Update on Merger with Polymetals - Notice of Meeting

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- 27 - 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%.
- 28 - There will be two substantial shareholders in the Merged Group which, together with D & J Sproule and E Sproule, are the Sproule Interests: Name Number of fully paid ordinary shares held % held of issued ordinary capital Meadowhead Investments 133,579,204 15.40% Mrs Jane Christine Sproule* 92,296,985 10.64% *David and Jane Sproule will also hold jointly an additional 1,155,000 SXG Shares, equating to 0.13% of the issued capital of the Merged Group. Meadowhead Investments and Jane Sproule are Associates and are related parties of David Sproule. The holdings set out in the table above do not include the relevant interests held by relatives of David Sproule who are not Associates of Meadowhead Investments or Jane Sproule. 7. Pro forma historical financial information (a) Historical financial profile of the Merged Group The Merged Group pro forma historical financial information provided in this Explanatory Memorandum comprises a pro forma consolidated statement of financial position as at 31 December 2012 which is based upon: • the Company’s audited consolidated statement of financial position as at 31 December 2012; and • the Polymetals audited consolidated statement of financial position as at 31 December 2012, (collectively the Historical Financial Information); and • relevant pro forma adjustments required to present SXG Shareholders with an indication of the profile of the Merged Group, (collectively the Pro Forma Financial Information). (b) Basis of preparation The Pro Forma Financial Information is provided for illustrative purposes and is prepared on the assumption that the Merger had occurred on 31 March 2013. The Merged Group financial statements are based on the Company’s and Polymetals’ financial statements as at 31 December 2012 which were audited by Stantons International and Deloitte Touche Tohmatsu respectively. The Pro Forma Financial Information: • has been prepared in accordance with the recognition and measurement principles of AASBs, together with pro forma adjustments to reflect the Merger; • has been presented in an abbreviated form and does not include all disclosures required by the Australian Accounting Standards applicable to annual financial reports prepared in accordance with the Corporations Act; in particular it does not include the notes to and forming part of the financial statements of the Company and Polymetals; and • has been prepared on the basis of historical cost, except for available-for-sale financial assets which are measured at fair value.
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ASX ANNOUNCEMENT / MEDIA RELEASE Fr
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ABN 71 124 374 321 U16,162 Colin St
Page 5 and 6: 3. Access to the cash reserves of P
Page 7 and 8: Disclaimer and Important Notice •
Page 9 and 10: SXG - Well Placed • • •
Page 11 and 12: SXG and PLY - Key Merger Metrics
Page 13 and 14: Indicative Merger Timetable •
Page 15 and 16: A Diversified Portfolio of Australi
Page 17 and 18: Marda Project • Rare greenfields
Page 19 and 20: Northern Gold Corridor Targets - Dr
Page 21 and 22: WA Gold Assets - Turner River • P
Page 23 and 24: Mt Boppy - A Near-Term Production O
Page 25 and 26: ASX Code: Investor Presentation J
Page 27 and 28: Pro Forma Gold Reserve Statement Pr
Page 30 and 31: ABN 71 124 374 321 U16,162 Colin St
Page 32 and 33: - 3 - Notice of General Meeting Not
Page 34 and 35: - 5 - Proxy appointment, voting and
Page 36 and 37: - 7 - 1.2 Rationale for the Merger
Page 38 and 39: - 9 - 1.5 Implementation of the Mer
Page 40 and 41: - 11 - in terms of assets and marke
Page 42 and 43: - 13 - (a) You may not agree with t
Page 44 and 45: - 15 - (b) the Technical Specialist
Page 46 and 47: - 17 - (a) Identity of the person r
Page 48 and 49: - 19 - (i) Other matters The Direct
Page 50 and 51: - 21 - The purpose of Resolution 2
Page 52 and 53: - 23 - Schedule 1 - Information abo
Page 54 and 55: - 25 - Woodside Energy Ltd and Dire
Page 58 and 59: - 29 - In accordance with ASIC Clas
Page 60 and 61: - 31 - million SXG Options which ha
Page 62 and 63: - 33 - Schedule 2 - Terms & Conditi
Page 64 and 65: - 35 - the Company out of profits o
Page 66 and 67: - 37 - Glossary In this Explanatory
Page 68 and 69: - 39 - Peak Litigation The litigati
Page 70 and 71: - 41 - Annexure A Refer enclosed In
Page 72 and 73: Financial Services Guide 21 June 20
Page 74 and 75: TABLE OF CONTENTS 1. Introduction 1
Page 76 and 77: 2. Summary and Opinion 2.1 Purpose
Page 78 and 79: The respective advantages and disad
Page 80 and 81: elieves that there are sufficient r
Page 82 and 83: Existing SXG PLY Capital structure
Page 84 and 85: Sandstone Exploration Potential In
Page 86 and 87: 5.3 Historical Balance Sheet Southe
Page 88 and 89: in tenement acquisition costs also
Page 90 and 91: The current SXG unlisted options on
Page 92 and 93: Drew Hill - White Dam Gold Project
Page 94 and 95: 6.4 Historical Statement of Compreh
Page 96 and 97: At 31 March 2013, PLY have recorded
Page 98 and 99: Gold Demand/Supply Mined Metric ton
Page 100 and 101: • On 9 August 2012, Regis Resourc
Page 102 and 103: eport to be used in our report. At
Page 104 and 105: 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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BDO CORPORATE FINANCE (WA) PTY LTD
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Update on Merger with Polymetals - Notice of Meeting

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