Update on Merger with Polymetals - Notice of Meeting

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(a)
Identity of the person receiving the New SXG Shares to be issued, its Associates
and any other persons obtaining a relevant interest
The New SXG Shares issued as a result of the payment of the Scheme
Consideration will be issued to the Sproule Interests, being:
(i)
(ii)
(iii)
Meadowhead Investments – 133,579,204 New SXG Shares;
Jane Christine Sproule – 92,296,985 New SXG Shares;
David & Jane Sproule – 1,155,000 New SXG Shares; and
New SXG Shares will also be issued to other Polymetals Shareholders which are
entities associated with relatives of David Sproule and Jane Sproule, but are not
Associates of the Sproule Interests. Those entities and their post-Merger interests
in SXG are as follows:
(iv)
(v)
(vi)
(vii)
Richlark Pty Ltd (as trustee for HL Sproule Family Trust) – 21,484,749 New
SXG Shares;
Richlark Pty Ltd (as trustee for RJ Sproule Family Trust) – 12,529,165 New
SXG Shares;
Richlark Pty Ltd (as trustee for Akers Family Trust) – 12,529,165 New SXG
Shares; and
H L & G E Sproule Pty Ltd – 3,006,091 New
SXG Shares.
(b)
Increase in the Sproule Interests’ voting power in the Company resulting from the
issue of New SXG Shares
As at the date of this Notice, the Sproule Interests do not have a relevant interest in
any SXG Shares and the current voting power in the Company of the Sproule
Interests is nil.
As a consequence of the issue of the Scheme Consideration on successful
implementation of the Merger, the Sproule Interests and each of its members will
have voting power in the Company of approximately 26.17%.
(c)
Reasons for the proposed issue of New SXG Shares
The Board considers that, for the reasons set out in paragraphs 1.9 and 1.10 of this
Explanatory Memorandum, it is in the interests of SXG Shareholders to undertake
the Merger. To do so, the Company proposes to issue the New SXG Shares to the
Sproule Interests in accordance with its obligations to pay the Scheme
Consideration to Polymetals Shareholders on the Scheme Implementation Date.
(d)
Timing of the issue of New SXG Shares
The terms of the Scheme require that New SXG Shares will be issued within
21 days of Court approval being obtained, being the Scheme Implementation Date.
(e)
Material terms of the issue of New SXG Shares to the Sproule Interests
Subject to SXG Shareholder approval of Resolution 1 and implementation of the
Scheme, the Company will issue 227,031,189 New SXG Shares to the Sproule
Interests on the basis of 11 New SXG Shares for every 1 Polymetals Share held by
the Sproule Interests in accordance with the terms of the Scheme.