IONDRIVE LIMITED — Capital/Financing Update 2007

Aug 27, 2007

N E W S • R E L E A S E •

FOR IMMEDIATE RELEASE Tuesday August 28, 2007

U.S. MOVE ADDS SECOND OVERSEAS

DIMENSION FOR SOUTHERN GOLD

Australian resources company, Southern Gold Limited (ASX: “SAU”) is spreading its gold exploration tentacles to the United States.

Drilling will start next week in the first of a three-staged program to prove up and develop a palaeoplacer gold project in the main mineralised corridor of Wyoming.

The move is among the first by an Australian explorer into palaeoplacer exploration - gold bearing shallow gravels which are readily mined and treated. Similar geological environments in California and Alaska are home to prominent palaeoplacer mines.

The Wyoming drill start adds to Southern Gold’s initial overseas foray 12 months ago with its agreement with Cambodia’s Ministry of Industry, Mines and Energy to develop local gold and base metals projects.

Drill start this weekend

Southern Gold is making its entry into the US resources sector through a new joint venture, Sweetwater Exploration LLC, with private company, New Discovery Gold LLC.

The Adelaide explorer will have the right to earn up to a 90% interest under the Joint Venture Agreement, to develop the South Pass palaeoplacer gold project in Freemont County, 400 kilometres northwest of Denver.

An internationally recognised placer expert from Micon International Inc., Dr Richard Garnett, has been retained by the JV to advise and direct the project.

Drilling of six holes will commence this weekend to evaluate the large volume of highly prospective gold-bearing placer material in a 12 kilometre long by half a kilometre wide palaeodrainage channel identified through magnetic surveys and previous drilling.

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Southern Gold’s Managing Director, Mr Stephen Biggins, said this initial work had defined gold-bearing gravels between 10 and 15 metres thick under just 10 metres of younger sedimentary cover.

“The geology of the area hosts the Archaean South Pass granite-greenstone (SPGG) belt remarkably similar to Precambrian volcano-sedimentary terrains of the Pilbara and Yilgarn in Western Australia and Canada’s Superior Province,” Mr Biggins said.

“The South Pass region in particular has been Wyoming’s most important source of gold and iron ore, with historic production from there conservatively estimated at 350,000 ounces of gold.

“The joint venture provides Southern Gold with entry to a potentially very large, easily-mined and metallurgically simple, gold deposit.”

Terms of JV agreement

Under the terms of the Sweetwater JV, Southern Gold is funding an initial US$250,000 verification phase over the South Pass and associated Antelope Hills target to earn an initial 30% interest.

Southern Gold can then earn a further 30% interest by expending a further US$2 million to progress work through a Stage 2 grid drilling program to define a resource to JORC standards.

The Australian explorer can then elect to add a final 30% stake to take its total interest to 90%, through funding a US$5 million Stage 3 Reserve Definition schedule, to include in-fill drilling, bulk sampling and metallurgical studies for bankable feasibility study purposes.

MEDIA CONTACT:

Ric Horn Stephen Biggins Kevin Skinner Chairman Managing Director Senior consultant Southern Gold Southern Gold Field Public Relations 08 8132 0044 08 8132 0044 08 8234 9555 0402 260 259 0419 859 600 0414 822 631

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