Update on Merger with Polymetals - Notice of Meeting

21 June 2013
The Directors
Southern Cross Goldfields Limited
PO Box 708
West Perth WA 6872
Dear Sirs
INDEPENDENT EXPERT’S REPORT
1. Introduction
On 8 April 2013, Southern Cross Goldfields Limited (“SXG” or the “Company”) and Polymetals Mining
Limited (“PLY”) announced that they had agreed to merge the two companies (the “Merger” resulting in
the “Merged Entity”) by way of a scheme of arrangement under which SXG will offer 11 SXG shares for
every one PLY share on issue (“The Scheme”).
An outline of the Scheme is presented in Section 4 with a discussion of the merits of the Scheme included
in Sections 11, 12, 13 and 14. Whilst this report does not address the benefits of the Merger itself an
understanding of the process of the Scheme and the merits of the Merger is important in assessing the
matters to be discussed in this report.
PLY’s largest shareholder, Meadowhead Investments and Mr & Mrs D Sproule (together the “Sproule
Interests”) collectively holds 48.8% of the issued capital of PLY. On successful implementation of the
Scheme, SXG will issue 458,537,981 new shares to PLY shareholders including 227,031,189 SXG shares to
the Sproule Interests, representing 26.17% of the issued capital of the Merged Entity.
Under the terms of the Merger and as a result of the implementation of the Scheme, SXG shares will be
issued to the Sproule Interests (“the Transaction”) which will result in the Sproule Interests holding more
than 20% of the issued capital in the Merged Entity. As such, the approval of SXG shareholders is required
under item 7 of section 611 of the Corporations Act.
We note that Transaction is integral to the Merger as the implementation of the Scheme is conditional on
the Transaction being approved by SXG shareholders, the Scheme being approved by PLY shareholders and
the court and the other conditions of the Scheme being satisfied. The Transaction itself will not occur
unless the Scheme is approved and implemented.
BDO Corporate Finance (WA) Pty Ltd ABN 27 124 031 045 AFS Licence No 316158 is a member of a national association of independent entities which are all members of BDO
(Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Corporate Finance (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International
Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under
Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.