KGL RESOURCES LIMITED — Capital/Financing Update 2009

Jun 29, 2009

ASX / MEDIA RELEASE

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30 June 2009

KENTOR GOLD LTD

ACN 082 658 080

- Kentor Secures Option to Purchase the Andash Gold Copper Project in the Kyrgyz Republic

• JORC Resource Estimate of 680,000 oz gold and 77,000 tonnes copper.

• Estimated annual average life of mine production approx. 60,000 oz gold and 5,000 t copper.

• Project development-ready

• Feasibility Study Completed

• Environmental and Social Impact Assessment completed

• Mining Licence Issued

• Mining and construction fleets purchased

• Low cost open pit operation (0.8 Waste:1 Ore strip ratio)

 Exploration Upside

Kentor Gold Limited ( “ Kentor Gold ” or the “ Company ” ) has negotiated a three-month option to purchase an 80% interest in the Andash gold-copper mining project ( “ Andash ” or the “ Project ” ) in the Kyrgyz Republic. This option can be extended for a further three months at the discretion and mutual agreement of both Kentor Gold and Aurum Mining plc ( ‘’ Aurum ’’ ). Aurum are the current owners of the Andash project.

Announcing the option agreement today, Kentor Gold Managing Director Mr Simon Milroy said:

“ Andash will provide Kentor with the opportunity to become a significant gold producer within two years. ”

“ Kentor will be able to take advantage of its well established local on-theground presence in the Kyrgyz Republic, as well as its mine development and operational expertise, to push forward at Andash and also at Savoyardy where we are targeting first gold production in 2010. ”

“ The exploration licence contains numerous other areas of known mineralisation in close proximity to the planned pit which will be actively explored to increase the resource base for the project. ”

Andash is a development-ready project.

A bankable feasibility study, compiled by Wardell Armstrong International in 2006, confirmed a Measured and Indicated Resource base of 19.2 million tonnes @ 1.1 g/t gold and 0.4% copper.

Registered Office Level 36 Riparian Plaza, 71 Eagle St Brisbane 4000 Phone: 61 (0) 7 3121 3206

Kyrgyz Republic Office 235/2 Erkindik Prospect, Bishkek Kyrgyz Republic 720739 Phone: +996 312 621 389

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www.kentorgold.com.au

A low cost open pit operation is proposed, with a very low strip ratio of 0.8 waste : 1.0 ore.

A Mining Licence has been issued and the Environmental and Social Impact Assessment has been completed.

Mining and construction fleets of heavy vehicles were purchased by Aurum for the development and operation of the Project. Their purchase by Kentor Gold is the subject of a separate option that Kentor Gold has also negotiated with Aurum. The fleet consists of new and near new Komatsu mining equipment including 2 excavators, 9 dump trucks, 2 graders, 2 front end loaders, 2 dozers, 1 explosives mixing truck, 2 blast hole drills and a fleet of construction related equipment including mobile cranes and compactors. The fleet is currently located in Kyrgyzstan and comes with a full set of spare parts. The fleet has a current replacement cost of approximately US$9 million.

Project Description

Andash is situated within the Tien Shan gold belt, one of the world ’ s largest gold provinces that stretches through Central Asia.

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The Project is located in the Talas valley, close to the Kyrgyz Republic ’ s north western border with the Republic of Kazakhstan. It is approximately 300 km by road from the capital city of Bishkek. The regional centre of Talas is 45 km from the site and the closest village, Kupre-Bazar, is 2.5 km away. Water is available at the site and a major power line passes within 15km of the licence area. The project is located approximately 170km away from the railway with connections to Europe.

The Licence covers an area of 53km[2] at an altitude of between 2,100 and 2,400m above sea level.

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Summary of Transaction

Kentor Gold has acquired an option from Aurum to purchase 100% of Kaldora Company Limited, a BVI registered holding company which has an 80% interest in the Kyrgyz-registered Andash Mining Company which in turn holds the licence to the Andash Project. A local partner of Aurum is entitled to the remaining 20% of Andash Mining Company.

Aurum has indicated that, once the options have been exercised, Aurum will acquire a 10% stake in Andash Mining Company from its local partner. The shareholders in Andash Mining Company following completion of the transaction will be Kentor with 80%, Aurum with 10% and Aurum ’ s local partner with 10%.

Key points of the option transaction are as follows:

• Kentor Gold will pay Aurum US$100,000 for an initial exclusive 3 month option to purchase 100% of Kaldora Company and separately the Aurum owned fleet of mining and construction equipment.

• Aurum will not unreasonably withhold a 3 month extension to the option in return for a payment of US$150,000. If a second three month option is given, Kentor will also pay Aurum a $150,000 deposit that will be off-settable from the purchase price once the deal is completed.

• –

• The option has two parts US$10,000,000 to purchase 100% of Kaldora, and US$5,000,000 to purchase the fleet of mining and construction equipment (although the option to purchase the fleet of equipment cannot be exercised unless the option to purchase 100% of Kaldora is also exercised).

• The transaction is subject to the approval of Aurum shareholders.

The following diagram illustrates the intended post transaction structure:

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----- Start of picture text -----

Kentor Gold Limited
(or a wholly owned
subsidiary)
100%
Kaldora Company
Limited
80%
Aurum Mining Local Kyrgyz
Company Company
10% Andash Mining 10%
Company
100%
The Project
(i.e. the licence to the Project)
----- End of picture text -----

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Resource Estimate

The resource estimate was completed by Wardell Armstrong International and is shown in the table below.

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Andash Resource Estimate
Category	Type	Tonnage (kt)	Grade		**Metal **
			Au(g/t)	Cu(%)	Au (oz)	Cu (t)
Measured	Oxide	923	0.88	0.5	26,114	4,638
	Sulphide	3,160	1.21	0.47	122,932	14,900
Indicated	Oxide	810	0.85	0.43	22,136	3,510
	Sulphide	14,305	1.11	0.38	510,507	54,260
Measured+Indicated		19,200	1.1	0.4	679,023	77,300
Inferred	Sulphide	379.6	0.93	0.25	11,350	950

History of the Project

The Andash deposit was first discovered in 1962 and extensively explored during the 1970 ’ s and 80 ’ s by Soviet geologists and in 1996-1997 by Ala-Too Gold Company, a subsidiary of Commonwealth and British Minerals. Exploration work identified three main mineralised zones of which Zone 1 contains the majority of the resource. In addition, geochemical and geophysical studies outlined a number of other potential targets.

Aurum acquired the Andash property in January 2005, and since then has undertaken an aggressive exploration programme, including an extensive infill drill programme on Zone 1 to the extent that the majority of the resource is in Measured and Indicated category.

Feasibility Study Findings

Wardell Armstrong International was commissioned by Aurum to provide a Feasibility Study for the development of a conventional open pit mining operation at Andash.

Ore treatment will be by flotation to produce a single copper-gold concentrate with a surface thickened tailings storage facility. Sale of concentrate will be to an international smelter.

The key findings, in the January 2007 Feasibility Report, were as follows:

• The Project economic model was based on excavation of 16 million tonnes of ore over an 8 year mine life, with ore treatment for 9 years;

• The initial capital expenditure was estimated at US$55.4M, with sustaining capital for major maintenance and tailings dam expansion of US$9.9M;

• Life of Mine average operating costs of US$9.6 per tonne of ore processed; and

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• A projected life of mine operating gold equivalent cash cost of US$223/oz.

Exploration upside

The Andash Project also includes Zone 2 and Zone 3 along with the Tokhtonysay and Nakhodka prospects nearby and three other additional exploration areas. Aurum have to date concentrated their drilling in the Zone 1 area only.

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The Tokhtonysay prospect is an IP target located approximately 6 km from the edge of the planned Zone 1 pit. In January 2008, Aurum announced the results of the initial exploration drill hole at Tokhtonysay which hit mineralisation from the surface to a depth of 85m with an intersection from 15m to 72m of 1.48g/t of gold and 1.41% copper, including 2.01g/t gold and 2.2% copper from 15m to 41m.

The Project contains a number of other attractive exploration targets which will be followed up in the future.

Plant Design

Work by the UK-based consulting and construction company GBM has proposed that the ore from Andash be processed using three stage crushing, ball milling, gravity concentration and flotation of the sulphide and oxide minerals sequentially to recover gold and copper into a combined sulphide/oxide concentrate assaying 22.3% copper and 81.8g/t gold. This concentrate will be shipped to a third party smelter for further treatment. The plant has been designed to treat 2 million tonnes a year.

Way Forward

Kentor Gold will immediately commence technical, financial and legal due diligence on the Project and the exploration tenements and commence examining funding options for the purchase and early development of the Project. The Project provides attractive returns at current metal prices and keen interest in the Project is anticipated from a number of potential off take parties.

A full review of capital and operating costs will be undertaken to incorporate the changes that have taken place since the feasibility study was completed.

About Kentor Gold

Kentor Gold Limited (ASX Code: KGL) is an Australian-based company formed in 1998 as a specialist gold explorer. The Company was listed on the Australian Securities Exchange (ASX) in March 2005 and has diversified into exploration for gold, geothermal energy and base metals in Central Asia where it has highly regarded, established local management.

Kentor Gold is considering the development of two gold mines in the Kyrgyz Republic – at Andash and Savoyardy. The option to acquire the Andash project was announced today.

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Kentor Gold has completed a pre-feasibility study to examine the potential for bringing the Savoyardy gold project into early production with mine start-up targeted for 2010. The Company has an option to purchase 100% of the Savoyardy project from Manas Resources Limited.

For further information contact:

Mr Simon Milroy Managing Director Phone: +61 44 88 515 75 Email: info@kentorgold.com.au

Competent Persons Statement:

The Exploration Results and Resource estimates in this report are based on information compiled by Dr. Phil Newall, who is a Chartered Engineer and Fellow of the Institute of Materials Minerals and Mining and a full time employee of Wardell Armstrong International. Dr. Newall has sufficient experience which is relevant to the style of the mineralisation and the type of deposit under consideration and to the activity to which he is undertaking, to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Dr. Newall has consented to the inclusion of this information in the form and context in which it appears in this report.

Photographs of the Mining Fleet follow

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40 Tonne Dump Truck

120 Tonne Excavator

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45 Tonne Excavator Grader

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Front End Loader

Dozer

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Blast Hole Drill Rigs Compactor

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50 t Mobile Crane

Service Truck

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Explosives Mixing Truck

Fuel and Lubrication Truck

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Backhoe

Bobcat

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