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

"Friday, February 13, 2004

KFG Resources Ltd. reported today that the Company completed a restructuring of its 8% convertible notes issued July 21, 2000, in the original aggregate principal amount of $2,500,500. Pursuant to the restructuring, an aggregate of $459,000 was paid in redemption of that amount of principal of the original notes. An aggregate of $1,441,500 of the original notes has been renewed and extended to July 21, 2005, with interest at 6.5%, payable semi-annually, and which may be converted into common shares of the Company at a price of $0.10 from July 21, 2003, to July 21, 2004 and $0.15 from July 21, 2004 to July 21, 2005. Non-transferable purchase warrants in an amount of 15,000 warrants for each $1,500 principal amount are attached to the new notes. Each warrant entitles the holder thereof to purchase one common share of the Company at a price of $0.1 0 from July 21, 2003, until July 21, 2004 and thereafter at a price of $0.15 until July 21, 2005, at which time the warrants expire. Mr. Robert A. Kadane, President of the Company, the holder of an aggregate of $600,000 principal amount of the original notes elected to convert such amount into an aggregate of 1,500,000 common shares of the Company, at the conversion price of $0.40 in effect at their maturity date, July 21, 2003. Following these transactions, Mr. Kadane holds an aggregate of 3,260,724 common shares of the Company, or 26.95% of the issued and outstanding common shares. All dollar amounts referred to above are expressed in Canadian dollars.

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."