IONDRIVE LIMITED — Capital/Financing Update 2007

Aug 28, 2007

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29[h] August 2007

Maiden drilling commences near SA’s Carrapateena on high priority Gawler Craton IOCGU targets

Southern Gold Ltd (ASX: SAU) has commenced its maiden drilling of high priority IOCGU targets on its Torrens South project near Carrapateena in South Australia. Five gravity anomalies, interpreted as dense hematite alterations, have been selected for drilling in the new program.

The first hole, targeting the Magnate anomaly on the southern portion of EL 3515 (Figure 1), will be part of a least an initial 5 hole program with depths ranging to 1000m. Southern Gold believes the size of the mineralisation style as seen in recent drilling results from nearby Carrapateena (905m at 2% copper and 1g/t gold) justifies its plans to drill deep holes.

The subsequent Baron and Kaiser targets, further to the northwest in EL 3513, are 10km SE along strike from the Punt Hill discoveries being drilled on the adjacent tenement.

The Shah/Mogul and Lord targets in the southern EL 3515, are located on the margin of an interpreted Hiltaba Granite and controlled by strong NW structures. These targets are in similar geological setting to Punt Hill and Carrapateena (Figure 1).

The Torrens South project consists of two tenements (EL 3513 and EL 3515) encompassing approximately 1,500 square kilometres located on the eastern margin of the Gawler Craton within the Olympic IOCGU province, host to the world-class Olympic Dam deposit, Prominent Hill and the recently discovered Carrapateena prospect, and including recent IOCGU discoveries at Punt Hill. This makes Southern Gold’s Torrens South Project extremely prospective for further IOCGU discoveries (Figure 2).

JV partner Crescent Gold (ASX:CRE) is fully funding the exploration program on the Torrens South Project by spending $4 million by 31/12/2008 to earn 50% in the Joint Venture.

Drilling will continue on the Torrens South Project for at least 3 months.

An additional 5 potential IOCGU drill targets have also been prioritized based on recent detailed gravity surveys completed by Southern Gold. Over 5,000 gravity stations at 1km and 250m spacing have been collected by Southern Gold since 2006.

For Further information please contact:

Mr Stephen Biggins Managing Director Phone: +61 (0) 8 8132 0044 Fax: +61 (0) 8 8132 0199

Southern Gold Limited 58 North Terrace PO Box 750 email: info@southerngold.com.au telephone 08 8132 0044 ABN 30 107 424 519 Kent Town Kent Town www:southerngold.com.au facsimilie 08 8132 0199 South Australia 5067 South Australia 5071

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Please visit our website at www.southerngold.com.au

The information in this report has been compiled by Stephen Biggins (BSc(Hons)Geol, MBA) as a full-time employee of Southern Gold and who is a member of the Australasian Institute of Mining and Metallurgy and is bound by and follows the Institute’s codes and recommended practices. As a Competent Person, he has a minimum of 5 years relevant experience in the style of mineralisation and types of activities being reported and has given written consent to the above report in the form and context in which it appears.

Figure 1. Gravity image and high-priority drillhole locations, Torrens South Project

Southern Gold Limited 58 North Terrace PO Box 750 email: info@southerngold.com.au telephone 08 8132 0044 ABN 30 107 424 519 Kent Town Kent Town www:southerngold.com.au facsimilie 08 8132 0199 South Australia 5067 South Australia 5071

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Figure 2. Torrens South project location within the Olympic Dam IOCGU corridor, Gawler Craton, South Australia

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Southern Gold Limited 58 North Terrace PO Box 750 email: info@southerngold.com.au telephone 08 8132 0044 ABN 30 107 424 519 Kent Town Kent Town www:southerngold.com.au facsimilie 08 8132 0199 South Australia 5067 South Australia 5071