IONDRIVE LIMITED — Proxy Solicitation & Information Statement 2020

Sep 17, 2020

Notice of Extraordinary General Meeting Southern Gold Limited ACN 107 424 519

Date of Meeting: 19 October 2020

Time of Meeting: 12 noon (Adelaide Time)

Place of Meeting: Southern Gold Limited, 10 George Street, Stepney SA 5069

Notice of Extraordinary General Meeting

Notice is given that an Extraordinary General Meeting of shareholders of Southern Gold Limited ACN 107 424 519 ( SAU or Company ) will be held at 12 noon (Adelaide time), on 19 October 2020 at Southern Gold Limited, 10 George Street, Stepney SA 5069.

Agenda

Ordinary Business

1. Resolution 1 - Ratification of the Issue of Shares under the First Tranche Placement under Listing Rule 7.1

To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:

“That, for the purposes of Listing Rule 7.4 and for all other purposes, the prior allotment and issue from placement capacity under Listing Rule 7.1 of 15,034,094 fully paid ordinary shares at $0.12 per share to the First Tranche Placement Recipients as set out in the Explanatory Memorandum accompanying this Notice of Meeting, be approved an ratified.”

Voting Exclusion: The Company will disregard any votes cast in favour of Resolution 1 by or on behalf of the First Tranche Placement Recipients, any Associates of the Placement Recipients, and any person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities in the Company, if Resolution 1 is passed, and any Associates of those persons. However, this does not apply to a vote cast in favour of Resolution 1 by:

• (a) a person as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with directions given to the proxy or attorney to vote on the Resolution in that way; or

• (b) the chair of the meeting as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with a direction given to the chair to vote on the resolution as the chair decides; or

• (c) a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met:

• (1) the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting, on the Resolution; and

• (2) the holder votes on the Resolution in accordance with directions given by the beneficiary to the holder to vote in that way.

2. Resolution 2 - Ratification of the Issue of Shares under the First Tranche Placement under Listing Rule 7.1A

To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:

“That, for the purposes of Listing Rule 7.4 and for all other purposes, the prior allotment and issue from placement capacity under Listing Rule 7.1A of 12,800,700 fully paid ordinary shares at $0.12 per share to the First Tranche Placement Recipients as set out in the Explanatory Memorandum accompanying this Notice of Meeting, be approved an ratified.”

Voting Exclusion: The Company will disregard any votes cast in favour of Resolution 2 by or on behalf of the First Tranche Placement Recipients, any Associates of the Placement Recipients, and any person who might obtain a benefit, except a

Notice of Extraordinary General Meeting

benefit solely in the capacity of a holder of ordinary securities in the Company, if Resolution 2 is passed, and any Associates of those persons. However, this does not apply to a vote cast in favour of Resolution 2 by:

• (a) a person as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with directions given to the proxy or attorney to vote on the Resolution in that way; or

• (b) the chair of the meeting as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with a direction given to the chair to vote on the resolution as the chair decides; or

• (c) a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met:

• (1) the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting, on the Resolution; and

• (2) the holder votes on the Resolution in accordance with directions given by the beneficiary to the holder to vote in that way.

3. Resolution 3 – Approval of Issue of Options to First Tranche Placement Recipients

To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:

"That, for the purposes of Listing Rule 7.1 and for all other purposes, approval be and is hereby given for the issue and allotment of 13,917,397 unlisted options, exercisable at $0.18 per share, expiring on 18 October 2022, to First Tranche Placement Recipients, on the terms set out in the Explanatory Memorandum accompanying this Notice of Meeting.”

Voting Exclusion: The Company will disregard any votes cast in favour of Resolution 3 by or on behalf of the First Tranche Placement Recipients, any Associates of the Placement Recipients, and any person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities in the Company, if Resolution 3 is passed, and any Associates of those persons. However, this does not apply to a vote cast in favour of Resolution 3 by:

• (a) a person as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with directions given to the proxy or attorney to vote on the Resolution in that way; or

• (b) the chair of the meeting as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with a direction given to the chair to vote on the resolution as the chair decides; or

• (c) a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met:

• (1) the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting, on the Resolution; and

• (2) the holder votes on the Resolution in accordance with directions given by the beneficiary to the holder to vote in that way.

4. Resolution 4 - Approval of Issue of Placement Shares and Options to Metal Tiger plc

To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:

"That, for the purposes of Listing Rule 10.11 and for all other purposes, approval be and is hereby given for the issue and allotment of 14,569,000 fully paid ordinary shares at $0.12 per share and 7,284,500 unlisted options, exercisable at $0.18 per share, expiring on 18 October 2022 to Metal Tiger plc (UK company number 04196004) on the terms set out in the Explanatory Memorandum accompanying this Notice of Meeting.”

Notice of Extraordinary General Meeting

Voting Exclusion: The Company will disregard any votes cast in favour of Resolution 4 by or on behalf of Metal Tiger plc, or any of their Associates. However, this does not apply to a vote cast in favour of Resolution 4 by:

• (a) a person as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with directions given to the proxy or attorney to vote on the Resolution in that way ;or

• (b) the chair of the meeting as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with a direction given to the chair to vote on the resolution as the chair decides; or

• (c) a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met:

• (1) the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting on the Resolution; and

• (2) the holder votes on the Resolution in accordance with directions given by the beneficiary to the holder to vote in that way.

5. Resolution 5 - Approval of Issue of Placement Shares and Options to Crescat Capital LLC

To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:

"That, for the purposes of Listing Rule 7.1 and for all other purposes, approval be and is hereby given for the issue and allotment of 20,840,000 fully paid ordinary shares at $0.12 per share and 10,420,000 unlisted options, exercisable at $0.18 per share, expiring on 18 October 2022 to Crescat Capital LLC, on the terms set out in the Explanatory Memorandum accompanying this Notice of Meeting.”

Voting Exclusion: The Company will disregard any votes cast in favour of Resolution 5 by or on behalf of Crescat Capital LLC, or any of their Associates. However, this does not apply to a vote cast in favour of Resolution 5 by:

• (a) a person as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with directions given to the proxy or attorney to vote on the Resolution in that way ;or

• (b) the chair of the meeting as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with a direction given to the chair to vote on the resolution as the chair decides; or

• (c) a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met:

• (1) the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting on the Resolution; and

• (2) the holder votes on the Resolution in accordance with directions given by the beneficiary to the holder to vote in that way.

6. Resolution 6 - Approval of Issue of Placement Shares and Options

To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:

"That, for the purposes of Listing Rule 7.1 and for all other purposes, approval be and is hereby given for the issue and allotment of 17,922,976 fully paid ordinary shares at $0.12 per share and 8,961,488 unlisted options, exercisable at $0.18 per share expiring on 18 October 2022, to the Placement Recipients on the terms set out in the Explanatory Memorandum accompanying this Notice of Meeting.”

Notice of Extraordinary General Meeting

Voting Exclusion: The Company will disregard any votes cast in favour of Resolution 6 by or on behalf of the Placement Recipients, or any of their Associates. However, this does not apply to a vote cast in favour of Resolution 6 by:

• (a) a person as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with directions given to the proxy or attorney to vote on the Resolution in that way ;or

• (b) the chair of the meeting as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with a direction given to the chair to vote on the resolution as the chair decides; or

• (c) a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met:

• (1) the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting on the Resolution; and

• (2) the holder votes on the Resolution in accordance with directions given by the beneficiary to the holder to vote in that way.

7. Resolution 7 - Approval of Issue of Fee Options to Joint Lead Managers

To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:

"That, for the purposes of Listing Rule 7.1 and for all other purposes, approval be and is hereby given for the issue and allotment of 2,000,000 unlisted options, exercisable at $0.18 per share expiring on 18 October 2022, to the Joint Lead Managers on the terms set out in the Explanatory Memorandum accompanying this Notice of Meeting.”

Voting Exclusion: The Company will disregard any votes cast in favour of Resolution 7 by or on behalf of the Foster Stockbroking and Ashanti Capital, or any of their Associates. However, this does not apply to a vote cast in favour of Resolution 7 by:

• (a) a person as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with directions given to the proxy or attorney to vote on the Resolution in that way ;or

• (b) the chair of the meeting as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with a direction given to the chair to vote on the resolution as the chair decides; or

• (c) a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met:

• (1) the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting on the Resolution; and

• (2) the holder votes on the Resolution in accordance with directions given by the beneficiary to the holder to vote in that way.

8. Resolution 8 - Approval of Issue of Fee Options Red Cloud Securities Inc

To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:

"That, for the purposes of Listing Rule 7.1 and for all other purposes, approval be and is hereby given for the issue and allotment of up to 1,584,100 unlisted options, exercisable at $0.16 per share expiring on 18 October 2022, to Red Cloud Securities Inc., for part advisory fees on the terms set out in the Explanatory Memorandum accompanying this Notice of Meeting.”

Notice of Extraordinary General Meeting

Voting Exclusion: The Company will disregard any votes cast in favour of Resolution 8 by or on behalf of the Red Cloud Securities Inc, or any of their Associates. However, this does not apply to a vote cast in favour of Resolution 8 by:

• (a) a person as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with directions given to the proxy or attorney to vote on the Resolution in that way ;or

• (b) the chair of the meeting as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with a direction given to the chair to vote on the resolution as the chair decides; or

• (c) a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met:

• (1) the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting on the Resolution; and

• (2) the holder votes on the Resolution in accordance with directions given by the beneficiary to the holder to vote in that way.

9. Other Business

To consider any other business that may be brought before the Meeting in accordance with the Company’s Constitution.

Explanatory Memorandum

Shareholders are referred to the Explanatory Memorandum accompanying and forming part of this Notice of Extraordinary General Meeting.

Snap Shot Time

Regulation 7.11.37 of the Corporations Regulations 2001 permits the Company to specify a time, not more than 48 hours before the Meeting, at which a “snap shot” of Shareholders will be taken for the purposes of determining Shareholders' entitlements to vote at the Meeting.

The Directors have determined that all Shares of the Company on the register as at 5pm (Adelaide time) on 17 October 2020 shall, for the purposes of determining voting entitlements at the Meeting, be taken to be held by the persons registered as holding the Shares at that time.

Proxies

Please note that:

• (a) a member of the Company entitled to attend and vote at the Meeting is entitled to appoint a proxy;

• (b) a proxy need not be a member of the Company; and

• (c) a member of the Company entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise, but where the proportion or number is not specified, each proxy may exercise half of the votes.

The enclosed Proxy Form for the Meeting provides further details on appointing proxies and lodging the Proxy Form. Proxies must be returned by 5pm (Adelaide time) on 15 October 2020.

Voting by Proxy

A Shareholder can direct its proxy to vote for, against or abstain from voting on each resolution by marking the appropriate box in the Voting Directions section of the proxy form. If a proxy holder votes, they must cast all votes as directed. Any directed proxies that are not voted will automatically default to the Chairman, who must vote the proxies as directed.

Notice of Extraordinary General Meeting

If the Chairman is to act as your proxy in relation to the meeting (whether by appointment or by default) and you have not given directions on how to vote by marking the appropriate box in the Voting Directions section of the proxy form, the Chairman intends to vote all valid undirected proxies in respect of each of the Resolutions in favour of the relevant resolution.

If you are in any doubt as to how to vote, you should consult your professional adviser.

Corporate Representative

If a representative of a Shareholder corporation is to attend the Meeting, a “Corporate Representative Certificate” should be completed and produced prior to the meeting. Please contact the Company’s Share Registry for a pro forma certificate if required.

By Order of the Board of Directors Southern Gold Limited

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Daniel Hill Company Secretary 17 September 2020

Explanatory Memorandum

1. Introduction

This Explanatory Memorandum is provided to shareholders of Southern Gold Limited can 107 424 519 ( SAU or Company ) to explain the Resolutions to be put to Shareholders at the Extraordinary General Meeting to be held at Southern Gold Limited, 10 George Street, Stepney on 19 October 2020 commencing at 12 noon (Adelaide time).

The Notice of Meeting, which is also enclosed , sets out details of the proposal concerning the seven Resolutions to be put to Shareholders.

The Directors recommend shareholders read the accompanying Notice of Meeting and this Explanatory Memorandum in full before making any decision in relation to the Resolutions.

Unless otherwise defined, the Terms used in this Explanatory Memorandum are defined in section 10.

2. Background to the Placement

2.1 Background

On 3 September 2020 the Company announced that it proposed to raise $10,200,000 (before costs) through an issue of a total of 85,000,000 fully paid ordinary shares at an issue price of $0.12 per share with one free option for every two shares subscribed exercisable at $0.18 per share, expiring on 18 October 2022 ( Placement ).

The proceeds of the Placement as follows:

Use (24 Months)	Estimated Amount ($m)
Diamond drilling programmes	$3.5m
Support costs for diamond drilling programme and technical team	$3.4m
Project Generation	$1.0m
Corporate Costs and Administration	$2.3m
TOTAL	$10.2m

The Company appointed Foster Stockbroking Pty Ltd and Ashanti Capital Pty Ltd to act as joint lead manager and bookrunner to the Placement. Red Cloud Securities Inc was appointed as advisor to the Placement.

2.2

First Tranche Placement

Resolution 1 and Resolution 2 seeks Shareholder ratification and approval for the prior issue of 27,834,794 fully paid ordinary shares to sophisticated investors at an issue price of $0.12 cents per Share ( First Tranche Placement Shares ), raising $3,340,175 (before costs) ( First Tranche Placement ).

The First Tranche Placement Shares were issued on 10 September 2022 and represents approximately 22% of the shares the Company had on issue at the time of the announcement of Prior Placement. The First Tranche Placement Shares were issued to the First Tranche Placement Recipients under the Company’s existing placement capacity under Listing Rules 7.1 and 7.1A prior to the date of the Meeting. Resolution 1 and Resolution 2 seeks Shareholder approval under Listing Rule 7.4 to ratify the issue of the First Placement Shares. Shareholder ratification will enable the Company to issue Shares in the next 12 months under its placement capacities without the need to seek prior shareholder approval.

Explanatory Memorandum

The company has offered to First Tranche Placement recipients a free option for every two shares subscribed, subject to shareholder approval. Resolution 3 seeks shareholder approval for the granting of options for First Tranche Recipients.

2.3 Second Tranche Placement

The remainder of the Placement Shares, being 53,331,976 Shares, with a free attaching option for every two shares subscribed ( Second Tranche Placement Shares ), will be issued as a second tranche to raise approximately $6,399,837 million ( Second Tranche Placement ). The issue of the Second Tranche Placement Shares requires Shareholder approval. If the issue of the Second Tranche Placement Shares is approved by Shareholders, it is anticipated that the Placement Shares will be issued and allotted to the Placement Recipients immediately following this meeting.

As part of the Second Tranche Placement, pursuant to cornerstone investor subscription agreements, Metal Tiger plc (UK company number 04196004) ( MTR ) has agreed to subscribe for 14,569,000 Placement Shares to raise a total of AUD$1,748,280 and Crescat Capital LLC ( Crescat ) has agreed to subscribe for 20,840,000 Placement Shares to raise a total of AUD$2,500,800. Resolutions 4 and 5 seek shareholder approval for the cornerstone placements with free attaching options for every two shares subscribed.

Resolution 6 seeks shareholder approval for the remaining part of the Second Tranche Placement.

The Company also seeks shareholder approval for options to be issued to its Joint Leader Managers Ashanti Capital and Foster Stockbroking, along with its placement advisor, Red Cloud Securities Inc, in Resolutions 7 and 8.

3. Resolution 1 and Resolution 2 – Ratification of Issue of Shares under First Tranche Placement under Listing Rule 7.1 and 7.1A

3.1 Background

Resolution 1 is an ordinary resolution and proposes to ratify the issue of the First Tranche Placement Shares. The First Placement Shares were issued to the First Placement Recipients on 10 September 2020 pursuant to the Placement. Further details in relation to the Placement are set out in Section 2 above.

• 3.2 ASX Listing Rules 7.1 and 7.4

Broadly speaking, and subject to a number of exceptions, Listing Rules 7.1 and 7.1A limit the amount of equity securities that a listed company can issue without the approval of its shareholders over any 12 month period to an aggregate 25% of the fully paid ordinary shares it had on issue at the start of that period.

The First Tranche Placement does not fit within any of these exceptions and, as it has not yet been approved by the Company’s shareholders, it effectively uses up part of the Company’s available placement capacity, reducing the Company’s ability to issue further equity securities without shareholder approval for the 12 month period following the issue date.

Listing Rule 7.4 sets out an exception to Listing Rules 7.1 and 7.1A. It provides that where a company in a general meeting ratifies a previous issue of securities made or agreed to be made pursuant to Listing Rule 7.1 or 7.1A (and provided that the previous issue did not breach Listing Rule 7.1) those securities will be deemed to have been made with shareholder approval for the purpose of Listing Rule 7.1 and 7.1A, and so does not reduce the Company’s capacity to issue further equity securities without shareholder approval under those rules.

The Company wishes to retain as much flexibility as possible to issue additional equity securities into the future without having to obtain shareholder approval for such issues under Listing Rule 7.1.

Ratification by the Shareholders of the Company to the First Tranche Placement is now sought pursuant to Listing Rule 7.4 under Resolution 1 in order to reinstate the Company’s capacity to

Explanatory Memorandum

issue up to 25% of its issued capital, if required, in the next 12 months without Shareholder approval.

• 3.3 Technical Information required by Listing Rule 7.5

Listing Rule 7.5 requires that the following information be provided to Shareholders in relation to the Shares the subject of Resolution 1:

• (a) the First Tranche Placement Shares were allotted to the First Placement Tranche Recipients, being:

• (1) the following other material investors who were issued more than 1% of SAU’s current issued capital:

  • Centennial Asset Management Pty Ltd

  • PS Super Nominee Pty Ltd

  • Regal Funds Management Pty Ltd

  • Lind Global Macro Fund, LLP

  • CS Third Nominees Pty Ltd

• (2) clients of Foster Stockbroking and Shaw Stockbroking who are sophisticated and professional investors.

• (b) the number of fully paid ordinary shares the Company issued was 15,034,094 under its 7.1 capacity and 12,800,700 under is 7.1A capacity;

• (c) the Placement Shares were issued on the same terms as, and will rank equally with, all fully paid ordinary shares in the Company on issue;

• (d) the Shares were issued on 10 September 2020;

• (e) the price of each Share issued was $0.12; and

• (f) the purpose of the issue and the use of funds raised is as set out in section 2.2.

3.4 Directors’ Recommendation

The Directors recommend that Shareholders vote in favour of Resolution 1 and Resolution 2. Any undirected proxies held by the Chairman will be voted in favour of Resolution

4. Resolution 3 - Approval of Issue of Options to First Tranche Placement Recipients

The Company seeks approval for the issue and allotment for 13,917,397 Options, exercisable at $0.18 per share on or before 18 October 2022 to sophisticated investor participants of the First Tranche Placement such that those securities will not be counted towards the 15% limit on the issue of securities pursuant to Listing Rule 7.1.

On 10 September 20202, the issued shares under a placement to sophisticated investors. The terms of the placement included the issue of one free option for every two shares subscribed.

Listing Rule 7.3 requires the following information to be provided to Shareholders for the purposes of obtaining shareholder approval:

• a) 13,917,397 Options to be issued, being one option for every two Shares subscribed under the First Tranche Placement, exercisable at $0.18 per Share, expiring 18 September 2022;

• b) the Options will be issued no later than thirty calendar days from the date of this Meeting;

• c) the free Option will be granted for every two Shares subscribed under the First Tranche Placement;

Explanatory Memorandum

• d) the sophisticated investors are;

• Centennial Asset Management Pty Ltd

• PS Super Nominee Pty Ltd

• Regal Funds Management Pty Ltd

• Lind Global Macro Fund, LLP CS Third Nominees Pty Ltd

• clients of Foster Stockbroking and Shaw Stockbroking who are sophisticated and professional investors.

• e) there are no funds raised by the issue of the Options;

• f) a voting exclusion statement has been included in the Notice of Annual General Meeting.

If Resolution 3 is not passed, the Company will issue the Options once placement capacity is available under Listing Rule 7.1.

The Directors unanimously recommend Shareholders vote in favour of Resolution 3. The Chairman intends to vote undirected proxies in favour of Resolution 3.

5. Resolution 4 - Approval of Issue of Placement Shares and Option to Metal Tiger plc

• 5.1 Background

Resolution 4 is an ordinary resolution and seeks Shareholder approval for the issue of Second Tranche Placement Shares and Options to MTR and for the purposes of Listing Rule 10.11. Further details in relation to the Placement are set out in Section 2 above.

• 5.2 Listing Rule 10.11

Listing Rule 10.11 prohibits the issue of Options by the Company to a person in a position of influence.

Resolution 4 seeks shareholder approval to the issue of Second Tranche Placement Shares and Options to MTR on the same terms and conditions as all Second Tranche Placement recipients.

If Resolution 4 is passed under Listing Rule 10.11, approval is not required under Listing Rule 7.1 and the Shares and Options issued 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.

If Resolution 4 is not passed, the Company will not proceed with the issue of the Second Tranche Placement Shares and Options to MTR and will need to examine alternative sources of funding (including an issue of Shares utilising the Company’s 15% Capacity).

5.3

Technical information required by Listing Rule 10.13

Pursuant to and in accordance with Listing Rule 10.13, the following information is provided in relation to the Placement:

• (a) the Second Tranche Placement Shares and Options will be allotted to MTR, as a cornerstone investor to the Placement pursuant to the Subscription Agreement.

• (b) MTR is a substantial holder in the Company, with a 14.09% shareholding and nominated Mr Michael McNeilly as non executive director of the Company pursuant to a cornerstone placement agreement with the Company in May 2020;

Explanatory Memorandum

• (c) the total number of fully paid ordinary shares the Company will issue will be 14,569,000 Shares and 7,284,500 unlisted Options exercisable at $0.18 per share, expiring on 18 October 2022;

• (d) the Placement Shares will be issued on the same terms as, and will rank equally with, all fully paid ordinary shares in the Company on issue;

• (e) the Shares are anticipated to be allotted and issued on or about 28 October 2020 and, in any event, no later than 3 months after the date of the Meeting;

• (f) the price of each Share is $0.12 with a free Option for every two shares subscribed;

• (g) the purpose of the issue and proposed use of funds is as set out in section 2.1

• (h) a voting exclusion statement is included in the Notice of Meeting.

5.4 Directors’ Recommendation

The Directors recommend that Shareholders vote in favour of Resolution 4. Any undirected proxies held by the Chairman will be voted in favour of Resolution 4.

6. Resolution 5 - Approval of Issue of Placement Shares and Options to Crescat Capital LLC

6.1 Background

Resolution 4 is an ordinary resolution and seeks Shareholder approval for the issue of Second Tranche Placement Shares and Options to Crescat Capital LLC ( Crescat ) and for the purposes of Listing Rule 7.1. Further details in relation to the Placement are set out in Section 2 above.

6.2

Listing Rule 7.1

Broadly speaking, and subject to a number of exceptions (none of which apply in respect of the Placement), Listing Rule 7.1 limits the amount of equity securities that a listed company can issue without the approval of its shareholders over any 12 month period to 15% of the fully paid ordinary shares it had on issue at the start of that period ( 15% Capacity ).

Resolution 5 seeks shareholder approval to the issue of Second Tranche Placement Shares and Options to Crescat for the purposes of Listing Rule 7.1, so that the issue of those Placement Shares does not count towards the Company’s 15% Capacity.

If Resolution 4 is passed, the Company, the Second Tranche Placement Shares and Options will be excluded from the calculation of the number of equity securities that the Company can issue without shareholder approval under Listing Rule 7.1.

If Resolution 4 is not passed, the Company will not proceed with the issue of the Second Tranche Placement Shares and Options to Crescat and will need to examine alternative sources of funding (including an issue of Shares utilising the Company’s 15% Capacity).

6.3

Technical information required by Listing Rule 7.3

Pursuant to and in accordance with Listing Rule 7.3, the following information is provided in relation to the Placement:

• (a) the Second Tranche Placement Shares and Options will be allotted to Crescat, as a cornerstone investor to the Placement pursuant to the Subscription Agreement.

Explanatory Memorandum

• (b) the total number of fully paid ordinary shares the Company will issue will be 20,840,000 Shares and 10,420,000 unlisted Options exercisable at $0.18 per share, expiring on 18 September 2022;

• (c) the Placement Shares will be issued on the same terms as, and will rank equally with, all fully paid ordinary shares in the Company on issue;

• (d) the Shares are anticipated to be allotted and issued on or about 23 October 2020 and, in any event, no later than 3 months after the date of the Meeting;

• (e) the price of each Share is $0.12 with a free attaching Option for every two Shares subscribed;

• (f) the purpose of the issue and proposed use of funds is as set out in section 2.1

• (g) a voting exclusion statement is included in the Notice of Meeting.

6.4 Directors’ Recommendation

The Directors recommend that Shareholders vote in favour of Resolution 5. Any undirected proxies held by the Chairman will be voted in favour of Resolution 5.

7. Resolution 6 - Approval of Issue of Placement Shares and Options

7.1 Background

Resolution 6 is an ordinary resolution and seeks Shareholder approval for the issue of the remaining Second Tranche Placement Shares and Options and for the purposes of Listing Rule 7.1. Further details in relation to the Placement are set out in Section 2 above.

7.2 Listing Rule 7.1

Broadly speaking, and subject to a number of exceptions (none of which apply in respect of the Placement), Listing Rule 7.1 limits the amount of equity securities that a listed company can issue without the approval of its shareholders over any 12 month period to 15% of the fully paid ordinary shares it had on issue at the start of that period ( 15% Capacity ).

Resolution 6 seeks shareholder approval to the issue of the remaining Second Tranche Placement Shares and Options to sophisticated investors for the purposes of Listing Rule 7.1, so that the issue of those Placement Shares does not count towards the Company’s 15% Capacity.

If Resolution 6 is passed, the Company, the Second Tranche Placement Shares and Options will be excluded from the calculation of the number of equity securities that the Company can issue without shareholder approval under Listing Rule 7.1.

If Resolution 6 is not passed, the Company will not proceed with the issue of the remaining Second Tranche Placement Shares and Options and will need to examine alternative sources of funding (including an issue of Shares utilising the Company’s 15% Capacity).

7.3

Technical information required by Listing Rule 7.3

Pursuant to and in accordance with Listing Rule 7.3, the following information is provided in relation to the Placement:

• (a) the Second Tranche Placement Shares and Options will be allotted to certain sophisticated investors in the Placement pursuant to the Subscription Agreement.

Explanatory Memorandum

• (b) the total number of fully paid ordinary shares the Company will issue will be up to 17,922,976 Shares and up to 8,961,488 unlisted Options exercisable at $0.18 per share, expiring on 18 October 2022;

• (c) the Placement Shares and Options will be issued on the same terms as, and will rank equally with, all fully paid ordinary shares in the Company on issue;

• (d) the Shares are anticipated to be allotted and issued on or about 23 October 2020 and, in any event, no later than 3 months after the date of the Meeting;

• (e) the price of each Share is $0.12, with a free attaching Option for every two shares subscribed;

• (f) the purpose of the issue and proposed use of funds is as set out in section 2.1

• (g) a voting exclusion statement is included in the Notice of Meeting.

• 7.4 Directors’ Recommendation

The Directors recommend that Shareholders vote in favour of Resolution 6. Any undirected proxies held by the Chairman will be voted in favour of Resolution 6.

8. Resolution 7 - Approval of Issue of Options to Joint Lead Managers

The Company seeks approval for the issue and allotment on for 2,000,000 Options exercisable at $0.18 per share on or before 18 October 2022 to the Joint Lead Managers such that those securities will not be counted towards the 15% limit on the issue of securities pursuant to Listing Rule 7.1.

On 3 September 2022, the Company announced a placement to sophisticated investors and appointed Foster Stockbroking Pty Ltd and Ashanti Capital Pty Ltd as Joint Lead Mangers to the placement. As part of the consideration for their services, the Company has agreed for the issue of Options in addition to cash consideration.

Listing Rule 7.3 requires the following information to be provided to Shareholders for the purposes of obtaining shareholder approval:

• a) 2,000,000 exercisable at $0.18 per Share, expiring 18 October 2022;

• b) the Options will be issued no later than thirty calendar days from the date of this Meeting;

• c) the Options are issue as a part of the consideration for services rendered in management of the placement, along with approximately $218k cash;

• d) the recipients are Foster Stockbroking Pty Ltd and Ashanti Capital Pty Ltd;

• e) there were no funds raised by this issue of Options;

• f) a voting exclusion statement has been included in the Notice of Annual General Meeting.

If Resolution 7 is not passed, the Company will issue Options once placement capacity is available under Listing Rule 7.1.

The Directors unanimously recommend Shareholders vote in favour of Resolution 7. The Chairman intends to vote undirected proxies in favour of Resolution 7.

Explanatory Memorandum

9. Resolution 8 - Approval of Issue of Options to Red Cloud Securities Inc

The Company seeks approval for the issue and allotment on for up to 1,584,100 Options exercisable at $0.16 per share on or before 18 October 2022 to Red Cloud Securities Inc such that those securities will not be counted towards the 15% limit on the issue of securities pursuant to Listing Rule 7.1.

On 3 September 2022, the Company announced a placement to sophisticated investors and appointed Red Cloud Securities Inc as advisor to the placement. As part of the consideration for their services, the Company has agreed for the issue of Options in addition to cash consideration.

Listing Rule 7.3 requires the following information to be provided to Shareholders for the purposes of obtaining shareholder approval:

• a) Up to 1,584,100 unlisted Options exercisable at $0.16 per Share, expiring 18 October 2022;

• b) the Options will be issued no later than thirty calendar days from the date of this Meeting;

• c) the Options are issue as a part of the consideration for services rendered in management of the placement, along with approximately $200k cash;

• d) the recipients are Red Cloud Securities Inc;

• e) there were no funds raised by this issue of Options;

• f) a voting exclusion statement has been included in the Notice of Annual General Meeting.

If Resolution 8 is not passed, the Company will issue Options once placement capacity is available under Listing Rule 7.1.

The Directors unanimously recommend Shareholders vote in favour of Resolution 8. The Chairman intends to vote undirected proxies in favour of Resolution 8.

10. Interpretation

Ashanti Capital means Ashanti Capital Pty Limited.

Associate has the meaning given to that term in the Listing Rules.

ASX means ASX Limited ACN 008 624 691 or the Australian Securities Exchange.

Board means the board of directors of the Company.

Company means Southern Gold Limited.

Constitution means the constitution of the Company from time to time.

Corporations Act means the Corporations Act 2001 (Cth) as amended, varied or replaced from time to time.

Director means a director of the Company.

Explanatory Memorandum means this explanatory memorandum accompanying the Notice of Meeting.

Joint Lead Managers means the managing agents for the placement in Australia being Foster Stockbroking Pty Ltd and Ashanti Capital Pty Ltd.

Explanatory Memorandum

Listing Rule means the official listing rules of the ASX as amended from time to time.

MTR means Metal Tiger plc (UK company number 04196004).

Notice of Meeting or Notice means the notice of meeting giving notice to shareholders of the Meeting, accompanying this Explanatory Memorandum.

Option means an unlisted option to subscribe for a Share on the terms summarised in Annexure A to the Explanatory Memorandum.

Ordinary Resolution means a resolution passed by more than 50% of the votes cast at a general meeting of shareholders.

Placement Shares has the meaning given to that term in section 2.1 of the Explanatory Memorandum.

Relevant Interest has the meaning given to that term in section 9 of the Corporations Act.

Resolution means a resolution proposed at the Meeting.

Share means an ordinary fully paid share in the issued capital of the Company.

Shareholder means a holder of Shares in the Company.

Any inquiries in relation to the Resolutions or the Explanatory Memorandum should be directed to Daniel Hill ( Company Secretary ):

10 George Street STEPNEY SA 5069 (08) 8368 8888

Explanatory Memorandum

Annexure A

Options Terms and Conditions

The rights and liabilities attaching to the Placement Options are as follows:

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• Each Placement Option entitles the holder to subscribe for one share.

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• Any Placement Option which has not been exercised before the relevant expiry date lapses.

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• Each Placement Option is exercisable at the relevant exercise price per share at any time before the relevant expiry date.

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• Some or all of the Placement Options may be exercised at any time or times prior to the relevant expiry date provided that if the number of Placement Options held is less than 5,000 then all the Placement Options must be exercised at one time and if more than 5,000 Placement Options are held they must be exercised in parcels of at least 5,000.

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• Placement Options will be fully transferable in accordance with the constitution of the Company and, for such time as the Company is listed, the Listing Rules.

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• No certificates will be issued for the Placement Options, but holding statements will be issued to holders for Placement Options issued.

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• shares issued pursuant to the exercise of any Placement Option will rank in all respects on equal terms with the existing shares.

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• shares issued pursuant to the exercise of Placement Options will be issued on a date which will not be more than ten business days after the receipt of a properly executed notice of exercise of option and the application moneys in respect of the exercise of the Placement Option.

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• The Company will not apply for quotation of the Placement Options.

• Application will be made by the Company to the ASX for permission for quotation to be granted in respect of shares issued upon exercise of any of the Placement Options in the manner required by the Listing Rules.

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• Holders can exercise Placement Options by completing and submitting a notice of exercise of options (which is set out on the holding statement for the Placement Options or, if none, such form as the Directors may accept) to the Company’s share registry together with the required exercise price.

• Upon issue of shares on exercise of any of the Placement Options, the Company must immediately give to ASX a notice under section 708A(5)(e) of the Corporations Act in respect of the shares that complies with section 708A(6) of the Corporations Act or must issue a disclosure document under Chapter 6D of the Corporations Act in respect of the shares to ensure that the shares are freely tradeable on and from the date of their issue.

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• A Placement Option will not entitle the holder to participate in any new issue of shares by the Company, unless the Placement Option has been duly exercised prior to the relevant record date.

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• If there is a reconstruction or reorganisation (including consolidation, sub-division, reduction or return) of the capital of the Company, the rights of the holder will be changed to the extent necessary to comply with the applicable Listing Rules at the time of the restructure or reorganisation. Any changes to the terms of the Placement Options will not result in any benefit being conferred on the holder which is not conferred on the Shareholders of the Company.

Explanatory Memorandum

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If there is a pro-rata issue (except a bonus issue) to the holder of shares, the exercise price of each Placement Option will be reduced according to the following formula:

O’ =	O –E[P-(S+D)]
	N + 1
Where
O’ =	The new exercise price of the Placement Option
O =	The old exercise price of the Placement Option
E =	The number of shares into which one Placement
	Option is exercisable
P =	The average market price per share (weighted by
	volume) of shares during the five trading
	days ending on the day before the ex-rights
	or ex-entitlements date
S =	The subscription price for a share under the pro-
	rata issue
D =	The dividend due but not yet paid on shares (except
	those to be issued under the pro-rata issue)
N =	The number of shares with rights or entitlements
	that must be held to receive a right to one
	new share

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• If there is a bonus issue to the holders of shares, the number of shares over which the Placement Option is exercisable will be increased by the number of shares which the holder of the Placement Option would have received if the Placement Option had been exercised before the record date for the bonus issue.

• In the event of a winding up of the Company unexercised Placement Options will have no right to a distribution of surplus assets of the Company.

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The Listing Rules prevail to the extent of any inconsistency with these terms.

• The Placement Options have not been, and will not be, registered under the U.S. Securities Act of 1933 and may not be offered or sold in the United States except in transactions exempt from, or not subject to, the registration requirements of the Securities Act and applicable U.S. state securities laws.

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• These terms are governed by the laws of South Australia and the holder submits to the non-exclusive jurisdiction of South Australian courts and courts of appeal from them.

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SOUTHERN GOLD LIMITED

ACN 107 424 519

EXTRAORDINARY GENERAL MEETING

MONDAY, 19 OCTOBER 2020 AT 12PM (CST)

PROXY FORM

Company Secretary Southern Gold Limited PO Box 255, Kent Town SA 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 annual general meeting of the Company to be held on 19 October 2020 at the offices of Southern Gold Limited, 10 George Street, Stepney, 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	Instructions on Voting	FOR	AGAINST ABSTAIN	AGAINST ABSTAIN
Resolution 1	Ratification of the Issue of Shares under the First Tranche Placement under Listing Rule 7.1
	Ratification of the Issue of Shares under the
Resolution 2	First Tranche Placement under Listing Rule
	7.1A
Resolution 3	Approval of Issue of Options to First Tranche Placement Recipients
Resolution 4	Approval of Issue of Placement Shares & Options to Metal Tiger plc
Resolution 5	Approval of Issue of Placement Shares & Options to Crescat Capital LLC
Resolution 6	Approval of Issue of Placement Shares & Options
Resolution 7	Approval of Issue of Fee Options to Joint Lead Managers
Resolution 8	Approval of Issue of Fee Options Red Cloud Securities Inc

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Where I/we have appointed the Chairman as my our/proxy (or the Chairman becomes my/our proxy).

Dated this day of 2020 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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