IONDRIVE LIMITED — Share Issue/Capital Change 2007

Feb 26, 2007

Solidad Uantin

Southern Urantun Emited

EROSERFUSZOOZ

For an offer of 70,000,000 New Shares at an issue price of \$0.20 to raise \$14,000,000.

UNDERVRIEERS

Lands Kirwan Tong Stockbrokers Pty Limited (AFS licence No. 245970) Taylor Collison Limited (AFS licence No. 247083).

IMPORTANT INFORMATION

This Prospectus provides important information to assist investors in deciding whether or not to invest in the Company. It should be read in its entrety. If you do not understand it you should consult your professional auvisor The Shares offeren under this Prospectus are of a speculative nature. .
Any assets deploted in protographs in this Prospectus are not assets of the Company unless otherwise stated.

CONTENTS

Corporate Directory	1
Key Dates	1
Important Notices	$\mathbf 2$
Chairman's Letter	3
Investment Highlights	4
Offer Summary	5
Company Overview & Strategy	6
Project Overview	9
Exploration Programme, Budget And Application Of Funds	18
Directors And Management	20
Corporate Governance	22
Details Of The Offer	23
How To Apply For Shares	25
Risk Factors	26
Independent Reports
Independent Consulting Geologist's Report ۰	28
Independent Accountant's Report ۰	48
Solicitor's Report ۰	58
Tenement Schedule	62
Summary Of Material Contracts	64
Terms Of Securities	68
Additional Information	70
Definitions	73
Glossary Of Technical Terms	74
Director's Responsibility Statement And Consent	80
Application Form	81

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CORPORATE DIRECTORY

Directors

Roger Marshall OBE BE MAUSIMM FAIM FAICD Non-Executive Chairman

John Afexander Anderson BSc Hons, MAusIMM, MSEG, MAIG, MGSA Managing Director

David Garred Jones BSc, MSc, FIMMM(Landon), FAusIMM, MGSA, MAIME-SME Non-Executive Director

Stephen Richard Biggins BSc Hons, MBA, MAusIMM Non-Executive Director

Company Secretary

Michael Robert Billing BBus, ASA

Registered Office

58 North Terrace KENT TOWN SA 5067

08 8132 0044 Tel: Fax: 08 8132 0199

info@southernuranium.com.au email: web: www.southernuranium.com.au

Operations Office

58 North Terrace KENT TOWN SA 5067

Underwriters to the Issue

Lands Kirwan Tong Stockbrokers Pty Limited Level 12, 99 William Street Melbourne Vic 3000

and

Taylor Collison Limited Level 2, 12 Pirie Street ADELAIDE SA 5000

Level 12, 55 Hunter Street Sydney NSW 2000

Independent Geologist

David Tonkin & Associates 25 Palmerston Road UNLEY SA 5061

Solicitors to the Issue

McDonald Steed McGrath Lawyers 262-266 Pirie Street ADELAIDE SA 5000

Independent Accountants / Auditors

Grant Thornton 67 Greenhill Road UNLEY SA 5061

Share Registry

Computershare Investor Services Pty Ltd GPO Box 1903 ADELAIDE SA 5001

Telephone: 1300 653 865 International: (+613) 9415 4132

KEY DATES

Indicative Timetable

Opening Date and Priority Offer Opening Date	27 February 2007
Priority Offer Closing Date (5pm CST)	9 March 2007
Closing Date (5pm CST)	16 March 2007
Allotment of Shares	23 March 2007
१८ महर्ष	30 March 2007

The above dates are indicative only and may be altered by the Company without notice

This Prospectus is dated 19th February 2007 and was lodged with ASIC on 19th February 2007. Neither ASIC nor the ASX take any responsibility for the contents of this Prospectus.

No Shares will be issued on the basis of this Prospectus later than 13 months after the date of this Prospectus.

An electronic version of this document is available on the internet at:

www.southernuranium.com.au

If you have received an Application Form without a complete and unaltered copy of this Prospectus please contact the Company which will send you, free of charge, either a printed or electronic version of this Prospectus (or both)

The offer of securities under this Prospectus is made in Australia only, as the Shares have only been qualified for issue in Australia. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and this Prospectus does not constitute an offer or invitation in any place in which, or to any person to whom, it would not be lawful to make such offer or invitation. The Company is entitled to refuse an application for securities under this Prospectus if it believes that the applicant did not receive the offer in Australia. Non-Residents should refer to Additional Information for further information.

This Offer should be considered speculative and be read in conjunction with the risk factors and all other information provided in this Prospectus.

In accordance with the Corporations Act, this Prospectus is subject to an exposure period of seven days from the date of lodgement with ASIC, or such other period (not exceeding 14 days after the date of lodgement) as ASIC may require.

The purpose of the exposure period is to enable the Prospectus to be examined by market participants prior to the raising of funds. No preference will be given to Applications received during the exposure period and all Applications received during that period will be treated as if they were simultaneously received on the date the Offer opens.

If the Prospectus is found to be deficient. Applications received during the exposure period will be dealt with in accordance with section 724 of the Corporations Act.

Certain terms and abbreviations used in this Prospectus have defined meanings which are explained in the Definitions section of this Prospectus.

Dear investor

On behalf of the Directors, I am pleased to present this prospectus and the opportunity to invest in Southern Uranium Limited ("Southern Uranium", the "Company").

Southern Uranium was formed to create a dynamic organisation to specifically explore for and develop uranium deposits in Australia. The past two years has seen a rapid increase in the global demand for uranium spurred on by an energy hungry world intent on reducing carbon emissions. The Directors believe the demand for uranium is expected to exceed forecast mine supply for at least 15 years. The resulting significant rise in the price of uranium oxide has reinvigorated exploration for this commodity.

The Company has acquired from Southern Gold Limited ("Southern Gold") interests in certain exploration tenements within the highly prospective Gawler Craton in South Australia. This State has a favourable geological setting for the discovery of worldclass uranium deposits and hosts two of the three operating mines in Australia. Over one third of the world's known uranium resources are located within the Gawler Craton. Southern Uranium has a quality exploration portfolio of advanced mineral tenements covering 10,393 km² of prospective areas in a geological province that is fast emerging as a leading producer of uranium.

Southern Uranium has established a strong and capable Board of Directors with broad expertise and skills in exploration, mining and commercial ventures which will ably guide the Company in its development and growth. The Directors have in excess of 85 years combined mineral exploration experience in Australian geology and terrains that includes exploration for iron oxide copper gold uranium (IOCGU) deposits similar to Olympic Dam, palaeochannel and unconformity uranium deposits.

The stated objective of the Company is to create shareholder value through the discovery and development of economic uranium deposits. The working capital will be at levels that ensure adequate liquidity to undertake aggressive exploration and project generation programs. Southern Uranium will commit to joint ventures; farm-ins and acquisitions whenever sound opportunities arise. Directors will develop international contacts and seek joint venture partners with specialized expertise and ability to provide significant finance and markets.

The funds raised under this prospectus will be applied to the established exploration programme in the Gawler Craton and to the acquisition of new advanced uranium projects elsewhere in Australia The priorities for the Gawler Craton will be: a) targeting IOCGU deposits with more than 10 prospective gravity targets identified within the Company's tenements: b) modern exploration of approximately 260 km of prospective palaeochannels with potential for roll front uranium deposits and c) newly recognized opportunities for unconformity uranium deposits. The Directors expect to commence exploration immediately following the successful fund raising and look forward to an active and productive first year of operation with considerable emphasis on drilling established and new targets.

In this prospectus, 70 million shares are being offered at \$0.20 per share. Shareholders of Southern Gold Limited who wish to invest in Southern Uranium, have a preferential entitlement and may apply for Shares using the Priority Application Form enclosed with the personal letter to Southern Gold Limited shareholders. Public investors can also apply using the Public Offer Application in this Prospectus. In considering the Offer, you should refer to the Prospectus in its entirety.

The Company welcomes the execution of a cornerstone investment agreement with Talbot Group Holdings Pty Ltd and CITIC Australia Pty Ltd and looks forward to developing national and international synergies with these Companies.

The balance of the Offer, after cornerstone investment, has been fully underwritten. Based on the issue price and the Offer being fully subscribed, it is expected that Southern Uranium will have a market capitalization of approximately \$23 million. Southern Gold will retain a shareholding of approximately 39% following listing.

Investment in Southern Uranium will afford investors the opportunity to participate in an active exploration program for uranium in some of Australia's most prospective and exciting geological provinces. On behalf of the Directors I commend this Offer to you and welcome you to share in the exciting future developments in the uranium industry.

Yours sincerely.

Roger Marshall Chairman

SOUTHERN URANIUM LTD PROSPECTUS 2007

INVESTMENT HIGHLIGHTS

• Southern Uranium Limited is a uranium resources company with a strong platform of active exploration properties initially developed by Southern Gold, with drill ready targets, in the highly prospective Gawler Craton of South Australia.
• The Offer is supported by cornerstone investors Talbot Group Holdings Pty Ltd as trustee for the Talbot Equities Trust ("Talbot") and CITIC Australia Pty Ltd ("CITIC").
• The Company aims to expand its exploration and development activities using established international contacts to $\ddot{\phantom{0}}$ participate in the growing uranium resource industry that is responding to rapid and robust increases in the uranium price.
• The Board offers considerable expertise with minerals and energy exploration and development. The members are:

Roger Marshall OBE Chairman
John Anderson	Managing Director
Stephen Biggins	Non-executive Director
David Jones	Non-executive Director

• South Australia, as the focus of Southern Uranium's initial exploration activities, offers excellent uranium exploration opportunities demonstrated by the State's concentration of Australia's uranium resources and operating mines. After the hiatus in uranium exploration and discoveries during the past twenty years, the State's warehoused potential was further demonstrated by the unturn producing the country's first new and significant uranium discovery at Beverley Four Mile.
• Southern Uranium controls an extensive portfolio of predominantly granted tenements covering 10,393 km² in the Gawler Craton. The portfolio was largely established before the recent blanket pegging rush and is therefore carefully selected priority ground that is prospective for palaeochannel roll front uranium deposits, unconformity uranium deposits and iron oxide copper gold uranium (IDCGU) deposits, the latter well exampled by the giant Olympic Dam mine.
• Refined geological models and new proven exploration technologies, developed by the Resources Industry during the twenty vear period of little uranium exploration, will be applied by the Company to search for established and new styles of uranium deposits in prospective geological terrains.
• More than half of the proposed fund raising (after IPO costs) will be applied to the established exploration programme in the Gawler Craton with a dominant drilling component allocated to test the advanced projects.
• Approximately one third of the funds will be applied to generating and acquiring new and advanced uranium projects.

OFFER SUMMARY

The Offer:

Pursuant to this Prospectus Southern Uranium will offer 70,000,000 Shares for subscription at a price of \$0.20 per Share to raise 1030 and 8 1030 and 8 1030 and 8 1030 and 8 1030 and 8 1030 and 8 1030 and 8 1030 and 8 1030 and 8 1030 per smaller to rate to rate
\$14,000,000. The Company has secured agreement from a consortium comprising Talbot Group H the Details of the Offer section.

Capital Structure:

Betails	Mumnor
Shares held by Southern Gold Limited	45,000,000
Shares to be issued pursuant to the Offer	70.000.000
Total shares on issue at Listing Date	115.000.000
Unlisted options on issue at Listing Date 1	9.500.000

1.5million options have been issued to Mr John Anderson and a further six million options in total have been issued (each to acquire 1 share) $\left( n\right)$ to the non executive directors of Southern Uranium Limited and the directors of Southern Gold Limited

$(2)$ 1 million options will be issued to each of the two Underwriters following listing

Annlication of Funds:

The funds raised from the Offer are primarily for the purpose of mineral exploration and project acquisition. See "Exploration Program, Budget and Application of Funds" section for a break down of proposed exploration.

Southern Gold Limited Priority Offer

Southern Uranium is offering SAU Shareholders registered as at 12 February 2007 (the "Record Date") the opportunity to become shareholders in Southern Uranium. See Details of the Offer for further information.

Southern Uranium Limited was incorporated on 18 July 2005 to hold and develop the uranium project interests of Southern Gold Limited.

The Company's objective is to increase shareholder value by company growth through the discovery, acquisition and development of substantial economic resources of uranium.

The foundations of the Company are a strong portfolio of projects presenting key exploration opportunities; an aggressive programme planned to meet the exploration and corporate objectives and a Board with exceptional commercial and technical expertise, with prior success in minerals and energy exploration, discovery and development.

The initial focus is exploration of the Company's established portfolio of projects in the world-class mining province of the Gawler Craton of South Australia and the generation of new opportunities. The Board also envisages building the economic base of the Company through strategic acquisitions both in the Gawler Craton and elsewhere.

Figure 1 - Australian uranium mines, prospects and areas of exploration potential (After Geoscience Australia)

The Investment Opportunity $1¹$

Southern Uranium Limited has a strong platform of active exploration properties in the highly prospective Gawler Craton of South Australia (Figure 1). The Company aims to expand its exploration and development activities throughout Australia to participate in the growing uranium resource industry that is responding to rapid and robust increases in the uranium price. These price increases are due to a uranium supply gap forecast with the global move towards greater use of nuclear power as a contributor to increasing energy needs, lower-carbon economies and energy security.

Australia is the world's second largest exporter of mined uranium and the Australian Government is facilitating the expected increase in the country's production and sales to substantial new .
customer countries such as China and potentially, India.

Australia already contains the largest global share of identified low-cost uranium resources. This is despite the severe downturn in uranium exploration between 1983 and 2004 caused by political restrictions and poor uranium prices (Figure 2). Australia's uranium resource base is largely comprised of deposits discovered before the 1980s. Olympic Dam was discovered in 1975 and dominates the Australian and global resource inventory. However the Directors believe the proposed expansion of this mine will only increase global supply by about a quarter of the forecast long-term shortfall in $U_{\rm a}O_{\rm g}$ supply. Other deposits and discoveries will be required to meet the full demand.

The large number of uranium discoveries made before the exploration downturn, and the few discoveries since, shows the potential for new discoveries awaiting the resurgence of uranium exploration in Australia (Figure 2). Despite its uranium endowment, Australia has a disproportional lack of some styles of uranium deposits such as veins, volcanic-hosted, intrusive-related and sandstone unconformity-hosted deposits compared with similar geological terrains overseas. This aberration may reflect the lack of modern uranium exploration and represents further opportunity to uranium explorers in this country.

The recent upturn in uranium prices in the past 2 years has re-invigorated interest in uranium exploration globally. While this upswing was in its infancy the Southern Gold directors recognised the trend and moved quickly to secure

an outstanding portfolio of projects in the Gawler Craton, arquably one of the worlds' premier uranium exploration provinces, in South Australia, whose government is supportive of uranium exploration and development.

Southern Uranium has rights to 20 tenements in the Gawler Craton (Figure 3). The majority of the tenements are granted and are subject to active exploration programmes. The tenements cover a total area of 10,393 km² that is prospective for palaeochannel roll-front uranium deposits, unconformity uranium deposits and iron oxide copper gold uranium (IOCGU) deposits. The latter are well exampled by the giant Olympic Dam deposit and mining overation.

The Company's projects are equally divided between sole holdings and joint ventures of which three are managed by Southern Uranium and the other two joint ventures are managed by our partners. The Company's tenements were largely secured during 2003 to 2005. As a result, the Southern Uranium tenements were selected over prospective positions ahead of the very competitive tenement pegging that accompanied the upsurge in uranium exploration and new IOCGU discoveries made in the Gawler Craton during 2005-6

The joint ventures, currently in place with major partners, add significant technical expertise to the exploration effort along with an assurance of ongoing funding participation.

$2.$ Corporate Synergies

Southern Uranium has entered into a cornerstone investment agreement with a consortium comprising Talbot Group Holdings Pty Ltd as trustee for the Talbot Equities Trust ("Talbot") and CITIC Australia Pty Ltd ("CITIC"). In addition to the commitment of the consortium to take up \$4,000,000 in the Offer, the cornerstone investment provides the consortium with a priority to be offered participation in Southern Uranium's exploration programmes and assets. The Directors expect the participation of Talbot and CITIC in the Company's financing will create wider national and international opportunities for establishing and developing uranium resources and access to international uranium markets, particularly in China.

Company Strategy $\mathbf{3}$

The objective of the directors is to build an enterprise which delivers capital growth and shareholder returns via exploration successes and strategic acquisitions, followed by mine development and profitable production.

Funds raised pursuant to this Offer will. in the first instance, be directed towards establishing a world class exploration team, exploration of the existing portfolio of projects, and evaluation and acquisition of new projects which meet Directors' criteria. Subsequent activities shall include project development, and mine establishment and operation

South Australia is the focus of Southern Uranium's initial exploration activities because the state continues to demonstrate an excellent world-class uranium pedigree that extends beyond the giant Olympic Dam resource. The Beverley insitu leach (ISL) operation is one other of the three mines operating under the legacy of the "No New Mines Policy". The Honeymoon ISL project is likely to be the next Australian uranium mine. Both are palaeochannel deposits situated within the Frome Embayment over the Curnamona Craton that is geologically very similar to the Gawler Craton (Figure 1). The Curnamona Craton also hosts Australia's most sionificant and recent uranium discovery at Beverley Four Mile. The uraniferous Prominent Hill deposit discovered during 2001 restated the uranium resource potential of IOGCU deposits in the Gawler Craton.

Southern Uranium will be applying new geological target models and exploration technologies that have become available to explorers during the hiatus in Australian uranium exploration. These ideas and techniques were developed from the geology exposed in developed uranium mines

or by ongoing exploration for other metals in the same geological terrains. For example, the Company will continue to use remote sensing and airborne electromagnetics (EM) already initiated on some of its projects to define prospective positions in palaeochannels for roll front uranium. The development of Olympic Dam and the recent IOCGU discoveries such as Prominent Hill and Carrapateena enable better selection of areas with potential for IOCGU deposits. Cheaper accurate gravity survey techniques ("microgravity") enable targets to be more precisely defined in those selected areas. Another modern geophysical technique, high resolution electromagnetics will also be available to explore for deeper deposit styles that are likely to be present but were not detectable by the simple radiometric surveys applied by the early uranium explorers.

The majority of the proposed fund raising (after IPO costs) will be applied to the established exploration programme in the Gawler Craton. The programme will have a high drilling component with more than half the exploration budget allocated to drilling established and new targets.

Figure 2 - Trends in Australian uranium exploration expenditures (1), discovery of deposits and uranium prices (2)

Figure 3 - Gawler Craton uranium projects - tenement location map

Introduction

Southern Uranium has exploration rights to 20 tenements covering 10,393 km² of prospective geology in the Gawler Craton (Figure 3). These rights are held predominantly through 100% owned Exploration Licences and some Exploration Licence Applications, but also include joint venture arrangements or access rights to explore for and develop uranium only.

The tenements and joint ventures were secured by Southern Gold mostly during the period 2003 - 2005 before the rush of blanket pegging that followed the Carrapateena discovery and the resurgence in uranium exploration.

The Southern Uranium portfolio is therefore considered to offer excellent exploration opportunities with projects selectively and competitively placed in areas of high uranium prospectivity.

The portfolio includes:

• About 260 km of Tertiary palaeochannels with limited exploration undertaken prior to the 1983 2004 hiatus demonstrating positive indications of the roll front style of uranium deposition. Southern Gold and joint venture partner Mega Uranium Limited ("Mega") restarted exploration of the palaeochannel projects including the successful application of modern exploration technologies, not available to earlier explorers, to better define prospective channel positions.
• Ten IOCGU prospects, some near drill ready, defined by new target selection criteria derived from a better understanding of Olympic Dam and the recent Prominent Hill and Carrapateena discoveries.
• Potential for unconformity uranium deposits within three of the project areas.

Gawler Craton Uranium Potential

Olympic Dam is the largest example of IOCGU deposits. These are characterised by a dominant iron oxide host to copper sulphides, silver and gold. The uranium content of IOCGU deposits can be variable and may be subeconomic. However the Olympic Dam resource contains economic amounts that make the deposit the largest single uranium resource, representing over one third of the world's known low cost unmined uranium.

The craton comprises basement geology of Archaean to Mesoproterozoic rocks overlain by Neoproterozoic flat-lying sediments and extensively covered by sediments of Tertiary age. The Tertiary sediments contain buried palaeochannels that are prospective for secondary roll front uranium deposits but otherwise have in the past severely hindered exploration for IOCGU and other deposit styles hidden in the prospective basement. The principal uranium sources proposed for the IOCGU deposits and palaeochannel systems are the extensive and uraniferous Hiltaba Granites and their coeval Gawler Range Volcanics.

The large size and geology of the Gawler Craton is prospective for multiple IOGCU deposits in repetitions of Olympic Damstyle environments. This potential was re-established by the uranium-anomalous iron oxide copper gold discovery at Prominent Hill in 2001. Prominent Hill revealed geological variations to Olympic Dam that improved our knowledge of where and how to look for more IOCGU deposits. This encouraged some explorers back to IDCGU exploration in the craton. Although not yet reported to contain uranium, the iron oxide copper gold discovery at Carrapateena in 2005 confirmed the application of the new search tactics and along with rising metal prices further raised tenement coverage in the Gawler Craton to a saturation level.

The geology of the Gawler Craton is similar to that of the Curnamona Craton near Broken Hill where Tertiary palaeochannels also drain off uraniferous granites in the basement. The Honeymoon and Beverley palaeochannel

roll front uranium deposits were discovered in the smaller and better explored Curnamona Craton during the 1960s and 1970s. The Gawler Craton was recognised as being similarly prospective for secondary uranium deposits and first pass exploration was undertaken during the 1970s. The buried palaeochannels were poorly defined and only partially tested .
by limited scout drilling positioned on surface drainage patterns. Even so, four prospects, (Yaninee, Yarranna, Ealbara and Warrior), were delineated with encouraging uranium concentrations however large segments of the very extensive palaeochannels were left untested when uranium exploration abated in 1983.

The geology of the Gawler Craton also offers potential for other uranium deposit styles evident in similar geological terrains overseas. Uranium deposits hosted in veins, volcanics, intrusives and consolidated sandstones over unconformities such as the Athabasca style deposits in Canada are likely to be present in the uranium pregnant Gawler Craton but have remained undetected due to the cover blinding early methods of radiometric surveying and the lack of persistent modern exploration.

Palaeochannel Roll Front Uranium Projects

The uranium-only joint venture projects at Tallaringa and Challenger West provide a dominant tenement position covering about 120 km of palaeochannel length over the Garford and Anthony systems in the northwest of the craton.

Smaller but prospective segments of palaeochannels are held in the Warrior South Project, the Yarlbrinda South Project (Narlaby Channel) and Comet Well Project (Yaninee Channel) and total about 90 km of palaeochannel length.

Another 50 km of less defined palaeochannels cross the tenement areas of the Streaky Bay and Southern Gawler Arc IOCGU Projects and will be evaluated for secondary uranium potential.

Challenger West - Tallaringa Project

The Challenger West - Tallaringa project comprises five properties: Garford (EL 3080), Indooroopilly (EL 3097), Half-Moon Lake (EL 3308), Tallaringa South (EL 3395) and Tallaringa North (EL 3396). The project covers a combined area of 3.005 km² on the northern Gawler Craton over palaeochannels surrounding the Challenger Gold Mine (Figure 4). Torontolisted Mega is managing uranium-only joint ventures for which Southern Uranium has 30% uranium-only interest in the two Tallaringa tenements and Mega has the right to earn an 80% uranium-only interest in the Garford, Indooroopilly and Half Moon Lake tenements by sole funding.

Early exploration was limited to scout drill traverses shown as the green dots on Figure 5 and intersected up to 640 ppm U.O. equivalent in the lower reaches of the Anthony Channel and lower anomalous values in the overlying lakes of the modern drainage (Figure 4). This preliminary exploration demonstrated the right environment and processes were in place for the formation of roll front style deposits in the palaeochannels as was reported by government geologists in a report published by Primary Industries and Resources South Australia ("PIRSA") in 2001.

Initial targets were selected at channel bends and junctions (Figure 4) delineated by gravity data not available to earlier explorers. A first phase of scout aircore drilling and downhole logging was undertaken by Mega during 2006 with 9,209 m of drilling completed with an average hole depth of 52 m. The drilling intersected a variety of oxidised and reduced sediments in wide channels representing prospective host environments. Gamma logging detected consistently anomalous horizons (Figure 6) and check assaying of drill samples returned up to 107 ppm $U_{\alpha}$ in EL 3308. Infill drilling in
the northwest corner of EL 3396 delineated a 1 x 3 km gamma log anomaly with potential for a basement target.

The reconnaissance drilling confirmed the potential for palaeochannel roll front uranium deposits in the project area but has only investigated about a quarter of the interpreted palaeochannel length. Airborne electromagnetics are being considered to better define the palaeochannels with followup drilling of potential targets along the remainder of the palaeochannels.

Tallaringa-Challenger West Project - Tenement coverage Figure 4over interpreted palaeochannels and location of historical anomalous uranium values

Figure 5 Tallaringa-Challenger West Project - Location of historical drilling and recent joint venture drilling

Figure 6-"Double peak" downhole gamma anomalies in drill section, EL3097

Warrior South Project

Warrior South EL 3284 covers an area of 321 km² including the prospective intersection of the Warrior and Kingoonya Palaeochannels about 60 km southwest of Tarcoola.

Young aeolian sands blanket the entire project area and hindered past explorers efforts to define the channel systems. Exploration prior to 1983 discovered a uranium deposit. subeconomic at the time, at the Warrior prospect about 25 km to the north upstream along Warrior Palaeochannel. Despite the potential demonstrated by the Warrior prospect, there is no record of uranium-focussed exploration in the Warrior South project area.

Modern remote sensing such as the satellite thermal image in Figure 7 enabled Southern Gold to design and undertake an airborne EM survey over the selected target channel junctions where there is potential for the mixing of groundwaters and the precipitation of uranium. Southern Uranium will assess the data from the airborne EM survey for buried channel bottoms and margins that contain reduced sediments able to accumulate uranium. Southern Uranium proposes a first pass drill programme of 25 holes on four traverses. As well as testing for uranium mineralisation the drilling will gather further information on the palaeochannel architecture, which will help define zones requiring further systematic drilling.

Yarlbrinda South (Narlaby) Project

Yarlbrinda South EL 3160 covers an area of 470 km² on the southwest margin of the Gawler Range Volcanics Domain, about 70 km northeast of Streaky Bay. Southern Uranium is managing a joint venture with the right to earn to 70% interest.

The project covers the southern extensions of the Yarlbrinda Shear Zone and a section of the Narlaby Palaeochannel. which drains westwards from areas of weathered radiogenic Hiltaba Suite granites and Gawler Range Volcanics

Exploration in the late 1970s and early 1980s discovered a sub-economic uranium deposit in the palaeochannel system at the Yarranna prospect, which lies 25 km to the west and has grades up to 3,550 ppm $U_xO_x$ . That exploration found local aroundwaters are extremely saline and acidic with very high uranium and radium concentrations in places.

Southern Gold recently used modern airborne EM to map the upstream extensions through the project area and found the main channel was not tested by previous drillholes shown as red dots on Figure 8. The value of the airborne EM in mapping prospective channel bottoms is demonstrated by the example of the conductivity section shown in Figure 9.

Forty first-pass air core holes are proposed to test the channels defined by the EM with detailed infill drilling likely in followup programmes.

Figure 7 - Warrior South Project - Palaeochannal and target dalineation by satellite thermal image

Figure 8 - Yarlbrinda South Project - Map of airborne EM traverses. interpreted palaeochannel positions (blue arrows) and past drillholes (red dots)

Figure 9 - EM conductivity profile across the Narlaby palaeochannel defining the prospective buried channels in red

Comet Well (Yaninee) Project

The Comet Well ELA 198/06 applies to a 137 km² area near Elliston and is 100% controlled by Southern Uranium. The project area contains an interpreted major junction of the Yaninee and Kattata Channels both of which contain elevated uranium.

Explorers in the 1970s discovered the Yaninee uranium prospect upstream from the project and concluded that carbonaceous sands in this channel formed a suitable environment for uranium mineralisation, but undertook no further work. Recent exploration drilling by others intersected up to 271 ppm $U_3O_8$ in the Kattata Channel 25 km upstream from the project area.

On granting of the tenement, Southern Uranium's initial exploration will define the palaeochannel outlines using remote sensing imagery, digital terrain modelling, and airborne EM surveys. Aircore and rotary mud-drilling and down-hole radiometrics will then test selected target areas.

IOCGU (Olympic Dam style) Projects

The IOCGU projects were selected using the revised criteria developed from the new information provided by the Prominent Hill and Carrapateena discoveries: i.e.:

• Northwest and northeast structural corridors controlling granite emplacement and hydrothermal activity.
• A high-level of granite emplacement within or directly beneath coeval Gawler Range Volcanics.
• Volcanic and hydrothermal centres.
• Low temperature ("epithermal") alteration especially fluorite and sericite with indications of haematite.
• Gravity anomalies in the range 2 10 milligals with sources modelled with densities greater than 3.1 gm/cc and depths to top less than 500 m.

The modern availability of microgravity is facilitating the Company's focus on gravity targeting for IOCGU deposits.

The Company's IOCGU projects are predominantly in the northwest Moonta - Tarcoola corridor i.e. Southern Gawler Arc, East Eyre Peninsula, and Jumpuppy (Figure 3). The potential of this corridor is shown by presence of:

• Historically mined IOCGU style deposits with northwest orientations at Moonta.
• A concentration of vein uranium occurrences where the corridor intersects northeast mylonites on the east side of Eyre Peninsula.
• The large volcanic breccia hosted base metal deposit at Menninnie Dam.
• Hiltaba-age gold deposits at Weednanna, Tunkillia and Tarcoola.
• Small high-level Hiltaba granites and volcanic centres.
• Epithermal alteration with small exposures of haematite at the base of the Gawler Range Volcanics.

The Southern Gawler Arc Project is a good example of how the modern exploration tactics can be progressively applied and the quality of targets that may be generated in the less developed IOCGU projects.

The Streaky Bay Project is situated on secondary regional structures on the west side of Eyre Peninsula. A single IOCGU target has been identified in the Yarlbrinda South Project

Two project areas at Oak Dam and South Vivian, that are held within the northwest Carrapateena - Prominent Hill corridor in the Olympic Dam area, are managed by farm-in partner Crescent Gold Limited ("Crescent").

Southern Gawler Arc Project

Peterlumbo Hill EL 3158 covers an area of 583 km² on the southern margin of the Gawler Range Volcanics Domain (Figure 10) in upper Eyre Peninsula. Subject to Ministerial $\cos$ consent $*$ to a transfer of this tenement from a subsidiary of Southern Gold. Southern Uranium will hold 100% of the tenement and will manage exploration for all minerals under a joint venture where Mega has the right to earn to 35% under a joint venture.

I* transfer lodged with PIRSA on 5 February 2007. Registration of the transfer is anticipated before or shortly after the Closing Date]

The focus of exploration is the Oxys volcanic centre and associated intrusive-hydrothermal complex that contains at least three high priority IOCGU and epithermal silver targets. The Oxys centre is possibly a shallower extension of the Wilcherry Complex along the Tarcoola-Moonta Corridor that was offset by the Buckleboo fault. The large Menninnie

Dam zinc lead system hosted in volcanic breccias and carbonates, the satellite Telephone Dam zinc lead prospect and the Weednanna gold prospect are Hiltaba age deposits interpreted to have formed deeper in the Wilcherry part of the hydrothermal system. Haematite-associated mineralisation at Olympic Hill outside the project and in brecciated or sericite-fluorite epithermally altered volcanics at Nankivel demonstrate the IOCGU processes are operating at higher levels within the Oxys volcanic centre (Figure 11).

Southern Gold drill tested the Victory target in 2005 when poor regional data showed it as the only gravity anomaly within the project. More detailed gravity data subsequently acquired by PIRSA revealed promising gravity anomalies within the Oxys centre that were developed into high priority IDCGU targets after gravity detailing by Southern Gold. The G1 and G2 gravity targets have areal sizes and amplitudes

Figure 10 - Southern Gawler Arc Project - Location and geological interpretation plan

Figure 11 - Oxys Volcanic Centre - Interpretive regional section

SOUTHERN URANIUM LTD PROSPECTUS 2007

similar to the Carrapateena signature at the same stage of exploration (Figure 12). The gravity attributes of the G1 target are modelled to have a probable source
with prospective densities of 3.3 gm/cc and depth to top of 200 m (Figure 13). Past limited soil geochemistry supports the targets with multiple anomalous metals as well as delineating a large silver target in unexposed geology extending south of the Nankivel breccia. The quality of these targets warrants detailing of other gravity anomalies within the area.

Southern Uranium proposes to undertake mapping and extended geochemical sampling and detailed gravity of the Oxys area, then drill the Nankivel IOCGU gravity
targets, the Nankivel South silver target and any other targets defined by the surface work.

Figure 12-Areal size and amplitude comparison of the Carrapateena (left) and Nankivel G1 (right) gravity anomalies

Figure 13-Gravity model section for the Nankivel G1 target

Jumpuppy Project

The Jumpuppy Project comprises three early-stage tenements along the corridor extending into the Gawler Range Volcanics northwest of the Southern Gawler Arc Project, i.e.; Kolendo EL 3493, Jumpuppy EL 3595 and Mount Sam EL 3675.

The tenements were selected as showing potential for gravity targets associated with hydrothermal centres within the Gawler Range Volcanics that are now viable hosts to IOCGU mineralisation under the new deposit models.

A large intrusive complex is evident in magnetic and gravity data at Tanners Dam and has been subjected to investigation by gold and base metals explorers who referred to the area as the Sherry's Dam prospect. Haematite veining and fluorite that is encouraging for IOCGU development was intersected by drilling within the gravity low of the intrusive core, however past explorers have not applied IOCGU concepts nor gravity targeting to elevated gravity responses on the hydrothermal margins.

Southern Uranium will explore the margins of the Tanners Dam complex with mapping, detailed gravity and geochemical surveys where appropriate.

The Kolendo and Mount Sam areas will be investigated for similar prospective environments.

Figure 14 - Streaky Bay Project - Oblique gravity image showing the location of detailed surveys and initial IOCGU targets

Streakv Bav Project

The project comprises three tenements; Streaky Bay EL 3512, Corvisart Bay ELA 707/05 and Courela ELA 199/06, covering a combined area of 1,466 km² on northwest Eyre Peninsula. Interpreted basement is predominantly Palaeoproterozoic granite gneiss of the St Peter Suite, intruded by large bodies of Mesoproterozoic Hiltaba Suite granite. Duteron of crystalline basement is rare or non-existent.

The area was selected for the IOCGU potential indicated
by the northeast trending "ridge" of magnetic and gravity
highs extending from the Mount Gunson area through the large gravity high under Lake Gairdner. An outlier of lower Gawler Range Volcanics is reported 20 km southeast of the area, indicating that a high-level, sub-volcanic igneous environment is probably preserved here, with potential for Olympic Dam style deposits associated with the Hiltaba Suite intrusions. The area contains a number of poorly delineated and un-drilled gravity targets, offering Southern Uranium an exploration opportunity.

Southern Gold detailed two large amplitude gravity anomalies and confirmed targets that warrant drilling (Figure 14). Detailing is proposed for other subtle gravity anomalies delineated in the regional data.

East Evre Project

East Eyre project comprises Lake Gilles (EL 3479), Moonabie (EL 3552) and Moseley Nobs (EL 3594) tenements, which cover a total area of 1,526 km² about 60 km west of Whyalla on the eastern side of Evre Peninsula. The tenements were selected over the projection of the Tarcoola-Moonta Corridor southeast of the Southern Gawler Arc Project. Here the corridor exhibits anomalous and small elongate bodies of Hiltaba Granite indicative of high levels of intrusion that are prospective for IOCGU formation.

The project area contains three zones of gravity anomalism; Junale Dam. Moslev Nobs and Plua Range that were delineated by Southern Gold's gravity detailing (Figure 15). Jungle Dam and Mosley Nobs are associated with Menninnie Dam style zinc lead mineralisation discovered by early explorers erroneously seeking Broken Hill style deposits. The prospects have potential for adjacent IOCGU hydrothermal phases and will be investigated with mapping, gravity detailing and geochemistry.

The potential for vein styles of uranium mineralisation will be investigated initially at the Salt Creek prospect only tested thusfar with shallow drilling by an early explorer. The radiometrically-anomalous microfractures in granite (see photograph below) are associated with Hiltaba dykes and are now known to occur at the western side of a large gravity zone (Figure 15). The prospect indicates potential for alternative types of uranium deposits formed during the craton-wide Hiltaba event of uranium mineralisation.

Figure 15 - East Eyre Project - Preliminary gravity image showing the areas of detailed surveying and targets

Unconformity Uranium Projects

The Oak Dam and South Vivian project areas lie in the Olympic Domain south and west of the Olympic Dam mine (Figure 3). Both projects have potential for deep IOCGU targets, but also offer unexplored potential for uranium deposits in sedimentary sequences unconformably overlying the basement geology. The type examples of this style of uranium deposit are the unconformity deposits in the Athabasca Basin in Canada. By analogy, the Pandurra Formation sandstones of the Cariewertoo Basin overlying the Gawler Craton basement provide the right environment for the source, transport and deposition of uranium in reduced rocks at unconformity or structural traps.

The basal sediments of the Gawler Range Volcanics also offer potential for similar uranium deposits at that unconformity over reduced basement rocks such as the graphitic sediments
in the Hutchison Group. The East Eyre IOCGU project area on the southern margin of the body of Gawler Range Volcanics will also be evaluated for that unconformity uranium potential.

Oak Dam and South Vivian Projects

The Oak Dam project (EL 3603) and the South Vivian project (ELA 324/06) respectively cover 174 km² and 861 km² over the prospective eastern margin of the Carlewerloo Basin adjacent to the IOCGU deposits in the basement high of the Olympic Domain.

A joint venture with Crescent Gold will investigate the potential for unconformity and perched uranium targets developed within the Pandurra formation sandstones onlapping onto the uraniferous basement. Deep-penetrating EM, as used in the Athabasca Basin, will be considered as a key exploration technique.

Potential IOCGU targets offered by two preliminary gravity anomalies and WMC's former Cocky Swamp prospect within the Dak Dam project area will also be evaluated.

EXPLORATION PROGRAMME, BUDGET AND APPLICATION OF FUNDS

The funds raised from the Offer are primarily for the purpose of mineral exploration as proposed in the two year programme and budget summarised in Table 1.

The programme and budget proposed for the current project portfolio are summarised as follows :

Palaeochannel Roll Front Projects

ta ka kasanya da kasa da kasa da kasa da kasa da kasa da kasa da kasa da kasa da kasa da kasa da kasa kas		Yeat 2
Expenditure	\$880,000	\$1,830,000
Drilling metres (aircore)	13.000 m	24.000 m

IOCGU and Unconformity Projects

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	Weard	Paarik
Expenditure	\$1,345,000	\$2,545,000
Drilling metres (percussion & diamond)	$2.600 \text{ m}$	10.000 m

In parallel with the proposed project exploration, project generation and acquisition will continue to provide Southern Uranium with access to new opportunities that the Board deems will enhance the asset portfolio for the Company's shareholders. A budget allocation is provided for these future activities.

The Company shall conduct its exploration in accordance with statutory obligations by undertaking industry best practice for safety, commercial, technical, land access and environmental procedures.

The results of the exploration shall be constantly monitored to ensure shareholders funds are applied in the most cost effective manner. The two year budget is based upon present knowledge and prioritisation of the projects and the assumption the projects will show improved potential as Southern Uranium advances the exploration programme.

On completion of the Offer, the Directors believe that the Company will have sufficient working capital to carry out its stated objectives

SOUTHERN URANIUM LTD PROSPECTUS 2007

Table 1 - Southern Uranium Limited - Exploration Programme and Budget

	\$14M subscription
PROJECT	\$'000
	Year 1	Year 2	Two year total
Palaeochanael projects
Tallaringe 3V (30% SUIL)	Test undrilled lengths of large channel system.
EL 3395	Airborne EM detailing;
EL 3396	4,000 m aircore drilling	5,000 m aircore drilling
	180	180	360
Challenger West JV (20% Still after partner's earn-in)	Test undrilled lengths of large channel system		8888888888
EL 3308	Airborne EM detailing
EL 3080	4,000 m aircore drilling	8,000 m aircore drilling
EL 3097	25	200	225
Marrior South	Downstream extension of Warrior channel
EL 3284	2,500 m aircore drilling	6,000 m aircore drilling
	300	750	1,050
Yalbrinda South JV (SUL earning to 70%)	Narlaby channel upstream from the Yarranna deposits
EL 3160	2,500 m aircore drilling	Airborne EM; 3,000 m aircore drilling
	300	500	800
Comet Well	Junction on Yanmee channel
ELA 198/06	Airborne EM	2,000 m aircore drilling
	75	200	275
IOCGU & Unconformity Projects
Southern Gawler Arc JV 165% SUL after partner's earn-m) EL 3158	Nankivel gravity targets in Oxys hydrothermal centre Mapping; soil geochem; gravity
	1,400 m diamond drilling	3,000 m diamond drilling
	375	650	1,025
Jungupty	Tanner's Dam & other hydrothermal centres
EL 3595	Mapping, gravity infill;	2,500 m percussion &
EL 3675	soil geochem	diamond drilling
EL 3493	300	620	920
Streaky Bay	Two large gravity targets in EL3512
ELA 198/06	Additional gravity detailing;	2,000 m diamond drilling
ELA 199/06	1,200 m percussion &
EL 3512	diamond drilling
	300	600	900
East Eyre Pennsula	Three anomalous gravity zones; Salt Creek prospect
EL 3479	Mapping; gravity detailing;	2,500 m percussion &
EL 3552	soil geochem;	diamond drilling
EL 3594	350	650	1,000
Stuart Shelf JV (partner earning in) ELA 324/06	IOCGU & sandstone unconformity targets in Olympic Dam district	W
EL 3603	20	25	45
TOTAL EXPLORATION BUDGET Project Generation / Acquisitions	2,225	4,375	6,600 5,000
Management / Corporate / Admin	750	800	1,550
Broker Fees	540		540
ASX Listing, Printing, Consultants, Sundries	310		310
TOTAL			14,000

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DIRECTORS AND MANAGEMENT

Directors' Profiles

A strong and capable Board of Directors' with broad technical and commercial expertise has been selected to quide the company in the development and management of a wide range of uranium exploration projects.

Roger Marshall OBE (68 years old) BE, MAUSIMM, FAIM, FAICD Chairman

Roger Marshall has over 40 years experience in the mining industry covering management, marketing, finance and operational roles. He was an Executive Director of the operating board of BP Australia, and MIM Holdings Limited (1984 - 1992) and A.G.D. Mining Limited (1999 - 2004). He also served as Chairman of Energy Brix Australia Corporation (1993 - 1996).

He has been responsible for the development and production of a number of mines and served on the Committee of World Coal Institute, London (1983 - 1993). He is also a former Chairman of the Australian Coal Association and the Queensland Coal Association (1987 - 1988) and was an Australian representative to the International Energy Agency, Roger is currently Deputy Chairman of CITIC Australia Trading Limited and has been Deputy Chairman of Macarthur Coal Limited since July 2001.

Roger's appointments to the Boards of other publicly listed companies include Chairman of Queensland Ores Limited since May 2005 and Copper Resources Corporation from November 2005.

Roger was appointed an Officer of the British Empire in 1989 for services to the Australian Coal Industry and an Honorary Life Fellow of the Australasian Institute of Management.

John Alexander Anderson (52 years old) BSc Hons, MAusIMM, MSEG, MAIG, MGSA Managing Director

John is a Brisbane-based geologist and exploration manager of 28 years experience, initially with Aberfoyle and more recently as General Manager - Exploration Australia for MIM Exploration Pty Ltd.

He has explored in most Australian jurisdictions for a wide range of commodities with an emphasis on the major base metal / gold mining centres including Kalgoorlie, Broken Hill, McArthur River, Mount Isa / Ernest Henry and the Gawler Craton.

John led teams in the discoveries of the Angas zinc resource, the major portion of the Menninnie Dam zinc deposit, the White Dam gold copper deposit and several mineral sands deposits in the Murray Basin. He is a former President of the South Australian Chamber of Mines and Energy, John is currently Non-Executive Director with Southern Gold Limited.

David Garred Jones (65 years old) BSc, MSc, FIMMM (London), FAusIMM, MGSA, MAIME-SME Non-Executive Director

David commenced his career in 1964 as a geologist with Broken Hill South Limited and was involved in the discovery of the Duchess Phosphate deposit near Mt Isa. Between 1966 and 1968 David was employed by Mt Isa Mines in Exploration for base metals in the Mt Isa district.

David held a Senior Lecturing position with the University of South Australia from 1971 - 1979 and was Research Professor at the University of British Columbia. Vancouver where he spent 10 months visiting all operating mines west of The Rockies from Yukon to Mexico and quest lecturing at various Academic Institutions including Stamford University.

From 1979 - 2000 David held various appointments with Newmont Australia (subsequently Newcrest Mining Limited) including Chief Geologist Australia. Exploration Manager International and Exploration Manager Europe, Asia and Africa. While employed with Newcrest David supervised exploration in Southeast Asia and Southwest Pacific, pioneered Newcrest's establishment in Indonesia and Vietnam and was responsible for operations in Europe (Greece, Bulgaria, Hungary, Czech Republic and Ireland). Prior to his retirement in 2000 David advised Newcrest on all aspects of long term and strategic planning and prepared the company annual business plan.

David is currently principal of his own consulting company VIDORO Pty Ltd and has undertaken independent geologist's reports for gold mines in Bolivia, Brazil, Kyrgyz Republic, the Philippines and Australia as well as reports on uranium projects in the Northern Territory and Queensland.

Stephen Richard Biooins (38 years old) BSc Hons, MBA, MAusIMM Non-Executive Director

Stephen has accumulated broad experience as a geologist in mineral exploration. development and mining throughout Australia over the past 15 years. He has also applied his MBA to the management of exploration, resource definition and feasibility studies. Stephen joined Pima Mining the mid 1990s as an exploration geologist, supervising various exploration projects in gold and base metals on the Gawler Craton. Prior to this, he spent 3 years with Mines and Energy SA (MESA) as an exploration geophysicist during the South Australian Exploration Initiative (SAEI). As a mineral geophysicist, Stephen has also worked with BHP (fron Duke) and Hamersley fron (Tom Price) in near-mine and in-pit iron ore exploration.

Stephen is the founding Managing Director of Southern Gold Limited.

Michael Robert Billing (53 years old)

BBus, ASA

Company Secretary and Financial Controller

Mick is an accountant with in excess of 30 years of mining industry experience in company secretarial and chief financial officer roles, including extensive periods in senior accounting and commercial roles with Bougainville Copper Ltd and WMC Resources Ltd. He has had experience with debt and equity raising and project evaluation and feasibility studies in Australia and overseas.

He is company secretary and non-executive director of Southern Gold Limited and company secretary and non-executive director of Australasia Gold Limited and an alternate director of Flinders Diamonds Limited.

Mick has agreed to act temporarily as company secretary for Southern Uranium pending the Board recruiting a permanent company secretary.

The Directors are committed to the principles underpinning best practice in corporate governance.

A description of the Company's main corporate governance practices is set out below.

Board Composition and Responsibility

The Board of Directors takes responsibility for corporate governance and operates according to the Company's Constitution.

The Board is to be comprised of a majority of non-executive directors, including the Chairman. The Chairman of the Board is to be elected by the Board and the performance of the Directors is to be reviewed on a regular basis.

The constitution provides that at every annual general meeting, one third of the Directors shall retire from office but may stand for re-election. Board composition shall also be reviewed periodically either when a vacancy arises or as it is considered the Company would benefit from the services of a new director to enhance the skills and experience of the Board to meet the strategic demands of the Company.

Directors have the right, in connection with their duties as Directors to seek independent professional advice at the expense of the Company, subject to prior approval of the Chairman, which may not be unreasonably withheld.

The Board has responsibility for internal control procedures within the Company. Compliance covering financial reporting, quality and integrity of: information, personnel, safety, environmental issues, and operations shall be reqularly monitored.

All Directors, managers, and employees are expected to act with the utmost integrity and objectivity, striving at all times to enhance the performance and reputation of the Company.

Committees

The Board considers that the Company is not currently of a size, nor are its affairs of such complexity, to justify the establishment of separate board committees. All matters which might otherwise be delegated to committees will be dealt with by the full board.

Fthical Standards

All executives and employees are required to adhere to laws and regulations, and act with the highest standards of honesty, integrity, and objectivity in all dealings with each other, the Company, and suppliers and the community.

The codes of conduct adopted by the Company shall be requiarly reviewed and updated as necessary to ensure they reflect the highest standards of behaviour and professionalism.

Continuous Disclosure

The Directors are committed to keeping the market fully informed of material developments to ensure compliance with ASX Listing Rules and the Corporations Act. At each Board meeting specific consideration is given to disclosure of any matters which should be disclosed under the Company's continuous disclosure policy.

Trading in Company Securities

Directors, management and other employees as nominated will not be permitted to trade in the Company's securities prior to any anticipated announcement to the ASX and for a 24 hour period after an announcement, provided that the person is not in possession of price sensitive information.

All transactions in company securities by directors, management and other employees are reported to the Board. In accordance with the provisions of the Corporations Act and the Listing Rules of the ASX, the Company advises the ASX of any transaction conducted by directors in the securities of the Company.

Risk Management

The Board reviews and monitors parameters under which risks will be managed. The identification, monitoring and where appropriate, the reduction of significant risk to the Company will be the responsibility of the managing director and the board.

Related Party Matters

Directors and senior management will be required to advise the Chairman of any related party contract or potential contract. The Chairman will inform the Board, and that person will not participate in discussions or decisions involving the matter.

Shareholder Relations

The Directors aim to ensure that shareholders are informed of all matters necessary to assess the performance of the Company.

Information on all major developments affecting the Company shall be communicated to shareholders through:

• The Annual Report; ٠
• Quarterly and half yearly reports;
• The Annual General Meeting and other General Meetings of shareholders called as appropriate:
• Other announcements in accordance with the Company's continuous disclosure policy; and
• The Company's web site.

Introduction

The information set out in this section is not intended to be comprehensive and should be read together with the more detailed information appearing elsewhere in this Prospectus. You should read this Prospectus in its entirety. If you do not understand it vou should consult your professional adviser.

The Offer

Southern Uranium is offering 70,000,000 Shares for subscription at a price of \$0.20 per Share to raise \$14,000,000.

Shares

Shares will be issued at a price of \$0.20. Subscription monies are pavable in full on Application. Newly issued Shares will rank equally in all respects with all other existing shares on issue.

A summary of the rights and liabilities attaching to Shares is set out under the Terms of Securities section.

Priority Allocation

Southern Uranium has agreed to offer SAU Shareholders registered at the Record Date the priority right to take up Shares, A maximum of 50,000,000 shares have been set aside for this purpose. The Priority Offer is not a pro-rata offer.

SAU shareholders are not restricted as to the number of Shares they may wish to apply for however the Directors reserve the right to accept for a lesser number of Shares. The Directors will in any event allocate as a minimum 10,000 Shares to valid Applications in the Priority Offer.

Application for SAU Priority Offer Shares must be made using the Yellow Priority Application Form accompanying the copy of this Prospectus sent to SAU Shareholders which must be completed and returned to the Company together with Application monies for the appropriate amount no later than the Priority Offer Closing Date. Priority Offers not received by the Priority Offer Closing Date may be treated as Public Offer Applications.

The Yellow Priority Application Form may also be used by SAU Shareholders who wish to participate in the Public Offer.

Offer Period

$\bullet$	Opening Date for receipt of Applications and SAU Priority Applications:	27 February 2007
$\bullet$	Priority Closing Date for receipt of SAU Priority Applications:	5pm 9 March 2007
	Closing Date for receipt of other Applications:	5pm 16 March 2007

(All times are CST and subject to variation without notice)

Applicants are encouraged to submit their Applications as early as possible. The Company reserves the right to close the Issue and/or the Priority Offer at an earlier time or date or to extend the closing times and dates without prior notice.

Applying for Shares

All Applications must be for a minimum of 10,000 Shares at the Application Price of \$0.20 per Share. All Applications for more than 10,000 Shares must be in multiples of 1,000 Shares.

If you wish to participate in the Offer, you should complete the Application Form accompanying this Prospectus in accordance with the instructions set out on the reverse of the Application Form.

Subject to the terms of the SAU Priority Offer, the Board reserves the right to accept any Application or Priority Application in whole or in part, or to reject any Application or Priority Application in whole or in part. Application monies will be held in trust on behalf of Applicants until the Shares are issued. If any Application or Priority Application is rejected (in whole or in part), the amount tendered in respect of Shares that have not been issued will be repaid to the unsuccessful Applicant, without interest.

If an Application Form is not completed correctly, or if the accompanying payment of application monies is for the wrong amount, it may still be treated as valid. The Director's decision as to whether to treat an Application as valid and how to construe, amend or complete the Application Form is final.

Issue of Shares

If the Company decides to accept your Application and issue the Shares, either in whole or in part, it will issue the Shares and dispatch a holding statement to you as soon as practicable after the Closing Date together with any Application monies received in excess of the number of Shares issued to you. The issue of Shares pursuant to this Prospectus is subject to ASX granting official quotation of the Company's securities and the minimum subscription being raised. It is the responsibility of Applicants to determine their allocation prior to trading in Shares. Applicants who sell Shares before they receive their holding statements will do so at their own risk.

Dividend Policy

The Company does not yet have a dividend policy. The Company has no immediate intention to declare or distribute dividends. Payment of future dividends will depend upon the future profitability and financial position of the Company.

Risk Factors

The Shares offered by this Prospectus should be considered speculative in nature. Risk factors which should be considered in relation to an investment in the Company are set out in the Risk Factors Section.

Stock Exchange Quotation

The Company will apply within 7 days after the date of this Prospectus for the Shares offered by this Prospectus to be quoted on the ASX. If the application is not made within 7 days after the date of this Prospectus, or if the Shares are not granted quotation within 4 months after the date of this Prospectus, the Company will repay all Application monies received with respect to the Offer, without interest in accordance with section 724 of the Corporations Act.

The fact that the ASX may grant quotation of the Shares is not to be taken in any way as an indication of the merits of the Company or the Shares.

CHESS

The Company will participate in the Clearing House Electronic Subregister System, known as CHESS. ASTC a wholly owned subsidiary of the ASX, operates CHESS in accordance with the Listing Rules and the SCH Business Rules.

Under CHESS, a holder of Shares will not receive a certificate but will receive a statement of their holding in the Company.

If a holder is broker sponsored. ASTC will send the holder a CHESS statement. The CHESS statement will set out the number of Shares allotted to each holder under this Prospectus, give details of the holder's HIN and give the participant identification number of the sponsor.

If you are registered on the Issuer Sponsored sub-register, your statement will be despatched by Computershare Registry Services Pty Ltd, and will contain the number of Shares allotted under the Prospectus and the holder's security holder reference number.

A CHESS statement or Issuer Sponsored statement will routinely be sent to holders at the end of any calendar month during which the balance of their holding changes. A holder may request a statement at any other time, however, a charge may be made for additional statements.

Holders of existing shares that are subject to an escrow period will, following release from escrow and Official Quotation of those shares, receive holding statements to replace the certificates for those shares.

Cornerstone Investment

The Company has secured agreement with a consortium comprising Talbot Group Holdings Pty Ltd as trustee for the Talbot Equities Trust and CITIC Australia Pty Ltd to take up between them a cornerstone investment in the Offer of \$4,000,000. Investment by CITIC is subject to prior approval by the Foreign Investment Review Board ("FIRB"). The proportions in which the consortium members initially take up the investment shares will depend, in part on FIRB approval being obtained. The Agreement is summarised in the Material Contracts section.

Underwriting

The Company has agreements with Lands Kirwan Tong and Taylor Collison to act as joint Brokers and Underwriters, to the Issue.
The Agreements are summarised in the Summary of Material Contracts section. The Underwriters wil Issue texcluding the cornerstone investment component).

Financial Forecasts

The Directors believe that they do not have a reasonable basis to forecast future earnings on the basis that the operations of the Company are inherently uncertain. Accordingly, any forecast or projection information would contain such a broad range of potential outcomes and possibilities that it is not possible to prepare a reliable best estimate forecast or projection.

How to Apply

Completed Application forms and payment must be received by Southern Uranium or Computershare by 5pm CST on the Closing Date. If paying by cheque, cheques should be made payable to Southern Uranium Limited. Postal and delivery addresses are as follows:

Southern Uranium Limited 58 North Terrace KENT TOWN SA (PO Box 750 KENT TOWN SA 5071)

Computershare Investor Services Pty Ltd

Level 5, 115 Grenfell Street ADELAIDE SA (GPO Box 1903 ADELAIDE SA 5001)

Lands Kirwan Tong Stockbrokers Pty Limited

Level 12, 99 William Street MELBOURNE Vic 3000 (PO Box 591 Collins Street West, Vic 8007)

Taylor Collison Limited

Level 2, 12 Pirie Street ADELAIDE SA 5000 (GPO Box 2046, Adelaide SA 5001)

In order for SAU Shareholders to be eligible for priority allocation, SAU Priority Applications must be received by the Company, Computershare or either of the Underwriters by 5pm CST on or before the Priority Closing Date.

Applications and Priority Applications may not be withdrawn after lodgement unless permitted under the Corporations Act following issue of a supplementary disclosure document. Further important instructions on how to apply are contained on the Application form or may be obtained by calling the Company or Computershare.

This section identifies areas the Directors regard as major risks associated with an investment in the Company. It is not exhaustive. The Directors recommend that potential investors consider the risks described below and other information contained in this Prospectus, as well as consulting with their professional advisors before deciding whether or not to apply for Shares.

General

There are numerous risks associated with investing in any form of business and with investing in shares generally. There are also specific risks associated with the Company's business and its involvement in the exploration and mining industry. General risks associated with investment in the Company may include:

• (a) fluctuation of the price at which the Company's Shares trade due to market factors:
• (b) high volatility of the Company's Shares in response to factors such as:
• additions or departures of key personnel;
• litigation and legislative change;
• press newspaper or other media reports;
• actual or anticipated variations in the Company's operating results;
• new services provided by the Company or its competitors.

Value of Shares

The Shares allotted under this Prospectus carry no quarantee in respect of profitability, dividends, return on capital, or the price at which they may trade on the ASX.

Exploration

Exploration is inherently associated with risk. Notwithstanding the experience, knowledge and careful evaluation a company brings to an exploration project there is no assurance that recoverable mineral resources will be identified. Even if identified, other factors such as technical difficulties, geological conditions, adverse changes in government policy or legislation or lack of access to sufficient funding may mean that the resource is not economically recoverable or may otherwise preclude the Company from successfully exploiting the resource.

Development and Mining

Possible future development of mining operations at any of the Company's projects is also subject to numerous risks. The Company's operations may be delayed or prevented as a result of weather conditions, mechanical difficulties, shortage of technical expertise or equipment. There may be difficulties with obtaining government and/or third party approvals. operational difficulties encountered with extraction and production activities, unexpected shortages or increase in the price of consumables, plant and equipment, cost overruns or lack of access to required levels of funding.

If the Company commences production, its operations may be curtailed or disrupted by a number of risks which are beyond its control such as environmental hazards, industrial accidents and disputes, technical failures, unusual or unexpected geological conditions, fires, explosions, adverse weather conditions and other accidents.

The Company's operations may be adversely affected by higher than anticipated ore treatment costs, worse than anticipated metallurgical conditions, fluctuations in base and precious metal prices or lack of availability of smelter capacity.

No assurance can be given that the Company will achieve commercial viability through development of any of its tenements or projects.

Limited operating experience and reliance on Key Personnel

The Company was incorporated on 18 July 2005. While its Directors and officers have significant experience in the mining industry, the Company has only limited historical, financial or operating information. If growth objectives are to be met, this will depend on the ability of the Directors to implement the current exploration and development strategies and to adapt, where necessary, to accommodate and manage any unforseen difficulties. Initially, the Company will rely heavily on the experience of
its technical directors John Anderson, Roger Marshall, David Jones and Stephen Biggins.

Resource Estimations

Resources estimates are inherently imprecise as they are expressions of judgement at a particular time based on available information, interpreted through experience and resource modelling techniques. The estimates, while made by qualified professionals, may change over time as other information becomes available which differs from information known or predicted by past drilling, sampling and geological interpretation. Estimates remain subject to change which may adversely affect the Company's operations or the commercial viability or its projects.

Commodity and Currency Price Volatility

Commodity prices are subject to influencing factors beyond the control of the Company and can be subject to significant fluctuations. Just some of these influencing factors include:

• fal world demand for particular commodities:
• (b) the level of production costs in major commodity producing regions
• expectations regarding inflation, interest rates and US dollar exchange rates. $(c)$

Any significant and/or sustained fluctuation in exchange rates or commodity prices could have a materially adverse affect on the Company's operations and its financial position.

Native Title and Aboriginal Heritage

The Native Title Act 1993 (Cth) recognises certain rights of indigenous Australians over land where those rights have not been extinguished. These rights, where they exist, may impact on the ability of the Company to carry out exploration or obtain production tenements. In applying for certain production tenements, the Company must observe the provisions of Native Title legislation. In carrying out exploration and/or mining operations it must observe Native Title legislation (where applicable) and Aboriginal Heritage legislation which protects Aboriginal sites and objects of significance.

In certain circumstance the consent of registered Native Title Claimants must be obtained prior to carrying out certain activities on land to which their claim relates. It is possible that the conditions imposed by Native Title Claimants on such consent may be on terms unacceptable to the Company. It is difficult to quantify, at this time the impact (if any) which Native Title issues may have in those areas of the Company's tenements where Native Title has not been extinguished. See Solicitor's Tenement Report for further information).

Tenure and Access

Mining and exploration tenements are subject to periodic renewal. There is no quarantee that current or future tenements or future applications for production tenements will be approved.

The Company's tenements are subject to numerous legislative conditions. The renewal of the term of a granted tenement is also subject to discretion of the relevant Minister. Renewal conditions may include increased expenditure and work commitments or compulsory relinquishment of areas of the tenements comprising the Company's projects. The imposition of new conditions or the inability to meet those conditions may adversely affect the operations, financial position and/or performance of the Company.

Compulsory Work Obligations

Each of the Company's tenements is subject to expenditure and work commitments which must be met in order to keep such tenement in good standing. These commitments may be varied on application of the tenement holder but any such variation is at the sole discretion of the Minister administering the relevant State mining legislation. If no variation is approved, and there is a failure to meet the commitments, this could lead to forfeiture of the tenement.

Environmental

The Company's projects are subject to both the relevant State and also Commonwealth laws and requlations relating to environmental matters. Should the Company proceed to development of one or more mines, it could be expected that such developments would have numerous environmental impacts which would require various statutory approvals to be put in place. There is no guarantee that such approvals would be granted. The Company intends to conduct its operations in an environmentally responsible manner and in accordance with relevant legislation. However, the Company is unable to predict the effect of future changes to environmental legislation or policy and the cost effect of such changes on its operations and financial position.

Uranium Development

State and Commonwealth laws and requlations relating to production and export of uranium products will affect the Company in the event of a discovery. The current approval processes for uranium mining are more rigorous than for conventional mines. There is a risk that, should economic deposits of uranium be discovered, the necessary government approvals may not be granted, may be significantly delayed and/or may affect the commercial viability of a project. Investors should be aware that changes in government, government policies and legislation could have a material adverse affect on the Company and/or its ability to develop any uranium project.

Shortage of Funding

The funds raised by the Offer will be used to carry out the Company's projects as detailed in this Prospectus. If the Company incurs unexpected costs or is unable to generate sufficient operating income from its proposed developments, further funding may be required. The Company may require additional funding to carry out further exploration, undertake feasibility studies, develop mining operations and/or acquire new projects. Any additional financing through share issues may dilute shareholdings acquired under this Prospectus. Debt financing may not be available to support the scope and extent of proposed developments. If available, it may impose restrictions on operating activities or anticipated expansion of the Company's operations.

Joint Ventures

The company may wish to develop its projects or future projects through joint venture arrangements. Any joint ventures entered into by, or interests in joint ventures assigned to, the Company could be affected by the failure or default of any of the joint venture participants.

DAVID TONKIN & ASSOCIATES

25 Palmerston Road, Unley, S.A. 5061 Telephone (08) 8272 0999

ARN "Bitan 574941

19 January 2007

The Directors Southern Uranium Limited 58 North Terrace Kent Town SA 5067

Gentlemen.

INDEPENDENT CONSULTING GEOLOGIST'S REPORT

Southern Uranium Limited ("Southern Uranium") commissioned me on 4 May 2006 to prepare an Independent Geologist's Report on 20 exploration properties located on the Gawler Craton in South Australia. This report is to be included in a Prospectus, to be lodged with the Australian Securities and Investments Commission, offering for subscription Shares, at an issue price of 20 cents per Share, to raise \$14 million. The funds raised will be employed in exploration and evaluation of the mineral properties. I have provided consent for the inclusion of the Independent Geologist's Report in the Prospectus, in the form and context in which the Report appears, for the purpose of informing shareholders and prospective shareholders.

The sources used in preparing this Report included information provided to me by Southern Uranium, open file technical reports submitted to the Government by previous exploration licence holders, technical reports and data made available by Government agencies, and other relevant published and unpublished information, as well as my professional knowledge of and experience as an exploration geologist. A listing of selected published references is included in the Report. I have worked extensively on the Gawler Craton and based on this knowledge made no field inspections during preparation of this Report.

The twenty properties described in this Report are understood to comprise fifteen Exploration Licences and five Exploration Licence Applications, covering a total area of 10,393 square kilometres. It should be noted that I have not considered matters concerning valuation of the mineral properties, the status of the tenements, the terms of any joint ventures and possible government or land ownership impacts in this report, and these matters are addressed elsewhere in the Prospectus. The Solicitor's Report, elsewhere in this Prospectus, provides a list of all mineral properties and associated tenement details.

The mineral properties secured by Southern Uranium are considered to be "Exploration Areas", which are inherently of a speculative nature. Nevertheless, it is evident that the mineral properties have been acquired by Southern Uranium on the basis of sound geological concepts and technical merit. Each is considered to be prospective to varying degrees for the discovery of uranium, and further exploration is justified. Southern Uranium has proposed exploration programmes and budgets that are in accordance with the perceived prospectivity and in balance with the funds to be raised. Southern Uranium's budget is considered reasonable and sufficient to meet the minimum statutory expenditure and joint venture

DAVID TONKIN & ASSOCIATES

25 Palmerston Road, Unley, S.A. 5061 Telephone (08) 8272 0999

commitments on the exploration tenements. The principals of Southern Uranium are technically well qualified to oversee the implementation of the proposed exploration programmes and to keep abreast of new developments and opportunities as they arise. In my opinion, Southern Uranium has developed satisfactory and well-defined exploration programmes and budgets that are consistent with the exploration targets indicated.

This report was prepared by me, consulting geologist David Tonkin. During the past four years I have prepared Independent Expert Reports for several companies raising funds to explore for base metals, precious metals and uranium in South Australia, Western Australia, New South Wales and Victoria. For the past twenty years I have worked as an independent consultant, mainly in South Australia and the Northern Territory, providing professional services to clients, including major international resource companies and the South Australian Department of Primary Industries and Resources. This followed twenty years previous experience with a major Australian resource company, during which time I worked on exploration programmes throughout Australia. I therefore have expert knowledge of the geological terrains covered by this prospectus.

I am a Member of the Australian Institute of Geoscientists (AIG), a Member of the Geological Society of Australia (GSA) and as detailed above have appropriate qualifications, experience and competence to be considered as an "Independent individual Expert" and a "Competent Expert" under the relevant codes. This Independent Geologist's Report has been prepared in accordance with the Code for the Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent Expert Reports (The VALMIN Code, 2005 Edition), which is binding on Members of the $AIG$ .

I have no material interest in current mineral tenements held by Southern Uranium, nor any other conflicts of interest in preparing this report. My relationship with Southern Uranium is solely that of a professional association between consultant and client. The sole benefit to me is cash remuneration paid at agreed daily rates plus any expenses. Payment of these fees is in no way contingent on the opinions expressed in this Report.

Yours faithfully,

Wah

DG Tonkin B Sc. M AIG, M GSA

Southern Uranium Limited

Independent Geologist's Report

DG Tonkin December 2006

EXECUTIVE SUMMARY

Southern Uranium Limited ("Southern Uranium") has interests in 20 exploration properties covering a total of 10,393 square kilometres on the Gawler Craton in South Australia. Details of the Company's interests in the properties are given in the Independent Solicitor's Report, elsewhere in this Prospectus.

The properties have potential for the discovery of commercial deposits of uranium in three different geological settings:

• $\bullet$ As sedimentary roll front uranium deposits in Tertiary palaeochannels
• In Mesoproterozoic and Palaeoproterozoic basement rocks, associated with Olympic Dam style IOCG deposits or as structurally controlled deposits in faults
• As unconformity related uranium deposits associated with Mesoproterozoic redbeds of the Pandurra Formation

At Challenger West-Tallaringa, Warrior South, Yarlbrinda South and Streaky Bay Projects, there is good potential for the discovery of sedimentary uranium deposits in palaeochannels associated with the Tertiary age Eucla Basin. These palaeochannels were incised into an older basement that contained potential primary sources of uranium, such as the uraniumbearing Hiltaba Suite granitoids and Gawler Range Volcanics. Weathering and erosion of these source rocks could have provided both channel-fill sediments and leached uranium for deposition as secondary deposits in the Tertiary palaeochannels. The palaeochannels are water-charged and contain both reduced and oxidised sediments, providing the necessary oxidationreduction (redox) interfaces for the accumulation of roll front style secondary uranium deposits. Exploration during the 1970s and 1980s demonstrated the presence of roll front uranium deposits in the Gawler Craton palaeochannels, such as the Warrior deposit in the Kingoonya Palaeochannel System and the Yarranna deposit in the Narlaby Palaeochannel, but these resources were not developed at that time.

Advances in geological understanding and exploration techniques during the past twenty years have given modern day explorers a significant advantage compared to the explorers of the previous era. Investigations by the Geological Survey of South Australia have provided a sound scientific knowledge of the Eucla Basin and its system of palaeochannels, as well as the nature and distribution of potential primary source rocks for the uranium. Techniques for locating and exploring the buried palaeochannels have improved greatly. New computer-based techniques in GIS, remote sensing and image processing include use of Landsat, NOAA and Shuttle Radar imagery to detect the location of buried channels. New or improved airborne geophysical methods include TEMPEST and HOISTEM electromagnetic surveys and improved magnetic, radiometric and gravity survey techniques, which can all play a part in channel definition. Ground geophysical methods like seismic reflection and micro-gravity are now used to locate channel positions within a palaeo flood-plain. Drilling equipment and techniques have also improved, allowing successful testing of unconsolidated sediments that were once problematic.

Nine projects have potential for the discovery of Olympic Dam style IOCG-Uranium deposits. These are the Yarlbrinda South, Streaky Bay, Southern Gawler Arc, Kolendo, Jumpuppy, Mt Sam, East Eyre Peninsula, Oakdam and South Vivian Projects. Each of these projects lies in a geological setting where Mesoproterozoic age Hiltaba Suite granitoids intrude what was once a high-level, sub-volcanic igneous environment, similar to that hosting the Olympic Dam, Prominent Hill and Carrapateena IOCG deposits.

The Oakdam and South Vivian Projects lie on the eastern Gawler Craton, where Carrapateena, Olympic Dam and Prominent Hill deposits appear to represent a northwest trending IOCG province. Southern Uranium has acquired the Southern Gawler Arc, Kolendo, Jumpuppy, Mt Sam and East Eyre Peninsula Projects because they lie in what may be a parallel northwest trend, represented by the IOCG-related mineralisation at Moonta - Wallaroo mines. Menninnie Dam prospect and Tarcoola Goldfield.

Oakdam and South Vivian Projects may also have potential for Athabasca Basin style unconformity related uranium deposits. Mineralisation in this style of deposit is found associated with the unconformable contact between weathered, uranium-bearing older Proterozoic basement and overlying Mesoproterozoic redbeds. In Canada, most uranium production is from this style of deposit, in the Athabasca Basin. Although the target horizon in the Southern Uranium properties may be considered deep, this style of deposit can be very large and high grade compared to other types of uranium deposit, so the possibility of finding this style of mineralisation should be kept in mind during IOCG-Uranium exploration programs.

CHALLENGER WEST - TALLARINGA PROJECT

Introduction

Challenger West - Tallaringa project comprises five properties: Garford (EL 3080), Indooroopilly Outstation (EL 3097), Half-Moon Lake (EL 3308), Tallaringa South (EL 3395) and Tallaringa North (EL 3396) (Figure 3). The project covers a combined area of approximately 3,005 square kilometres on the northern Gawler Craton, 130 kilometres southwest of Coober Pedy and partly surrounding the Challenger Gold Mine. The tenements cover approximately 70 kilometres of the Garford Palaeochannel and about 50 kilometres of the Anthony Palaeochannel.

Geological Setting

Outcrop in the project area is limited, with a Quaternary surface cover of mainly aeolian sand, pedogenic calcrete and playa lakes. Concealed beneath the Quaternary cover are the remnants of ancient river systems, preserved as Tertiary palaeochannel sediments. The Garford Palaeochannel crosses the northern block of tenements and the Anthony Palaeochannel crosses the southern block (Figure 16). These palaeochannels are incised into older rocks. locally including Jurassic Algebuckina Sandstone, but mostly the weathered Precambrian crystalline basement.

The basement of consists mainly of Archaean gneisses of the Mulgathing Complex. These gneisses host the nearby Challenger gold deposit. Palaeoproterozoic late tectonic granitoids and Mesoproterozoic mafic dykes of the Gairdner Dyke Swarm also intrude the older basement rocks.

Uranium Exploration Potential

Challenger West - Tallaringa project has good potential for the discovery of sedimentary roll front uranium deposits. There may also be potential for IOCG-Uranium mineralisation.

A report produced in 2001 by Primary Industries and Resources South Australia (PIRSA) and the University of Adelaide, highlighted the uranium potential of the Tertiary palaeochannels flowing into the Eucla Basin, such as the Garford and Anthony Palaeochannels. The report identified the presence of favourable channel sediments for the precipitation of uranium from groundwaters. As a result of the study preceding the report, Tertiary palaeochannels are now better defined than they were during the exploration of the 1970s and early 1980s. Uranium exploration can now be focussed more effectively, directly targeting favourable sites within the buried palaeochannels.

Over the past decade, the Geological Survey of South Australia identified the occurrence and distribution of radiogenic Mesoproterozoic (Hiltaba Suite) granites on the Gawler Craton. That work will assist explorers to identify sedimentary uranium targets that are close to uranium bearing potential source rocks. Concentrations of sedimentary uranium are known to be present in the region. CRAE intersected up to 0.064% U308 in the lower reaches of the Anthony channel in 1972-73.

Uranium anomalies can be seen in PIRSA radiometric imagery along the entire course of the Garford Palaeochannel, whilst in the Anthony Palaeochannel anomalies appear over Lake Anthony and Lake Bring and the downstream section of the channel. These anomalies provide encouragement for uranium exploration in those sections of the palaeochannels.

Geophysical data highlight the presence of coincident gravity and aeromagnetic targets at the Westpoint Hill prospect. These anomalies have been interpreted as iron-altered granitoids, and therefore may be targets for IOCG-Uranium

Figure 16 - Challenger Geology

mineralisation of the Olympic Dam type. Interpreted northeast trending stratigraphy appears to wrap around the southeastern margin of this geophysical target area, possibly representing a zone of local dilation, making it a preferred locus for concentration of metals during a mineralising event.

Previous Uranium Exploration

The earliest recorded uranium exploration in the project area began in 1972, In the period up to 1983 several companies investigated the Tertiary palaeochannels in this region, searching for roll-front uranium deposits.

CRA Exploration Pty Ltd (CRAE) explored for sedimentary uranium in the Lake Anthony and Lake Bring areas from 1972 to 1973, following up high-order radiometric anomalies over the playa lakes. CRAE undertook low-level airborne and ground scintillometer surveys, followed by auger drilling of anomalies, discovering concentrations of uranium up to 643 ppm, most of which they found in Eocene lignites within lake sediments. Uranium was separated from its daughter products, meaning that the radiometric anomalies found did not necessarily coincide with uranium deposits. Originally, the uranium appears to have been leached from dispersed sources in nearby basement outcrop.

Uranerz (Aust.) Pty Ltd (Uranerz) explored the Durkin area from 1974 to 1975, anticipating that the Mulgathing Trough would contain basal arkosic sediments with potential to host uranium mineralisation. After undertaking refraction seismic and gravity geophysical surveys, Uranerz concluded that the sediments lacked the characteristics to encourage further exploration.

In 1977, Nobelex NL (Nobelex) investigated the lower reaches of the Garford Palaeochannel, following up airborne radiometric anomalies and some previous shallow drilling by SA Department of Mines. Nobelex carried out ground magnetometer and radiometric surveys over four anomalous lakes and undertook ground reconnaissance and grid sampling of these and nearby lakes. Two diamond core holes drilled into selected magnetic anomalies under Lake Islam intersected magnetite-bearing basement at shallow depth. The cores showed only weak radioactivity. Nobelex concluded that the surface radioactivity identified in the playa lakes is due to weathering of radioactive minerals from the adjacent basement rocks.

BP Mining Development Australia Pty Ltd (BP) searched for sedimentary uranium in the Garford and other palaeochannels in the Lake Anthony and Wilkinson Lakes areas, from 1978 to 1981. Radiometric surveys and drilling outlined a channel system containing weak uranium mineralisation. BP also found anomalous concentrations of uranium in groundwaters. but failed to identify significant uranium mineralisation or suitable sedimentary environments.

Afmeco Pty Ltd (Afmeco) investigated the Mulgathing area for uranium and base metals between 1980 and 1983. Ground-based follow-up of radiometric anomalies, including aircore and diamond core drilling, detected a significant, but restricted thorium anomaly in sediments near West Well. Investigation of the underlying weathered basement did not identify a nearby primary source for the thorium mineralisation in the sediments.

Gravity surveys completed in 2005-2006 by Southern Gold Ltd (Southern Gold) provided detailed palaeochannel data to enable selection of prospective drainage and structural targets for sedimentary uranium deposits in the Garford and Anthony Palaeochannels, Between March and June 2006. Southern Gold and Joint Venture partners completed a 9,200 metre aircore drilling program in the Garford and Anthony channels. The JV drilled 174 aircore holes to an average of 52 metres deep. Holes were sited to test geologically and geophysically defined targets. The drilling intersected a variety of oxidised and reduced sediments, suggesting the presence of redox conditions. Down-hole geophysical logging revealed radiometric anomalies persisting in several adjacent drillholes in Indooroopilly tenement, which is interpreted as a strong indication that roll front uranium mineralisation processes were active in the palaeochannel. Assays returned up to 90 ppm U308 in Half Moon Lake tenement. In the western Garford Palaeochannel, in Tallaringa North tenement. drilling intersected a 1 x 3 kilometre radiometric anomaly. Assays returned up to 60 ppm U308.

Proposed Uranium Exploration Program

The project is subject to the Challenger West Uranium Joint Venture and the Tallaringa Uranium Joint Venture. In both cases joint venture partner, Mega Uranium Ltd (Mega Uranium) is the manager of the project. Canada's Mega Uranium is one of the world's largest uranium explorers and brings considerable expertise and resources to the exploration program.

WARRIOR SOUTH PROJECT

Introduction

The project contains Warrior South (EL 3284), which covers an area of 321 square kilometres covering a section of the Kingoonya Palaeochannel System, about 60 kilometres southwest of Tarcoola, on the central Gawler Craton (Figure 3).

Geological Setting

Quaternary aeolian sands blanket the entire project area. Concealed below that and incised into the weathered basement are the preserved remnants of a large Tertiary river system, the Kingoonya Palaeochannel System, which includes the Warrior Palaeochannel tributary. Figure 17 shows the approximate location of these channels, interpreted from remotely-sensed imagery, geophysical surveys, elevation data and drilling information.

Interpreted basement at Warrior South project belongs to the Harris Greenstone Domain and the Nuvts Subdomain. on the central Gawler Craton. The east-west trending Yerda Shear Zone separates the two domains. Archaean rocks of the Harris Greenstone Domain include gneisses of the Mulgathing Complex and rocks of the Harris Greenstone sequence. Interpreted Palaeoproterozoic basement includes late tectonic granitoids of the St Peter or Tunkillia Suites and sediments of the Tarcoola Formation (Figure 18). Mesoproterozoic Hiltaba Suite granites have not been interpreted within the project, but may intrude the older basement here, as they do nearby.

Uranium Exploration Potential

Warrior South project has good potential for the discovery of sedimentary roll front uranium deposits in the Warrior and Kingoonya Palaeochannels. Exploration prior to 1983 discovered a sub-economic uranium deposit at Warrior prospect, about 25 kilometres to the north, in Warrior Palaeochannel. In a study completed in 2001, PIRSA and the University of Adelaide highlighted the uranium potential in the Tertiary palaeochannels of this region. That study found that the palaeochannels are highly charged with groundwaters and contain organic channel sediments with potential to precipitate uranium from the groundwaters. Within nearby basement rocks are radiogenic Hiltaba Suite granites, providing an erosion source for channel fill sediments and uranium.

Warrior South project may also hold potential for uranium mineralisation associated with Olympic Dam style IDCG deposits. Lower Gawler Range Volcanics are identified about 50 kilometres to the east, so this region may preserve a high-level, sub-volcanic igneous environment, similar to the Olympic Dam setting.

Previous Uranium Exploration

The project area has been relatively lightly explored to date, with no recorded uranium-specific exploration. Since the discovery of Olympic Dam deposit in 1975, a few companies have conducted exploration programs that, whilst not explicitly aimed at IOCG-Uranium targets, probably included Olympic Dam style deposits as a target.

Amoco Minerals Australia Company (Amoco) searched for gold and base metals in Precambrian basement in 1980-81. Following an airborne magnetic survey and ground magnetic and gravity surveys, Amoco drilled two holes on a gravity target in granitoid basement.

Placer Exploration Pty Ltd (Placer) and Rio Tinto Exploration Pty Ltd (Rio Tinto) explored an area overlapping the west

Figure 17 - Warrior South Palaeochannel

Figure 18 - Warrior South Geology

and south edges of the project, from 1995 to 1998. Regional calcrete sampling revealed weak gold anomalies, partly coincident with gravity and magnetic features. The joint venturers did not undertake recommended follow-up work.

Grenfell Resources Ltd (Grenfell) took up the same area as Placer and Rio Tinto in 1999 - 2000, targeting Olympic Dam style and Archaean-hosted gold deposits. Grenfell identified weakly elevated copper, gold and nickel concentrations in the existing calcrete data, without undertaking follow-up on the ground.

Southern Gold completed an airborne TEMPEST EM survey over Warrior South project in September 2006, covering a total of 760 line km with 500m spacing between lines. The survey defined the deeper and more prospective portions of the Warrior palaeochannel.

Proposed Exploration Program

Southern Uranium will assess the data from the airborne TEMPEST EM survey recently completed by Southern Gold. The assessment will include geological interpretation to refine the locations of potential trap sites for sedimentary uranium deposits. Southern Uranium will then follow up positive airborne EM results within the interpreted palaeochannels with aircore drilling and downhole radiometrics, designed to test the main channel position and any discrete targets identified by the survey data. Initially, Southern Uranium proposes to drill 25 holes on four traverses. On completion of each hole geophysical logging will be carried out using a down-hole gamma tool and samples collected for geological logging and geochemical analysis. As well as testing for uranium mineralisation the drilling will gather further information on the palaeochannel architecture, which will help define zones requiring further systematic drilling.

YARLBRINDA SOUTH PROJECT

Introduction

The project contains Yarlbrinda South (EL 3160), which covers an area of 470 square kilometres on the southwest margin of the Gawler Range Volcanics Domain, about 70 kilometres northeast of Streaky Bay. Yarlbrinda South project covers the southern extensions of the Yarlbrinda Shear Zone and a section of the Narlaby Palaeochannel, which drains westwards from areas of weathered radiogenic Hiltaba Suite granites and Gawler Range Volcanics (Figure 3).

Geological Setting

Bedrock in the project is generally covered by Quaternary aeolian sand or playa lake deposits. Concealed beneath the cover and incised into the weathered basement rocks is the preserved remnant of a Tertiary river system, the Narlaby Palaeochannel. The palaeochannel contains uranium mineralisation associated with redox fronts near the contact between carbonaceous sediments and overlying oxidised sands.

Crystalline basement rocks in the Yarlbrinda South project lie in the Nuyts Subdomain, on the south-western margin of the Gawler Range Volcanics Domain and adjacent to the Yarlbrinda Shear Zone. Basement within the project is interpreted mainly as Palaeoproterozoic granite gneisses of the St Peter Suite, intruded by Mesoproterozoic Hiltaba Suite granites, which appear as minor scattered outcrops in the north of the project (Figure 19).

Uranium Exploration Potential

Yarlbrinda South project has potential for sedimentary roll front uranium deposits and for uranium associated with IOCG mineralisation in the basement.

The main Narlaby Palaeochannel and two tributaries cross the project. Exploration in the late 1970s and early 1980s discovered a sub-economic uranium deposit in the palaeochannel system at Yarranna prospect, which lies 25 kilometres to the west, and has grades up to 3,550 ppm U308. Past exploration also discovered traces of mineralization at Nunjikompita and Ilkina, closer to the project. That exploration found that local groundwaters are extremely saline and acidic, containing very high uranium and radium concentrations in places. Abundant outcrop and sub-crop of radiogenic Hiltaba Suite granites and Gawler Range Volcanics in the basement provided a potential primary source of uranium, to be released by weathering and concentrated as secondary deposits in the Narlaby Palaeochannel.

Southern Uranium can take advantage of modern exploration techniques not available in the 1970s and 1980s, such as NOAA and Landsat imagery, powerful image processing

Figure 19 - Yaribrinda South Geology

software to interpret remote sensing data, GIS software to locate and compile data, and improved aircore technology for drilling of target areas. The company has used HOISTEM. another new technology, to define channel geometry. PIRSA is currently compiling and levelling radiometric data from past surveys, which will provide integrated radiometric imagery for the state. In some areas, the initial imagery clearly shows trains of radiometric anomalies highlighting playa lakes formed above the courses of buried palaeochannels. demonstrating the potential of this new product as a prospecting tool.

Yarlbrinda South project also has potential for the discovery of uranium deposits associated with Olympic Dam style IOCG-Uranium deposits. The project lies on the south-western margin of the Gawler Range Volcanics in a zone where Hiltaba Suite aranites intruded a sub-volcanic igneous environment, similar to the setting of Olympic Dam, which is the world's largest uranium mine. The more detailed regional gravity coverage acquired by PIRSA in the 2005 PACE program. combined with the 1993 SAEI aeromagnetic coverage, provides a geophysical data set not available to earlier explorers.

Previous Uranium Exploration

Uranium

ACI Technical Centre Pty Ltd (ACI) explored for uranium in 1968-69, searching for a radiometric anomaly evident in data from a survey flown in 1958. Ground radiometric surveys did not detect an anomaly, leading ACI to the conclusion that the anomaly detected previously was due to atomic fall-out from nuclear tests in 1952, which had dispersed by 1968.

Carpentaria Exploration Company Pty Ltd (CEC) explored for sedimentary uranium over a wide region of northwest Eyre Peninsula, from 1979 to 1984. Resistivity surveys, airborne magnetic and radiometric surveys, geochemical sampling and drilling revealed the presence of a large Tertiary palaeochannel system, the Narlaby Palaeochannel, which crosses the project area. CEC delineated subeconomic deposits of uranium associated with redox fronts in the western part of the Narlaby Palaeochannel, at Yarranna prospect. Elsewhere, including the Ilkina area, there were traces of uranium mineralisation. CEC found that groundwaters in the palaeochannel system are extremely saline and acidic, as well as containing very high concentrations of uranium and radium in places.

Southern Gold conducted a HOISTEM airborne electromagnetic survey over the Narlaby Palaeochannel on Yarlbrinda South tenement in late 2005, covering 230 line kilometres on ten regional traverses. Data processing and interpretation of the survey showed good depth resolution of the host sediments and the base of the channel. The work identified palaeochannel uranium targets for a proposed drilling program.

IOCG-Uranium

From 1996 to 2000, Equinox Resources NL (Equinox), in joint venture with Phelps Dodge Australasia Inc., explored for IOCG-Uranium style deposits associated with the Yarlbrinda Shear Zone. Equinox noted the presence of Hiltaba Suite granitoids and Gawler Range Volcanics in the vicinity of the shear zone. In the project area and further south, soil and calcrete sampling by Equinox defined several low-order gold anomalies. RAB drilling returned anomalous silver, cobalt and chromium, but only slightly elevated gold and copper. Transported cover sediments appeared to create sampling problems, diluting drill samples with overburden material. .
Equinox did not test some anomalies.

In 2005-2006, Southern Gold completed detailed gravity surveys over two residual gravity anomalies identified by a review of the 2km x 2km PACE gravity data, which was collected by PIRSA in 2005. Geophysical modelling identified a gravity anomaly at Koolgera prospect, where detailed infill gravity defined an IOCG target that warrants drilling.

Proposed Exploration Program

Sedimentary Uranium

Southern Uranium will drill 40 air core holes to test Hoist EM targets within the Narlaby Palaeochannel. There has been no previous drilling in the centre of the channel where these holes are planned. Detailed infill drilling of the palaeochannel will follow, once the HOISTEM survey interpretation has been confirmed by the reconnaissance drilling.

IOCG-Uranium

Ground magnetics over the G1 target at Koolgera prospect will help define the relationship between the gravity anomaly and the adjacent magnetic anomalies. Initially, shallow aircore drilling traverses will test the G1 target, which modelling indicates is relatively shallow (< 200m from surface). RC and diamond drilling will follow up positive results.

STREAKY BAY PROJECT

Introduction

The project comprises four properties, Streaky Bay (EL 3512), Corvisart Bay (ELA 707/05) and Courela (ELA 199/06), which form the main block, and Comet Well (ELA 198/06), which is a separate block about 40 kilometres southeast of the other tenements (Figure 3). The project covers a combined area of 1,603 square kilometres on northwest Eyre Peninsula.

Geological Setting

Streaky Bay project lies in the Nuyts Subdomain of the central Gawler Craton, Interpreted basement is predominantly Palaeoproterozoic granite gneiss of the St Peter Suite. intruded by large bodies of Mesoproterozoic Hiltaba Suite granite (Figure 20). Outcrop of crystalline basement is rare or non-existent. The dominant cover throughout the project is provided by Quaternary sediments of the Bridgewater Formation, which are up to about 100 metres thick. In the southeast section of the project, Quaternary sediments conceal Tertiary palaeochannel sediments, which include carbonaceous facies and minor lignite.

Uranium Exploration Potential

Streaky Bay project has potential for Olympic Dam style IOCG-Uranium deposits and for sedimentary uranium in Tertiary palaeochannels.

Steaford Complex

Figure 20 - Streaky Bay Geology

Corunna Conglomerate/
Blue Range Beds

The area was selected for the IOCG-Uranium potential indicated by the northeast trending "ridge" of magnetic and gravity highs extending from the Mount Gunson area through the large gravity high under Lake Gairdner. The project lies more than 70 kilometres from the Gawler Range Volcanics Domain, but an outlier of lower Gawler Range Volcanics is reported 20 kilometres southeast of the area, indicating that a high-level, sub-volcanic igneous environment was probably preserved here, with potential for Olympic Dam style deposits associated with the large Hiltaba Suite intrusions. The area contains a number of poorly delineated and un-drilled gravity targets, offering Southern Uranium an exploration opportunity.

Poorly explored Tertiary palaeochannels cross the project and these have potential for roll front style uranium deposits. formed as secondary concentrations of uranium weathered from the abundant Hiltaba Suite basement intrusions. Comet Well tenement overlies a section of the Yaninee Palaeochannel, which was discovered and partly outlined in the 1980s. The Robinson Palaeochannel crosses southern Streaky Bay tenement. Explorers in the 1970s concluded that carbonaceous sands in this channel formed a suitable environment for uranium mineralisation, but undertook no further work.

There may also be potential for vein style uranium mineralisation, hosted by major northeast and northwest trending faults that were active at the time of the Hiltaba Suite thermal event.

Previous Exploration

Sedimentary Uranium

Central Pacific Minerals NL and Endeavour Oil Company NL (Endeavour) explored for sedimentary uranium in Cainozoic palaeodrainages of the Robinson Basin in 1971-72, mainly east of the project. Endeavour identified a suitable environment for uranium mineralisation in carbonaceous sands of the Robinson Basin, although uranium assays were low. However, bore water samples contained mildly anomalous uranium in places.

CRA Exploration Pty Ltd (CRAE) explored Tertiary palaeochannels in the southern part of the project for sedimentary uranium from 1980 to 1982. Resistivity surveys defined Tertiary palaeochannels, which rotary drilling tested. CRAE found weak uranium concentrations at redox interfaces in three drillholes intersecting Tertiary palaeochannel sediments, which also contained minor lignite. Of 25 holes drilled, 24 intersected Hiltaba Suite granite basement.

Carpentaria Exploration Company Pty Ltd (CEC) explored for sedimentary uranium over a wide region on western Eyre Peninsula, from 1980 to 1983. CEC discovered a major Tertiary channel system, the Narlaby Palaeochannel, to the north of the project area and found sub-economic concentrations of uranium associated with redox fronts at several places. However, CEC palaeochannel work did not extend into the project.

IOCG-Uranium

Esso Exploration and Production Australia Inc. (Esso) explored for uranium and base metals in the Comet Well area, from 1980 to 1982. As Esso focussed on the crystalline basement, it can be inferred their target was IOCG-Uranium style mineralisation. Esso carried out gravity and magnetic surveys before drilling three holes. The drilling intersected basic plutonic igneous rocks and gneisses. beneath Tertiary carbonaceous sediments.

Western Mining Corporation Ltd (WMC) explored for gold and base metals from 1992 to 1995. The nature of the work indicates that the target was IOCG-Uranium deposits. WMC conducted airborne magnetic - radiometric surveys, ground magnetic, gravity, TEM and IP surveys and RC drilling, WMC targets were coincident gravity, magnetic and IP anomalies. One drillhole intersected a weak gold - nickel anomaly. Others intersected magnetite - pyrite bearing mafic rocks or carbonaceous Tertiary sediments.

Sceale Bay Development Corporation Pty Ltd (Sceale Bay) explored for base and precious metals from 1992 to 2001. Again, the target was apparently IOCG-Uranium mineralisation. Sceale Bay conducted ground magnetics over aeromagnetic and gravity anomalies, finding that geophysical anomalies were due to the contrast between highly magnetic gabbroic rocks and adjacent granites.

Diamond Ventures Exploration Pty Ltd explored for diamonds and gold around Comet Well, between 1994 and 1999, Calcrete samples outlined gold anomalies, which follow-up did not confirm. Calcrete assays returned elevated copper values. with associated nickel and cobalt. Drilling intersected thick Tertiary sediments and found traces of gold within deformed basement zones.

Acacia Resources Ltd (Acacia) explored for copper - gold and lead - zinc deposits in the north of the project, in 1994-95. Acacia carried out ground magnetic and TEM surveys, and drilled one RC hole to test a magnetic anomaly, which they concluded was due to a barren magnetic gabbro.

Newcrest Mining Ltd (Newcrest) explored for copper - gold deposits (i.e. (OCG-Uranium style) from 1996 to 1999. Following calcrete sampling and ground magnetic surveys. Newcrest tested four magnetic targets with 47 RC drillholes. Drilling intersected Cainozoic cover sediments up to 80 metres thick. Most holes found a basement of layered acid to mafic igneous rocks, mafic schists or Hiltaba Suite granite. A hole at Yantanabie prospect intersected 3 metres @ 525 ppm molybdenum in fresh Hiltaba Suite granite. Several aeromagnetic anomalies remain to be tested.

Southern Gold undertook gravity detailing of two broad anomalies in the southern tenement area during 2006. The anomalies were confirmed to have target-sized peak amplitudes of 8-10 milligals over large areas of dense bedrock and warrant drill testing for IOCGU potential.

Proposed Exploration Program

Exploration for IOCG-Uranium deposits will focus on the two established gravity targets and other more discrete gravity anomalies yet to be detailed within the project area. These targets and anomalies present Carrapateena- or Olympic Dam-like opportunities that will be drill tested where warranted

Because the Tertiary palaeochannels are poorly defined, Southern Uranium's initial exploration for sedimentary uranium deposits will concentrate on defining the palaeochannel outlines more closely, using remote sensing imagery, digital terrain modelling, and airborne radiometric and EM surveys. Aircore and rotary mud-drilling and down-hole radiometrics will then test selected target areas.

SOUTHERN GAWLER ARC PROJECT

Introduction

The project contains Peterlumbo Hill (EL 3158), which covers an area of 583 square kilometres on the southern margin of the Gawler Range Volcanics Domain, on upper Eyre Peninsula (Figure 3).

Geological Setting

The project straddles the boundary between the Coulta and Cleve Subdomains, marginal to the Gawler Range Volcanics Domain, on the southern Gawler Craton. The oldest interpreted crystalline basement rocks include Archaean gneisses of the Sleaford Complex. Palaeoproterozoic metasediments of the Hutchison Group and Palaeoproterozoic late tectonic granitoids. Unconformably overlying the older basement in the northeast of the tenement are Mesoproterozoic lower Gawler Range Volcanics (Figure 21). Outliers of these volcanics are also found in the southwestern part of the tenement. Mesoproterozoic Hiltaba Suite granite intrudes all older basement rocks. Lower Gawler Range Volcanics outcrop strongly in the northeast section of the project, in a pattern characterised by narrow linear valleys filled with Quaternary sediments, probably reflecting basement faults. Elsewhere, outcrop is sparse, with a relatively thin cover of Cainozoic sediments. In the northwest corner of the project. Quaternary cover conceals Tertiary channel sediments of the Thurloa Palaeochannel, which drains southwards from an area of Gawler Range Volcanics outcrop.

Uranium Exploration Potential

Southern Gawler Arc ("SGA") project has potential for
uranium associated with IOCG deposits. Gawler Range Volcanics are preserved in both the northeast and southwest corners of the project, exposing a former high-level, sub-

Figure 21 - Southern Gawler Arc Geology

volcanic igneous environment, which is geologically similar to the setting at Olympic Dam. Menninnie Dam prospect, located five kilometres east of the project, is interpreted as another Hiltaba-age mineralising system, created by unseen granite at depth, the Wilcherry Complex. Mineralisation at Menninnie Dam is associated with an interpreted volcanic vent, Iving at the unconformity between Gawler Range Volcanics and the underlying Palaeoproterozoic basement. Previous explorers recognised several probable former volcanic vents along the southern margin of the Gawler Range Volcanics in this region.

Within the SGA project area, the interpreted Oxys Dam volcanic centre, which lies between the Buckleboo Granite and Gawler Range Volcanics outcrop north of the Uno Fault. also offers a prospective sub-volcanic environment. Southern Gold defined two gravity targets with potential for haematitic 10CG-Uranium mineralisation deeper in the intrusivehydrothermal system. The interpreted vent contains outcrops of a variety of indicative volcanic and intrusive types including granodiorite, rhyolite dykes and haematite-alunite altered rhyolite breccia. A large silver soil anomaly extending from the breccia offers an epithermal target.

Southern Uranium recognises a major geological feature, the Moonta - Tarcoola Corridor, which runs northwest from Moonta-Wallaroo, through Menninnie Dam and Weednanna prospects and on through Tunkillia gold prospect to the Tarcoola Goldfield. This corridor contains a concentration of Hiltaba Suite intrusions and related mineralisation. Southern Uranium believes a similar corridor runs northwest through the Carrapateena, Olympic Dam and Prominent Hill IOCG deposits.

The Moonta -- Tarcoola Corridor is poorly explored away from Moonta, Tunkillia and Tarcoola, so Southern Uranium selected properties at SGA - Kolendo, Jumpuppy, Mt Sam, and East Evre Peninsula for their location in this corridor and their suitability for the gravity targeting of potential IDCGU deposits. Southern Uranium believe that intersections between this northwest trending corridor and northeast trending gravity ridges deserve higher priority, and display geological settings analogous to Olympic Dam and Carrapateena.

Southern Gawler Arc project may also have potential for vein deposits of uranium, hosted by major fault structures that were active during the Hiltaba Suite thermal event.

Previous Uranium Exploration

Uranium

Pancontinental Mining Ltd (Pancontinental) explored for unconformity/vein type uranium mineralisation in the Proterozoic basement rocks, in 1978-79. However, the absence of a Mesoproterozoic sandstone cover sequence negated the target model. Radiometric surveys detected anomalies, which Pancontinental attributed to scavenging by iron and manganese.

Pegmin Ltd searched for uranium, from 1979 to 1980. Follow-up of weak radiometric anomalies showed they were related to Tertiary laterites or lake sediments, not to Palaeoproterozoic basement rocks.

IOCG-Uranium

Although little past exploration in the project area specifically targeted IOCG deposits, much of the gold and base metals exploration in this area would have been effective in detecting evidence for this style of mineralisation.

Aberfovle Resources Ltd explored the region from 1989 to 1999. Regional exploration highlighted an area of gold

anomalism at Nankivel Dam prospect, within the Southern Gawler Arc project. Soil sampling centred on the Nankivel Dam prospect revealed an 8 kilometre circular feature in geochemical data. Aberfoyle geologists interpreted the data as a zone of potassic alteration and enrichment, with associated enrichment of base and precious metals.

Exploration of the Mount Ive Gate area was undertaken by M.I.M. Exploration Pty Ltd (MIM), in a joint venture with Aberfoyle in 1995-96. Work centred on the Nankivel Dam prospect where previous work by Aberfoyle had located a silicified haematite matrix breccia complex, with a goldlead anomalous zone to the north. MIM reported that their observations were consistent with hydrothermal alteration of original acid volcanic rocks. The alteration was seen as epithermal in origin, possibly emanating from a deeper volcanic vent, which fractured the rocks and produced the haematite breccia and associated silicification. However, surface geochemical sampling and three RC drillholes by MIM produced disappointing results, although the presence of fluorite and probable epithermal pyrite was encouraging. Moderately elevated lead (up to 3,450 ppm) and zinc (up to 7,000 ppm) were recorded.

Acacia Metals Pty Ltd (Acacia) continued exploration of the Mount Ive Gate area in a subsequent joint venture with Aberfoyle, from 1997 to 1999. Acacia concentrated on a search for gold mineralisation, using calcrete geochemical surveys as the prospecting tool. Acacia reported two low order anomalous sites to the northeast of Nankivel Dam.

M.I.M. Exploration Pty Ltd (MIM) explored the project area in 2002-03. MIM interpretations of existing geophysical, geochemical and geological data highlighted the presence of a gravity anomaly located at the intersection of major northeast and northwest trending magnetic lineaments, in the eastern part of the project. MIM suggested this anomaly may reflect IOCG, Olympic Dam style mineralisation. MIM conducted a detailed gravity survey, which defined a 6 milligal anomaly at Victory prospect. Two lines of MIMDAS IP, sited to test the gravity peak indicated several shallow, highly chargeable and conductive anomalies, apparently flanking the gravity anomaly. A deeper chargeable anomaly seemed to coincide with the top of a higher density body. MIM completed four RC drillholes, one each on four chargeable anomalies. All holes intersected pyrite. The three eastern holes did not encounter significant mineralisation, except some anomalous lead and silver. The westernmost hole intersected anomalous copper and zinc in amphibolitic hornfels rocks. MIM did not test the gravity anomaly, which was interpreted to lie at greater depth.

Southern Gold has explored the project since early 2005, concentrating on the Victory and Nankivel prospects. Four diamond core holes at Victory prospect intersected a large mass of variably altered and sulphidic mafic rock, in contact with graphitic and sulphidic metasediments. Cores display sulphide veins, quartz-garnet veins and zones of pervasive sericite-chlorite alteration, but no iron oxide alteration. Assays of drill core yielded low values. Southern Gold concluded that the gravity anomaly was due to a thick sequence of basaltic rocks, intersected in three holes. Graphitic and sulphidic metasediments intersected in one hole explains the conductive body detected by IP surveys.

Also in 2005. PIRSA completed a PACE-funded, 2 km x 2 km gravity survey covering the western and southern margins of the Gawler Range Volcanics Domain. The improved gravity image shows a ring structure, matching a similar feature in the magnetic data, and interpreted as a possible caldera,

consistent with Southern Gold's prior interpretation of the Oxys Dam volcanic centre. Southern Gold completed detailed gravity surveys in late 2005, covering features recognised from the PACE gravity survey. These detailed surveys defined two 2-3 millioal gravity anomalies in a prospective geological position, at the base of the Gawler Range Volcanics.

Proposed Exploration Program

Southern Uranium will investigate two gravity anomalies on the Nankivel Ring structure, recognised from the 2005 PACE gravity survey and followed up with detailed gravity in 2005 $-2006$ . The two gravity anomalies are drilling targets for potential IOCG-Uranium deposits.

KOLENDO PROJECT

Introduction

The project contains Kolendo (EL3493), which covers an area of 208 square kilometres adjacent to the company's Southern Gawler Arc project, on the southern margin of the Gawler Range Volcanics Domain, 140 kilometres west of Port Augusta (Figure 3).

Geological Setting

Kolendo project lies on the southern margin of the Gawler Range Volcanics Domain, on the boundary with the Cleve Subdomain. Bedrock is entirely Mesoproterozoic Gawler Range Volcanics (Figure 21). In the north of the project, Yardea Dacite of the upper Gawler Range Volcanics overlies Eucarro Dacite of the lower Gawler Range Volcanics, which crops out in the south. Outcrop is abundant. Structure is dominated by conjugate sets of northwest and northeast trending faults. marked by narrow linear depressions where Cainozoic deposits cover bedrock.

South of Kolendo, in the adjoining Southern Gawler Are project, Gawler Range Volcanics overlie an older basement, including Archaean Sleaford Complex gneisses, Palaeoproterozoic Hutchison Group metasediments and Lincoln Complex granitoids. Hiltaba Suite granites intrude the older basement and are interpreted at depth beneath Palaeoproterozoic and Gawler Range Volcanics at Menninnie Dam prospect, 15 kilometres to the southeast of Kolendo project.

Uranium Exploration Potential

Because of its geological setting, Kolendo project has potential for Olympic Dam style IOCG-Uranium deposits. The project lies near the margin of the Gawler Range Volcanics, which preserve underlying rocks that occupied a shallow, sub-volcanic igneous environment during eruption of the volcanics and intrusion of the co-magmatic Hiltaba Suite granites. This was a similar environment to those in which Olympic Dam, Prominent Hill and Carrapateena IOCG deposits formed. Menninnie Dam deposit, which lies about 15 kilometres southeast of Kolendo project, is associated with an interpreted volcanic vent. Iving at the unconformity between Gawler Range Volcanics and the underlying Palaeoproterozoic rocks. Menninnie Dam is believed to represent a hydrothermal alteration system associated with high-level intrusions, breccias and iron oxide alteration. which are all features of an IDCG deposit. Previous explorers have recognised several probable former volcanic vents along the southern margin of the Gawler Range Volcanics in this region.

As previously discussed, Kolendo project lies on a major geological feature recognised by Southern Uranium as a northwest trending lineament, the Moonta-Tarcoola Corridor. The company recognises that this corridor contains a concentration of Hiltaba Suite intrusions and related mineralisation and likens it to a similar corridor containing the Olympic Dam, Prominent Hill and Carrapateena IOCG deposits.

Kolendo project may also have potential for vein deposits of uranium, hosted by major fault structures that were active during the Hiltaba Suite thermal event.

Previous Uranium Exploration

CRA Exploration Pty Ltd (CRAE) explored a wide region extending to the northwest in 1990 and 1991. As well as targeting diamonds, epithermal gold and volcanogenic base metals associated with volcanic centres. CRAE sought Olympic Dam style IOCG-Uranium deposits beneath the Gawler Range Volcanics. CRAE expected volcanic hosted deposits would be expressed as gravity lows with subdued magnetic relief, whilst they expected Olympic Dam style deposits would produce large amplitude gravity highs. CRAE identified interpreted volcanic centres, caldera collapse structures and possible discrete volcanic vents in several places, including Cotton Bush Dam and Kolendo prospects, about five kilometres north of the project. Geochemical surveys yielded anomalies at Cotton Bush Dam, which were tested with trial GEOTEM (airborne electro-magnetic) surveys.

Proposed Exploration Program

Southern Uranium has identified two low amplitude gravity targets, recognised from regional data and in the PIRSA 2-kilometre spaced PACE survey, completed in 2005. The company will investigate these anomalies further in conjunction with more advanced exploration on the adjoining Southern Gawler Arc project.

JUMPUPPY PROJECT

Introduction

The project contains Jumpuppy (EL 3595), which covers an area of 990 square kilometres in the south-western Gawler Range Volcanics Domain, 140 kilometres northeast of Streaky Bay (Figure 3).

Geological Setting

Bedrock throughout the project is Yardea Dacite, the youngest and most extensive unit of the Gawler Range Volcanics. Outcrop is relatively abundant and appears to reflect the general northwest and northeast trending fault sets, which are marked by linear valleys containing a relatively thin cover of Cainozoic sediments.

Geological and geophysical interpretations suggest that Hiltaba Suite granites are present at relatively shallow depth in the Tanner Dam - Sherry Dam area, evidenced by coincident gravity and magnetic lows (Figure 22). However, the Yardea Dacite is at least 200 metres thick, as previous drilling shows.

Uranium Exploration Potential

Jumpuppy project has potential for uranium deposits associated with Olympic Dam style IOCG-Uranium mineralisation. Prospectivity centres on the Tanners Dam granite, an interpreted late stage Hiltaba Suite body believed to intrude Yardea Dacite to a relatively shallow depth. Previous investigations by PIRSA and company explorers have identified coincident gravity and magnetic lows in this area as a probable granitic intrusion at shallow depth. Geological mapping has located a small microgranite plug. which may be the surface expression of a concealed Hiltaba Suite intrusion. Alternatively, the coincident geophysical features may reflect a late stage volcanic vent, which would

Exploration Licence Application	- Tunkilija Suite
Hiltaba Suite (Inc. concealed, interpreted)	St. Peters Suite
Upper Gawler Range Volcanics (Vardea Dacite)	Late syntectonic granitoids
Lower Gawler Range Volcanics [1976].	Hutchison Group
-Corunna Conglomerate/ Blue Range Beds	Sleaford Complex

Figure 22 - Jumpuppy Geology

also provide a suitable geological environment for the formation of IOCG-Uranium deposits. Several small gravity highs surround the sub-circular geophysical low and may reflect dense, hematite-rich bodies associated with IOCG-Uranium mineralisation. These present immediate exploration targets. Previous drilling in this area, which was not ideally sited and did not directly test these gravity anomalies. intersected encouraging lithologies, including red rock alteration, fluorite and quartz-hematite veins.

Like SGA and Kolendo projects, Jumpuppy project lies on a major geological feature recognised by Southern Uranium as a northwest trending lineament, the Moonta-Tarcoola Corridor. The company recognises that this corridor contains a concentration of Hilfaba Suite intrusions and related mineralisation and likens it to a similar corridor containing the Olympic Dam, Prominent Hill and Carrapateena IOCG deposits.

Jumpuppy project may also have potential for vein deposits of uranium, hosted by major fault structures that were active during the Hiltaba Suite thermal event.

Previous Uranium Exploration

Since 1989, several explorers have investigated this area for IOCG-Uranium, epithermal gold and volcanogenic base metal deposits associated with volcanic centres and Hiltaba Suite granites.

In 1989-1990. CRA Exploration Ptv Ltd (CRAE) explored for epithermal gold and volcanogenic base metals in association with volcanic centres; for non-magnetic Olympic Dam style deposits beneath younger volcanics; and for diamonds. CRAE recognised similarities between the Gawler Range Volcanics and other Mesoproterozoic alkaline igneous rocks at Kiruna in Sweden, in the St Francois Terrane of Missouri, Bancroft in Canada and at Olympic Dam on the Stuart Shelf. CRAE anticipated that volcanic-hosted mineralisation would produce gravity lows accompanied by low magnetic relief. whereas Olympic Dam style targets would produce largeamplitude local gravity highs of several milligals or more.

Consultants Hunting Geology and Geophysics (Australia) Pty Ltd recognised several possible eruptive centres across the southern project area, south and southeast of Peltabinna Hill, interpreted from regional geophysical data. CRAE interpretation of data from a subsequent detailed airborne magnetic-radiometric survey indicated possible volcanic centres or caldera collapse structures up to several kilometres across at Sherry Dam, which is within the project area, at Wooly Dam, two kilometres south of the project, and at Cotton Bush Dam, in Kolendo project. CRAE defined possible discrete volcanic vents at Brambo Dam, within the project, and at Kolendo. Ground geophysical follow-up surveys were not encouraging. Trial GEOTEM traverses at Sherry Dam and Cotton Bush Dam did not indicate any basement conductors.

CRAE collected gravel, stream sediment and rock chip geochemical samples. Rock chip sampling at Sherry Dam tested a narrow, poorly outcropping zone of silicified, sulphide-bearing porphyry. Assays yielded up to 69 ppm antimony, 1,010 ppm lead, 143 ppm copper and 240 ppm zinc. Mineralogical examination revealed traces of galena. chalcopyrite, covellite, sphalerite and tetrahedrite-tennantite. Geological mapping around Sherry Dam by CRAE located a small microgranite plug, which has been interpreted as the outcropping surface expression of an otherwise concealed Hiltaba Suite intrusion. The probable full extent of this intrusion is evident as a 7 x 15 kilometre magnetic low.

In 1994, Mines and Energy South Australia (MESA) identified two possible volcanic structures on the YARDEA 250 000 map sheet, the Yardea vent and the Kolendo vent. MESA also investigated the possible outcrop expression of the interpreted Hiltaba Suite intrusion near Sherry Dam (Tanners Dam granite), identifying an 800 metre long zone of secondary silicification and epithermal quartz veining in dacites above the interoreted intrusion.

Helix Resources NL (Helix) and AngloGold Australasia Ltd (AngloGold) explored for gold and IOCG style deposits associated with Gawler Range Volcanics and Hiltaba Suite granite, from 1995 to 2002. In the south of the project, stream sediment and calcrete sampling produced only weak gold anomalies. Ground geophysical surveys detected no significant magnetic or gravity anomalies. Three kilometres southwest of Yardea, Helix and AngloGold drilled a possible volcanic vent, interpreted from earlier SADME work, without reaching a conclusion.

In the north of the project area, AngloGold and Helix conducted an airborne magnetic and radiometric survey over the concealed, interpreted Hiltaba Suite granite at Tanner Dam, identifying several magnetic targets. AngloGold and Helix also carried out stream sediment and rock chip sampling, and geological mapping. Stream sediment assays reported anomalous gold and rock chips reported anomalous lead, zinc and copper. A gravity survey over the interpreted Tanner Dam granite revealed six residual gravity anomalies, four of which were tested with RC drilling. One drillhole intersected anomalous zinc and silver, but the drilling did not explain the gravity anomalies. Further RC drilling, which tested rock chip geochemical anomalies, yielded maximum values of 12 ppb gold, 1.1% lead and 0.1% copper. Drilling in a demagnetised feature south of Tanner Dam intersected nothing of significance. An IP traverse across the interpreted granite suggested this method could be effective in locating disseminated sulphides in this area.

Pima Mining NL (Pima) and others explored for gold and base metals associated with Gawler Range Volcanics and Hiltaba Suite granites, from 1997 to 2002. Pima was interested in mineralisation associated with shear zones and possible volcanic vents. Intended calcrete sampling was restricted by poor calcrete cover in this region. Pima identified a major northwest trending structural lineament with associated quartz veining south of Yardea.

Proposed Exploration Program

Gravity data for the project area is based on regional scale surveys only. Southern Uranium will undertake detailed gravity surveys over several localised anomalies seen in the regional data, as well as geological outcrop examinations, followed by drilling of selected targets.

MOUNT SAM PROJECT

Introduction

The project contains Mount Sam (ELA 180/06), covering an area of 652 square kilometres in the Gawler Range Volcanics Domain, about 150 kilometres northeast of Streaky Bay (Figure 3).

Geological Setting

Mount Sam project lies in the western Gawler Range Volcanics Domain, Lower Gawler Range Volcanics of the Glyde Hill Volcanic Complex form bedrock throughout most of the project, overlain by upper Gawler Range Volcanics (Yardea Dacite) in the south and southeast of the project. Hiltaba Suite granites, which are Mesoproterozoic in age and co-magmatic with the Gawler Range Volcanics, intrude to the immediate west of the project and possibly also at Bullyonna Well, in the southeast block of the tenement (Figure 23). Outcrop is abundant, with a thin cover of Quaternary sediments elsewhere.

Uranium Exploration Potential

Mount Sam project has potential for uranium deposits associated with IOCG-Uranium mineralisation, similar to Olympic Dam in style. The area was selected for two reasons: firstly, because it lies along an interpreted northwest trending Moonta-Tarcoola mineralisation corridor; secondly, because of the potentially thin bedrock of lower Gawler Range Volcanics, apparently extruded from a major volcanic centre to form the Glyde Hill Volcanic Complex and later intruded by Hiltaba Suite granites. This represents a former sub-volcanic geological environment that is prospective for the development of IOCG-Uranium and related epithermal deposits. Previous exploration identified interpreted Hiltaba Suite intruding even into the upper Gawler Range Volcanics, at Bullyonna Well.

Previous Uranium Exploration

Since 1968, explorers have searched the project area for uranium (including sedimentary uranium), IOCG-Uranium deposits, gold, base metals and diamonds.

ACI Technical Centre Pty Ltd (ACI) explored mainly to the south of the project in 1968-69. ACI concluded that an anomaly detected previously was due to atomic fall-out from earlier nuclear tests.

Carpentaria Exploration Co. Pty Ltd (CEC) explored for sedimentary uranium, mainly to the south and west of the project, from 1979 to 1980.

Afmeco Pty Ltd (Afmeco) explored for uranium and other commodities in the Glyde Hill Volcanic Complex from 1980 to 1983. Firstly, Afmeco attempted to correlate rock types with airborne geophysical signatures. Then Afmeco tested apparently fault-related aeromagnetic anomalies, believing these could be associated with the passage of mineralising fluids. Afmeco conducted intensive geophysical work over selected magnetic and radiometric anomalies, to test for concealed IOCG-Uranium deposits and other styles of mineralisation. After airborne surveys, Afmeco conducted ground-based gravity, magnetic and Sirotem surveys, before aircore and diamond drilling at six locations. Drilling did not locate significant uranium or other mineralisation.

BHP Gold Mines Ltd (BHP) targeted epithermal gold in felsic Gawler Range Volcanics of the Glyde Hill Volcanic Complex. BHP noted the presence of gold mineralisation in basement rocks marginal to the Gawler Range Volcanics, for example at Glenloth and Tarcoola goldfields, and regarded Olympic Dam

Figure 23 - Mt Sam Geology

a major "volcanogenic" gold deposit, coeval with extrusion of the Gawler Range Volcanics.

Western Mining Corporation Ltd (WMC) explored the southern part of the project from 1992 to 1995. Their target was 'precious and base metal mineralisation" on the southern margin of the Glyde Hill Volcanic Complex, regarded as a possible caldera structure in the lower Gawler Range Volcanics. WMC considered the overlying Yardea Dacite to the east, though generally unprospective, may have potential to host very high level Acropolis style deposits.

WMC strategy was to follow up two regional gravity high areas. A single-point anomaly at Bullyonna Well was not substantiated, but WMC found gravity anomalies nearby. at Mt Cooper Dam and Kulgulya, each with coincident magnetic anomalies. The second large gravity anomaly at Mangaroongah was upheld and also coincided with a magnetic anomaly. WMC subsequently identified another three coincident gravity and magnetic anomalies in the region and conclude that the sources of all six geophysical anomalies lay beneath the felsic Gawler Range Volcanics.

WMC identified many signs of hydrothermal alteration and/or structural disruption. Positive signs for IOCG-Uranium style mineralisation included:

• $\mathbf{1}$ . A small outcrop of Hiltaba Suite granite at Bullvonna Well, intruding Yardea Dacite
• $\overline{2}$ . Evidence of iron-oxide hydrothermal activity
• 1. Argillic alteration
• 1. Possible basal Black Dacite fragments, indicating Yardea Dacite could be thin
• Possible Hutchison Group basement, incorrectly mapped 5. as Gawler Range Volcanics
• 1. Iron oxide nodules, possibly representing hematite replacement of volcanics, and with elevated barium, copper and uranium contents.

WMC followed up the geophysics and these indications with grid gravity, magnetics and IP and/or Sirotem, then drilled six RC or diamond drillholes. Work centred on Kulgulya prospect, immediately east of the project, where WMC drilled five holes, without finding a geophysical source. At Rocky Creek, mapping located rare veins of quartz-malachite - fluorite - hematite. The granophyre host rock contained elevated copper, silver, bismuth and lead contents. Abundant miarolitic cavities filled with fluorite and hematite suggested this is a high-level Hiltaba Suite intrusion. At Dans Hole, WMC considered outcrops of quartzite, previously mapped as Yandoolka Rhyolite, more likely to be Palaeoproterozoic Hutchison Group, possibly Warrow Quartzite.

Equinox Resources NL (Equinox) targeted Ernest Henry or Olympic Dam style IOCG-Uranium deposits associated with Hiltaba Suite granites or Gawler Range Volcanics, from 1996 to 2001. Equinox collected calcrete, soil, rock chip and stream sediment samples, following up anomalous areas with RAB and RC drilling. However, Equinox work extended over only the southwest corner of the project.

Proposed Exploration Program

The 2005 PACE gravity survey did not extend over this area. Southern Uranium will focus on subtle features in the regional gravity data, together with highs in the aeromagnetic data, which may reflect zones of hydrothermal iron oxide alteration associated with an IOCG-Uranium deposit. Detailed gravity surveys will provide better quality data to define targets for drill testing. Geological mapping, supported by detailed remotes sensing, thermal mapping and other geophysical data, will help to identify and map alteration zones within the project area.

EAST EYRE PENINSULA PROJECT

Introduction

East Eyre Peninsula project includes three properties on upper Evre Peninsula, about 60 kilometres west of Whyalla. East Eyre Peninsula project comprises Lake Gilles (EL 3479), Moonabie (EL 3552) and Moseley Nobs (EL 3594) tenements, which cover a total area of 1,526 square kilometres (Figure 3).

Geological Setting

East Eyre Peninsula project lies in the Cleve and Spencer Subdomains of the southern Gawler Craton. The predominant crystalline basement rocks are Palaeoproterozoic in age, and include Miltalie Gneiss, Hutchison Group metasediments, preearly syntectonic granitoids and late syntectonic granitoids. Small inliers of Archaean Sleaford Complex crop out in places (Figure 24). Intruding the older basement in a roughly northwest trending belt are Mesoproterozoic Hiltaba Suite granites. Outcrop is plentiful in the southern section of the project, but a thin cover of Quaternary fluvial, alluvial and aeolian sediments covers bedrock in much of the northern section.

Uranium Exploration Potential

East Eyre Peninsula project has potential for the discovery of uranium associated with Olympic Dam style IOCG deposits. There may also be potential for vein deposits and for sedimentary uranium deposits.

The project lies near the southern margin of the Gawler Range Volcanics Domain, in a zone with known intrusions of Hiltaba Suite granites, such as the Charleston Granite. At the time of the Hiltaba Suite thermal event, this would have been a shallow, sub-volcanic igneous environment, similar to the geological setting of IOCG deposits at Olympic Dam.

Figure 24 - East Eyre Peninsula Geology

Prominent Hill and Carrapateena. The 2006 PACE gravity survey approved by PIRSA will cover part of Moonabie property and provide an early indication for that area.

Like SGA and Kolendo projects, East Eyre Peninsula project lies on a major geological feature recognised by Southern Uranium as a northwest trending lineament, the Moonta-Tarcoola Corridor. The company recognises that this corridor contains a concentration of Hilfaba Suite intrusions and related mineralisation and likens it to a similar corridor containing the Olympic Dam, Prominent Hill and Carrapateena IOCG deposits.

East Eyre Peninsula project may also have potential for vein style uranium deposits, hosted by major fault structures that were active at the time of Hiltaba Suite intrusion. In the southern part of the project, there may be potential for roll front style sedimentary uranium deposits, associated with redox boundaries identified by previous explorers.

Previous Uranium Exploration

Since 1967 the project area has attracted very active exploration activity, including seven uranium exploration campaigns and eight IOCG-Uranium campaigns, as well as exploration for other commodities.

Uranium

Kerr-McGee Australia Ltd (Kerr-McGee) explored for epidenetic uranium deposits or stratabound uranium deposits of the Rum Jungle (NT) style, from 1967 to 1969. The company flew an airborne radiometric survey, following up on the ground with geophysical surveys, geochemical sampling, 13 diamond drillholes and 9 rotary holes. Kerr-McGee found that most of the radiometric anomalies were due to the abundant feldspars in oneissic outcrops. Although Kerr-McGee did find disseminated and vein type primary uranium mineralisation and iron-oxide-hosted secondary uranium at many places, there were no significant occurrences. The best sample came from the Calcookra mine and assayed 7,000 ppm uranium, 1.200 nom thorium and 2.000 nom vanadium. Kerr-McGee concluded that uranium mineralisation in the basement rocks is not stratigraphically controlled, instead being localised in fault breccias and shear zones, associated with weak sulphide mineralisation. Drill core samples showed that uranium and thorium content decreases with depth.

Kerr-McGee also searched for uranium in Tertiary sediments, drilling 72 rotary holes across the watershed of the Driver River. Although Tertiary and Recent sediments emitted strong radiometric anomalies, drilling yielded only trace quantities of uranium, the highest value being 0.029% U308. At the base of the oxidised zone. Kerr-McGee identified a thin interval of increased radiation, which was mostly due to thorium.

BHP Company Ltd (BHP) explored for uranium and copper from 1968 to 1970, although most of the area covered lay to the north and east of the project.

Pacminex Ptv Ltd conducted regional radiometric and magnetic airborne surveys in the southern section of the project, between 1970 and 1973, Ground follow-up with scintillometer traverses did not detect significant radioactivity on the ground.

In 1971-72, RF West explored for epithermal or hydrothermal uranium northeast of Kimba. Work comprised geological reconnaissance and sampling and analysis of groundwaters for dissolved uranium. No analysis detected more than 5 ppb uranium.

CRA Exploration Pty Ltd (CRAE) explored for sedimentary uranium in Tertiary sands of the Cowell Basin in the southeast of the project, from 1978 to 1980. Drilling by CRAE to follow up resistivity surveys southwest of Midgee identified a redox front in Tertiary sediments, but no associated uranium mineralisation.

Pancontinental Mining Ltd (Pancontinental) explored for unconformity related uranium deposits in 1978-79, covering an area Iving mainly north of the project. Pancontinental found no Mesoproterozoic sandstones covering Palaeoproterozoic basement, which downgraded the prospect. Some uranium anomalies detected by radiometric surveys Pancontinental attributed to scavenging by iron and manganese.

Afmeco Pty Ltd (Afmeco) explored for uranium in the southern section of the project from 1980 to 1982. Airborne radiometric surveys revealed several anomalies. However, Afmeco considered the gneissic bedrock not to be prospective for uranium, as the anomalies are characterised by a high level of thorium.

IOCG-Uranium

Aberfoyle Resources Ltd (Aberfoyle) and joint venture partners explored for IOCG-Uranium and base metal deposits from 1991 to 2001, in the northern section of the project.

Aberfoyle assessed earlier geochemical soil and calcrete data, reprocessed and interpreted aeromagnetic data to define bedrock alteration zones and studied regolith patterns using Landsat imagery. The geochemical data contained a 5 ppb anomaly at Ziggy's Corner, but no strong anomalies. The southern half of the Aberfoyle licence contained no geophysical feature that might represent an IOCG-Uranium target.

Acacia resources Ltd (Acacia) and joint venture partners explored for base metals and copper-gold (presumably IOCG-Uranium deposits) from 1993 to 2001. Acacia undertook an aeromagnetic survey, geological mapping, ground magnetic and EM surveys, and geochemical soil and rock chip sampling. Aircore drilling intersected BIF at magnetic anomalies and anomalous base metals at an EM anomaly. A diamond drillhole intersected anomalous zinc. Acacia investigated the copper-gold potential with calcrete and rock chip sampling, and regolith mapping. Geochemical results were not anomalous.

Minotaur Gold Ltd (Minotaur) explored for Olympic Dam style copper-gold mineralisation associated with Hiltaba Suite intrusives, as well as for gold associated with BIFs, from 1997 to 2002. The area covered lay mostly south and west of the project.

Craton Resources NL (Craton) targeted base and precious metals and uranium in the southern section of the project, from 1997 to 2000. Craton carried out calcrete and stream sediment sampling and an aeromagnetic survey. The company reported anomalous copper in calcrete near the Charleston Granite contact and identified a number of magnetic targets, without undertaking further work.

AngloGold Australia Metals Pty Ltd (AngloGold) explored for gold and copper from 1999 to 2004, over an area extending northwest from the northwest corner of the project. AngloGold collected calcrete samples, which outlined broad anomalous areas of low-order gold (>5 ppb Au) in some places.

Helix Resources NL (Helix) explored for shear-hosted gold deposits associated with the Charleston Granite (an inferred Hiltaba Suite intrusion) from 2001 to 2002. The area covered lay mostly east of the southern section of the project. Helix also targeted IOCG-Uranium deposits associated with BIFs of the Middleback Subgroup. Geochemical sampling of calcareous materials defined weakly anomalous gold and copper west of the Middleback Range, and scattered base metal highs along the western edge of their licence (the eastern edge of the project). Helix identified weakly anomalous gold (maximum 5.2 ppb Au) associated with a zone of elevated copper. Lead and zinc highs occur close to the interpreted edge of the Charleston Granite. Helix considered the geochemical anomalies too low-order to warrant followup.

Aquila Resources Ltd (Aquila) targeted IOCG-Uranium deposits associated with possible altered Hiltaba Suite intrusions, from 2002 to 2005. After assessing previous work and interpreting available gravity and magnetic data. Aquila attempted to define structural trends and zones of iron oxide alteration possibly related to concealed Hiltaba Suite. Aquila relinquished the ground because thick Quaternary cover made exploration difficult and they saw little potential for IOCG-Uranium deposits.

In mid 2006, Southern Gold Ltd undertook additional gravity surveys, collecting 1,016 gravity readings over 800 square kilometres at 1 km x 1 km station spacing. Preliminary imaging and assessment revealed three main gravity anomalies and

the presence of major northwest trending structures. At Jungle Dam prospect, 77 infill stations increased the gravity detail to 500 m stations.

Proposed Exploration Program

Southern Uranium will investigate the IOCG-Uranium potential of the gravity targets identified in the regional gravity surveys conducted by Southern Gold. Exploration will include detailed gravity surveys to refine anomalies identified in the regional gravity data.

The extent of outcrop and shallow bedrock in the project area will permit the effective use of surface geochemistry for exploration. Southern Uranium plans to apply a range of appropriate geochemical techniques to improve target definition and prioritise targets for testing with RC and/or diamond drilling wherever warranted.

OAKDAM PROJECT

Introduction

The project contains Oakdam (EL 3603), which covers an area of 174 square kilometres on the Stuart Shelf Province, 50 kilometres south of Olympic Dam, the world's largest uranium mine (Figure 3).

Geological Setting

Oakdam project lies in the Olympic Domain of the eastern Gawler Craton. Crystalline basement is covered here by more than 800 metres of flat-lying younger strata, including the Neoproterozoic Stuart Shelf sediments and the Mesoproterozoic redbeds of the Pandurra Formation. Basement geology is interpreted from widely spaced deep drillhole information and geophysical interpretation (Figure 25).

The oldest rocks of the interpreted crystalline basement are the Archaean gneisses of the Mulgathing Complex. Interpreted Palaeoproterozoic rocks include metasediments of the Hutchison Suite, granitoids of the Donington Suite and metasediment and volcanics of the Wallaroo Group. Overlying these older rocks are the Mesoproterozoic Gawler Range Volcanics. Granitoids of the Hiltaba Suite intrude Gawler Range Volcanics and older basement.

Onlapping the basement high represented by the Andamooka Dome are Mesoproterozoic redbeds of the Pandurra Formation, deposited unconformably on weathered basement in the Cariewerloo Basin.

Uranium Exploration Potential

Oakdam project holds potential for uranium deposits associated with IOCG style mineralisation. The project lies on the margin of the Gawler Range Volcanics in a zone that occupied a shallow, sub-volcanic igneous environment during the time of Hiltaba Suite intrusion and emplacement and IOCG-Uranium mineralisation at Olympic Dam and Carrapateena, as well as at several other IOCG style prospects in this region. A map of Gawler Craton IOCG potential, produced by Geoscience Australia and PIRSA, places Oakdam project in a zone ranked one, where one is high and four is moderate potential.

Oakdam may also have potential for unconformity related uranium deposits associated with the unconformity at the base of the Pandurra Formation, although depths could be considered excessive.

Figure 25 - Oakdam Geology

Previous Uranium Exploration

Exploration if the Oakdam project region since 1966 has targeted IOCG-Uranium and unconformity uranium deposits, as well as other commodities.

Western Mining Corporation Ltd (WMC) explored for IOCG-Uranium and unconformity uranium deposits from 1976 to 1981, with the primary target being Olympic Dam style IOCG-Uranium. Within the Oakdam project area, WMC drilled hole CSD 1 at Cocky Swamp Dam. in 1980. The hole was sited to test a 2 milligal gravity anomaly coinciding with an east-west trending 500 nT magnetic anomaly lying on the edge of the Arcoona gravity structure. CSD 1 intersected low grade copper sulphide mineralisation in iron-oxide-altered sediments and possible volcanics at depths of between 898 and 980 metres. Pyrite and chalcopyrite dominated the sulphide minerals, occurring as disseminations and aggregates, as well as in magnetite-rich veins. The best intercent returned 2 metres @ 1.05% Cu. Basement lies beneath 865 metres of Neoproterozoic and Mesoproterozoic sediments.

Seltrust Mining Corporation Ltd (Seltrust) and Mount Isa Mines Ltd (MIM) explored mainly to the northwest, west and southwest of the project, between 1977 and 1986. The target was base metals, including Olympic Dam style IOCG-Uranium deposits. No specific targets were investigated in the project area

Proposed Exploration Program

A joint venture, under which Crescent Gold Limited may earn a staged interest, will investigate two gravity anomalies. indicated by existing, relatively wide spaced surveys. Following proposed detailed gravity surveys, these anomalies will be evaluated as potential drilling targets. The joint venture will also examine the Cocky Swamp prospect in more detail. seeking to identify additional targets within the substantial hematite alteration zone indicated by WMC hole CSD 1.

The joint venture will investigate the potential of the Pandurra Formation sandstones to host unconformity uranium deposits where the Cariewerloo Basin possibly onlaps onto the basement of the uraniferous Olympic Dam Domain. The use of deep-penetrating EM would be considered as a prime exploration tool followed by deep drilling for high-grade Athabasca style targets.

SOUTH VIVIAN PROJECT

Introduction

South Vivian project (ELA 324/06) covers 861 square kilometres on the central Gawler Craton, 90 kilometres west of Olympic Dam the world's largest uranium mine (Figure 3).

Geological Setting

The project straddles the northern margin of the Gawler Range Volcanics Domain, in a region where crystalline basement rocks are concealed by a sequence of Phanerozoic and Neoproterozoic - Mesoproterozoic sediments ranging from less than 300 metres thick in the southwest to more than 600 metres thick in the north of the project.

Basement geology is interpreted from geophysical and drillhole data as mainly Mesoproterozoic volcanics, which overlie older Archaean gneisses (Figure 26). Unconformably overlying crystalline basement are redbeds of the Pandurra Formation, which were deposited in the Cariewerloo Basin during the Mesoproterozoic Era. Northwest trending mafic rocks of the Gairdner Dyke Swarm intrude Pandurra Formation as well as the older basement.

Uranium Exploration Potential

South Vivian project has potential for uranium associated with Olympic Dam style IOCG deposits and for unconformity related uranium deposits, of the type seen in the Athabasca Basin in Canada or the Alligator Rivers region in the Northern Territory.

The project straddles the northern margin of the Gawler Range Volcanics. The zone beneath and marginal to these volcanics was a shallow, high level igneous environment during the Mesoproterozoic Hiltaba thermal event, similar to the geological setting at the Olympic Dam IOCG-Uranium deposit, which lies 90 kilometres to the east.

There may also be potential for basement unconformity related uranium mineralisation. The Gawler Range Volcanics and co-magmatic Hiltaba Suite intrusives are enriched in uranium, providing a potential primary source from which uranium could be leached during weathering. Redbeds of the overlying Pandurra Formation provide an oxidising environment in which uranium could be transported in solution, to accumulate in suitable reducing trap sites related to the unconformity or intersecting fault zones.

Previous Uranium Exploration

Since 1966, explorers in the South Vivian region have targeted uranium as well as other commodities. Several companies

Figure 26 - South Vivian Geology

searched for Olympic Dam style IOCG-Uranium deposits and one company targeted sedimentary uranium.

Dampier Mining Company Ltd (Dampier) explored the northern part of the project area for sedimentary uranium in 1973-74. Dampier drilled four stratigraphic holes, one of which is in the South Vivian tenement. The holes intersected Permian marine shales.

Carpentaria Exploration Company Pty Ltd (CEC) explored for Olympic Dam style IOCG and Mt Gunson style stratabound copper, between 1978 and 1980. CEC investigated geophysical anomalies in the regional data, following up with gravity and ground magnetic surveys. In the Mt Paisley region, which included the northern part of the project area. CEC drilled one percussion drillhole, which was abandoned at 152 metres in probable Permian clay and concluded that a very thick Adelaidean sequence covered basement. In the Mt Eba region, which included the centre of the project area, CEC drilled three percussion holes to a depth of 400 metres each, without reaching basement. In the Bon Bon region, which covered an area mostly south-west of the project, CEC drilled four holes averaging 200 metres deep, three of which intersected Pandurra Formation overlying Gawler Range Volcanics basement. These holes lie 20 to 30 kilometres southwest of the project area.

From 1980 to 1986, Esso Exploration and Production Australia Inc. (Esso) explored a region including the northern part of the project area, targeting Olympic Dam style IOCG deposits. Work included gravity and ground magnetic surveys, and EM depth probing. Esso pre-collared and cored two diamond holes to the west of the project to depths of 617 m and 860 m. Hole DP 2, located 9 km west of the project, intersected Pandurra Formation from 204 m to end-of-hole at 806 m. DP 1, located only 4 km north of DP 2, hit Archaean basement at only 166 m, indicating the presence of a major fault, marking the northwest edge of the Cariewerloo Basin.

The Shell Company of Australia Ltd (Shell) explored a region covering the centre of the project from 1981 to 1983, targeting Olympic Dam style IOCG deposits. Work included gravity and ground magnetic surveys and the drilling of one hole. Hole ŘL 1, sited 6 km east of the project, intersected Pandurra Formation intruded by Gairdner Dykes from 238 m to end of hole at 674 m. Shell concluded that the target gravity anomaly was probably due to the Gairdner Dykes.

Coombedown Resources NL (Coombedown) explored a region including the southern project area, from 1997 to 2000, targeting IOCG-Uranium deposits. Coombedown interpreted existing geophysical and drilling data and concluded that the interpreted features of interest represented a variety of sources. These included BIF, ultramatic rocks, iron-rich granitic breccias and Gairdner Dykes crossing Gawler Range Volcanics or Hiltaba Suite rocks. Coombedown identified six targets, keeping four in retained tenure.

Goldstream Mining NL (Goldstream) explored for Olympic Dam style IOCG deposits in a region surrounding the northern part of the project area, from 2000 to 2005. After extensive re-interpretation and evaluation of existing geophysical data, Goldstream concluded that the area contains no significant geophysical features likely to reflect potential IOCG targets.

No previous holes drilled in the project area reached crystalline basement.

Proposed Exploration Program

A ioint venture, under which Crescent Gold Limited may earn a staged interest, will investigate the IOCGU potential, by conducting detailed gravity surveys over selected anomalies. defined by interpretation of existing regional geophysical data.

The depth and nature of the Pandurra Formation sandstones will also be assessed for the potential to host unconformity uranium deposits.

PRINCIPAL SOURCES OF INFORMATION

The sources of information for this report include published research papers, unpublished PIRSA open file reports, confidential company reports provided by Southern Uranium, and my own professional experience working in the areas covered by the report. Selected published references are listed below.

Drexel, J.F., Preiss, W.V., and Parker, A.J., 1993. The geology of South Australia, Vol. 1, The Precambrian, South Australia. Department of Primary Industry and Resources. Geological Survey, Bulletin, 54.

Drexel, J.F., and Preiss, W.V. (Eds), 1995. The geology of South Australia, Vol. 2. The Phanerozoic, South Australia. Department of Primary Industry and Resources, Geological Šurvey, Bulletin, 54.

Geological Survey of South Australia, 2005. South Australia Geoscientific GIS Dataset, South Australia. Department of Primary Industry and Resources. December 2005 release CD.

Heithersay, P., 2002. Prominent Hill discovery - URN 1: The best Cu-Au intersection in 25 years. South Australia. Department of Primary Industry and Resources. MESA Journal Vol. 24.

Hou, B., Frakes, L.A., Alley, N.F. Stamoulis, V. and Rowett, A., 2000. Geoscientific signatures of Tertiary palaeochannels and their significance for mineral exploration in the Gawler Craton region. MESA Journal 19:36-39.

Hou, B., Frakes, L.A, and Alley, N.F., 2001. Development of geoscientific models for exploration in Tertiary palaeochannels draining the northwest Gawler Craton, SA, South Australia, Department of Primary Industry and Resources, Report book $2001/02$ ¹.

Hou. B., Frakes, L.A., Alley, N.F., and J.D.A. Clarke, 2003. Characteristics and evolution of the Tertiary palaeovalleys in the northwest Gawler Craton, South Australia. Australian Journal of Earth Sciences 50:215-230.

JNR Resources Inc., 2005. Uranium industry; uranium deposits & exploration; Athabasca Basin overview. http://www. inrresources.com/s/UraniumPages.asp accessed 10/11/2005.

Johns, R.K., 1961. Geology and Mineral Resources of Southern Eyre Peninsula. South Australia. Geological Survey. Bulletin 37.

McKay, A. Lambert, I.B. and Miezitis, Y. 2001. Australia's uranium resources and production in the world context. In: Hardy, C. Ed. Proceedings, Fourth Conference on Nuclear Science and Engineering in Australia, 24-25 October, 2001, ANA, Sydney: 23-29.

Revnalds, L.J., 2001. Geology of the Olympic Dam Cu-U-Au-Ag-REE deposit. MESA Journal 23:4-11.

Rogers, P.A., Fabris, A.J. and Hou, B., 2003. Cainozoic basins. In: Heithersay, P.S., Drexel, J.F., Hibburt, J.E. and Thomas, C.A. (Eds), 2003, South Australian mineral explorers guide. South Australia. Department of Primary Industries and Resources. Mineral Exploration Data Package, 11, ch. 13.

Schwarz, M.P., Morris, B.J., Sheard, M.J., Ferris, G.M., Daty, S.J., and Davies, M.B., 2002. Gawler Craton. In: Heithersay, P.S., Drexel, J.F., Hibburt, J.E., and Thomas, C.A., (Eds) 2002. South Australian mineral explorers quide, draft edn. Office of Minerals and Energy Resources. South Australian Department of Primary Industry and Resources, Adelaide, CD.

Skirrow, R.G., Bastrakov, E., Davidson, G., Raymond, O.L., and Heithersay, P., 2002. The geological framework, distribution and controls of Fe-oxide and related alteration, and Cu-Au mineralisation in the Gawler Craton, South Australia: Part II: alteration and mineralisation. In: Porter, T.M., (Ed.). Hydrothermal iron oxide copper-aold and related deposits: a global perspective. Vol. 2. PGC Publishing, Adelaide.

Uranium Information Centre Ltd, 2001. Geology of uranium deposits. Nuclear issues briefing paper #34 November 2001. http:// www.uic.com.au/nip34.htm accessed 11/11/2005.

Grant Thornton

Chartered Accountants and Business Advisers

Our Ref: SJG/AH/CGK эрлэд гүгд хүлэг.
СССой Fio Лирамаа (Sousbero Studian Lad +1.8 Benomi)nc

STRICTLY PRIVATE AND CONFIDENTIAL

The Board of Directors Southern Uranium Limited 58 North Terrace ADELAIDE SA 5000

15 February 2007

Dear Sirs

INDEPENDENT ACCOUNTANT'S REPORT ON REVIEWED HISTORICAL FINANCIAL INFORMATION

Introduction

We have prepared this Independent Accountant's Report ("report") on the historical information of Southern Uranium Limited ("the Company") for inclusion in a Prospectus dated on or about 15 February 2007 relating to the following proposed transaction:

Pursuant to this prospectus, the Company offers for subscription 70,000,000 shares in the Company at an issue price of \$0.20 per share to raise \$14,000,000. All amounts are payable in full on application.

Expressions referred to in the Prospectus have the same meaning in this report.

Background

The Company was incorporated in Adelaide on 18 July 2005 as an unlisted Public Company limited by shares. Since its incorporation the objective of the Company has been to identify and acquire uranium deposits within the Gawler Craton. The Company is currently a wholly owned subsidiary of Southern Gold Ltd, which is listed on the Australian Stock Exchange $(ASX).$

Subsequent to 31 October 2006 Company has entered into the following transactions:

• Pursuant to a resolution of the Board of Directors dated 31 January 2007, the Company has issued 7,500,000 share options to directors. Each option is unlisted, has an exercise price of \$0.25 and is exercisable at any time until 31 March 2010. The fair value of the options based on the Black-Scholes methodology is \$NIL.
• Pursuant to an agreement dated 2 February 2007 and contingent upon the successful listing of the Company on the ASX, the Company will issue 2,000,000 share options to corporate advisors and underwriters to the offer. Each option is unlisted, has an exercise price of \$0.25 and is exercisable at any time within 4 years of the listing date. The fair value of the options based on the Black-Scholes methodology is \$60,000.

Level 1 67Greenhill Road Wayville SA 5034 GPO Box 1270 Arielaide SA 5001 DX 275 Adelaide T (08) 8372 6666 F (08) 8372 6677 E info@gtsa.com.au W www.grantthorstos.com.au

Grant Thornton South Australian Partnership ABN 27 244 906 724

An independent South Australian partnership entitled to trade under the name Grant Thornton. Grant Thornton is a trademark owned by Grant Thornton International and used under licence by independent firms and entities throughout the world.

Grant Thornton 象

Historical and Pro-forma information

The historical and pro-forma financial information ("together referred to as the financial information") set out on pages 38 to 46 of this report comprises:

• The audited Income Statement from incorporation to 30 June 2006;
• The audited Balance Sheet as at 30 June 2006;
• The audited Statement of Cash flows from incorporation to 30 June 2006;
• The audited Statement of Changes in Equity from incorporation to 30 June 2006;
• The interim Income Statement for the four month period ended 31 October 2006;
• The interim Balance Sheet as at 31 October 2006;
• The interim Statement of Cash flows for the four month period ended 31 October 2006:
• The interim Statement of Changes in Equity for the four month period ended 31 October 2006;
• The pro-forma Balance Sheet as at 31 October 2006, based on the assumption that the transactions contemplated in the prospectus have been completed at 31 October 2006: and
• Notes to the audited, interim and pro-forma Financial Information.

Scope

You have requested Grant Thornton South Australian Partnership ("Grant Thornton") prepare a report covering the following information:

• The interim historical performance of the Company for the four month period ended $\left( a\right)$ 31 October 2006; and
• The interim historical Balance Sheet as at 31 October 2006 and the Pro-forma Balance $(b)$ Sheet as at 31 October 2006, which assumes completion of the contemplated transactions disclosed in the Prospectus and the transactions which have occurred subsequent to 31 October 2006 which have been detailed above.

The interim historical information set out on pages 38 to 46 has been extracted from the reviewed records of the Company for the four month period ended 31 October 2006 and the audited financial records of the Company for the period from incorporation to 30 June 2006, which have been audited by Grant Thornton and on which an unqualified audit opinion was issued.

The Directors of Southern Uranium Limited are responsible for the preparation and presentation of the financial information included in this report. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and estimates inherent in the financial information.

We have conducted our review of the financial information including the pro-forma adjustments in accordance with the Australian Auditing Standard ASRE 2410 "Review of an Interim Financial Report Performed by the Independent Auditor of the Entity." We have made such enquiries and performed such procedures as we in our professional judgement, consider reasonable in the circumstances including:

analytical procedures on the interim financial performance of the Company for the relevant historical period;

Grant Thornton %

• a review of accounting records, work papers and other documents;
• a review of the assumptions used to compile the pro-forma Balance Sheet;
• a review of adjustments made to the pro-forma historical financial information;
• a comparison of consistency in application of the recognition and measurement principles of the applicable financial reporting framework and the accounting policies adopted by the Company; and
• enquiry of directors, management and other persons directly responsible for financial and accounting matters.

These procedures do not provide all the evidence that would be required in an audit, thus the level of assurance provided is less than given in an audit and accordingly we do not express an audit opinion.

Review Statement on Historical Financial Information

Based on our review, which is not an audit, nothing has come to our attention which causes us to believe that:

• the interim historical financial information set out on pages 38 to 46 does not present $(a)$ fairly the historical financial position of the Company as at 31 October 2006 and its historical performance and cash flows for the four month period ended 31 October 2006, in accordance with, in all material respects, the applicable financial reporting framework and the accounting policies adopted by the Company; and
• $(b)$ the pro-forma Balance Sheet as at 31 October 2006 has not been properly prepared on the basis of the pro-forma transactions.

Subsequent Events

Since the 31 October 2006 and to the date of this report the Company has incurred costs associated with the production of this prospectus and managing of the company's assets.

Apart from the matters dealt with in this report and having regard to the scope of our review, to the best of our knowledge and belief, no material transactions or events outside the ordinary business of the Company have come to our attention that require comment on or adjustment to the information referred to in our report or that would cause such information to be misleading or deceptive.

Independence and Disclosure of Interest

Grant Thornton does not have any interest in the outcome of this issue other than for the preparation of this report and for acting as auditors of the Company for which normal professional fess will be received.

Yours faithfully GRANT THORNTON South Australian Partnership

SIGRAY Partner

INTERIM INCOME STATEMENT

FOR THE PERIOD ENDED 31 OCTOBER 2006

	Audited Period ended 30 June 2006	Reviewed Period ended 31 October 2006
Revenue
Total Revenue
Expenses
Bank fees
Computer expenses
Office expenses
Travel & accommodation
Survey costs
Profit from ordinary activities before income tax expense
Income tax expense
Profit from ordinary activities after income tax expense

The above income statement should be read in conjunction with the accompanying notes.

INTERIM BALANCE SHEET AND CONSOLIDATED PRO FORMA BALANCE SHEET AS AT 31 OCTOBER 2006

		Audited	Reviewed	Unandited Pro Forma Subscription
	Note	30 June 2006	31 October 2006 ۸	31 October 2006 Ñ.
CURRENT ASSETS
Cash	3	1	1	13,150,001
TOTAL CURRENT ASSETS		1	1	13,150,001
NON CURRENT ASSETS
Exploration assets	4		1,140,758	1,140,758
TOTAL NON CURRENT ASSETS			1,140.758	1,140,758
TOTAL ASSETS		. ŋ	1,140,759	14,290,759
CURRENT LIABILITIES
Payables
TOTAL CURRENT LIABILITIES		00000000000000000000000000000000000000	÷.
TOTAL LIABILITIES
NET ASSETS		4	1,140,759	14,290,759
SHAREHOLDERS EQUITY
Issued capital	5	1	1,140,759	14,632,759
Share based payments				60,000
Retained earnings				(402,000)
TOTAL SHAREHOLDERS EQUITY		$\mathbf{1}$	1 140 759	14,290,759

The above balance sheet and consolidated pro-forma balance sheets should be read in conjunction with the accompanying notes.

INTERIM CASHFLOW STATEMENT FOR THE PERIOD ENDED 31 OCTOBER 2006

	Antited Period ended 30 June 2006	Reviewed Period ended 31 October 2006
Operating activities
Receipts from customers
Payments to suppliers
Interest received
Cash inflows/(outflows) from operating activities
Investing activities
Payments for property, plant and equipment
Payments made for exploration activities		(1,140,758)
Cash inflows/(outflows) from investing activities		(1,140,758)
Financing activities
Proceeds from the issue of shares		1,140,758
Payments for share issue costs
Cash inflows/(outflows) from financing activities	ា	1,140,758
Net increase/(decrease) in cash
Cash at the beginning of the period
1989 - Johann Stoff, Amerikaansk politiker († 1989) Cash at the end of the period

The above cashflow statement should be read in conjunction with the accompanying notes.

INTERIM STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 31 OCTOBER 2006

	Ordinary Shares	Shares Based Payment Reserve	Retained Earnings
Balance at incorporation
Profit attributable to members of the Company
Shares issued during the period
Balance at 30 June 2006 (Audited)
Profit attributable to members of the Company
Shares issued during the period	1,140,758
Balance at 31 October 2006 (Reviewed)	1,140,759
Pro-forma transactions
Issue of 2,000,000 share options to Corporate Advisors - Refer Note 2	(60,000)	60,000
Issue of 70,000,000 new shares pursuant to this Prospectus	14,000,000
Expenses of the Offer	(640,000)		(210,000)
Deferred tax assets associated with the expenses of the Offer written off - Refer Note 2	192,000		(192,000)
Pro-forma transactions at 31 October 2006	146324759	60.000	(402.000)

The above statement of changes in equity should be read in conjunction with the accompanying notes.

NOTES TO THE INTERIM FINANICAL STATEMENTS

FOR THE PERIOD ENDED 31 OCTOBER 2006

NOTE 1 - STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The financial information has been prepared in accordance with the measurement but not all of the disclosure requirements of Australian Accounting Standards and International Financial Reporting Interpretations Committee (IFRIC) interpretations, In the view of the Directors of Southern Uranium Limited ("the Company"), the omitted disclosures would provide no further relevant information to potential investors.

(a) Basis of Preparation

The Company has prepared financial statements in accordance with the Australian Accounting Standards.

Reporting Basis and Conventions

The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.

(b) Income Tax

The charge for current income tax expense is based on the profit for the year adjusted for any non-assessable or disallowed items. It is calculated using the tax rates that have been enacted or are substantially enacted by the balance sheet date.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the income statement except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.

Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the economic entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

(c) Principles of Consolidation

A controlled entity is any entity Southern Uranium Limited has the power to control the financial and operating policies so as to obtain benefits from its activities.

All inter-company balances and transactions between entities, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistencies with those policies applied by the parent entity.

Where controlled entities have entered or left the consolidated entity during the year, their operating results have been included/ excluded from the date control was obtained or until the date control ceased.

(d) Depreciation

The depreciable amount of all fixed assets including building and capitalised lease assets, but excluding freehold land, is depreciated on a straight-line basis over their useful lives to the consolidated entity commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

(e) Exploration and Development Expenditure

Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.

Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the area is made.

A requiar review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.

(f) Incorporation

The company was incorporated on 18 July 2005.

(a) Contributed equity

Issued capital is recognised at the fair value of the consideration received by the company.

Any capital raising costs are initially recognised as a prepaid expense and offset directly against equity as a reduction of the share proceeds on receipt.

(h) Equity-settled compensation

Shares and share options issued as part of employees remuneration payments or to other counterparties in return for goods and services are measured at the more readily determinable fair value of good / service or the fair values of the equity instrument. The fair value of the equity instrument is determined by application of the Black Scholes methodology.

Where the grant date and the vesting date are different the total expenditure will be allocated between the two dates taking into account the terms and conditions attached to the instruments and the counterparties as well as management's assumptions about probabilities of payments and compliance with and attainment of the set out terms and conditions.

Note 2 - Basis of Preparation of the Consolidated Pro Forma Balance Sheet

The Consolidated Pro Forma Balance Sheet has been prepared from the Reviewed Balance Sheet adjusted for the following transactions as if they had taken place on 31 October 2006:

• The issue of 7,500,000 share options to the directors' of the Company. These options are unlisted, have an exercise price of \$0.25 per option, and are exercisable at any time until 31 March 2010. The fair value of these options, based on the Black-Scholes methodology is SNIL:
• The issue of 2,000,000 share options to the Company's corporate advisors and underwriters to the offer. These options have an exercise price of \$0.25 per option, exercisable at any time within 4 years of the ASX listing date The fair value of these options, based on the Black-Scholes methodology is \$60,000; and
• The issue of 70,000,000 shares at an issue price of \$0.20 per share to raise \$14,000,000, less associated capital raising costs estimated to be \$910,000, of which \$700,000 has been directly off-set against raised capital (\$508,000 net of tax).

	Amned	Reviewed	Unaudited Pro Forma Subscription
	30 June 2006	31 October 2006	31 October 2006
Note 3 - Cash Assets
Cash on hand and at bank		the contract of the contract of the contract of the contract of the contract of	13.150.001

Note 4 - Exploration Assets

Exploration expenditure 1,140,758

Note 5 - Contributed Equity

	Number of shares issued	ß.
Paid up Capital
Shares issued on incorporation	100.000
Shares issued during the period ended 30 June 2006
Balance as at 30 June 2006	100.000
Shares issued during the period ended 31 October 2006	44.900.000	1,140,758
Balance as at 31 October 2006	45.000.000	1440.759
Shares issued pursuant to this Prospectus	70.000.000	14.000.000
Less capital raising costs (net of tax effect)		(508,000)
Pro Forma balance as at 31 October 2006	115.000.000	14 632 759

Share options
On completion of the transactions contemplated in this Prospectus, the following share options will be outstanding.
Share options on issue at 30 June 2006
Share options on issue at 31 October 2006
Share options issued subsequent to 31 October 2006
- Managing Director i	1,500,000
- Non Executive Directors 1	3,000,000
- Southern Gold Ltd Directors 1	3,000,000
- Corporate Advisors 2	2,000,000
Total share options	9,500,000

(1) These options are unlisted, and have an exercise price of \$0.25 per option and are exercisable at any time until 31 March 2010.

(2) These options are unlisted and have an exercised price of \$0.25 per option. Each option os exercisable at any time within 4 years of the ASX listing date.

Note 6 - Expenditure commitments

Due to the nature of the Company's operations in exploring and evaluating areas of interest, it is difficult to accurately forecast the nature or amount of future expenditure. It will be necessary for the company to incur expenditure in order to retain present interests in mineral tenements and joint ventures. The timing and amounts of exploration expenditure commitments of the Company may vary significantly from the forecast based upon the results of work performed by the Company and joint venture partners, which will determine the prospectively of the relevant area of interest.

Note 7 - Controlled Entities

Name of Entity Country of Incorporation Ownership Interest
Parent Entity
allite and the second control of the second second second second second second second second second second second second second second second second second second second second second second second second second second sec Southern Uranium Limited Australia
Controlled Entity
Sunthe Uranium Pty Ltd Australia $100\%$

、
刁ノ

16 February 2007

The Directors Southern Uranium Limited PO Box 170 KENT TOWN SA 5072

Dear Sirs,

Solicitor's Report - Southern Uranium Limited

The following report has been prepared for inclusion in a Prospectus to be dated on or about 19 February 2007 ("Prospectus") for issue by Southern Uranium Limited (ACN 115 338 979) ("Southern Uranium") offering for subscription 70,000,000 shares at an issue price of \$0.20 per share to raise \$14,000,000.

This report relates to:

• (a) The registered and unregistered interests of Southern Uranium in the mining tenements set out in the Tenement Schedule to this report;
• The material contracts summarised in this Prospectus; and $(b)$
• $(c)$ The application of native title to the Tenements.

$1¹$ Tenements

• $11$ We have undertaken searches of the Tenements in the registers maintained by the Department of Primary Industry and Resources South Australia ("PIRSA") pursuant to the Mining Act 1971 (SA) ("the Mining Act") and the information set out in the Tenement Schedule to this report is based on the results of those searches.
• $1.2$ We have assumed that the Tenements have been validly granted pursuant to the Mining Act.
• $1.3$ The terms and conditions attaching to each of the mining tenements listed in the Tenement Schedule are available from PIRSA. Other than the matters set out in section 5 of this Report and in the Tenement Schedule, we do not consider that any of the mining tenements are subject to unusual or special conditions.

2. Native Title

• As a result of the High Court decision in Mabo v. Queensland, delivered in 1992, which $21$ recognised the concept, at common law, of continuing Aboriginal native title to land, the Native Title Act (Commonwealth) ("NTA") was enacted in 1993 providing, among other things, a mechanism for negotiation between government, native title and non-native title parties in relation to certain future uses of native title land, and providing for native title parties to claim compensation for certain acts extinguishing or impairing native title rights.
• 2.2 This statutory right to negotiate is conferred on both registered claimants to, and holders of native title rights, in relation to certain kinds of future acts (including future acts which confer a right to mine or explore).
• If the right to negotiate applies to an act and is not complied with, the act will be invalid to 23. the extent that it affects native title.
• 2.4 In accordance with the provisions of the NTA, the State of South Australia has enacted a complementary, alternative right to negotiate procedure relating to mining and exploration in South Australia. This alternative procedure is found in Part 9B of the Mining Act and is to be complied with instead of the NTA provisions in order to validate future acts relating to the conferral of mining and exploration rights.
• 2.5 An exploration licence does not confer a right to conduct mining operations unless (a) the operations do not affect native title, (b) a declaration has been made at law that the land is not subject to native title (c) the explorer has entered into an agreement with all native title parties having an interest in the area or (d) a determination has been made in the Environment Resources and Development Court, authorising operations
• In 2001 the Native Title (South Australia) (Validation and Confirmation) Amendment Act $26$ 2000 (SA) was enacted providing for certain acts which took place between 1 January 1994 and 23 December 1996, known as "intermediate period acts" to be validated. In accordance with this Act, native title has been extinguished in South Australia over land which, on or before 23 December 1996, was the subject of certain types of perpetual lease.
• Further legislative amendments may well be enacted as a result of decisions pending in $2.7$ the High Court and Federal Court, either extending or contracting the effect of native title rights and the right to negotiate procedures on mining operations.

MCDONALD STEED MCGRATH THE CALCULUS CONT

ARN 26 195 673 841 262-266 Pirie Street Adelaide South Australia 5000 PO Box 3216 Randie Mall South Australia 5000 Telentone (08) 8223 5088 International (08) 8223 5088 Eaccimito (G8) 8223 5290 email mail@mcdonaldsteed.com.au web artdress www.mcdonaldsteed.com.au Michael McDonald PARTNER Abinail Steed PARTNER Jane McGrath PARTNER Catherine Burns SOLICITOR. Karen Richards SOLICITOR. Jaanne Miller SOLICITOR. Natalie May MIGRATION AGENT No. 0100623 John JB Cooper CONSULTANT Andrew Ray CONSULTANT (Melbourne)

3. Native Title and the Mining Tenements

• Searches of the National Native Title Register and the South Australian Mining Tenement Register indicate that all of $31$ the Tenements are affected to some extent by native title claims. Claims affecting each of the Tenements are set out in the Tenement schedule attached to this report.
• $3.2$ Where mining operations may affect native title, the right to negotiate provisions of the Mining Act are engaged and the proponent may seek to authorise mining operations by entering into a native title mining agreement ("NTMA") with relevant native title parties (who are those persons who, at the end of a two month period following issue of notices under the Mining Act, are registered as holders of, or claimants to, native title in respect of the relevant land)
• 3.3 Under the Mining Act a "conjunctive" agreement (authorising both exploration and mining activities) is not permitted.
• Alternatively, an Indigenous land Use Agreement (ILUA) may be negotiated under the NTA. In some areas registered 34 ILUAs are already in place with native title parties and may be adopted upon application and payment of certain fees.
• Other than as set out in section 5, the Company has not yet issued relevant notices under Section 63M of the Mining 3.5 Act initiating negotiations in relation to those tenements were native title may exist and has not vet commenced negotiations of an NTMA or ILUA with any other relevant parties.
• 3.6 Delays may be experienced in gaining access to land in relation to which an NTMA needs to be negotiated under the Mining Act.

Aboriginal Heritage А

• 4.1 State and Commonwealth laws provide for the protection of places, areas, objects and remains which are of significance to Aboriginal persons.
• Under the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth), the Commonwealth Minister has $4.2$ the power to make declarations to protect and preserve areas or objects of Aboriginal significance.
• The South Australian Aboriginal Heritage Act 1988 also protects Aboriginal heritage and provides for the 4.3 identification of sites of significance on a register maintained pursuant to the Act.
• A search of the Central Archive, which includes the Register of Aboriginal Sites and Objects has identified a number 4.4 of archaeological, historical, mythological and ceremonial sites located within the Tenements.
• $4.5$ The Act provides that it is an offence to damage, disturb or interfere with an Aboriginal site, object or remains, whether or not such site, object or remains is entered on the register. Care will need to be taken to avoid disturbance to the identified sites
• In accordance with common practice across the State, Southern Uranium will need to conduct heritage clearance 4 R surveys in relation to proposed mining operations in order to minimise the risk of contravening the heritage legislation.

Mining Tenements 5.

5.1 Exploration Licences 3158, 3595, 3512, 3493, 3479, 3552, 3594, 3603 and 3675

Except for EL3158, each of these exploration licences is held by Sunthe Uranium Pty Ltd ("Sunthe") (a wholly owned subsidiary of the Company). A transfer of EL3158 from the current holder, Gawler Arc Holdings Pty Ltd to Sunthe has been lodged with PIRSA and is anticipated to be registered prior to or shortly after the Closing Date

The terms and conditions of the licences authorise exploration for all mineral except extractive minerals or precious stones. The licences confer no rights on the holder to carry out operations on native title land other than in accordance with Part 9B of the Mining Act.

The term of each of the licences is set out in the Tenement Schedule. EL3512, 3493 and 3479 have or will expire prior to the date of this Prospectus. In each case an application for renewal has been lodged with PIRSA by Sunthe, seeking grant of a further term. While renewal of the tenements is in the discretion of the Minister, it is anticipated that each of these tenements will be renewed for a further term of not less than 12 months.

Each of EL3595, 3512, 3552, 3594 if affected to some extent by various conservation or regional reserves and/or Native Vegetation or National Heritage Act conditions. Additional statutory requirements (over and above those imposed under the Mining Act) need to be met prior to exploration activities being undertaken in affected areas within the tenements. See additional information set out in the notes to the Tenement Schedule.

EL3603 is located within the Woomera Prohibited Area and the Woomera Instrumented Range Area. Prior consent of the Area Administrator is required in order to enter onto and/or conduct exploration on this Tenement. The Area Administrator may impose conditions or restrictions on those activities.

EL3603 is also subject to a joint venture agreement with Uranium West Pty Ltd (a subsidiary of Crescent Gold Limited), whereby Uranium West may earn up to a 75% interest in the tenement. Details of the joint venture arrangement are summarised in the Material Contracts section.

EL3158 is subject to a joint venture agreement with Hindmarsh Resources Limited, whereby Hindmarsh may earn up to a 35% interest in the tenement. Details of the agreement are set out in the Material Contracts section.

EL3675 falls within the Antakirinja Native Title Claim area in respect of which an Indigenous Land Use Agreement ("ILUA") has been registered under the NTA. The Company may therefore elect to become a party to the ILUA rather than negotiating an NTMA under Part 9B. Entry into the ILUA is voluntary. The ILUA provides a mechanism for heritage clearance surveys to be undertaken on agreed terms. The full text of the ILUA is available on the PIRSA website.

5.2 Exploration Licence Applications 324/06, 707/05, 198/06 and 199/06

Each of these applications is made in the name of Sunthe. An offer of grant has yet to be made in respect of each application. In respect of ELA324/06, an offer of grant is anticipated to be made during the life of this Prospectus.

ELA324/06 is also subject to a joint venture agreement with Uranium West Ptv Ltd as summarised in the Material Contracts section.

ELA707/05 falls partly within a Coastal Reserve area and additional conditions relating to environmental protection may be imposed on grant.

ELA198 falls party within a gazetted conservation reserve. See notes to the Tenement Schedule for additional statutory requirements which may affect this tenement on grant. Some further restrictions may also apply as a result of one or more petroleum exploration tenements having been granted in the area of this application.

ELA199, upon its grant will carry certain restriction relating to Native Vegetation clearance or disturbance as it falls within a Native Vegetation under Heritage Agreement Act area.

5.3 Joint Venture Interests

(a) Exploration Licences 3080 and 3097

These tenements are held by subsidiaries of Southern Gold - Challenger West Holdings Pty ltd (80%) and CMH Resources Pty Ltd (20%). Hindmarsh Resources Ltd entered into a joint venture with the holders in April 2005 to explore for and earn a joint venture interest in Uranium only on these tenements. Southern Gold (by its subsidiaries) retains all rights to other Minerals. The subsidiaries assigned their joint venture interest in
Uranium to the Company by deed dated 7 August 2006. Hindmarsh Resources remains the manager of the joint venture. Further details of these joint venture interests are provided in the Material Contracts section.

An NTMA between Southern Gold and the Antakirinia Native Title group was registered in 2004 in respect of EL3080 and 3097. The Agreement is summarised in the Material Contracts Section.

(b) Exploration Licence 3308

This Tenement is held by Southern Gold. In April 2005, Southern Gold granted joint venture rights in respect of exploration for Uranium to Hindmarsh Resources Ltd. By deed dated 7 August 2006, Southern Gold assigned its joint venture rights to the Company. Southern Gold retains rights to all other Minerals (see Material Contracts section for further detail)

The tenement expires on 16 February 2007. A renewal application has or will be lodged seeking a further term and there is no indication that an extension will not be granted.

This tenement falls within the Woomera Prohibited Area and prior consent of the Area Administrator must therefore be obtained by the joint venture for exploration purposes.

In June 2006, Southern Gold issued section 63M notices under the Mining Act initiating negotiations with native title parties relating to EL3308. An NTMA has yet to be entered into in relation to the tenement.

(c) Exploration Licences 3395 and 3396

These tenements are held by Hindmarsh Resources Ltd. By letter agreement dated 26 April 2005, Hindmarsh granted rights to Southern Gold to earn up to a 30% interest in these tenements. Southern Gold has assigned its joint venture rights in these tenements to the Company by Deed dated 7 August 2006 (see further details in the Material Contracts section).

As operator of the joint venture, Hindmarsh is a party to the registered ILUA affecting these tenements. The tenements also fall within the Woomera Prohibited Area and are subject to the necessary consents.

(d) Exploration Licence 3160

This tenement is held jointly by Ian Garsed (65%) and Sunthe Uranium Pty Ltd (35%) with rights pursuant to a joint venture agreement dated 15 June 2005 for Sunthe Uranium to earn up to a 70% interest in the tenement. (refer Material Contracts section for further details of the joint venture arrangements)

A renewal application in respect of the tenement, which expired 19 January 2007 has also been lodged and is awaiting processing. It is anticipated that a renewal of the term will be granted for up to a further 2 year period.

(e) Exploration Licence 3284

This tenement is held by Challenger West Holdings Pty Ltd (a wholly owned subsidiary of Southern Gold). By agreement dated 15 January 2007, the Company has been granted rights of access to explore the tenement
for Uranium and, if successful, to develop any Uranium discovery. (Further details of the access rights are described in the Material Contracts section).

A renewal application for the tenement, (which expired on 1 December 2006) has been lodged and is pending decision.

6. Uranium Legislation

Each of the granted tenements authorises exploration for all minerals, including uranium (but excluding extractive minerals). The Mining Act however, precludes mining operations for the recovery of uranium, subject to section 10A. That section provides, inter alia, for uranium mining to be conducted only with prior Ministerial consent, which consent may be granted subject to conditions. Depending on Governmental policy at the time, such consent may or may not be granted or may be granted on conditions which are onerous or render a project uneconomical.

Development of a uranium mine would also engage the provisions of the South Australian Radiation Protection and Control Act 1982 under which licensing is required and Commonwealth legislation, including the Environment Protection and Biodiversity Conservation Act 1999 ("EPBC Act") and the Customs Act 1901.

The EPBC Act prohibits operations involving mining or milling of uranium except with the prior approval of the relevant Commonwealth Minister. The Customs Act regulates export of uranium products, with particular regard to the Nuclear Non-Proliferation Treaty, the purpose of which, is to restrict the export of nuclear material for other than peaceful purposes. Exports are subject to prior Governmental approval processes.

Any or all of this legislation and/or Government policy of the day may delay, limit or preclude the ability of the Company to develop a uranium discovery.

Material Contracts $\mathbf{7}$

• 7.1 We have examined the material contracts disclosed in this Prospectus which appear to have been properly executed.
• The description of the material contracts summarised in this Prospectus, does not in our opinion, and based on our $7.2$ examination of the same, contain any statement or matters that are false in a material particular or misleading in the form and context in which it appears.
• 7.3 The material contracts disclosed in this Prospectus are those which have been identified to us by Southern Uranium.

8. Assumptions

For the preparation of this report it has been assumed that:

• 8.1 information provided by government authorities is accurate and current.
• 8.2 all statutory permits approvals and licences which have been obtained are validly given and are in full force and effect
• copies of documents provided to us by Southern Uranium or third parties are true and correct copies of those $R²$ documents.
• the parties to any contracts agreements and other documents that have been examined are made within the 8.4 capacity and the power of the party executing the document or entering into that agreement and copies executed have been duly and properly executed according to law and according to any constituent or empowering authority.

$\mathbf{q}$ Qualifications and Scope

• 9.1 We have only undertaken the searches and made the enouiries described in this report:
• 9.2 No assessment of the validity or strength of any current or future native title claim has been made.
• 9.3 This report relates only to the laws in force in South Australia and the Commonwealth as at the date of this report.

10. Consent and Declarations

• 10.1 McDonald Steed McGrath and the persons involved in the preparation of this Report have no interest in or financial relationship with Southern Uranium, other than Michael McDonald, a partner in the firm, who is a director of Southern Gold Limited.
• 10.2 Other than normal commercial fees for the preparation of this Report and participation in the due diligence process, no direct or indirect benefit has been received by McDonald Steed McGrath in connection with the preparation of this report
• 10.3 McDonald Steed McGrath has given, and has not withdrawn its consent to the issue of the Prospectus with this report in the form and context in which it is included.

Yours sincerely

Abigail Steed

McDONALD STEED McGRATH LAWYERS

TENEMENT SCHEDULE

Tenement	Registered Holder / Applicant	Tenement Name	Anes	Expenditure	Tem	Registered Native Title Claims	Notes
EL3080	Challenger West Holdings Pty Ltd 80%, CMH Resources Pty Ltd 20%	Garford	497km 2	400.000	30.4.03-29.4.08	Antakirinja	1,4
EL3097	Challenger West Holdings Pty Ltd 80%, CMH Resources Pty Ltd 20%	Indroopilly	496km 2	320,000	12.6.03 11.6.07	Antakirinja	1.4
EL3308	Southern Gold Ltd	Half Moon Lake	517km 2	160,000	17.2.05-16.2.07	Antakirinja	1, 5, 17
EL3395	Hindmarsh Resources Ltd	Tallarınga South	990km 2	250,000	15.8.05-14.8.07	Antakirinja	1, 6, 17
EL3396	Hindmarsh Resources Ltd	Tallaringa North	$505$ km 2	160,000 fover 2 years)	17.8.05-16.8.08	Antakirinja	1, 6, 17
EL3160	Sunthe Uranium Pty Ltd 35% lan Garsed 65%	Yalbrinda South	470km 2	225,000	20 1.04 19 1.07	Gawler Ranges, Barngarla, Far West Coast	2.1
EL3158	Gawler Arc Holdings Pty Ltd	Peterlumbo	583km 2	340,000	20.1.04-19.1.08	Gawler Ranges	1,26
EL3595	Sunthe Uranium Pty Ltd	Jumpuppy	990km 2	125,000	57.05-4.7.07	Gawler Ranges	89
EL3512	Sunthe Uranium Pty Ltd	Streaky Bay	905km 2	120,000	31.1.06-30.1.07	Wirangu No 2	7,12
EL3493	Sunthe Uranium Pty Ltd	Kolenda	$208$ km 2	50,000	18.1.06.17 1.07	Gawler Ranges	T,
EL3479	Sunthe Uranium Pty Ltd	Lake Gilles	$672$ km 2	95,000	22.12.05-21.12.06	Gawler Ranges, Barngarla	7
EL3552	Sunthe Uranium Pty Ltd	Moonable	402km 2	70,000	$5106-30.4.07$	Barngarla	9, 13, 14, 15
EL3594	Sunthe Uranium Pty Ltd	Mosely Nobs	452km 2	75,000	5.7.06-4.7.07	Barngarla, Gawler Ranges	11, 18, 23, 24
EL3603	Sunthe Uranium Ptv Ltd	Oak Dam	$1/4km^2$	45,000	1770646707	Barngaria, Kokotha	16, 17, 25
EL3675	Sunthe Uranium Pty Ltd	Mt Sam	$652$ km 2	95,000	11.12.06-10.12.07	Gawler Ranges	9.6
EL3284	Challenger West Holdings Pty Ltd	Warrior South	$321 \mathrm{km}^2$	120,000	2.12.04-1.12.06	Far West Coast	3.1
ELA324/06	Sunthe Uranium Pty Ltd	South Vivian	$861$ km 2		not yet granted	Barngarla, Antakirinja	16,25
ELA707/05	Sunthe Uranium Pty Ltd	Corvisart Bay	38km 2		not yet granted	Wirangu No.2	$22\,$
ELA198/06	Sunthe Uranium Pty Ltd	Comet Well	137 km 2		not yet granted	Wirangu No 2	20, 21
ELA199/06	Sunthe Uranium Pty Ltd	Courela	523km 2		not yet granted	Wirangu No 2 !!!!!!!!!!!!!!!!!!!!	-11.

This table should be read with the accompanying notes

Notes to the Tenement Schedule

	TEMEMENT SCHEDULE continued
	Notes to the Tenement Schedule
$\mathbf{1}$	In Joint Venture with Hindmarsh Resources*	¥	Summarised in Material Contracts Section
$\mathbf{z}$	Transfer of 35% from Gawler Arc Holdings Pty Ltd to Sunthe Uranium completed	A	There is no automatic right of access to areas designated as a Geological Monument. In some instances where the Geological Monument is located within a National Park or Reserve, access
3	Deed of Access for Uranium only *		is prohibited without a Permit from the State Heritage Authority
4	Tenement subject to Native Title Agreement for Exploration with Southern Gold *	B	Additional governmental consultation and environmental conditions under both State and Commonwealth legislation may
5	Part 9B Notice issued under Mining Act		apply to areas located within an area designated as a National Heritage place.
6	Tenement falls within registered Indigenous Land Use Agreement area	C	Additional consultation with aboriginal groups may be required prior to accessing those parts of the tenement affected, as automatic rights of entry for exploration or mining do not apply
7	Renewal application lodged - pending decision	D
8	Tenement affected by Geological Monument (A)		Compliance with any heritage management plans in existence is require and a Declaration of Environmental Factors will need
9	Tenement affected by National Heritage Area (B)		to be approved by PIRSA and the Minister for Environment and Conservation prior to conduction activities on the tenement.
10 11	Tenement affected by Aboriginal Tribal Grounds (C) Tenement affected by Native Vegetation under Heritage Agreement		Additional conditions may apply in relation to the disturbance of
	Act(D)		native vegetation in sensitive areas
12	Tenement affected by Gawler Ranges Science Area (E)	E	A notice of entry must be served on the Minister for Environment and Conservation and a Declaration of Environmental Factors is
13 14	Tenement affected by Lake Gilles Conservation Reserve (E) Tenement affected by Plug Ranges Conservation Reserve (E)		required to be approved by the Director of Mines in consultation
15	Tenement affected by Sheoak Hill Conservation Reserve (E)	F	with the Minister Prior consent of the Area Administrator is required within the
			Woomera Prohibited Area is required for entry onto and conduct of exploration activities within the WPA. Conditions on entry may
16	Tenement affected by Woomera Instrument Range (F)		be imposed under the Defence Act. These conditions are likely to be more stringent in the area of the instrument range due to
17	Tenement affected by Woomera Prohibited Area (G)		active weapons testing within the area
18	Tenement affected by Mining Production Tenement Regulation Area (H)	G	Prior consent of the Area Administrator is required within the Woomera Prohibited Area is required for entry onto and conduct of exploration activities within the WPA. Conditions on entry may
19	Tenement affected by Yellabinna Regional Reserve (E)		be imposed under the Defence Act
20	Tenement affected by Petroleum Tenements (I)	H	The grant of some mining production tenements is also regulated in this area by the Development Act and development
21	Tenement affected by Kulliparu Conservation Reserve (E)		of a mine may require oversight by the Development
22	Tenement affected by Coastal Reserve (E)	ı	Assessment Commission
23	Tenement affected by Cortlinye Conservation Reserve (E)		Where there is a prior grant of a Petroleum tenement under the Petroleum act, an exploration tenement granted under the
24	Tenement affected by Mootra Conservation Reserve (E)		Mining Act will carry a condition that exploration which may affect operations authorised under the Petroleum Tenement may only be carried out with the prior consent of that tenement
25	In Joint Venture with Uranium West Pty Ltd and Crescent Gold Limited		holder.
26	A Deed of Assignment * and Instrument of Transfer have been executed to transfer this tenement and the joint venture interest from Gawler Arc Holdings Pty Ltd to Sunthe Uranium Pty Ltd. Both documents have been lodged with PIRSA for Ministerial Consent and registration. It is anticipated that the transfer of the tenement will take place prior to or shortly after the Closing Date.

$\frac{1}{\tau}$

The following brief summary of material contracts relating to the Company is prepared by the Company's solicitors. McDonald Steed McGrath Lawyers. In order to fully understand all rights and obligations contained in the material contracts it would be necessary to review them in full and the summaries below should be read in that light.

LOAN AGREEMENT

On 15 January 2007 the Company and Southern Gold Limited (SAU) entered into a loan agreement whereby the Company confirmed that expenditure by SAU in relation to costs of the Offer and certain other costs relating to restructuring of tenement holding incurred by SAU from June 2006 to the date of listing are to be treated as an interest free loan to the Company, to be reimbursed by the Company immediately after listing.

DIRECTORS' AGREEMENTS:

Each of the non-executive directors has entered into an agreement with the Company on standard commercial terms for their respective appointments. Remuneration and other special terms of the agreements are summarised as follows:

Roger Marshall

• appointment as non-executive Chairman for a term of 3 years (subject to re-election as required by the Company's constitution
• annual directors fees of \$70,000 plus 10% superannuation entitlement
• consultancy arrangement, commencing 1 January 2007 to provide additional services (outside directors obligations) may be provided at a daily rate of \$1,000 plus GST plus expenses.

David Jones

• appointment as non-executive Director for a term of 3 years (subject to re-election); $\overline{a}$
• annual director's fees of \$50,000 plus 10% superannuation entitlement:
• Mr Jones may provide consultancy services through his company Vidoro Pty Ltd outside of his director's obligations at a daily rate of \$1,000 plus GST plus expenses.

Stephen Biggins

• appointment as non-executive Director for a term of 3 years (subject to re-election)
• annual director's fees of \$50,000 plus 10% superannuation entitlement:

MANAGING DIRECTOR'S AGREEMENT:

The Company has entered into an employment agreement with John Anderson for him to act as Managing Director for a term of 3 years, renewable annually at an annual salary of \$220,000 plus 15% superannuation entitlement. Mr Anderson is entitled to continue his duties as non-executive director of Southern Gold and, subject to consent of the Company, may continue to provide additional consultancy services to Southern Gold through his company Austrike Resources Pty Ltd in accordance with existing contractual arrangements. The agreement may be terminated by the Company giving 6 months notice or paying 6 months salary in lieu of notice.

CONSULTANT SERVICES - COMPANY SECRETARY AND CHIEF FINANCIAL OFFICER:

The Company has entered into an agreement with Michael Billing and his company MBB Trading Pty Ltd to provide Company Secretarial and Chief Financial Officer services for a temporary period not exceeding 12 months. Services are to be provided on an as needs basis and at a daily rate of \$1,000 plus GST plus expenses. The agreement may be terminated by either party on 1 month's notice. The Company has agreed to actively seek to recruit a permanent Company Secretary and Chief Financial Officer to replace Mr Billing's services, at the earliest opportunity.

DEEDS OF INDEMNITY

As permitted by the Company's Constitution, the Company has entered into a deed of indemnity with each of the Directors and Company Secretary which deeds provide an indemnity for each of the officers of the Company from liability arising as a result of acting in their respective capacities subject to certain exclusions. Legal and other costs of defending any action arising in relation to such liability are to be met by the Company.

TENEMENT FARM-IN AND ACCESS ARRANGEMENTS

In addition to the specific agreement terms described below, each of the joint venture agreements set out below contains standard terms relating to dilution, withdrawal after minimum expenditure, pre-emptive rights on assignment and other terms commonly found in exploration joint ventures

Letter Joint Venture Agreement - EL3080 and Deed of Assignment

By Letter Agreement dated 26 April 2005 between Challenger West Holdings Pty Ltd and CMH Resources Pty Ltd ("Southern") and Hindmarsh Resources Ltd, the parties entered into a Joint Venture Arrangement in relation to uranium only. Hindmarsh has a right to earn a 51% interest in uranium located on the tenement by spending \$250,000 within 24 months of the commencement date. It has a further right to earn up to a total of 80% interest in uranium by spending an additional sum of \$250,000 within 42 months of the commencement date. Hindmarsh is manager of the joint venture. Hindmarsh is yet to earn any participating interest in the joint venture.

By Deed of Assignment and Assumption dated 7 August 2006 Southern agreed and Hindmarsh consented to an assignment of Southern's rights under the Joint Venture Agreement to Southern Uranium Ltd. Southern remains the owner of the tenement and has ongoing obligations to maintain the tenement in good standing. If Hindmarsh withdraws from the joint venture without

earning any interest in the uranium. Southern Uranium will retain 100% interest in the uranium rights. In those circumstances, the Deed provides for Southern and Southern Uranium to negotiate in good faith to resolve any issues which may be raised by Hindmarsh withdrawing from the Joint Venture.

Letter Joint Venture Agreement - EL 3097 and Deed of Assignment

By letter dated 26 April 2005 Challenger West Holdings Pty Ltd and CMH Resources Pty Ltd ("Southern") and Hindmarsh Resources Ltd entered into a Joint Venture in respect of uranium exploration licence on EL 3097. The terms of the Agreement are otherwise identical to the Agreement relating to EL 3080.

A Deed of Assignment and Assumption was entered into as between Southern, Hindmarsh and Southern Uranium on 7 August 2006 in identical terms to the Deed relating to EL 3080.

Letter Joint Venture Agreement - EL3308

By Letter Agreement dated 26 April 2005 Southern Gold Ltd ("Southern") and Hindmarsh Resources Ltd entered into a Joint Venture in respect of uranium exploration rights on EL 3308. The terms of that Joint Venture Arrangement are identical to the Letter Agreement relating to EL 3080. Similarly a Deed of Assignment and Assumption was entered into between Southern, Hindmarsh and Southern Uranium on 7 August 2006 assigning Southern's joint venture interests to Southern Uranium on the same terms and conditions as the Deed relating to EL3080.

Letter Joint Venture Agreement - ELA 96 / 05 and 199 / 05 (now EL 3395 and 3396)

By Joint Venture Agreement dated 26 April 2005 Southern Gold Ltd ("Southern") and Hindmarsh Resources Ltd entered into a Joint Venture Agreement whereby Hindmarsh, the holder of the tenements, granted to Southern a right to earn a 30% interest in the tenements by spending \$400,000 on exploration within 24 months of the commencement date. Hindmarsh is manager of the joint venture but must exercise its rights as manager so as to facilitate Southern being able to meet the expenditure commitments as required by the Agreement

By Deed of Assignment and Assumption dated 7 August 2006 Southern agreed and Hindmarsh consented to Southern assigning its joint venture interest in the tenements to Sunthe Uranium Pty Ltd.

Letter Joint Venture Agreement - EL 3158

By Letter Agreement dated 26 April 2005 Gawler Arc Holdings Pty Ltd ("Southern "), the holder of the tenement, granted joint venture rights to Hindmarsh Resources Ltd to earn up to a 35% interest in the tenement by incurring exploration expenditure of \$250,000 within 36 months of the commencement date to earn 25% and further expenditure of \$250,000 within 48 months of the commencement date to earn an additional 10% interest.

By Deed of Assignment and Assumption dated 2 February 2007. Southern has assigned its joint venture interest and agreed to transfer the tenement to Sunthe Uranium Pty Ltd. A transfer of the tenement has been lodged with PIRSA and is awaiting ministerial consent and registration.

Farm-in Joint Venture Agreement - Sunthe Uranium and Ian Garsed EL3160

By Agreement dated 15 June 2005, Southern Gold entered into a joint venture agreement with the holder of EL3160, Mr Ian Garsed to earn up to a 70% interest in the tenement by incurring exploration expenditure of \$300,000 within 3 years.

By Deed of Assignment and Assumption dated 8 January 2007, Southern Gold has assigned its 35% interest in the tenement and its continuing rights and obligations under the joint venture to Sunthe Uranium Pty Ltd. Pursuant to the deed, the Company has quaranteed the obligations of its subsidiary under the joint venture.

Tenement Access Agreement for Uranium - Challenger West Holdings and Southern Uranium EL3284

By agreement dated 15 January 2007, the holder of the tenement, Challenger West Holdings Pty Ltd ("CWH"), granted access and exploration rights in respect of Uranium (excluding IOCGU targets) to the Company through its subsidiary, Sunthe Uranium Pty Ltd ("Sunthe"). Under the Agreement, Sunthe is entitled to enter onto and explore for Uranium and in the event of a discovery may apply for a production tenement. CWH has reserved rights to all other Minerals and may enter into joint ventures in relation to those minerals, subject to preserving Sunthe's rights under the agreement.

CWH must maintain the tenement free from relinquishment unless Sunthe has not met PIRSA expenditure commitments in respect of the tenement in any 2 year period, in which case CWH may relinquish by first giving Sunthe 30 days notice of its intention to do so.

CWH agrees to provide mining information relevant to Uranium on an ongoing basis to Sunthe and vice versa in relation to mining information relevant to other Minerals.

Gawler Craton Joint Venture Agreement - Uranium West Pty Ltd, Crescent Gold Limited, Southern Gold Limited and Southern Uranium Limited

This joint venture agreement dated 21 December 2006 relates to EL3603 and ELA324/06 and also to 2 tenements held by Southern Gold (collectively "the tenements"). Uranium West, a wholly owned subsidiary of Crescent Gold, has been granted rights to earn up to a 75% interest in the tenements or any one or more of them by spending:

• \$1,000,000 within 12 months to earn 25%
• \$3,000,000 within a further 12 months to earn a further 25% (50%)
• \$3,000,000 within a further 12 months to earn a further 25% (75%)

Expenditure may be in respect of any one or more of the tenements and, after spending a minimum of \$750,000. Uranium West may withdraw from the joint venture in respect of one or more tenement ad continue spending on the remaining tenements.

Southern Gold and the Company may jointly elect to contribute to joint venture costs after Uranium West has earned a 50% interest in the tenements and in any event shall be required to contribute pro-rata when Uranium West elects to cease sole funding. Once Uranium West ceases to sole fund exploration, 2 separate joint ventures will be created, as between Uranium West and the Company in respect of EL3603 and ELA324/06 and as between Southern Gold and Uranium West in respect of the other 2 tenements. Thereafter usual contribution obligations and dilution provisions apply as between the relevant parties.

During the earn-in period. Uranium West is manager but each of Southern Gold and the Company are the operator for their respective tenements.

A party may dilute and convert to a 10% free carried interest. Upon a decision to mine being made, Uranium West may elect to buy out the free carried interest for \$35,000,000.

Uranium West's parent company, Crescent Gold Limited guarantees the obligations of its subsidiary under the agreement.

NATIVE TITLE AGREEMENT

Southern Gold Limited and Antakirinia Native Title Claimants

Southern Gold Limited ("SAU") has entered into a Native Title Mining Agreement with the Antakirinja Native title Claimants ("Claimants") in respect of EL3080 and 3097. The Agreement is on standard industry terms and provides for SAU to request the Claimants to conduct heritage clearance surveys prior to undertaking on ground exploration activities. A number of clearance surveys have been undertaken under the NTMA by SAU and/or Hindmarsh Resources (as manager under the joint venture agreement) with no substantive restrictions being placed on exploration activities.

The NTMA allows SAU to assign its rights and obligations under the agreement with prior consent of the Claimants. While the tenements remain in joint venture there is no requirement to formally assign the agreement to the Company.

UNDERWRITING AGREEMENTS:

Lands Kirwan Tong Stockbrokers Pty Limited ("LKT") and Southern Uranium

By Agreement dated 16 February 2007, LKT has agreed to underwrite the placement of 25,000,000 shares in the offer. The agreement is subject to the Taylor Collison Agreement (summarised below) and to Southern Uranium securing cornerstone investment of at least 20,000,000 shares in the Offer. LKT is entitled to fees and commissions as follows:

• a management fee of \$20,000.00
• an underwriting fee of 5% of the underwritten amount (\$250,000).
• 1,000,000 options, exercisable at \$0.25 with a term of 4 years from the date of listing. These options will be issued subject to escrow restrictions imposed by ASX Listing Rules.

Southern Uranium will be responsible for any other costs of LKT reasonably incurred and not covered by the underwriting commission, including costs resulting from any order or direction of ASIC or ASX.

Southern Uranium provides usual warranties including warranties relating to the Company's assets and activities, compliance with laws and the accuracy and completeness of information provided and indemnifies LKT against all costs arising from any breach of such warranties.

The agreement may be terminated by LKT on the occurrence of any material adverse change including events involving a change in law, misrepresentation, false or misleading statements by the Company, insolvency events, change in the Company's capital structure or management, breach or termination of a material contract, certain actions by ASIC against the Company, fall in market or uranium prices and the advent or escalation of hostilities or terrorist acts in named countries (other than existing acknowledged hostilities in the Middle East and North Korea).

Taylor Collison and Southern Uranium

By Agreement dated 16 February 2007, Taylor Collison has agreed to underwrite the placement of 25,000,000 shares in the offer. The agreement is subject to the LKT Agreement (summarised above) and to Southern Uranium securing cornerstone investment of at least 20,000,000 shares in the Offer. Taylor Collison is entitled to fees and commissions as follows:

• a management fee of \$20,000.00
• an underwriting fee of 5% of the underwritten amount (\$250,000) out of which Taylor Collision shall meet any subunderwriting, stamping, brokerage fees and its administrative and management costs.
• 1,000,000 options, exercisable at \$0.25 with a term of 4 years from the date of listing. These options will be issued subject to escrow restrictions imposed by ASX Listing Rules.

The balance of the terms of the agreement are the same as the LKT agreement summarised above including in respect of costs, warranties, indemnities and termination events.

CORNERSTONE INVESTMENT AGREEMENTS:

Talbot Group Holdings Pty Ltd as trustee for the Talbot Equities Trust ("Talbot"), CITIC Australia Pty Ltd ("CITIC") and Southern Uranium

By agreement dated 15 February 2007, a consortium of investors comprising Talbot and CITIC have agreed to apply for not less than 20,000,000 Shares in the Offer. Any application by and allocation of Shares to CITIC is subject to approval being obtained SOUTHERN URANIUM LTD PROSPECTUS 2007 $R\bar{R}$

from the Foreign Investment Review Board pursuant to the Foreign Acquisitions and Takeovers Act 1975 and the Federal Governments' Foreign Investment Policy prior to the Priority Closing Date. Subject to that condition, the consortium members may determine between themselves the percentage of the total agreed allocation to be taken up by each of them.

If Southern Uranium fails to raise \$14,000,000, or meet the ASX listing requirements on or before June 2007, the Cornerstone Investment Agreement will terminate and Southern Uranium will refund any application monies paid by CITIC and Talbot in accordance with the Cornorations Act.

The Company has agreed with the Consortium to negotiate in good faith and to enter into a priority agreement, the principal terms of which are set out in the Cornerstone Investment Agreement and have been agreed to include the following:

• the Company must notify the Consortium in the event that it intends to enter into a joint venture agreement or otherwise assign any tenement and, subject to any pre-existing third party joint venture rights, to offer the Consortium the first right of refusal to match or better the terms of the proposed assignment or joint venture;
• the Consortium may exercise the right within 30 days of receiving an offer notice;
• If the Consortium elects not to take un the option if will be deemed to have waived its first right of refusal in respect of the relevant tenement or tenements and the Company may proceed with concluding a joint venture or assignment on the notified terms:
• The agreement will be for an initial term of 10 years, but is subject to the consortium maintaining, throughout the term, a minimum shareholding in the Company of 15%;
• The consortium's shareholding may drop below the minimum 15% for a period not exceeding 180 consecutive days without termination of the agreement occurring;
• Other usual industry terms

Inspection of Documents: Copies of material contracts, the Constitution of the Company and consents referred to in the Additional Information Section may be inspected, free of charge, at the registered office of the Company 58 North Terrace Kent Town. South Australia during normal business hours.

Rights attaching to Shares

For details of rights attaching to the Shares investors should refer to the Company's Constitution (a copy of which is available for inspection at the Company's registered office). This summary is not exhaustive and does not purport to be a definitive statement of the rights and liabilities of shareholders

Votina

Subject to any rights or restrictions attached to any Shares, every shareholder present in person or by proxy, attorney or representative, at general meetings has one vote on a show of hands and, on a poll, has one vote for each fully paid share held.

Dividends

Before declaring a dividend, the Directors may, at the discretion of the Directors, set aside out of the profits of the Company such sums as they think proper as reserves to be applied for any purpose for which the profits of the Company may properly be applied.

Subject to the rights of shareholders holding Shares with special rights (if any), a dividend payable on Shares will be paid according to the proportion that the amount paid on Shares (including amounts credited) represents of the total amount paid and payable for the Share.

Dividends may only be paid out of the profits of the Company

The Directors may authorise payment by the Company of such dividends, including interim dividends, as the Directors consider are justified by the profits of the Company. The payment of such dividends does not require the sanction of the shareholders.

Rights on Winding Up

Subject to the Corporations Act, the Listing Rules and any rights or restrictions attached to a class of shares (if any), upon the Company being wound up, the liquidator may, with the approval of a special resolution of the members divide any part of the assets of the Company, in specie or in kind, among contributors, including shareholders.

Transfer of Shares

There are no restrictions on the transfer, in a proper form, effected in accordance with the SCH Business Rules, of Shares once the Company is admitted to the Official List of the ASX. Prior to the Company being so admitted, the Company may, in the Board's discretion, refuse to register any transfer of Shares. After admission to the Official List, the Company may only refuse to register a transfer of Shares where the Listing Rules or SCH Business Rules require or permit the Company to do so.

Issue of Shares

Except as provided by contract or the Company's Constitution, the issue of Shares is under the control of the Directors who may allot them with such rights and restrictions as to dividends, voting, return of capital or otherwise and on such terms and conditions as the Directors determine. Directors may also grant options to take up unissued Shares in the Company in such manner and on such terms as the Directors see fit.

Notices

Shareholders are entitled to receive notice of, attend and vote (in person or by proxy, attorney or representative) at all general meetings of the Company and to receive notices and other documents required to be furnished to shareholders in accordance with the Constitution, the Corporations Act and the Listing Rules.

Terms of Ontions

Each of Stephen Biggins, Ric Horn, Mike McDonald, Mick Billing, Roger Marshall and David Jones have received 1,000,000 Promoter Options and John Anderson has received 1,500,000 Promoter Options.

At listing, each of the joint Underwriters is entitled to receive 1,000,000 Broker Options.

Promoter Options and Broker Options are exercisable at \$0.25 ("Exercise Price")

Promoter Options are exercisable on or before 31 March 2010 ("Promoter Exercise Date") and Broker Options are exercisable within 4 years of the date of issue ("Broker Exercise Date"). Other terms attaching to the Options are as follows:

• Entitlement to Ordinary Shares: The Optionholder is entitled on payment of the Exercise Price to be allotted one ordinary $\mathbf{1}$ fully paid share in Southern Uranium Limited ("the Company") for each Option exercised (subject to possible adjustments referred to below).
• Exercise Period: The Options held by the Optionholder are exercisable in whole or in part at any time after the Company $\overline{2}$ is admitted to the official list of Australian Stock Exchange Limited ("ASX") and on or before midnight on the Promoter Exercise Date or the Broker Exercise Date (as the case may be) ("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 lanse.
• 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.

• The Company will not make application for official quotation of the Options on ASX. 4.

• $5.$ Method of Exercise of Options: Options are exercisable by the Optionholder completing and signing a "Notice of Exercise of Options" 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.

• Shares allotted on exercise: The Company will make application for official quotation on ASX of new shares allotted on В. 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.
• $\overline{J}$ . 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.
• $8.$ 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:

$$
A = 0 - \frac{E{P-(S+D)}}{(N+1)}
$$

Where:

• $A =$ the new exercise price of the Option;
• $0 =$ the old exercise price of the Option;
• $E =$ The number of underlying shares into which one Option is exercisable:
• $\bar{P}$ $\equiv$ 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 pro rata 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.
• Bonus Issue: If there is a bonus issue to the holders of ordinary shares in the capital of the company, the number of 9. 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.
• $10.$ Regraanisation of Capital: If, during the currency of the Options the capital of the Company is reproanised, 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.
• Transfer: Options may be transferred or transmitted at any time prior to their expiry and same will be recorded on the $11.$ Company's Register of Optionholders.
• Meetings: The Optionholder, if appearing on the Company's Register of Optionholders at the relevant date, will be entitled to $12.$ 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.

Incorporation

Southern Uranium Limited was incorporated as a public company on 18th July 2005.

Interest of Director's and Promoters

Except as disclosed in this Prospectus:

• (a) no Director:
• person named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with $(b)$ the preparation and distribution of this Prospectus: or
• (c) promoter of the Company: or
• (d) underwriter to the Offer or financial services licensee named in this Prospectus as a financial services licensee involved in the Offer, (whether individually or in consequence of that person's association with any company or firm or in any material contract entered into by the Company) has now, or has had, in the 2 year period ending on the date of this Prospectus, any interest in (i) the formation or promotion of the Company; (ii) any property acquired or proposed to be acquired by the Company in connection with its formation or promotion or in connection with the Offer, or (iii) the Offer

Except as disclosed in this Prospectus, no amounts of any kind (whether in cash, Shares, options or otherwise) have been paid or agreed to be paid to any of the above persons as an inducement to become or to qualify as, a Director or otherwise for services rendered by him or his company or firm in connection with the formation or promotion of the Company or the Offer.

At the date of this Prospectus:

• The Company has procured the services of:
• Mr John Anderson as Managing Director for a period of 1 year with an option to renew for 2 additional periods of 12 months at an annual cost of \$220,000 plus 15% superannuation entitlement.
• each of Mr David Jones, and Mr Stephen Biggins (as Non-Executive Directors) for a period of 3 years each to receive annual directors fees of \$50,000 plus 10% superannuation contribution
• Mr Roger Marshall as non-executive Chairman for a period of 3 years with directors fees of \$70,000 plus 10% superannuation entitlements to be paid annually.
• Consulting services of Mr Michael Billing (as Company Secretary and Chief Financial Officer) for a period not exceeding 12 months at a daily consulting rate of \$1,000 plus GST plus expenses (details of these arrangements are more particularly set out in the Material Contracts section) At the date of this Prospectus the Company has not paid any Directors fees.
• The Underwriters will be paid the fees of approximately \$540,000.00 and will be issued 2,000,000 Broker Options for managing the Offer:
• David Tonkin & Associates has or will be paid a fee of around \$14,200.00 for preparing the Independent Geologist's Report section of this Prospectus.
• Grant Thornton Accountants have or will be paid a fee of approximately \$5,000.00 for preparing the Investigating Accountants Report section of this Prospectus.
• McDonald Steed McGrath Lawyers have or will be paid a fee of approximately \$51,000.00 for preparing the Solicitor's Tenement Report section of this Prospectus and in their role as solicitors to the Offer;
• 1,000,000 options in Southern Uranium Limited have been issued to each of the directors of Southern Gold Limited other than Mr John Anderson who has received 1,500,000 options. These options are issued at an exercise price of \$0.25, exercisable on or before 31 March 2010

Directors

Directors may subscribe for Shares under this Prospectus.

Directors shall be entitled to be reimbursed all reasonable travelling, accommodation and other expenses properly incurred by the Directors in attending Board meetings, shareholders meetings and otherwise in connection with the business of the Company

Consents

The Directors have given their consent to the lodgement of this Prospectus with ASIC and have not withdrawn their consent prior to lodgement.

The following persons have given their written consent to be named in this Prospectus and have not withdrawn such consent before lodgement of this Prospectus with ASIC:

Taylor Collison Limited has consented to being named as a Broker and Underwriter to the Offer.

Lands Kirwan Tong Stockbrokers Pty Limited has consented to being named as a Broker and Underwriter to the Offer.

David Tonkin & Associates have consented to being named as Independent Geologist to the Company and to the inclusion of its Independent Geologist's Report in this Prospectus in the form and context in which it is included;

Computershare Investor Services Ptv Ltd has consented to being named as Share Registry for the Company;

Grant Thornton has consented to being named as Investigating Accountants to the Company and to the inclusion of its Investigating Accountant's Report in this Prospectus in the form and context in which it appears;

McDonald Steed McGrath - Lawyers have consented to being named as solicitors to the Offer.

Uranium West Pty Ltd. Crescent Gold Ltd. Mega Uranium Ltd. Hindmarsh Resources Ltd. Austrike Resources Pty Ltd. Vidorg Pty Ltd, MBB Trading Pty Ltd, Ian Garsed, CITIC Australian Pty Ltd and Talbot Group Holdings Pty Ltd have each consented to being named in the manner and context in which their respective names appear in this Prospectus.

Expenses of the Offer

It is estimated that the expenses of the Offer, payable by the Company, including fees payable to the Underwriter (of approximately \$540,000), fees of the Independent Geologist, Independent Accountants and Solicitors, printing, ASX listing fees, share registry fees, posting, advertising and other miscellaneous expenses will be approximately \$850,000 which will be paid using proceeds of the Offer.

Details of Directors Interests: The holdings of Options of the Directors and Officers in the Company prior to this Offer are as follows:

	No. of Options:
John Anderson	1.500.000
Stephen Biggins	1,000,000
Roger Marshall	1,000,000
David Jones	1,000,000
Mick Billing	1,000,000

Notes on Option-holding: All of the options referred to above were granted for no monetary consideration

Restricted Securities

Options issued to promoters and brokers capitalist prior to or as part of this Offer are expected to be subject to escrow restrictions to be imposed by the ASX on admission of the Company to the Official List. Any determination as to escrow will be made by the ASX and details thereof released to the market prior to commencement of trading in the Shares.

Legal Proceedings

The Company is not involved in any legal or arbitration proceedings. The Directors are not aware of any such proceedings pending or threatened.

Dividend Policy

The Company does not yet have a dividend policy. The Company has no immediate intention to declare or distribute dividends. Payment of future dividends will depend upon the future profitability and financial position of the Company.

Constitution

The Constitution is incorporated into this Prospectus by reference in accordance with section 712 of the Corporations Act. A copy may be viewed at the Company's registered office.

Electronic Prospectus and Application

From the time the Offer opens this Prospectus (including the Application form) may be viewed online at www.southernuranium.com.au. Persons who access the electronic version of this Prospectus should ensure that they download and read the entire Prospectus. This Prospectus is only available online to residents in Australia. A paper copy will be provided, free of charge to any person in Australia who requests a copy by contacting the Company or Computershare during the period of the Offer. The Application Form must be completed in accordance with the instructions set out in the Application Form

Non-Residents

Non-Residents should consult their professional advisers as to whether any formalities need to be observed or authorities obtained in subscribing for Shares, and, if necessary should obtain such approvals as may be required in order to legally subscribe for, and be issued Shares. The return of a completed Application Form by a Non-Resident will be taken by the Company to constitute a representation and warranty by the Applicant that the Company may lawfully issue the Shares to the Applicant.

Privacy

The information asked for in the Application Form is used to carry out registry functions including sending annual reports, notices of meeting, newsletters and notifications to the ATO.

The Company and Computershare will normally only use the information you provide on the Application Form for these purposes. If the information requested is not provided, your application may not be able to be processed or accepted. The Company and Computershare will not normally disclose information about shareholders to external parties, except to parties to which the Company has outsourced functions or which provide advice to the company such as the Company's insurers, accountants, auditors and legal advisers. The Company and Computershare might be required to disclose information about

you to Government authorities such as the ATO or ASIC. You are able to access information the Company and Computershare hold about you on request, and you are entitled to correct any information which is inaccurate or out-of date by contacting the Company and or Computershare.

Employee Share Option Plan

A summary of the rules of the Plan is set out below:

• $\overline{a}$ All employees will be eligible to participate in the Plan.
• The allocation of options to each employee, or nominee of the employee, is at the discretion of the Board. $\bullet$
• Each option is to subscribe for one fully paid share in the Company and will expire 5 years from its date of issue. An option is exercisable at any time from its date of issue.
• Each option shall be issued free. The exercise price of options will be determined by the Board, subject to a minimum price equal to 90% of the market price of the Company's shares at the time the options are offered.
• The total number of shares the subject of options issued under the Plan, when aggregated with issues during the previous 5 years pursuant to the Plan, must not exceed 5% of the Company's share capital.
• If, prior to the expiry date of options, a person ceases to be an employee of a group company for reason other than retirement at age 60 or more (or such earlier age as the Board permits), permanent disability, redundancy or death, the options held by the employee (or nominee) must be exercised within 3 months thereafter otherwise they will automatically lapse. If an employee dies, the options held by that person will be exercisable by that person's legal representative.
• Options may not be transferred other than to the legal representative of a deceased option holder.
• The Company will not apply for official quotation of options issued under this Plan. ٠
• Shares issued from the exercise of options shall rank equally with all other ordinary shares issued by the Company.
• If there is a bonus share issue to holders of shares, the number of shares over which an option is exercisable will be increased by the number of shares which the option holder would have received if the option had been exercised before the record date for the bonus issue.
• If there is to be a pro rata issue (except a bonus issue), the Exercise Price of an Option may be reduced according to the following formulae:

$$
0^n = 0 - \frac{E[P-(S+D)]}{N+1}
$$

Where

$0^\circ$ = the new exercise price of the Option:

$0$ = the old exercise price of the Option;

$E =$ the number of underlying securities into which one Option is exercisable;

$P =$ the average market price per security (weighted by reference to volume) of the underlying securities during the 5 day trading period ending on the day before the ex-right date or the ex-entitlement date;

$S =$ the subscription price for a security under the pro rata issue

$D =$ dividend due but not yet paid n the existing underlying securities (except those to be issued under the pro rata issue);

$N =$ the number of securities with rights or entitlements which must be held to receive a right to one new security.

• If there is a reorganisation of the issued capital of the Company, unexercised options will be reorganised in accordance with the Listing Rules of the Australian Stock Exchange.
• The terms of the options shall be changed if holders (whose votes are not to be disregarded) of ordinary shares in the Company approve such a change. However the terms of the Options shall not be changed to reduce the exercise price, increase the number of options, or change any period for exercise of the options.

AS and S-Australian dollars, unless otherwise stated:

Applicant - means a person who submits an Application or a Priority Application:

Application – means a valid application to subscribe for Shares and includes a valid Priority Application!

Application Form – means the application form contained in this Prospectus or a copy of the application form contained in this Prospectus or a direct derivative of the application form which is contained in this Prospectus and includes an application

form for SAU Shareholder priority allocation:

Application Price - means \$0.20 being the amount payable in respect of each Share under the Offer:

ASIC - means Australian Securities & Investments Commission:

ASX - means the ASX Limited ACN 008 624 691:

ASTC

ATO - means the Australian Taxation Office:

Board – means the Board of Directors of Southern Uranium Limited unless the context indicates otherwise:

$BPAY - refers to bill payment by way of electronic means:$

Business Day - means a day on which the trading banks are open in Adelaide:

Chairman – means the chairman of the Board:

CHESS - means ASX Clearing House Electronic Sub-registry System:

Closing Date – means the date on which the Offer closes:

Company and Southern Uranium - means Southern Uranium Limited ACN 115 338 979; In this Prospectus, a reference to Southern Uranium includes, where applicable, a reference to its wholly owned subsidiary Sunthe Uranium Pty Ltd (ACN 119 366 166.);

Computershare – means Computershare Investor Services Pty Ltd (ACN 078 279 277) whose details are set out in the Corporate Directory:

Constitution $-$ means the constitution of the Company as amended from time to time;

Corporations Act - means the Corporations Act 2001;

CST - means the time applicable in Adelaide, South Australia:

Directors – means directors of Southern Uranium Limited, unless the context indicates otherwise:

Exercise Price – means the amount payable to the Company upon exercise of an Option being the subscription money for the issue of a Share upon the exercise of the Option:

HIN - means holder identification number;

Record Date - means 12 February 2007:

SAU Priority Application and Priority Application - mean a valid application to subscribe for Shares made by a SAU Shareholder during the Priority Offer period:

SAU Shareholder – means a person holding shares in Southern Gold Limited as at the date of this Prospectus:

Southern Gold and SAU - mean Southern Gold Limited (ACN 107 424 519);

Sunthe Uranium - means Sunthe Uranium Pty Ltd (ACN 119 366 166) a wholly owned subsidiary of the Company:

Initial Public Offering or IPO - means the first offering of shares pursuant to a Prospectus:

Issue or Offer – means the issue of Shares pursuant to this Prospectus:

Issuer Sponsored – means securities issued by an issuer that are held in uncertificated form without the holder entering into a sponsorship agreement with a broker or without the holder being admitted as an institutional participant in CHESS;

Listing Rules $-$ means Listing Rules of the ASX;

Non-Resident - means a person domiciled outside Australia;

Offer Period – means the period commencing on the Opening Date and ending on the Closing Date;

Official List - means the Official List of the ASX;

Official Quotation - means quotation of the Shares on the Official List;

Options – means an option to take up shares in the Company:

Opening Date - means the date immediately following the expiry of the exposure period referred to on page 2 of this Prospectus; Priority Closing Date - means the date on which the Priority Offer closes

Priority Offer - means the priority offer of Shares to SAU Shareholders

Prospectus - means this Prospectus

Proper SCH Transfer – has the same meaning given in the Corporations Act:

SCH Business Rules - means the SCH Business Rules issued by ASX Settlement and Transfer Corporation Pty Ltd ACN 008 504 532:

Share – means an ordinary share in the capital of the Company:

Shareholders – means the holders of Shares in the Company:

Underwriters - means Taylor Collison Limited (ACN 008 172 450) and Lands Kirwan Tono Stockbrokers Pty Ltd (ACN 006 634 411)

GLOSSARY OF TECHNICAL TERMS

acid	Igneous rocks with over 66% silica (quartz).
acid rock	Igneous rock in which high-silica minerals dominate (also "felsic").
Adelaidean	A time period from 870 to 570 million years ago.
aeolian	Deposited by wind action.
aeromagnetic	A survey of the Earth's magnetic field conducted by an aircraft.
aeromagnetic survey	A survey made from the air for the purpose of recording magnetic survey data on rocks.
AGSO	Australian Geological Survey Organisation, formerly the Bureau of Mineral Resources, now Geoscience Australia.
aircore	A rotary drilling technique that uses compressed air to cut a core sample and return fragments to surface inside the drill rods.
alkaline rock	An igneous rock containing more sodium and/or potassium than is required to form feldspar with the available silica.
alluvium	An unconsolidated sediment deposited by water.
alunite	A hydrated sulphate of potassium and aluminium, generally occurring as a product of hydrothermal alteration in feldspathic igneous rocks.
amphibolite	A metamorphic rock consisting of amphibole and plagioclase, formed from basic igneous rocks such as dolerites or basalts.
andesite/andesitic	A volcanic rock intermediate in composition between basalt and rhyolite.
anomaly	An area where exploration has revealed results higher (or sometimes lower) than the local background level.
Archaean	The oldest rocks of the Precambrian era, older than 2,500 million years.
argillic alteration	A type of alteration in which certain rock minerals are converted to minerals of the clay group.
arkose	A form of sandstone composed to detrital grains of feldspar and quartz.
arsenopyrite	Arsenical pyrites.
Ās Āи	The chemical symbol for the element arsenic. The chemical symbol for the element gold.
auger drilling	A drilling method where the sample rises up the outside of spiral drill rods.
auriferous	Gold-bearing.
banded iron formation	A sedimentary rock composed largely of iron minerals and chert and showing distinct banding.
hasait	A dark and fine grained basic volcanic igneous rock.
base metal	A metal inferior in value to precious metals; e.g. copper, lead, zinc, nickel.
basement	A much older harder rock surface underlying more recent deposits.
basic rocks/volcanics	Igneous rocks containing between 45 and 52% silica, distinct from acid or intermediate rocks.
basic	An igneous rock which is low in silica, generally less than 55%, eg basalt.
batholith	A very large mass of intrusive plutonic igneous rock, often granitic.
Вí	The chemical symbol for the element bismuth.
BIF	Banded iron formation
biotite	A dark mica mineral.
BLEG	Bulk leach extractable gold analysis; an analytical method for accurately determining low levels of gold.
breccia	A coarse grained rock of angular broken rock fragments cemented together.
bulk sample	A large, representative sample.
Cainozoic	Latest of the four eras of geological time; dating from 65 million years to the present.
calcite	A common mineral, calcium carbonate.
calcrete caldera	A calcareous desert soil, or in soil precipitate, formed from crystallisation of calcite and associated carbonates by evaporation of upward moving solution.
carbonaceous	A large, basin-shaped, volcanic depression within which smaller vents may be present. Containing fine particles of carbon distributed through the rock.
chalcopyrite	A copper-iron sulphide mineral, an important ore of copper CuFeS 2 .
chlorite	A platy mica mineral rich in iron & magnesium, often formed by alteration.
co-magmatic	Igneous rocks derived from the same parent magma.
colluvium	A loose, heterogeneous and incoherent mass of soil and regolith deposited by down-slope
	processes.
conglomerate	A sedimentary rock composed predominantly of rounded pebbles, cobbles or boulders deposited by the action of water.
costean	A trench cut in order to collect a sample across a mineral prospect.
covellite	An ore of copper: CuS
cover	Applied to rocks or a sequence of rocks that overlie older rocks, usually basement.
craton	A large, stable and generally old part of the Earth's crust.
crust/crustal	The outermost part of the earth adj. Crustal.
Сu	The chemical symbol for the element copper.

GLOSSARY OF TECHNICAL TERMS	continued
dacite	An extrusive intermediate volcanic rock composed mainly of plagioclase, quartz, pyroxene or/or hornblende.
Devonian diamond drilling	A time period from approximately 400 to 345 million years ago. Drilling method where a diamond impregnated bit cuts a cylindrical hole to recover a continuous rock core sample.
dip dolerite	The angle at which a layer or bed is inclined from the horizontal. A medium grained basic intrusive rock composed mostly of the minerals pyroxene and sodium- calcium feldspar.
downhole gamma logging	Measurement of rock radioactivity, indicative of radioactive elements including but not exclusively uranium, by lowering a probe down a drillhole.
dry-blowing	A means of recovering gold from soil via the use of wind to winnow and concentrate denser material.
dunite dyke	A peridotite consisting essentially of olivine and chromite. A tabular body of intrusive igneous rock, crosscutting the host strata.
EL.	Exploration Licence.
ELA	Exploration Licence Application.
electromagnetics, EM survey	A method of measuring the alternating magnetic fields associated with electrical currents artificially or naturally maintained in the subsurface.
eluviat Eocene	A term for loose sediments on a slope close to their area of origin. The period of geological time between 55 and 34 Ma.
epidote	A yellow-green hydrated iron, aluminium, calcium silicate often a product of metamorphism or hydrothermal alteration.
epithermal	Hydrothermal activity within one kilometre of the earths surface in a temperature range 50 to 200 degrees Celsius, usually forming veins.
eruptive extrusive	Volcanic rocks that have burst through other rocks in a molten state. An igneous rock that has been erupted on to the earth's surface.
facing	Applied to the original direction of a layer.
fault	Fracture in a rock sequence where one side has moved relative to the other.
feldspar	One of the commonest minerals, consisting of alkali aluminium silicates.
felsic	Descriptive term for a light coloured igneous rock rich in silica.
ferricrete ferruginous	Surficial layer more or less cemented with iron oxide. Containing iron.
fluorite	A mineral formed of calcium and fluorine which forms cubic crystals.
fluviatile	Refers to the results of river action.
foliated	Showing planar mineral alignment, usually as a result of metamorphic processes.
fuchsite	Bright green chromium-rich variety of muscovite.
g/t gabbro	An abbreviation for grams per tonne, a standard unit for reporting the concentration of precious metals in a rock, equivalent to parts per million (ppm). A coarse grained intrusive rock that is low in silica and has relatively high levels of iron and
galena	magnesium minerals. Lead sulphide, PbS.
gangue	The non-metalliferous or non-valuable components of ore.
garnet	A commonly red to brown euhedral mineral found in metamorphic rocks.
geochemical survey	A systematic study of the variation of chemical elements in rocks or soils.
geomorphology	Study of the form and origin of natural land surface features.
geophysics GEOTEM	Study of the earth by quantitative physical methods. A fixed-wing airborne electromagnetic (EM) geophysical survey system.
GIS	Abbreviation for Geographic Information System
gneiss	A metamorphic rock with compositional banding.
gossan	A ferruginous deposit remaining after the oxidation of the original sulphide minerals in a vein or ore zone.
granite granitoid	A plutonic felsic igneous rock composed of quartz, feldspar and mica. A general term to describe course grained felsic intrusive igneous rocks, resembling granite.
granodiorite	A course grained intermediate igneous intrusive rock composed of quartz, feldspar and hornblende and/or biotite.
granulite facies	Metamorphic conditions of high temperature and/or pressure.
graphitic	Containing graphite, a native form of elemental carbon generally found in meta-sedimentary rocks.
gravity survey	A geophysical survey technique using a gravimeter to measure the force of gravity at locations within an area.
greenschist facies	Metamorphic conditions of moderate temperature and pressure, characterised by the presence of the minerals chlorite, amphibole and sodium plagioclase.

greenstone

groundwater haematite high-Mg basalt

HoistEM hornfels hydrothermal ianeous indicator minerals

Inferred Resource inlier intrusive IOCG deposit IOCGU deposit IP survey K-feldspar

kg/t U_.0

kimberlite komatiite lacustrine lag sample lamprophyre Landsat late tectonic laterite lava leucogranite lianite lineament lode Ma mafic magnetic survey magnetite magnetometer malachite manganiferous matrix MESA Mesoproterozoic Mesozoic

meta metamorphic metasediment

miarolitic

micaceous micro-gravity microgranite milligal

Term commonly applied to low metamorphic grade rocks of basic composition and comprised largely of the minerals albite, chlorite and amphibole. Commonly applied to Archaean rock sequences dominated by these rock types. Subterranean water held in fractures and porous rock or sand beneath the earth's surface Iron oxide mineral, Fe, 0, (hematite). A basalt with a higher proportion of magnesium than thoeleiitic basalts, but less than that usually attributed to komatiitic basalts. A helicopter-towed time domain electromagnetic survey system. A fine grained metamorphic rock recrystallised by the heat of an intrusion. A process when hot water-rich solutions transfer materials or alter rocks. Rocks formed by crystallisation from molten material. In connection with kimberlite exploration, indicator minerals include: pyrope garnet. picroilmenite, chrome-diopside, kimberlitic zircon, chromite and diamond. The least assured category of mineral resource. An area of rocks surrounded by rocks of younger age. Cf: outlier A body of igneous rock that was intruded whilst molten in to the earth's crust. Abbreviation for Iron-Oxide-Copper-Gold deposit, e.g. Olympic Dam orebody. Abbreviation for Iron-Oxide-Copper-Gold-Uranium deposit, e.g. Olympic Dam orebody. Induced Polarisation survey, an electrical geophysical method used to detect buried deposits formed by disseminated sulphide minerals. A potassium rich variety of feldspar. Measure of uranium content in rocks e.g. 0.640 kg/t U₂O₂ is equivalent to 0.064% U₂O₂ A type of ultramafic rock and the major primary source of diamonds. Magnesium-rich mafic to ultramafic extrusive rock. Produced by or belonging to lakes. Sample of coarser or heavier residual material which accumulates by deflation on the ground surface A mafic igneous rock containing a high percentage of biotite, hornblende and pyroxene as phenocysts and a fine-grained groundmass including feldspars. An unmanned satellite designed to provide multi-spectral imagery of the earth's surface. An event occurring towards the end of a tectonic event, or a rock or feature so formed. A cemented residuum of weathering, generally leached in silica with a high alumina and/or iron content. Igneous rock that was extruded onto the Earth's surface before solidifying. Light coloured granite, lacking mafic minerals. A soft brown coal intermediate between peat and sub-bituminous coal. A naturally occurring major linear feature in the earth's crust often associated with mineral deposits. A separate, tabular part of an orebody with well defined walls. Millions of years before present. Dark coloured igneous rocks composed dominantly of magnesian and iron rock-forming silicates. A survey of the Earth's magnetic field either from the ground or the air. Magnetic ferrous iron oxide (Fe.0.); principal cause of magnetic anomalies. An instrument used for measuring the intensity of the earth's magnetic field. Bright green mineral-hydrated copper carbonate, often in weathered Cu ore. Containing abundant manganese. The rock or earthy material containing a mineral or metallic ore. Former Department of Mines and Energy, South Australia. A period of geological time from 1600 to 1000 Ma. A time period from approximately 225 to 65 million years ago. A prefix meaning that the rock type has undergone metamorphism. A rock that has modified texture, mineralogy and composition due to the effects of pressure. heat and fluids within the crust. Sedimentary rock that has been re-crystallised by metamorphism. Term applied to small irregular cavities in igneous rocks (especially granites), into which small crystals of the rock-forming minerals protrude. Contains micas, a common hydrated silicate with a platy structure. A high-sensitivity geophysical gravity survey technique. A fine-grained granitic rock.

A unit of acceleration used with gravity measurements.

SOUTHERN URANIUM LTD PROSPECTUS 2007

GLOSSARY OF TECHNICAL TERMS	continued
MIMDAS	An induced polarisation electrical geophysical survey technique developed by Mount Isa Mines Limited.
mineralisation MMI	An anomalous concentration of metals of economic interest. Mobile Metal Ion: A sensitive analytical technique for detecting ions that have moved some distance from oxidising mineralisation.
Mп	The chemical symbol for the element manganese.
Mo	The chemical symbol for the element molybdenum.
monzogranite	A granular plutonic rock containing approximately equal amounts of orthoclase and plagioclase feldspar, but usually with a low quartz content.
mylonite	deformation of a rock by pressure applied in a definite direction without chemical changes to the materials.
Neoproterozoic	A period of geological time from 1000 to 545 Ma.
nickel laterite	Nickel ore hosted within the laterite profile, usually derived from the weathering of olivine-rich ultramafic rocks.
NOAA	National Oceanic and Atmospheric Administration, a type of satellite imagery with resolution of around one kilometre.
olivine	An olive green magnesium-iron silicate (Mg, Fe) 2 SiO a , common in mafic and ultramafic igneous rocks.
onlap	Extension of successive sedimentary units beyond the limits of their predecessors as they transgress onto older rocks at the margins of a depositional basin.
open file	A category of reports at a Mines Department Library which are available for public perusal after a title has been relinquished; contrast with closed file.
Ordovician	A time period from 500 to 440 million years ago.
orogen/orogenic	A linear or arcuate region that has been subjected to folding and other deformation.
outcrop	The surface expression of a rock layer, verb to crop out.
outfier	An isolated area of rock surrounded by older rocks. Abbreviation for Troy ounce (31.103477 grams), an Imperial unit of weight used widely in the
0Z	gold mining industry.
PACE	The Plan for Accelerating Exploration, whereby the South Australian government offers an incentive for companies to drill holes that will add to the knowledge of the geology of various regions.
palaeochannel	An ancient preserved stream or river.
Palaeoproterozoic	A period of geological time from 2500 to 1600 Ma.
Palaeozoic	A time period from approximately 590 to 248 million years ago.
Pb	The chemical symbol for the element lead.
pedogenic	Pertaining to soil formation.
pegmatite	A very course grained igneous rock formed at a late stage of magmatic differentiation.
percussion drilling peridotite	Rock drilling carried out by the hammering action of a pneumatically driven drill bit. A coarse grained igneous rock composed essentially of olivine, with or without other mafic minerals, and little or no feldspar.
Permian	A time period from approximately 280 to 225 million years ago.
petrology	The study of rocks in the fullest sense, adj. Petrographic.
Phanerozoic	Period of the earth's history represented by rocks in which the evidence of life is abundant, from about 570Ma to the present.
phyllite	A metamorphic rock with abundant mica and a strong fabric.
PIRSA	Department of Primary Industry and Resources South Australia.
Playa	A dry or ephemeral lake or salina.
plug	A vertical pipelike body of magma representing the conduit to a former volcanic vent.
pluton/plutonic	An igneous rock that has solidified slowly at depth in the Earth's crust. A felsic intrusive or subvolcanic rock with larger crystals set in a fine groundmass.
porphyry potassic alteration	A variety of alteration with anomalous concentrations of potassium.
ppb	Parts per billion; a measure of low level concentration.
ppm	Parts per million; quantitative equivalent of g/t.
Precambrian	Era of geological time before the Cambrian, from about 4600 to 545 Ma.
precious metals	General term for gold, silver or minerals of the platinum group.
prospect	Location of perceived mineral potential
prospectivity	Qualitative estimate of the potential for undiscovered mineral resources
Proterozoic	The second eon of the Precambrian, spanning the period from 2,500 to 545 million years before the present.
pseudomorph	A mineral whose outward crystal form is that of another mineral species, which it has replaced.
Pt	The chemical symbol for the element platinum.
pyrite	An iron sulphide mineral, FeS.

pyroclastic	Clastic rocks that result from explosive volcanic activity.
quartz	The mineral silicon dioxide, the commonest mineral in the Earth's crust.
quartzite	A rock composed predominantly of quartz.
Quaternary	A time period from 1.8 million years ago to the present.
RAB	Rotary Air Blast, a rotary drilling technique that uses compressed air to clear the drill bit of cuttings and return them to the surface.
radiogenic	Derived from a radioactive process.
radiometric survey	A geophysical survey technique whereby measurements are made of ambient radiation that may be indicative of different rocks, ores, etc.
RC drilling	Reverse circulation drilling, a rotary percussion drilling technique in which the samples are returned to the surface inside the drill rods minimising contamination.
Recent	Geological age from about 20,000 years ago to the present.
redbed	A sedimentary sequence predominantly red due to the presence of iron oxide.
redox boundary	Chemical reduction-oxidation boundary.
regolith	The layer of weathered and transported material overlying fresh rock.
remote sensing	The process by which satellite images are created by scanning the earth's surface using sensors on satellites.
resistivity	A means of detecting buried features and areas of disturbance by measuring the resistance of an electrical current passed through the ground.
resource	That part of a mineral occurrence that is estimated to be of potential economic merit.
retrograde	Process of adjustment of mineral assemblage to lower grade metamorphism.
rhyodacite	Igneous rocks intermediate between rhyolite and dacite.
rhyolite	A fine grained acid volcanic rock having a similar chemical composition to granite.
roll front uranium	A type of uranium deposition localized as a roll or interface separating an oxidized interior from a reduced exterior. The reduced side of this interface is significantly enriched in uranium.
roof pendant	A downward projection of country rock into an igneous intrusion.
rotary percussion	A drilling technique involving simultaneous hammering and rotation action by a bit.
rotary mud drilling	A drilling process using a rotating bit to cut the rock and a solution of heavy mud to recover the cuttings.
SADME	The former South Australian Department of Mines and Energy.
SAEI	The South Australian Exploration Initiative, which ran from July 1992 to June 1996, whereby \$23.5m was allocated by the State Government to mineral and petroleum geoscientific programs.
saprock	Zone of partially weathered towards the base of the weathered profile, in which the original textures have been preserved.
saprolite	Disintegrated, in-situ rock, partially decomposed by the chemical and physical processes of oxidation and weathering.
Sb	The chemical symbol for the element antimony.
	A geochemical process involving adsorption of trace elements onto Fe, Mn and Al-hydroxide.
scavenging schist	A micaceous metamorphic rock with parallel orientation of its minerals.
scintillometer	An instrument for measuring the natural radiation of rocks.
sediment	A rock formed of particles which were deposited from suspension in water, wind or ice.
sedimentary uranium	A type of uranium deposit found in sedimentary rocks of palaeodrainage channels.
sedimentary	A term describing a rock formed by the accumulation of biogenic or chemically formed minerals, and/or transported rock or mineral particles.
seismic reflection	The return of part of the energy of seismic waves to Earth's surface after the waves bounce off a rock boundary.
seismic refraction	The bending of seismic waves as they pass from one material to another.
sericite	A fibrous form of muscovite, often resulting from the alteration of feldspar.
shale	A laminated sediment in which most particles are clay grade (<0.0039mm).
shear (zone)	A zone in which shearing has occurred on a large scale so that the rock is crushed and brecciated.
Shuttle Radar	The Shuttle Radar Topography Mission (SRTM) obtained elevation data on a near-global scale to generate a high-resolution digital topographic database of Earth.
silcrete	A surficial layer more or less cemented with silica.
silicífied	Partially replaced by silica.
sill	A tabular intrusive body of igneous rock that is conformable with the layers it intrudes.
Silurian	A time period from 440 to 400 million years ago.
Sirotem	An electromagnetic geophysical exploration system developed by CSIRO.
skarn slate	A type of mineralisation occurring in the contact zone of an intrusion. A finely foliated metamorphic rock that results from the metamorphism of rocks such as shale under stress.

The principal ore of zinc: (Zn.Fe)S. sphalerite spinifex texture Interpenetrating lacy elongate glivine crystals in komatiite, commonly thought to have formed by auenching. A small secondary fault diverging from a maior fault at a low angle. snlav stockwork A three-dimensional network of veinlets. stratabound A mineral deposit confined to a single stratigraphic unit. A type of stratabound deposit in which the ore minerals appear to have been deposited at the stratiform same time as the enclosing sediments. stratioraphy The succession or superimposition of rock strata. stream sediment sampling A geochemical exploration technique where stream sediments are the sampling medium. strike The direction or trend of bedding, cleavage or a fault on a horizontal plane. structural lineament A linear structural feature of regional extent. Large scale linear zone or belt recognised by geological feature alignment. structural corridor Referring to an igneous intrusion whose depth is intermediate between that of plutonic and the sub-volcanie surface. sub crop The near surface presence of a concealed rock laver. sub-economic Describing a resource that is not economic under the prevailing economic conditions. subduction zone A long narrow belt where one tectonic plate is descends beneath another. sulphidic Rich in sulphide minerals. supergene Process of ore enrichment or depletion by descending oxidising solutions. Solution of metal by oxidised surface waters from the upper part of an ore deposit and its supergene enrichment precipitation below, usually in response to reduction, creating a zone of enrichment. surficial Pertaining to the surface of the earth. A fold in rocks in which the strata dip inward from both sides towards the axis. syncline An event occurring during tectonic activity, or a rock or feature so formed. syntectonic tafus Loose rock transported downhill by gravity. targets Exploration targets consist of a location that can be tested by drilling. They generally represent an anomaly from a survey or a geological concept. tectonic The forces involved in maior structural processes forming faults and folds in the earth's crust. TFM Transient electro-magnetic, a type of EM survey. TEMPEST An advanced fixed-wing airborne electromagnetic survey system. Exploration or mining land title allowing various actions, eq an EL. tenement An ore of copper: (Cu,Fe)₁₂As₄S₃₃. tennantite The geological period prior to the Quaternary from 1.8 to 65 Ma. Tertiary An ore of copper: (Cu,Fe), Sb,S,. tetrahedrite A type of Landsat imagery with resolution of around 30 metres. thematic mapper A variety of basalt containing little or no olivine and in which the proportion of silica at a tholeiitic basalt particular magnesium content is high. A radioactive element. thorium tremolite Calcium magnesium amphibole. tuff Volcanic ash strata. A sediment deposited by a turbidity current. turbidite Mafic rock tvoe composed of minerals rich in magnesium and iron silicates. ultramafic unconformity A position in a sedimentary sequence where there is a lack of continuity in adiacent rock strata caused by a time break in sedimentation. uraniferous Containing uranium. A tabular or sheet like mineral-filled fracture. vein VLF-EM Very low frequency electromagnetic; a geophysical prospecting technique. volcanic vent An opening through which lava and rock fragments erupt. volcanic, volcanogenic Formed or derived from a volcano. weathering A process of change to rocks brought about by their exposure to oxygen and water. The chemical symbol for the element zinc. Zn

DIRECTOR'S RESPONSIBILITY STATEMENT AND CONSENT

In accordance with section 720 of the Corporations Act, each Director has consented in writing to lodgement of the Prospectus
with ASIC and has not withdrawn that consent.

Signed for and on behalf of Southern Uranium Limited

On 19 February 2007.

$-\nu$ ll

Roger Marshall
Chairman

Southern Uranium Limited

ACN 115 338 979

$\overline{\phantom{a}}$

PUBLIC Application Form

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contact your stockbroker or professional adviser without delay. You should read the entire prospectus carefully before completing this form. To meet the requirements of the Corporations Act, this Application Form must not be distributed unless

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				v. m m ---
	Adviser Code
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33

PUBLIC OFFER APPLICATION FORM AND GUIDE TO THE APPLICATION FORM

How to Complete this form

Shares Applied for

Enter the number you wish to apply for. The application must be for a minimum of 10,000 Shares and thereafter in multiples of 1,000 Shares.

R Annlication Monies

Enter the amount of Application Monies. To calculate the amount, multiply the number of Shares by the price per Share.

c Applicant Name(s)

Enter the full name you wish to appear on the statement of Share holding. This must be either your own name or the name of a company. Up to 3 joint Applicants may register. You should refer to the table below for the correct
forms of registrable title. Applications using the incorrect form of names may be rejected. Clearing House Electronic Subregister System (CHESS)
participants should complete their name identically to that presently registered in the CHESS system.

Postal Address D

Enter your postal address for all correspondence. All communications to you
from the Registry will be mailed to the person(s) and address as shown. For Joint Applications, only one address can be entered.

F Contact Details

Enter your contact details. These are not compulsory but will assist us if we need to contact you.

CHESS

-
Southern Uranium Ltd (the Company) will apply to ASX to participate in CHESS operated by ASX Settlement and Transfer Corporation Pty Ltd, a wholly owned
subsidiary of Australian Stock Exchange Limited. In CHESS, the Company will Subsidiary of Australian Stock Exchange Limited. In Criess, the Company will
operate an electronic CHESS Subregister of security holdings and an electronic
Issuer Sponsored Subregister of security holdings. Together the tw ance... If you allotted to you under this Application
on the CHESS Subregister, enter your CHESS HIN. Otherwise, leave this
section blank and on allotment, you will be sponsored by the Company and
section blank and on allo allotted a Securityholder Reference Number (SRN).

If Section A has been completed and the details differ to those recorded under in Section A has been completed and the details unter to move recordance
the CHESS HIN in Section G then your holding will be registered in accordance
with the details currently held on the Southern Gold Limited register.

G Payment

University of the matter of the Southern Uranium Limited in
Australian currency and cross it "Not Negotiable". Your cheque or bank draft must be drawn on an Australian Bank.

Complete the cheque details in the boxes provided. The total amount must agree with the amount shown in Box B.

Cheques will be processed on the day of receipt and as such, sufficient cleared Einds must be held in your account as cheques returned unpaid may not be re-
presented and may result in your Application being rejected. Cash will not be accepted. Receipt for payment will not be forwarded.

Declaration

second completing this Public Offer Application Form, the Applicant(s) should read the accompanying Prospectus. By lodging this Public Offer Application Before completing this report of Shares that this application for Shares in Southern Uranium Limited is upon and subject to the terms of the Prospectus and the Form, the Applicant(s) agrees that this application for Shares

Privacy Statement

Personal information is collected on this form by Computershare, as registrar for securities issuers ("the issuer"), for the purpose of maintaining registers of security recise and distribution payments and other corporate actions and communications. Your personal information may be disclosed to our related bodies corporate, to the control of the corporate communications. Your personal inf by Computershare, or you would like to correct information that is inaccurate, incorrect or out of date, please contact Computershare. In accordance with the Corporations
Act 2001, you may be sent material (including marke marketing material by contacting Computershare. You can contact Computershare using the details provided at the bottom of this form or E-mail privacy@computershare.com.au.

If you have any enquiries concerning your application, please contact Computershare on 1300 653 865.

CORRECT FORMS OF REGISTRABLE TITLE

Note that only logal entities are allowed to hold securities. Applications must be in the name(s) of a natural person(s), companies or other legal entities in accordance with the Corporations Act. At least one full given n

Type of Investor	Correct Form of Registration	Incorrect Form of Registration
Individual	Mr John Alfred Smith	JS Smith
Use given name(s) in full, not initials
Joint	Mr John Alfred Smith & Mrs Janet Mary Smith	John Alfred & Janet Mary Smith
Use given name(s) in full, not initials
Company	ABC Pty Ltd	ABC P/L
Use company title, not abbreviations		ABC Co.
Trusts	Ms Penny Smith	Penny Smith Family Trust
- Use trustee(s) personal name(s)
Do not use the name of the trust
Deceased Estates	Mr Michael Peter Smith	Estate John Smith
Use executor(s) personal name(s)
Do not use the name of the deceased
Minor (a person under the age of 18)	Mr John Alfred Smith	Peter Smith
Use the name of a responsible adult with an
appropriate designation
Partnerships	Mr John David Smith & Mr Michael Peter	John Smith and Son
Use partners personal name(s)	Smith
Do not use name of partnership
Clubs/Unincorporated Bodies	Mr John David Smith	Smith Investment Club or ABC Tennis Association
Use office bearer(s) personal name(s)
Do not use the name of the club, etc.
Superannuation Funds	John Smith Pty Ltd	John Smith Pty Ltd Superannuation Fund
Use the name of trustee of the fund
Do not use the name of the fund

Lodgement of Application

Application Forms must be received at the Adelaide office of Computershare Investor Services Pty Limited ("Computershare") by no later than 5.00 pm CST on 16 March, 2007.

PAYMENT OPTIONS

By Mail

Southern Uranium Ltd Levelberg Enverter Services Pty Limited
GPO Box 1903 Adelaide SA 5001

Taylor Collison Ltd GPO Box 2046
Adelaide SA 5001

Lands Kirwan Tong Stockbrokers Pty Ltd PO Box 951 Collins Street West VIC 8007

In Percon Computershare Investor Services Pty Limited Level 5
115 Grenfell Street Adelaide SA 5000 Taylor Collison Ltd Level 2
12 Pirie Street Adefaide SA 5000

Lands Kirwan Tong Stockbrokers Pty Ltd Level 12
1evel 12
99 William Street Melbourne VIC 3000

Southern Uranium Limited

ACN 115 338 979

$\overline{\phantom{a}}$

PUBLIC Application Form

This Application Form is important. If you are in doubt as to how to deal with it, please contact your stockbroker or professional adviser without delay. You should read the entire prospectus carefully before completing this form. To meet the requirements of $44 - 5$ ifiana Anti-thia Annliantian Ear والممغر والمغمالة لمطافعها فمرزود

	нае согроганота жет ина момпоанозгт онаганиат ног на спаланител пысаа included in, or accompanied by, the prospectus.
$\mathsf{A}$	I/we apply for		$\mathbf{B}$	liwe lodge full Application Money
				ZS.	D
	Number of shares in Southern Uranium Limited at 20 cents per share or such lesser number of shares which may be allocated to me/us
$\overline{c}$	Individual/Joint applications - refer to naming standards overleaf for correct forms of registrable title(s)
	Given Namefel Tike or Company Name			Sumarge
	Iníni Aonlicant 2 or Account Designation.
	Joint Annicant 3 or Account Designation
$\mathbf{D}$	Enter your postal address - Include State and Postcode
	Street Number Unit	Street Name or PO Box /Other Information
	City / Suburb / Town				State Postcode
I E	Enter your contact details
	Contact Name			m	Telephone Numher - Rusiaess Hours / After Hours
F	CHESS Participant
	Holder Identification Number (HIN) X		subregister.		Please note that if you supply a CHESS HIN but the name and address details on your form do not correspond exactly with the registration details held at CHESS, your application will be deemed to be made without the CHESS HIN, and any securities issued as a result of the IPO will be field on the Issuer Sponsored
	Cheque details - Make your cheque or bank draft payable to Southern Uranium Limited
G	Drawer	Cheque Number	BSB Number	Account Number	Amount of cheque
					A\$.
	Drawer	Cheque Number	BSB Number	Account Number	Amount of cheque

Registry Use Only

Broker Code

By submitting this Application Form, liwe declare that this application is completed and lodged according to the Prospectus and the declarations/statements on the reverse of this Application form and I/we declare that all details and statements made by me/us (including the declaration on the reverse of this Application Form) are complete and accurate. I/we agree to be bound by the Constitution of the Company. See back of form for completion guidelines

	Adviser Code
œ -- w		s	$\sim$	÷

40

	Street Number	Street Name or PO Box /Other Information
		________ ی این است است که است است که است که است است که است است است که است که است

PUBLIC OFFER APPLICATION FORM AND GUIDE TO THE APPLICATION FORM

How to Complete this form

Shares Applied for

Enter the number you wish to apply for. The application must be for a minimum of 10,000 Shares and thereafter in multiples of 1,000 Shares.

R Annlication Monies

Enter the amount of Application Monies. To calculate the amount, multiply the number of Shares by the price per Share.

c Applicant Name(s)

Enter the full name you wish to appear on the statement of Share holding. This must be either your own name or the name of a company. Up to 3 joint Applicants may register. You should refer to the table below for the correct
forms of registrable title. Applications using the incorrect form of names may be rejected. Clearing House Electronic Subregister System (CHESS)
participants should complete their name identically to that presently registered in the CHESS system.

Postal Address D

Enter your postal address for all correspondence. All communications to you
from the Registry will be mailed to the person(s) and address as shown. For Joint Applications, only one address can be entered.

F Contact Details

Enter your contact details. These are not compulsory but will assist us if we need to contact you.

CHESS

-
Southern Uranium Ltd (the Company) will apply to ASX to participate in CHESS operated by ASX Settlement and Transfer Corporation Pty Ltd, a wholly owned
subsidiary of Australian Stock Exchange Limited. In CHESS, the Company will Subsidiary of Australian Stock Exchange Limited. In Criess, the Company will
operate an electronic CHESS Subregister of security holdings and an electronic
Issuer Sponsored Subregister of security holdings. Together the tw ance... If you allotted to you under this Application
on the CHESS Subregister, enter your CHESS HIN. Otherwise, leave this
section blank and on allotment, you will be sponsored by the Company and
section blank and on allo allotted a Securityholder Reference Number (SRN).

If Section A has been completed and the details differ to those recorded under in Section A has been completed and the details unter to move recordance
the CHESS HIN in Section G then your holding will be registered in accordance
with the details currently held on the Southern Gold Limited register.

G Payment

University of the matter of the Southern Uranium Limited in
Australian currency and cross it "Not Negotiable". Your cheque or bank draft must be drawn on an Australian Bank.

Complete the cheque details in the boxes provided. The total amount must agree with the amount shown in Box B.

Cheques will be processed on the day of receipt and as such, sufficient cleared Einds must be held in your account as cheques returned unpaid may not be re-
presented and may result in your Application being rejected. Cash will not be accepted. Receipt for payment will not be forwarded.

Declaration

second completing this Public Offer Application Form, the Applicant(s) should read the accompanying Prospectus. By lodging this Public Offer Application Before completing this report of Shares that this application for Shares in Southern Uranium Limited is upon and subject to the terms of the Prospectus and the Form, the Applicant(s) agrees that this application for Shares

Privacy Statement

Personal information is collected on this form by Computershare, as registrar for securities issuers ("the issuer"), for the purpose of maintaining registers of security recise and distribution payments and other corporate actions and communications. Your personal information may be disclosed to our related bodies corporate, to the control of the corporate communications. Your personal inf by Computershare, or you would like to correct information that is inaccurate, incorrect or out of date, please contact Computershare. In accordance with the Corporations
Act 2001, you may be sent material (including marke marketing material by contacting Computershare. You can contact Computershare using the details provided at the bottom of this form or E-mail privacy@computershare.com.au.

If you have any enquiries concerning your application, please contact Computershare on 1300 653 865.

CORRECT FORMS OF REGISTRABLE TITLE

Note that only logal entities are allowed to hold securities. Applications must be in the name(s) of a natural person(s), companies or other legal entities in accordance with the Corporations Act. At least one full given n

Type of Investor	Correct Form of Registration	Incorrect Form of Registration
Individual	Mr John Alfred Smith	JS Smith
Use given name(s) in full, not initials
Joint	Mr John Alfred Smith & Mrs Janet Mary Smith	John Alfred & Janet Mary Smith
Use given name(s) in full, not initials
Company	ABC Pty Ltd	ABC P/L
Use company title, not abbreviations		ABC Co.
Trusts	Ms Penny Smith	Penny Smith Family Trust
- Use trustee(s) personal name(s)
Do not use the name of the trust
Deceased Estates	Mr Michael Peter Smith	Estate John Smith
Use executor(s) personal name(s)
Do not use the name of the deceased
Minor (a person under the age of 18)	Mr John Alfred Smith	Peter Smith
Use the name of a responsible adult with an
appropriate designation
Partnerships	Mr John David Smith & Mr Michael Peter	John Smith and Son
Use partners personal name(s)	Smith
Do not use name of partnership
Clubs/Unincorporated Bodies	Mr John David Smith	Smith Investment Club or ABC Tennis Association
Use office bearer(s) personal name(s)
Do not use the name of the club, etc.
Superannuation Funds	John Smith Pty Ltd	John Smith Pty Ltd Superannuation Fund
Use the name of trustee of the fund
Do not use the name of the fund

Lodgement of Application

Application Forms must be received at the Adelaide office of Computershare Investor Services Pty Limited ("Computershare") by no later than 5.00 pm CST on 16 March, 2007.

PAYMENT OPTIONS

By Mail

Southern Uranium Ltd Levelberg Enverter Services Pty Limited
GPO Box 1903 Adelaide SA 5001

Taylor Collison Ltd GPO Box 2046
Adelaide SA 5001

Lands Kirwan Tong Stockbrokers Pty Ltd PO Box 951 Collins Street West VIC 8007

In Percon Computershare Investor Services Pty Limited Level 5
115 Grenfell Street Adelaide SA 5000 Taylor Collison Ltd Level 2
12 Pirie Street Adefaide SA 5000

Lands Kirwan Tong Stockbrokers Pty Ltd Level 12
1evel 12
99 William Street Melbourne VIC 3000