IONDRIVE LIMITED — Capital/Financing Update 2012

Mar 21, 2012

ASX ANNOUNCEMENT

22 March 2012

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Kratie South, Cambodia Pro-Rata Funding Period Update

Southern Gold Limited (ASX:SAU) (“Southern Gold”) is today providing an update on the status of the Kratie South (Cambodia) joint venture, between Southern Gold’s Cambodian entity Southern Gold (Cambodia) (“SGC”) and the Japan, Oil, Gas and Metals National Corporation (“JOGMEC”).

As announced in 2011, JOGMEC (under the Kratie South Letter Agreement) met its expenditure commitment under the Kratie South Letter Agreement (dated 1 May 2008) to earn 51% equity interest of the Kratie South project. On completing its farm-in contributions, the Pro-Rata Funding period commenced. During the Pro-Rata Funding period JOGMEC has the right to elect to contribute to the funding of Exploration Programs in accordance with its respective equitable interest of 51%.

JOGMEC had elected to contribute to the first exploration program of 2011/2012 by way of reimbursement of funds, and have now confirmed their election not to contribute to the second work program. Following their election not to contribute and on completion of the second work program, JOGMEC’s interest will be calculated and diluted according to the standard dilution clause.

Mekong Minerals Limited

As announced on 9 February 2012, Southern Gold has executed a non-binding Term Sheet with Mekong Minerals Limited (“Mekong”) to enter into Shareholder and Management Agreements whereby Mekong will have the exclusive right to earn an interest in Southern Gold subsidiary Southern Gold Asia (“SG Asia”) and to manage the activities of SG Asia and its wholly owned subsidiary SGC. Mekong will spend up to US$5.7m on exploration activities on the mineral projects in Cambodia to earn up to 70% of SG Asia. This sole funding earn-in period shall be over three years with Mekong providing finance and management services. Mekong will have a minimum commitment to spend of US$1 million within the first 12 months.

Mekong is an Australian unlisted public company incorporated for the specific purpose of acquisition, exploration and development of mineral properties in Vietnam, Laos and Cambodia. The Company is active in securing mineral projects that range from an early stage of exploration (predrilling) to advanced exploration or development projects for main stream commodities such as gold, silver, copper, lead, zinc, nickel and other commodities. The Company currently manages a small team of resource industry professionals dedicated to targeting, acquisition and development of mineral projects.

For further information please contact:

Nanette Anderson Managing Director

T: +61 8 8368 8888 F: +61 8 8431 5619 E: info@southerngold.com.au W: www.southerngold.com.au

Southern Gold Limited 229 Greenhill Rd PO Box 255 email: info@southerngold.com.au telephone 08 8368 8888 ABN 30 107 424 519 Dulwich Kent Town web: www:southerngold.com.au facsimilie 08 8368 8899 South Australia 5006 South Australia 5071