Update on Merger with Polymetals - Notice of Meeting

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
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