IONDRIVE LIMITED — Capital/Financing Update 2012

Apr 9, 2012

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10 APRIL 2012

Dear Option Holder,

Reduction of exercise price of options

Southern Gold Limited (ASX : SAU) has recently undertaken a fully underwritten two (2) for seven (7) non-renounceable rights issue priced at $0.043 per new share to raise approximately A$3.31 million before costs ( Rights Issue ). The Rights Issue closed on 5 April 2012.

As a result of the Rights Issue, the exercise price of your Southern Gold Options ( Options ) has been reduced in accordance with the terms and conditions of issue of those Options, effective from 6 April 2012.

The new exercise prices of the Options are set out in the table below. You will be able to ascertain the new exercise price of your Options by reference to the expiry date and the old exercise price of the Options that you hold.

ASX Code	Expiry Date	Old ExercisePrice	New ExercisePrice
SAUAA	21 October 2012	$0.35	$0.349
SAUAB	1 December 2015	$0.105	$0.104
SAUAD	28 November 2012	$0.75	$0.749
SAUAE	30 September 2013	$0.15	$0.149
SAUAI	1 December2014	$0.105	$0.104
SAUAK	30 October2013	$0.15	$0.149
SAUAO	25 May2013	$0.20	$0.199
SAUAS	30 June 2014	$0.30	$0.299
SAUAW	29 June 2012	$0.15	$0.149

Please note that the revised exercise price of the Options specified in this letter will prevail over the exercise price specified in the Option Certificate issued in respect of your Options.

If you have any queries in relation to this please contact me of 08 8368 8888

Yours sincerely

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Nick Harding Company Secretary Southern Gold Limited

Southern Gold Limited Ground Floor, Unit 1 PO Box 255 email info@southerngold.com.au telephone 08 8368 8888 ABN 30 107 424 519 229 Greenhill Road Kent Town web southerngold.com.au facsimile 08 8431 5619 Dulwich SA 5065 SA 5071