ABN 30 107 424 519

SOUTHERN GOLD LIMITED

NOTICE OF EXTRAORDINARY GENERAL MEETING AND EXPLANATORY MEMORANDUM ACN 107 424 519

NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting of Southern Gold Limited will be held at Southern Gold Limited,

Level 1, 8 Beulah Road, Norwood, South Australia, 5067 on Wednesday, 21 September 2016 at 4pm (CST).

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NOTICE OF EXTRAORDINARY GENERAL MEETING

Notice is hereby given that an Extraordinary General Meeting of shareholders of Southern Gold Limited ( Southern or Company ) will be held at 4pm (CST) on Wednesday 21 September 2016 at Southern Gold Limited, Level 1, 8 Beulah Road, Norwood, South Australia, 5067.

The Explanatory Memorandum to this Notice provides additional information on matters to be considered at the Meeting. The Explanatory Memorandum and the Proxy Form form part of this Notice.

Terms and abbreviations used in this Notice and the Explanatory Memorandum are defined in the Glossary.

AGENDA

Resolution 1 – Approval for issue of shares to Subscribers

To consider, and if thought fit, pass, with or without amendment, the following resolution as an ordinary resolution:

That for the purpose of Listing Rule 7.1 and for all other purposes, approval is given for the issue and allotment by the Company of 3,428,571 fully paid ordinary shares to the Subscribers at an issue price of $0.35 per Share and on the terms and conditions set out in the Explanatory Memorandum.

Voting Exclusion Statement

A vote on this resolution must not be cast (in any capacity) by or on behalf of any of the following persons:

a person (and their associates) who may participate in the proposed issue and a person (and their associates) who might obtain the 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:

it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or
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 Proxy Form to vote as the proxy decides.

Resolution 2 – Ratification of a previous issue of shares to Asiatic Gold Ltd

To consider, and if thought fit, pass, with or without amendment, the following resolution as an ordinary resolution:

That for the purpose of Listing Rule 7.4 and for all other purposes, approval is given for the issue and allotment by the Company of 6,294,942 fully paid ordinary shares to Asiatic Gold Ltd on 7 July 2016 on the terms and conditions set out in the Explanatory Memorandum.

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Voting Exclusion Statement

The Company will disregard any votes cast on resolution 2 by a person who participated in the issue and any of their associates.

However, the Company need not disregard a vote if:

it is cast by a person as a proxy for a person who is entitled to vote in accordance with the directions on the Proxy Form; or
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 Proxy Form to vote as the proxy decides.

Resolution 3 ‐ Approval of the transfer of Shares to Mr Simon Mitchell or his nominee

To consider, and if thought fit, pass, with or without amendment, the following resolution as an ordinary resolution:

That for the purpose of Listing Rule 10.11 and for all other purposes, the transfer by way of in specie distribution of 93,421 Shares to the Managing Director, Mr Simon Mitchell, or his nominee, on the terms and conditions set out in the Explanatory Memorandum, is approved.

Voting Exclusion Statement

In accordance with ASX Listing Rules, the Company will disregard any votes cast on resolution 3 by Mr Simon Mitchell and any of his associates.

However, the Company need not disregard a vote if:

it is cast by a person as a proxy for a person who is entitled to vote in accordance with the directions on the Proxy Form; or
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 Proxy Form to vote as the proxy decides.

Further, in accordance with the Corporations Act, a vote must not be cast on this resolution (and will be taken not to have been cast if cast contrary to this restriction) by a member of the Key Management Personnel, and any Closely Related Party of such a member, acting as proxy if their appointment does not specify the way the proxy is to vote on this resolution or expressly authorises the person who is the chair of the meeting to exercise the proxy. However, the member or any Closely Related Party of such a member may vote if it is cast by a person as a proxy appointed by writing that specifies how the proxy is to vote on the resolution or by a person who is the chair of the meeting at which the resolution is voted on and the appointment expressly authorises the chair to exercise the proxy even if the resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel.

By order of the Board

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D Hill Company Secretary Dated this 15 August 2016

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Voting Entitlements

Pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth), made pursuant to Section 1074E(2)(g) of the Corporations Act 2001 (Cth), the Directors have determined that the shareholding of each Shareholder for the purposes of ascertaining the voting entitlements for the Extraordinary General Meeting will be as it appears in the Share register on Monday, 19 September 2016 at 7pm (CST).

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 posted to the Company at PO Box 255, Kent Town, SA 5071 or sent by facsimile to Southern Gold Ltd on +61 8 8363 0697, not later than 48 hours before the commencement of the Extraordinary General 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 Extraordinary General Meeting is incorporated in and comprises part of this Notice of Extraordinary General Meeting and should be read in conjunction with this Notice. The Explanatory Memorandum contains a glossary that defines capitalised terms as used in both this Notice of Extraordinary General Meeting and the Explanatory Memorandum.

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EXPLANATORY MEMORANDUM – PART 1 (GENERAL INFORMATION)

This Explanatory Memorandum has been prepared to assist Shareholders in consideration of resolutions proposed for the Extraordinary General Meeting of the Company to be held on Wednesday, 21 September 2016 at Southern Gold Ltd, Level 1, 8 Beulah Road Norwood, Adelaide, South Australia, commencing at 4pm (CST).

It should be read in conjunction with the accompanying Notice of Extraordinary General Meeting.

Summary of transaction to acquire International Gold Private Ltd

As announced on 8 July 2016, Southern has executed binding legal documentation with unlisted public company, Asiatic Gold Ltd ( Asiatic ) to acquire its wholly‐owned Singaporean registered company, International Gold Private Ltd ( IGPL ) itself 100% owner of Korean company, Hee Song Metals Co. Ltd ( HSML ). The consideration includes 6,294,942 Southern ordinary shares which were issued within the Company’s placement capacity under Listing Rule 7.1 and 7.1A ( Consideration Shares ) and A$116,000 cash. Further, Southern has agreed to assume certain liabilities in HSML to the value of $70,000. The Consideration Shares will be distributed to Asiatic shareholders on a 38 Asiatic shares to 1 Southern Share basis (subject to Asiatic shareholder approval). HSML holds significant mineral tenure in South Korea, consisting of 44 granted tenements across 17 project areas totalling some 119km[2] .

Summary of the resolutions which are the subject of the business of the Meeting

The Consideration Shares, which were issued within the Company’s placement capacity under Listing Rules 7.1 and 7.1A can be ratified under Listing Rule 7.4. This has the effect of refreshing the Company’s placement capacity under Listing Rules 7.1 and 7.1A, for which approval is being sought under resolution 2.

As noted above, a condition of the sale is the requirement to complete an ‘in specie’ distribution of the Consideration Shares to Asiatic shareholders which is anticipated to take place over the next few months. Until the ‘in specie’ distribution is complete or 12 months, whichever is the shorter, the Consideration Shares will remain in escrow and are non‐voting.

Furthermore, several of Asiatic’s major shareholders (offshore based sophisticated investors) have agreed to subscribe for $1.2 million of Southern shares at $0.35/Share ( Subscription Shares ), an 18% premium to 20 day VWAP of $0.297 on 6 July ( Subscribers ). The issue of these shares is subject to Southern Shareholder approval, now being sought at this Extraordinary General Meeting. This cornerstone funding raised will be used to help the Company preserve cash flow from the Cannon gold mine, for Australian and Korean based project development and exploration activities and to provide flexibility on potential dividends (or capital return) to be considered at the appropriate time.

In addition, Southern’s Managing Director holds a small parcel of shares in Asiatic, and should Asiatic shareholders approve the in‐specie distribution, he will receive 93,421 Southern shares in two entities he controls as a consequence of this transaction. ASX has notified Southern that approval from shareholders is required under Listing Rule 10.11 to enable the distribution to the Managing Director to proceed.

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EXPLANATORY MEMORANDUM – PART 2 (EXPLANATION OF THE PROPOSED RESOLUTIONS)

Resolution 1 – Approval for issue of shares to Subscribers

Resolution 1 seeks approval of Shareholders for the issue of 3,428,571 Shares to the Subscribers for the purpose of Listing Rule 7.1.

ASX Listing Rule 7.1

ASX Listing Rule 7.1 sets out the basic prohibition on an entity issuing or agreeing to issue Equity Securities in any 12 month period which amount to more than 15% of its ordinary securities. An issue in excess of the 15% limit can be made with the approval of holders of ordinary securities.

The proposed issue of 3,428,571 shares cannot be accommodated within the Company’s 15% placement capacity under Listing Rule 7.1 and therefore requires prior Shareholder approval under Listing Rule 7.1. This Resolution seeks such Shareholder approval.

If this resolution is passed, the shares to be issued will not be counted towards the Company’s 15% limit under Listing Rule 7.1. Further, the base number for determining the Company’s 15% limit will be increased by the number of shares to be issued.

If this resolution is not passed, the proposed issue will not proceed and the funding to be raised will not be received by the Company.

No related party (as defined by the Listing Rules) of the Company is proposed to be issued shares.

Listing Rule 7.3 requires the following information be provided to Shareholders for the purpose of obtaining Shareholder approval under Listing Rule 7.1:

(a) A maximum of 3,428,571 shares will be issued.
(b) The Company will issue the shares as soon as practicable following shareholder approval but in any event no later than 3 months after the date of the Meeting.
(c) The issue price is $0.35 per share.
(d) The shares will be issued to the parties set out in the following table:

Name	Number of Subscription Shares
Potezna Gromadka Ltd	1,142,857
Valbonne II	1,142,857
Mr. Eric Guerlain	1,142,857

(e) The shares will be issued as fully paid and will rank equally in all respects with the existing shares on issue. They will be subject to voluntary escrow for a period of 12 months from the date of issue.

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(f) funds raised will be used to help the Company preserve cash flow from the Cannon gold mine, for Australian and Korean based project development and exploration activities and to provide flexibility on potential dividends (or capital return) to be considered at the appropriate time.
(g) the Shares may be issued and allotted progressively, but no later than 3 months after the date of the Meeting to consider resolution 1.

The Directors RECOMMEND that Shareholders vote in favour of resolution 1.

Resolution 2 ‐ Ratification of previous issue of Shares

The Company seeks approval for the purposes of Listing Rule 7.4 for the issue and allotment on 7 July 2016 of 6,294,942 Shares to Asiatic such that those Shares will not be counted towards the 15% limit on the issue of securities without Shareholder approval pursuant to Listing Rule 7.1 or the 10% limit on the issue of securities without shareholder approval pursuant to Listing Rule 7.1A. If resolution 2 is passed then those Shares will be deemed to have been issued with Shareholder approval and will, therefore, not be counted towards the aforementioned 15% limit or 10% limit.

On 8 July 2016 the Company announced the issue of a total of 6,294,942 Shares to Asiatic in respect of the acquisition of IGPL. The issue of these Shares was completed within the Company’s placement capacity under Listing Rules 7.1 and 7.1A. Resolution 2 relates to 6,294,942 Shares that were issued without security holder approval, the issue of which is now to be ratified under Listing Rule 7.4, if approved by Shareholders.

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

a) 6,294,942 ordinary Shares were issued;
b) the Shares were issued for non cash consideration for the acquisition of IGPL;
c) the Shares were issued on the same terms as, and rank equally with, the existing issued Shares. They will be escrowed for the earlier of 12 months and the date on which Asiatic gives a written direction to the Company’s share registry to effect the in specie distribution;
d) the Shares were issued to Asiatic but, subject to approval of Asiatic shareholders, will be transferred to the Asiatic shareholders on the basis set out in Part 1 of this Explanatory Memorandum;
e) no funds were raised;
f) a voting exclusion statement has been included in the Notice.

The Directors RECOMMEND that Shareholders vote in favour of resolution 2.

Resolution 3 – Approval of the distribution of Shares to Mr Simon Mitchell or his nominee

Listing Rule 10.11 prohibits the issue of Shares by the Company to any of its Directors without prior Shareholder approval.

Mr Mitchell holds a small parcel of shares in Asiatic. Should Asiatic shareholders approve the in‐specie distribution, Mr Mitchell will receive 93,421 Southern shares in two entities he controls as a consequence of this transaction.

ASX has advised the Company that Listing Rule 10.11 applies and accordingly, the Company seeks Shareholder approval to enable the distribution to Mr Mitchell or his nominee to proceed.

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The following information is provided in accordance with Listing Rule 10.13 for the purposes of the Shareholder approval sought pursuant to Listing Rule 10.11:

(a) The Shares will be distributed to Mr Simon Mitchell or his respective nominees.
(b) The maximum number of Shares to be distributed to Mr Simon Mitchell or his respective nominee will be 93,421.
(c) The Shares to be distributed to Mr Mitchell or his respective nominees under resolution 3 will effected by Asiatic after approval of the in‐specie distribution.
(d) The Shares will be distributed for nil consideration.
(e) The Shares to be distributed are on the same terms as, and rank equally with, all other Shares on issue as at the date of distribution.
(f) No funds will be raised by the distribution of Shares.

A voting exclusion statement has been included in the Notice.

The Directors (other than Mr Mitchell) RECOMMEND that Shareholders vote in favour of resolution 3.

Important information for Shareholders

The Chair will not vote any undirected proxies in relation to resolution 3 unless the Shareholder expressly authorizes the Chair to exercise the proxy even though it is connected directly or indirectly with the remuneration of a member of Key Management Personnel. Please note that if the Chair of the meeting is your proxy (or becomes your proxy by default), by completing the attached proxy form, you will expressly so authorize the Chair.

Alternatively, if you appoint the Chair as your proxy, you can direct the Chair to vote for or against or abstain from voting on resolution 3 by marking the appropriate box on the proxy form.

As a further alternative, Shareholders can nominate as their proxy for the purposes of resolution 3, a proxy who is not a member of the Company’s Key Management Personnel or any of their Closely Related Parties. That person would be permitted to vote undirected proxies (subject to the Listing Rules).

If approval is given under Listing Rule 10.11 approval is not required under Listing Rule 7.1, and the Shares distributed pursuant to this resolution will not be included in the calculation of the Company’s 15% annual placement capacity pursuant to Listing Rule 7.1.

No other material information

Other than as set out in this document, and previously disclosed to the Shareholders, there is no other information that is known to the Directors which may reasonably be expected to be material to the making of a decision by the Shareholders whether or not to vote in favour of any of the resolutions.

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GLOSSARY

In this Explanatory Memorandum and in the Notice of Meeting, the following terms have the following meanings 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);

“ ASX Listing Rules” means the listing rules of ASX.

“Board” means the current board of directors of the Company.

“Closely Related Party” of a member of the Key Management Personnel means:

(a) a spouse or child of the member;
(b) a child of the member’s spouse;
(c) a dependant of the member or of the member’s spouse;
(d) anyone else who is one of the member’s family and may be expected to influence the member or be influenced by the member, in the member’s dealings with the Company; or
(e) a company that the member controls.

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

“ Corporations Act” means the Corporations Act 2001 (Cth).

“CST” means central standard time as observed in Adelaide, South Australia.

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

“ Equity Securities ” has the meaning given to that term in the Listing Rules.

“ Explanatory Memorandum” means the explanatory statement accompanying the Notice.

“Extraordinary General Meeting” or “Meeting” means the meeting convened by the Notice.

“ Key Management Personnel ” means those persons having authority and responsibility for planning, directing and controlling the activities of the Company directly or indirectly, including any Director.

“ 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.

“ Meeting ” means the Extraordinary General Meeting convened by the Notice of Meeting;

“ Notice ” or “ Notice of Meeting ” means this notice of meeting including the Explanatory Memorandum and the Proxy Form.

“Proxy Form” means the proxy form accompanying the Notice.

“ related party” has the meaning given to that term in Section 228 of the Corporations Act.

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

“ Shareholder” means a holder of Shares in the Company.

“ Subscribers ” means the parties set out in the Explanatory Memorandum in respect of resolution 1;

“ VWAP ” means Volume Weighted Average Price of the Company’s ASX‐listed Shares trading under code SAU.

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SOUTHERN GOLD LIMITED ACN 107 424 519

EXTRAORDINARY GENERAL MEETING WEDNESDAY, 21 SEPTEMBER 2016 AT 4PM (CST) PROXY FORM

Company Secretary Southern Gold Limited PO Box 255 Kent Town South Australia 5071 FACSIMILE: +61 (0) 8 8363 0697

I/We

______________ Being a member of Southern Gold Limited,

of (address)

hereby appoint

or failing him/her, the Chairman of the meeting as my/our proxy to vote on my/our behalf at the extraordinary general meeting of the Company to be held on 21 September 2016 at Southern Gold Limited, Level 1, 8 Beulah Road, Norwood, South Australia, and at any adjournment thereof. If no voting directions are given, the Chairman will vote in favour of each resolution.

Instructions on Voting

FOR AGAINST ABSTAIN

Resolution 1 Issue of Shares to Subscribers

Resolution 2 Ratification of previous issue of Shares Resolution 3 Approval of transfer of Shares to Mr Simon Mitchell

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Where I/we have appointed the Chairman as my our/proxy (or the Chairman becomes my/our proxy). I/we expressly authorise the Chairman to exercise my/our proxy on Resolution 3 even though Resolution 3 is connected directly or indirectly with the remuneration of a member of key management personnel, which includes the Chairman.

Dated this ____ day of ________2016

Individuals and joint holders to sign: Companies to sign (affix common seal if applicable):

______ _______ Signature Director, or sole Director / Secretary

______ _______ Signature Director / Company Secretary

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AI assistant

IONDRIVE LIMITED Proxy Solicitation & Information Statement 2016

65132_rns_2016-08-24_c17ae3eb-e58f-4b38-acfc-b8411f57bb09.pdf