IONDRIVE LIMITED — AGM Information 2014

Nov 26, 2014

SOUTHERN GOLD

ON TRACK TO GOLD PRODUCTION 2014 ANNUAL GENERAL MEETING

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SOUTHERN GOLD

Southern Gold overview

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Corporate snapshot

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About Southern Gold (ASX: SAU)

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• Primary focus is developing the Cannon Gold Resource within the Bulong Project near Kalgoorlie, Western Australia to production stage.

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• A pre-feasibility study has been completed on the project and the objective is to begin mining operations in 2015.

• Mine and Profit Share Term Sheet signed with Metals X to help advance development at Cannon.

• Near Resource and regional exploration continues at Bulong Project, and longer term exploration targets at Cowarna Project.

• The company also has Mekong Minerals earning an interest into its Cambodian tenement prospective for copper gold as base metals

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FROM DISCOVERY TO DEVELOPMENT 3
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cont. Corporate snapshot

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Financial information

	Number of shares	386.0 m
	Share price (as at 26 November 2014)	A$0.009
	Market capitalisation	A$3.5 m
	Cash (as at 30 Sept 2014)	A$0.6 m
	Enterprise value	A$3.4 m
	Loan (transaction with Metals X)	A$0.5 m

Note: 2.9m listed options (exercise prices A$0.060-0.105 with expiries 01-Dec-15 – 15-Oct-17

Major shareholders

	Silver Lake Resources	11.2%
	Gary B Branch	6.1%
	JP Morgan Nominees	4.1%
	National Nominees Board and management	3.0% 6.3%

Strategic partners

Metals X

A top 10 Australian gold producer through two operations in WA along with development projects Australia’s largest tin producer and also holds nickel assets.

Mekong Minerals Australian exploration company focused on SouthEast Asia.

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FROM DISCOVERY TO DEVELOPMENT 4
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Project portfolio

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Bulong Gold Project and the Cannon Gold Resource

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Southern Gold’s flagship Bulong Gold project, which contains the Cannon Gold Resource, is located 30km east of the world class gold district of Kalgoorlie, Western Australia

Project portfolio

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FROM DISCOVERY TO DEVELOPMENT 6
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Pre Feasibility Study – Key Outcomes

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Completed Pre Feasibility Study (PFS) confirmed favourable project economics

• PFS completed August 2013

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• ◦Demonstrated positive economic returns with a low capital cost structure

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• Further optimisation completed in February 2014

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• ◦Resulted in improved economics through reduced operating costs

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• The open pit and underground mine design supports the production of 484kt at 4.4g/t Au for 68,200oz

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FROM DISCOVERY TO DEVELOPMENT 7
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PFS – Forecast Free Cash Flow

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Forecast positive free cash flows available within the short-term horizon

• PFS demonstrates that development of the Cannon Gold Resource as a toll treatment operation delivers positive economic returns with a low capital cost structure.

• Metals X involvement expected to enhance project economics.

Mine Life Mined Ounces Recovery (ave) Infrastructure Cost Operating Cost WA State Royalty Free surplus cash flow	Scenario 1 A$1,350/oz Au Base Case A$1,400/oz Au Scenario 2 A$1,500/oz Au Months 36 36 36 oz Au 68,200 68,200 68,200 % 92 92 92 A$m 13.3 13.3 13.3 A$/oz 964 964 964 % 2.5 2.5 2.5 A$m 9.3 12.4 18.5 FROM DISCOVERY TO DEVELOPMENT 8

Transaction with Metals X

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Mining and profit share agreement executed to fast-track development and reduce project risk

• Metals X: Australian top ten gold producer, Australia’s largest tin producer.

• Metals X to finance, mine and process ore from the Cannon Gold Resource for 50:50 profit share.

• Secured loan facility of A$500,000 (8% p.a. interest).

• Reduces Southern Gold’s operational risk by utilising Metal X’s dedicated technical team with experience in both toll-treatment and mine development.

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FROM DISCOVERY TO DEVELOPMENT 9
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Value Enhancement Opportunities

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Opportunity to increase the size of the forecast mine capability through further exploration

• Inferred Resource material within the pit design has not been included in the mining inventory.

• Infill drilling to test robust continuity of areas currently defined as inferred ounces.

• Cannon Gold Resource remains open to the west.

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FROM DISCOVERY TO DEVELOPMENT 10
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Exploration Upside

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The Cannon Gold Resource was discovered within the Cannon Trend, a 1km trend of gold-in-soil anomalies

• The resource has progressed from initial discovery through to a PFS completed in 2013

• Mine development has been approved subject to securing finance and regulatory approvals

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FROM DISCOVERY TO DEVELOPMENT 11
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Building the Southern Gold Resource base

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Several other prospective areas around Cannon Gold Resource

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• Pinner – c.10,000oz currently defined.

• Cannon South – 2 drill-holes intersected what appears to be an extension or repetition of the prospective host unit of the Cannon Go ld Resource

• Arsenal – 1 test hole intersected 40m of alteration which is visually and chemically similar to alteration around high grade gold zones of Cannon Gold Resource

Cannon Trend gold in soil anomalies and the Cannon Gold Resource

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FROM DISCOVERY TO DEVELOPMENT 12
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Future Value Growth

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Strong potential exists to build the Company’s resource base through exploration at the Cowarna Project, however Southern Gold’s current focus remains firmly on the Bulong Project

Cowarna Gold Project

• 50km south-east of the Bulong Gold Project

• Considerable scope for further structural target ng o i f go ld Resources

• Longer term objective: extend resource base at Cowarna Gold Project through extension of tenement holdings

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FROM DISCOVERY TO DEVELOPMENT 13
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SOUTHERN GOLD

Key milestones and investment case

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Key milestones

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Strong newsflow expected in short to medium term

Cannon Gold Resource development and production
Formal agreement with Metals X underway	Completed
Final regulatory approvals received	4Q 2014
Roadworks and other preliminary development*	4Q 2014 /1Q 2015
Complete development and begin production*	1Q 2015
Near Cannon Gold Resource exploration
Follow up drilling Arsenal and Cannon South	3Q 2015
First pass drill testing of Tier 1 targets	4Q 2015
Regional exploration
Exploration program at Cowarna Project	2H 2015

• Development dates are subject to regulatory approval schedules

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FROM DISCOVERY TO DEVELOPMENT 15
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Discovery to development

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Cannon Gold Resource perfectly positioned for success and wider tenement position provides strong future outlook

Cannon Gold Resource

• Only 30km east of Kalgoorlie

• Development in 2014: early cashflow opportunity

• Existing potential to grow the Resource base

Metals X transaction

• Agreement will fast-track development and reduce project risk

• Potential to lead to further optimisation of project costs and mine plan

The bigger picture

• 250km[2] tenement holding, with 30 priority anomalies

• Follow up work has prioritised 6 Tier 1 targets

• Knowledge gained from work at the Cannon Gold Resource provides important structural and geochemical information to assess regional targets for similarities

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FROM DISCOVERY TO DEVELOPMENT 16
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SOUTHERN GOLD

Appendix A – Bulong Gold Resource

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Cannon Gold Resource

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93% of the Cannon Gold Resource is within the Indicated category

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Type
Indicated Inferred Total
Tonnes Au Au Tonnes Au Au Tonnes Au Au
t g/t Ounces t g/t Ounces t g/t Ounces
Oxide 8,000 3.0 800 1,500 2.4 100 9,500 2.9 900
Transitiona l 137,600 3.1 13,900 34,100 2.6 2,900 171,700 3.0 16,800
Fresh 573,500 4.3 78,500 57,500 2.3 4,200 631,000 4.1 82,800
Total 719,100 4.0 93,200 93,000 2.4 7,200 812,200 3.9 100,400
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Note (1): Rounding errors affect totals Note (2): Source - Cannon Mineral Resource JORC Statement, ASX 31/1/2014

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FROM DISCOVERY TO DEVELOPMENT 18
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Bulong Gold Resource

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The Pinner Resource bolsters Southern Gold’s Resource base

		Indicated	Indicated		Inferred			Total
	Tonnes	Au	Au	Tonnes	Au	Au	Tonnes	Au	Au
	t	g/t	Ounces	t	g/t	Ounces	t	g/t	Ounces
	Cannon Gold Resource
Oxide	8,000	3.0	800	1,500	2.4	100	9,500	2.9	900
Transitional	137,600	3.1	13,900	34,100	2.6	2,900	171,700	3.0	16,800
Fresh	573,500	4.3	78,500	57,500	2.3	4,200	631,000	4.1	82,800
Total	719,100	4.0	93,200	93,000	2.4	7,200	812,200	3.9	100,400
	Pinner Resource
Oxide	-	-	-	600	3.0	200	600	3.0	200
Transitional	-	-	-	76,400	2.2	5,400	76,400	2.2	5,400
Fresh	-	-	-	94,900	2.0	6,100	94,900	2.0	6,100
Total	-	-	-	172,000	2.1	11,500	172,000	2.1	11,500
Total Resource	719,100	4.0	93,200	265,000	2.2	18,700	984,100	3.5	111,900
Appendix 1 – Bulong Gold Project					Resource Table
						FROM DISCOVERY TO DEVELOPMENT				19

Disclaimer

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Forward-looking statements

The information in this presentation is published to inform you about Southern Gold Limited (“Southern Gold”) and its activities. Some statements in this presentation regarding estimates or future events are forward looking statements. These may include, without limitation:

• Estimates of future cash flows, the sensitivity of cash flows to metal prices and foreign exchange rate movements;

• Estimates of future metal production; and

• Estimates of the resource base and statements regarding future exploration results and increasing the company’s resource base

Such forward looking statements are based on a number of estimates and assumptions made by the Company and its consultants in light of experience, current conditions and expectations of future developments which the Company believes are appropriate in the current circumstances. Such statements are expressed in good faith and believed to have a reasonable basis. However the estimates are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from estimated results.

All reasonable efforts have been made to provide accurate information, but the Company does not undertake any obligation to release publicly any revisions to any “forward-looking statement” to reflect events or circumstances after the date of this presentation, except as me be required under applicable laws. Recipients should make their own enquiries in relation to any investment decisions from a licensed investment advisor.

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FROM DISCOVERY TO DEVELOPMENT 20
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Disclaimer cont.

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Competent Person’s statements

The information in this report that relates to Exploration Results has been compiled under the supervision of Mr. Ian Blucher (MAusIMM). Mr Blucher, who is a full time employees of Southern Gold Limited and a Member of the Australian Institute of Mining and Metallurgy, has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity he has undertaken to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for the Reporting of Mineral Resources and Ore Reserves. Mr Blucher consents to the inclusion in this report of the matters based on the information in the form and context in which it appears.

The information in this report that relates to Mineral Resources is based on information compiled by Mr Ian Blucher (MAusIMM). Mr. Blucher is a full time employee of Southern Gold Limited and has sufficient experience that is relevant to the style of mineralisation, type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (JORC, 2012). Mr Blucher consents to the inclusion in this report of the matters based on the information in the form and context in which it appears.

Pre-Feasibility Study Results

The Optimisation announcement dated 13 February 2014 had no material changes to the methodology and assumptions used to determine the production target as detailed in the PFS announcement of 28 August 2013, and all of the key parameters continue to apply. The Optimisation announcement provided an update to the market of the reduction in the forecast operating costs. There have been no material changes to the methodology used to determine the operating costs as outlined in the PFS announcement.

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Appendix 1 – Bulong Gold Project Resource Table
FROM DISCOVERY TO DEVELOPMENT 21
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SOUTHERN GOLD

Nanette Anderson Managing Director +61 8 8368 8888 info@southerngold.com.au www.southerngold.com.au

229 Greenhill Road Dulwich SA 5065

PO Box 255 Kent Town SA 5071