IONDRIVE LIMITED — Capital/Financing Update 2007

Feb 19, 2007

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20th February 2007

SOUTHERN URANIUM SECURES CORNERSTONE AGREEMENT AND LODGES PROSPECTUS

The Directors of Southern Gold Limited (ASX Code: SAU) and Southern Uranium Limited (Proposed ASX Code : SNU) are pleased to announce Southern Uranium has secured a \$4 million Cornerstone Investment Agreement to support the Initial Public Offering (IPO) for which a prospectus was lodged with ASIC yesterday, 19 February 2007.

Southern Uranium Limited is issuing 70,000,000 shares to raise \$14,000,000 cash as part of its IPO. Southern Uranium has reserved 50 million shares of the IPO as Priority Shares to be allocated to Southern Gold shareholders registered on the 12 February 2007. The Priority Offer is not a pro-rata offer. SAU shareholders are not restricted as to the number of shares they may wish to apply for however the Directors of Southern Uranium reserve the right to accept for a lesser number of shares. The Directors will in any event allocate as a minimum 10,000 shares to valid applications in the Priority Offer.

Southern Uranium has reached a Cornerstone Investment agreement with a Consortium comprising CITIC Australia Pty Ltd ("CITIC") and Talbot Group Holdings Pty Ltd ("TGH"), both existing Southern Gold shareholders. CITIC Australia Pty Ltd is 100% owned by the CITIC Group, one of China's largest state-owned companies. With assets in excess of USD 100 billion, CITIC Group's activities include banking and financial businesses, industrial investments (including those in the energy and raw materials sectors) and international trade.

The Consortium has agreed to become cornerstone investors in the IPO by subscribing to 20 million of the Priority Shares in Southern Uranium. CITIC's shareholding within the Consortium is subject to Foreign Investment Review Board (FIRB) approval. The parties have agreed principal terms for the establishment of a Priority Agreement providing for the Consortium to have a first right of refusal on assignments of Southern Uranium assets and new joint ventures while the Consortium maintains a 15% shareholding in Southern Uranium.

The remaining 50 million IPO shares not subject to the Cornerstone Agreement are underwritten by Taylor Collison Limited and Lands Kirwan Tong Stockbrokers Pty Limited.

The indicative dates for the IPO are; close of the Priority Offer to Southern Gold shareholders at 5pm CST on 9^th March 2007 and close of the Public Offer at 5pm CST on 16 March 2007. Listing is anticipated on 30 March 2007.

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 facsimilie 08 8132 0199 www.southerngold.com.au

Southern Uranium's initial focus is on uranium exploration projects covering over $10,000$ km² in one of the worlds leading uranium provinces, the Gawler Craton, which hosts over a third of the world uranium resources at Olympic Dam.

For Further information please contact:

Mr John Anderson Managing Director Southern Uranium Limited

Tel: +61 (0) 8 8132 0044 Fax: +61 (0) 8 8132 0199

Please visit our website at www.southernuranium.com.au And also the Southern Gold website at www.southerngold.com.au

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

facsimilie 08 8132 0199