Highlights:

Delivers for first time, total of 22 contiguous blocks dominating key mining, exploration and electricity grid corridor between Olympic Dam and Port Augusta.

Total RGP holding includes a 260,000 PJ Inferred geothermal resource.

RGP’s location overlaps 275Kv high voltage power lines linking Olympic Dam and Prominent Hill mines to South Australia’s power hub at Port Augusta.

Southern Gold had previously held only four non-contiguous granted GELs in an area directly west of Lake Torrens. The additional licenses now give it a total of 22 granted GELs covering an area of 10,000km2.

The company recently established a large estimated Inferred Geothermal Resource of 260,000 petajoules (PJ) within GEL302 – a tenement in the southeastern area of Southern Gold’s RGP holdings and representing just 5% of the total project’s now granted geothermal footprint.

“With today’s approvals securing an uninterrupted geothermal access opportunity and with a large inferred geothermal resource cofirmed, the heat flows measured by Southern Gold on the Roxby Geothermal Project provide a strong basis to progress investigations towrds the commercial development of an Engineered Geothermal System (EGS),” Managing Director Stephen Biggins, said today.”

“We have successfully locked in one of the largest strategic geothermal land holdings in an area that hosts growing energy markes, including the world-class Olympic Dam and Prominent Hill mines,” Biggins said.

“The proposed Olympic Dam expansion alone is forecast to consume close to half of the State’s power supply.”

“The Roxby Geothermal Project is also strategically located to straddle the existing 275Kv and 132Kv power lines that connects Oympic Dam and Prominent Hill mines and is close to the national power grid at Port Augusta.”

“The Roxby Geothermal Project overlaps the South Australian Heat Flow Anomaly (SAHFA). The SAHFA which has been demonstrated to host very high temperature source rocks with potential for geothermal power productio.”

“As a result, the potential economics of the RGP are built around the proximity of commercially viable, insulated hot rocks to high voltage power distribution infrastructure and nearby market demand. The excellent infrastructure in the region combined with reliable energy supplies contributes to the sustained project developent and production economics in the region.”

“Southern Gold is considering introducing a development partner into the RGP project to fast-track exploration through examining 30+ historic wells in the tenure and identifying and drilling optimally located proof-of-concept wells”.

“With much greater certainty on the Roxby Geothermal Project fundamentals after today’s approvals, Southern Gold is now preparing an application for a $7 million grant from the current second round of the Federal Government’s $50 million Geothermal Drill Program.”

Grant applications close in August 2009.