IONDRIVE LIMITED — Capital/Financing Update 2013

Nov 5, 2013

5 November 2013

Dear Southern Gold Limited Option holder,

RE: Non‐renounceable Rights Issue

We advise that on 6 November 2013, Southern Gold Limited (Southern Gold) will be announcing a partially underwritten three (3) for eight (8) non‐renounceable rights issue to raise up to approximately A$2 million (before expenses) (Rights Issue).

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.

Full details of the Rights Issue will be set out in the announcement of the Rights Issue, the Offer Memorandum and Appendix 3B to be lodged with ASX on 6 November 2013.

Eligibility to participate

The Rights Issue is based on the number of Shares held by an eligible shareholder on the record date for the Rights Issue. If you hold only options in Southern Gold, the Rights Issue will not apply to that holding.

To be eligible to participate in the Rights Issue in respect of the Southern Gold shares to be issued if you were to exercise the Southern Gold options you hold, you will need to exercise those Southern Gold options and be registered (with a registered address in Australia or New Zealand) as the holder of those underlying Southern Gold shares by the Record Date, being 5.00pm AEST on Thursday, 14 November 2013 (Record Date).

Option holders are not able to participate in the Rights Issue in respect of their Southern Gold options without first exercising some or all of those options prior to the Record Date.

It should be noted that if, in addition to your Southern Gold options, you also currently hold Southern Gold shares, you will be able to participate in the Rights Issue but only in respect of those Southern Gold shares that you hold as at the Record Date.

If you do not wish to participate in the Rights Issue (in respect of your Southern Gold options) you do not need to take any action.

The purpose of this letter is to advise you of the impending Rights Issue and to give you adequate opportunity to exercise some or all of your Southern Gold options prior to the Record Date so that you may participate in the Rights Issue.

To exercise some or all of your Southern Gold options you will need to give notice in writing to Southern Gold in accordance with the terms and conditions of the issue of those Southern Gold options together with payment of the exercise price for each Southern Gold option exercised.

If you do not exercise your options, then after the closing date of the Rights Issue an adjustment may be made to the exercise price of your options in accordance with the formula set out in the terms and conditions of your Southern Gold options.

The anticipated timetable for the Rights Issue (subject to amendment) is as follows:

EVENT	DATE
Announcement of rights issue– announcement of rights issue,Offer Memorandum and ASX Appendix 3B and Cleansing Noticelodged with the ASX.	6 November 2013
Ex date– the date on which Shares commence trading without theentitlement to participate in the Offer.	8 November 2013
Record date– the date for determining entitlements ofShareholders to participate in the Offer.	14 November 2013
Offer Memorandum sent to Shareholders– dispatch of OfferMemorandum and Entitlement and Acceptance Forms – Offeropens for acceptances	15 November 2013
Closing date– the last day for receipt of acceptance forms(5.00pm AEST)	3 December 2013
Deferred Settlement Trading commences‐ New Shares issuedunder Offer commence quotation on deferred settlement basis	4 December 2013
Shortfall notification date	6 December 2013
Dispatch date– allotment of New Shares. Deferred settlementtrading ends	11 December 2013
Expected commencement of normal trading in New Shares	12 December 2013

Dispatch of holding statements to Shareholders who accepted 13 December 2013 the offer

Southern Gold reserves the right to amend this timetable subject to the ASX Listing Rules.

You are encouraged to consult with your stockbroker or other professional adviser and read the Rights Issue Offer Memorandum that will be lodged with the ASX on 6 November 2013 fully before exercising any of your Southern Gold options. If you have any queries in relation to the exercise of your Southern Gold options and the Rights Issue, you should contact your stockbroker or other professional adviser.

Yours sincerely,

Dan Hill Company Secretary

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