IONDRIVE LIMITED — Capital/Financing Update 2020

Sep 2, 2020

Proposed issue of securities

==> picture [21 x 22] intentionally omitted <==

Announcement Summary

Entity name

SOUTHERN GOLD LIMITED

Announcement Type

New announcement

Date of this announcement

Thursday September 3, 2020

The Proposed issue is:

==> picture [8 x 8] intentionally omitted <==

A placement or other type of issue

Total number of +securities proposed to be issued for a placement or other type of issue

		Maximum Number of
ASX +security code	+Security description	+securities to be issued
n/a	Unlisted Options exercisable at 18 cents per share expiring	42,500,000
	18 October 2022
SAU	ORDINARY FULLY PAID	85,000,000

Proposed +issue date Wednesday October 28, 2020

Refer to next page for full details of the announcement

Proposed issue of securities

1 / 6

Proposed issue of securities

==> picture [21 x 22] intentionally omitted <==

Part 1 - Entity and announcement details

1.1 Name of +Entity

SOUTHERN GOLD LIMITED

We (the entity named above) give ASX the following information about a proposed issue of +securities and, if ASX agrees to +quote any of the +securities (including any rights) on a +deferred settlement basis, we agree to the matters set out in Appendix 3B of the ASX Listing Rules.

1.2 Registered Number Type

ACN

Registration Number

107424519

1.3 ASX issuer code

SAU

1.4 The announcement is

==> picture [8 x 9] intentionally omitted <==

New announcement

1.5 Date of this announcement

Thursday September 3, 2020

1.6 The Proposed issue is:

==> picture [8 x 8] intentionally omitted <==

A placement or other type of issue

Proposed issue of securities

2 / 6

Proposed issue of securities

==> picture [21 x 22] intentionally omitted <==

Part 7 - Details of proposed placement or other issue

Part 7A - Conditions

7A.1 - Are any of the following approvals required for the placement or other type of issue? +Security holder approval Court approval Lodgement of court order with +ASIC ACCC approval FIRB approval Another approval/condition external to the entity Yes

7A.1a Conditions

Approval/Condition Date for determination Is the date estimated or ** Approval actual? received/condition met? +Security holder approval Friday October 16, 2020 Estimated

Comments

The proposed issue will be a first tranche using the Company's existing placement capacity under Listing Rule 7.1 and 7.1A capacity for 31,680,002 fully paid ordinary shares, with 53,319,998 fully paid ordinary shares to be issued subject to shareholder approval. The placement shares also have an entitlement to one free unlisted option for every two shares issued. The 42,500,000 unlisted options will be subject to shareholder approval.

Part 7B - Issue details

Is the proposed security a 'New Will the proposed issue of this class' (+securities in a class that is +security include an offer of not yet quoted or recorded by ASX) attaching +securities? or an 'Existing class' (additional Yes securities in a class that is already quoted or recorded by ASX)? Existing class

Details of +securities proposed to be issued

ASX +security code and description

SAU : ORDINARY FULLY PAID

Number of +securities proposed to be issued

85,000,000

Offer price details

Proposed issue of securities

3 / 6

Proposed issue of securities

==> picture [21 x 22] intentionally omitted <==

Are the +securities proposed to be issued being issued for a cash consideration? Yes

In what currency is the cash What is the issue price per consideration being paid? +security? AUD - Australian Dollar AUD 0.12000

Will these +securities rank equally in all respects from their issue date with the existing issued +securities in that class? Yes

Attaching +Security

Is the proposed attaching security a 'New class' (+securities in a class that is not yet quoted or recorded by ASX) or an 'Existing class' (additional +securities in a class that is already quoted or recorded by ASX)? New class

Attaching +Security - New class (+securities in a class that is not yet quoted or recorded by ASX)

Details of attaching +securities proposed to be issued

ISIN Code (if Issuer is a foreign company and +securities are non CDIs)

Have you received confirmation from ASX that the terms Will the entity be seeking quotation of the 'new' class of of the proposed +securities are appropriate and +securities on ASX? equitable under listing rule 6.1? No No ASX +security code +Security description New class-code to be confirmed Unlisted Options exercisable at 18 cents per share expiring 18 October 2022

+Security type

Options

Number of +securities proposed to be issued

42,500,000

Offer price details

Are the +securities proposed to be issued being issued for a cash consideration? No

Please describe the consideration being provided for the +securities

Free attaching option for every two shares subscribed.

Proposed issue of securities

4 / 6

Proposed issue of securities

==> picture [21 x 22] intentionally omitted <==

Please provide an estimate of the AUD equivalent of the consideration being provided for the +securities

Will all the +securities issued in this class rank equally in all respects from their issue date? Yes

Options details

+Security currency

AUD - Australian Dollar

Exercise price Expiry date AUD 0.1800 Tuesday October 18, 2022

Details of the type of +security that will be issued if the option is exercised

SAU : ORDINARY FULLY PAID

Number of securities that will be issued if the option is exercised

42,500,000

Please provide a URL link for a document lodged with ASX setting out the material terms of the +securities proposed to be issued or provide the information by separate announcement.

Part 7C - Timetable

7C.1 Proposed +issue date

Wednesday October 28, 2020

Part 7D - Listing Rule requirements

7D.1 Has the entity obtained, or is it obtaining, +security holder approval for the entire issue under listing rule 7.1? Yes

7D.1a Date of meeting or proposed meeting to approve the issue under listing rule 7.1 Friday October 16, 2020

Proposed issue of securities

5 / 6

Proposed issue of securities

==> picture [21 x 22] intentionally omitted <==

7D.2 Is a party referred to in listing rule 10.11 participating in the proposed issue? No

7D.3 Will any of the +securities to be issued be +restricted securities for the purposes of the listing rules? No

7D.4 Will any of the +securities to be issued be subject to +voluntary escrow? No

Part 7E - Fees and expenses

7E.1 Will there be a lead manager or broker to the proposed issue? Yes

7E.1a Who is the lead manager/broker?

Ashanti Capital Pty Ltd and Foster Stockbroking Pty Ltd as joint lead managers. Red Cloud Securities as advisor and placing agent.

7E.1b What fee, commission or other consideration is payable to them for acting as lead manager/broker?

$475,000 cash fees plus 2 million options expiring on 18 October 2022, exercisable at 18 cents, and 1.71million options expiring on 18 October 2022, exercisable at 16 cents.

7E.2 Is the proposed issue to be underwritten?

==> picture [8 x 8] intentionally omitted <==

No

7E.4 Details of any other material fees or costs to be incurred by the entity in connection with the proposed issue

Part 7F - Further Information

7F.01 The purpose(s) for which the entity is issuing the securities

The amounts raised will be used for expanded drilling campaigns on multiple targets, an increase in project generation activity along with general working capital.

7F.1 Will the entity be changing its dividend/distribution policy if the proposed issue proceeds? No

7F.2 Any other information the entity wishes to provide about the proposed issue

It is intended 18,879,302 ordinary shares will be issued out of the Company's existing 7.1 capacity, and 12,800,700 ordinary shares will be issued out of the Company's existing 7.1A capacity. All remaining shares and options will be subject to shareholder approval on or about 16 October 2020.

Proposed issue of securities

6 / 6