IONDRIVE LIMITED — Capital/Financing Update 2019

Jun 16, 2019

Non-Renounceable Rights Issue

• 1 for 3 non-renounceable rights issue at an offer price of 11 cents per share to raise approximately $2.3m, before costs

• Free attaching option for every 2 new shares issued

• Fully underwritten by 4 major shareholders

Shares on Issue: 62.5m

Share Price: $0.13 Market Capitalisation: $8.1m

Asset Base – WA, Australia Cannon Au Mine (100%) Glandore Au Project (100%) Cowarna Au Project (100%)

Asset Base – South Korea Gubong Au Mine (50/50 BMV JV) Kochang Au Mine (50/50 BMV JV) Weolyu Au-Ag Project (100%) Deokon Au-Ag Project (100%) Beopseongpo Au Project (100%) Neungju Au Project (100%) Aphae Au Project (100%) Taechang Au Project (100%) Hampyeong Au Project (100%) Sonbul Au Project (100%)

Directors

Greg Boulton AM (Chairman) Simon Mitchell (MD) Peter Bamford David Turvey

Head Office

Southern Gold Ltd 10 George St Stepney SA 5069 Telephone: (08) 8368 8888 Facsimile: (08) 8363 0697 info@southerngold.com.au www.southerngold.com.au ABN: 30 107 424 519

Postal Address

Southern Gold Ltd PO Box 255, Kent Town SA 5071

Southern Gold Limited is pleased to announce a pro-rata, non-renounceable Rights Issue to all eligible shareholders to raise up to $2,294,174, before costs.

This Rights Issue has been launched to ensure the Company is well prepared for the next stage of its development and execute its Korean-focused strategy.

More specifically, the proceeds from this Rights Issue will be primarily directed to exploration drilling in South Korea where the Company has a high confidence in confirming several new precious metal deposit discoveries.

In addition, the funding will cover our near-term contributions to the 50/50 Joint Venture with London-listed Bluebird Merchant Ventures Ltd (BMV). The Joint Venture is targeting gold production over the coming year with Southern Gold’s share of development costs to be covered by the proceeds of the asset sale (principally the Cannon deposit) announced on 1 April 2019.

The Rights Issue entitlement applies to shareholders registered on 21 June 2019 on the basis of 1 new fully paid ordinary share for every 3 shares held by eligible shareholders, at an issue price of 11 cents per share, with a free attaching option for every 2 new shares issued. The free attached option has an exercise price of 18 cents per share, expiring 31 December 2021.

The Rights Issue is fully underwritten by four existing shareholders.

The issue price of $0.11 per share is a discount of 15% to the last traded price of $0.13 and a 12% discount to the volume weighted average market price of Southern Gold shares for the 5 trading days prior to this announcement.

Southern Gold Managing Director, Mr. Simon Mitchell

“With the sale process of the assets in Western Australia expected to be concluded shortly, it was important to have funding to commit to exploration drilling in the coming months. We have several excellent targets in South Korea but two stand-out as exceptional. At Beopseongpo we have a world-class low sulphidation epithermal gold target and at Deokon we have found ultra-high-grade gold-silver mineralisation. Both projects have high quality walk-up targets that have never been drilled.

This Rights Issue enables our shareholders to participate at these price levels and potentially secure additional upside through the attached option. With the possibility of new precious metal deposit discovery in the near term, this financing represents an excellent opportunity for our shareholders to get set for what will be an exciting future.”

The shares offered under the Rights Issue will rank equally with existing shares. In addition to subscribing for the shareholder entitlement, eligible shareholders may also apply for shortfall.

The Rights Issue is made under a Prospectus that has been lodged with ASIC and which is available on the ASX announcement platform. Eligible shareholders should consider the Prospectus in deciding where to acquire the shares under the Rights Issue and complete the personalised Entitlement and Acceptance Application Form that will accompany the Prospectus.

The proposed timetable for the Rights Issue is set out below:

	EVENT	EVENT	DATE	DATE
	Announcement of Rights Issue		Monday, 17 June 2019
	Lodge Prospectus with ASIC and ASX		Monday, 17 June 2019
	Further ASX announcements (App	endix 3B)
	Company sends notice of Rights Is	sue to Shareholders	Wed	nesday, 19 June 2019
	"Ex" date		Thurs	day, 20 June 2019
	Record Date to identify Sharehold	ers entitled to participate	Frida	21 June 2019
	in the Offer		y,
	ProspectusandEntitlementandAcceptanceFormsdispatched to Shareholders, Offer period opens		Wednesday, 26 June 2019
	Last date to extend the Offer closing date		Monday, 15 July 2019
	Closing date for acceptances		Thursday, 18 July 2019
	Shares quoted on a deferred settlement basis		Friday, 19 July 2019
	Notification to ASX of under subscriptions		Tuesday, 23 July 2019
	Issue date for New Shares and New Options issued under theOffer. Deferred settlement trading endsUpdated Appendix 3B (if required)		Thursday, 25 July 2019
	Normal trading of New Shares on ASX commences		Friday, 26 July 2019

The Directors may extend the Closing Date by giving at least 3 business days’ notice to the ASX prior to the Closing Date. As such, the date the New Shares are expected to commence trading on the ASX may vary. An Appendix 3B has been announced relating to the rights issue on 17 June 2019.