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

"Tuesday, January 4, 2005

Consolidated revenues (unaudited) for the six months ended October 31, 2004....

KFG Resources Ltd. reported today that it had consolidated revenues (unaudited) for the six months ended October 31, 2004, of US$2,292,302, compared to US$2,141,660 for the six months ended October 31, 2003, resulting in net income (unaudited) of US$215,751 for the six months ended October 31, 2004, compared to a loss of US$45,873 for the same period of 2003. Total assets at October 31, 2004, were US$1,504,186 (unaudited), compared to US$1,015,289 (audited) at April 30, 2004. The Company reported a deficit of US$2,431,676 (unaudited) at October 31, 2004, compared to a deficit of US$2,272,615 (audited) at April 30, 2004. The Company had outstanding 12,101,501 shares at October 31, 2004.

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."