IONDRIVE LIMITED — Director's Dealing 2009

May 7, 2009

ASX ADELAIDE 08 82165099

No. 2337∎

8 May 2009

Mr Dion Silvy, Senior Adviser (Issuers), Adelaide ASX Markets Supervision Pty Ltd 91 King William St Adelaide, SA 5000

APPENDIX 3Y - CHANGE OF DIRECTOR'S INTEREST NOTICE

Dear Sir.

In response to your correspondence of 7 May 2009 concerning the late lodgement of a Director's Interest Notice for Gregory Boulton I offer the following :

1. Please explain why the Appendix was lodged late.

The late lodgement was due to an unfortunate miscommunication in advising the company secretary of share purchase transactions made on behalf of the director. Four separate purchase transactions occurred over a period of a week but unfortunately only three of these four transactions were notified by the director's broker to the company. This oversight was discovered with the normal reconciliation of directors shareholding at the end of the month and a 3Y Change of Director's Interest Notice was raised immediately to correct the shareholding held by the director.

1. What arrangements does the Company have in place with its directors to ensure that it is able to meet its disclosure obligations under listing rule 3.19A?

At every board meeting directors are required to disclose whether there has been any change in their shareholding of the Company since the last meeting. Notification of this is recorded in the board minutes. With the recent appointment of a new company secretary a review of internal procedures and processes is continuing to ensure that the Company complies with its disclosure obligations under listing rule 3.19A and all other governance matters. These procedures will include emphasis on internal communication of any trading by directors in the Company's shares and reconciliation with the share registrar to ensure that the final shareholding as communicated is correct.

1. If the current arrangements are inadequate or not being enforced, what additional steps does the Company intend to take to ensure compliance with listing rule 3.19B?

With the implementation of the review currently being conducted as mentioned in point 2 the Company is confident that internal procedures will be strengthened to ensure that this issue will not reoccur in the future.

Yours Sincerely,

Nick Harding Company Secretary Southern Gold Limited

Southern Gold Limited ABN 30 107 424 519

Р. - 3 No. 2337

ASX Markets Supervision Pty Ltd ABN 26 087 780 489 91 King William Street Adelaide SA 5000

GPO Box 547 Adetaide SA 5001

Telephone 61 8 8216 5000 Facsimile 61 8 8216 5099 www.asx.com.au

7 May 2009

Nick Harding Company Secretary Southern Gold Limited 47 Tynte Street North Adelaide SA 5006

By facsimile: (08) 8368 8899

Dear Nick

Southern Gold Limited (the "Company") Appendix 3Y - Change Director's Interest Notice

We refer to the following;

• 1. The Appendix 3Y lodged by the Company with ASX on 7 May 2009 for Greg Boulton;
• $2.$ Listing rule 3.19A which requires an entity to tell ASX the following:
• $3.19A.1$ The notifiable interests of a director of the entity (or in the case of a trust, a director of the responsible entity of the trust) at the following times.
  • On the date that the entity is admitted to the official list. $\bullet$
  • On the date that a director is appointed.

The entity must complete Appendix 3X and give it to ASX no more than 5 business days after the entity's admission or a director's appointment.

• 3.19A.2 A change to a notifiable interest of a director of the entity (or in the case of a trust, a director of the responsible entity of the trust). The entity must complete Appendix 3Y and give it to ASX no more than 5 business days after the change occurs.
• $3.19A.3$ The notifiable interests of a director of the entity (or in the case of a trust, a director of the responsible entity of the trust) at the date that the director ceases to be a director. The entity must complete Appendix 3Z and give it to ASX no more than 5 business days after the director ceases to be a director.
• 1. Listing rule 3.19B which states as follows.

An entity must make such arrangements as are necessary with a director of the entity (or in the case of a trust, a director of the responsible entity of the trust) to ensure that the director discloses to the entity all the information required by the entity to give ASX completed Appendices 3X, 3Y and 3Z

Australian Securities Exchange

Australian Stock Exchange Sydney Futures Exchange

Australian Clearing House SFE Clearing Corporation

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within the time period allowed by listing rule 3.19.A. The entity must enforce the arrangements with the director.

$\overline{4}$ . The Companies Update dated 27 June 2008, reminding listed entities of their obligation to notify ASX within 5 business days of the notifiable interests in securities held by each director and outlining the action that ASX would take in relation to breaches of listings rules 3.19A and 3.19B.

As the Appendix 3Y indicated that a change in the director's relevant interests occurred on 2 April 2009, it appears that the Appendix 3Y should have been lodged with the ASX by 9 April 2009. As the Appendix 3Y was lodged on 7 May 2009 it appears that the Company may be in breach of listing rules 3.19A and/or 3.19B. It also appears that there may have been a breach of S205G of the Corporations Act by the director concerned.

Please note that ASX is required to record details of breaches of the listing rules by listed companies for its reporting requirements.

ASX reminds the Company of its contract with ASX to comply with the listing rules. In the circumstances ASX considers that it is appropriate that the Company make necessary arrangements to ensure there is not a reoccurrence of a breach of the iisting rules.

Having regard to listing rules 3.19A and 3.19B and Guidance Note 22: "Director Disclosure of Interests and Transactions in Securities - Obligations of Listed Entities", we ask that you answer each of the following questions:

• $1.$ Please explain why the Appendix was lodged late.
• $2.$ What arrangements does the Company have in place with its directors to ensure that it is able to meet its disclosure obligations under listing rule 3.19A?
• 3 If the current arrangements are inadequate or not being enforced, what additional steps does the Company intend to take to ensure compliance with listing rule 3.19B?

Your response should be sent to me by e-mail at Dion.Silvy@asx.com.au or by facsimile on facsimile number (08) 8216 5099. It should not be sent to the Company Announcements Office.

A response is requested as soon as possible and, in any event, not later than half an hour before the start of trading (i.e. before 9.30 a.m. A.E.S.T.) on Monday, 12 May 2009.

Under listing rule 18.7A, a copy of this query and your response will be released to the market, so your response should be in a form suitable for release and should separately address each of the questions asked. If you have any queries or concerns, please contact me immediately.

Yours Sincerely.

Dion Silvy Senior Adviser (Issuers), Adelaide

Direct Line: (08) 8216 5034