installation costs 13.17
Provisional cost items 0.33
Upgrade requirements 1.44
Plant and Infrastructure Contingencies (overruns) 5.26
Tailings Dam 1.98
Owners Costs
Project Supervision 0.30
First Fills 0.45
Total Processing and Infrastructure 35.74
1
Costs exclude GST
AMC notes that the allowance for the single SAG mill is based on sourcing a suitable used mill. There is a
risk that actual costs in the milling area may increase depending on the cost and refurbishment of the mill
that is sourced for the plant.
AMC notes in ASX announcement of 14 August 2012 that Southern Cross quoted an estimated capital cost
for the project at $25M (plus or minus $5M) to refurbish and relocate the plant from Sandstone to Marda.
AMC understands this was a preliminary estimate prior to the decision to upgrade the plant and the receipt of
a more detailed cost estimate. In AMC’s opinion the capital estimate shown in Table 4.4 is reasonable.
4.1.8.7 Operating Cost Estimate
Southern Cross has prepared an operating cost estimate based on an assessment by independent technical
specialists in the July FS. This estimate was prepared to an accuracy level of ±20% on the basis of an
annual ore throughput of 480 ktpa of blended ore.
The Southern Cross cost estimate is presented in Table 4.5.
Table 4.5
Marda Operating Cost Estimate
Cost Centre
LOM
($M)
Operating Cost
Mean LOM
($/t ore treated)
Salaries and labour 20.41 8.23
Reagents and operating consumables 25.55 10.30
Power 24.43 9.85
Maintenance 3.09 1.24
G/A, flights and accommodation 1.46 0.59
Total Process Operating Costs 74.93 30.21
AMC considers the mean LOM unit operating cost of $30/t ore to be in general agreement with treatment
costs for other Australian gold projects of a similar throughput and plant complexity.
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4.1.9 Environment
4.1.9.1 Overview
Marda appears to involve no environmental risks that cannot be managed with well established strategies
and techniques, although hydrogeology and some geochemistry reports were not available for this review.
Statutory environmental approval is likely to be uncontroversial, as potential environmental impacts have
been well characterised and their manageability demonstrated. Extensive consultation with regulators has
been important in managing approvals-related risks.
While there are fauna conservation issues (rare/endangered species), these fauna are likely to be only
marginally impacted by project activities. Moreover, studies conducted for the project are likely to enhance
scientific knowledge of the occurrence and auto-ecology of these species, thereby supporting conservation
efforts by the relevant agencies. Importantly, conservation risks to approval have been mitigated by close
and regular liaison with the agencies.
Acid mine drainage is an inconsequential risk at the four Central Marda deposits. Results of geochemical
test work for the King Brown and Golden Orb deposits were not available for this review. At Marda Central,
much of the sulphide present in mine waste occurs as sulphates, rather than sulphides and, even where
sulphides are present, relatively large volumes of carbonate also occur. Similarly, risks of circum-neutral
metal enrichment of leachates from waste stockpiles have been shown to be low: potential metal pollutants
in labile forms are not present at elevated concentrations, and significant acid-neutralising capacity is likely
to be available in stored waste.
Water supply from existing and proposed bores at Marda is reported to be adequate for project needs,
although hydrogeological reports were not available for this review. While excess water is unlikely (pits are
reported to be dry to full mining depth), the disposal to land or water-course of significant volumes of excess
water would attract close scrutiny from regulators.
Closure poses no technical challenges at Marda, based on current information. The closure provision of
$2.2M is considered by AMC to be reasonable, reflecting the relatively small disturbance footprint of the
project. This situation could change, however, if mined pits partially refilled with groundwater – rehandling of
mine waste to backfill pits above the re-established water table would result in additional,
yet-to-be-determined, closure costs.
4.1.9.2 Statutory Environmental Approval
Portions of the project area are included in a proposed Dual Purpose Mining and Conservation Reserve.
AMC considers this not to pose a significant risk, as mining is legally an acceptable land use, subject to
agreement and consultation with the regulator. Other companies in the region are in comparable situations,
and the dual-use model is now well established. The lengthy and detailed consultation conducted with
government agencies by Southern Cross is considered to have ensured adequate security of tenure and
purpose for the project.
State environmental approval is most unlikely to involve the lengthy and complex processes of Part IV of the
EP Act, administered by the EPA. Potential impacts are easily manageable by other agencies, and in recent
years the EPA has increasingly and pointedly not assessed such projects, and relied on these other
agencies. Southern Cross has maintained close contact with the Office of the EPA (OEPA), which has
clearly flagged that EPA assessment is unlikely to be necessary.
A Works Approval (to construct) and a Licence (to operate) will be required under Part V of the EP Act,
administered by the DEC. These are relatively routine processes, compared with those of Part IV of the EP
Act, and are unlikely to delay project implementation.
The Mining Proposal processes of the Mining Act, administered by the DMP will also be required. A Mining
Proposal is currently being prepared, with submission planned for June 2013. The DMP undertakes to
complete its assessment of proposals within 30 days, although this timeframe can be significantly changed if
additional information is requested after submission of a proposal. Southern Cross and its environmental
consultants are aware of this risk, and have committed to submitting a sufficiently detailed document. For
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project scheduling, it is practical to assume a DMP approval within 8 to 12 weeks of submission of the Mining
Proposal.
The federal EPBC Act could theoretically be triggered by the occurrence at Marda of “threatened fauna
species and communities” (species include the Malleefowl and Major Mitchell’s Cockatoo). However,
targeted surveys for Malleefowl and assessment of risks to the cockatoo have identified low and manageable
risk of impacts. On this basis, it is possible that no referral will be made under the EPBC Act. The Act
requires referral only of proposals likely to cause significant impacts and, while there is a risk that the
proposal could be referred by another party, AMC considers referral to be unnecessary. It is common
practice for a professional consultant to complete the referral pro forma document and, if appropriate,
endorse it as “referral not necessary”. This document is then available if the proposal is referred by others, to
quickly have the referral discontinued.
4.1.10 Flora and Fauna
Flora and vegetation conservation issues are of minor significance at Marda. No Declared Rare Flora (DRF)
or Threatened Ecological Communities (TECs) will be impacted. Priority Flora Species (PFS) which do occur
on the project area have been reviewed by the relevant agencies on a regional basis and, while some
modification of project facility locations may be required, no significant impediment to implementation is
considered likely. A proposed Priority Ecological Community (PEC) in the region is considered unlikely to
constrain project development, because the location of facilities has been discussed at length with DMP and
DEC.
Conservation-sensitive fauna species (two wishbone spiders, a pseudoscorpion, the Malleefowl and Major
Mitchell’s Cockatoo) have been recorded in the environs of the project, but impacts on all species are
considered by AMC to be easily manageable.
The spiders and pseudoscorpion do not occur on areas proposed for disturbance, and are thus most unlikely
to be impacted, given the implementation of environmental management plans which prevent disturbance of
land outside approved envelopes.
A targeted survey for Malleefowl revealed no active (current use) or recently active (1 to 5 years) nesting
mounds on the Southern Cross tenements. Three inactive mounds were found, but none in areas proposed
for disturbance. Some 400 ha of potential Malleefowl habitat was identified in the environs of the project, but
only a small amount (some 6%) occurs on areas of proposed disturbance. Management of potential
Malleefowl impacts is a regional issue, with the greatest risk at Marda being from traffic deaths. Workforce
education and monitoring will form part of the operating environmental management plan for Marda, and can
reasonably be expected to manage impacts.
Impacts on the Major Mitchell’s Cockatoo are considered likely to be small, as this volant species can avoid
disturbance and seek alternative habitat, of which there are large undisturbed tracts in the region.
Assessment of potential impacts on conservation-sensitive fauna at Marda have been characterised by close
and regular consultation with the DEC. Minuted meetings have been held, and the DEC appears to be aware
of both the low risks of significant impacts and the contribution to a broader understanding of the
auto-ecology of some of these species, particularly the Malleefowl. AMC therefore considers it unlikely that
consideration of fauna impacts will significantly affect environmental approval and ongoing operation.
4.1.11 Acid and Metalliferous Drainage
Based on rigorous geochemical test work conducted on representative samples using recognised
techniques, risks of acid and metalliferous drainage (AMD) in waste rock at Marda Central (four pits) have
been shown to be extremely low.
Sulphide sulphur concentrations in waste rock are mostly below the rule-of-thumb threshold of 0.3%S, and
occurrences of carbonate and other acid-neutralising compounds are significant. By far the greater
proportion of samples were shown to be NAF, and the few samples judged by acid-base accounting to be
PAF were shown to be NAF after more detailed testing.
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Leaching test work has also shown the risks of circum-neutral metal enrichment of drainage from stockpiled
waste rock to be low.
While AMD risks at Marda Central are considered by AMC to be low, no rigorous test work results were
available for this review. The risk of AMD challenges at the King Brown and Golden Orb deposits therefore
cannot be dismissed absolutely.
4.1.12 Water Management
Southern Cross advises that project water demand will be met from existing and proposed bores at Marda,
but no hydrogeology reports were available for this review. Based on limited drill-hole sampling, no
dewatering of mine pits has been judged likely to be necessary, but AMC has not been able to rigorously
assess this view. Should dewatering in excess of project demand prove necessary, disposal to land or
nearby water-courses could attract the scrutiny of regulators (DEC and the Department of Water (DoW)).
While such a situation is unlikely in the low-rainfall area of the project, and with relatively shallow pits
planned, there are regional precedents for the development of unforeseen excess-water issues.
Groundwater in the project area is saline and, while adequate for processing and (after reverse osmosis)
potable supply, unlikely to be required by other users. The project area is remote and sparsely inhabited, and
other mining operations in the area are unlikely to place demands on groundwater exploited by Southern
Cross.
4.1.13 Rehabilitation and closure
Technical closure and rehabilitation issues at Marda are undemanding. The creation of safe, stable and nonpolluting
landforms after mining will require no novel strategies or techniques. The lack of potential AMD
issues at Marda means that complex and expensive encapsulation of PAF waste will not be needed, and
simple landscaping of waste stockpiles, with appropriate erosion-control and water-capture structures, can
easily meet DMP guidelines. It is noted again here that rigorous geochemistry test work results for the King
Brown and Golden Orb deposits were not available for this review, so AMD risks, and implications for
closure, have not been assessed for those deposits.
Given the small disturbance footprint of the project and the improbability of needing to manage
acid-generating waste rock, the existing closure cost estimate of $2.2M is considered by AMC to be
adequate and reasonable, subject to the AMD question noted immediately above, and to the following
qualification.
It is noted that the DEC has a general stance across the mining industry of opposition to the formation of pitlakes
after mining. While it has been assumed that all proposed pits at Marda are above the water table,
AMC has not sighted hydrogeological reports confirming this view. If the water table is such that pit lakes
could form after mining, backfilling to several metres above natural water table could be demanded by DEC
and DMP. Without detailed hydrogeological information, it is not possible to quantify the volume of backfill
involved, and thus the amount and cost or rehandling mine waste.
4.1.14 Project Implementation
A formal feasibility document exists for Marda thus making the process of financing and approvals
straightforward. However this is a green fields development project. Therefore three months should be
allowed to complete environmental approvals and financing. A further 6 to 9 months should be allowed for
procurement, construction and commissioning..
4.1.15 AMC Production Cases
AMC has modelled two cases for Marda. The cases are projections of mining and processing tonnages, gold
grades and costs. The cases are provided to BDO for consideration of value.
Southern Cross provided AMC with a range of technical information: Mineral Resource models, Ore
Reserves, mine designs and schedules and a feasibility study. AMC has prepared its cases based on this
information.
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Case 1, ore production, is primarily based on the feasibility study scenario using Ore Reserves, and that part
of Mineral Resources included in the mine plan provided. AMC added additional ore to the production case
in years 5 and 6 of the schedule based on the likelihood of conversion of near mine Mineral Resources to
Ore Reserves and exploration success also contributing to additional ore Reserves.
Case 2, ore production, includes that scheduled in Case 1, with the addition of two years production
simulated to reflect the likely conversion of additional Mineral Resources to Ore Reserves and likely success
with exploration in the Marda region. AMC has included additional production to extend the mine life for two
years to reflect further exploration success.
The two production cases are designed to provide a lower and upper range of likely outcomes for the Marda
Project.
AMC believes that the two production cases described appropriately provide a value on the Mineral
Resources and exploration potential for the greater Marda Gold project.
Marda Case 1 (Feasibility Case)
Key aspects of AMC's case 1 model are:
• The mine schedule and processing schedule are essentially based on the 5 year LOM plan provided in
the feasibility study with a limited amount of ore added to end of the mine life.
• Project development commences in May 2014.
• Operating and capital costs are based on those provided in the feasibility study.
• Average unit mining costs of $3.24/t of material moved are used.
• Average processing costs of $30.21/t ore processed are assumed.
• Total ore processed is 2.7 Mt at a head grade of 2.3 g/t.
• AMC adjusted the head grade to reflect a lower grade of diluting material than that assumed in the
feasibility study based on the AMC review of the Resource model, this had the effect of lowering the
head grade from 2.36 g/t to 2.31 g/t over the life of the project.
• AMC adjusted the metallurgical recovery for the project in the first three years from 95% to 94%
compared to the feasibility study based on our review of the test work..
• Total gold production of 190 koz of gold.
• Initial capital expenditure of $38.2M based on the feasibility study. This capital is principally associated
with site establishment and relocation and refurbishment of the processing facilities and camp from
Sandstone to Marda.
• Closure costs increased by $1.2M compared to the feasibility study to offset the assumed residual
value of the mining equipment.
Marda Case 2 (Feasibility Case Plus Additional Inventory)
Key aspects of AMC's case 2 model are:
• Assumptions as in case 1 for the first 4 years of production.
• An additional 1 million tonnes of ore at a grade 2.31 g/t is added to the end of the mine life. AMC has
assumed that operating costs are the same as those incurred in year 2014 for the extension period.
The head grade is based on the project average. The 1 Mt represents 50% of the Marda Inferred
Resource converting to Ore Reserves. The average project head grade has been applied.
• Processing recoveries are assumed to be 92% in the extension years to reflect a lower confidence in
the recovery characteristics for this material.
• Total gold production of 246 koz of gold.
• A higher capital expenditure over the extension period is assumed compared to case 1 due to costs
that would be associated with starting or extending open pits.
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Exploration Valuation
AMC considers that the production cases indicate an appropriate value for groups of tenements hosting
Mineral Resources. In the Marda area, tenements hosting Mineral Resources occupy about half of the
overall tenement area. The northern part of the Marda tenement area (about 650 km 2 ) does not host any
Mineral Resources but remains prospective for gold and base metals as previously described. AMC
considers it appropriate to assign a value of $1,000/km 2 to $2,000/km 2 indicating a range of values for this
area of $0.65M to $1.3M.
Opportunities and Risks
AMC considers that additional opportunities that might be available for Marda include:
• Southern Cross has undertaken a review of the mine schedules in the feasibility study. The results of
this work demonstrate a mine plan targeting early development of higher grade ore. AMC has
reviewed this work and although it is preliminary in nature, believes the revised mine schedules would
generate higher earlier cash flows and an increase in the projects DCF compared to case 1.
• A significant resource remains outside and below the open pits at Marda. Reductions in cost
structures and/or an increase in gold price would allow more of this material to be mined economically.
• AMC has not considered underground mining of additional resources in its evaluation as no work has
been undertaken in this regard. However, a number of the Mineral Resources at Marda have a grade
that might support underground mining.
• Potential to achieve plant throughputs greater than design once the project is commissioned.
• Potential to install higher grinding capacity and hence increase plant throughput and gold production.
This could be achieved by specifying a larger SAG mill or utilising the spare ball mill at Sandstone.
The rest of the process plant either has the capacity to handle the additional tonnage or modifications
required are relatively simple and inexpensive.
AMC considers that the following risks apply to Marda:
• Marda is a green-fields open pit operation. There is no historical mining or ore processing in the area,
therefore there is a level of risk associated with the key assumptions for the project such as mine
dewatering, geotechnical and productivity assumptions.
• The advance rate assumed for the open pits is high, however this is offset to an extent by the number
of ore sources available and the ore stockpiles built up during the operation.
• AMC's production cases include Inferred Mineral Resources and assumed further exploration success.
Based on AMC's assessment of the large Mineral Resource inventory and exploration prospectivity in
the area, AMC considers that there is a reasonable basis for including these in its production cases.
However, it is not certain if further exploration will result in the determination of additional Mineral
Resources and Ore Reserves.
• Slightly lower metallurgical recoveries are possible in later years of the project because of limit specific
test work on the ore scheduled to be treated in those years.
4.2 Sandstone Project
The Sandstone project was acquired by Southern Cross from Troy Resources NL (Troy) in a transaction
completed in March 2013 involving $2.3M cash, replacement of $2.7M of existing environmental bonds, a
2% net smelter royalty and 44M SXG options. The transaction included the Sandstone treatment plant and
camp.
Troy acquired the project in 1998, purchased the Sandstone treatment plant in 1999 and commenced mining
at Bulchina. The Bulchina pit produced 230,000 oz of gold. Production commenced from the Lord Nelson
and Lord Henry pits in 2005. Mining at Lord Nelson was discontinued in August 2007 having produced
180,000 oz of gold but was restarted in a pit cutback to produce a further 27,440 oz of gold. The Lord Henry
pit was completed in 2007 having produced 48,000 oz of gold.
41

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The Sandstone project tenements (Figure 4.2) are located near the town of Sandstone approximately
730 km north-east of Perth in the East Murchison Mineral Field, Western Australia. The Sandstone shire has
a history of gold mining since the late 1800s and when Troy’s mining operations ceased in 2010, it was
operating the only gold mine in the district with ore mined from an open cut mine at Lord Nelson. Ore from
Lord Nelson was hauled to the Sandstone mill located near Troy’s first open pit mine at Bulchina mine.
The Sandstone project tenements cover an area of about 985 km 2 consisting of:
• 14 exploration licences.
• 20 mining leases.
• 34 prospecting licences.
• 10 miscellaneous licences.
• 1 general purpose lease.
Figure 4.2
Sandstone Tenement Location
42

BDO CORPORATE FINANCE (WA) PTY LTD
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4.2.1 Geology
The Sandstone project covers part of the Archaean Sandstone greenstone belt which is a triangular area of
greenstone belt rocks interpreted as a north-plunging antiform located at the northern end of the Southern
Cross province. The greenstone belt lies at the northern end of the Diemals dome at the conjunction of the
Youanmi and Edale faults (Figure 4.3).
Figure 4.3
Sandstone Project Geology
The greenstone belt consists of mafic volcanic and intrusive rocks with subordinate ultramafic, banded iron
formation (BIF) and siliciclastic sediments. Granitoid plutons associated with the Diemals dome intrude the
southern margin of the belt. The metamorphic grade is greenschist facies, although amphibolites facies
assemblages are locally developed along the flanks of the belt.
The Lord Nelson and Lord Henry deposits are about 3 km apart along the north-south trending Trafalgar
shear zone (Figure 4.4). Lord Henry differs from Lord Nelson in that it strikes broadly east-west compared
with the north-north-west strike of Lord Nelson. Most of the gold Mineral Resource at Lord Henry is in fresh
rock whereas nearly all of Lord Nelson is in the oxide zone.
43

BDO CORPORATE FINANCE (WA) PTY LTD
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Technical Specialist's Report
Figure 4.4
Lord Nelson and Lord Henry Geology
The Lord Nelson deposit is hosted by a zone of intermixed high-magnesium basalt and granodiorite above a
footwall ultramafic unit. A central and an east lode have been defined. Both zones trend north-north-west, dip
approximately -50º to the west and plunge to the south. The central zone is located mainly in the supergene
zone horizon. The east lode is a zone of pyrite-silica-biotite-quartz veining that follows the ultramafic footwall
contact. Gold mineralisation at Lord Henry is dominated by veining. Wall rock alteration is strong but with
little pyrite.
The Lord Henry deposit is hosted by granodiorite bound to the south and west by a sheared ultramafic
contact, forming part of the Trafalgar shear. Mineralisation comprises a series of stacked lodes that dip 20º
to 30º to the north characterised by quartz-sericite-chlorite-pyrite alteration. The overall trend of the
mineralised zones is north-east with a defined length of 400 m. High-grade gold intersections are associated
with sulphide-rich quartz veins and stringers.
The Two Mile Hill deposit is hosted in a late-stage, near vertical intrusive tonalitic stock which cuts the local
stratigraphy of mafic volcanics and BIF (Figure 4.5). The stock is about 220 m long and 70 m wide and is
pervasively altered with sericite, silica and carbonate and contains variable amounts of disseminated pyrite.
It also contains an open-sheeted system of quartz veins varying from

BDO CORPORATE FINANCE (WA) PTY LTD
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Technical Specialist's Report
Figure 4.5
Two Mile Hill Geology
Gold mineralisation has been intersected in the tonalite continuously from surface to a vertical depth of over
400 m in diamond drillholes. The tonalite has been intersected over a strike length of 220 m and an average
width of 70 m. Gold mineralisation in the tonalite stock remains open at depth and along strike.
A small tonnage of higher-grade gold mineralisation (average 9.9 g/t Au in the Mineral Resource) occurs in
BIF at Two Mile Hill.
4.2.2 Mineral Resources
Mineral Resources are reported for Lord Nelson, Lord Henry and Two Mile Hill (Table 4.6). All of these
Mineral Resources have been mined in open pits to some extent. Mineral Resources are also reported for a
number of small deposits reported collectively, some of which are remnants around previously mined pits.
These deposits are:
• Havilah
• Bulk Oak Reefs
45

BDO CORPORATE FINANCE (WA) PTY LTD
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Technical Specialist's Report
• Vanguard
• Ladybird
• Maninga Marley
• Shillington
• Sandstone North
• Plum Pudding
• Oroya
• Tigermoth
• Piper
• Wirraminna.
Table 4.6 Sandstone Mineral Resources at June 2012
Location Indicated Resource Inferred Resource
Tonnes
(kt)
Grade
(g/t Au)
Tonnes
(kt)
Grade
(g/t Au)
Lord Nelson 392 3.0 84 1.8
Lord Henry 987 1.9 39 1.7
Two Mile Hill Tonalite 10,541 1.3
Two Mile Hill BIF 59 9.9
Sandstone (other) 494 1.8 1,922 1.9
Total 1,932 2.3 12,586 1.4
Mineral Resources at Lord Henry are reported at a 0.8 g/t Au COG and for Lord Nelson and Two Mile Hill at
0.5 g/t Au COG.
Rotary air blast (RAB) and air core (AC) drilling have been used for exploration sampling but data from these
drillhole types are not used in resource estimation. Reverse circulation (RC) is the main drilling method used
for resource estimation in association with some diamond drilling.
Drilling has been completed using accepted industry practices. Drillhole collars are surveyed and drillholes
are surveyed downhole. Samples and diamond drill core are geologically logged. Resource definition RC
drillholes are sampled at 1 m intervals. Diamond drill core is sampled at 1 m intervals respecting geological
variations and cut using diamond saws with half core submitted for assay.
Sample assaying is undertaken by independent laboratories. Gold content is determined by acid digest and
fire assay. Field duplicates, blanks and certified reference materials are submitted to monitor assay quality
control.
The Lord Henry and Lord Nelson resource estimates have been developed within an interpretation guided by
a 0.2 g/t Au COG and geological logging. The estimates are conventional block models with grade estimated
using OK with estimation parameters determined from a study of variography. Bulk densities were assigned
based on mean values for oxide, transition and fresh rock. The resource estimates are classified as
Indicated and Inferred Resources based on confidence in the geological and grade continuity reflecting
drillhole spacing. The Mineral Resources are reported at a 1 g/t Au COG.
The Two Mile Hill resource estimate is based on interpretation of distribution of the tonalite from drillhole
geological data. The estimate is a conventional block model with grade estimated using OK with estimation
parameters determined from a study of variography. Bulk densities were assigned based on mean values for
oxide and fresh rock. The estimate has been classified as Inferred Resource reflecting the drillhole spacing.
The Mineral Resources are reported at a 0.5 g/t Au COG.
46

BDO CORPORATE FINANCE (WA) PTY LTD
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Technical Specialist's Report
The Lord Henry, Lord Nelson and Two Mile Hill Mineral Resources have been estimated using accepted
industry practice and have been classified and reported in accordance with the JORC Code.
4.2.3 Exploration
The Sandstone tenements have been extensively explored for gold over many years. There are exploration
targets that could be further tested.
The depth extent within the tonalite intrusive at Two Mile Hill has been intersected continuously from surface
to a vertical depth of over 400 m in diamond drillholes but the deposit remains open at depth. High-grade
gold mineralisation associated with quartz veining and pyrite replacement of BIF on or near its contact with
the tonalite may not be completely investigated and may be a target for high-grade gold mineralisation.
Other felsic intrusive rocks on the tenements could be explored for large tonnage low-grade gold
mineralisation based on the Two Mile Hill model.
The Indomitable, Piper, Tiger Moth, Cessna and Musketeer prospects are associated with the Indomitable
shear and subsidiary structures. The prospects were originally discovered by RAB drilling and some RC
drilling has been carried out at Indomitable. A Mineral Resource has been estimated at Tiger Moth. Drilling
does not completely test the shear zone and primary mineralisation associated with the surface oxide
mineralisation has not been tested.
4.2.4 Valuation
AMC notes that to date no development and evaluation work has been conducted by Southern Cross on the
Sandstone project.
The Sandstone tenements were acquired by Southern Cross in March 2013.
The tenements contain 720,000 oz of gold in Indicated and Inferred Resources. Considering the yardstick
values for categories of Mineral Resources described in Section 3.2.7, AMC values these tenements
between $4.5M and $10M using this method.
The tenements cover an area of 985 km 2 of greenstone belt rocks with identified Mineral Resources. Using
the unit area values described in Section 3.2.7, the value of the tenements is $2.0M to $5.9M using this
method.
Considering these methods, AMC values the Sandstone tenements between $3.4M and $8.3M.
47

BDO CORPORATE FINANCE (WA) PTY LTD
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Technical Specialist's Report
5 QUALIFICATIONS
AMC is a firm of mineral industry consultants whose activities include the preparation of due diligence reports
on, and reviews of, mining and exploration projects for equity and debt funding and for public reports. In
these assignments, AMC and its subconsultants have acted as independent parties. Although we do not
consider it a conflict, AMC has had recent roles reviewing the Marda gold project feasibility study and has
also reviewed certain mine geotechnical aspects for the Wingina Well project. Neither AMC nor its
subconsultants have any business relationship with Grant Thornton, BDO, Polymetals or Southern Cross
other than the carrying out of individual consulting assignments as engaged.
While some employees of AMC and its subconsultants may have small direct or beneficial shareholdings in
Polymetals or Southern Cross, neither AMC nor the contributors to this report nor members of their
immediate families have any interests in Polymetals or Southern Cross that could be reasonably construed
to affect their independence. AMC has no pecuniary interest, association or employment relationship with
Grant Thornton, BDO, Polymetals or Southern Cross.
AMC is being paid a fee by Southern Cross according to its normal per diem rates and out-of-pocket
expenses in the preparation of this report. AMC's fee is not contingent upon the outcome of the Transaction
or Scheme. The approximate fee paid to AMC for this work is $16,000.
In correspondence relating to our engagement, Southern Cross agreed to comply with those obligations of
the commissioning entity under the VALMIN Code including that to the best of its knowledge and
understanding, complete, accurate and true disclosure of all relevant material information will be made.
Polymetals and Southern Cross have separately represented in writing that to the best of their knowledge,
they have provided AMC with all material information relevant to their operations and projects described in
this report.
In preparing this report, AMC has relied on information provided by Polymetals and Southern Cross, and
AMC has no reason to believe that information is materially misleading or incomplete or contains any
material errors. Polymetals and Southern Cross have been provided with drafts of our report to enable
correction of any factual errors and notation of any material omissions. The views, statements, opinions and
conclusions expressed by AMC are based on the assumption that all data provided to it by Polymetals and
Southern Cross are complete, factual and correct to the best of their knowledge. This report and the
conclusions in it are effective at 7 June 2013. Those conclusions may change in the future with changes in
relevant metal prices, exploration and other technical developments in regard to the projects and the market
for mineral properties.
Southern Cross has provided AMC with indemnities in regard to damages, losses and liabilities related to or
arising out of its engagement other than those arising from illegal acts, bad faith or negligence on its part or
its reliance on unauthorised statements from third parties.
This report has been provided to BDO for the purposes of forming its opinion in relation to the Transaction.
AMC has given its consent for its report to be appended to BDO's report and for it to be provided to
shareholders and has not withdrawn that consent before their lodgement with the Australian Securities &
Investments Commission. Neither this report nor any part of it may be used for any other purpose without
written consent.
The signatories to this report are corporate members of the AusIMM and bound by its Code of Ethics.
D Varcoe
MAusIMM
Principal Mining Engineer
L Gillett
FAusIMM (CP)
Director
48

BDO CORPORATE FINANCE (WA) PTY LTD
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Technical Specialist's Report
APPENDIX A
PRINCIPAL SOURCES OF INFORMATION
In preparing this report, AMC has relied on information provided by Polymetals and Southern Cross.
GENERAL
SXG Executed Scheme Implementation Agreement 20130407.pdf.
POLYMETALS MINING LIMITED
Environment, Permitting and Hydrology
Environmental Impact Statement (and Appendices): Mt Boppy Gold Mine – Proposed Redevelopment
Project. Polymetals (Mt Boppy) Pty Ltd. November 2011.
Annual Environmental Management Report: Mt Boppy Gold Mine Canbelego NSW. Polymetals (Mt Boppy)
Pty Ltd. February 2013.
Life of Mine Tailings Management Strategy: Mt Boppy Gold Project. Polymetals (Mt Boppy) Pty Ltd.
November 2011. Allan Watson Associates. October 2012.
Mt Boppy Gold Mine – Proposed Redevelopment Project. Mining Operations Plan Version 3. Polymetals (Mt
Boppy) Pty Ltd. October 2012
Mine Waste Management Plan (MWMP) for the Mt Boppy Gold Mine, Canbelego, NSW. Report No.
611013-MWMPv2. Environmental Earth Sciences Qld. October 2011.
Mining Lease Conditions, Mining Lease No. 1681. NSW Government, Department of Trade and Investment
– Resources and Energy Division. January 2013.
Mt Boppy Gold Mine Development Project: Overview. Polymetals Mining Limited. June 2012.
NAF and PAF Waste Field Testing. Polymetals Mining Limited. Safe Work Procedure. (Undated.)
Turner River – Presentation to DMP. (Undated.)
Geology, Resources and Exploration Property Valuations
Polymetals Mining Limited, 2012: Mt Boppy Resource <strong>Update</strong> Report – January 2012.
Polymetals Mining Limited, 2012: Boppy Sth Resource Summary Report – September 2012.
Polymetals Mining Limited, 2012: Exploration Licence 5842 Canbelego Including Exploration Conducted
Within Ml311, GL3255, GL5836, GL5848, GL5898 & MPL240. 11th Annual Exploration Report For
The Reporting Period 20th April 2011 To 19th April 2012.
Landsdowne Resources Pty Ltd, 2012: Information Memorandum Turner River Gold, Silver & Base Metal
Projects, Pilbara WA.
Ravensgate Consultants, 2012: Block Model Resource Estimation on the Discovery Zn, Ag & Pb Base
Metals Project for Lansdowne Resources Pty Ltd.
Ravensgate Consultants, 2012: Block Model Resource Estimation on the Orchard Tank Zn, Ag & Pb Base
Metals Project for Lansdowne Resources Pty Ltd.
Poly13-005.Tenement Summary.
Polymetals ASX Announcement 13 March 2013.
LDR TURNER RIVER_ INFORMATION MEMORANDUM (21 April 2012).
2013 02 ResEst Report Wingina Well.
Block Model resource Estimation Report for Amanda Gold Project by Ravensgate.
Block Model resource Estimation Report for Mt Berghaus Gold Project by Ravensgate.
Appendix A -1

BDO CORPORATE FINANCE (WA) PTY LTD
Polymetals Mining Limited and Southern Cross Goldfields Limited
Technical Specialist's Report
Mining and Modelling
Ore Reserve Signoff Mt Boppy S Buxton 290612.docx.
112101 - Wingina Well Geotechnical Review.pdf.
1669-M01_MB_Optimisation_Memo_v03.pdf.
1693AMD20130305_Turner_River_optimisation_memo_v04.pdf.
1693AMD20130305_Turner_River_optimisation_memo_v04.zip.
Andys EM Letter and Overview (Polymetals).pdf.
Poly\Appendix E1 Hydrogeological Assessment (revised).pdf.
Poly\Appendix K2 SWMP (Final) 29 June 12.pdf.
ASX_28Sep2012_Annual_Report_2012.pdf.
ASX_29Jan2013_Mt Boppy Feasibility Announcement.pdf.
Copy of Opt Pit Totals from AMDAD Feb 13.xlsx.
Heap Leach Equipment List V2.xlsx.
MINENHIL00411AA_Mt_Boppy_Geotechnical_Reviewx.pdf.
Mt Boppy Development - project overview 20130115 V3.pdf.
Mt Boppy Financial and Cashflow 4-Feb-13 (V6C).xlsx.
Mt Boppy Plant Hire Proposal - MRA 8Nov12.pdf.
Mt Boppy Royalty Deed executed by GCR and GCO.pdf.
mt_boppy_300912_v7.str.
Ore Reserve Signoff Mt Boppy_SBuxton 290612.docx.
Prelim Hydrogeological Report KBR.pdf.
TR HL and waste dump design V1.xlsx.
Turner River Whittle Inputs_CIL Feb13.xls.
Turner River Whittle Inputs_Heap Leach Feb13.xls.
WinginaWellConceptualLocationPlan.pdf.
SOUTHERN CROSS GOLDFIELDS LIMITED
Environment, Permitting and Hydrology
Bamford Consulting Ecologists: Targeted Fauna Assessment, Mt Jackson. January 2013.
Bioscope Environmental: Biological and Environmental Physio-chemical studies of the Marda Project.
January 2013.
Bioscope Environmental: Known Flora and Vegetation Values of the Marda Project. January 2013.
Botanica Consulting, and Western Botanical: Various reports on flora and vegetation of SXG deposits Red
Legs, Marda, King Brown and Die Hardy. 2012.
Cecchi, John B: Report on an Aboriginal Heritage Survey of Southern Cross Goldfields Ltd Marda Gold
Project Additional Areas and Die Hardy Road Widening. January 2013.
Precis Report – Potential for Acid Generation from Mining Wastes, Marda District. (Undated.)
Rapallo: Southern Cross Goldfields – Marda, Golden Orb, King Brown and Battler Projects. Feasibility
Study; Environmental. February 2012.
Rapallo: Level 2 Short-Range Endemic Survey of the Marda Tenement and Level 1 Short-Range Endemic
Survey of the Golden Orb and King Brown Tenements. June 2012.
Rapallo: Soils and Waste Rock Characterisation for Marda Central Deposits. January 2013.
Appendix A -2

BDO CORPORATE FINANCE (WA) PTY LTD
Polymetals Mining Limited and Southern Cross Goldfields Limited
Technical Specialist's Report
Rock Team: Southern Cross Goldfields – Marda Project; Summary. October 2012.
Terrestrial Ecosystems: Short-Range Endemics for Southern Cross Goldfields multiple project areas.
January 2013.
Terrestrial Ecosystems: Tree Hollow Assessment for Cockatoos at Battler, King Brown, Marda and Golden
Orb. September 2011.
Geology, Resources and Exploration Property Valuations
Troy Resources NL, 201: Sandstone Gold Project Information Memorandum, May 2011
Troy Resources NL, 2009: Sandstone Technical Report, Sandstone Project, Mid West Region, Western
Australia, July 2009
Truelove A J, 2012: Review Of Regional Scale Exploration Potential Sandstone Project for Southern Cross
Goldfields Ltd
AMC212109 - 27 March 2013 - Final Report.
Legal Due Diligence Report (300413) v4 (updated version).
SXG ASX Announcement 23 November 2012.
SXG Preliminary Final Report for the year ended 30 June 2012.
Metallurgy, Plant and Associated Infrastructure
METS: Report: Southern Cross Feasibility Study, Date: 20/07/2012, Doc No: J531-RP-000-002-C (Part of
Feasibility Study - Metallurgy Section 8).
Como Engineers: Report: Southern Cross Feasibility Study Marda Gold Project Definitive Feasibility Study,
July 2012 (Part Of Feasibility Study – Processing Plant Section 9).
Como Engineers: Report: Marda Gold Project Sandstone Plant Refurbishment and Relocation Study,
November 2012.
Rock Team: Report: Marda Gold Project Summary, October 2012.
G Brock, Memo: To Glenn Jardine; Review of SXG Deposit Metallurgy Data; 3 January 2011.
Mining and Modelling
AMC Report Summary_FINAL.pdf.
AMC212109 - 27 March 2013 - Final Report.pdf.
ASX_SXG_Feasibility_Study_090512_v2_Final 2.pdf.
ASX_SXG_Sandstone Acquisition_140812_Final.pdf.
Southern Cross Feasibility Summary - 011012 Draft V4.5 - Final.pdf.
Southern Cross Financial Model April 2013 - Revised for ITE comments.xlsx.
SouthernCross_Schedule_1475_v7_270412.xlsx.
Appendix A -3

BDO CORPORATE FINANCE (WA) PTY LTD
Polymetals Mining Limited and Southern Cross Goldfields Limited
Technical Specialist's Report
APPENDIX B
ABBREVIATIONS
$ Australian dollar unless otherwise
specified
$M Dollars million
% Percent
AC
Air core
Ai
Abrasion index
AMC
AMC Consultants Pty Ltd
AMD
Acid and metalliferous drainage
AMDAD
Australian Mine Design and
Development
Au
Gold
BCFM
Base case financial model
BDO
BDO Corporate Finance (WA) Pty Ltd
BIF
Banded iron formation
BWi
Bond ball mill work index
CIL
Carbon-in-leach
CIP
Carbon-in-pulp
CNWAD
Weak acid dissociable cyanide
Coffey
Coffey Mining Pty Ltd
COG
Cut-off grade
Como
Como Engineers Pty Ltd
Cu
Copper
CWi
Crushing work index
D1
First deformation event
D2
Second deformation event
D3
Third deformation event
DCF
Discounted cash flow
DEC
Department of Environment and
Conservation
DMP
Department of Mines and Petroleum
DoW
Department of Water
DRF
Declared rare fauna
EP Act
Environmental Protection Act
EPA
Environmental Protection Authority
EPA
Environmental Protection Authority
EPBC Act Commonwealth Environmental
Protection and Biodiversity
Conservation Act
EPL
Environmental Protection Licence
FIFO
Fly-in fly-out
g
gram
g/t
grams per tonne
Grant Thornton Grant Thornton Corporate Finance Pty
Ltd
GSWA
Geological Survey of Western
Australia
IER
Independent expert's report
IP
Induced polarisation
JORC Code Australasian Code for Reporting of
Exploration Results, Mineral
Resources and Ore Reserves, The
JORC Code 2004 Edition, Effective
December 2004, Prepared by the Joint
Ore Reserves Committee of the
Australasian Institute of Mining and
Metallurgy, Australian Institute of
Geoscientists and Minerals Council of
Australia (JORC)
KBR
Kellogg Brown & Root Pty Ltd
km
kilometres
koz
thousand ounces
kt
thousand tonnes
ktpa
thousand tonnes per annum
LOM
M
m
m 2
m 3
Marda
mm
mRL
Mt
Mtpa
NAF
NPV
OEPA
OK
oz
PAF
PEC
PEM
PFS
Polymetals
ppm
RAB
RC
ROM
RWi
SAG
SMC
Southern Cross
t
TECs
tpa
tph
TSF
TSR
UCS
US$
VALMIN Code
Zn
Troy
life-of-mine
million
metres
square metre
cubic metres
Marda gold project
millimetres
reduced level
million tonnes
million tonnes per annum
Non acid-forming
Net present value
Office of the EPA
Ordinary kriging
ounce
Potentially acid-forming
Priority ecological community
Prospectivity enhancement multiplier
Priority flora species
Polymetals Mining Limited
parts per million
Rotary air blast
Reverse circulation
Run-of-mine
Bond rod mill work index
Semi-autogenous
Sag mill competency
Southern Cross Goldfields Limited
tonnes
Threatened ecological communities
tonnes per annum
tonnes per hour
tailings storage facility
Technical Specialist's Report
Unconfined compressive strength
United States Dollars
Code for the Technical Assessment
and Valuation of Mineral and
Petroleum Assets and Securities for
Independent Expert Reports. The
VALMIN Code 2005 Edition, Prepared
by the VALMIN Committee, a joint
committee of the Australasian Institute
of Mining and Metallurgy, the
Australian Institute of Geoscientists
and the Mineral Industry Consultants
Association with the participation of
the Australian Securities and
Investment Commission, the
Australian Stock Exchange Limited,
the Minerals Council of Australia, the
Petroleum Exploration Society of
Australia, the Securities Association of
Australia and representatives from the
Australian finance sector.
Zinc
Troy Resources NL
Appendix B -1

BDO CORPORATE FINANCE (WA) PTY LTD
Polymetals Mining Limited and Southern Cross Goldfields Limited
Technical Specialist's Report
The contributors to this report include the following:
APPENDIX C
REPORT CONTRIBUTORS
Name Qualifications Affiliations Involvement
Bruce Gregory BEng (Mining)
Diploma Financial
Management
Diploma Applied
Finance & Investment
AMC General
Manager/Principal
Mining Engineer
Peer Reviewer.
Lawrie Gillett
Brad Watson
BEng (Mining)
DipGeosc (Mineral
Economics
BEng (Hons) (Mining
Engineering),
BComm (Finance)
FAusIMM (CP),
MAIME,
GAICD
AMC Senior Mining
Engineer
Dean Carville B App Sc (App. Geol) AMC Geology Manager/
Principal Geologist
Peer Reviewer.
Valuation modelling and technical
support.
Geology, Resources and
Exploration Property Valuations.
Chris John
BSc (Agric) (Hons)
PhD
John Consulting Service,
Director
Environment, Permitting and
Hydrology
David Varcoe BEng (Mining) (Hons) AMC Principal Mining
Engineer
Project Manager and Review of
Mining and General Aspects.
Rachael Birch MSc (Geology) AMC Senior Geologist Geology, Resources and
Exploration Property Valuations.
Rob Chesher
BSc (Metallurgy)
(Hons)
AMC Corporate
Manager/Principal
Consultant
Tony Showell BAppSc (Metallurgy) AMC Associate –
Metallurgist
Metallurgy, Plant and Associated
Infrastructure - Mt Boppy and
Turner River.
Metallurgy, Processing and
Associated Infrastructure -
Marda.
Appendix C - 1

BDO CORPORATE FINANCE (WA) PTY LTD
Polymetals Mining Limited and Southern Cross Goldfields Limited
Technical Specialist's Report
APPENDIX D
POLYMETALS TENEMENTS
Tenements and Expenditure by Month
Type Number Project Registered Holder Date
Granted
Date
Expiry
Annual
Expenditure
Ha Blocks ($) ($)
E 1 E47_0891 Mt Dove Domain Mining Pty Ltd 18/07/2002 17/07/2013 14,070.00 44 132,000.00 20,512.80
E E45_2995 Wingina Well Indee Domain Mining Pty Ltd 7/08/2008 6/08/2013 10,560.00 33 49,500.00 8,124.60
E E45_3390 Mt Berghaus Last Crusade Pty Ltd 6/01/2011 5/01/2016 18,250.00 56 57,000.00 10,161.20
E E45_3391 Baker Well Indee HSD Last Crusade Pty Ltd 6/01/2011 5/01/2016 6,400.00 20 20,000.00 3,629.00
E E45_3392 Berghaus Last Crusade Pty Ltd 6/01/2011 5/01/2016 22,390.00 70 70,000.00 12,701.50
P 2 P45_2655 Amanda Domain Mining Pty Ltd 30/05/2008 29/05/2016 25.50 0.1 2,000.00 58.50
E E45_2533 Discovery,Orchard Tnk De Grey Mining Ltd 24/06/2005 23/06/2014 73,100.00 23 70,000.00 10,722.60
E E45_2364 Tabba Tabba De Grey Mining Ltd 28/02/2006 27/02/2013 1,500.00 6.5 50,000.00 3,263.40
E EL_4199 Macdonald Hill Exco Operations (SA)Limited 75% and 10/11/2008 9/11/2012 4,900.00 - 70,000.00 639.70
Polymetals (White Dam) Pty Ltd 25%
E EL_4200 Mingary " 12/11/2008 11/11/2012 22,900.00 - 100,000.00 2,493.70
E EL_4321 Bullo Sth " 14/10/2009 13/10/2012 9,600.00 - 80,000.00 1,123.80
E EL_4533 Drew Hill " 28/07/2010 27/07/2014 34,300.00 - 260,000.00 3,115.25
M 3 ML_6275 White Dam " 11/09/2007 10/09/2014 249.80 - - 11,178.55
M ML_6395 White Dam " 8/12/2011 7/12/2021 250.00 - - 11,524.03
M MPL_95 White Dam " 11/09/2007 10/09/2014 24.10 - - 1,078.00
M MPL_104 White Dam " 24/01/2008 23/01/2015 250.00 - - -
M MPL_105 White Dam " 24/01/2008 23/01/2015 250.00 - - 13,250.00
M MPL_106 White Dam " 24/01/2008 23/01/2015 162.60 - - 8,617.80
M MPL_107 White Dam " 24/01/2008 23/01/2015 132.30 - - 7,011.90
M MPL_139 White Dam " 8/12/2011 7/12/2021 250.00 - - 11,518.21
M GL_3255 Mt Boppy - Canbelego - 20/05/1926 20/05/2012 8.30 - - 338.00
M GL_5836 Mt Boppy - Canbelego - 15/06/1965 15/06/2012 6.00 - - 338.00
M GL_5848 Mt Boppy - Canbelego - 15/02/1968 15/06/2012 8.60 - - 338.00
M GL_5898 Mt Boppy - Canbelego - 21/06/1972 21/06/2013 7.50 - - 338.00
M ML_311* Mt Boppy - Canbelego - 8/12/1976 21/06/2013 10.10 - - 2,960.00
MP 4 MPL_240* Mt Boppy - Canbelego - 17/01/2013 12/12/2033 17.80 - - 3,011.00
M ML_1681 Mt Boppy - Canbelego - - 12/12/2033 - - 2,637.00
MLA 5 MLA_281 Mt Boppy - Canbelego - 4/05/2006 - 188.20 - - -
E EL_5842 Canbelego Polymetals (Mt Boppy) Pty Ltd - 100% 19/04/2001 19/04/2013 20,460.00 70 100,000.00 -
Area
Annual
Rent
1.
2.
3.
4.
5.
Exploration Licence WA
Prospecting Licence
Mining Lease
Mining Purposes
Mining Lease Application
Appendix D-1

BDO CORPORATE FINANCE (WA) PTY LTD
Polymetals Mining Limited and Southern Cross Goldfields Limited
Technical Specialist's Report
APPENDIX E
SOUTHERN CROSS TENEMENTS
Tenements and Expenditure by Month
Type Number Project Registered Holder Date
Granted
Date
Expiry
Annual
Expenditure
Annual
Rent
Ha Blocks ($) ($)
E 1 E77/1233 Blackbournes Southern Cross Goldfields Ltd 18/07/2007 17/07/2014 300.00 1 15,000.00 273.00
E E77/1234 Blackbournes Southern Cross Goldfields Ltd 4/07/2005 3/07/2014 2,700.00 35 70,000.00 4,195.80
E E77/1599 Blackbournes Southern Cross Goldfields Ltd 12/05/2009 11/05/2014 2,100.00 7 30,000.00 1,235.50
E E77/1726 Blackbournes Southern Cross Goldfields Ltd 21/09/2010 20/09/2015 2,400.00 8 20,000.00 933.60
E E77/1837 Blackbournes Southern Cross Goldfields Ltd 5/09/2011 4/09/2016 2,400.00 8 20,000.00 933.60
P 2 P77/3663 Blackbournes Southern Cross Goldfields Ltd 10/03/2009 9/03/2017 120.00 - 4,800.00 270.00
P P77/3664 Blackbournes Southern Cross Goldfields Ltd 10/03/2009 9/03/2017 151.00 - 6,040.00 339.75
P P77/4112 Blackbournes Southern Cross Goldfields Ltd 12/12/2011 11/12/2015 68.00 - 2,720.00 153.00
P P77/4113 Blackbournes Southern Cross Goldfields Ltd 12/12/2011 11/12/2015 200.00 - 8,000.00 450.00
E E77/1976 Boondine Southern Cross Goldfields Ltd 16/05/2012 15/05/2017 900.00 3 15,000.00 340.50
E E77/1790 British Hill Southern Cross Goldfields Ltd 13/01/2011 12/01/2016 600.00 2 15,000.00 233.40
E E77/1939 British Hill Southern Cross Goldfields Ltd 19/10/2011 18/10/2016 300.00 1 10,000.00 280.65
E E77/1368 Bullfinch North Southern Cross Goldfields Ltd 15/04/2008 - 300.00 4 10,000.00 273.00
E E77/1373 Bullfinch North Southern Cross Goldfields Ltd 15/04/2008 14/04/2018 5,700.00 23 30,000.00 3,353.50
E E77/1390 Bullfinch North Southern Cross Goldfields Ltd 15/04/2008 14/04/2018 1,200.00 8 20,000.00 706.00
E E77/1391 Bullfinch North Polaris Metals Pty Ltd 28/01/2009 27/01/2014 600.00 6 20,000.00 362.90
E E77/1630 Bullfinch North Southern Cross Goldfields Ltd 10/12/2009 9/12/2014 4,500.00 15 30,000.00 2,721.75
E E77/1765 Bullfinch North Southern Cross Goldfields Ltd 11/10/2010 10/10/2015 1,200.00 4 15,000.00 466.80
E E77/1893 Bullfinch North Southern Cross Goldfields Ltd 6/08/2012 5/08/2017 2,100.00 7 20,000.00 816.90
E E77/1964 Bullfinch North Southern Cross Goldfields Ltd 3/04/2012 2/04/2017 300.00 1 10,000.00 273.00
M 3 M77/1064 Bullfinch North Southern Cross Goldfields Ltd 7/01/2009 6/01/2030 9.70 - 10,000.00 154.00
M M77/1089 Bullfinch North Southern Cross Goldfields Ltd 4/05/2009 3/05/2030 10.59 - 10,000.00 165.00
M M77/1090 Bullfinch North Southern Cross Goldfields Ltd 4/05/2009 3/05/2030 25.60 - 10,000.00 390.00
M M77/1094 Bullfinch North Southern Cross Goldfields Ltd 4/05/2009 3/05/2030 59.61 - 10,000.00 900.00
M M77/1101 Bullfinch North Southern Cross Goldfields Ltd 3/07/2009 2/07/2030 118.55 - 11,900.00 1,832.60
M M77/1103 Bullfinch North Southern Cross Goldfields Ltd 4/05/2009 3/05/2030 0.76 - 5,000.00 15.00
M M77/123 Bullfinch North Southern Cross Goldfields Ltd 9/12/1986 8/12/2028 150.45 - 15,100.00 2,325.40
M M77/1253 Bullfinch North Polaris Metals Pty Ltd 11/01/2011 10/01/2032 1,519.24 - 152,000.00 23,408.00
M M77/228 Bullfinch North Southern Cross Goldfields Ltd 6/04/1988 5/04/2030 134.90 - 13,500.00 2,079.00
P P77/3625 Bullfinch North Southern Cross Goldfields Ltd 23/10/2007 22/10/2015 72.90 - 2,920.00 164.25
P P77/3626 Bullfinch North Southern Cross Goldfields Ltd 23/10/2007 22/10/2015 24.10 - 2,000.00 56.25
P P77/3627 Bullfinch North Southern Cross Goldfields Ltd 23/10/2007 22/10/2015 24.50 - 2,000.00 56.25
P P77/3628 Bullfinch North Southern Cross Goldfields Ltd 23/10/2007 22/10/2015 150.70 - 6,040.00 339.75
P P77/3629 Bullfinch North Southern Cross Goldfields Ltd 23/10/2007 22/10/2015 108.30 - 4,360.00 245.25
P P77/3630 Bullfinch North Polaris Metals Pty Ltd 23/10/2007 22/10/2015 125.10 - 5,040.00 283.50
P P77/3631 Bullfinch North Polaris Metals Pty Ltd 23/10/2007 22/10/2015 1.95 - 2,000.00 22.50
P P77/3632 Bullfinch North Polaris Metals Pty Ltd 23/10/2007 22/10/2015 20.40 - 2,000.00 47.25
P P77/3633 Bullfinch North Polaris Metals Pty Ltd 23/10/2007 22/10/2015 33.20 - 2,000.00 76.50
P P77/3634 Bullfinch North Polaris Metals Pty Ltd 23/10/2007 22/10/2015 20.50 - 2,000.00 47.25
P P77/3635 Bullfinch North Polaris Metals Pty Ltd 23/10/2007 22/10/2015 3.80 - 2,000.00 22.50
P P77/3636 Bullfinch North Polaris Metals Pty Ltd 23/10/2007 22/10/2015 48.10 - 2,000.00 110.25
P P77/3970 Bullfinch North Polaris Metals Pty Ltd 6/04/2010 5/04/2014 12.00 - 2,000.00 26.40
P P77/4033 Bullfinch North Southern Cross Goldfields Ltd 4/04/2012 3/04/2016 9.66 - 2,000.00 22.00
P P77/4107 Bullfinch North Southern Cross Goldfields Ltd 6/07/2012 5/07/2016 12.99 - 2,000.00 29.25
P P77/3996 Bullfinch North - Ennuin Southern Cross Goldfields Ltd 16/03/2011 15/03/2015 126.00 - 5,040.00 283.50
P P77/3997 Bullfinch North - Ennuin Southern Cross Goldfields Ltd 16/03/2011 15/03/2015 119.00 - 4,760.00 267.75
E E77/1374 Bullfinch North JV Polaris Metals Pty Ltd 27/11/2007 26/11/2017 12,300.00 69 82,000.00 10,094.20
E E77/1423 Clampton North Southern Cross Goldfields Ltd 7/11/2008 6/11/2013 9,000.00 30 45,000.00 5,443.50
E E77/1424 Clampton North Southern Cross Goldfields Ltd 11/08/2008 10/08/2013 1,800.00 6 30,000.00 1,088.70
E E77/1509 Clampton North Southern Cross Goldfields Ltd 3/06/2011 2/06/2016 3,000.00 10 20,000.00 1,135.00
E E77/1566 Clampton North Southern Cross Goldfields Ltd 29/04/2009 28/04/2014 3,000.00 10 30,000.00 1,765.00
E E77/1649 Clampton North Southern Cross Goldfields Ltd 10/12/2009 9/12/2014 1,500.00 5 20,000.00 907.25
E E77/1699 Clampton North Southern Cross Goldfields Ltd 6/04/2010 5/04/2014 4,500.00 15 20,000.00 1,702.50
E E77/1728 Clampton North Southern Cross Goldfields Ltd 21/09/2010 20/09/2015 900.00 3 15,000.00 350.10
E E77/1880 Clampton North Southern Cross Goldfields Ltd 3/10/2011 2/10/2016 8,700.00 29 29,000.00 3,384.30
P P77/3816 Clampton North Southern Cross Goldfields Ltd 23/02/2009 22/02/2017 103.00 - 4,120.00 231.75
P P77/3817 Clampton North Southern Cross Goldfields Ltd 23/02/2009 22/02/2017 127.00 - 5,080.00 279.40
P P77/4022 Clampton North Southern Cross Goldfields Ltd 28/02/2011 27/02/2015 120.00 - 4,800.00 270.00
P P77/4119 Clampton North Southern Cross Goldfields Ltd 3/08/2012 2/08/2016 34.24 - 2,000.00 78.75
E E77/1375 Copper Bore Radar Iron Ltd 30/01/2008 29/01/2018 3,900.00 13 50,000.00 3,200.60
M M77/973 Copper Bore Polaris Metals Pty Ltd 20/02/2008 19/02/2029 6.00 - 10,000.00 92.40
E E77/1791 Die Hardy Range Southern Cross Goldfields Ltd - - 600.00 2 - -
Area
Appendix E-1

BDO CORPORATE FINANCE (WA) PTY LTD
Polymetals Mining Limited and Southern Cross Goldfields Limited
Technical Specialist's Report
Tenements and Expenditure by Month
Type Number Project Registered Holder Date
Granted
Date
Expiry
Annual
Expenditure
Annual
Rent
Ha Blocks ($) ($)
L 4 L77/261 Die Hardy Range Southern Cross Goldfields Ltd - - 40.00 - - -
M M77/576 Die Hardy Range Southern Cross Goldfields Ltd 15/06/1993 14/06/2014 35.46 - 10,000.00 540.00
M M77/824 Die Hardy Range Southern Cross Goldfields Ltd 8/06/2005 7/06/2026 180.00 - 18,000.00 2,700.00
E E77/1938 Dulcie - Marvel Loch South Southern Cross Goldfields Ltd 19/10/2011 18/10/2016 300.00 1 10,000.00 280.65
L L77/226 Dulcie - Marvel Loch South Dulcie Operations 18/10/2011 17/10/2032 20.00 - 0.00 273.00
M M77/1246 Dulcie - Marvel Loch South Dulcie Operations 8/04/2010 7/04/2031 84.00 - 10,000.00 1,260.00
M M77/1250 Dulcie - Marvel Loch South Dulcie Operations 26/08/2010 25/08/2031 270.00 - 27,000.00 4,158.00
E E77/1721 Evanston Polaris Metals Pty Ltd - - 9,300.00 31 - -
E E77/1376 Evanston Polaris Metals Pty Ltd 8/04/2008 7/04/2018 9,300.00 31 46,500.00 5,471.50
E E77/1653 Evanston Southern Cross Goldfields Ltd 10/12/2009 9/12/2014 1,800.00 6 30,000.00 1,088.70
E E77/1741 Evanston Southern Cross Goldfields Ltd 20/08/2010 19/08/2015 10,800.00 36 36,000.00 4,201.20
E E77/1742 Evanston Southern Cross Goldfields Ltd 18/04/2011 17/04/2016 900.00 3 15,000.00 340.50
E E77/1814 Evanston Southern Cross Goldfields Ltd 23/05/2011 22/05/2016 1,500.00 5 15,000.00 567.50
E E77/1911 Evanston Southern Cross Goldfields Ltd 6/09/2011 5/09/2016 3,600.00 13 20,000.00 1,400.40
P P77/4063 Evanston Southern Cross Goldfields Ltd 20.69 - 0.00 0.00
E E77/1384 Jackson North Polaris Metals Pty Ltd 1/05/2008 30/04/2013 1,500.00 5 20,000.00 882.50
E E77/1280 Johnston Range Radar Iron Ltd 13/08/2007 12/08/2014 9,600.00 64 64,000.00 5,648.00
E E77/1281 Johnston Range Radar Iron Ltd 13/08/2007 12/08/2014 10,500.00 70 70,000.00 6,177.50
E E77/1807 Johnston Range Radar Iron Ltd 5/09/2011 4/09/2016 900.00 3 15,000.00 350.10
E E77/1879 Johnston Range Southern Cross Goldfields Ltd 3/10/2011 2/10/2016 11,100.00 37 37,000.00 4,317.90
E E77/1508 Marda Southern Cross Goldfields Ltd - - 6,300.00 21 - -
E E77/2024 Marda Southern Cross Goldfields Ltd - - 2,400.00 8 - -
E E77/2025 Marda Southern Cross Goldfields Ltd - - 600.00 2 - -
E E77/2089 Marda Southern Cross Goldfields Ltd - - 6,000.00 20 - -
G 5 G77/120 Marda Southern Cross Goldfields Ltd - - 92.00 - - -
L L77/258 Marda Southern Cross Goldfields Ltd - - 149.00 - - -
L L77/259 Marda Southern Cross Goldfields Ltd - - 32.00 - - -
L L77/260 Marda Southern Cross Goldfields Ltd - - 18.00 - - -
P P77/4179 Marda Southern Cross Goldfields Ltd - - 198.32 - - -
P P77/4180 Marda Southern Cross Goldfields Ltd - - 159.35 - - -
P P77/4181 Marda Southern Cross Goldfields Ltd - - 199.06 - - -
E E77/1117 Marda Cliffs Asia Pacific Iron ore Pty Ltd 27/10/2004 26/10/2013 9,300.00 70 93,000.00 14,452.20
E E77/1164 Marda Radar Iron Ltd 28/03/2006 900.00 9 30,000.00 718.50
E E77/1293 Marda Southern Cross Goldfields Ltd 22/11/2006 21/11/2013 300.00 4 15,000.00 280.65
E E77/1295 Marda Cliffs Asia Pacific Iron ore Pty Ltd 6/03/2007 5/03/2014 6,300.00 24 50,000.00 5,170.20
E E77/1321 Marda Cliffs Asia Pacific Iron ore Pty Ltd 18/01/2007 17/01/2017 900.00 5 30,000.00 738.60
E E77/1322 Marda Cliffs Asia Pacific Iron ore Pty Ltd 18/01/2007 17/01/2017 7,500.00 41 50,000.00 6,155.00
E E77/1427 Marda Southern Cross Goldfields Ltd 23/06/2008 22/06/2013 5,400.00 18 30,000.00 3,177.00
E E77/1474 Marda Southern Cross Goldfields Ltd 25/11/2008 24/11/2013 6,300.00 24 31,500.00 3,810.45
E E77/1477 Marda Southern Cross Goldfields Ltd 20/11/2008 19/11/2013 900.00 3 20,000.00 544.35
E E77/1488 Marda Southern Cross Goldfields Ltd 6/02/2009 5/02/2014 2,700.00 9 30,000.00 1,633.05
E E77/1496 Marda Southern Cross Goldfields Ltd 25/11/2008 24/11/2013 900.00 3 20,000.00 544.35
E E77/1498 Marda Southern Cross Goldfields Ltd 1/04/2009 31/03/2014 300.00 1 10,000.00 273.00
E E77/1499 Marda Southern Cross Goldfields Ltd 19/01/2009 18/01/2014 3,000.00 10 30,000.00 1,814.50
E E77/1500 Marda Southern Cross Goldfields Ltd 19/01/2009 18/01/2014 600.00 2 20,000.00 362.90
E E77/1505 Marda Southern Cross Goldfields Ltd 16/02/2009 15/02/2014 900.00 3 20,000.00 544.35
E E77/1650 Marda Southern Cross Goldfields Ltd 10/12/2009 9/12/2014 900.00 3 20,000.00 544.35
E E77/1654 Marda Southern Cross Goldfields Ltd 10/12/2009 9/12/2014 2,100.00 7 30,000.00 1,270.15
E E77/1657 Marda Southern Cross Goldfields Ltd 16/12/2009 15/12/2014 1,200.00 4 20,000.00 725.80
E E77/1658 Marda Southern Cross Goldfields Ltd 16/12/2009 15/12/2014 300.00 1 10,000.00 280.65
E E77/1817 Marda Southern Cross Goldfields Ltd 23/05/2011 22/05/2016 600.00 2 15,000.00 273.00
E E77/1899 Marda Southern Cross Goldfields Ltd 3/04/2012 2/04/2017 600.00 2 15,000.00 273.00
E E77/1921 Marda Southern Cross Goldfields Ltd 8/05/2012 7/05/2017 2,700.00 9 20,000.00 1,021.50
E E77/1996 Marda Southern Cross Goldfields Ltd 17/05/2012 16/05/2017 300.00 1 10,000.00 273.00
E E77/1997 Marda Southern Cross Goldfields Ltd 3/12/2012 2/12/2017 600.00 2 15,000.00 280.65
E E77/2067 Marda Southern Cross Goldfields Ltd 14/02/2013 13/02/2018 900.00 3 15,000.00 350.10
L L77/238 Marda Southern Cross Goldfields Ltd 1/08/2012 31/07/2033 17.50 - - 245.70
L L77/239 Marda Southern Cross Goldfields Ltd 1/08/2012 31/07/2033 21.10 - - 300.30
L L77/240 Marda Southern Cross Goldfields Ltd 1/08/2012 31/07/2033 86.94 - - 1,187.55
L L77/241 Marda Southern Cross Goldfields Ltd 1/08/2012 31/07/2033 12.40 - - 177.45
L L77/242 Marda Southern Cross Goldfields Ltd 5/10/2012 4/10/2033 59.90 - - 819.00
M M77/646 Marda Southern Cross Goldfields Ltd 24/05/1994 23/05/2015 121.60 - 12,200.00 1,830.00
M M77/931 Marda Southern Cross Goldfields Ltd 8/06/2005 7/06/2026 807.20 - 80,800.00 12,120.00
M M77/962 Marda Southern Cross Goldfields Ltd 8/06/2005 7/06/2026 593.00 - 59,300.00 8,895.00
P P77/3460 Marda Southern Cross Goldfields Ltd 24/08/2011 23/08/2015 199.00 - 7,960.00 447.75
P P77/3461 Marda Radar Iron Ltd 24/08/2011 23/08/2015 199.00 - 7,960.00 447.75
P P77/3462 Marda Radar Iron Ltd 24/08/2011 23/08/2015 135.00 - 5,400.00 303.75
P P77/3801 Marda Southern Cross Goldfields Ltd 22/01/2010 21/01/2014 1.00 - 2,000.00 22.50
P P77/3802 Marda Southern Cross Goldfields Ltd 22/01/2010 21/01/2014 1.00 - 2,000.00 22.50
P P77/3808 Marda Southern Cross Goldfields Ltd 23/02/2009 22/02/2017 139.00 - 5,560.00 312.75
Area
Appendix E-2

BDO CORPORATE FINANCE (WA) PTY LTD
Polymetals Mining Limited and Southern Cross Goldfields Limited
Technical Specialist's Report
Tenements and Expenditure by Month
Type Number Project Registered Holder Date
Granted
Date
Expiry
Annual
Expenditure
Annual
Rent
Ha Blocks ($) ($)
P P77/3809 Marda Southern Cross Goldfields Ltd 23/02/2009 22/02/2017 196.00 - 7,840.00 441.00
P P77/3810 Marda Southern Cross Goldfields Ltd 23/02/2009 22/02/2017 199.00 - 7,960.00 447.75
P P77/3811 Marda Southern Cross Goldfields Ltd 23/02/2009 22/02/2017 116.00 - 4,640.00 261.00
P P77/3812 Marda Southern Cross Goldfields Ltd 23/02/2009 22/02/2017 142.00 - 5,680.00 319.50
P P77/3813 Marda Southern Cross Goldfields Ltd 23/02/2009 22/02/2017 67.00 - 2,680.00 150.75
P P77/3868 Marda Southern Cross Goldfields Ltd 4/03/2009 3/03/2013 126.00 - 5,040.00 283.50
P P77/3898 Marda Southern Cross Goldfields Ltd 24/02/2010 23/02/2014 165.20 - 6,640.00 373.50
P P77/3899 Marda Southern Cross Goldfields Ltd 6/03/2009 5/03/2017 24.00 - 2,000.00 54.00
P P77/3901 Marda Southern Cross Goldfields Ltd 21/08/2012 20/08/2016 168.84 - 6,760.00 380.25
P P77/3903 Marda Southern Cross Goldfields Ltd 24/02/2010 23/02/2014 20.22 - 2,000.00 47.25
P P77/3936 Marda Southern Cross Goldfields Ltd 6/03/2009 5/03/2017 24.00 - 2,000.00 54.00
P P77/3967 Marda Southern Cross Goldfields Ltd 22/01/2010 21/01/2014 97.00 - 3,880.00 218.25
P P77/4028 Marda Southern Cross Goldfields Ltd 18/04/2011 17/04/2015 131.00 - 5,240.00 288.20
P P77/4029 Marda Southern Cross Goldfields Ltd 18/04/2011 17/04/2015 131.00 - 5,240.00 288.20
P P77/4076 Marda Southern Cross Goldfields Ltd 6/07/2012 5/07/2016 72.14 - 2,920.00 164.25
P P77/4077 Marda Southern Cross Goldfields Ltd 16/07/2012 15/07/2016 151.52 - 6,080.00 342.00
P P77/4078 Marda Southern Cross Goldfields Ltd 16/07/2012 15/07/2016 187.20 - 7,520.00 423.00
P P77/4079 Marda Southern Cross Goldfields Ltd 6/07/2012 5/07/2016 80.00 - 3,200.00 180.00
P P77/4080 Marda Southern Cross Goldfields Ltd 6/07/2012 5/07/2016 83.00 - 3,320.00 186.75
P P77/4101 Marda Southern Cross Goldfields Ltd 5/07/2012 4/07/2016 40.02 - 2,000.00 92.25
P P77/4118 Marda Southern Cross Goldfields Ltd 3/08/2012 2/08/2016 42.76 - 2,000.00 96.75
P P77/4165 Marda Southern Cross Goldfields Ltd 5/03/2013 4/03/2017 25.70 - 2,000.00 58.50
R 5 R77/1 Marda Southern Cross Goldfields Ltd 14/12/2004 13/12/2013 175.00 - 0.00 1,172.50
R R77/2 Marda Southern Cross Goldfields Ltd 14/12/2004 13/12/2013 255.00 - 0.00 1,708.50
E E77/1766 Marda Central Southern Cross Goldfields Ltd 11/10/2010 10/10/2015 300.00 1 10,000.00 280.65
E E77/1900 Marda Central Southern Cross Goldfields Ltd 6/09/2011 5/09/2016 3,000.00 10 20,000.00 1,167.00
G G77/35 Marda Central Southern Cross Goldfields Ltd 9/11/1989 8/11/2031 4.00 - 0.00 54.60
M M77/394 Marda Central Southern Cross Goldfields Ltd 4/08/1989 3/08/2031 987.80 - 98,800.00 15,215.20
P P77/3412 Marda Central Southern Cross Goldfields Ltd 16/10/2009 15/10/2013 200.00 - 8,000.00 450.00
P P77/3414 Marda Central Southern Cross Goldfields Ltd 16/10/2009 15/10/2013 200.00 - 8,000.00 450.00
P P77/3552 Marda Central Southern Cross Goldfields Ltd 16/10/2009 15/10/2013 172.00 - 6,880.00 387.00
P P77/4055 Marda Dome Southern Cross Goldfields Ltd 29/08/2012 28/08/2016 9.30 - 2,000.00 22.50
E E77/1659 Marda Dome Southern Cross Goldfields Ltd 24/03/2010 23/03/2015 2,700.00 9 20,000.00 1,021.50
P P77/3978 Marda Dome Southern Cross Goldfields Ltd 18/07/2012 17/07/2016 9.65 - 2,000.00 22.50
P P77/3979 Marda Dome Southern Cross Goldfields Ltd 18/07/2012 17/07/2016 42.05 - 2,000.00 96.75
P P77/3994 Marda Dome Southern Cross Goldfields Ltd 18/07/2012 17/07/2016 158.22 - 6,360.00 357.75
E E77/1803 Mt Geraldine Southern Cross Goldfields Ltd 17/05/2011 16/05/2016 600.00 2 15,000.00 273.00
E E77/1773 Mt Holland Southern Cross Goldfields Ltd 18/04/2011 17/04/2016 3,300.00 11 20,000.00 1,248.50
E E77/1775 Mt Holland Southern Cross Goldfields Ltd 29/03/2011 28/03/2016 1,800.00 6 20,000.00 681.00
E E77/1776 Mt Holland Southern Cross Goldfields Ltd 10/03/2011 9/03/2016 900.00 3 15,000.00 350.10
E E77/1777 Mt Holland Southern Cross Goldfields Ltd 20/01/2011 19/01/2016 600.00 2 15,000.00 233.40
E E77/2081 Mt Jackson Southern Cross Goldfields Ltd 300.00 1 0.00 0.00
E E77/1497 Mt Jackson Southern Cross Goldfields Ltd 20/11/2008 19/11/2013 600.00 2 20,000.00 362.90
E E77/1778 Parker Dome Southern Cross Goldfields Ltd 8/11/2010 7/11/2015 600.00 2 15,000.00 233.40
M M77/581 Parker Dome Dulcie Operations 3/05/1993 2/05/2014 9.62 - 10,000.00 150.00
E E77/1965 Parker Range Southern Cross Goldfields Ltd 3/04/2012 2/04/2017 2,100.00 7 20,000.00 794.50
E E77/2009 Parker Range Southern Cross Goldfields Ltd 26/06/2012 25/06/2017 600.00 2 15,000.00 273.00
L L77/221 Parker Range Southern Cross Goldfields Ltd 25/08/2011 24/08/2032 26.13 - 0.00 368.55
L L77/223 Parker Range Southern Cross Goldfields Ltd 18/10/2011 17/10/2032 32.00 - 0.00 436.80
L L77/224 Parker Range Southern Cross Goldfields Ltd 25/08/2011 24/08/2032 2.00 - 0.00 27.30
L L77/225 Parker Range Southern Cross Goldfields Ltd 25/08/2011 24/08/2032 9.00 - 0.00 122.85
M M77/1025 Parker Range Southern Cross Goldfields Ltd 18/10/2002 17/10/2023 4.00 - 5,000.00 61.60
M M77/1044 Parker Range Southern Cross Goldfields Ltd 24/09/2003 23/09/2024 4.80 - 5,000.00 77.00
M M77/1102 Parker Range Southern Cross Goldfields Ltd 5/09/2007 4/09/2028 2.50 - 5,000.00 46.20
M M77/1256 Parker Range Southern Cross Goldfields Ltd 1/08/2011 31/07/2032 999.00 - 99,900.00 15,384.60
M M77/166 Parker Range Southern Cross Goldfields Ltd 27/10/1987 26/10/2029 51.42 - 10,000.00 800.80
M M77/948 Parker Range Southern Cross Goldfields Ltd 7/01/2004 6/01/2025 19.62 - 10,000.00 308.00
P P77/3645 Parker Range Southern Cross Goldfields Ltd 26/05/2008 25/05/2016 119.00 - 4,760.00 261.80
P P77/3657 Parker Range Dulcie Operations 15/05/2008 14/05/2016 10.00 - 2,000.00 22.00
P P77/3957 Parker Range Southern Cross Goldfields Ltd 15/10/2009 14/10/2013 178.00 - 7,120.00 400.50
P P77/3958 Parker Range Southern Cross Goldfields Ltd 15/10/2009 14/10/2013 178.00 - 7,120.00 400.50
P P77/3959 Parker Range Southern Cross Goldfields Ltd 15/10/2009 14/10/2013 195.00 - 7,800.00 438.75
P P77/4016 Parker Range Southern Cross Goldfields Ltd 18/04/2011 17/04/2015 9.40 - 2,000.00 22.00
P P77/4032 Parker Range Dulcie Operations 18/04/2011 17/04/2015 56.00 - 2,240.00 123.20
P P77/4036 Parker Range Southern Cross Goldfields Ltd 17/11/2011 16/11/2015 193.03 - 7,760.00 436.50
P P77/4037 Parker Range Southern Cross Goldfields Ltd 17/11/2011 16/11/2015 191.91 - 7,680.00 432.00
P P77/4038 Parker Range Southern Cross Goldfields Ltd 17/11/2011 16/11/2015 196.28 - 7,880.00 443.25
P P77/4102 Parker Range Dulcie Operations 5/07/2012 4/07/2016 169.20 - 6,800.00 382.50
P P77/4103 Parker Range Southern Cross Goldfields Ltd 5/07/2012 4/07/2016 14.41 - 2,000.00 33.75
P P77/4120 Parker Range Southern Cross Goldfields Ltd 3/08/2012 2/08/2016 179.97 - 7,200.00 405.00
Area
Appendix E-3

BDO CORPORATE FINANCE (WA) PTY LTD
Polymetals Mining Limited and Southern Cross Goldfields Limited
Technical Specialist's Report
Tenements and Expenditure by Month
Type Number Project Registered Holder Date
Granted
Date
Expiry
Annual
Expenditure
Annual
Rent
Ha Blocks ($) ($)
P P77/4121 Parker Range Southern Cross Goldfields Ltd 3/08/2012 2/08/2016 181.63 - 7,280.00 409.50
P P77/4122 Parker Range Southern Cross Goldfields Ltd 3/08/2012 2/08/2016 198.79 - 7,960.00 447.75
P P77/4124 Parker Range Southern Cross Goldfields Ltd 7/02/2012 6/02/2016 200.00 - 8,000.00 450.00
P P77/4125 Parker Range Southern Cross Goldfields Ltd 7/02/2012 6/02/2016 200.00 - 8,000.00 450.00
P P77/4150 Parker Range Southern Cross Goldfields Ltd 27/12/2012 26/12/2016 183.75 - 7,360.00 414.00
P P77/4151 Parker Range Southern Cross Goldfields Ltd 27/12/2012 26/12/2016 9.58 - 2,000.00 22.50
P P77/4152 Parker Range Southern Cross Goldfields Ltd 27/12/2012 26/12/2016 7.81 - 2,000.00 22.50
P P77/4168 Parker Range Southern Cross Goldfields Ltd 5/03/2013 4/03/2017 184.18 - 7,400.00 416.25
P P77/4169 Parker Range Southern Cross Goldfields Ltd 5/03/2013 4/03/2017 96.28 - 3,880.00 218.25
E E29/564 Perrinvale Cliffs Asia Pacific Iron ore Pty Ltd 9/01/2006 8/01/2015 6,300.00 42 70,000.00 9,790.20
E E29/593 Perrinvale Cliffs Asia Pacific Iron ore Pty Ltd 17/09/2007 16/09/2014 600.00 2 30,000.00 353.00
E E29/653 Perrinvale Cliffs Asia Pacific Iron ore Pty Ltd 19/12/2007 18/12/2017 2,700.00 9 50,000.00 1,588.50
E E29/655 Perrinvale Cliffs Asia Pacific Iron ore Pty Ltd 19/12/2007 18/12/2017 1,500.00 5 30,000.00 882.50
E E29/793 Perrinvale Polaris Metals Pty Ltd 4/07/2011 3/07/2016 900.00 3 15,000.00 350.10
E E30/331 Perrinvale Cliffs Asia Pacific Iron ore Pty Ltd 19/12/2007 18/12/2017 900.00 3 30,000.00 529.50
E E30/423 Perrinvale Polaris Metals Pty Ltd 4/07/2011 3/07/2016 2,100.00 7 20,000.00 816.90
E E30/424 Perrinvale Polaris Metals Pty Ltd 4/07/2011 3/07/2016 600.00 2 15,000.00 233.40
P P29/1922 Perrinvale Cliffs Asia Pacific Iron ore Pty Ltd 19/12/2007 18/12/2015 95.75 - 3,840.00 216.00
P P29/1923 Perrinvale Cliffs Asia Pacific Iron ore Pty Ltd 19/12/2007 18/12/2015 152.02 - 6,120.00 344.25
P P29/1926 Perrinvale Cliffs Asia Pacific Iron ore Pty Ltd 19/12/2007 18/12/2015 124.12 - 5,000.00 281.25
P P29/1927 Perrinvale Cliffs Asia Pacific Iron ore Pty Ltd 19/12/2007 18/12/2015 21.32 - 2,000.00 49.50
P P30/1011 Perrinvale Cliffs Asia Pacific Iron ore Pty Ltd 19/12/2007 18/12/2015 98.08 - 3,960.00 222.75
E E77/1289 Radio Southern Cross Goldfields Ltd 24/10/2007 23/10/2014 3,600.00 47 50,000.00 2,118.00
E E77/1692 Radio Southern Cross Goldfields Ltd 7/04/2010 6/04/2015 900.00 3 15,000.00 340.50
L L77/81 Radio Southern Cross Goldfields Ltd 19/01/1990 18/01/2015 5.84 - 0.00 81.90
M M77/633 Radio Southern Cross Goldfields Ltd 25/08/1994 24/08/2015 979.95 - 98,000.00 15,092.00
P P77/3614 Radio Southern Cross Goldfields Ltd 5/02/2008 4/02/2016 12.64 - 2,000.00 29.25
P P77/3665 Radio Southern Cross Goldfields Ltd 22/05/2008 21/05/2016 200.00 - 8,000.00 440.00
P P77/3666 Radio Southern Cross Goldfields Ltd 22/05/2008 21/05/2016 83.00 - 3,320.00 182.60
P P77/3759 Radio Southern Cross Goldfields Ltd 19/02/2009 18/02/2017 64.64 - 2,600.00 146.25
P P77/3760 Radio Southern Cross Goldfields Ltd 19/02/2009 18/02/2017 120.80 - 4,840.00 272.25
P P77/3761 Radio Southern Cross Goldfields Ltd 19/02/2009 18/02/2017 103.80 - 4,160.00 234.00
E E57/576 Sandstone Southern Cross Goldfields Ltd 13/02/2006 12/02/2015 1,800.00 30 70,000.00 1,477.20
E E57/580 Sandstone Southern Cross Goldfields Ltd 30/09/2005 29/09/2014 3,300.00 61 70,000.00 5,128.20
E E57/583 Sandstone Southern Cross Goldfields Ltd 5/10/2005 4/10/2014 4,500.00 68 70,000.00 6,993.00
E E57/592 Sandstone Southern Cross Goldfields Ltd 30/09/2005 29/09/2014 3,600.00 48 70,000.00 5,594.40
E E57/640 Sandstone Southern Cross Goldfields Ltd 30/10/2008 29/10/2013 19,500.00 69 97,500.00 11,794.25
E E57/641 Sandstone Southern Cross Goldfields Ltd 30/10/2008 29/10/2013 16,200.00 54 81,000.00 9,798.30
E E57/642 Sandstone Southern Cross Goldfields Ltd 5/09/2007 4/09/2017 10,200.00 34 68,000.00 8,370.80
E E57/664 Sandstone Southern Cross Goldfields Ltd 7/01/2008 6/01/2018 600.00 2 30,000.00 492.40
E E57/666 Sandstone Southern Cross Goldfields Ltd 27/11/2007 27/11/2017 1,800.00 6 50,000.00 1,477.20
E E57/667 Sandstone Southern Cross Goldfields Ltd 10/12/2008 9/12/2013 1,500.00 5 20,000.00 907.25
E E57/670 Sandstone Southern Cross Goldfields Ltd 10/12/2008 9/12/2013 6,000.00 20 30,000.00 3,629.00
E E57/703 Sandstone Southern Cross Goldfields Ltd 7/01/2008 6/01/2018 5,700.00 19 50,000.00 4,677.80
E E57/704 Sandstone Southern Cross Goldfields Ltd 20/02/2008 19/02/2018 9,300.00 31 62,000.00 7,632.20
E E57/808 Sandstone Southern Cross Goldfields Ltd 21/06/2010 20/06/2015 600.00 2 15,000.00 280.65
G G57/3 Sandstone Southern Cross Goldfields Ltd 27/06/1994 26/06/2015 9.62 - - 136.50
L L57/10 Sandstone Southern Cross Goldfields Ltd 22/03/1994 21/03/2014 4.20 - - 68.25
L L57/15 Sandstone Southern Cross Goldfields Ltd 26/08/1999 25/08/2020 69.00 - - 941.85
L L57/22 Sandstone Southern Cross Goldfields Ltd 2/11/2004 1/11/2025 7.60 - - 109.20
L L57/23 Sandstone Southern Cross Goldfields Ltd 5/08/2005 4/08/2026 132.00 - - 1,801.80
L L57/24 Sandstone Southern Cross Goldfields Ltd 30/06/2006 29/06/2027 17.80 - - 245.70
L L57/25 Sandstone Southern Cross Goldfields Ltd 30/06/2006 29/06/2027 6.23 - - 95.55
L L57/26 Sandstone Southern Cross Goldfields Ltd 30/06/2006 29/06/2027 7.50 - - 109.20
L L57/27 Sandstone Southern Cross Goldfields Ltd 1/11/2006 31/10/2027 1.30 - - 27.30
L L57/33 Sandstone Southern Cross Goldfields Ltd 19/02/2010 18/02/1931 11.28 - - 163.80
L L57/34 Sandstone Southern Cross Goldfields Ltd 19/02/2010 18/02/1931 4.24 - - 68.25
M M57/1 Sandstone Southern Cross Goldfields Ltd 1/12/1982 30/11/2024 290.35 - 29,100.00 4,481.40
M M57/128 Sandstone Southern Cross Goldfields Ltd 27/09/1989 26/09/2031 974.45 - 97,500.00 15,015.00
M M57/129 Sandstone Southern Cross Goldfields Ltd 10/04/1989 9/04/2031 996.80 - 99,700.00 15,353.80
M M57/130 Sandstone Southern Cross Goldfields Ltd 14/03/1989 13/03/2031 662.45 - 66,300.00 10,210.20
M M57/163 Sandstone Southern Cross Goldfields Ltd 7/11/1989 6/11/2031 716.75 - 71,700.00 11,041.80
M M57/22 Sandstone Southern Cross Goldfields Ltd 7/09/1984 6/09/2026 135.65 - 13,600.00 2,094.40
M M57/239 Sandstone Southern Cross Goldfields Ltd 9/11/1993 8/11/2014 52.09 - 10,000.00 816.20
M M57/248 Sandstone Southern Cross Goldfields Ltd 23/06/1994 22/06/2015 85.04 - 10,000.00 1,324.40
M M57/266 Sandstone Southern Cross Goldfields Ltd 19/12/1994 18/12/2015 7.37 - 10,000.00 123.20
M M57/301 Sandstone Southern Cross Goldfields Ltd 5/02/2001 4/02/2022 521.25 - 52,200.00 8,038.80
M M57/40 Sandstone Southern Cross Goldfields Ltd 16/04/1986 15/05/2028 354.95 - 35,500.00 5,467.00
M M57/415 Sandstone Southern Cross Goldfields Ltd 23/06/1999 22/06/2020 789.95 - 79,000.00 12,166.00
M M57/416 Sandstone Southern Cross Goldfields Ltd 23/06/1999 22/06/2020 980.00 - 98,000.00 15,092.00
Area
Appendix E-4

BDO CORPORATE FINANCE (WA) PTY LTD
Polymetals Mining Limited and Southern Cross Goldfields Limited
Technical Specialist's Report
Tenements and Expenditure by Month
Type Number Project Registered Holder Date
Granted
Date
Expiry
Annual
Expenditure
Annual
Rent
Ha Blocks ($) ($)
M M57/417 Sandstone Southern Cross Goldfields Ltd 23/06/1999 22/06/2020 936.10 - 93,700.00 14,429.80
M M57/439 Sandstone Southern Cross Goldfields Ltd 8/10/2004 7/10/2025 648.85 - 64,900.00 9,994.60
M M57/529 Sandstone Southern Cross Goldfields Ltd 8/10/2004 7/10/2025 997.20 - 99,800.00 15,369.20
M M57/530 Sandstone Southern Cross Goldfields Ltd 8/10/2004 7/10/2025 999.00 - 99,900.00 15,384.60
M M57/632 Sandstone Southern Cross Goldfields Ltd 15/12/2009 14/12/2030 253.25 - 25,400.00 3,911.60
M M57/68 Sandstone Southern Cross Goldfields Ltd 8/02/1988 7/02/2030 638.25 - 63,900.00 9,840.60
M M57/88 Sandstone Southern Cross Goldfields Ltd 12/07/1988 11/07/2030 219.85 - 22,000.00 3,388.00
P P57/1091 Sandstone Southern Cross Goldfields Ltd 31/01/2007 30/01/2015 165.35 - 6,640.00 373.50
P P57/1092 Sandstone Southern Cross Goldfields Ltd 31/01/2007 30/01/2015 197.57 - 7,920.00 445.50
P P57/1095 Sandstone Southern Cross Goldfields Ltd 31/01/2007 30/01/2015 151.36 - 6,080.00 342.00
P P57/1108 Sandstone Southern Cross Goldfields Ltd 1/08/2007 31/07/2015 23.63 - 2,000.00 54.00
P P57/1109 Sandstone Southern Cross Goldfields Ltd 1/08/2007 31/07/2015 21.60 - 2,000.00 49.50
P P57/1110 Sandstone Southern Cross Goldfields Ltd 31/08/2007 30/08/2015 73.19 - 2,960.00 166.50
P P57/1114 Sandstone Southern Cross Goldfields Ltd 24/06/2008 23/06/2016 73.18 - 2,960.00 166.50
P P57/1115 Sandstone Southern Cross Goldfields Ltd 28/03/2008 27/03/2016 51.59 - 2,080.00 117.00
P P57/1116 Sandstone Southern Cross Goldfields Ltd 24/06/2008 23/06/2016 23.80 - 2,000.00 54.00
P P57/1117 Sandstone Southern Cross Goldfields Ltd 24/06/2008 23/06/2016 80.34 - 3,240.00 182.25
P P57/1118 Sandstone Southern Cross Goldfields Ltd 24/06/2008 23/06/2016 70.68 - 2,840.00 159.75
P P57/1119 Sandstone Southern Cross Goldfields Ltd 24/06/2008 23/06/2016 3.25 - 2,000.00 22.50
P P57/1121 Sandstone Southern Cross Goldfields Ltd 11/06/2008 10/06/2016 70.74 - 2,840.00 159.75
P P57/1122 Sandstone Southern Cross Goldfields Ltd 28/03/2008 27/03/2016 40.64 - 2,000.00 92.25
P P57/1203 Sandstone Southern Cross Goldfields Ltd 21/02/2008 20/02/2016 168.00 - 6,720.00 378.00
P P57/1204 Sandstone Southern Cross Goldfields Ltd 21/02/2008 20/02/2016 118.00 - 4,720.00 265.50
P P57/1206 Sandstone Southern Cross Goldfields Ltd 28/03/2008 27/03/2016 34.68 - 2,000.00 78.75
P P57/1209 Sandstone Southern Cross Goldfields Ltd 28/03/2008 27/03/2016 108.06 - 4,360.00 245.25
P P57/1210 Sandstone Southern Cross Goldfields Ltd 11/06/2008 10/06/2016 100.06 - 4,040.00 227.25
P P57/1220 Sandstone Southern Cross Goldfields Ltd 16/04/2008 15/04/2016 48.00 - 2,000.00 108.00
P P57/1221 Sandstone Southern Cross Goldfields Ltd 28/03/2008 27/03/2016 46.00 - 2,000.00 103.50
P P57/1222 Sandstone Southern Cross Goldfields Ltd 28/03/2008 27/03/2016 43.00 - 2,000.00 96.75
P P57/1224 Sandstone Southern Cross Goldfields Ltd 16/04/2008 15/04/2016 32.00 - 2,000.00 72.00
P P57/1225 Sandstone Southern Cross Goldfields Ltd 28/03/2008 27/03/2016 95.00 - 3,800.00 213.75
P P57/1229 Sandstone Southern Cross Goldfields Ltd 16/04/2008 15/04/2016 21.59 - 2,000.00 49.50
P P57/1230 Sandstone Southern Cross Goldfields Ltd 16/04/2008 15/04/2016 25.80 - 2,000.00 58.50
P P57/1235 Sandstone Southern Cross Goldfields Ltd 8/09/2009 7/09/2013 199.66 - 8,000.00 450.00
P P57/1236 Sandstone Southern Cross Goldfields Ltd 29/07/2009 28/07/2013 131.67 - 5,280.00 297.00
P P57/1237 Sandstone Southern Cross Goldfields Ltd 29/07/2009 28/07/2013 84.31 - 3,400.00 191.25
P P57/1246 Sandstone Southern Cross Goldfields Ltd 10/08/2010 9/08/2014 23.79 - 2,000.00 54.00
P P57/1252 Sandstone Southern Cross Goldfields Ltd 10/08/2010 9/08/2014 10.96 - 2,000.00 24.75
P P57/1253 Sandstone Southern Cross Goldfields Ltd 10/08/2010 9/08/2014 21.59 - 2,000.00 49.50
P P57/1254 Sandstone Southern Cross Goldfields Ltd 17/01/2011 16/01/2015 16.75 - 2,000.00 38.25
P P57/1255 Sandstone Southern Cross Goldfields Ltd 17/01/2011 16/01/2015 21.61 - 2,000.00 49.50
E E77/1459 Windarling East Polaris Metals Pty Ltd 3/05/2011 2/05/2016 14,100.00 47 47,000.00 5,334.50
E E77/2018 Windarling East Southern Cross Goldfields Ltd 11/12/2012 10/12/2017 2,400.00 8 20,000.00 933.60
P P77/4170 Windarling Peak Southern Cross Goldfields Ltd - - 134.40 - - -
P P77/4171 Windarling Peak Southern Cross Goldfields Ltd - - 200.00 - - -
E E77/1353 Windarling Peak Polaris Metals Pty Ltd 9/05/2008 8/05/2013 2,700.00 12 30,000.00 1,588.50
E E77/1462 Windarling Peak Polaris Metals Pty Ltd 3/05/2011 2/05/2016 21,000.00 70 70,000.00 7,945.00
E E77/1275 Yilgarn Iron Ore Polaris Metals Pty Ltd 1/05/2008 30/04/2013 2,400.00 34 30,000.00 1,412.00
E E77/1380 Yilgarn Iron Ore Polaris Metals Pty Ltd 19/05/2011 18/05/2016 1,200.00 4 15,000.00 454.00
P P77/4185 Southern Cross Goldfields Ltd - - 191.71 - - -
P P77/4186 Southern Cross Goldfields Ltd - - 172.00 - - -
P P77/4187 Southern Cross Goldfields Ltd - - 196.33 - - -
Area
1.
2.
3.
4.
5.
6.
Exploration Licence WA
Prospecting Licence
Mining Lease
Miscellaneous Licence
General Purpose Lease
Retention Lease
Appendix E-5