IONDRIVE LIMITED — M&A Activity 2012

Aug 6, 2012

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ASX ANNOUNCEMENT

7 August 2012

TRAFFORD RESOURCES TO PURCHASE SOUTHERN GOLD’S 51% SHARE IN THE CHALLENGER JOINT VENTURE – SOUTH AUSTRALIA

Southern Gold Limited (“Southern Gold”) is pleased to announce that pursuant to a signed Letter of Intent, Trafford Resources Limited (“Trafford”) will purchase Southern Gold’s 51% interest in the Western Gawler Craton JV with Dominion Gold Operations (a 100% owned subsidiary of Kingsgate Consolidated Limited) and its 100% owned Challenger West tenement (“Challenger Project”) (Figure 1) .

Under the sale terms Trafford will purchase the Challenger Project for A$500,000 cash and 3,000,000 Trafford shares (subject to a 12 month voluntary escrow period). Once a decision is made to conduct a feasibility study on a JORC resource of over 500,000oz gold, Trafford will issue a further A$1 million worth of Trafford shares to Southern Gold or its nominee.

Completion of the transaction is subject to final execution of formal documentation incorporating the terms agreed under the Letter of Intent and will be conditional on the parties obtaining all necessary consents and approvals, and execution of any documentation required to effect the sale, including a Deed of Assignment for the 51% JV interest.

“ Trafford is very well placed to take advantage of the exploration boom in South Australia. Together with its Wilcherry Hill Project (2,692Km[2] ) on the Eyre Peninsula and this Western Gawler Craton project Trafford now has >8,300 Km[2 ] of Gawler Craton to define and develop targets. The Gawler Craton has produced a number of world class deposits such as Olympic Dam, Prominent Hill and Challenger Gold Mine and there is no reason why it cannot be repeated ” said Ian Finch Managing Director of Trafford Resources.

Southern Gold Managing Director Nanette Anderson said “Entering into this Agreement is consistent with Southern Gold’s intention to focus on exploration, evaluation and development at the Bulong Gold project, Western Australia, where recent results show continued high grade gold hits (see June Quarterly 2012). Southern Gold looks to undertake this Agreement to release value from the sale of this asset and by reducing its operating cost while maintaining exposure to potential upside at the Challenger Project.”

For further information please contact:

Nanette Anderson Managing Director

T: +61 8 8368 8888 F: +61 8 8431 5619 E: info@southerngold.com.au W: www.southerngold.com.au

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Figure 1: Map of Trafford’s Western Gawler Craton Project. Total area covered is 5,653Km[2 ]

Southern Gold Limited 229 Greenhill Rd PO Box 255 email: info@southerngold.com.au telephone 08 8368 8888 ABN 30 107 424 519 Dulwich Kent Town web: www:southerngold.com.au facsimilie 08 8368 8899 South Australia 5006 South Australia 5071