KGL RESOURCES LIMITED — Interim / Quarterly Report 2007

Oct 29, 2007

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Kentor Gold September 2007 Quarterly Activities Report

Highlights

• Drilling commenced at the Savoyardy project

• High grade intersections from the first hole at Savoyardy.

• Joint Venture with Panax over the geothermal energy projects

KENTOR GOLD QUARTERLY REPORT - SEPTEMBER 2007

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Savoyardy Gold Project

A 1,500 metre diamond drilling programme commenced at the Savoyardy Gold project on the 6th of September 2007.

The drilling programme has been designed to test a 300 metres length of strike to a depth of approximately 90 metres below surface.

In addition to the exploration drilling, a programme of mapping, trenching and sampling has commenced in the area between the current drill programme and the Chinese border.

Exploration trenches and adits constructed in the 1970s showed the presence of high grade gold and antimony contained in a number of structures with widths of up to 27 metres. The mineralised structures can be traced for over 7 km to the south west along strike until they move off the Savoyardy exploration licence at the Chinese border.

On October 3rd Kentor Gold received strong assay results from the first hole at the Savoyardy Gold Project in Southern Kyrgyzstan. Fire assay results were received for hole SVD_PD_09 for the 24 metre interval from 76 metres down hole depth to the end of the hole.

High grade results of 14 metres at 15.1g/t gold from the drill hole SVD_PD_09 support the envisaged mineralised lode model. The significant SVD_PD_09 intersections are shown in Table 1. Significantly the grades were relatively consistent with 11 of the 14 samples grading between 10g/t and 30g/t Au.

TABLE 1 TABLE OF SIGNIFICANT INTERSECTIONS FROM HOLE SVD_PD_09

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Grade
Hole ID Northing Easting Depth Dip Azimuth From To
(g/t Au)
SVD_PD_09 4443660 446774 99 -75 130 78 79 29.6
79 80 18.0
80 81 13.6
81 82 13.3
82 83 25.20
83 84 10.8
84 85 18.5
85 86 5.18
86 87 15.90
87 88 10.4
88 89 9.6
89 90 6.24
90 91 12.4
91 92 23.1
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Kentor is earning a 70% interest in the Savoyardy exploration licence from Perseus Mining Limited through the expenditure of US$6 million on exploration and development of the licensed area.

KENTOR GOLD QUARTERLY REPORT - SEPTEMBER 2007

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FIGURE 1. DIAMOND DRILLING AT SAVOYARDY

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Geothermal Energy

On the 5th of September Kentor Gold announced that it had formed an alliance with Panax Geothermal Pty Ltd (Panax), one of the pioneers of hot fractured rock (HFR) geothermal energy developments in Australia, as part of its plans to advance its geothermal exploration interests.

Kentor and Panax signed a Memorandum of Understanding (MOU) to form a joint venture to explore and develop the four geothermal energy licences held by Kentor in the Kyrgyz Republic.

Panax is a dedicated geothermal energy company run by Dr. Bertus de Graaf, formerly the founding Managing Director of Geodynamics Limited. Dr de Graaf has been prominent in the development of HFR geothermal energy in Australia and is widely regarded as one of the authorities in the field. He has also played a pivotal role in helping Australia to become a leading player in this rapidly emerging global industry.

Panax has now merged its geothermal interests in Kyrgyzstan and in India with Uranoz Limited (ASX code: URO), a company which is also acquiring the Limestone Coast Geothermal Project through its merger with Scopenergy Limited. Dr de Graaf has now been appointed Managing Director of URO. URO Following an initial 6 months evaluation period, Panax will earn the right to a 51% interest in the joint venture project through the expenditure of $5million over a four year period. Panax may also choose to earn an additional 10% interest in the project through the expenditure of a further $1million.

Thereafter, Panax and Kentor will either contribute funding relative to their equity interest in the project or choose to dilute their stake according to an agreed formula.

Panax and Kentor have also agreed to cooperate in identifying other possible geothermal energy projects in countries within the former Soviet Union.

FIGURE 2. TRANSPORTING CORE FROM THE DRILL SITE

KENTOR GOLD QUARTERLY REPORT - SEPTEMBER 2007

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Dunmarra Uranium

A field trip was undertaken to the Dunmarra basin during the quarter, to examine each of the areas under application and to meet the land holders. The licences are still under application. Granting of the licences is expected before the end of the year.

Gold Exploration

Mapping and sampling took place in the Bashkol licence area, targeting areas of previously reported gold and uranium anomalism. The rock chip samples have been sent to the laboratory and assays results are expected in October.

along the lease boundary with the Kumtor mine. The holes are located in areas of shallow or no moraine cover so the drilling conditions should be far better than previously encountered. The program consists of four 250 metre deep diamond holes. Drilling is expected to commence in November.

Business Development

Kentor Gold is continuing with its strategy of acquiring and developing advanced projects which have the potential to be quickly developed into operations. During the quarter, Kentor evaluated a number of projects both in Australia and Central Asia.

A diamond drilling program has been designed to test induced polarisation (IP) anomalies on the Akbel tenement in an area

Competent Person Statement

This report is based on information compiled by Rudy Lennartz, who is a member of the Australian Institute of Mining and Metallurgy and a consultant to Kentor Gold Limited. Mr. Lennartz 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. Mr. Lennartz has consented to the inclusion of this information in the form and context in which it appears in this report.

For further information: Simon Milroy Managing Director Ph 0448 851575 info@kentorgold.com.au www.kentorgold.com

KENTOR GOLD QUARTERLY REPORT - SEPTEMBER 2007

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