IONDRIVE LIMITED — Capital/Financing Update 2007

Aug 27, 2007

28[th] August 2007

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Southern Gold explores Sedimentary Gold in Wyoming, U.S.A.

Highlights

• Southern Gold enters Joint Venture Agreement to develop the South Pass and Antelope Hills palaeoplacer gold projects in Wyoming, USA.

• Southern Gold has the option to earn a 90% interest in the Wyoming projects

• Drilling of six Becker drill holes will commence on September 1[st] 2007 to evaluate the large volume of highly prospective gold bearing placer material.

• Magnetic surveys and previous drilling defined a major palaeodrainage approximately 12 kms long and 0.5 kms wide containing gold-bearing gravels between 10 and 15 m thick under 10m of younger sediments .

• The South Pass palaeoplacer occurrences are similar to the palaeoplacers of California and Alaska.

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

• Bulk samples collected from the drill holes will be treated using a Denver Gold Saver and Nelson Concentrator through a processing plant that will closely approximate the proposed metallurgical flow sheet and gold recovery.

Southern Gold is pleased to announce the execution of a joint venture agreement with New Discovery Gold LLC to develop a palaeoplacer gold deposit in the South Pass gold district, Freemont County, Wyoming, approximately 400 kms north-west of Denver, Colorado (Fig 1).

The geology of the area hosts the Archaean South Pass granite-greenstone (SPGG) belt with remarkable similarities in the style of structure, stratigraphy and mineralisation to the Precambrian volcano-sedimentary terrains of the Pilbara and Yilgarn in Western Australia and the Superior Province of Canada.

The South Pass region has been Wyoming’s most important source of gold and iron ore and mineralisation within the SPGG belt includes gold, iron, copper, silver, tungsten and uranium. The Geological Survey of Wyoming (Report 44, 1991) conservatively estimates historical production from the South Pass region to total approximately 350,000 oz of gold.

Prominent International mining consultant, Dr Richard Garnett, has proposed a three stage program through to bank feasibility.

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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SAU believes this is an excellent investment opportunity and entry to a potentially very large, easily-mined and metallurgically simple, gold deposit. SAU will accelerate exploration and assessment studies toward the commercial development of the South Pass and Antelope Hill gold deposits.

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.

For further information on this project please contact:

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

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.

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 1: South Pass and Antelope Hills location plan, Wyoming, U.S.A

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