IONDRIVE LIMITED — Capital/Financing Update 2019

Jun 16, 2019

17 June 2019

Dear Option Holder

NOTICE TO OPTIONHOLDERS OF NON-RENOUNCEABLE ENTITLEMENT OFFER

We write to you as the registered holder of Southern Gold Limited (ASX: SAU) (Company) options as at today's date. As advised in the Company's ASX announcement dated 17 June 2019, the Company is undertaking a non-renounceable pro-rata Entitlement Offer (Offer) to eligible shareholders of ordinary fully paid shares in the Company at an issue price of $0.11 per share and on the basis of 1 new share (New Share) for every 3 shares held at the record date on 21 June 2019 (Record Date). Pursuant to the Offer, the Company will issue up to 20,856,124 New Shares to raise up to $2,294,174 before costs. In addition, a free attaching option, exercisable at $0.18 per share at any time until expiry on 31 December 2021, will be issued on the basis of 1 option for every 2 new shares issued.

The Offer will be available to all of the Company's shareholders registered on the Record Date whose registered address is in Australia, New Zealand, European Economic Area (Liechtenstein and Luxembourg), France and Switzerland (Eligible Shareholders).

A prospectus in relation to the Offer was lodged with ASIC on 17 June 2019 and will be sent to Eligible Shareholders in due course. Under the terms of the options you currently hold, there is no entitlement to participate in the Offer unless you exercise your options, and are entered onto the register as a shareholder of the Company by 5pm (WST) on the Record Date.

If you wish to participate in the Offer, a notice of options exercise and payment of the options exercise price should be lodged with the Company's share registry, Security Transfer Australia Pty Ltd, with sufficient time to ensure that you are registered as a shareholder of the Company by the Record Date.

If you do not wish to participate in the Offer, no action is required.

If you require clarification on any of the above matters, please contact the Company Secretary, on +61 (8) 8368 8888 and for all general shareholder enquiries, please contact Security Transfer Australia Pty Ltd on 1300 992 916 (within Australia) or +61 3 9628 2200 (outside Australia).

Yours faithfully

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Dan Hill Company Secretary

Southern Gold Limited 10 George Street PO Box 255 email info@southerngold.com.au telephone 08 8368 8888 ABN 30 107 424 519 Stepney SA 5069 Kent Town SA 5071 web southerngold.com.au facsimile 08 8363 0697