Mawson Proposed Merger with Southern Cross and Dual Listing
ASX ANNOUNCEMENT
1305 – 1090 West Georgia Street, Vancouver, BC, V6E 3V7
Phone: +1 604 685 9316 / Fax: +1 604 683 1585
NEWS RELEASE June 10, 2024
MAWSON PROPOSED MERGER WITH SOUTHERN CROSS AND DUAL LISTING
Vancouver, Canada — Mawson Gold Limited (“Mawson” or the “Company”) (TSXV: MAW) (Frankfurt: MXR)
(PINKSHEETS: MWSNF) is pleased to announce that it has entered into a non-binding term sheet (“NBTS”) with
Southern Cross Gold Limited (“SXG”) (ASX:SXG) dated June 11, 2024 (AEST), contemplating the acquisition of
SXG by Mawson through an Australian scheme of arrangement transaction (the “Australian Arrangement”).
Pursuant to the NBTS, Mawson is expected to acquire all the ordinary shares of SXG (the “SXG Shares”) that
Mawson does not already own and change its name to Southern Cross Gold Ltd (the “New Southern Cross”).
The New Southern Cross will maintain its listing on the TSX Venture Exchange (“TSXV”) and seek a dual listing
on the Australian Securities Exchange (“ ASX”). The Australian Arrangement is not considered a related party
transaction pursuant to Multilateral Instrument 61- 101 – Protection of Minority Security Holders in Special
Transactions.
Bruce Griffin, Member of the Special Committee and Independent Director, states: “There has been
widespread support both in Canada and overseas for the simplification of the Mawson and SXG corporate
structures. Once completed, the simpler, dual -listed structure will allow us to achieve the following core
objectives: access to broader capital markets and institutional/private investors; eliminat e the perceived major
shareholder overhang; and attract an expected lower cost of equity capital which will allow the Sunday Creek
gold-antimony asset (the “Sunday Creek Project”) to continue its path to development . I strongly believe that
our proposal is in all Mawson shareholders’ interests in the short, medium and long term.
“Over the past two months, SXG and Mawson have been carefully reviewing strategic options to maximize value
to shareholders of each of Mawson and SXG and the proposed Australian Arrangement reflects the continued
commitment of the management teams and board of directors of each company to achieve our respective core
objectives to benefit all shareholders, whether big or small, anywhere in the world . The single best solution ,
therefore, is the Australian Arrangement, the principal terms of which have been agreed in-principle by SXG and
MAW in the NBTS”.
Key points of the NBTS are:
1. Prior to the transaction becoming effective, Mawson will affect a share consolidation of its common shares
(the “Mawson Shares”) at a ratio of approximately 3.1581:1 (the “Consolidation”), resulting in the number
of outstanding Mawson Shares being equal to the number of SXG Shares held by Mawson;
2. Mawson to acquire all SXG Shares that it does not own by way of the Australian Arrangement, and will
issue shares of New Southern Cross in Australia ( either in the form of CHESS Depositary Interests “CDIs”
on the ASX or, if a shareholder elects, common shares of New Southern Cross on the TSXV) on a 1 for 1
(post-consolidation) basis, which would give Mawson’s existing shareholders as of the record date
approximately 49.6% ownership on completion of the Australian Arrangement;
3. Mawson to maintain its listing on the TSXV and to seek to dual list on the ASX. The parties’ intention is
that trading of the SXG Shares and the new CDIs of New Southern Cross will be seamless, with minimal
interruption in trading. Australian shareholders should benefit from tax rollover relief rules;
4. The current Australian Board and management team of SXG to lead and manage New Southern Cross;
5. Proposed spin-off of Mawson’s Swedish uranium assets, subject to Swedish regulatory changes, prior to
the closing of the Australian Arrangement to benefit Mawson shareholders;
6. SXG to delist from ASX concurrently with the closing of the Australian Arrangement;
7. SXG shareholders to vote on the Australian Arrangement. Mawson shareholders to also vote on certain
aspects of the Australian Arrangement; and
8. The process is expected to take approximately three to four months during and after which time SXG
shares will trade normally with minimal to no interruptions.
The Australian Arrangement, aimed at consolidating ownership and establishing a single dual-listed company to
hold the Sunday Creek Project, has been chosen for its expected operational, corporate and international tax
efficiency and the benefits it offers to all shareholders of both SXG and Mawson. To achieve the goal of building
the Sunday Creek Project , SXG will need to continue to lower the cost of equity capital. The Australian
Arrangement is a foundational step in this direction as it results in a simplified ownership structure, a dual listing
that allows access to Australian and North American capital markets, and a structure that is both investable by
institutional shareholders and places all shareholders on the same level.
New Southern Cross’ overarching objective will be to maximize value per share with an aim to develop one of
the highest cashflow margin gold mines globally, while prioritizing environmental sustainability and stakeholder
interests in all our communities. To realize this vision, New Southern Cross will concentrate on three key areas:
• Grade: Enhancing drill density in existing high-grade zones to demonstrate continuity and increase high-
grade volumes.
• Volume: Expanding mineralization along the core 1.2 km strike from Christina to Apollo down to and
below 1km depth.
• District Scale: Intensifying exploration efforts across the region, focusing on strike extensions and
parallel trends within the 10km strike featuring historical workings, early -stage drill discoveries, and
highly anomalous soil sampling data.
Specifically, Mawson believes that the immediate benefits to its shareholders include:
• Simplification of Structure : Mawson anticipates immediate benefits for its shareholders through a
more transparent and institutional-investible structure. The Company believes this will lead to a potential
revaluation of the asset, reducing the cost of capital to advance the Sunday Creek Project to become one
of the highest margin gold assets globally.
• Direct Exposure to Sunday Creek: The Australian Arrangement and the listing of New Southern Cross’
shares on both the ASX and TSXV offers new and existing shareholders of New Southern Cross direct
exposure to the globally leading Sunday Creek Project. The North American market has greatly benefited
from the wealth generated from the rebirth of the Victorian goldfields in Australia over the last 8 years.
• Institutional Support: The Australian Arrangement will transition the combined entity’s shareholder
base to a more institutionally dominated and supportive register. SXG brings both a high-quality register
with a significant overlap of current Mawson shareholders and access to further high quality global and
supportive Australian and European institutional shareholders. Notably, major shareholders of both SXG
and Mawson, such as Pierre Lassonde, Darren Morcombe, and Konwave AG, are supportive of the
Australian Arrangement.
• Cost Reduction and Share Fungibility: Consolidating separate companies will lead to cost savings,
while allowing for the fungibility of shares between the North American and Australian stock exchanges,
benefiting all shareholders.
• Management and Board Continuity : New Southern Cross is expected to be led by the current
successful Australian management team and Board of SXG, ensuring continuity and leveraging their
expertise. It is anticipated that New Southern Cross will be led by Mr. Tom Eadie as Non -Executive
Chairman and Mr. Michael Hudson as President & CEO.
Mawson’s Chairman and Interim CEO, Michael Hudson, states, “Given my fiduciary responsibilities across
both Mawson and SXG, I have relied on the highly competent independent directors and independent special
committees to finalize the Australian Arrangement terms to achieve a long-desired aim to simply consolidate the
ownership of the Sunday Creek Project in a dual listed structure.
“Now with the NBTS signed, we can move forward with a tax-effective and clear plan that is in the best interests
of all shareholders. The Special Committees have taken logical and clear steps for a mutually beneficial
transaction aimed at reducing the cost of capital for future development of the globally significant Sunday Creek
Project.
“The strategic Australian Arrangement will unlock value with the consolidation of ownership and direct exposure
to the Sunday Creek Project, with the benefits of a dual listing in North American and Australia. I am very excited
to have the opportunity to lead as President & CEO the New Southern Cross , which will become further
recognized as a growth and high-grade gold story across both the Australian and North American markets.”
Term of the NBTS
In conjunction with mutual due diligence, Mawson and SXG will in good faith negotiate a Scheme Implementation
Agreement (“SIA”) over the coming weeks, to implement the Australian Arrangement containing terms and
conditions, including representations and warranties, customary non -solicitation covenants, break fees, board
support and fiduciary -out provisions, all customary for transactions of this nature. Following that, SXG will
prepare a Scheme Booklet for its shareholders, comprising the Notice of Meeting, Explanatory Statement, and
Independent Expert’s Report (“IER”). Special independent committees have been formed for both Mawson and
SXG to negotiate the terms of the Australian Arrangement.
Capital Structure
Under the terms of the NBTS, should the Australian Arrangement be implemented, and prior to the transaction
becoming effective, Mawson will affect a share consolidation of its number of s hares on issue (305,045,320)
(the “Mawson Shares”) at a ratio of approximately 3.1581:1 (the “Consolidation”), resulting in the number of
outstanding Mawson Shares being equal to the number of SXG Shares (96,590,910) held by Mawson (subject
to rounding).
Under the Australian Arrangement, Mawson will then offer to purchase the SXG shares Mawson does not already
own on the basis of a 1:1 exchange ratio for new Mawson shares , so that existing holders of SXG (other than
Mawson) will own approximately 50.4% of issued New Southern Cross shares following completion of the
Australian Arrangement.
SXG shareholders, via the Australian Arrangement, may exchange one fully paid ordinary SXG share for one post
consolidation Mawson common share (either in the form of CDIs or, if a shareholder elects, Mawson common
shares) such that at the completion of the Australian Arrangement existing MAW shareholders will hold
approximately 49.6% of the issued capital of Mawson. As a result of the Australian Arrangement, it is expected
that SXG will become a wholly owned subsidiary of Mawson.
The issued capital of New Southern Cross at the completion of the Australian Arrangement will be approximately
194.9 million shares, mirroring the same capital structure of SXG as at today’s date.
Dual Listing
It is expected that Mawson will change its name to Southern Cross Gold Ltd and will seek dual list on the ASX
through the admission to quotation of the CDIs (which will be subject to the ASX listing and admission process).
Once the Australian Arrangement is complete, it is anticipated that Mawson (to be renamed Southern Cross Gold
Ltd) will trade on both the TSXV and the ASX.
Promptly after execution of SIA to implement the Australian Arrangement, Mawson and SXG will prepare and
submit an ASX listing application for Mawson on an assumed post -completion basis, together with ancillary
documents and applications (such as an application for in-principle advice on suitability for listing, details of the
terms of Mawson Shares and CDIs, pro forma combined financial statements, and other materials required by
ASX). SXG and its advisers will take the lead in assisting Mawson in preparing the content of the in -principle
advice application to ASX, the formal listing application, and ancillary submissions and applications.
Experienced Australian Team
Following completion of the Australian Arrangement , it is expected that the Board of New Southern Cross will
be reconstituted so that it comprises the current members of the SXG board of directors led by Mr. Tom Eadie
as Non-Executive Chairman. An additional director may be drawn from the current Mawson b oard of directors.
Management of New Southern Cross is expected to mimic the current management of SXG led by Michael Hudson
as President & CEO, Lisa Gibbons as General Manager and Kenneth Bush as Exploration Manager.
Mawson Spin-Off
Immediately prior to, or concurrently with the completion of the Australian Arrangement, Mawson intends to,
subject to Swedish regulatory change, and considering all corporate and tax matters, either:
• distribute Euro Canna Holdings Ltd. (“Euro Canna”) common shares to the Mawson shareholders (the
“Spinout Transaction”); or
• sell Euro Canna or its assets to an arm’s length third party and distribute the net proceeds to the holders
of Mawson shares as at the Record Date of the Mawson Special Meeting (the “Sale Transaction” and
together with the Spinout Transaction, the “Euro Canna Transaction”).
The Euro Canna Projects (hereinafter defined) host the majority of Sweden’s conventional hard rock historic
uranium resources (combined 22.7Mlb U3O8 (see below)).
During March 2023, Euro Canna, acquired six exploration licenses: Björklund nr 1 & 2, Björkråmyran nr 3,
Kvarnån nr 5, Nöjdfjället nr 1, and Skuppesavon nr 2 for 16,138 hectares. All these exploration licenses are
granted and are located through central and northern Sweden to explore for zirconium, scandium, yttrium and
lanthanum and other lanthanides (rare earths) (“Euro Canna Projects”).
Although Sweden benefits from having 40% of its electricity supply generated by nuclear energy, a uranium
exploration and mining moratorium has been in place in the country since May 2018. The Swedish Government
has indicated a positive stance on re-evaluating and lifting the moratorium. Exploration, development and mining
of the Euro Canna Projects is still possible under the current Swedish Minerals Act; however, recovery of uranium
in a mining scenario would not be permitted under the current mineral leg islation. The Swedish Government
announced an inquiry into the ban on mining uranium. The inquiry concluded on 15 May 2024 and Mawson
believes a public announcement by the Swedish government will be made shortly.
Sweden’s current center-right coalition government has also indicated strong support to expand nuclear power
in Sweden. There are currently six operating nuclear reactors in Sweden that supply approximately 40% of the
country’s electricity. The Swedish Government has called for the possible restart of Ringhals nuclear power plant
Units 1 and 2, as well as to prepare for the construction of new reactors.
The Euro Canna Projects are considered a valuable option on the potential for Sweden regulation chan ges
regarding uranium exploration and development.
The historic uranium resources within the six exploration licences staked by Euro Canna consist of:
• Pleutajokk1: 5.3 Mlb U3O8 (1.93 Mt @ 0.120% U3O8)
o A v ein type uranium prospect related to sodic-metasomatism and high -grade metamorphism
hosted by metavolcanic rocks.
• Lilljuthatten1: 4.2 Mlb U3O8 (0.78 Mt @ 0.240 % U3O8)
o A vein and breccia uranium type prospect related brittle deformation in leucogranite.
• Kvarnån1: 3.7 Mlb U3O8 (1.94 Mt @ 0.086% U3O8)
o A vein and dissemination uranium type prospect related to sodic-metasomatism and high-grade
metamorphism hosted by metavolcanic rocks.
• Kläppibäcken2: 3.3 Mlb U3O8 (1.94 Mt @ 0.080 % U3O8)
o A vein and breccia uranium type prospect related brittle deformation in leucogranite.
• Björkråmyran1: 3.3 Mlb U3O8 (1.33 Mt @ 0.1% U3O8)
o A vein type uranium prospect hosted by shear zones in albitized granitic rocks.
• Skuppesavon1 1.8 Mlb U3O8 (0.98 Mt @ 0.08% U3O8)
o A v ein type uranium prospect related to sodic-metasomatism and high -grade metamorphism
hosted by metavolcanic rocks.
• Nöjdfjället1: 1.1 Mlb U3O8 (0.76 Mt @ 0.068 % U3O8)
o A vein and breccia uranium type prospect related brittle deformation in leucogranite.
1. The resource estimates quoted are based on a report, “Introductory Technical Report on Eight Uranium Properties In Northern
Sweden” by Andrew Phillips from Telluride & Associates dated 15th July 2005. The resource was calculated using a polygonal
method and is roughly analogous to the CIM definitions “Indicated” and “Inferred”. These data are historical in nature and
Mawson has not completed sufficient exploration to verify the estimates and is not treating them as National Instrument
defined resources or reserves verified by a qualified person and the historical estimate should not be relied upon. The
Company believes this historical resource and the data used to compile the estimate – which represent the most recent
estimates and data available – are generally reliable and relevant.
2. The resource estimate quoted is based on a report, “Kläppibäcken Resource Report 2007” by Goeff Reed dated 14 October
2007. The resource was estimated within a geologically constrained mineralized envelope; with a lower cut-off of 0.025%
uranium applied to resource blocks populated using the inverse distance squared method within Maptek Vulcan software. The
model utilized a total of 56 holes for 8,943 metres and is roughly analogous to the CIM definitions “Indicated” and “Inferred”.
These data are historical in nature and Mawson has not completed sufficient exploration to verify the estimates and is not
treating them as National Instrument defined resources or reserves verified by a qualified person and the historical estimate
should not be relied upon. The Company believes this historical resource and the data used to compile the estimate – which
represent the most recent estimates and data available – are generally reliable and relevant.
A qualified person has not done sufficient work to classify the historical estimate as current mineral resources
or mineral reserves and the issuer is not treating the historical estimate as current mineral resources or mineral
reserves.
Approvals and Timing
The Australian Arrangement is subject to a range of conditions, including, but not limited to, approval by SXG
shareholders, court approval and regulatory approvals, as well as SXG and Mawson entering into a SIA relating
to the Australian Arrangement containing terms and conditions, including representations and warranties ,
customary non-solicitation covenants, board support and fiduciary-out provisions all customary for transactions
of this nature.
Closing of the Australian Transaction is expected to take three to four months following the execution of the SIA
by the parties and assuming that the scheme of arrangement is successful, that there are no rival bidders and
that there are no regulatory actions that will affect timing.
SXG will require the usual shareholder approvals to implement the Australian Arrangement as required by the
Corporations Act, being both:
• a 75% vote by number of SXG shares voted, and
• a majority in number of the SXG shareholders who vote.
Mawson and its associates will not be entitled to vote on the Australian Arrangement.
Mawson will require:
• shareholder and TSXV approval to implement the changes to the Mawson Board of the resulting entity,
as required by the policies of the TSXV being a simple majority in the number of Mawson shares voted;
• TSXV approval on the Consolidation; and
• shareholder and TSXV approval to implement the Spinout Transaction , if applicable, as required under
the Business Corporations Act (British Columbia) being a 66⅔% vote by the number of Mawson Shares
voted. The Euro Canna Transaction is also expected to be subject to certain conditions customary for
this type of transaction including, but not limited to, regulatory and court approvals in British Columbia.
About Sunday Creek
The Sunday Creek Project is located 60km north of Melbourne within 19,365 hectares of granted exploration
tenements. SXG is also the freehold landholder of 133.29 hectares that form the key portion in and around the
main drilled area at the Sunday Creek Project.
Gold and antimony form in a relay of vein sets that cut across a steeply dipping zone of intensely altered rocks
(the “host”). When observed from above, the host resembles the side rails of a ladder, where the sub-vertical
mineralised vein sets are the rungs that extend from surface to depth. At Apollo and Rising Sun these individual
‘rungs’ have been defined over 600 m depth extent from surface to 1000 m below surface, are 2 m to 30 m
wide, and are 20 m to 100 m in strike.
Our systematic drill program is strategically targeting these significant vein formations. Initially these have been
defined over 1,350 m strike of the host from Christina to Apollo prospects, of which approximately 620 m has
been more intensively drill tested (Rising Sun to Apollo). At least 47 ‘rungs’ have been discovered to date, defined
by high-grade intercepts to >7,000 g/t Au) along with lower grade edges. Ongoing step-out drilling is aiming to
uncover the potential extent of this mineralised system.
Geologically, the project is located within the Melbourne Structural Zone in the Lachlan Fold Belt. The regional
host to the Sunday Creek mineralisation is an interbedded turbidite sequence of siltstones and minor sandstones
metamorphosed to sub-greenschist facies and folded into a set of open north-west trending folds.
Qualified Person
The Qualified Person, Michael Hudson, Executive Chairman and a director of Mawson Gold, and a Fellow of the
Australasian Institute of Mining and Metallurgy, has reviewed, verified and approved the technical contents of
this release.
About Mawson Gold Ltd
In May 2022, Mawson spun-off its Australian assets via an IPO of SXG onto the ASX. Mawson currently holds
49.57% (96,590,910) of SXG’s shares (194,863,187) on issue.
Further Information
Further discussion and analysis of the Sunday Creek project is available through the interactive Vrify 3D
animations, presentations and videos all available at www.southerncrossgold.com.au.
On behalf of the Board,
"Bruce Griffin "
Bruce Griffin , Member of the Special
Committee and Independent Director
Further Information
www.mawsongold.com
1305 – 1090 West Georgia St., Vancouver, BC, V6E 3V7
Mariana Bermudez (Canada), Corporate Secretary
+1 (604) 685 9316 [email protected]
Forward-Looking Statement
This news release contains forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and
assumptions and accordingly, actual results and future events could differ materially from those expressed or implied in such statements.
You are hence cautioned not to place undue reliance on forward-looking statements. All statements other than statements of present or
historical fact are forward -looking statements, including statements with respect to the NBTS and the likel ihood that the SIA will be
entered into and that the Australian Arrangement, including the proposed consolidation of Mawson’s shares, proposed listing of Mawson’s
shares on the ASX and Euro Canna Transaction, will be consummated on the terms and timeline provided herein or at all, the benefits of
the Australian Arrangement to Mawson and SXG and the receipt of all required approvals including without limitation by shareholders
and applicable court, regulatory authorities and applicable stock exchanges. Forwa rd-looking statements include words or expressions
such as "proposed", "will", "subject to", "near future", "in the event", "would", "expect", "prepared to" and other similar w ords or
expressions. Factors that could cause future results or events to differ materially from current expectations expressed or implied by the
forward-looking statements include general business, economic, competitive, political, anticipated Swedish legislative changes on the
current ban on uranium mining and social uncertainties; the state of capital markets; risks relating to (i) the preliminary and non-binding
nature of the NBTS, (ii) the ability of the parties to satisfy the conditions precedent to the execution of the SIA or to ultimately agree on
definitive terms, (iii) the impact on the respective businesses, operations and f inancial condition of Mawson and SXG resulting from the
announcement of the Australian Arrangement and/or the failure to enter into definitive agreement(s), including the SIA, or to complete
the Australian Arrangement on terms described or at all, (iv) delay or failure to receive board, shareholder regulatory or court approvals,
where applicable, or any other conditions precedent to the completion of the SIA, (v) unforeseen challenges in integrating the businesses
of Mawson and SXG, (vi) failure to realize the anticipated benefits of the Australian Arrangement or Euro Canna Transaction, (vii) other
unforeseen events, developments, or factors causing any of the aforesaid expectations, assumptions, and other factors ultimately being
inaccurate or irrelevant; and other risks described in Mawson’s and SXG’s documents filed with Canadian or Australian securities regulatory
authorities. You can find further information with respect to these and other risks in filings made by Mawson or SXG with the securities
regulatory authorities in Canada or Australia, as applicable, and available in Canada at www.sedarplus.ca. Mawson’s documents are also
available at www.mawsongold.com We disclaim any obligation to update or revise these forward-looking statements, except as required
by applicable law. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.