2015 Broken Hill Resources Investment Symposium - Southern Gold (ASX:SAU) - Simon Mitchell

SOUTHERNGOLD

SOUTHERN GOLD: A UNIQUE JUNIOR Investor Presenta4on – May 2015

Disclaimer Forward-‐looking statements The informa4on in this presenta4on is published to inform you about Southern Gold Limited (“Southern Gold”) and its ac4vi4es. Some statements in this presenta4on regarding es4mates or future events are forward looking statements. These may include, without limita4on:

•  Es4mates of future cash flows, the sensi4vity of cash flows to metal prices and foreign exchange rate movements;

•  Es4mates of future metal produc4on; and

•  Es4mates of the resource base and statements regarding future explora4on results and increasing the company’s resource base

Such forward looking statements are based on a number of es4mates and assump4ons made by the Company and its consultants in light of experience, current condi4ons and expecta4ons of future developments which the Company believes are appropriate in the current circumstances. Such statements are expressed in good faith and believed to have a reasonable basis. However the es4mates are subject to known and unknown risks and uncertain4es that could cause actual results to differ materially from es4mated results. All reasonable efforts have been made to provide accurate informa4on, but the Company does not undertake any obliga4on to release publicly any revisions to any “forward-‐looking statement” to reflect events or circumstances a\er the date of this presenta4on, except as me be required under applicable laws. Recipients should make their own enquiries in rela4on to any investment decisions from a licensed investment advisor.

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What makes Southern Gold unique?

FROM DISCOVERY TO DEVELOPMENT 3

1.  Gold Address: Kalgoorlie “Blue Chip” Ground Posi4on 2.  High grade gold resource (93% Indicated= 93koz Au @ 4g/t Au)

3.   Solid cash balance (~$1.2m as at 31 March 2015 + $0.35m from R&D) with poten4al cash genera4on from near term produc4on

4.  Metals X as financers and operators of Cannon Mine

5.  Resource Upside with poten4al gold resource extensions @ Cannon

6.   MulLple exploraLon targets with significant regional footprint with poten4al below historical shallow RAB drilling

Given the features above, what would you expect Southern Gold market capitalisa4on to be?

1. Kalgoorlie “Blue Chip” Gold Address Southern Gold’s Cannon Gold Resource: 30km east of the world class gold district of Kalgoorlie


Metals X – Jubilee Mill is where Cannon Gold

Resource ore will be processed

(approx. 35km haul).

2. High Grade Gold Resource

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Cannon Project Gold Resource -‐ 93% in the Indicated category with grade of 4g/t Au

Indicated Inferred Total Tonnes Au Au Tonnes Au Au Tonnes Au Au

t g/t Ounces t g/t Ounces t g/t Ounces Oxide 8,000 3.0 800 1,500 2.4 100 9,500 2.9 900

Transi4onal 137,600 3.1 13,900 34,100 2.6 2,900 171,700 3.0 16,800 Fresh 573,500 4.3 78,500 57,500 2.3 4,200 631,000 4.1 82,800 Total 719,100 4.0 93,200 93,000 2.4 7,200 812,200 3.9 100,400

•  Higher grade should translate to lower operating cost per ounce of gold produced

•  Ensure a robust project relatively insulated to downside gold price movement

@ 1.0g/t Au cut-off grade

FROM DISCOVERY TO DEVELOPMENT

3. Cash Genera4on from near term produc4on

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Base Case A$1,400/oz Au

Scenario 1 A$1,500/oz Au

Scenario 2 A$1,600/oz Au

Mine Life Months 36 36 36 Tonnes Mines Tonnes 484,000 484,000 484,000 Head grade g/t Au 4.4 4.4 4.4

Mined Ounces1 oz Au 68,200 68,200 68,200 Recovery (ave) % 92 92 92

Infrastructure Cost A$m 13.3 13.3 13.3 Opera4ng Cost A$/oz 964 964 964

WA State Royalty2 % 2.5 2.5 2.5 Free surplus cash flow A$m 12.4 18.5 24.6

(See ASX announcement dated 29 August 2013 and 18 February 2014 for key parameters of PFS) Note 1: Mined ounces and grade calculated, based on cut-‐off grade from $1400/oz base case scenario. Note 2: WA State Royalty of 2.5% is applied to all ounces produced a\er the first 2,500 oz produced in each financial year.

•  Current cash balance $1.2m, R&D Tax refund +$0.35m, near term cash flow

•  Two phase development – Phase 1 Open Cut & Phase 2 Underground

•  Phase 1 Open Pit economics to be updated using Metals X cost structure shortly


4. Metals X as project financiers & operators Nov 2014: Mining and profit share agreement executed


Key terms

Metals X to manage all mining operaLons

At-‐cost, open book basis

Secured loan facility A$500,000

Profit share 50:50

•  Metals X -‐ experienced and well-‐funded mining company who are an Australian top ten gold producer and Australia’s largest 4n producer.

•  Metals X -‐ finance, mine, haul and process ore from the Cannon Gold Resource with these ac4vi4es charged on an at-‐cost, open book basis.

•  Reduces project execu4on risk. •  Phase 1 development of the open pit within 12 months of commencement. (expected June/July 2015)

•  Op4on for the par4es to agree to proceed with Phase 2 underground development.

8 FROM DISCOVERY TO DEVELOPMENT

5. Poten4al Gold Resource Extensions SecLon 110mN SecLon 175mN

7.6m @21.5g/t Au

7.5m @11.5g/t Au

Open

Open

•  Excellent grade and width at depth indicating the deposit is open at depth

•  Deposit size is constrained by the poor capital markets of 2013-2014, not drilling

You have to drill more than shallow holes…..


6. “Blue Sky”….historical first pass RAB drilling

……..Cannon resource sits under the RAB drilling


6. Deeper RC Drilling found Cannon

……..lets take a look at that again


6. Drill Deeper than 50m


6. Historic shallow drilling provides “Blue Sky”

Corporate Overview

Financial informaLon

Number of shares 527.5 m

Share price (18 May 2015) A$0.010

Market capitalisaLon A$5.3 m

Debt (Metals X finance) A$0.5 m

Cash (@ 31 March 2015) A$1.2 m

Enterprise value A$4.6 m

Major shareholders

Silver Lake Resources 8.20%

Gary B Branch 4.45%

PS Super Nominee 3.79%

JP Morgan Nominees 3.44%

Board and Management 7.42%

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RelaLve share price performance Recap of Key Points

1.  “Blue Chip” Gold Address

2.  High grade gold (4g/t Au)

3.  $1.2 m cash now & genera4on

4.  Metals X as operators

5.  Resource extensions @ Cannon

6.  More gold to find….


Board of Directors

•  Corporate and technical experience in the resource sector for 25 years

•  Senior execu4ve for the past decade including Toro Energy Ltd and Asia4c Gold Ltd

•  Gold experience with Normandy NFM, Aurora Gold, RGC Explora4on

•  Project finance execu4ve in investment banking

Greg Boulton AM – Non-‐ExecuLve Chairman Corporate finance •  25 years of corporate finance experience •  Experience in capital raisings, acquisi4ons and commercial

nego4a4ons •  Chairman of Paragon Equity •  Deputy Chairman K&S Corpora4on

•  Non-‐Execu4ve Director of Statewide Superannua4on Trust

•  40 years of mining industry experience •  Worked in company secretarial, Non-‐Execu4ve and

Managing Director roles •  Experience in debt and equity raising, project evalua4on and

feasibility studies in Australia and overseas

•  Execu4ve Chairman/CEO of AIM-‐listed Thor Mining •  Non-‐Execu4ve Director at ASX-‐listed Emperor Range Group

Ltd

•  Over 27 years experience in the Australian and Asian resource sector

•  Driven business development, corporate merger and acquisi4on ac4vi4es in precious metals, bulk commodi4es and industrial minerals

•  Experience in minerals explora4on, project development and commercial evalua4on of mineral assets

•  Previous directorships with ASX-‐listed Lawson Gold and formerly ASX-‐listed FerrAus

David Turvey – Non-‐ExecuLve Director Geology

Mick Billing – Non-‐ExecuLve Director Corporate finance and accounLng

Simon Mitchell – Managing Director Geology and Corporate Development

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MulL-‐disciplinary Board with strong technical and corporate experience


SOUTHERNGOLD

Current Ac4vi4es

Grade Control Drilling Completed

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CANNON GOLD PROJECT – Grade Control and SterilisaLon Drilling completed in February


Grade Control Drilling Results

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Within the limits of drilling, Grade Control affirms the overall geometry of the mineralisaLon


Pre-‐Development/Permixng Timetable



Cannon Project – Mine Plan Finalisa4on

Key milestones

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Strong newsflow expected in the next 6-‐12 months

Cannon Gold Resource development and producLon

Re-‐op4misa4on, pit design and revised schedule and economics Late May 2015

Final regulatory approvals submiyed Early June 2015

Roadworks and other preliminary development* 2Q 2015

Complete development and begin produc4on* 2Q/Q3 2015

First Net Cash Flow from Opera4ons* 4Q 2015

Near Cannon Gold Resource exploraLon

Follow up drilling at adjacent to Cannon mine (Arsenal and Monument) Q3 2015

First pass drill tes4ng of Tier 1 targets (Railway South and Too4ng Bec) Q2/Q3 2015

Regional exploraLon

Explora4on program at Cowarna Project Q4 2015/Q1 2016

* Development dates are subject to regulatory approval schedules and explora4on programs will be scheduled around cash flow 4melines


Discovery to development to further discovery

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Cannon Gold Resource •  Only 30km east of Kalgoorlie giving easy access to infrastructure, skilled workforce, informed stakeholders, mining equipment and processing plants

•  Cannon Mine development in 2015 to provide an early cashflow opportunity •  Exis4ng poten4al to grow the gold resource through further tes4ng and underground explora4on Metals X transacLon •  Mining and profit share agreement to fast-‐track development and reduce project risk •  Poten4al to lead to further opLmisaLon of project costs and mine plan The bigger picture •  200km2 tenement holding, with 30 priority anomalies iden4fied from regional geochemical auger programme conducted over the eastern area of the Bulong Gold Project

•  Follow up work has priori4sed 6 Tier 1 targets – what else did the RAB drilling miss? •  Knowledge gained from work at the Cannon Gold Resource provides important structural and geochemical informa4on to assess regional targets in context


Southern Gold is a unique junior gold company with a market cap of $5-$6m.

SOUTHERNGOLD

Appendix A – Bulong Gold Resource

Indicated Inferred Total

Tonnes Au Au Tonnes Au Au Tonnes Au Au t g/t Ounces t g/t Ounces t g/t Ounces

Cannon Gold Resource

Oxide 8,000 3.0 800 1,500 2.4 100 9,500 2.9 900

Transi4onal 137,600 3.1 13,900 34,100 2.6 2,900 171,700 3.0 16,800

Fresh 573,500 4.3 78,500 57,500 2.3 4,200 631,000 4.1 82,800

Total 719,100 4.0 93,200 93,000 2.4 7,200 812,200 3.9 100,400

Pinner Resource

Oxide -‐ -‐ -‐ 600 3.0 200 600 3.0 200

Transi4onal -‐ -‐ -‐ 76,400 2.2 5,400 76,400 2.2 5,400

Fresh -‐ -‐ -‐ 94,900 2.0 6,100 94,900 2.0 6,100

Total -‐ -‐ -‐ 172,000 2.1 11,500 172,000 2.1 11,500

Total Resource 719,100 4.0 93,200 265,000 2.2 18,700 984,100 3.5 111,900

Appendix 1 – Bulong Gold Project Resource Table 23

Bulong Gold Resource 93% of the Cannon Gold Resource is within the Indicated category

Appendix 1 – Bulong Gold Project Resource Table 24

Disclaimer cont. Competent Person’s statements The informa4on in this report that relates to Explora4on Results has been compiled under the supervision of Mr. Ian Blucher (MAusIMM). Mr Blucher, who is a full 4me employees of Southern Gold Limited and a Member of the Australian Ins4tute of Mining and Metallurgy, has sufficient experience which is relevant to the style of mineralisa4on and type of deposit under considera4on and to the ac4vity he has undertaken to qualify as a Competent Person as defined in the 2012 Edi4on of the Australasian Code for the Repor4ng of Mineral Resources and Ore Reserves. Mr Blucher consents to the inclusion in this report of the mayers based on the informa4on in the form and context in which it appears. The informa4on in this report that relates to Mineral Resources is based on informa4on compiled by Mr Ian Blucher (MAusIMM). Mr. Blucher is a full 4me employee of Southern Gold Limited and has sufficient experience that is relevant to the style of mineralisa4on, type of deposit under considera4on and to the ac4vity being undertaken to qualify as a Competent Person as defined in the 2012 Australasian Code for Repor4ng of Explora4on Results, Mineral Resources and Ore Reserves” (JORC, 2012). Mr Blucher consents to the inclusion in this report of the mayers based on the informa4on in the form and context in which it appears. Pre-‐Feasibility Study Results The Op4misa4on announcement dated 13 February 2014 had no material changes to the methodology and assump4ons used to determine the produc4on target as detailed in the PFS announcement of 28 August 2013, and all of the key parameters con4nue to apply. The Op4misa4on announcement provided an update to the market of the reduc4on in the forecast opera4ng costs. There have been no material changes to the methodology used to determine the opera4ng costs as outlined in the PFS announcement.

Simon Mitchell Managing Director +61 8 8368 8888 [email protected] www.southerngold.com.au Level 1, 8 Beulah Road Norwood, SA 5065 PO Box 255 Kent Town SA 5071

SOUTHERNGOLD

2015 Broken Hill Resources Investment Symposium - Southern Gold (ASX:SAU) - Simon Mitchell

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