KFG Resources Ltd. - News Release



    
    Trading Symbol: KFG
    TSX Venture Exchange
    

    NATCHEZ, MS, May 12 /CNW/ - KFG Resources Ltd. (the "Company") is pleased
to announce that it expects to close a private placement of up to 4 million
units (the "Units") at a price of Cdn.$0.06 per Unit (the "Offering"). Each
Unit will consist of one common share in the capital of the Company and one
common share purchase warrant (each whole warrant, a "Warrant"). Each Warrant
will entitle the holder to subscribe for one additional common share of the
Company at a price of Cdn.$0.10 per share for a period of two years from the
date of issue.
    Total gross proceeds of the Offering will be up to Cdn.$240,000. The
proceeds of the Offering will be used for exploration and development of the
Company's property in Mississippi and for general working capital purposes.
    In connection with the Offering, Union Securities Ltd. of Vancouver has
assisted the Company in this private placement and will receive a cash
finder's fee equal to 6% of the gross proceeds from the sale of the Units.
    The Offering is subject to certain conditions, including the approval of
the TSX Venture Exchange.

    
                                                     "James F. Gilbert"
                                                 ---------------------------
                                                 James F. Gilbert, Secretary
    

    This news release does not constitute an offer to sell or a solicitation
of an offer to buy any of the securities in the United States. The securities
have not been and will not be registered under the United States Securities
Act of 1933, as amended (the "U.S. Securities Act") or any state securities
laws and may not be offered or sold within the United States or to U.S.
Persons unless registered under the U.S. Securities Act and applicable state
securities laws or an exemption from such registration is available.

    This press release contains "forward-looking information" that is based
on the Company's current expectations, estimates, forecasts and projections.
This forward-looking information includes, among other things, statements with
respect to the Company's plans, outlook, business strategy and exploration and
development of the Company's properties. The words "may", "would", "could",
"should", "will", "likely", "expect," "anticipate," "intend", "estimate",
"plan", "forecast", "project" and "believe" or other similar words and phrases
are intended to identify forward-looking information.
    Forward-looking information is subject to known and unknown risks,
uncertainties and other factors that may cause the Company's actual results,
level of activity, performance or achievements to be materially different from
those expressed or implied by such forward-looking information. Such factors
include, but are not limited to: the ability to raise sufficient capital to
fund exploration and development; the quantity of and future net revenues from
the Company's reserves; oil and natural gas production levels; commodity
prices, foreign currency exchange rates and interest rates; capital
expenditure programs and other expenditures; supply and demand for oil and
natural gas; schedules and timing of certain projects and the Company's
strategy for growth; competitive conditions; the Company's future operating
and financial results; and treatment under governmental and other regulatory
regimes and tax, environmental and other laws.
    This list is not exhaustive of the factors that may affect our
forward-looking information. These and other factors should be considered
carefully and readers should not place undue reliance on such forward-looking
information. The Company disclaims any intention or obligation to update or
revise forward-looking information, whether as a result of new information,
future events or otherwise.

    
    THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
    RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE CONTENT OF THIS PRESS
    RELEASE.
    





For further information:

For further information: Robert A. Kadane, President, (303) 825-7080


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