IONDRIVE LIMITED — Proxy Solicitation & Information Statement 2009

Dec 1, 2009

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2 December 2009

NOTICE OF GENERAL MEETING OF SHAREHOLDERS

Attached is a notice of meeting and explanatory memorandum in relation to a meeting of shareholders of Southern Gold Limited (“the Company”) to be held at the company’s registered office at 47 Tynte St, North Adelaide, South Australia, 5006 at 10.00 am (CST) on Thursday 31 December 2009.

The meeting was foreshadowed in the recent Company announcement on 26 November 2009 in relation to a placement of 40,000,000 shares over two tranches to raise $5 million to fund the Company’s current exploration program.

Formal notification of this General Meeting has been dispatched to all Southern Gold Limited shareholders by mail today.

Regards

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Nick Harding Company Secretary

Southern Gold Limited 47 Tynte Street PO Box 1016 emailinfo@southerngold.com.au telephone 08 8368 8888 ABN 30 107 424 519 North Adelaide North Adelaide web southerngold.com.au facsimile 08 8368 8899 South Australia 5006 South Australia 5006

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SOUTHERN GOLD LIMITED ACN 107 424 519 ( “Company” )

NOTICE OF GENERAL MEETING

NOTICE IS HEREBY GIVEN that a General Meeting of Southern Gold Limited will be held at the Company’s registered office at 47 Tynte Street, North Adelaide, South Australia, commencing at 10.00am (CST) on Thursday 31 December 2009.

Special Business

To consider and, if thought fit, pass each of the following resolutions as an ordinary resolution:

Resolution 1. Ratification of previous issue of Shares

“That for the purposes of ASX listing rule 7.4 and for all other purposes, the issue and allotment by the Company of 21,000,000 fully paid ordinary shares in the capital of the Company at 12.5 cents per share to a number of placees completed on or about Friday 4 December 2009, is approved.”

The Company will disregard any votes cast on Resolution 1 by a person that participated in the issue and any associates of a person that participated in the issue. However the Company need not disregard a vote if:

• (a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the relevant proxy form; or

• (b) it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the relevant proxy form to vote as the proxy decides.

Resolution 2. Approval of the issue of shares

“That, for the purposes of ASX Listing Rule 7.1 and all other purposes, the issue and allotment by the Company of a total of up to 19,000,000 fully paid ordinary shares in the capital of the Company at 12.5 cents per share to a number of placees, on the terms and conditions set out in the Explanatory Memorandum accompanying the notice of this meeting, is approved.”

The Company will disregard any votes cast on Resolution 2 by a person that may participate in the proposed issue, any associates of a person that may participate in the proposed issue, and any person who might obtain a benefit except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed. However the Company need not disregard a vote if:

• (a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the relevant proxy form; or

• (b) it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the relevant proxy form to vote as the proxy decides.

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By order of the Board

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N J Harding

Company Secretary Dated this 30[th] day of November 2009

Voting Entitlements

Pursuant to the Corporations Regulations 2001, Regulation 7.11.37 made pursuant to Section 1074E(2)(g) of the Corporations Act 2001, the Directors have determined that the shareholding of each Shareholder for the purposes of ascertaining the voting entitlements for the General Meeting will be as it appears in the share register Tuesday 29 December 2009 at 7:00pm (Adelaide time).

Proxies

A Shareholder entitled to attend and vote at the meeting has the right to appoint a proxy, who need not be a Shareholder of the Company. If a Shareholder is entitled to cast two or more votes they may appoint two proxies and may specify the percentage of votes each proxy is appointed to exercise.The Proxy form must be deposited at the share registry of the Company, Computershare Investor Services Pty Limited, located at GPO Box 242, Melbourne VIC 3001, or at the Company’s registered office, 47 Tynte Street, North Adelaide, SA 5006, or by facsimile to Computershare on 1800 783 447 (within Australia) or +61 3 9473 2555 (outside Australia) or to the Company on 61 8 8368 8899, not later than 48 hours before the commencement of the meeting. For Intermediary Online subscribers only (custodians), please visit www.intermediaryonline.com to submit your voting intentions, which must be submitted by not later than 48 hours before the commencement of the meeting.

Corporate Representative

A corporation that is a Shareholder or a proxy may elect to appoint a person to act as its corporate representative at the meeting, in which case the corporate Shareholder or proxy (as applicable) must provide that person with a certificate or letter executed in accordance with the Corporations Act authorising him or her to act as that Shareholder’s or proxy’s (as applicable) corporate representative. The authority must be sent to the Company and/or the Company’s Share Registry (detailed above) in advance of the meeting or handed in at the meeting when registering as a corporate representative.

Explanatory Memorandum

The Explanatory Memorandum accompanying this Notice of General Meeting is incorporated in and comprises part of this Notice of General Meeting and should be read in conjunction with this Notice.

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SOUTHERN GOLD LIMITED

ACN 107 424 519 EXPLANATORY MEMORANDUM

This Explanatory Memorandum has been prepared to assist Shareholders in consideration of resolutions proposed for the General Meeting of the Company to be held on Thursday 31 December 2009 at the offices of the Company, 47 Tynte Street, North Adelaide, South Australia 5006, commencing at 10:00 am (Adelaide time).

Background

On Thursday 26 November 2009, the Company announced a placement of 40,000,000 Shares at 12.5 cents each to sophisticated, professional, and other investors in two tranches, to raise a total of $5,000,000.

Tranche 1, comprising 21,000,000 Shares, will be accommodated within the available 15% capacity of the Company’s issued capital prior to the placement under Listing Rule 7.1, and will be issued and allotted on or about Friday 4 December 2009. The issue and allotment of Tranche 2, comprising up to 19,000,000 Shares, is subject to Shareholder approval under Listing Rule 7.1.

Each tranche of the placement has or will be undertaken without a disclosure document, as the offer to each investor satisfies the requirements of either section 708(8), 708(10) or section 708(11) of the Corporations Act.

The funds raised from the placement will allow SAU to continue to progress exploration across its gold and base metal projects, including:

• in Cambodia, where SAU intends to continue exploration on its four 100% owned tenements, of which a small initial drilling program has returned excellent first pass results, in addition to continued exploration on SAU’s three other tenements in Cambodia which is currently fully funded by Japan Oil Gas and Metals National Corporation (“JOGMEC”) up to a total of US$4.5 million to earn JOGMEC a 51% interest in these three tenements;

• in South Australia, where SAU is in Joint Venture with Dominion Mining Limited on an area surrounding its Challenger Gold Mine, with 37 targets identified and where follow‐up reverse circulation and diamond drilling is scheduled; and

• in Western Australia, where the Company intends to undertake a drilling program at the Cannon prospect, part of the Company’s Bulong South Project, 30 km east of Kalgoorlie.

Funds raised will also be applied to SAU’s general working capital requirements.

Resolution 1 seeks ratification by Shareholders of the Shares that will have been issued by the Company under Tranche 1 of the placement as at the date of the General Meeting and Resolution 2 seeks approval of Shareholders to the issue of the Shares under Tranche 2 of the placement, so that:

• a) these Shares will not be counted towards the 15% 12 month limit on the issue of equity securities permitted by Listing Rule 7.1; and

• b) to ensure the Company maintains flexibility during the upcoming 12 month period to supplement the Company’s working capital requirements and undertake further capital transactions, should the Directors determine this to be in the best interests of the Company.

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Resolution 1 ‐ Ratification of previous issue of Shares

ASX Listing Rule 7.4 states that an issue by a company of equity securities made without prior approval under Rule 7.1 is treated as having been made with approval for the purpose of Rule 7.1 if the issue did not breach Rule 7.1 and the Company’s members subsequently approve it.

On or about 4 December 2009, the Company will complete the issue and allotment of 21,000,000 Shares under Tranche 1 of the placement to a number of sophisticated, professional, and other investors at 12.5 cents per Share. As stated above, Tranche 1 will be accommodated within the available 15% capacity of the Company’s issued capital prior to the placement, pursuant to ASX listing rule 7.1.

None of the placees are a related party (within the meaning of the Corporations Act) of the Company.

Resolution 1 seeks approval by Shareholders to the issue of the 21,000,000 Shares comprised in Tranche 1 of the placement. If the Resolution is passed then the Shares comprised in Tranche 1 will be deemed to have been issued with Shareholder approval and will, therefore, not be counted towards the 15% limit prescribed by ASX Listing Rule 7.1.

ASX Listing Rule 7.5 requires that the following information be provided to Shareholders for the purposes of obtaining Shareholder approval pursuant to ASX Listing Rule 7.4:

• (a) the total number of securities issued and allotted under Tranche 1 will be 21,000,000 Shares;

• (b) the issue price for the securities is 12.5 cents per Share;

• (c) the Shares will be allotted as fully paid and will rank equally with the existing Shares on issue;

• (d) the Shares will be issued and allotted to a number of sophisticated, professional, and other investors identified by Hartleys Limited, broker to the placement; and

• (e) funds raised from the issue have been and will be used as specified in the Background section of this Explanatory Memorandum.

The Company will disregard any votes cast on Resolution 1 by a person that participated in the issue of the Shares under Tranche 1 and any associates of a person that participated in the issue. However the Company need not disregard a vote if:

• (a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the relevant proxy form; or

• (b) it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the relevant proxy form to vote as the proxy decides.

Each of the Directors intends to vote in favour of Resolution 1. The Chairman intends to vote undirected proxies in favour of Resolution 1.

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Resolution 2. Approval of the issue of shares

The issue and allotment of up to 19,000,000 Shares comprised in Tranche 2 of the placement to sophisticated, professional, and other investors cannot be accommodated within the 15% placement capacity under Listing Rule 7.1 and is, therefore, subject to Shareholder approval under Listing Rule 7.1.

Resolution 2 seeks Shareholder approval for the issue and allotment of up to 19,000,000 Shares comprised in Tranche 2 of the placement. If Resolution 2 is approved, the Shares will not be counted towards the 15% 12 month limit on the issue of equity securities permitted by Listing Rule 7.1.

None of the placees are a related party (within the meaning of the Corporations Act) of the Company.

For the purposes of Listing Rule 7.3, the following information is provided to Shareholders:

• the maximum number of Shares that may be issued and allotted to sophisticated, professional, and other investors under Tranche 2 of the placement is up to 19,000,000 Shares;

• the Company will issue and allot the Shares comprised in Tranche 2 as soon as practicable following the meeting and, in any event, no later than 3 months after the date of the meeting;

the issue price for the Shares is 12.5 cents per Share;

• the Shares will be issued and allotted to a number of sophisticated, professional, and other investors identified by Hartleys Limited, broker to the placement;

each Share will be fully paid and will rank equally in all respects with the existing Shares on issue; and

• it is intended that the funds raised from the issue will be used as specified in the Background section of this Explanatory Memorandum.

The Company will disregard any votes cast on Resolution 2 by a person that may participate in the proposed issue, any associates of a person that may participate in the proposed issue, and any person who might obtain a benefit except a benefit solely in the capacity of a holder of ordinary securities, if the resolution is passed. However the Company need not disregard a vote if:

• (a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the relevant proxy form; or

• (b) it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the relevant proxy form to vote as the proxy decides.

Each of the Directors intends to vote in favour of Resolution 2. The Chairman intends to vote undirected proxies in favour of Resolution 2.

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GLOSSARY

In this Explanatory Memorandum, the following terms have the following unless the context otherwise requires:

" ASX " means ASX Limited ACN 008 624 691 or the securities exchange operated by ASX Limited (as the context requires);

" Company " means Southern Gold Limited (ACN 107 424 519).

" Corporations Act " means the Corporations Act 2001 (Cth).

" Directors " means the directors of the Company from time to time and " Director " means any one of them.

" Explanatory Memorandum " means this explanatory memorandum.

" Listing Rules " means the listing rules of ASX and any other rules of ASX which are applicable while the Company is admitted to the official list of ASX, each as amended or replaced from time to time, except to the extent of any express written waiver by ASX.

“ Share ” means a fully paid ordinary share in the capital of the Company.

• " Shareholder " means a holder of Shares.

“ Tranche 1 ” means the first tranche of the placement described in the Background section of this Explanatory Memorandum, comprising 21,000,000 Shares.

“ Tranche 2 ” means the second tranche of the placement described in the Background section of this Explanatory Memorandum, comprising up to 19,000,000 Shares.

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Lodge your vote:

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By Mail:

Computershare Investor Services Pty Limited GPO Box 242 Melbourne Victoria 3001 Australia

Alternatively you can fax your form to (within Australia) 1800 783 447 (outside Australia) +61 3 9473 2555

For Intermediary Online subscribers only (custodians) www.intermediaryonline.com

For all enquiries call:

(within Australia) 1300 556 161 (outside Australia) +61 3 9415 4000

Proxy Form

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For your vote to be effective it must be received by 10:00am (ACDT) on Tuesday 29 December 2009

How to Vote on Items of Business

Signing Instructions

All your securities will be voted in accordance with your directions.

Individual: Where the holding is in one name, the securityholder must sign.

Appointment of Proxy

Joint Holding: Where the holding is in more than one name, all of the securityholders should sign.

Voting 100% of your holding: Direct your proxy how to vote by marking one of the boxes opposite each item of business. If you do not mark a box your proxy may vote as they choose. If you mark more than one box on an item your vote will be invalid on that item.

Power of Attorney: If you have not already lodged the Power of Attorney with the registry, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: Where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please sign in the appropriate place to indicate the office held.

Voting a portion of your holding: Indicate a portion of your voting rights by inserting the percentage or number of securities you wish to vote in the For, Against or Abstain box or boxes. The sum of the votes cast must not exceed your voting entitlement or 100%.

Appointing a second proxy: You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you appoint two proxies you must specify the percentage of votes or number of securities for each proxy, otherwise each proxy may exercise half of the votes. When appointing a second proxy write both names and the percentage of votes or number of securities for each in Step 1 overleaf.

Attending the Meeting

Bring this form to assist registration. If a representative of a corporate securityholder or proxy is to attend the meeting you will need to provide the appropriate “Certificate of Appointment of Corporate Representative” prior to admission. A form of the certificate may be obtained from Computershare or online at www.investorcentre.com under the information tab, "Downloadable Forms".

A proxy need not be a securityholder of the Company.

Comments & Questions: If you have any comments or questions for the company, please write them on a separate sheet of paper and return with this form.

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Turn over to complete the form

View your securityholder information, 24 hours a day, 7 days a week:

www.investorcentre.com

Your secure access information is:

Review your securityholding

SRN/HIN:

Update your securityholding

PLEASE NOTE: For security reasons it is important that you keep your SRN/HIN confidential.

916CR_0_Sample_Proxy/000001/000001/i

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Change of address. If incorrect, mark this box and make the correction in the space to the left. Securityholders sponsored by a broker (reference number commences with ’ X ’) should advise your broker of any changes.

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Proxy Form

Please mark to indicate your directions

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Appoint a Proxy to Vote on Your Behalf

I/We being a member/s of Southern Gold Limited hereby appoint

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the Chairman of the meeting

OR

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PLEASE NOTE: Leave this box blank if you have selected the Chairman of the Meeting. Do not insert your own name(s).

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, as the proxy sees fit) at the General Meeting of Southern Gold Limited to be held at 47 Tynte Street, North Adelaide, South Australia on Thursday, 31 December 2009 at 10:00am (ACDT) and at any adjournment of that meeting.

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Items of Business

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PLEASE NOTE: If you mark the Abstain box for an item, you are directing your proxy not to vote on your behalf on a show of hands or a poll and your votes will not be counted in computing the required majority.

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1. Ratification of a prior issue of 21,000,000 shares

2. To approve the issue of up to 19,000,000 shares

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The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business.

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Signature of Securityholder(s) This section must be completed.

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Individual or Securityholder 1 Securityholder 2 Securityholder 3
Sole Director and Sole Company Secretary Director Director/Company Secretary
Contact
Contact Daytime
Name Telephone Date / /
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S A U

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