IONDRIVE LIMITED — Capital/Financing Update 2009

Jun 28, 2009

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29[th] June 2009

Southern Gold to monetise its investment

in Southern Uranium Limited for $2.475 million

Southern Gold Limited (“ Southern Gold ” or “ the Company ”) is pleased to announce that it has reached in‐principle agreement with Talbot Group Holdings Pty Ltd (“ Talbot ”), CITIC Australia Pty Ltd (“ CITIC ”) and Southern Uranium Limited (“ Southern Uranium ”) in relation to a non‐ renounceable pro rata offer of its 39.1% shareholding in Southern Uranium to Southern Uranium’s shareholders at 5.5 cents per share, which will be underwritten by Talbot and CITIC (“ the Transaction ”). Southern Gold will realise $2.475 million gross proceeds in respect of the Transaction.

Completion of the Transaction remains subject to a number of conditions precedent. Further details are set out in the attached Heads of Agreement.

Funds raised pursuant to the Transaction, in addition to expected cash reserves of $2 million following the successful completion of a placement to raise $1.6 million, ensure Southern Gold is well funded to continue to actively progress its exploration programme.

In Australia Southern Gold’s exploration programme will primarily involve:

• Follow up reverse circulation (RC) and diamond drilling on the Challenger Area Gold Project in South Australia. Drilling will commence in July and will follow‐up previous high‐grade gold intersections, with the Company targeting its maiden resource estimate at the Golf Bore prospect for Q4 2009; and

• Follow‐up drilling on the Bulong Gold and Nickel Sulphide Project in Western Australia to test broad gold intersections discovered at the Monument and Cannon Prospects, and nickel sulphides at the Euston Prospect.

• Advancing development of recently announced 260,000PJ Inferred Geothermal Resource within the Roxby Geothermal Project in South Australia

In Cambodia Southern Gold will progress exploration on its four 100% owned tenements. Exploration of Southern Gold’s other three tenements in Cambodia will continue to be fully funded by Southern Gold’s joint venture partner, Japan Oil, Gas and Metals National Corporation (“ JOGMEC ”), up to a total of US$4.5 million, as JOGMEC earns a 51% interest in these three tenements. Initial assay results from recent drilling in Cambodia are expected in early July 2009.

For further information please contact

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

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