KGL RESOURCES LIMITED — Interim / Quarterly Report 2007

Jul 25, 2007

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Kentor Gold June 2007 Quarterly Activities Report

Highlights

• Successful completion of placement to raise A$2.6m

• Appointment of Simon Milroy as Managing Director

• Successful execution of the Savoyardy Joint Venture Agreement

• Commencement of uranium exploration in the Dunmarra Basin

• Granting of four geothermal energy licences in the Kyrgyz Republic

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Kentor Appoints New Managing Director

Simon Milroy commenced as the new Managing Director for Kentor Gold Limited (“Kentor Gold”) on the 14th May 2007. A mining engineer by profession, Simon has worked in Asia for the past 8 years on a variety of development projects, most recently with Pan Australian Resources where he successfully managed the start up and development of the Phu Bia and Phu Kham projects in Laos.

Simon’s extensive project development experience forms an integral part of the company’s strategy to acquire and develop advanced resource projects within Central Asia.

Savoyardy Gold Project

Kentor Gold signed an agreement with Perseus Mining Limited (“Perseus”) on 14th May 2007 to earn a 70% interest in the Savoyardy 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 Gold will spend a minimum of US$500,000 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. Once Kentor Gold attains a 70% interest in the Savoyardy project, Kentor and Perseus will fund further expenditure commensurate with their respective interests or dilute their interests in accordance with an agreed formula.

During the quarter, access roads to the Project were developed and planning for a 1,500 diamond drilling program was undertaken, which is due to commence in August 2007 and aims to produce an initial resource by March 2008.

Dunmarra Uranium

A Heads of Agreement has been signed with the vendors of five Exploration Licence Applications (ELA) in the Dunmarra Basin of the Northern Territory. A new wholly-owned subsidiary of Kentor, Dunmarra Uranium Limited (“Dunmarra”) was formed and upon execution of a formal agreement and transfer of the ELAs, 45% of the shares in Dunmarra will be transferred to the vendors. Due diligence has recently been completed and a shareholders agreement is now being drafted.

Dunmarra Uranium (Kentor Gold Limited 55%) also made Exploration Licence Applications for an additional 4 licences in the Northern Territory. When the transfer of the vendors’ ELAs is complete,this will take the total ELA area controlled by Dunmarra to 5,474 square kilometres.

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The exploration targets within the Dunmarra ELA are sandstone hosted and roll front uranium orebodies. Sandstone hosted deposits have produced over 80% of the total uranium ever mined in the USA, and are the basis of significant production in Kazakhstan. In South Australia the Beverley and Honeymoon operations are of this type.

Reconnaissance exploration of the Dunmarra tenements commenced in June 2007 with sampling of existing water bores, waterholes and surface outcrops identified by aerial radiometric surveys.

Geothermal Energy

Five applications were made during the quarter for geothermal energy licences in the Kyrgyz Republic. The areas chosen were considered to be prospective for geothermal energy of the Hot Fractured Rock type analogous to the Cooper Basin. The exploration target in each area is hot fractured granite with temperatures in excess of 250[o] C.

Should the exploration programme be successful, the business strategy is to generate emission-free electricity for export to China. The rapidly developing Xinjiang-Uyghur Autonomous Region of China lies adjacent to the Kyrgyz Republic.

Kentor’s applications are the first for geothermal energy in the Kyrgyz Republic. Four of the licence areas were subsequently granted, the North Issykul licence has not been granted.

Collection and analysis of all existing data on the areas has commenced and a respected international geothermal specialist has visited each of the licence areas and is providing expert advice to Kentor Gold.

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Gold Exploration

The drilling program at Akbel has been completed with drills being demobilised and the camp placed on care and maintenance. The results of the drilling programme are now being evaluated and a new drilling programme is planned for the fourth quarter of 2007.

The new drilling programme is being planned to test a number of promising targets near the boundary with the Kumtor lease. A mapping and sampling project is also planned to commence in the fourth quarter to test a number of targets within the Bashkol licence area, including some reported occurrences of uranium.

Evaluation of the East Koksu and Za Alai tenements has not warranted further work and these tenements will be dropped.

Business Development

During the quarter, Kentor Gold continued to review and evaluate a number of advanced development projects within Central Asia. This process will continue as Kentor Gold is actively seeking to add to its portfolio of advanced projects in the region.

Corporate

A placement was completed to raise A$2,600,000 from clients of Far East Capital Limited. The placement comprised the issue of 20 million fully paid ordinary shares at A$0.13 each. The placement was approved by shareholders at the AGM on 24 May, 2007.

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

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