Attention Business Editors:

KFG Resources Ltd. - News Release

    Trading Symbol: KFG
    TSX Venture Exchange

    NATCHEZ, MS, July 24 /CNW/ - KFG Resources Ltd. reported today that the
6,100 foot Wilcox test well previously reported to be drilled by the Company's
subsidiary, KFG Petroleum Corporation, in Avoyelles Parish, Louisiana,
resulted in a dry hole. Mr. Robert A. Kadane, President of the Company,
reported that the well was drilled on a 640 acre lease block located in
Sections 35 and 36, TVN R4E, and that no further exploration on this acreage
was contemplated at this time.

    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."

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

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