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 Table 3.4 Basic Design Parameters Parameter Unit Value Crusher Annual Tonnage t 356,400 Monthly Tonnage t 33,000 Throughput t/h 156.7 Operation Days/week 5 Operation Hours/day 12 Utilisation % 90 Primary Mill Annual Tonnage t 300,000 Monthly Tonnage t 25,000 Throughput t/h 38.1 Operation Days/wk 7 Operation Hours/day 21.6 Utilisation % 90 Bond Ball Mill Wi kWh/t 18.1 Gold Gold Recovery % 80 Gold Production (total project) oz 62,511 Operating costs are summarised in Table 3.5. Key cost contributors, such as labour, power and reagents are reasonable by industry standards. Table 3.5 Processing Unit Cost Cost Element $/t Crusher lease 1.76 Reagents/consumables 8.36 Power 7.99 Maintenance 3.89 Labour 10.26 Refining 0.88 Processing Total 33.14 The overall processing unit cost of $33.14/t is reasonable. A comparable gold plant in the area currently reports an overall processing cost of $35/t. 3.1.5.6 Worker's Camps Polymetals currently operates a small, serviced camp in Canbelego for company geologists and mine caretakers. The project had allowed for the relocation of a 60-person, camp from White Dam to Canbelego for Mt Boppy workers. Due to the imminent sale of the White Dam asset this camp is no longer available. AMC added a capital cost contingency to address the requirement to purchase a new camp. An appropriate site has been selected. A camp for the mining contractor will also be located in Canbelego. 3.1.5.7 Water Supply Mt Boppy is in a region of very low rainfall (approximately 300 mm per year) therefore the mine must rely on bore water for processing. The plant requires 450 ML/pa of make-up water, however only 240 ML/pa is available under the existing permit. Currently the intention is to bridge the shortfall by dewatering the pit. Polymetals state that the inventory currently in the pit together with future inflow will be adequate for the 2-year life of the mine. 14
BDO CORPORATE FINANCE (WA) PTY LTD Polymetals Mining Limited and Southern Cross Goldfields Limited Technical Specialist's Report 3.1.5.8 Power Supply Power will be generated in Cobar and supplied using an existing line and transformer on site. Polymetals has calculated demand on the basis of 35 kWh/t required by the plant. This value is reasonable, and slightly conservative. A detailed electrical load survey is currently under way to more accurately forecast expected demand. 3.1.6 Environment 3.1.6.1 Overview As a previously-operational mine, Mt Boppy has a recent history of environmental feasibility and performance, facilitating the obtaining of environmental approvals required for the recommencement of operations. Moreover, technical environmental challenges are relatively uncontentious, and are considered to be manageable using established and recognised environmental management strategies. Practicable environmental management plans have been developed to ensure environmental protection. Biodiversity and conservation issues are of minor significance, acid and metalliferous drainage is demonstrably manageable in this dry environment and water supply and management is unlikely to hazard either other potential users in the area or aquatic ecosystems. The most sensitive environmental issue will be community relations, reflecting the operation’s close proximity to Canbelego township. Additionally, AMC was unable to review a closure cost estimate, but believes this liability unlikely to amount to more than several million dollars. It is unlikely that the proposed pit-lake closure strategy involves risk of increasing salinity. This issue was considered by the NSW Office of Water to have been addressed with no issues identified. 3.1.6.2 Statutory Environmental Approvals Other than planning-law approvals, the most important environmental permit is an Environmental Protection Licence (EPL). An EPL was applied for in August 2012, and AMC was advised that the EPL was issued in January 2013. Permits to abstract groundwater have been obtained from the NSW Office of Water under the provisions of the Water Management Act. Other, secondary, permits (heritage, dangerous goods etc.) are either in hand or unlikely to prove problematical, as they are for the most part of a registration, rather than impactassessment, nature. There is little likelihood that environmental impacts could trigger the requirements for assessment under the EPBC Act. AMC thus considers that statutory approvals are unlikely to delay or constrain project development. 3.1.6.3 Biodiversity and Conservation No conservation estate property or threatened flora species or vegetation community will be impacted by the project; in part, this reflects the existence of little remnant native vegetation and its low conservation value due to past modification by human activities. There is theoretical potential for 14 conservation-sensitive fauna species to occur in the project area, but even if they are present the nature and extent of disturbance is small on even a local scale as to make any impacts of little consequence. A biodiversity offset program is considered unlikely to be necessary, reflecting the inconsequential impact of the project on the local and regional biodiversity resource. 3.1.6.4 Acid and Metalliferous Drainage Static (acid-base accounting) has identified around 20% of mine waste to be potentially acid-forming (PAF), with the remainder non acid-forming (NAF). Little acid-consuming material is considered to exist. 15
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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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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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We note that SXG’s EV/resource mu
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The Adjusted Mt Boppy Model was pre
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2013 2014 2015 2016 2017 2018 Gold
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AMC and management of PLY advise th
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Mt Boppy Case 2 Mt Boppy Project Ca
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Mt Boppy Case 2 Sensitivity analysi
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Update on Merger with Polymetals - Notice of Meeting

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