IONDRIVE LIMITED — AGM Information 2005

Nov 22, 2005

SOUTHERN GOLD LIMITED 2005 ANNUAL GENERAL MEETING CHAIRMAN'S ADDRESS

Ladies and Gentlemen, I present to you the Chairman's address.

Following the listing of your Company on 21 April this year, an aggressive program of exploration activities and initiatives was commenced on a number of fronts.

The first few months of the gestation of the Company were devoted to establishing office and computing facilities. Company policies and staffing. Acquisition of appropriately qualified geoscience personnel was a serious impediment to the implementation of an active exploration program. This has been overcome with the recruitment of Peter Hill as our Exploration Manager and Bethany Lawrence as a junior geologist. We have also been fortunate to have the services of Graham Bubner (geophysicist) and Teena Coppin to manage our tenement reporting requirements.

The exploration tempo of the Company increased during the second half of 2005 with active exploration for nickel and gold at Bulong near Kalgoorlie WA, gold and copper at Challenger in South Australia, gold at the Grenfell goldfield NSW and iron oxide, copper, gold, uranium at the Victory prospect on the Gawler Craton. The exploration team led by John Anderson has also identified new prospects with the potential to lpst a large multi-metallic deposit similar to Olympic Dam within the company's Yarlbrinda tenements.

Your Directors identified a significant potential within the Challenger West project and the Yarlbrinda South project to host extensive palaeochannel systems (buried river bed deposits) capable of hosting uranium deposits similar to Beverley and Honeymoon on the Curnamona Craton. Southern Gold Limited concluded a joint venture agreement with Hindmarsh Resources Limited which should see the expenditure of $\mathcal{D}$ .5 million for uranium on tenements on the Gawler Craton, a province which hosts about 40% of the world's uranium resource.

Despite suggestions in the media and a decision by the State ALP Convention, to maintain the status quo, with regard to the three mine uranium policy, your Directors remain positive about the outlook for the future of the uranium industry and development of new mines

On 19 August SAU presented a submission to the Federal Government's Committee reviewing the importance of non-fossil fuels to Australia. We the Directors believe that uranium presents a clean and safe fuel for developing Nations such as China, India and South American and African countries. Greenhouse gases, global warming and climate change are perhaps the single most important issue facing the world today and it is encouraging to see more journalists, political commentators, politicians and the general public debating the nuclear power issue.

The South Australian Government continues to support exploration for uranium through the PACE (Program for Accelerated Exploration) scheme and continues to support a review of the "No New Mines" policy at the next Federal ALP conference.

With this in mind the Directors have initiated the formation of a new wholly-owned uranium exploration Company, Southern Uranium Limited. We believe that this will provide us with greater flexibility for funding the exploration of our uranium targets and the opportunity to attract substantial long-term funding from a major alliance partner.

In mentioning the Government's PACE program, I would like to congratulate the South Australian Government on this exciting and successful initiative and add that Southern Gold Limited has been awarded a total of \$146,000 to be applied to drilling expenses in our Southern Gawler Arc and Yarlbrinda projects. We have also lodged an application for additional PACE funding to explore the newly identified Yathong gravity IOCGU target at Yarlbrinda. Steve will discuss this exciting new prospect in more detail.

The current level of exploration activity in South Australia is in part due to the underexplored nature of the States highly prospective geological terrains where significant deposits of copper, gold, lead, zinc, uranium, coal and heavy mineral sands have been identified and are scheduled for development over the next few years. The Directors believe that the high commodity prices for uranium, copper and nickel, and more recently gold, (reached an 18 month high of US\$493) will be sustained in the foreseeable future.

Your Company will continue to focus on exploration for gold, copper, uranium and nickel and will investigate any opportunities to participate in the development of these commodities either through acquisition or joint venture. Southern Gold Limited has a very large land holding in South Australia, WA and NSW and is in discussion with possible alliance partners to assist with the exploration of our highly prospective portfolio of mineral tenements.

I would like to take this opportunity to sincerely thank those shareholders who supported our recent Shareholder Share Purchase Plan. The successful capital raising was undertaken at a time when there was considerable competition from other Companies seeking new funds. The financial position of Southern Gold Limited and the ability to pursue new mineral exploration ventures has been significantly strengthened with the capital raised.

Successful exploration for economic mineral deposits is a function of the tenacity and perseverance of the personnel involved. I would like to thank my fellow Directors, your Managing Director, Stephen Biggins, our energetic geoscientific staff and our highly qualified band of contractors for their diligent and tenacious efforts in developing and exploring our prospects.

Our future is clearly defined and the strategies to progress the Company from a junior explorer to a mineral producer are now in place. Southern Gold Limited with additional ground holding and the refinement of our IOCGU exploration model is now positioned as a key explorer on the Gawler Craton. I believe that shareholders can look forward to a period of growth and exciting new discoveries by Southern Gold Limited.