Update on Merger with Polymetals - Notice of Meeting

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Stephen Jones
(Chief Financial
Officer)
Stephen Jones has more than 15 years’ experience in a range of entities with
operations in Australia, the Americas and Africa. Stephen has worked in corporate
administration, finance management and project development roles for companies
involved in exploration, project evaluation and development and operations in a
range of minerals including iron ore, coal, gold and base metals.
5. Intentions in relation to SXG, Polymetals and the Merged Group
If the Merger is implemented:
• SXG will continue as an ASX listed entity;
• Polymetals will become a wholly owned subsidiary of the Company; and
• the board of SXG will be reconstituted so that it comprises the persons as set out in
Section 3.
If the Scheme is implemented, it is intended that:
• Polymetals will apply for removal from the official list of ASX; and
• as Polymetals will be a wholly owned subsidiary of the Company, the board of
Polymetals will be reconstituted so that it comprises persons nominated by the Board.
It is intended that the Merged Group rationalise administrative functions, with the closure
and sale of the Polymetals office in Queensland and relocation of relevant activity and
information to the Company’s Perth office. This will result in some redundancies within the
Polymetals group.
It is not expected that there will be any payment of a dividend by the Merged Group in the
short term. It is the intention of the Merged Group to consider the payment of future
dividends having due regard to the Merged Group’s profits, financial position and future
capital requirements.
6. Capital structure and ownership of the Merged Group
Polymetals Shareholders will receive 11 New SXG Shares for each Polymetals Share they
own as at the Record Date. Based on Polymetals’ current issued share capital, if the
Scheme is implemented, SXG will issue approximately 458,537,981 New SXG Shares to
Polymetals Shareholders.
As a result, the number of SXG Shares on issue will increase from 408,912,834 (being the
number currently on issue) to 867,450,815 on an undiluted basis.
New SXG Shares to be
issued
Cumulative total of SXG
Shares on issue
As at the date of the Scheme
Booklet
To be issued as Scheme
Consideration
Not applicable 408,912,834
458,537,981 867,450,815
If the Scheme is implemented, Polymetals Shareholders will collectively hold approximately
52.9% of the shares in the Merged Group, with SXG Shareholders collectively holding the
remaining 47.1%.