KGL RESOURCES LIMITED — Capital/Financing Update 2012

Jul 16, 2012

Kentor Gold Ltd ACN 082 658 080

CLEANSING NOTICE UNDER SECTION 708AA(2)(F) OF THE CORPORATIONS

ACT

17 July 2012.

This notice is given by Kentor Gold Ltd (“ Company ”) under section 708AA(2)(f) of the Corporations Act 2001 (Cth) (“ Act ”) as notionally modified by the Australian Securities and Investments Commission (ASIC).

On 17 July 2012, the Company announced a non-renounceable rights issue (Rights Issue). Under the Rights Issue, shareholders with a registered address in Australia and New Zealand are invited to subscribe for 5 fully paid KGL ordinary shares (New Shares) for every 17 existing ordinary shares held as at 7pm on 25 July 2012.

Kentor advises that:

1. the New Shares to be issued pursuant to the Rights Issue will be offered for issue without disclosure under Part 6D.2 of the Act;

2. this notice is being given under section 708AA(2)(f) of the Act as modified by ASIC;

3. as a disclosing entity, KGL is subject to regular reporting and disclosure obligations;

4. as at the date of this notice KGL has complied with:

   • i. The provision of Chapter 2M of the Act as they apply to KGL; and

   • ii. Section 674 of the Act, and

5. as at the date of this notice, there is no excluded information, apart from that disclosed below, of the type referred to in sections 708AA(8) and 708AA(9) of the Act as notionally modified by ASIC that is required to be set out in this notice.

6. the potential effect the Rights Issue will have on the control of KGL, and the consequences of that effect will depend upon a number of factors, including investor demand and existing shareholdings.

   • Kentor’s major shareholder, KMP Investments Pte Ltd (KMP) currently holds 14.67% in the Company. As a result of the placement announced 17 July 2012, KMP’s holding in Kentor will increase to 19.9%. KMP has provided a commitment to take-up its full entitlement under the Rights Issue.

Additionally, KGL and KMP have entered into an Underwriting Agreement. New Shares with a value of up to $5 million not taken up by Eligible Shareholders under the Rights Issue or allocated to Eligible Shareholders under the Top-Up Offer will be allocated to KMP. The possible outcomes of KMP’s holding in the Company are as detailed in the following table.

Kentor Gold Limited

www.kentorgold.com.au

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	KMP’s % Interest in the
	Company
Current shareholding	14.67%
Shareholding following thePlacement	19.9%
Shareholding if Eligible
Shareholders Entitlement take up
is:
100%	19.9 %
75%	24.5%
50%	25.4%
25%	27.7%
0%	29.1%

The Company considers that any such increase in the voting power of KMP in the Company may have a material effect on the control of the Company as KMP would, in these circumstances, be likely to have a greater degree of influence when voting on resolutions to be considered at Shareholder meetings. Notwithstanding this, the Board considers that such an effect is acceptable in the circumstances, as it would only occur where all Eligible Shareholders have had an equitable opportunity to participate in the Offer.

Disclosure Items

• i. The Company is currently in negotiations with a third party with a view to entering into a Joint Venture arrangement in relation to Bashkol Tenement in the Kyrgyz Republic. The agreement, if completed, will require the third party to fund the exploration and development costs in relation to the Bashkol tenement in exchange for part ownership in the project (“Farm-in”). The terms and conditions of this transaction are yet to be finalised.

• ii. The Company has entered into a sale agreement with the original supplier of the two Ball Mills purchased for the Andash project. The Company intends to re-purchase the equipment at the appropriate stage in the project’s development.

• iii. As a result of KMP increasing its holding in the Company to 19.9% following the placement, the Board has invited KMP to appoint a suitable director to its Board. KGL will keep Shareholders informed of any new directors appointed to the Board.

Yours sincerely,

KENTOR GOLD LTD

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17 July 2012