Mr. Robert A. Kadane, President of KFG Resources Ltd., stated today that KFG is withdrawing the statements attributed to the Company in the National Resource Investor, FAX Alert #3, Volume 2000, dated February 21, 2001, with respect the Company's proposed operations in the Fayette Field, Jefferson County, Mississippi. The management of the Company finds that such Alert contains excessively promotional language and that the estimates of reserves and production may not be substantiated and should not be relied upon. Furthermore, the Company believes that the information in the Alert does not conform to the disclosure requirements of the Canadian Venture Exchange. Mr .Kadane noted that the Company is committed to providing timely disclosure when require and appropriate and is working to insure that all disclosure regarding the Company will be in compliance with all applicable regulatory requirements.

The Company's common shares are listed on the Canadian Venture Exchange, Vancouver, B.C., 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."