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 Drilling completed by Southern Cross Goldfields Limited (Southern Cross) in 2011 was carried out using common industry practice with assay quality control in place. Drillhole collars are surveyed and downhole surveys are carried out. RC sample recovery was observed to be good although diamond core recovery was poor for most of Northern Deposits except King Brown. Historic quality control data is incomplete. Extensive validation of historic data was completed by an independent consultant and Ravensgate accepted the historic data as acceptable to use for the resource estimates. The interpretations for the resource estimates were developed relying on drillhole logging and based on lithological control. A nominal lower COG of 0.5 g/t Au was used to interpret the mineralisation. All of the deposits have a number of mineralised domains. Assays within the domains were composited to 1 m. The influence of statistical outliers on grade estimation was limited through top-cutting and by restricting the distance of influence of the outliers. Grades were estimated into the block models using OK. Estimation parameters for the resource estimates were determined from variography studies. Bulk density data comprise 532 measurements collected from diamond core. Bulk density values vary between the deposits, and were applied according to rock type and elevation. Resource estimates were classified as Measured, Indicated or Inferred Resources based on a confidence item value calculated from a number of parameters and then used to describe levels of interpolation confidence. Mineral Resources are reported with Ore Reserves excluded. The majority of Mineral Resources within a $1,475/oz optimised pit design is classified as Measured. This is reasonable where drilling data is dense and has been validated, and where there is good continuity of mineralisation. Where it has not been possible to validate a significant amount of historical drilling data confidence in the resource estimate is less certain. The Mt King Mineral Resource was estimated in 2008 by Hellman and Schofield using 23 RC holes drilled at a nominal 100 mE by 50 mN spacing. Recoverable resources were estimated using multiple indicator kriging from 2 m composites. AMC considers that Marda Mineral Resource estimates have been prepared using accepted industry practice and have been classified in accordance with the JORC Code. 4.1.4 Joint Ventures In August 2011 Southern Cross entered into an agreement with Barranco Resources NL to acquire the Red Legs and Die Hardy deposits. The agreement comprises a two year option at a cost to Southern Cross of $20,000 every six months. If Southern Cross elects to exercise the option it will pay $500,000 in cash and issue 20 million shares in Southern Cross to Barranco. The agreement covers two retention licences covering the deposits. Upon exercise, Southern Cross will hold all mineral rights to the retention licences, including Barranco’s existing royalty over the Mt King deposits (owned by Southern Cross). 4.1.4.1 Radio Gold Mine In August 2011, Southern Cross reached agreement with Renaissance Minerals Limited to enter into a farmin agreement for the historic high-grade Radio Gold Mine. The deposit was mined to only 100 m below surface and produced 71,000 oz (57,000 t at 38.5 g/t Au). Previous drilling art Radio Gold Mine has been restricted to an area surrounding existing workings. Extensions to mineralisation may be identified. Under the agreement Southern Cross will also acquire Renaissance Minerals Limited's Mt Rankin Gold Project. The tenement package is located immediately along strike of Southern Cross’s existing tenements in the region and within close proximity to existing gold mining and processing facilities at Marvel Loch and Westonia.. 30
BDO CORPORATE FINANCE (WA) PTY LTD Polymetals Mining Limited and Southern Cross Goldfields Limited Technical Specialist's Report 4.1.4.2 Dulcie Gold Project In the March 2012 Quarter Southern Cross entered into a formal sale agreement with a private consortium for the sale of the Dulcie Gold Project and related tenements for a consideration of $1M in cash plus a 5% gross royalty on future production. Payments relating to the sale were received in the June 2012 Quarter. 4.1.4.3 Western Areas NL (Southern Cross 30% Nickel Interest, 100% Non-nickel Interest) In August 2011, Southern Cross entered into an agreement with Western Areas NL whereby Western Areas NL acquired 70% of Southern Cross’s nickel rights across much of Southern Cross’s tenement package. The agreement excluded some tenements including the tenements at the Copper Bore Project and the Non-iron Rights on Radar Iron’s tenement. Previous exploration undertaken identified multiple nickel sulphide targets, including a 66 km strike length with known favourable nickel sulphide olivine cumulate host rocks. 4.1.5 Exploration 4.1.5.1 Gold Review of regional exploration in 2011-2012 identified high priority targets along the Evanston Shear Zone and Andromeda Trend. Auger drilling tested priority targets identified in the review, particularly a largely undrilled gold trend extending over a strike length of 30 km. Southern Cross advises that further auger drilling is currently in progress. 4.1.5.2 Red Boomerang The Red Boomerang prospect lies along the Evanston Shear Zone. Previous drilling intersected porphyry-hosted mineralisation including 6 m at 23.8 g/t Au and 11 m at 4.7 g/t Au. Four lines of auger drilling was conducted over a 2 km strike at 400 m spacing, and defined a +100 ppb Au anomaly extending over a strike length of 1.3 km. 4.1.5.3 Lancelot The Lancelot prospect lies along the Evanston Shear Zone, immediately north of the Gwendolyn tenement (Vector Resources). Auger drilling returned results of up to 3,000 ppb Au. Subsequent auger drilling at 40 m centres along 200 m to 800 m spaced lines confirm a semi-continuous 5 km long anomaly greater than 40 ppb Au along the main trend between Lancelot and Gwendolyn. These results build on previous RC drilling which returned results including 4 m at 17.36 g/t Au, 5 m at 6.13 g/t Au, and 4 m at 2.80 g/t Au. 4.1.5.4 White Pointer The White Pointer prospect is approximately 40 km north-west of the proposed gold treatment facility at Marda and 500 m north-west of Red Boomerang. A gold anomaly has been defined by auger drilling at 40 centres along 200 m spaced lines. The anomaly is defined by values of +40 ppb Au has been identified over a strike length of 2.2 km with a +100 ppb Au core over 1 km. 4.1.5.5 Thresher The Thresher prospect is approximately 60 km north-west of the proposed gold treatment facility at Marda. This prospect lies close to the Evanston Shear Zone and parallel to an adjacent magnetic unit. A gold anomaly defined by values of +40 ppb Au has been identified over a strike length of 800 m with a +100 ppb Au core over 400 m. 4.1.5.6 Copper Bore Auger drilling was conducted during February 2012 to test for anomalous mineralisation at the Copper Bore trend and extension of to the south of Southern Gossan. The drilling identified anomalous grades up to 652 31
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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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15. Sources of information This rep
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esponsible for conducting appropria
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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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