Update on Merger with Polymetals - Notice of Meeting

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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 iii
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ASX ANNOUNCEMENT / MEDIA RELEASE Fr
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ABN 71 124 374 321 U16,162 Colin St
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3. Access to the cash reserves of P
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Disclaimer and Important Notice •
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SXG - Well Placed • • •
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SXG and PLY - Key Merger Metrics
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Indicative Merger Timetable •
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A Diversified Portfolio of Australi
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Marda Project • Rare greenfields
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Northern Gold Corridor Targets - Dr
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WA Gold Assets - Turner River • P
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Mt Boppy - A Near-Term Production O
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ASX Code: Investor Presentation J
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Pro Forma Gold Reserve Statement Pr
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ABN 71 124 374 321 U16,162 Colin St
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- 3 - Notice of General Meeting Not
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- 5 - Proxy appointment, voting and
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- 7 - 1.2 Rationale for the Merger
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- 9 - 1.5 Implementation of the Mer
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- 11 - in terms of assets and marke
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- 31 - million SXG Options which ha
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Financial Services Guide 21 June 20
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TABLE OF CONTENTS 1. Introduction 1
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2. Summary and Opinion 2.1 Purpose
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The respective advantages and disad
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elieves that there are sufficient r
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Existing SXG PLY Capital structure
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Sandstone Exploration Potential In
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5.3 Historical Balance Sheet Southe
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in tenement acquisition costs also
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The current SXG unlisted options on
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Drew Hill - White Dam Gold Project
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6.4 Historical Statement of Compreh
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At 31 March 2013, PLY have recorded
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Gold Demand/Supply Mined Metric ton
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• On 9 August 2012, Regis Resourc
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eport to be used in our report. At
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eport to be used in our report. At
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Funding assumptions SXG has receive
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AMC modelled two cases for the Mard
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Marda Project Case 2 Units 31-Dec-1
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uildings and water supply. The $38.
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Considering the valuation outcomes
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Southern Cross Goldfields Limited V
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We calculated the corporate costs o
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Update on Merger with Polymetals - Notice of Meeting

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