IONDRIVE LIMITED — Capital/Financing Update 2007

Jun 5, 2007

6^th lune 2007

\$1 million of drilling to start on IOCGU gravity targets near Carrapateena, Gawler Craton, S.A.

Southern Gold Ltd (ASX: SAU) has committed to drill at least 5 high priority IOCGU targets on its Torrens South project near Carrapateena in South Australia. The gravity anomalies targeted for drilling, interpreted as dense hematite alterations, have been selected for drilling in the upcoming program.

An additional 8 potential IOCGU drill targets have also been prioritized based on the recent detailed gravity surveys completed by Southern Gold. Over 3,900 gravity stations at 250m spacing were completed in early 2007. Nine target areas in total were geophysical modelled - highlighting anomalous dense volumes within the subsurface (Figure 1).

The initial drilling program comprises at least 5 holes with a maximum depth 1000m. "The size of the mineralisation style as seen in recent drilling results from nearby Carrapateena (905m at 2% copper and 1g/t gold), justifies our plans to drill 1000m holes" said Southern Gold Managing Director Stephen Biggins. Some of the new gravity targets on Southern Gold's Torrens South Project are 10km SE along strike from the Punt Hill discoveries being drilled on the adjacent tenement.

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 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 (Figures 2.3 & 4).

Southern Gold will also be conducting further detailed gravity surveys to verify attractive gravity anomalies identified by historic surveys. A commitment to additional drilling at Tycoon, Mogul and Tsar Targets Areas is expected once this extra gravity is acquired later this month.

IV partner Crescent Gold is fully funding this program by spending \$4,000,000 by 31/12/2008 to earn 50% in the Joint Venture.

Discussions are currently underway with drilling contractors to enable this deep drilling program to start as early as next month.

For Further information please contact:

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

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

Southern Gold Limited ABN 30 107 424 519

58 North Terrace Kent Town South Australia 5067 South Australia 5071

PO Box 750 Kent Town

email: info@southerngold.com.au telephone 08 8132 0044 www:southerngold.com.au

facsimilie 08 8132 0199

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. Residual gravity image and proposed drillhole locations, Torrens South Project, S.Australia.

Southern Gold Limited ABN 30 107 424 519

58 North Terrace Kent Town South Australia 5067 PO Box 750 Kent Town South Australia 5071

email: info@southerngold.com.au www.southerngold.com.au

telephone 08 8132 0044 facsimilie 08 8132 0199

ASX RELEASE

Figure 2. A. Idealised gravity profile and B. Interpreted geological cross section

Southern Gold Limited ABN 30 107 424 519

58 North Terrace Kent Town South Australia 5067

PO Box 750 Kent Town South Australia $5071\,$ email: info@southerngold.com.au telephone 08 8132 0044 www:southerngold.com.au

facsimilie 08 8132 0199

ASX RELEASE

Figure 3 - Close up of Magnate (Target 3) and Tycoon (Target 4) Gravity Targets

Figure 4 - Close up of Tsar Gravity Target (Target 5)

Southern concernment ABN 30 107 424 519

so roma renace Kent Town South Australia $5067\,$ טער אמט טר Kent Town South Australia $5071\,$

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renginane uo os de 0044 facsimilie 08 8132 0199