IONDRIVE LIMITED — AGM Information 2017

Oct 24, 2017

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SOUTHERN GOLD

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‘BLUECHIP’ GOLD EXPLORER

AGM Presentation – 25 October 2017 ASX Ticker: SAU

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.

Competent Person’s statements

The information in this report that relates to Exploration Results has been compiled under the supervision of Mr. Justin Gum (MAIG). Mr Gum who is an employee of Southern Gold Limited and a Member of the Australasian Institute of Geoscientist, 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 Gum 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 Exploration Results has been compiled under the supervision of Dr Chris Bowden (FAusIMM(CP)). Dr Bowden, who is an employee of Southern Gold Limited and a Fellow and Chartered Professional of The Australasian 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 Exploration Results, Mineral Resources and Ore Reserves. Dr Bowden 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 has been compiled under the supervision of Mr. Paul Androvic (AusIMM). Mr Androvic who is an employee of Southern Gold Limited and a Member of the Australasian 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 Androvic consents to the inclusion in this report of the matters based on the information in the form and context in which it appears.

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Corporate Overview: Highlights of FY16/17

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Gubong Gold Mine historic underground
workings draped on Google Earth image,
centre field of view approximately 1.5km wide
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Conceptual Underground with block model, Cannon
Gold Mine, Kalgoorlie, WA
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South Korea – Acquired July ’16 for ~A$2m scrip & A$0.1m cash

• Gubong & Taechang Au Mines deal with Bluebird MV in March ’17 with US$1m farm in and A$0.5m premium placement

• SAU Shareholders with “free option” on remainder of SK assets

Kalgoorlie, WA – Cash Flow

• Cannon Au Mine: $13.7m cash injection = all debt repaid, $5m cash balance

• Transfind Extended deal completed

• Unfranked Special Dividend 3c/share

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Corporate Strategy

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 Search for ‘world class’ gold deposits, organically funded  Next stage of organic funding?

 Near Term Cash = Cannon Underground (Kalgoorlie)  Mid Term Cash = Gubong Gold Mine (South Korea)

 Other potential sources of organic funding?

• Glandore (Kalgoorlie)?

• Kochang or Weolyu (South Korea)?

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Southern Gold: a Blue Chip Explorer

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 Technical People Douglas Kirwin, Chris Bowden, Justin Gum;

• Exploration Ground

262km[2] in Kalgoorlie and 120km[2] South Korea;

 Funding @ 30/9/17 Cash ~$5m + Cannon underground to come;

• Capital Structure

49.1m shares;

 Shareholder Return 87% return over last 2 financial years (incl. 3c/sh div).

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Good People

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Board

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Greg Boulton, Chairman

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Simon Mitchell, Managing Director

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David Turvey, Non-Executive Director

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Mick Billing, Non-Executive Director

Company Secretary

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Dan Hill, Company Secretary

Technical

Key Managerial

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Doug Kirwin, Chris Bowden, Technical Advisor Exploration Manager, Korea

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Justin Gum, Principal Geologist, Australia

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Ray Ridge, CFO

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Joseph Lee, Country Manager, Korea

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Good Ground: Kalgoorlie, 46 tenements, 262km[2]

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Westgold Resources Ltd
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Good Ground: South Korea, 44 graticules, 120km[2]

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Funding, Capital Structure, Business Model

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Number of ordinary shares on issue	49.15m
Staff and Director Options	~4.7m
Total Fully Diluted Shares	53.85m
Share price (23 October 2017)	A$0.27
Market capitalisation (undiluted)	A$13.3m
Cash (est 30 Sept 2017)	A$5m
Enterprise value	A$8.3m

Special Dividend recently paid of unfranked 3c/share cash or

Scrip equivalent @ A$0.25/share under the Dividend Reinvestment Plan (approx. 33% of shares participated) = ~12% pre tax return

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FY16+FY17 Share Price Graph: Low 17c, High 46c

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A$0.5m Placement priced
40c at 38.6c, +35% Premium
A$1.2m Placement
35c at 35c, +25%
Premium
30c
Current share
25c
price @ 27c
3c per share unfranked
20c
special dividend lifts
return to +39%
30 June 2015 30 June 2016 30 June 2017
@ 20c @27c = +35% @34.5c = +28%
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* Past performance not a guarantee of future performance.
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The Organic Funding Model: Cannon Au Mine

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	Open Pit: ~95koz Au Resource ~52koz Au recovered ~A$13.7m Profit to Southern Underground Resource:	Open Pit: ~95koz Au Resource ~52koz Au recovered ~A$13.7m Profit to Southern Underground Resource:	Open Pit: ~95koz Au Resource ~52koz Au recovered ~A$13.7m Profit to Southern Underground Resource:	Open Pit: ~95koz Au Resource ~52koz Au recovered ~A$13.7m Profit to Southern Underground Resource:	Open Pit: ~95koz Au Resource ~52koz Au recovered ~A$13.7m Profit to Southern Underground Resource:
	Category	Level mRL	Tonnes	Grade **g/t **	Ounces
	Total Indicated	170 -> 240	121,600	5.68	22,170
	Total Inferred	145 -> 240	20,700	2.21	1,470
	Total Resource	145 -> 240	142,200	5.18	23,640
	@2.5g/t Au cutoff 109kt @ 6.2g/t Au for 21.7koz

Cannon Updated ID2 Block modelled interpolation, with conceptualised 4 level underground development, Cannon Pit (semitransparent light grey) and Westgold adit development and stope (in blue). See ASX release 9 October 2017 for details.

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Developing Mine Restart Capex <US$10m

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 120km historic underground development in place, including 3 shafts  Enormous embedded value  Unmined veins confirmed in situ  Target delineation: 3 years of resources Gubong historic map of old working with recently located access highlighted.

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What’s Coming in FY17/18? A lot….

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1. Cannon Underground (WA) – significant value release, currently assessing

2. Cannon Brownfield (WA) – following the Cannon shear, targets being defined

3. Glandore (WA) – up to 168g/t Au in rocks, currently drilling

4. Cowarna (WA) – extensive untested BIF strike extent, first drilling

5. Transfind Extended (WA) – visible gold in surface samples, first drilling

6. Gubong (SK) – BMV report in April/May, pathway forward to first production

7. Weolyu (SK) – up to 18g/t Au / 1030g/t Ag in rocks, currently drilling and securing underground access to high grade veins

8. Kochang (SK) – up to 24g/t Au / 650g/t Ag in rocks, currently securing underground access to high grade veins

9. Hampyeong (SK) – more details on potential to be released shortly

• + Project Generation (SK) – leveraging the Doug Kirwin database (est. value >US$10m)

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“Blue Chip” with EV< AUD$10m

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• Potential underground gold mines at:

• Cannon (WA)

• Gubong (SK) - with Bluebird Merchant Ventures

• Multiple kilometre-scale high grade Au mineralised systems being explored

• New very high quality epithermal targets being generated

• Very tight capital structure (premium placements, monetisation of assets)

• Delivering a return to shareholders (special dividend 3c per share paid)

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Research and Contacts

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• ERA, Keith Goode, April 2017 (price target >$0.40/share)

http://www.eagleres.com.au/reports/item/apr-2017-southern-gold-ltd

Simon Mitchell Managing Director +61 8 8368 8888 info@southerngold.com.au www.southerngold.com.au

Level 1, 8 Beulah Road Norwood, SA 5065 PO Box 255 Kent Town SA 5071

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South Korean Photography Copyright Erin van der Wyk

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