KGL RESOURCES LIMITED — Interim / Quarterly Report 2008

Apr 29, 2008

ASX / MEDIA RELEASE

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KENTOR GOLD LTD

ACN 082 658 080

30 April 2008

Quarterly Activities Report Period Ending 31 March 2008

Summary

• Rehabilitation of exploration adits completed to allow underground diamond drilling to commence at Savoyardy

• Chaarkuduk base metals exploration licence granted to CJSC Kentor (KGL 80%)

• Kurgan base metals exploration licence granted to CJSC Kentor (KGL 80%)

• Akshyrak (Previously Inylchek) geothermal energy exploration licence granted to CJSC Kentor (KGL 80%)

• Bashkol exploration licence reissued to CJSC Kentor (KGL 80%)

• Panax Geothermal Limited commits to Kyrgyz geothermal energy joint venture

• Mr Craig Irvine appointed General Manager Exploration

Outlook

Savoyardy Gold And Geothermal Projects Gaining Pace

Kentor Gold Limited (ASX Code: KGL) is now focused on progressing exploration at the Savoyardy gold project while advancing the geothermal projects with joint venture partner Panax Geothermal Limited. Both projects are situated in the Kyrgyz Republic in Central Asia (Figure 1).

Managing Director Simon Milroy said extensive drilling and testing programs are planned at the Savoyardy site, with results expected over the coming months.

“This project will now be the focus of Kentor Gold’s gold exploration as year-round drilling activity is now possible at the highly-prospective site,” Mr Milroy said.

“Panax Geothermal A$5 million commitment to Kentor Gold’s Kyrgyz Geothermal Energy project is very pleasing and a clear endorsement of the quality of the targets.”

“Preparations have now been made for the commencement of detailed field work in early May.”

“The exploration licences granted for both base metal and geothermal interests in the past quarter provide an extended pipeline of exploration tenements in this mineral-rich belt.”

Representatives of Kentor Gold will travel to Russia in May to explore the possibility of involvement with advanced projects by leveraging the skills of our Russian-fluent management team into a region with excellent mineralisation prospects.

“Kentor Gold remains committed to assessing projects that can be advanced more rapidly towards production and firmly believe the results from the programs now established will be evident in 2008-09,” Mr Milroy said.

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

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KENTOR GOLD LTD

PROJECTS

Savoyardy – Gold

(Kentor earning 70%)

Rehabilitation of underground exploration adits was completed by a team of miners in the past the quarter. The rehabilitation of the adits has improved the access to the site and has allowed full access to the ore body for mapping and sampling. The development of additional drill cuddies for diamond drilling from the underground workings is now underway. Drilling at Savoyardy commenced on 29 April 2008 and the drilling will now be able to be continued year-round as the operations will be unaffected by surface weather conditions.

Induced Polarisation surveys to identify areas of high sulphidation are planned during the northern summer. This will be followed up with soil sampling and drilling. A total of 4,500 metres of drilling is planned, comprising of 1,500 metres from underground and an additional 3,000 metres from the surface. Approximately half of the planned surface drilling will be targeting new mineralised zones that have been identified between the Rudny area and the Chinese border (Figure 2).

Akbel – Gold.

Attempts by Kentor Gold’s subsidiary, CJSC Kentor (KGL 80%), to drill through approximately 60 meters of moraine to test targets were made during the past quarter. Despite the best efforts of the drilling contractor, the drill holes could not penetrate the dense moraine covering to reach the target. The moraine consisted of large boulders and free flowing gravels.

The focus of the exploration activity at this site will now move to areas of anomalous gold which have been identified at the Tarasu, Tarasai and Achik-Tash anomalies (Figure 3). These areas have no moraine cover and drill holes will be able to be collared directly into the bed rock. These areas are currently covered in snow and it is expected that they will be accessible by June 2008.

Bashkol - Gold, Uranium.

CJSC Kentor has been re-issued the Bashkol Prospecting Licence with boundaries adjusted to include 2 uranium occurrences discovered by Soviet geologists in the 1950's, but unexplored since then (Figure 4). The two occurrences are:

 East Kuylyu

Uranium, vanadium, and molybdenum noted by Soviet geologists but totally unexplored.  Kaindybulak Uranium, vanadium, and molybdenum noted by Soviet geologists but totally unexplored.

Kentor intends to send a field party to the area for reconnaissance as soon as weather conditions allow.

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Base Metals

CJSC Kentor was granted the Chaarkuduk and the Kurgan exploration licences which are prospective for base and precious metals (Figure 1).

Chaarkuduk - Lead, Zinc, Copper, Gold, Silver, uranium.

Chaarkuduk is a known lead occurrence drilled by the Soviets and further explored by a number of adits. The occurrences have been defined by varying amounts of surface mapping and sampling, exploration adits and some limited amounts of diamond drilling.

The other known prospects on the Chaarkuduk licence (Figure 5) which have know occurrences of lead, zinc, copper, gold, silver and/or Uranium are:  Uchkashka #2;

• Kyzyljar;

• Jergalan;

• Lower Tyup;

• Upper Tyup; and

• Tash-Tyubin.

Kurgan - Lead, Zinc, Copper, Silver, Gold. CJSC Kentor has also been granted an Exploration License of 310 square kilometres for all minerals in the Jalalabad Oblast of the Kyrgyz Republic (Figure 6).

The license area is considered prospective for lead, zinc, silver and gold and also contains a number of mineral occurrences which have previously been defined by work carried out during the Soviet era.

During the quarter Kentor concentrated on collecting all known data for the Chaarkuduk, Kurgan, Chunkei and Yangidavan exploration licences. Field activities to commence in the coming months include mapping, sampling and geo-physical surveys to be followed by drilling.

Geothermal Energy

(KGL 80%, Panax Geothermal earning 51%)

Kentor Gold continued working on collecting and analysing all available existing information on the geothermal licence applications in the Kyrgyz Republic.

Dr Graeme Beardsmore, a geothermal energy expert, commissioned by Panax Geothermal Limited (Kentor Gold’s joint venture partner), spent twelve days in the Kyrgyz Republic reviewing the data and conducting site visits. During the site visit, Dr. Beardsmore confirmed the geothermal gradient at Inylchek as being over 100 degrees centigrade per kilometre to a depth of 700 meters from surface, and came to the conclusion that “the Inylchek prospect represents a world-class engineered geothermal system opportunity”.

Kentor Gold and Panax Geothermal conducted a number of presentations on the Geothermal Energy Project to the Kyrgyz Government in January 2008. The Minister of Economic Development has stated his full support for the project.

The results of the work to date have indicated that the Inylchek geothermal energy exploration licence has a high chance of hosting a world class heat reservoir at a relatively

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KENTOR GOLD LTD

shallow depth. Due to these indications, an application was made to increase the size of the exploration licence. This has now been granted by the Kyrgyz Government. The new licence area is known as Akshyrak and covers an area of 823 square kilometres. The evaluation phase of the Memorandum of Understanding with Panax Geothermal Limited ended in March 2008.

Panax Geothermal have now made the commitment to proceed with the Geothermal Energy Joint Venture. Panax Geothermal has the right to earn up to 51% equity in Kentor Gold’s geothermal exploration licences by spending A$5 million. This includes commencing the drilling of at least one deep hole within the first three years.

Preparations have now been made for the commencement of field work in early May, comprising:

• Thermal spring sampling for geo-thermometry to provide an assessment of the potential temperatures at depth;

• Measurements of geothermal gradients and/or heat flow in existing bore holes; and

• Further examination and evaluation of the existing geological and geophysical database.

Dunmarra Uranium – Uranium.

Kentor Gold conducted preliminary exploration during the quarter, including reviewing all known data for the tenements in the Dunmarra basin. The Company is now of the opinion that the tenements are not considered to be prospective for uranium. No further exploration will be conducted on these tenements as the board considers that shareholders funds would be better spent on the more advanced projects the Company is exploring in the Kyrgyz Republic.

Uranium remains a key target for Kentor Gold and advanced uranium projects will continue to be sought.

Corporate

Mr Craig Irvine commenced employment with Kentor Gold in February 2008 as General Manager Exploration. Mr Irvine is a geologist with 20 years experience, including more than 10 years in various senior roles for a range of operational and development projects across geographically diverse regions. Mr. Irvine will be directing the exploration programs on the Company’s tenements and evaluating new projects and potential acquisitions.

Prior to his most recent position at Perilya Ltd’s Beltana Zinc Project, Mr Irvine’s experience has been primarily in gold and copper operations and development projects for companies including Newcrest Mining and Western Mining Corporation. Mr Irvine is a member of the Australian Institute of Mining and Metallurgy.

For further information, visit our website at www.kentorgold.com.au or contact:-

	Media:
Simon Milroy	Anna O’Gorman
Managing Director	Principal Consultant
Kentor Gold	Three Plus
Ph +61 7 3121 3206	Ph +61 7 3503 5700
info@kentorgold.com.au	annao@threeplus.com.au

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KENTOR GOLD LTD

Figure 1: Kentor Gold Tenement Location Map Kyrgyz Republic

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Figure 2: Savoyardy Ore Field Sketch Map

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Figure 3: Akbel Licence – Anomalous gold in soil

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Figure 4: known mineral occurrences on the re-issued Bashkol licence

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Figure 5 Regional Geology of the Chaarkuduk Exploration Licence

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Figure 6: Known mineral occurrences on the Kurgan Exploration Licence

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Competent Persons Statement:

The information in this report that relates to Exploration Results is based on information compiled by Craig Irvine, who is a member of the Australasian Institute of Mining and Metallurgy and a full time employee of Kentor Gold Limited. Mr. Irvine 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. Irvine has consented to the inclusion of this information in the form and context in which it appears in this report.

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Appendix 5B Mining exploration entity quarterly report

5BRule 5.3

Appendix 5B

Mining Exploration Entity Quarterly Report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.

Name of entity

KENTOR GOLD LIMITED

	ABN 52 082 658 080 Consolidated statement of cash flows		Quarter ended (“current quarter”) 31 MARCH 2008	Quarter ended (“current quarter”) 31 MARCH 2008
Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration and evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) Net Operating Cash Flows		Current quarter $A’000		Year to date (12 months) $A’000
		11 (903) (206) 22 (8)		11 (903) (206) 22 (8)
		(1,084)		(1,084)
Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)		(2) (5)		(2) (5)
		(7)		(7)
		(1,091)		(1,091)

• See chapter 19 for defined terms.

Appendix 5B Page 1

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Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	1.13 Total operating and investing cash flows (brought forward)	1.13 Total operating and investing cash flows (brought forward)	(1,091)	(1,091)	(1,091)
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (provide details if material) Net financing cash flows			27 (80)		27 (80)
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end ofquarter			(1,144) 2,456		(1,144) 2,456
			1,313		1,313
Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities
1.23 1.24		Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.10		Current quarter $A'000
				90
				-
1.25 Explanation necessaryfor an understandingof the transactions Remuneration payments in respect of directors during the March 2007 quarter. Non-cash financing and investing activities 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows N/A 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reportingentityhas an interest N/A		Explanation necessaryfor an understandingof the transactions
		Remuneration payments in respect of directors during the March 2007 quarter.
	N/A
	Details of outlays made by other entities to establish or increase their share in projects in which the reportingentityhas an interest
	N/A

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

Financing facilities available

Add notes as necessary for an understanding of the position.

3.1 Loan facilities 3.2 Credit standby arrangements	Amount available $A’000	Amount used $A’000
	Nil	Nil
	Nil	Nil

Estimated cash outflows for next quarter

Estimated cash outflows for next quarter
4.1 Exploration and evaluation 4.2 Development	$A’000
	750
Total	750

Reconciliation of cash

Reconciliation of cash at the end of the quarter (as shown	Reconciliation of cash at the end of the quarter (as shown	Current quarter	Previous quarter
in the	consolidated statement of cash flows) to the related	$A’000	$A’000
items	in the accounts is as follows.
5.1	Cash on hand and at bank	1,313	2,456
5.2	Deposits at call	-	-
5.3	Bank overdraft	-	-
5.4	Other (provide details)	-	-
	Total: cash at end of quarter(item 1.22)	1313	2,456

Changes in interests in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased	Tenement reference	Nature of interest (note (2))	Interest at beginning ofquarter	Interest at end of quarter
	Inylchek		80%	0%
	Bashkol Kurgan Akshyrak Chaarkuduk		0% 0% 0% 0%	80% 80% 80% 80%

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

	Total number	Number quoted	Issue price per security (see note 3) (cents)	Amount paid up per security (see note 3) (cents)
7.1 Preference +securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs,redemptions	-	-	-	-
	-	-	-	-
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs	68,488,129	68,488,129	-	-
	- -	- -
7.5 +Convertible debt securities(description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted	-	-	-	-
	- -	- -	- -	- -
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	266,667 300,000 300,000 300,000 2,500,000 100,000 100,000 100,000		Exercise price 75 cents 62.5 cents 75 cents 87.5 cents 20 cents 30 cents 60 cents 80 cents $1.00	Expiry date 01/07/2008 ) Termination of ) executive ) employment 31/05/2008 31/05/2009 31/05/2012 31/05/2012 31/05/2012
	-	-
7.11 Debentures(totals only)	-	-
7.12 Unsecured notes(totals only)	-	-

Please note: As previously announced, shareholder approval is being sought at the AGM (22 May 2008) for the allotment and issue of a series of options to executives. On approval, the vesting and issue of these options will be administered by the Board of Directors and once exercised, will increase the number of options on issue from 3,966,667 to 6,866,667.

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).

• 2 This statement does / ~~does not~~ * (delete one) give a true and fair view of the matters disclosed.

Sign here: ( ~~Director~~ /Company secretary)

Date: 30 April 2008

Print name: Kylie Anderson

Notes

• 1 The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

• 2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities .

• 4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.

• 5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

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• See chapter 19 for defined terms.

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