KFG Resources Ltd. (the “Company”) is pleased to announce the closing of the first tranche (the “First Tranche”) of the private placement previously announced in its press release of September 7, 2007 (the “Offering”). On October 11, 2007 the Company issued, by way of private placement, 18,055,000 units of the Company at a purchase price of CDN$0.10 per unit (the “Units”). Each Unit consists of one common share in the capital of the Company and one common share purchase warrant (a “Warrant”). Each Warrant entitles the holder to subscribe for one additional common share of the Company at a price of CDN$0.20 per share for a period of two years from the date of issue. The First Tranche is the first of two tranches comprising the Offering by the Company of up to 20 million units. The second tranche units will be offered on the same terms as the Units. The Company expects that the second tranche of the Offering will occur in late October.

The Company has granted Union Securities Ltd. of Toronto, Ontario (”Union”) an over-allotment option to increase the size of the Offering by five million Units, which must be exercised within five business days after the closing of the Offering and closed within ten business days after the closing of the Offering.

Under the terms and conditions of the private placement, the Company paid Union a work fee of $10,000 plus Union’s expenses with respect to the First Tranche and a commission of 8.0% of the gross proceeds of the First Tranche along with Union’s expenses resulting in the Company receiving net proceeds of $1,629,686. The Company also issued to Union options entitling Union to purchase for a period of two years from the date of closing up to 1,805,500 units at a price of $0.10 per unit (the “Agent’s Units”). The Agent’s Units have the same terms as the Units.

All securities issued in connection with the Offering will be subject to a hold period of four months and one day after issuance.

The Offering is subject to the final 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.

SOURCE: KFG RESOURCES LTD.

Posted: 10|13|07 at 3:44 pm. Filed under: News.