Update on Merger with Polymetals - Notice of Meeting

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.
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