IONDRIVE LIMITED — Management Reports 2022

Feb 8, 2022

STRATEGIC DIRECTION UPDATE

The Board of Southern Gold Ltd (“Southern Gold”, “SAU” or “the Company”), is pleased to provide shareholders with an update on the strategic direction for the Company into 2022 and beyond.

Key Points

• South Korea continues as Southern Gold’s primary focus with the Exploration Manager having been based in-country since October 2021. Additional senior geological staff and contractor resources have been engaged for ongoing exploration campaigns.

• Company to leverage its management and exploration expertise to seek to expand project and country focus extended to Australia by seeking a new strategic investment / project prospects for Gold and Copper.

• Company is exploring options relating to the two hundred million shares received from BMV for purchase of SAU’s JV interest in the Kochang and Gubong mines in South Korea. At the closing price on 7[th] February 2022 the BMV shares are marked to market at A$7.6 million.

• CEO recruitment continues seeking an experienced leader to drive the Company’s strategic direction.

Southern Gold Chairman, Greg Boulton commented:

“With our cash reserves of $6.5m and the ability to reduce our holding in BMV as appropriate, we are well positioned to not only increase our exploration focus on South Korea but also search for and evaluate strategic investments / project interests in Gold and Copper exploration/development assets in Australia.

Our directors have significant skills in exploration, investment evaluation and deal structuring and these skills will be used to develop a short list of Gold, Silver and Copper exploration projects for the Board to consider.”

South Korea Focus

During the November to January winter period, a major data compilation and regional targeting study was undertaken and currently continues with the goal of identifying new highly prospective epithermal gold-silver mineralisation in the Cretaceous-age extensional basins.

Future programmes will be led by our highly experienced team, spearheaded by our in-country Exploration Manager, Robert Smillie. Robert is leading the target work with the assistance of our NZ based geological consultancy, Craig Panther, who has in-depth experience and knowledge of South Korean geology and epithermal deposit styles through his time in-country with Ivanhoe Mining in early 2000s. Our Non-Executive Director, Doug Kirwin with Craig Panther were key players in the discovery and evaluation of the Gasado, Moisan and Eunsan epithermal gold-silver deposits (Moisan and Gasado are currently in production), and are instrumental in progressing our assets in South Korea.

Southern Gold Limited ABN 30 107 424 519

10 George Street PO Box 255 email info@southerngold.com.au telephone 08 8368 8888 Stepney SA 5069 Kent Town SA 5071 web southerngold.com.au facsimile 08 8363 0697

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Figure 1: December fieldwork - Tongyeong mine extension veins (left) and vein breccias at western Geoje Island (right)

A major campaign of field work is currently underway and is being managed by Senior Geologist, Scott Randall, along with a consultant mapping geologist and data management geologist. Our expertise to develop our South Korean Company will be 15 people in total, which is the largest exploration team in South Korea.

Project generation programmes are planned for February 2022 to June 2022, in the Haenam, Kaldam-Jinan, South Gyeongsang and Yeongdong Basins.

The Company currently has 65 tenement applications in progress for a total area of 181.6 km[2] .

While Covid-19 and the inability for contractors to travel to South Korea severely impacted 2021 field work, the Company remains focused on assessing existing areas under application, progressing the discovery of new areas of interest for application. It is the opinion of our experienced technical team that the prospectivity of South Korea remains very high based on historical gold production and geology. Stable government, minimum regulation and an English-speaking workforce provides a positive environment for modern exploration techniques.

Exploration opportunities being evaluated in Australia.

Following successful discovery and production by Southern Gold at the Cannon Gold project in Western Australia, SAU is searching for Investment, outright project acquisition project joint ventures in gold, silver or copper tenements in Australia. The Board expects the identification of these opportunities to take 2-3 months.

Southern Gold’s Australian exploration assets previously included the Bulong South, Glandore and Cowarna gold projects.

The SAU Board believes we have significant cash and assets that can be converted to cash in the short to medium term, to enable evaluation and investment in Australian projects. The Company is of course open to receiving approaches from vendors or potential partners with projects outside of Australia but this will not be a key focus of the exercise in Australia.

BMV Shares received

Bluebird Merchant Ventures Ltd (BMV), is a London Stock Exchange listed company (LSE: BMV) with a market capitalisation of GBP £12.4 million (AUD $23.7 million, using a conversion rate of 0.5242).

On Wednesday, 22 December 2021 the Company, through its wholly owned Singaporean subsidiary, International Gold Private Limited (“IGPL”), was issued with the second tranche of 150,000,000 Ordinary shares in BMV (refer ASX Announcement 29 June 2021).

Southern Gold now holds 200 million BMV shares, representing 32.1% of the issued capital of BMV. 75 million of the shares are subject to escrow until 21 June 2022.

As the largest shareholder in BMV, we clearly have alignment with the BMV Board to have funding in place and people on the ground in South Korea to develop the Kochang and Gubong mines.

Recruitment of CEO

As announced to the market on Monday, 1 November 2021, an Executive Search firm was appointed to identify a suitably qualified and experienced CEO that will work with the Board to achieve the above Strategies targeting an improvement of the value of the Company.

The Company continues to work with an Executive Search Firm and this appointment is anticipated to be filled during the second quarter of 2022.

Further Information: Greg Boulton AM Investor and Media Relations 08 8368 8888 Lexi O’Halloran info@southerngold.com.au lexi@janemorganmanagement.com.au

Southern Gold Limited: Company Profile

Southern Gold Ltd is a successful gold explorer listed on the Australian Securities Exchange (ASX ticker “SAU”). Southern Gold owns 100% of a substantial portfolio of high-grade gold projects in South Korea that are largely greenfield epithermal gold-silver targets in the south-west of the country. Backed by a first-class technical team, Southern Gold’s aim is to find tier one epithermal gold-silver deposits in a jurisdiction that has seen very little modern exploration. Southern Gold is also a major shareholder of London-listed Bluebird Merchant Ventures Ltd (BMV), a company currently developing two gold mine projects in South Korea.

Forward-looking statements

Some statements in this release regarding estimates or future events are forward looking statements. These may include, without limitation:

• Estimates of future cash flows, the sensitivity of cash flows to metal prices and foreign exchange rate movements;

• Estimates of future metal production; and

• Estimates of the resource base and statements regarding future exploration results.

Such forward looking statements are based on a number of estimates and assumptions made by the Company and its consultants in light of experience, current conditions and expectations of future developments which the Company believes are appropriate in the current circumstances. Such statements are expressed in good faith and believed to have a reasonable basis. However, the estimates are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from estimated results.

All reasonable efforts have been made to provide accurate information, but the Company does not undertake any obligation to release publicly any revisions to any “forward-looking statement” to reflect events or circumstances after the date of this presentation or ASX release, except as maybe required under applicable laws. Recipients should make their own enquiries in relation to any investment decisions from a licensed investment advisor.