Update on Merger with Polymetals - Notice of Meeting

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.
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