Mr. Robert A. Kadane, President of KFG Resources Ltd., announced today that the Company has closed the purchase of a 43.75% working interest (32.81% net revenue interest) in the Fayette Field, Jefferson County, Mississippi, and will assume operations of the properties. Mr. Kadane noted that this acquisition, covering 4,000 acres held by production of about 30 barrels of oil per day, was made primarily for the remaining shallow gas production and the Company at present plans to drill three shallow Wilcox test wells in February, 2001, to develop the shallow gas potential in the Fayette Field.

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."