IONDRIVE LIMITED — Capital/Financing Update 2008

Jul 23, 2008

24[th] July 2008

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First substantial gold intersections in Cambodia as Southern Gold doubles its tenement holding

• 32m @ 2.74 g/t gold trench intersection, Kratie North

• Intersection includes 4m @ 15.7 g/t gold

• Landmark 16,500 line kilometre airborne geophysical survey in Cambodia identifies more intrusive and alteration systems

• Southern Gold acquires 100% of Four Cambodian Exploration Licences covering 1000km[2 ] prospective for gold and base metals

• SAU now holds 100% 7 Granted ELs covering over 1,500km[2] in Cambodia

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Southern Gold Tenement Location Map indicating recent exploration highlights.

Southern Gold Limited 47 Tynte Street PO Box 1016 email: info@southerngold.com.au telephone 08 8368 8888 ABN 30 107 424 519 North Adelaide North Adelaide www:southerngold.com.au facsimilie 08 8368 8899 South Australia 5006 South Australia 5006

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Kratie North Project

(Phnum Khtong EEL, SAU 100% ‐ JOGMEC earning 51%)

A substantial gold intersection of 32m @ 2.74 g/t gold (including 4m @ 15.7 g/t gold), was returned from recently excavated trenches on the Kratie North project.

A total 470m of trenching targeted a 1000 X 220m, 25ppb Au in soil anomaly. Additional anomalous results of 4m @ 1.1 g/t Au were returned from a trench 600m to the north of the highest grade trench intersection (see figure below).

These results are also supported by results from nearby rock chip sampling, where numerous +1 g/t gold (maximum of 15.6 g/t Au) rock chip samples have been returned.

Drilling on these projects is planned to start next Quarter as soon as the wet season ends.

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Kratie North Trench Locations and Gold Results over Gold in Soil Contours.

Southern Gold Limited 47 Tynte Street PO Box 1016 email: info@southerngold.com.au telephone 08 8368 8888 ABN 30 107 424 519 North Adelaide North Adelaide www:southerngold.com.au facsimilie 08 8368 8899 South Australia 5006 South Australia 5006

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Kratie South Project

(Preak Khlong & O’Khtung EELs, SAU 100% ‐ JOGMEC earning 51%)

Sampling has identified a new gold‐lead O’Kthung NE Anomaly (see Figure below). The dimensions of this 20ppb Au anomaly are 1600 X 450m

The O’Kthung NE Anomaly has highly anomalous rock chip results associated with it. These include rock chip results of 0.15 to 0.34 g/t gold as well as lead assays up to 1.08% and silver results as high as 111.4 g/t.

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Kratie South locations and gold results of regional soil geochemistry over new 1VD aeromagnetic image highlighting multiple intrusive system.

Southern Gold Limited 47 Tynte Street PO Box 1016 email: info@southerngold.com.au telephone 08 8368 8888 ABN 30 107 424 519 North Adelaide North Adelaide www:southerngold.com.au facsimilie 08 8368 8899 South Australia 5006 South Australia 5006

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Anomalous results continue to be returned from the recent follow‐up soil sampling to the regional wide spaced program on Kratie South.

The Preak Khlong NW Anomaly (see Figure below) also shows great potential, this anomaly being 1500 X 250m in size, with a peak value of 100ppb Au. Rock chip samples of up to 28.2 g/t Au are associated with this anomaly.

Southern Gold plans to test both these anomalies with approximately 1500m of trenching once government approvals have been given. Drilling of targets is planned to start next Quarter as soon as the wet season ends.

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Arsenic contours over Gold in Soils Image, Preak Khlong NW Anomaly, Kratie South Project.

Southern Gold Limited 47 Tynte Street PO Box 1016 email: info@southerngold.com.au telephone 08 8368 8888 ABN 30 107 424 519 North Adelaide North Adelaide www:southerngold.com.au facsimilie 08 8368 8899 South Australia 5006 South Australia 5006

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Aeromagnetic and Radiometric Survey

Southern Gold has also recently completed flying one of Cambodia’s largest airborne geophysical surveys on both its wholly owned and JV projects. The detailed 16,500 line kilometre survey is expected to lead a step change in understanding and targeting gold and base metal mineralisation in NE Cambodia.

Already the aeromagnetic data has identified previously unknown prospective intrusive bodies and related alteration zones as well large areas of intensely fractured rock.

Four Exploration Licences prospective for gold and base metals covering 1000km[2] acquired 100% by SAU

At the corporate level, Southern Gold has consolidated its position as an early mover in Cambodia’s frontier mining industry by moving to a full 100% interest in four Exploration Licences (ELs) in which it had held an 80% stake. Covering a total of approximately 1,000km[2] , the four recently granted Exploration Licences more than double Southern Gold’s 100% granted tenement holding in Cambodia (refer map).

The four ELs had earlier been granted by the Cambodian Government jointly to Southern Gold and a local Joint Venture Partner. Convinced by the early potential of the projects, Southern Gold elected to acquire its joint venture partner’s 20% interest, by issuing cash and shares, to hold the ELs 100% and maximise the Company’s exposure to these prospective areas. The acquisitions take to seven, the number of granted ELs held by Southern Gold in northeast Cambodia (refer map), three of which are in Joint Venture tenements with the large Japanese government organisation, JOGMEC.

JOGMEC committed in May this year to a US$4.5 million Joint Venture to earn a 51% interest in three of Southern Gold’s tenements in Cambodia – Phnum Khtong (Kratie North Project), and two adjoining blocks, Preak Khlong and O’Kthung (Kratie South Project).

For further information please contact:

Mr Stephen Biggins Managing Director Phone: +61 (0) 8 8368 8888 Fax: +61 (0) 8 8368 8899

The information in this report has been compiled by Stephen Biggins (BSc(Hons)Geol, MBA) as an 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 47 Tynte Street PO Box 1016 email: info@southerngold.com.au telephone 08 8368 8888 ABN 30 107 424 519 North Adelaide North Adelaide www:southerngold.com.au facsimilie 08 8368 8899 South Australia 5006 South Australia 5006

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About Southern Gold

Southern Gold Limited is in a prime position to aggressively pursue the opportunities in its portfolio comprising advanced gold and nickel assets in world-class mining provinces.

Southern Gold is close to defining JORC gold resources on it’s Challenger JV incorporating the Golf Bore prospect in South Australia, has recently discovered additional nickel sulphide at its Euston prospect, Bulong South, Western Australia and has established a significant land position and exploration team in Cambodia with highly prospective gold results to date.

Southern Gold has significant leverage to building Resources from its multiple, advanced and immediate gold and nickel drill targets.

Southern Gold Limited 47 Tynte Street PO Box 1016 ABN 30 107 424 519 North Adelaide North Adelaide South Australia 5006 South Australia 5006

email: info@southerngold.com.au telephone 08 8368 8888 www:southerngold.com.au facsimilie 08 8368 8899