Ann: Seventh Profit Distribution of $1.5m Received From Cannon, page-2

Cannon Mine Next Steps

Results from the Reverse Circulation (RC) drilling campaign completed in July are expected to be reported shortly. These results will assist confirmation of the below-pit gold resource, particularly the distribution of the high grade zone that drives the economics of the proposal to further develop Cannon now as an underground gold mine. Once a revised gold resource and conceptual underground mine design are finalised and these economic outcomes are confirmed by the latest round of RC drilling, Southern Gold will aim to move forward with the commercial arrangements of underground mining over the course of the next few months. The Company has commenced discussions with various potential development partners to assist in this regard. Southern Gold Managing Director, Mr Simon Mitchell: “Our cash position is building while at the same time we are active on multiple fronts in Australia and South Korea with both exploration and development drilling. We either have been or are drilling at Cannon, Glandore and Weolyu, with results from these programmes expected over the coming months. We are actively building additional value in the portfolio and effectively organically funding our exploration efforts.”