KGL RESOURCES LIMITED — Capital/Financing Update 2012

Mar 11, 2012

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Kentor advances geothermal power supply project in Solomon Islands

12 March 2012

Australian-b a sed Kent o r Gold Limited (AS X : KGL) is entering the ranks of gol d mining co m panies in 2012.

 Geothermal Prospecting Licence Granted

Kentor G old Limite d (Kentor Gold or the Co m pany) is pleased to announ c e its 100% subsidiary K entor Ener g y Pty Ltd h as been granted a 3-year P r ospecting Licence for g e othermal energy by the Sol o mon Island s Governme n t. The Lic e nce is cent r ed on the i s land of Sav o , a dorman t volcano with vig o rous geoth e rmal activit y about 35k m from Honi a ra.

The Comp a ny is prog r essing a pipeline of advanced p r ojects in Australia an d the Kyrgyz R epublic.

• The Murchison Gold Project in Western Australia - scheduled to commenc e high grade gold mining at t he Burnakur a plant in mid-2012, with the potential to add gold- c opper produ c tion from the neig h bouring G a banintha deposit.

Kentor previously i n vestigated geothermal energy res o urces in Central Asia. The w ork was di s continued d ue to the l o w power prices p revailing in the region. Consequ e ntly, a re v iew was conduc t ed of So u th Pacific opportuniti e s for con v entional, volcani c related pro j ects in locations with hi g h cost die s el power generat i on.

• The high grade, very low cost Andash Gold-Copper Project in the Ky r gyz Rep u blic – developm e nt-ready, aw a iting site access a n d targeting 2013 to commenc e production a t 70,000 oz gold and 7,400 tonn e s copper pa for an initial six y e ars, with high potential for expan s ion.

Previou s geoscie n ce results indicate that a s u bstantial geother m al reservoir at a tem p erature of 2 60-300°C m ay exist beneat h Savo, pro b ably at co n ventional geothermal d epths of less th a n 2,000 m. In Honiara, electricity is produced e n tirely by diesel g enerators r e sulting in consumers h aving to pa y among the world’s highest prices for power, curre n tly around 62 cents per kW h .

Kentor p lans to supply geother m al power t o Honiara, c a pital city of the Solomon Isla n ds, at significantly redu c ed cost.

• The Jervois Copper-SilverGold Project in the Northern Territory – targeting 2 0 14 startup follow i ng current feasibility studies in t o developing the high grade cop p er-silver res o urce with potential f o r gold and o t her base metals.

The sit u ation creat e s a compelling busines s opportunity in which geother m al power from Savo c o uld replac e diesel gen e ration in the Ho n iara grid. This shoul d significantly reduce c onsumer costs, e nhance e c onomic de v elopment a nd improv e energy security in the Solomon Islands, while p roviding, for Kentor Energy, an attr a ctive retu r n on in v estment w hich is comme n surate wit h the degre e of risk a n d innovati o n in the project.

Issued capital:

106.2 millio n ordinary sha r es 2.7 million u n listed option s

Market Capitalisation

9 March 2012: $155 million

Kentor Gold Limited

www.kentorgold.com.au

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Kentor Energy plans to study the feasibility of constructing on Savo a geothermal power plant which will potentially supply the entire Honiara grid and provide future extensions to other demand centres on Guadalcanal. A legally-binding Surface Access Agreement has already been signed with customary landowners on Savo and initial fieldwork during 2012 will involve geothermal mapping and a 3D geophysics survey which will focus on identifying an Inferred Geothermal Resource under the Australian Geothermal Reporting Code . If successful this will be followed by exploration drilling and estimation of an Indicated Geothermal Resource. This estimate will provide the basis for a comprehensive technical, commercial and environmental feasibility study in 2013-early 2014 which should allow production drilling and construction of a first-stage 20 MW geothermal power plant in 201516.

Commenting on the project Kentor Managing Director Simon Milroy said:

“ The Solomon Islands desperately needs cheaper and more reliable power and the country’s development partners and international development banks are very keen to see significant infrastructure investments like this. The Solomon Islands Government and the people of Savo are providing great encouragement for the project.”

When appropriate, Kentor Gold plans to divest Kentor Energy into a separate self-funded entity to add value for Kentor Gold shareholders.

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Figure 1 Savo Island

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Kentor Gold Limited

www.kentorgold.com.au

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Figure 2 Location of Savo Island

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Kentor Gold Limited

www.kentorgold.com.au

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For further information contact:

Mr Simon Milroy Managing Director Phone: (07) 3121 3206 Email: info@kentorgold.com.au

Mr. David Waterhouse Investor Relations Phone (03) 9670 5008 Email: dwaterhouse@waterhouseir.com.au

Competent Person Statement

The information in this report that relates to Exploration Results, Geothermal Resources or Geothermal Reserves is based on information compiled by Dr Graeme Wheller, who appears on the Register of Practicing Geothermal Professionals maintained by the Australian Geothermal Energy Group Incorporated at the time of the publication of this Report. Dr Wheller is employed by Volcanex International Pty Ltd, an independent company that provides consulting services to Kentor. Dr Wheller has sufficient experience which is relevant to the style and type of geothermal play under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the Second Edition (2010) of the ‘Australian Code for Reporting Exploration Results, Geothermal Resources and Geothermal Reserves’. Dr Wheller has consented in writing to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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