Southern Cross Goldfields Ltd is an Australian exploration company offering investors a compelling combination of near term cash flow and outstanding exploration potential. The Company has a dominant 4,000km 2 tenement and mineral rights holding in the prolific Marda & Southern Cross regions of Western Australia. The Company recently announced the acquisition of Troy Resources Sandstone Gold Project to bring SXG s combined JORC resource base to 1.3 million ounces. The Troy acquisition also includes a 600,000 tonne per annum gold plant and 100 person camp. The Company s proposed Marda Gold Project presents the opportunity to establish the region s only gold production facility with significant exploration upside. Board of Directors Samantha Tough Non-Executive Chairman Glenn Jardine Managing Director Graham Brock Non-Executive Director John Rowe Non-Executive Director Capital Structure Shares on Issue 408.9 M Options on Issue 48.5 M Contact +61 8 9215 7600 +61 8 9485 1283 admin@scross.com.au PO Box 708, West Perth 6872 Unit 16, 162 Colin St, West Perth 6005. UPDATE ON WA GOLD PROJECTS Debt funding, development and exploration activities progressing well Key Points Acquisition of Sandstone Gold Project from Troy Resources progressing positively to completion. Debt financing activities for both the Sandstone acquisition and Marda development are well advanced. Marda regional gold exploration continues to demonstrate untapped potential. Southern Cross Goldfields Limited (ASX: SXG SXG or the Company ) is pleased to provide an update on financing, development and exploration activities at its key gold projects in Western Australia. Sandstone Gold Project Acquisition and Financing SXG is continuing to work positively with Troy Resources (ASX: TRY Troy ) towards the completion of formal documentation for the acquisition of the Sandstone Gold Project and the parties have also agreed to an extension to the end of December to enable acquisition financing and documentation to be finalised. The Company recently announced that RMB Resources ( RMB ) has been mandated to provide 100 per cent debt funding for the Sandstone Gold project acquisition (see ASX Announcement 24 October). RMB has subsequently undertaken positive technical due diligence including site visits to Southern Cross, Sandstone and Marda. Formal loan documentation and legal due diligence are also well advanced. Marda Gold Project Financing SXG, in conjunction with its independent corporate adviser PCF Capital Group, has been conducting a formal competitive process to secure funding for the development of the Marda Gold Project. Indicative terms have been received from several well respected financial institutions and detailed evaluation of the indicative terms is underway with a view to short-listing potential debt providers in the near future. The indicative terms received from potential debt providers are in line with the Company s previous statements regarding the level of debt funding likely to be available for the project s development. Marda Regional Gold Exploration SXG is continuing its highly successful regional auger drilling and geochemical targeting programme within its extensive Marda tenement and gold rights package.
Further to the Company s recent announcements SXG has continued auger drilling immediately north of its Lancelot prospect. The results of this new auger drilling will be released in the coming weeks. It is expected that additional in-fill auger drilling will be required before the end of the year to refine drill targets along the 10km long corridor centred on Lancelot. In addition, new in-fill auger drilling will be conducted before the end of the year at Red Boomerang. Targets generated will be followed up with RAB and/or RC drilling in the New Year. The Company will also conduct auger drilling and geochemical analysis along the 20km long corridor between Red Boomerang and the Gwendolyn deposit in the New Year where the Company s previous work has identified encouraging results. Marda Gold Project Development Activities The Company has been progressing work required to advance the Marda Project to development and production. These activities have included engineering studies into the refurbishment and relocation of the Sandstone plant and camp to Marda and definitive environmental impact studies for the disturbance areas at Marda. Environmental and engineering studies completed, or in progress, at Marda include: Detailed engineering review for the refurbishment and relocation of the Sandstone plant to Marda completed; Tender documents for the development of the Marda Project including the relocation and refurbishment of the Sandstone plant to Marda have been issued, and Targeted spring flora and fauna surveys in areas proposed to be cleared for infrastructure, mining and processing facilities. The Marda Gold Project is one of the very few pure greenfields gold projects in WA progressing towards production in recent years, said SXG s Managing Director, Mr Glenn Jardine. Following completion of the Sandstone acquisition, the Company will have 1.3 million ounces in its gold resource base, a fit-for-purpose gold plant and camp and a very attractive 4,000 square kilometre exploration package in the Marda region. In addition, Sandstone provides both short and long-term production options in its own right. With this strong development pathway in front of us, we are very focused on securing a competitive financing package to enable us to complete the Sandstone acquisition before the end of the year and fund the development of Marda, he continued. - ENDS -
FIGURE 1 COMBINED MARDA AND SANDSTONE TENEMENT AND RESOURCE PACKAGE
For further details, please contact Glenn Jardine, Managing Director Southern Cross Goldfields Ltd Telephone: +61 8 9215 7600, email glennj@scross.com.au Refer to www.scross.com.au For media inquiries, please contact: Nicholas Read Read Corporate Telephone: +61 9388 1474, email nicholas@readcorporate.com.au Table 1 Combined SXG and Sandstone Project JORC Mineral Resource Estimate Measured Indicated Inferred Total Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces SXG 2,795,670 2.26 203,446 2,613,657 1.80 151,051 2,785,432 2.02 180,224 8,194,734 2.03 534,606 Sandstone (i) 1,932,000 2.32 145,200 12,586,000 1.42 574,400 14,518,000 1.54 719,600 Total 2,795,670 2.26 203,446 4,545,657 2.03 296,251 15,371,432 1.53 754,624 22,712,734 1.72 1,254,206 (i) Sandstone resources are taken from the Troy Resources Limited, 2011 Annual Report Table 2 SXG JORC Mineral Resource Estimate Deposit Measured Indicated Inferred Total Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces NORTHERN DEPOSITS Marda Central 1,918,197 1.91 117,885 161,609 1.61 8,371 326,748 1.71 17,953 2,406,554 1.86 144,209 King Brown 100,300 4.36 14,060 63,300 2.59 5,274 73,925 2.95 7,012 237,500 3.45 26,300 Golden Orb 415,829 3.01 40,246 102,890 1.97 6,517 175,600 1.79 10,107 694,319 2.54 56,700 Mt King 523,000 3.00 50,450 523,000 3.00 50,450 Sub Total 2,434,326 2.20 172,191 327,799 1.91 20,162 1,099,273 2.42 85,522 3,861,373 2.24 277,659 Barranco Option 1,302,243 1.70 71,900 949,576 1.64 50,300 2,251,819 1.68 122,300 Sub Total 2,434,326 2.20 172,191 1,630,042 1.74 92,062 2,048,849 2.06 135,822 6,113,192 2.03 399,959 SOUTHERN DEPOSITS Battler 361,344 2.69 31,255 39,300 3.46 4,372 52,087 3.53 5,912 452,731 2.85 41,539 British Hill 944,315 1.80 54,617 684,496 1.74 38,490 1,628,811 1.80 93,108 Sub Total 361,344 2.69 31,255 983,615 1.90 58,989 736,583 1.90 44,402 2,081,542 2.03 134,647 Total 2,795,670 2.26 203,446 2,613,657 1.80 151,051 2,785,432 2.02 180,224 8,194,734 2.03 534,606 Notes to Accompany Mineral Resource Estimate table: Numbers may not add due to rounding. The resource model for King Brown, Golden Orb, Battler, Marda Central (Python, Dolly Pot, Dugite, Goldstream, Cobra, Taipan and Green Tree), were constructed using Minesight software. The resource estimates for these deposits utilized a block model with block dimensions typically of 5m by 2m by 2.5m blocks (X, Y, Z). The Die Hardy Deposits containing sub-areas designated as Die Hardy and Red Legs were also constructed using Minesight software. The resource estimates for these deposits utilized a block model with block dimensions typically of 5m by 1m by 2.5m blocks (X, Y, Z). Block interpolation of the Northern and Southern deposits was estimated using Ordinary Kriging within mineralization wire-frames based upon a ~0.50g Au/t lower delineation cut-off. The Marda Central project area is comprised of the Python, Dolly Pot, Dugite, Goldstream Cobra, Taipan, and Green Tree deposits. Resource classification has been considered with respect to various reporting modifying factors as outlined in the JORC Code (Dec 2004). Consideration has been given to data quality, drilling and sample density, distances of interpolated blocks from assays points and the associated statistical local spatial distribution of gold and estimation variances. Resource assaying data sets derived from all available reverse circulation and diamond drill sampling. Geology rock mass models and interpreted fault or shear zones have been used to constrain mineralisation as appropriate. Weathering domains have been used to constrain mineralisation and help assign representative bulk density estimates. Bulk densities are based on testwork carried out by SXG and previous companies and has been adjusted where necessary according to underlying weathering and / or oxidation state. Data density varies and is reflected in the resource category which has been applied. All measured resources have a drill-hole density of approximately 12.5m x 12.5m. All indicated resources except Battler have a drill-hole density of approximately 25m x 25m. Battler has a drill
density of 20m x 12.5m. Inferred resources have variable density but always less than 50m x 50m except for Mt King which has variable drill-hole spacing between 25m and 100m and the Barranco Option resources which have an approximate drill hole spacing of 100m x 20m and were assigned an Inferred Resource status. Assays are generally fire assay, with limited aqua regia assays in the weathered zone. All drill-hole collars are surveyed by GPS. Down hole survey data is limited for historic drilling, except at British Hill, where most drill-holes are surveyed. All SXG s drilling has adequate down hole survey information. The resource estimation for Barranco Option resources was by polygonal cross-sectional methodology with the mean of all assays within a polygon used as the calculated grade. JORC Code Compliance Statement The geological information in the report to which this statement is attached that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Richard Simmons who is a Member of The Australasian Institute of Mining and Metallurgy. Richard Simmons is a full time employee of Southern Cross Goldfields Limited. Richard Simmons has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Richard Simmons consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. The resource estimation of the King Brown deposit is based on work completed by independent consultant Mr Don Maclean of Ravensgate Minerals Industry Consultants based on resource drilling data sets provided by SXG. Mr Maclean is a Member of The Australasian Institute of Mining and Metallurgy and qualifies as a Competent Person in respect of the 2004 JORC code and has sufficient experience relevant to the style of mineralisation and deposit type being estimated. Mr Maclean has consented to the inclusion of this information in the form and context in which it appears in this report. Resource estimations for the Battler deposit in the Southern deposit area is based on work completed by independent consultant Mr Stephen Hyland of Ravensgate Minerals Industry Consultants which is based on resource drilling data sets provided by SXG. Mr Hyland is a Fellow of The Australasian Institute of Mining and Metallurgy and qualifies as a Competent Person in respect of the 2004 JORC code and has sufficient experience relevant to the style of mineralisation and deposit type being estimated. Mr Hyland has consented to the inclusion of this information in the form and context in which it appears in this report. The updated resource estimations for the Northern deposits, including the Python, Dolly Pot, Dugite, Goldstream, Cobra, Taipan,Green Tree, Golden Orb, Die Hardy and Red Legs deposits were also carried out by Mr Stephen Hyland again utilizing resource drilling data sets provided by SXG. Mr Hyland is a Principal Consultant with Ravensgate Minerals Industry and is also a Fellow of The Australasian Institute of Mining and Metallurgy. Mr Hyland has sufficient experience which is relevant to the style of mineralisation and type of deposits under consideration and to the activity undertaken to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Hyland also consents to the inclusion in the report of the resource estimation matters for these deposits based on the reporting information in the form and context in which it appears. Disclaimer This document has been prepared by Southern Cross Goldfields Limited (SXG). The information and opinions contained in this document are derived from public and private sources which we believe to be reliable and accurate but which, without further investigation, cannot be warranted as to their accuracy, completeness or correctness. This information is supplied on the condition that SXG, and any director, agent or employee of SXG, are not liable for any error or inaccuracy contained herein, whether negligently caused or otherwise, or for loss or damage suffered by any person due to such error, omission or inaccuracy as a result of such supply. Forward-Looking Statements This document contains forward looking statements concerning the projects owned by SXG. Statements concerning mining reserves and resources may also be deemed to be forward looking statements in that they involve estimates based on specific assumptions. Forward-looking statements are not statements of historical fact and actual events and results may differ materially from those described in the forward looking statements as a result of a variety of risks, uncertainties and other factors. Forward looking statements are based on SXG s beliefs, opinions and estimates as of the dates the forward looking statements are made, and no obligation is assumed to update forward looking statements if these beliefs, opinions and estimates should change or to reflect other future developments. Exploration potential is conceptual in nature and where there has been insufficient exploration to define a Mineral Resource it is uncertain if further exploration will result in the determination of a Mineral Resource. Readers are cautioned not to place undue reliance on forward-looking statements and SXG assumes no obligation to update such information.