KGL RESOURCES LIMITED — Capital/Financing Update 2007

May 23, 2007

KENTOR GOLD LIMITED ABN 52.082.858.080

Cornorate Office Level 3, 15 Queen Street Melbourne Victoria 3000 www.kenforgold.com Tel: +61 (3) 9621 1344 Fax: +61 (3) 9621 1544 E-mail: info@kentorgold.com

Kyrgyz Republic 235/2 Erkindik Prospect 720739 Bishkek

+996 (312) 621 389 Tel: Fax: +996 (312) 665 759 E-mail: kentor2@mail.kg

ASX ANNOUNCEMENT

24 May 2007

KENTOR GOLD LIMITED SECURES RIGHT TO EARN 70% INTEREST IN THE SAVOYARDY GOLD PROSPECT IN DEAL WITH PERSEUS MINING LIMITED

• Kentor adds advanced gold project to a growing and diversified international portfolio
• Prospect explored by trenching and underground development, no significant drilling $\bullet$ to date
• On strike with Majestic Gold's Sawayaerdun project across the Chinese border $\bullet$
• Kentor plans to commence exploration in the near future with the construction of $\bullet$ access tracks and a drill rig ready to start.

Kentor Gold Limited ("Kentor") has signed a Heads of Agreement with Perseus Mining Limited ("Perseus") to earn a 70% interest in the Savovardy exploration licence through the expenditure of US\$6 million on exploration and development of the licensed area.

The Savoyardy exploration licence is held by Perseus's wholly owned subsidiary Closed Joint Stock Company Savoyardy ("CJSC Savoyardy"). Kentor must spend a minimum of US\$500,000 on exploring Savoyardy by 31 March 2008 and can earn a 70% interest in CJSC Savoyardy by incurring cumulative expenditure of US\$1.25 million by 31 March 2009, US\$3 million by 31 March 2010, US\$4.5 million by 31 March 2011 and US\$6 million by 31 March 2012. When Kentor has earned a 70% interest in the Savoyardy project, Kentor and Perseus will fund further expenditure in proportion to their respective interests or dilute their interests in accordance with an agreed formula.

Location, Access and Physiography

The Savoyardy Project is located approximately 145km to the southeast of the city of Osh in the Kyrgyz Republic and approximately 300km south of Bishkek, adjacent to the border with China. Road access is available to the centre of the project area from Osh city, with approximately 50% of the road paved and the remainder gravel.

The project area covers the valley of the Savoyardy River at elevations between 2,500m and 3,700m above sea level. The physiography consists of steep rugged slopes and narrow to moderate width valleys below a summer snow-line at approximately 4,000m elevation. The vegetation is dominated by sparse alpine grassland and scrub with minor conifer stands.

Tenure

The Savoyardy Project comprises a single Exploration Licence (Au-87-04) covering 124km2. The tenement is registered in the name of CJSC Savoyardy, a wholly-owned subsidiary of Perseus.

Geology

The Savoyardy Project is situated within a northeast trending belt of sedimentary rocks, which form part of the Southern Tien Shan thrust/fold complex. The project is dominated by a sequence of carbonaceous shales, which are reported to contain up to 15% carbon and are intercalated with lenses of sandstone and limestone.

Savoyardy Project

Figure 1 Savoyardy Project

Gold mineralisation occurs where north trending faults intersect fracture zones developed along the anticlinal hinge zones within the basement carbonaceous shales, and also along the thrust contact between the shales and overlying sandstones.

Alteration associated with mineralisation is dominated by a quartz-carbonate-sulphide assemblage. The nature of sulphide mineralisation has been studied in detail, identifying specific associations between gold and pyrite-arsenopyrite or alternatively sphaleritetennantite-tetrahedrite mineralisation. The gold is reported to be finely dispersed and free within sulphides dominated by pyrite.

Exploration History

The Savoyardy area was first mapped during a program of regional prospecting carried out by Soviet explorers between 1971 and 1973. Geological mapping was undertaken at a scale of 1:50,000, concentrated along the regional northeast trending Savoyardy Fault Zone, and the entire project area was incorporated in a broader program of stream sediment and soil geochemistry.

Significant gold anomalies were outlined in two broadly parallel northeast trending horizons extending over a strike length of 15km to the Chinese border, and a further 10km into China itself. More discrete anomalies were generated along the thrust contact between the carbonaceous shales and older glacigene sediments to the north; however these anomalies occur largely along valley floors and are mainly obscured by alluvial cover. A series of more diffuse anomalies, including the Savoyardy, Karagatty, Karagatty II, Tata1, Pogranichnoe and Lesnoe Prospects, straddle the contact between the carbonaceous shales and the Permo-Carboniferous sandstones.

During the 1970's the Soviet regime was intent on developing mineral resources of strategic and industrial importance. The discovery of antimony mineralisation at the Savoyardy Prospect between 1974 and 1977 initiated detailed mapping (1:5,000 scale) and sampling. Although gold was identified to be indirectly associated with antimony at Savoyardy, the principal focus was to develop and mine the antimony mineralisation. Between 1977 and 1980 a trenching program was followed by underground exploration, including the development of an adit and several crosscuts.

The Soviets are understood to have completed metallurgical test work biased toward the recovery of gold by means of flotation followed by cyanidation. The 65kg-sample of pyrite-arsenopyrite ore with a gold grade of 30.8g/t was tested in the State Laboratory. A flotation concentrate was obtained from ore milled to 0.002mm to 0.07mm and analysed and the concentrate was then treated by cyanidation, the result of this was an overall gold recovery of 95.87%.

Table 1 Savoyardy Project Significant Gold Mineralisation from Adit sampling, Zones 4 and 10

Zone $#4$		Zone $#10$		Convergent Zone
Width (m)	Au $(g/t)$	Width (m)	Au $(g/t)$	Width (m)	Au $(g/t)$
$2.1*$	8.5	9.0	3,0	$8.3*$	13.1
$2.5*$	3.0	18.0	7.9	$2.7*$	19.8
$2.5*$	8.1	20.6	3.4	11.4	6.2
$1.6*$	7.2	$27.2*$	2.9	$2.5*$	29.7
$2.4*$	2.6			$7.5*$	2.3
				$2.5*$	16.8
				4.4	8.5
				$2.7*$	78

* denotes mineralisation running into wall (open ended sample traverse)

Figure 2 Savoyardy Deposit Adit 3110m RL

The Savoyardy stratigraphy and structural corridor extends across the border into China, where Majestic Gold Corporation (TSX.V: MJS) holds the Sawayaerdun Project. Majestic Gold Corporation have announced that they have identified over 1.4 Moz of gold to date.

Exploration by Perseus Mining

In 2005, Perseus re sampled the exploration adit. A total of 910m of adit sampling was undertaken, open ended intercepts from cross cuts included 7m at $12.9g/t$ , 14m at $4.0g/t$ , 32m at $1.7g/t$ (incl. 9m at $4.1g/t$ ) and 11m at $1.9g/t$ Au.

Sampling across the lode exposed in the adit roof included 2m intercepts (open on both sides due to the width of the adit) of 2m at $38.9g/t$ , 2m at $37.3g/t$ , 2m at $22.8g/t$ , 2m at $18.0$ g/t, 2m at 17.6g/t, 2m at $14.9$ g/t, 2m at $12.9$ g/t and 2m at $12.1$ g/t Au. Most (+90%) of the gold in the +300m long Zone 4 is contained within high-grade sulphide rich shoots which have a high bulk density. Zone 10 has not been fully re-sampled due to access limitations within crosscuts where the soft carbonaceous shale contact containing high grades were previously intercepted. Hanging wall Devonian sediments have excellent stability and the adit does not accumulate noxious gases and oxygen levels are good, even without ventilation.

In 2005 and 2006, Perseus conducted an extensive soil geochemical survey over the main Savoyardy prospect. A total of 1575 samples were taken on a largely $50 \times 25m$ grid. Several gold anomalous zones were identified with a maximum gold assay of 1280 ppb gold being recorded. 49 samples (3% of the population) recorded greater than 100ppb gold. Most anomalies were coincident with mapped lodes or trends of lodes, but some are located between parallel lodes, possibly indicating some linking or stockworking.

Exploration and Resource Potential

Substantial exploration and underground development was undertaken by Soviet agencies at the Savoyardy Prospect. While much of this work was focused on antimony, gold mineralisation was quantified on the basis of surface trenching and underground face sampling.

The license area also holds the potential for economic occurrences of antimony.

The Soviet constructed adit has explored the top 100m along a 500m strike length of the outcropping mineralisation. Kentor Gold Limited believe the project holds considerable upside with the ore body open at depth and along the remaining 11.5 km of the mineralised structure.

KENTOR GOLD LTD

ACN 082 658 080

Figure 3 Savoyardy Prospect - Savoyardy Gold Project