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 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 2
BDO CORPORATE FINANCE (WA) PTY LTD Polymetals Mining Limited and Southern Cross Goldfields Limited Technical Specialist's Report 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. 3
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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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- 13 - (a) You may not agree with t
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- 15 - (b) the Technical Specialist
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- 17 - (a) Identity of the person r
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- 19 - (i) Other matters The Direct
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- 21 - The purpose of Resolution 2
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- 23 - Schedule 1 - Information abo
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- 25 - Woodside Energy Ltd and Dire
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- 27 - Stephen Jones (Chief Financi
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- 29 - In accordance with ASIC Clas
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- 31 - million SXG Options which ha
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- 33 - Schedule 2 - Terms & Conditi
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- 35 - the Company out of profits o
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- 39 - Peak Litigation The litigati
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- 41 - Annexure A Refer enclosed In
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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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SXG share price and trading volume
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On 28 February 2013 SXG announced t
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Control Premium The concept of a pr
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