KFG Resources Ltd. Announces Private Placement and Addition to the Board of
Directors

TSX Venture: KFG

VANCOUVER , Jan. 22 /CNW/ - KFG Resources Ltd. (the "Company" or "KFG") today announced that it has entered into an agency agreement (the "Agency Agreement") with Union Securities Ltd. ("Union") in respect of a private placement of up to 30,000,000 units (the "Units") at a price of $0.065 per Unit (the "Private Placement"). Each Unit will consist of one common share and one common share purchase warrant ("Warrant"). Each Warrant will entitle the holder to subscribe for one additional share of the Company at a price of $0.10 per share for a period of two years from the date of issue.

Pursuant to the Agency Agreement, Union will be entitled to receive an agency fee of $10,000 , a cash commission equal to 8% of the gross proceeds of the Private Placement and warrants equal to 10% of the Private Placement. Each warrant that Union receives will entitle Union to purchase an additional Unit at a price of $0.065 for a period of two years from the date of issue.

Management has also welcomed long time shareholder, Elizabeth Kadane to the Board of Directors. She joins Chairman Robert A. Kadane and directors Keith N. Pople and Michael P. Raftery.

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

    NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER
    (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE)
     ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
    

For further information: KFG Resources Ltd.: Robert Kadane, President, Tel: [phone]; CHF Investor Relations: Christopher Haldane, Account Manager, Tel: [phone] ext.237, Email: [email protected]