Update on Merger with Polymetals - Notice of Meeting

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- 31 - million SXG Options which had a calculated value of $0.372 million giving total acquisition cost for accounting purposes of $3.653 million. This acquisition price is recorded as $2.013 million to property, plant and equipment and $1.640 million to tenements; • a deposit of $2.719 million to cash back environmental bonds relating to previous activities on the Sandstone Gold Project; • recording a liability of $1 million for the existing environmental liabilities assumed; • recording a liability of $7 million for the loan from RMB; and • recording additional reserves of $0.493 million being the calculated value of options issued as follows: options issued to Troy Resources $0.372 million, options issued to RMB $0.11 million, options issued to PCF Capital Group Pty Limited $0.011 million. (ii) Sale of White Dam and Drew Hill by Polymetals On 27 May 2013 Polymetals announced the sale of its interests in the Drew Hill and White Dam operations. The sale included the following elements: • receipt of cash of $1.437 million from Exco Resources Limited (Exco) as consideration; • addition of $0.275 million to property, plant and equipment to reflect additional consideration being the receipt of Exco’s 50% share of the White Dam mine camp; and • disposal of current and non-current assets and liabilities as shown above. (iii) Transaction costs and other adjustments (a) (b) (c) transaction costs of $1.5 million, payment to Meadowhead Investments of $0.3 million and combined SXG and Polymetals cash outflows of $3.5 million during the quarter from 31 December 2012 to 31 March 2013 have been deducted from the 31 December 2012 cash balance; Polymetals accounting policy is to capitalise the costs of exploration evaluation and development (EE&D) expenditure as well as tenement acquisition costs. The accounting policy of SXG is to capitalise tenement acquisition costs but expense EE&D costs as they are incurred. This adjustment reflects the expensing of the previously capitalised EE&D costs of Polymetals to align with the SXG accounting policy; as an operating and cash producing company Polymetals has previously recorded deferred liabilities (DTLs) and deferred tax assets (DTAs) (including carried forward tax losses). With the sale of White Dam (Polymetals only operating asset) and no future operations that are virtually certain of realising taxable income the merged entity will not record DTLs and DTAs. This adjustment removes all DTLs and DTAs from the merged entity balance sheets;
- 32 - (d) (e) the elimination of Polymetals contributed equity of $8.302 million, reserves of $0.456 million and accumulated gains of $17.252 million; and the value of the consideration paid to Polymetals Shareholders for their Polymetals Shares under the Scheme is based on the SXG Share price of $0.026 per SXG Share (being the ASX closing price of SXG Shares on 5 April 2013) of $11.922 million. The actual value of the consideration paid will depend on the actual SXG Share price at close of trading on ASX on the Implementation Date.
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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 •
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 56 and 57: - 27 - Stephen Jones (Chief Financi
Page 58 and 59: - 29 - In accordance with ASIC Clas
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
Page 106 and 107: Funding assumptions SXG has receive
Page 108 and 109: 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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