IONDRIVE LIMITED — Capital/Financing Update 2013

Nov 6, 2013

ASX ANNOUNCEMENT

7 NOVEMBER 2013

NON-RENOUNCEABLE RIGHTS ISSUE LETTERS TO SHAREHOLDERS

Please find attached copies of the following two letters which have been sent today in relation to the rights issue announced by Southern Gold Limited (Company) on 6 November 2013 (Rights Issue):

• (1) Letter to shareholders of the Company who have registered addresses in Australia and New Zealand and, provided this remains the case as at the record date on 14 November 2013, will be entitled to participate in the Rights Issue; and

• (2) Letter to shareholders who currently have a registered address outside Australia or New Zealand and, provided this remains the case as at the record date on 14 November 2013, will not be entitled to participate in the Rights Issue.

For further information on the Rights Issue, please contact the Company’s Share Registry, Computershare Investor Services Pty Ltd, on 1300 555 159 (within Australia) or +61 3 9415 4062 (outside of Australia).

Southern Gold Ltd

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Dan Hill Company Secretary

Southern Gold Limited Ground Floor, Unit 1 PO Box 255 ABN 30 107 424 519 229 Greenhill Road Kent Town Dulwich SA 5065 SA 5071

email info@southerngold.com.au telephone 08 8368 8888 web southerngold.com.au facsimile 08 8431 5619

7 November 2013

Dear Shareholder,

RE: NON-RENOUNCEABLE RIGHTS ISSUE

The Board of Southern Gold Ltd (“Southern Gold” or “the Company”) is pleased to invite you to participate in the pro-rata non-renounceable rights issue to raise up to approximately A$2.0m (before costs), as announced by Southern Gold on 6 November 2013 (“Rights Issue”).

Following Southern Gold’s announcement on 29 August 2013 of the completion of its PreFeasibility Study of the Cannon Gold deposit, and the Board’s decision to mine that deposit (subject to finance and regulatory approvals), proceeds of the Rights Issue will be used to fund final works relating to completion of the Mining Proposal, initial preparation work for site development and follow up drilling of near resource targets.

Your Directors consider that Southern Gold has a positive future and that the Rights Issue provides an opportunity to further participate in Southern Gold’s future growth. All Board members intend to take up their respective Entitlements in full. Ms Nanette Anderson, the Managing Director of Southern Gold, has agreed to partially underwrite the issue for up to a further 7 million shares.

Full details of the Rights Issue are set out in the Offer Memorandum and Appendix 3B lodged with ASX on 6 November 2013. A copy of the Offer Memorandum is available to download from both the ASX website (at www.asx.com.au) and Southern Gold’s website (at www.southerngold.com.au).

Eligible shareholders will receive on or around 19 November 2013 a copy of the Offer Memorandum including a personalised Entitlement and Acceptance Form which will provide detailed instructions on how to participate in the Rights Issue.

Please find below the anticipated timetable for the Rights Issue.

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

Timetable

The anticipated timetable for the Rights Issue is as follows:

EVENT	DATE
Announcement of rights issue– announcement of rights issue, Offer Memorandum, ASX Appendix 3B and Cleansing Notice lodged with the ASX.	6 November 2013
Ex date– the date on which Shares commence trading without the entitlement to participate in the Offer.	8 November 2013
Record date– the date for determining entitlements of Shareholders to participate in the Offer.	14 November 2013
Offer Memorandum sent to Shareholders– dispatch of Offer Memorandum and Entitlement and Acceptance Forms - Offer opens for acceptances	19 November 2013
Closing date– the last day for receipt of acceptance forms (5.00pm AEST)	3 December 2013
Deferred Settlement Trading commences- New Shares commence quotation on ASX on deferred settlement basis	4 December 2013
Shortfall notification date	6 December 2013
Dispatch date– allotment of New Shares. Deferred settlement trading ends	11 December 2013
Expected commencement of normal trading in New Shares on ASX	12 December 2013
Dispatch of holding statements to Shareholders who accepted the offer	13 December 2013

This timetable is indicative only. Subject to the ASX Listing Rules, the Directors reserve the right to vary the dates for the Offer at their discretion. Should this occur, then the extension will have a consequential effect on the anticipated date of issue and normal trading of the New Shares.

Southern Gold Limited Ground Floor, Unit 1 PO Box 255 ABN 30 107 424 519 229 Greenhill Road Kent Town Dulwich SA 5065 SA 5071

email info@southerngold.com.au telephone 08 8368 8888 web southerngold.com.au facsimile 08 8431 5619

The key information in connection with the Rights Issue is set out below for your reference, and as required by the ASX Listing Rules:

• the Rights Issue is non-renounceable and is being undertaken on the basis of three (3) new fully paid ordinary shares (“New Shares”) for every eight (8) ordinary shares held by eligible shareholders;

• the issue price is A$0.015 cents per New Share, which represents a discount of 16.7% to the closing market price of the Company’s shares on 5 November 2013 (being the last trading day prior to announcement of the Rights Issue) of 1.8c per share;

• the record date to determine entitlements for eligible shareholders is 5.00pm AEST on 14 November 2013 (“Record Date”).

Only registered shareholders with a registered address in Australia and New Zealand as at the Record Date are eligible to participate in the Rights Issue. Shares commence trading without the entitlement to participate in the Rights Issue on 8 November 2013 (the Ex Date for the Rights Issue, being 4 business days prior to the Record Date);

• eligible shareholders will be able to apply for additional New Shares in excess of their entitlement at the same issue price of A$0.015 per New Share. Allocation of additional New Shares applied for will be subject to there being a shortfall in subscriptions under the Rights Issue and will be at the discretion of Southern Gold;

• each New Share will rank equally with and be issued on the same terms as those quoted fully paid ordinary shares already issued by the Company. Application for quotation of the New Shares offered under the Rights Issue was made by the Company on 6 November 2013;

• for the purposes of calculating your entitlement, fractional entitlements to New Shares will be rounded up to the nearest whole number of shares;

• the Rights Issue is underwritten by Ms Nanette Anderson, Managing Director of Southern Gold, up to 7 million shares (or A$105,000). There are no fees payable to Ms Anderson in relation to the underwriting;

• the Rights Issue is being made in accordance with section 708AA of the Corporations Act 2001 and without a prospectus;

• the Rights Issue is non-renounceable, accordingly rights will not be tradeable on ASX or otherwise transferrable. Shareholders who do not take up their entitlements in full will not receive any value in respect of that part of their entitlement that they do not take up. Shareholders who are not eligible to receive entitlements will not receive any value in respect of entitlements they would have received had they been eligible;

• a maximum of 135,223,868 (based on the undiluted share capital of the Company as at 5 November 2013) New Shares will be issued under the Rights Issue. This number excludes any allowance for shares issued in the event any option holders exercise their right to convert their options to ordinary shares prior to the Record Date. This number is also subject to

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

reconciliation of entitlements and rounding. Based on that number, the maximum number of listed ordinary shares on issue following the Rights Issue will be 495,820,849;

• no shareholder approval will be required for the Rights Issue;

• Southern Gold does not have a dividend policy and does not intend to declare a dividend in the near future.

• the proceeds from the Rights Issue will be primarily directed to the final works relating to the completion of the mining proposal and initial preparation work for site development of the Cannon Gold deposit, along with follow up drilling of near resource targets; and

• BBY Limited has been appointed as Lead Manager to the Rights Issue and will be paid a fee of 1.5% of the gross proceeds raised by the Rights Issue, exclusive of GST.

Actions required of Eligible Shareholders

Pursuant to the Rights Issue there are a number of actions Eligible Shareholders may take:

• take up all or some of your entitlements;

• take up all of your entitlements and apply for additional New Shares;

• not participate in the Rights Issue and if so; you do not need to take any action.

If you are eligible and wish to participate in the Rights Issue, it will be necessary for you to complete and return the personalised Entitlement and Acceptance Form that will accompany the Offer Memorandum expected to be sent to eligible shareholders on 19 November 2013 in accordance with the instructions on that Form. You will need to ensure your application money for the entitlements you wish to take up is received by Computershare Investor Services Pty Ltd by no later than 5.00pm (AEST) on 3 December 2013.

If you have any queries about the Rights Issue, please contact either the Company’s Share Registry, Computershare Investor Services Pty Ltd, on 1300 555 159 (within Australia) or +61 3 9415 4062 (outside of Australia).

Yours sincerely,

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Dan Hill Company Secretary

Southern Gold Limited Ground Floor, Unit 1 PO Box 255 ABN 30 107 424 519 229 Greenhill Road Kent Town Dulwich SA 5065 SA 5071

email info@southerngold.com.au telephone 08 8368 8888 web southerngold.com.au facsimile 08 8431 5619

7 November 2013

Dear Overseas Shareholder,

RE: NON-RENOUNCEABLE RIGHTS ISSUE

On 6 March 2012, Southern Gold Limited (Southern Gold) announced a three (3) for eight (8) nonrenounceable rights issue at an issue price of $0.015 (1.5 cents) per new SAU share to raise up to approximately $2 million (before expenses) (Rights Issue).

Full details of the Rights Issue can be found in the Offer Memorandum for the Rights Issue which was lodged with the ASX on 6 November 2013 and is available to download from both the ASX website (at www.asx.com.au) and Southern Gold’s website (at www.southerngold.com.au).

Southern Gold has determined, pursuant to the Corporations Act 2001 (Cth) and Listing Rule 7.7.1(a) of the ASX Listing Rules, that it would be unreasonable to make offers under the Rights Issue to shareholders with a registered address outside of Australia and New Zealand.

Accordingly, in compliance with ASX Listing Rule 7.7.1(a) and the Corporations Act, Southern Gold wishes to advise that it will not be extending the Rights Issue to Shareholders with registered addresses outside of Australia and New Zealand as at the record date, being 5.00pm (Australian Eastern Standard Time) on 14 November 2013. Your SAU shareholding is currently registered to an address outside of Australia and New Zealand.

If you have any queries about the Rights Issue please contact Southern Gold’s Share Registry, Computershare Investor Services Pty Ltd, on 1300 556 161 (within Australia) or +61 3 9415 4000 (outside of Australia).

Yours sincerely,

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Dan Hill Company Secretary

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