Update on Merger with Polymetals - Notice of Meeting

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(i)
Other matters
The Directors further note that implementation of the Scheme is conditional on SXG
Shareholder approval of Resolution 1.
1.15 Key risks of the Merged Group, if the Scheme is implemented
If the Scheme is implemented, Polymetals will become a wholly-owned subsidiary of SXG
and SXG Shareholders will be exposed to the risks associated with the Company acquiring
ownership and control of Polymetals and Polymetals’ assets and operations as a result of
the Merger.
Risks that may impact the financial and operational performance of the Merged Group are
outlined below.
These risks:
(a)
(b)
are not, and should not be relied on as, or considered to be, an exhaustive list of the
risks that SXG Shareholders may face or be exposed to if the Merger is successful;
and
are general in nature and regard has not been had to the individual circumstances,
including the investment objective, financial situation, tax position or particular needs
of SXG Shareholders.
Additional risks and uncertainties that SXG is currently unaware of, or that SXG currently
considers to be immaterial, may also become important factors that can adversely affect the
Merged Group’s operating and financial performance in the future.
(a)
Sale of SXG Shares by Polymetals Shareholders issued as Scheme Consideration
Polymetals Shareholders will receive a specified number of New SXG Shares based
on their holdings in Polymetals as at the Record Date. Some of the Polymetals
Shareholders may not wish to hold their allotment of New SXG Shares and may
choose to sell them on ASX.
The SXG share price on ASX may be adversely affected in the short term if a
significant number of Polymetals Shareholders sell their allotment of New SXG
Shares soon after implementation of the Scheme.
(b)
Integration risks and realisation of anticipated synergies
The long-term success of the Merged Group will depend, amongst other things, on
the success of management in integrating the respective businesses and the
strength of management of the Merged Group. The Merger between SXG and
Polymetals to form the Merged Group involves the integration of businesses and
operations that have previously operated as independent entities. There is no
guarantee that the businesses of the Merged Group will be able to be integrated
successfully, without unexpected delays or incurring additional costs.
Further, as discussed in Section 1.11, while SXG and Polymetals expect that value
can be added to the Merged Group through the realisation of synergies, there is a
risk that implementation of the Merger may not result in realisation of the synergies
expected due to:
(i)
unexpected delays, challenges, liabilities and costs in relation, but not
limited, to integrating operating and management systems; and