IONDRIVE LIMITED — Capital/Financing Update 2009

Oct 8, 2009

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9[th] October 2009

Southern Gold Expands WA Gold Portfolio with New Joint Venture at Bulong South

Southern Gold Limited (ASX:SAU) has expanded its gold exploration footprint at its Bulong South Project in Western Australia through a new farm‐in Joint Venture on three adjoining exploration licences held by Heron Resources Ltd (ASX:HRR).

Under the terms of the Joint Venture with Heron, Southern Gold can earn a 51% interest in the three tenements by spending $120,000 on exploration within 2 years. Southern Gold then has the potential to earn up to 80% by spending another $120,000 by the end of the third year. Southern Gold can withdraw from the JV after spending a minimum of $60,000.

The gold potential of the Bulong South area, 30 kilometres east of Kalgoorlie (Figure 1), has recently been upgraded by drilling results from another local gold explorer of 42 metres @ 2.7g/t gold within 10 metres of the northern boundary Southern Gold’s central tenement.

Southern Gold’s exploration on the Bulong South Project has continued to discover improved gold intersections and to expand the identified gold mineralisation (Figure 2). A two phase drilling program will commence at Bulong South in November to follow‐up recent gold intersections. This drilling will follow‐up consistent broad gold intersections at the Monument and Cannon Prospects, targeting extensions to the depth and strike of mineralisation and to calculate the potential for gold resources.

Southern Gold’s first round of drilling at Cannon confirmed a broad low grade zone of mineralisation of 33m @ 1.85g/t gold from 28m, containing a higher grade zone of 11m @ 4.1g/t gold from 48m.

At the Monument Prospect (1km southeast of Cannon), drilling to date by Southern Gold has consistently intersected gold over a 550m strike length and which is open to the northwest and the southeast. Results include a number of broad intersections of mineralisation in addition to higher grade intersections of 6m @ 4.1 g/t gold . In addition, drilling intersected a further 20m @ 1.03g/t gold at the Pinner Prospect positioned between Monument and Cannon.

For further information contact:

Mr Stephen Biggins Managing Director T: +61 (0) 8 8368 8888 F: +61 (0) 8 8368 8899 W: southerngold.com.au

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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Figure 1. Southern Gold 100% and JV tenure located 30km east of Kalgoorlie, Western Australia.

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Figure 2. Gold drill intersections at Monument, Cannon and Pinner gold prospects at Bulong South

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