Update on Merger with Polymetals - Notice of Meeting

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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