IONDRIVE LIMITED — Share Issue/Capital Change 2005

Apr 19, 2005

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Т٥	Company Announcements Office
Fax number	1300 135 634
From	Companies, Adelaide
Date	20104105
Subject	FOR MARKET RELEASE
Number of pages	(including this page)

alian Stock Exchange Limited --------------------------------------19 1g William Street ide SA 5000

lox 547 de SA 5001

hone 61 8 8216 5000 Facsimile 61 8 8216 5099 Internet http://www.esx.com.au

THE FOLLOWING ANNOUNCEMENT IS FOR RELEASE TO THE MARKET

UNDER ASX LISTING ENTITY CODE:

SAU
SAVO

Note: the information contained in this facsimile is confidential and may be privileged or subject to copyright. It is intended for the addressee only. If you have received the facsimile in error please call the sender immediately and return it by mail or DX to the address above. The unauthorised use of the information may result in liability for breach of confidentiality, privilege or copyright.

Southern Gold Limited Terms and Conditions of Options Expiring 31 March 2007

• 1. Each Attaching Option entitles the holder to subscribe for one Share upon exercise by notice in writing and payment of the Attaching Option price, during the exercise period;
• 1. The exercise price of each Attaching Options is \$0.20;
• 1. The exercise period of the Attaching Options is from the date the Company issues the Attaching Options to 5,00pm (CST) on 31 March 2007.
• 1. An Attaching Option will not confer an entitlement to receive a dividend declared or paid by the Company, or an entitlement to vote at a general meeting of the Company nor will it confer an entitlement to participate in any pro rata or entitlement offer of securities to Shareholders;
• 1. Subject to the Company's Constitution, each Share issued pursuant to the exercise of an Attaching Option will rank equally in all respects with other issued shares:
• 1. The Company will apply to the ASX for official quotation of the Attaching Options and will apply to the ASX for official quotation of the Shares issued upon exercise of Attaching Options within the time period required by the Listing Rules;
• 1. The Attaching Options will be freely transferable.
• 1. Any Attaching Option not exercised before the end of the exercise period will lapse at the end of the exercise period;
• 1. All Attaching Options may be exercised if a takeover bid (as defined In the Corporations Act) is made for Shares;
• 1. In the event of a reorganisation or reconstruction of the capital of the Company, the rights of the Attaching Option holder will be changed to the extent necessary to comply with the Listing Rules applying to the reorganisation or reconstruction of capital at the time of the reorganisation or reconstruction.
• 1. If the Company makes a rights issue (other than a bonus issue), the exercise price of Attaching Options on issue will be reduced according to this formula:

$$
A = O - \frac{E {P - (S + D)}}{(N + 1)}
$$

Where:

• $A =$ the new exercise price of the Attaching Option;
• $O =$ the old exercise price of the Attaching Option;
• $E =$ the number of underlying shares into which one Attaching Option is exercisable;
• $P =$ the average closing sale price per ordinary share (weighted by reference to volume) recorded on the stock market of ASX during the 5 trading days ending on the day before the ex rights date or ex entitlement date (excluding special crossings or overnight sales);
• S = the subscription price for an ordinary share under the prorata issue;

• $D =$ the dividend due but not yet paid on each ordinary share at the relevant time (except those to be issued under the pro rata issue); and

• $N =$ the number of ordinary shares that must be held to entitle holders to receive a right to one new ordinary share in the pro rata issue.

• 1. If there is a bonus issue to the holders of ordinary shares in the capital of the Company the number of ordinary shares over which an Attaching Option Is exercisable will be increased by the number of ordinary shares which the holder of the Attaching Option would have received if the Attaching Option had been issued before the record date of the bonus issue.
• 1. Attaching Option holders appearing on the Company's register of Attaching Option holders at the relevant date will be entitled to receive and will be sent all reports and accounts required to be laid before Shareholders in general meetings and all notices of general meetings and will have the right to attend but shall have no right to vote at that meeting.

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TERMS AND CONDITIONS OF GRANT Options exercisable on or before 31 December 2007

• 1. Entitlement to Ordinary Shares: The Optionholder is entitled on payment of 20 cents per share ("the Exercise Price") to be allotted one ordinary fully paid share in Southern Gold Limited ("the Company") for each Option exercised (subject to possible adjustments referred to below).
• 1. Exercise Period: The Options held by the Optionholder are exercisable in whole or in part at any time after the Company is admitted to the official list of Australian Stock Exchange Limited ("ASX") and on or before midnight on 31 December 2007 ("Exercise Period"). Reminder notices will be forwarded to the Optionholder prior to the expiry of the Exercise Period. Options not exercised before the expiry of the Exercise Period will lapse.
• 1. Register of Optionholders: The Options will be recorded on the Company's Register of Optionholders maintained in Adelaide. The Register will be open for inspection by the Optionholder free of charge. Shares to be allotted on exercise of Options will be recorded on the Company's share registry.
• 1. The Company will not make application for official quotation of the Options on ASX.
• 1. Method of Exercise of Options: Options are exercisable by the Optionholder completing and signing a "Notice of Exercise of Options" in the form set out below and lodging it at the Company's share registry together with payment of the Exercise Price. A Notice of Exercise of Options will only be effective when the Company has received the full amount of the Exercise Price in cleared funds. Options exercised during a month will be deemed to have been exercised on the last business day of the month.
• 1. Shares allotted on exercise: The Company will make application for official quotation on ASX of new shares allotted on exercise of the Options. Those shares will participate equally in all respects with existing issued ordinary shares. Options do not carry any dividend entitlement. New shares allotted on exercise of the Options will qualify for dividends declared after the date of their allotment.
• 1. New Issues: The Optionholder may only participate in new issues of securities to holders of ordinary shares in the Company if the Option has been exercised and shares allotted before the record date for determining entitlements to the issue. The Company must give prior notice to the Optionholder of any new issue before the record date for determining entitlements to the issue in accordance with ASX Listing Rules.
• 1. Pro Rata Issues: If between the date of issue and the date of exercise of an Option the Company makes a rights issue (being a pro rata issue of ordinary shares in the capital of the Company that is not a bonus issue), the exercise price of Options on issue will be reduced according to the following formula:

$A =$ $\Omega$ -

$$
\frac{E{P-(S+D)}}{(N+1)}
$$

Where:

• $A =$ the new exercise price of the Option;
• $Q =$ the old exercise price of the Option;
• E = The number of underlying shares into which one Option is exercisable;
• $P =$ The average closing sale price per ordinary share (weighted by reference to volume) recorded on the stock market of ASX during the 5 trading days ending on the day before the ex rights date or ex entitlement date (excluding special crossings or overnight sales;
• $S =$ The subscription price for an ordinary share under the prorata issue:
• $D =$ The dividend due but not yet paid on each ordinary share at the relevant time (except those to be issued under the prorata issue); and
• $N =$ The number of ordinary shares that must be held to entitle holders to receive a right to one new ordinary share in the prorata issue.
• 1. Bonus Issue: If there is a bonus issue to the holders of ordinary shares in the capital of the company, the number of ordinary shares over which the Option is exercisable will be increased by the number of ordinary shares which the holder would have received if the Option had been exercised before the record date for the bonus issue.
• 1. Reorganisation of Capital: If, during the currency of the Options the capital of the Company is reorganised, the rights attaching to the Options will be changed to the extent necessary to comply with ASX Listing Rules applying to a reorganisation of capital at the time of the reorganisation.
• 1. Transfer: Options may be transferred or transmitted at any time prior to their expiry and same will be recorded on the Company's Register of Optionholders.
• 1. Meetings: The Optionholder, if appearing on the Company's Register of Optionholders at the relevant date, will be entitled to receive and will be sent all reports and accounts required to be laid before shareholders in general meeting and all notices of general meetings and will have the right to attend but shall have no right to vote at such meetings.

TERMS AND CONDITIONS OF GRANT Options exercisable on or before 31 March 2008

• 1. Entitlement to Ordinary Shares: The Optionholder is entitled on payment of 20 cents per share ("the Exercise Price") to be allotted one ordinary fully paid share in Southern Gold Limited ("the Company") for each Option exercised (subject to possible adjustments referred to below).
• 1. Exercise Period: The Options held by the Optionholder are exercisable in whole or in part at any time after the Company is admitted to the official list of Australian Stock Exchange Limited ("ASX") and on or before midnight on 31 March 2008 ("Exercise Period"). Reminder notices will be forwarded to the Optionholder prior to the expiry of the Exercise Period. Options not exercised before the expiry of the Exercise Period will lapse.
• 1. Register of Optionholders: The Options will be recorded on the Company's Register of Optionholders maintained in Adelaide. The Register will be open for inspection by the Optionholder free of charge. Shares to be allotted on exercise of Options will be recorded on the Company's share registry.
• 1. The Company will not make application for official quotation of the Options on ASX.
• 1. Method of Exercise of Options: Options are exercisable by the Optionholder completing and signing a "Notice of Exercise of Options" in the form set out below and lodging it at the Company's share registry together with payment of the Exercise Price. A Notice of Exercise of Options will only be effective when the Company has received the full amount of the Exercise Price in cleared funds. Options exercised during a month will be deemed to have been exercised on the last business day of the month.
• 1. Shares allotted on exercise: The Company will make application for official quotation on ASX of new shares allotted on exercise of the Options. Those shares will participate equally in all respects with existing issued ordinary shares. Options do not carry any dividend entitlement. New shares allotted on exercise of the Options will qualify for dividends declared after the date of their allotment.
• 1. New Issues: The Optionholder may only participate in new issues of securities to holders of ordinary shares in the Company if the Option has been exercised and shares allotted before the record date for determining entitlements to the issue. The Company must give prior notice to the Optionholder of any new issue before the record date for determining entitlements to the issue in accordance with ASX Listing Rules.
• 1. Pro Rata Issues: If between the date of issue and the date of exercise of an Option the Company makes a rights issue (being a pro rata issue of ordinary shares in the capital of the Company that is not a bonus issue), the exercise price of Options on issue will be reduced according to the following formula: