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 3.2.3.2 Mineral Resources Mineral Resources have been estimated for the Discovery and Orchard Tank deposits and is based on drilling data collected by De Grey in 2005 and 2006. Drilling is mainly RAB, AC with some RC and is spaced at about 20 m x 40 m. The estimate is a conventional block model with grade estimated using OK with estimation parameters determined from a study of variography. Bulk densities were assigned based on mean values for oxide, transition and fresh rock. The estimate has been classified as Inferred Resource reflecting some uncertainty in the historic data. The Mineral Resources are reported at a 1.0% Zn COG. The Discovery and Orchard Tank Mineral Resources have been estimated using accepted industry practice and have been classified and reported in accordance with the JORC Code. 3.2.3.3 Valuation The Turner River base metals project comprises two exploration licences covering an area of 95 km 2 . The tenements include a polymetallic Mineral Resource. Yardstick values for polymetallic Mineral Resources are more difficult to determine than those for gold tenements because of different combinations of metals, metallurgy, and considerations of location and scale. The tenements were the subject of a farm-in arrangement between Landsdowne and De Grey whereby Landsdowne could earn a 75% interest in the tenements by spending $1.5M over three years. The joint venture terms valuation method indicates a value of the vendor’s interest at $0.35M at the time of the agreement. Polymetals has spent about $0.60M on exploration and has a beneficial interest of 55%, although no interest is earned if the full farm-in expenditure commitment is not met. The tenements cover an area of 95 km 2 with identified Mineral Resources. AMC considers a range of $2,000/km 2 to $5,000/km 2 to be appropriate for the Turner River base metals project. The value of the tenements is in the range $0.11M to $0.26M for Polymetals 55% interest using this method. Details of exploration expenditure prior to the farm-in were not available to AMC. Valuation using the past expenditure method was not possible. 26
BDO CORPORATE FINANCE (WA) PTY LTD Polymetals Mining Limited and Southern Cross Goldfields Limited Technical Specialist's Report 4 SOUTHERN CROSS GOLDFIELDS LIMITED 4.1 Marda Gold Project 4.1.1 Introduction The Marda Gold Project (Marda) is located in the Shire of Yilgarn in Western Australia and is approximately 400 km north-east of Perth and 150 km north of the town of Southern Cross (Figure 4.1). Southern Cross is located approximately 400 km east of Perth and 200 km to the west of the mining centre of Kalgoorlie. A feasibilty study was completed on the project in 2012. This is a green-fields project with no development in place. Figure 4.1 Location of Marda Gold Project 27
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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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- 37 - Glossary In this Explanatory
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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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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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Polymetals Mining Limited Value of
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projects. PLY has discounted the to
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The Merged Entity - SXG Low Preferr
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Note f: Minority discount Following
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12. Is the Transaction fair In asse
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As set out in section 12, the Trans
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Page 156 and 157: APPENDIX 2 - VALUATION METHODOLOGIE
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Page 168 and 169: AMC Consultants Pty Ltd ABN 58 008
Page 170 and 171: BDO CORPORATE FINANCE (WA) PTY LTD
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Update on Merger with Polymetals - Notice of Meeting

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