Contact: Robert A. Kadane, President (303) 825- 7080

"Friday, January 2, 2004

KFG Resources Ltd. announced today that it had consolidated revenues (unaudited) for the six months ended October 31, 2003, of US$2,141,660, compared to US$1,391,943 for the six months ended October 31, 2002, resulting in a loss (unaudited) of US$256,321 for the six months ended October 31, 2003, compared to a loss of US$296,570 for the same period of 2002. Total assets at October 31, 2003 US$I,125,361 (unaudited), compared to US$1,370,021 at April 30, 2003. The Company reported a deficit of US$2,734,705 (unaudited) at October 31, 2003, compared to a deficit of US$2,478,384 at April 30, 2003. The Company had outstanding 10,601,501 common shares at October 31, 2003.

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

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