IONDRIVE LIMITED — Director's Dealing 2016

Feb 22, 2016

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23 February 2016

Mr Sebastian Bednarczyk Senior Advisor, Listings (Perth) ASX Compliance Pty Ltd Level 40 Central Park 152-158 St Georges Terrace Perth WA 6000

Dear Sir,

Southern Gold Ltd – Late Lodgement of Appendix 3Y

We refer to the recent lodgement of the Appendix 3Ys on 12 February 2016 and your letter dated 18 February 2016.

In response to your questions;

1. Please explain why the Appendix was lodged late?

The Appendix was lodged late due to the company secretary failing to ensure receipt of an ASX announcement confirmation following an attempted upload to the ASX announcements platform.

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?

Each director has entered into a Deed of Access, Indemnity and Insurance with the Company. Under the Deed each director is required to provide to the Company full details of any change in securities registered in the director’s name as soon as reasonably possible after the date of the change and in any event no later than 3 business days after the change.

Furthermore, the Company’s Security Trading Policy obliges a director to notify the Company Secretary within 3 days to allow notification to the ASX within the 5 days after any dealings in the Company’s securities (either personally or through a third party) which results in a change in the relevant interest of the director in the Company’s securities.

Southern Gold Limited Level 1 PO Box 255 email info@southerngold.com.au telephone 08 8368 8888 ABN 30 107 424 519 8 Beulah Road Kent Town web southerngold.com.au facsimile 08 8431 5619 Norwood SA 5067 SA 5071

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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?

The Company has reviewed the current arrangements under listing rule 3.19B with Directors and their obligations under listing rule 3.19A and has taken steps to ensure that adequate internal systems are in place to require acknowledgement of ASX announcements, by a minimum of two internal recipients of the ASX announcement confirmations.

Yours sincerely

Dan Hill

Company Secretary

Southern Gold Limited Level 1 PO Box 255 email info@southerngold.com.au telephone 08 8368 8888 ABN 30 107 424 519 8 Beulah Road Kent Town web southerngold.com.au facsimile 08 8431 5619 Norwood SA 5067 SA 5071

18 February 2016

Dan Hill Company Secretary Southern Gold Limited 8 Beulah Road NORWOOD SA 5067

By Email: dhill@southerngold.com.au

Dear Mr Hill,

SOUTHERN GOLD LIMITED (the “Company ”)

We refer to the following;

1. The Appendices 3Y lodged by the Company with ASX on 12 February 2016 for:

   • 1.1. Michael Billing;

   • 1.2. David Turvey; and

   • 1.3. Gregory Boulton.

(together, the “Directors’ Notices”)

1. 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.

     • 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) including whether the change occurred during a closed period where prior written clearance was required and, if so, whether prior written clearance was provided. The entity must complete Appendix 3Y and give it to ASX no more than 5 business days after the change occurs.

Level 40, Central Park www.asx.com.au 152‐158 St George's Terrace Customer service 13 12 79 Perth WA 6000

ASX Compliance Pty Limited ABN 26 087 780 489

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

1. 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.

The Appendices 3Y indicate that a change in Directors’ notifiable interest occurred on 19 November 2015 and 30 November 2015. It appears that the Directors’ Notices should have been lodged with ASX by 26 November 2015 and 7 December 2015 respectively. Consequently, the Company may be in breach of listing rules 3.19A and/or 3.19B. It also appears the directors concerned may have breached section 205G of the Corporations Act.

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 listing 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 Appendices were 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 or by facsimile on facsimile number (08) 9381 1322. It should not be sent to the Market Announcements Office.

A response is requested as soon as possible and, in any event, 3.00 pm (WST) on Monday, 22 February 2016 .

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.

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Yours sincerely [Sent electronically without signature] Sebastian Bednarczyk Senior Adviser, Listings (Perth)

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