Further to its news release of April 6, KFG Resources Ltd. and Union Securities Ltd have agreed to increase the size of the best-efforts private placement to a total of $2.5 million of 8% convertible notes, with attached share purchase warrants. All other terms of the private placement will remain as disclosed. The private placement continues to be subject to regulatory acceptance.

The Company's common shares are listed on the Canadian Venture Exchange, trading symbol "KFG". For additional information, please contact Mr. Robert A. Kadane, President, at (303) 825- 7080.

The Canadian Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release."