KGL RESOURCES LIMITED — Management Reports 2011

Jun 7, 2011

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Kentor Gold Ltd Highlights of interview....  Plans for further Resources at new Australian assets.

• Explains why that can be done quickly.

• Hence, explains how early development & production is possible in Australia.

Date of lodgement: 8 Ju n e 2011

Title:

“Co m pany Insig h t – Plans f o r early gold - copper pro d uction in A ustralia”

• Discusses the most valuable of these new assets.

• Andash in Kyrgyz Rebublic remains main focus.

Record of interview:

companyinsight.net.au

Kentor G old Ltd (A S X code: KGL) annou n ced on 12 M ay the su c cessful tak e over of Jin k a Minerals Limited (J i nka) and o n ly three w e eks later a n nounced a n initial gol d Resource at one of t h e former J i nka project s , Burnakura, in Weste r n Australi a , and a tar g eting of go l d producti o n within 1 2 months. What are you r major obje c tives to progress the Ji n ka assets a n d add valu e ?

Managing Director, Simon Milroy

We felt that the fast e st way that w e could a d d value to each of the a s sets and ge t an early feel for the p otential at each of th e m was to c alculate J O RC resour c es for eac h of the thr e e projects. All of the p rojects hav e sufficient d rilling to g o straight to a JORC re s ource. Goi n g through t he process a lso shows u p where fur t her drilling will add th e most value.

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You hav e already a n nounced o n 30 May a J ORC Reso u rce of 500 , 000 ounces at Burnaku r a (Meekat h arra distric t , Western A ustralia). H ow were y o u able to do this so quickly?

Managing Director, Simon Milroy

We com m enced the r esource est i mation as s o on as we h a d agreed t h e takeover terms with t h e vendors of Jinka. D u ring the t a keover period we wor k ed with Ji n ka to ensu r e all plann e d work continued un i nterrupted t o avoid a n y delays i n the drill programme s . We ha v e commen c ed an airb o rne geoph y sical surve y at Gabani n tha, the ot h er WA gol d project ne a r Burnaku r a, to allow t he planned drilling pro g ramme at G abanintha t o be well ta r geted.

We are also movi n g quickly at Jervois, in the No r thern Terr i tory, wher e the drilli n program m e we anno u nced three weeks ago h as already c ommenced.

companyinsight.net.au Which of the three p rojects do you consid e r of potentially most v alue in the longer ter m ? Why?

Managing Director, Simon Milroy

Althoug h the Western Australi a n gold projects will b e the first i n to producti o n, Jervois is potential l y the most valuable in t he long ter m . The proj e ct contains high grade c opper – go l d minerali s ation adja c ent to hig h grade si l ver, lead, zinc miner a lisation o u tcropping i n numerous areas ove r a 12km s t rike length . The drill d efined mineralisation i s open alo n g strike a n d down di p . The deep e st hole on t he licence still returned high gra d e copper a n d gold.

companyinsight.net.au How lo n g will it t a ke to esta b lish JORC Resources at the othe r projects a nd to add t o Resourc e s at Burnak u ra?

Managing Director, Simon Milroy

We exp e ct to have t h e initial JORC Resour c e estimates available f o r Gabanint h a and Jervois around t h e end of this month. Updates to e a ch of these estimates will take place towards t h e end of t h is calendar y ear when w e have com p leted the p l anned drill p rogramme s .

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Can you outline the s tatus of eac h project?

Managing Director, Simon Milroy

At Burn a kura, we are doing a f o ur month f e asibility stu d y and will then comm e nce the wo r k needed t o modify an d re-commi s sion the plant.

At Gab a nintha we w ill comm e nce a feas i bility stud y . The min e ralisation a t Gabanint h a contains copper as w ell as gold. T he concep t that we are investigati n g is to add s ome flotati o n capacity to the front of the Burn a kura plant w hich is on l y 20km aw a y. We wou l d then float a copper-gold concent r ate to rem o ve the cop p er. This s h ould allow the remaini n g gold to b e recovere d in the CIP plant.

At Jervois we will b e doing a p re-feasibilit y study this year follo w ed by a fe a sibility stu d y next yea r . The conc e pt at Jervo i s is an ope n pit operation feeding o re to a flo t ation plant t o produce copper-gol d concentrate and sepa r ate lead an d zinc con c entrates for sale to thi r d party sm e lters.

Jervois i s located approximatel y 200km ea s t of the Ali c e Springs to Darwin r a il line, hen c the expo r t of concen t rates shoul d be relative l y straight f o rward.

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What ab o ut the timi n g and the p o tential rate s of product i on?

Managing Director, Simon Milroy

We are v ery fortuna t e that all t h ree project s are locate d on grante d mining lic e nces and n o t subject to native tit l e. This me a ns that the timeline t o developm e nt is much faster than a greenfie l ds discover y . The Bur n akura plan t was place d on care a n d mainten a nce less th a n

two yea r s ago, henc e we antici p ate that restarting the o peration w i ll be relati v ely easy. W are targe t ing having i t back in production by June next year.

We are currently d o ing a shor t feasibility study look i ng at the r estart of th e plant in a n expande d capacity. T he plant w as previous l y configur e d to treat t h e hard underground ore. Howeve r , we are pl a nning to m i ne the soft e r oxide ore only, hence we are ai m ing to double the capa c ity to arou n d 300,000 t pa. As soo n as it has b e en commis s ioned we w ill be looki n g to expan d the capaci t y further to around 500 , 000 tpa.

We are a lso plannin g a separate study to ex a mine a pot e ntial heap l each operat i on at the si t e to treat t h e low grad e ore.

It is too e arly to esti m ate produ c tion rates. However, t h ese will be released to the market a s we com p lete each of the studies.

companyinsight.net.au

Can you explain the infrastructu r e in place?

Managing Director, Simon Milroy

The Bur n akura oper a tion includ e s a CIP pl a nt, power s t ation, tailings dam, wa t er supply, 9 0 person c a mp, wareh o use, work s hop and of f ices. All o f the faciliti e s are in pl a ce and are i n good co n dition. Th e plant is c u rrently mis s ing the el u tion colum n and gold r oom and w e anticipat e that we ca n purchase t h ese items o n the secon d hand mar k et.

The site i s approxim a tely 30 mi n utes drive fr om Meeka t harra whic h has daily c o mmercial a ir services t o Perth.

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What w a s the gold p rice when Burnakura and Gabanintha were p reviously i n productio n ? Do you h ave a roug h idea of the capital costs required t o get Burna k ura and Ga b anintha ba c k into pro d uction? W h at about po t ential oper a ting costs?

Managing Director, Simon Milroy

The ope n pit mining operations a t Burnakur a and Gaba n intha cease d when the g old price w a s approxi m ately $450 / oz. The ex i sting drilli n g shows th a t the mine r alisation continues do w n dip and a long strike from the pi t s, hence we are confide n t that with a gold pric e of $1,500/ o z most of t his will no w be econo m ic.

Our prel i minary estimate is tha t it will cos t approxima t ely A$5M t o get Burn a kura back i n producti o n. Howev e r, the capit a l and opera t ing cost est i mates will b e available as soon as w e complet e the feasibi l ity study.

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How wil l you fund y our plans f o r the Jinka a ssets?

Managing Director, Simon Milroy

We are p lanning to fu nd the re-commissioni n g of Burna k ura and th e exploratio n programm e s at each of the three p rojects fro m existing ca s h reserves.

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You are developing your flags h ip Andash Gold-Cop p er Project i n the Kyr g yz Republic. Where d o es Andash rank amon g st your expanded proje c t suite, bot h in terms o f priority a n d the pote n tial to add v alue for sh a reholders?

Managing Director, Simon Milroy

Andash r emains the m ain focus f or the com p any. The p r oject is full y funded an d ready to g o . Resolvi n g the com m unity issue s and com m encing construction is the numbe r one task f o r both my s elf and the r est of the K entor Team .

companyinsight.net.au Thank y o u Simon.

Burnakura Inferred Resource estimates May 2011

		Mt 0.5 g/t Au cu Au g/t t off Au koz	1.0 g/t Mt Au Au cut off g/t Au k oz	1. Mt 5 g/t Au cut Au g/t off Au koz
	NOA Alliance Lewis Reward Authaal FederalC Banderol ity	5.3 1.9 1.2 1.2 0.4 0.6 1.8 1.3 1.1 1.2 1.7 1.0 307 79 42 46 22 19	3.4 0.8 0.4 0.4 0.2 0.2 2.4 262 2.0 51 1.8 23 2.0 26 2.7 17 1.5 10	2.2 0.4 0.2 0.2 0.1 0.1 3.0 2.7 2.3 2.8 3.7 2.1 212 35 15 18 12 7
	Total	10.6 1.5 516	5.4 2.2 390	3.2 2.9 298

H&S is a gr o up of consultin g geologists pro v iding expert se r vices to the hardrock minerals i n dustry in the fi e lds of explorati o n, evaluation, resource estimation and opti m isation of gra d e control. Th e group specia l ises in applic a tion of advanc e d geostatistic a l methods to re s ource estimatio n and grade con t rol.

The inform a tion in this rep o rt that relates to mineral reso u rce estimation for Burnakura is based on wor k completed by M r Jonathon A b bott who is a f ull-time employ e e of Hellman & Schofield Pty L td and a mem b er of the Austr a lasian Institute of Mining and Metallurgy. Mr Abbott has suffi c ient experienc e which is releva n t to the style of mineralisation a nd type of deposit under consi d eration and to the activity whic h he is undertaki n g to qualify as a Competent Pe r son as defined i n the 2004 Editi o n of the ‘Aust r alasian Code f o r Reporting of E xploration Res u lts, Mineral Resources and Ore Reserves’. Mr A bbott consents to the inclusio n in the report of the matters ba s ed on his infor m ation in the for m and context in w hich it appear s . Mr Abbott visit e d the Burnak u ra project from 2 0 to 21 April

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