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 • Vanguard • Ladybird • Maninga Marley • Shillington • Sandstone North • Plum Pudding • Oroya • Tigermoth • Piper • Wirraminna. Table 4.6 Sandstone Mineral Resources at June 2012 Location Indicated Resource Inferred Resource Tonnes (kt) Grade (g/t Au) Tonnes (kt) Grade (g/t Au) Lord Nelson 392 3.0 84 1.8 Lord Henry 987 1.9 39 1.7 Two Mile Hill Tonalite 10,541 1.3 Two Mile Hill BIF 59 9.9 Sandstone (other) 494 1.8 1,922 1.9 Total 1,932 2.3 12,586 1.4 Mineral Resources at Lord Henry are reported at a 0.8 g/t Au COG and for Lord Nelson and Two Mile Hill at 0.5 g/t Au COG. Rotary air blast (RAB) and air core (AC) drilling have been used for exploration sampling but data from these drillhole types are not used in resource estimation. Reverse circulation (RC) is the main drilling method used for resource estimation in association with some diamond drilling. Drilling has been completed using accepted industry practices. Drillhole collars are surveyed and drillholes are surveyed downhole. Samples and diamond drill core are geologically logged. Resource definition RC drillholes are sampled at 1 m intervals. Diamond drill core is sampled at 1 m intervals respecting geological variations and cut using diamond saws with half core submitted for assay. Sample assaying is undertaken by independent laboratories. Gold content is determined by acid digest and fire assay. Field duplicates, blanks and certified reference materials are submitted to monitor assay quality control. The Lord Henry and Lord Nelson resource estimates have been developed within an interpretation guided by a 0.2 g/t Au COG and geological logging. The estimates are conventional block models 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 resource estimates are classified as Indicated and Inferred Resources based on confidence in the geological and grade continuity reflecting drillhole spacing. The Mineral Resources are reported at a 1 g/t Au COG. The Two Mile Hill resource estimate is based on interpretation of distribution of the tonalite from drillhole geological data. 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 and fresh rock. The estimate has been classified as Inferred Resource reflecting the drillhole spacing. The Mineral Resources are reported at a 0.5 g/t Au COG. 46
BDO CORPORATE FINANCE (WA) PTY LTD Polymetals Mining Limited and Southern Cross Goldfields Limited Technical Specialist's Report The Lord Henry, Lord Nelson and Two Mile Hill Mineral Resources have been estimated using accepted industry practice and have been classified and reported in accordance with the JORC Code. 4.2.3 Exploration The Sandstone tenements have been extensively explored for gold over many years. There are exploration targets that could be further tested. The depth extent within the tonalite intrusive at Two Mile Hill has been intersected continuously from surface to a vertical depth of over 400 m in diamond drillholes but the deposit remains open at depth. High-grade gold mineralisation associated with quartz veining and pyrite replacement of BIF on or near its contact with the tonalite may not be completely investigated and may be a target for high-grade gold mineralisation. Other felsic intrusive rocks on the tenements could be explored for large tonnage low-grade gold mineralisation based on the Two Mile Hill model. The Indomitable, Piper, Tiger Moth, Cessna and Musketeer prospects are associated with the Indomitable shear and subsidiary structures. The prospects were originally discovered by RAB drilling and some RC drilling has been carried out at Indomitable. A Mineral Resource has been estimated at Tiger Moth. Drilling does not completely test the shear zone and primary mineralisation associated with the surface oxide mineralisation has not been tested. 4.2.4 Valuation AMC notes that to date no development and evaluation work has been conducted by Southern Cross on the Sandstone project. The Sandstone tenements were acquired by Southern Cross in March 2013. The tenements contain 720,000 oz of gold in Indicated and Inferred Resources. Considering the yardstick values for categories of Mineral Resources described in Section 3.2.7, AMC values these tenements between $4.5M and $10M using this method. The tenements cover an area of 985 km 2 of greenstone belt rocks with identified Mineral Resources. Using the unit area values described in Section 3.2.7, the value of the tenements is $2.0M to $5.9M using this method. Considering these methods, AMC values the Sandstone tenements between $3.4M and $8.3M. 47
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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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Meadowhead Meadowhead Indemnity The
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APPENDIX 2 - VALUATION METHODOLOGIE
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APPENDIX 3 - DISCOUNT RATES SXG We
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Having regard to the above we consi
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Merged Entity Determining the corre
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associated (relative to the compara
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APPENDIX 4 - TECHNICAL SPECIALIST V
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AMC Consultants Pty Ltd ABN 58 008
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