IONDRIVE LIMITED — Capital/Financing Update 2012

Feb 8, 2012

ASX ANNOUNCEMENT 9 February 2012

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MEKONG MINERALS PROPOSAL TO FARM IN TO SOUTHERN GOLD’S CAMBODIAN ASSETS

Southern Gold Limited (ASX :SAU) (“Southern Gold”) is pleased to announce it has executed a nonbinding 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 Southern Gold (Cambodia) Ltd (“SGC”). Mekong will spend up to US$5.7m on exploration activities on mineral projects in Cambodia to earn up to 70% of SG Asia.

Indicative Terms of Proposed Agreements

In the Term Sheet Southern Gold and Mekong have agreed to negotiate the formal shareholder and management agreements in good faith within 2 months (or such later date as they agree). The terms of the agreements are to be consistent with the following:

• Mekong will earn an equity interest in SG Asia by providing finance and management services to SG Asia and SGC.

• Mekong shall fund 100% of SG Asia’s exploration activities in Cambodia up to US$5.7 million over three years and by doing so will earn up to a 70% interest in SG Asia. Mekong will have a minimum commitment to spend of US$1.0 million within the first 12 months. Mekong will earn its interest on a pro-rata basis for each US$1 million expended.

• After the earning period an equity dilution formula will operate if either party elects not to contribute to ongoing work programs and, if either party is diluted to a 10% interest or less, the diluting party shall be entitled to a 1.5% net smelter royalty interest.

• Provided that Mekong earns a 70% interest in SG Asia, Mekong shall have an exclusive six month option to purchase the remaining 30% interest in SG Asia for US$4.5 million in cash or equivalent value of fully paid ordinary shares in Mekong upon its listing on the Australian Securities Exchange (or other valid stock exchange) plus a 1.5% net smelter royalty interest.

• Mekong will appoint one director to the SG Asia board prior to earning 50% and thereafter will be entitled to appoint 2 directors. The decisions of the board will be by majority vote other than certain critical decisions that will require a unanimous vote.

• Southern Gold and Mekong will give to the other a first right on sale of their respective ownership in SG Asia or any royalty.

• SGC’s joint venture arrangements with JOGMEC (referred to further below) will continue to apply to the Kratie South Project.

• The agreements will be conditional upon the parties obtaining any necessary regulatory approvals and consents in Cambodia and any other approvals as may be required.

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

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Southern Gold Managing Director Nanette Anderson said. “Entering into this term sheet and the negotiation of the formal agreements is consistent with Southern Gold’s intention to focus on exploration, evaluation and development at the Bulong Gold project, Western Australia. Southern Gold looks to undertake this agreement to release value by reducing our operating costs, while maintaining exposure to future upside in Cambodia.

On announcement of the Term Sheet by Southern Gold, Mekong’s Director Anthony McClure said, “The term sheet with Southern Gold reflects an excellent opportunity to formalise arrangements to invest in “pioneer-status and advanced exploration projects” in keeping with Mekong’s strategy of growing our business in Asia.”

Southern Gold and Mekong Minerals view the terms and conditions of the Term Sheet and proposed Agreements as being reflective and supportive of their respective corporate strategies. Further, that the negotiation recognise the success and efforts to date by Southern Gold and the requisite skills base of Mekong Minerals to enable future success in Cambodia.

Summary of Southern Gold’s Exploration in Cambodia

Southern Gold Limited (SAU) has been exploring for gold and base metal deposits in the Kingdom Of Cambodia since early 2006 and has acquired a significant portfolio of seven highly prospective Exploration Licences and Exploration and Exploitation Licences (EL and EEL locations, Figure 1) in the Provinces of Kratie, Mondulkiri and Ratanakiri in north eastern Cambodia. The EL and EELs comprise 1,554.25km[2] of granted tenement in terrain having the potential to host quality intrusive related gold and base metal deposits (e.g. OZ Minerals’ Ok Vau gold deposit).

Exploration since 2006 has included extensive soil, stream and rock chip sampling, trenching, reverse circulation and diamond core drilling and completed airborne magnetic and radiometric surveys over all seven tenements. This exploration has identified several highly prospective prospects that Southern Gold continues to actively evaluate (e.g. Gossan and Anchor prospects).

In 2007, Southern Gold entered a Joint Venture with Japan Oil, Gas and Metals National Corporation (JOGMEC) over the Kratie North (Phnum Khtong EEL) and South Projects (Preak Khlong and O’Khtung EEL). Under the terms of this joint venture JOGMEC had the right to earn 51% of the Kratie North and South Projects by contributing US$4.5 million to exploration over three years.

SGC has built a positive working relationship with JOGMEC and as of May 2011, JOGMEC has earned 51% of the Kratie South Project and as announced elected early in 2011 not to continue funding the Kratie North Project, which has therefore reverted back to Southern Gold 100%. JOGMEC’s decision to continue funding exploration on the Kratie South Project is pending.

The Company’s exploration program during 2011 has included extensive drilling and trenching, infill soil sampling and geological mapping campaigns. Drilling during 2011 has again identified significant high grade gold intersections (with associated base metal sulphides) at the Gossan and Preak Khlong prospects within the Kratie South project. Result highlights include 5 metres @ 8.25 g/t gold (from 56 metres depth) at the Preak Khlong NW prospect, while positive results from the Gossan prospect include gold assay results of 5 metres @ 5.42 g/t (from 73m), 3 metres @ 8.51 g/t (from 58m), 2 metres @ 13.49 g/t (from 89m) and 2 metres @ 2.87 g/t (from 55m).

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

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Work conducted and results achieved to date by Southern Gold and other “pioneer” Australian explorers in Cambodia, has started to show the prospectivity of an area that has limited “modernday” exploration or market attention.

Full details of exploration results are contained in periodic announcements to the Australian Stock Exchange and are also available on the Company’s website http://www.southerngold.com.au

Background on Mekong Minerals Limited

Mekong Minerals Limited 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 (pre-drilling) 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,

Southern Gold Limited ABN 30 107 424 519

226 Greenhill Road Dulwich SA 5065 PO Box 255 Kent Town SA 5071

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

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Figure 1: Location Plan of Southern Gold’s tenements in Cambodia

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229 Greenhill Rd PO Box 255 email: info@southerngold.com.au telephone 08 8368 8888 Dulwich Kent Town web: www:southerngold.com.au facsimilie 08 8368 8899 South Australia 5006 South Australia 5071

Southern Gold Limited ABN 30 107 424 519