IONDRIVE LIMITED — Capital/Financing Update 2009

Jan 12, 2009

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SOUTHERN GOLD LIMITED ACN 107 424 519

ASX ANNOUNCEMENT

Notice under Section 708AA of the Corporations Act

Southern Gold Limited (ASX: SAU) ( SAU ) refers to its Offer Memorandum and Appendix 3B lodged with ASX on 24 December 2008 in relation to a one for three non‐renounceable pro‐rata rights issue priced at $0.05 per new SAU share ( Rights Issue ).

This notice is given under section 708AA(2)(f) of the Corporations Act 2001 (Cth) (the Act ). SAU advises that:

• (1) the securities being offered under the Rights Issue will be offered for issue without disclosure to investors under Part 6D.2 of the Act;

• (2) as at the date of this notice SAU has complied with the provisions of Chapter 2M of the Act as they apply to SAU and section 674 of the Act;

• (3) as at the date of this notice there is no information that is excluded information under section 708AA(8) and (9) of the Act that has not already been disclosed to investors generally or in the Offer Memorandum and Appendix 3B lodged on 24 December 2008;

• (4) the potential effect the Rights Issue will have on the control of SAU’s undiluted share capital will depend on the extent shareholders take up their entitlements. If all shareholders take up their entitlements the Rights Issue will have no effect on the control of SAU. The maximum effect the Rights Issue could have on the control of SAU is an increase in the percentage of the total issued share capital of SAU held by Talbot Group Holdings Pty Ltd from 7.08% to a maximum of 30.25% in aggregate, if no shareholder takes up its entitlement and Talbot subscribed for all shortfall shares it has fully underwritten pursuant to the Rights Issue;

• (5) the consequence of the potential effect on control of SAU referred to in paragraph (4) above will be an increase in the voting power of the substantial shareholders referred to in that paragraph by an amount equal to the percentage increase in its control of SAU’s undiluted share capital. The maximum combined voting power that Talbot could have post the Rights Issue is 30.25%.

Dated this 12th day of January 2009

By order of the Board

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Greg Boulton Chairman Southern Gold Limited

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