Trading Update

KazakhGold Group Ltd
31 January 2006

31 JANUARY 2006





                            KAZAKHGOLD GROUP LIMITED

                         ('KazakhGold' or the 'group')





                                 TRADING UPDATE





KazakhGold Group Limited (London: KZG), one of the leading gold producers in
Kazakhstan, today issues this Trading Update.  The Trading Update is in advance
of the Company's Preliminary Results for the financial year ended 31 December
2005, which are expected to be released by May 2006.  The information contained
herein has not been audited and is subject to further review.





Gold Production



KazakhGold has three main operating mines, Aksu, Bestobe and Zholymbet in
northern Kazakhstan.  Gold production from these mines recommenced in July 2005
after a period of partial shut down during which ore processing and mine
facilities were reconfigured and upgraded.  Growth in output from these mines
continues to increase in line with the Board's expectations:



•         In the year to 31 December 2005, gold production was 90,100 ounces



•         In the 6 months to 31 December 2005, gold production was 83,300 ounces



•         In December 2005, gold production was 23,900 ounces, an increase of
35% over November 2005 (17,900 ounces)



The table below summarises gold production during the 6 months to 31 December
2005:


                  Month                                         Gold Production

                                                                           Oz
6 months to end June 05                                                  6,800

July                                                                     4,600

August                                                                   9,300

September                                                               12,300

October                                                                 15,300

November                                                                17,900

December                                                                23,900

Total                                                                   90,100





The table below summarises average grade and recovery over the period:


             Ore mined                            Grade                     Recovery
               Tonnes                          gm / tonne

             1,467,439                            2.35                       81.3%





Recent events



Successful tender application



Since joining the London Stock Exchange Main Market on 1 of December 2005,
KazakhGold has continued to seek new exploration and production opportunities in
Kazakhstan.  In addition to the four deposits announced at the time of listing,
KazakhGold has now been awarded five new licenses by the Ministry of Energy and
Mineral Resources of Republic Kazakhstan:



•         Southern Karaultube (9.3 km2) and  Kyzylsorskoe (60 km2) - both
located in the Akmola region, North Kazakhstan, close to existing mining
operations



•         Pridorojnoe (390 km2) and Kaskabulakskoe (491 km2) - both located in
East Kazakhstan, close to the deposits acquired in July 2005



•         Zones of No 1 and No 2 of deposits of Akshatau MMC (56.6
km2) - located in the Karaganda region, Central Kazakhstan



It is expected that registration of legal documents will be completed in the
first quarter of 2006.  The exploration and further development of these
deposits will be carried out by our recently formed joint venture with Barrick
Gold - 'Joint Venture BarrickKazakhaltyn Exploration LLP' - in which both
parties have equal participation.



The joint venture has already started work on a detailed programme covering the
geological investigation of the deposits.  It is expected that prospecting works
will begin in May 2006.



Kanat Shaikhanovich Assaubayev, President of KazakhGold, said:



'We are delighted with the continuing strong growth in gold production, and the
performance of the recently commissioned new production facilities at our three
main mine complexes.  Following our recent Global Offer, in conjunction with our
admission to the London Stock Exchange Main Market, we now have the resources to
focus on the further expansion of these production facilities and also turn our
attention to exploration at our existing and new acquired deposits.  I look
forward to updating shareholders further at the time of our Preliminary Results
announcement.'





CONFERENCE CALL

KazakhGold will host two short conference calls for Analysts and Investors
today.  Details are as follows.

Analysts: 09.00 GMT: Please call [phone] and request to be
connected to the KazakhGold teleconference.

Investors: 10.00 GMT: Please call [phone] and request to be
connected to the KazakhGold teleconference.

A replay facility will be available from approximately one hour after each
conference call until 18:00 GMT on 07 February 2006.   Please call +44 (0) 20
7784 1024 Toll UK, access code: 3720246#.



Further information:


Citigate Dewe Rogerson                             ING
[phone]                               [phone]



UK Media                                           Mark Martin, Managing Director
Martin Jackson / George Cazenove
                                                   (Julia Bereschenko, Vice President
                                                   
International Media                                
David Westover                                    
                                                   
                                                   
Analysts
Nina Soon







Notes to Editors





•         KazakhGold's B and C1 reserves and C2 and P1 resources, under the
former Soviet system of classification of geological reserves and resources (the
'FSU Classification') from its principal mines, are estimated at 13 million
ounces and 33 million ounces of gold, respectively




•         KazakhGold is completing a period of investment in the modernisation
and expansion of processing capacity which is expected to result in a
significant increase in gold production in 2006 and thereafter



•         Lord Daresbury, a non-executive director of Evraz Group S.A. and
chairman of De Vere Group Plc, is non-executive Chairman and Stephen Oke, David
Netherway and Toktarkhan Kozhagapanov, who together bring an extensive portfolio
of emerging market mining expertise, are non-executive directors of the Company.



•         Key strengths include low extraction and processing costs in respect
of its open pits, waste dumps and tailings, a developed infrastructure network
in close proximity to its major assets, an experienced management team with a
proven track record and being the natural consolidator of gold mining assets in
Kazakhstan



•         The Group's strategy is to increase gold production significantly,
lower its operating costs per ounce and create one of Central Asia's leading
gold mining companies



•         KazakhGold was admitted to the Official List of the Financial
Services Authority and to trading on the London Stock Exchange plc's regulated
market for listed securities on 1 December 2005, following a Global Offer to
institutional investors.  The Global Offer consisted of 13,100,000 GDRs at an
Offer Price of $15 per GDR.   GDR's issued and outstanding after the Global
Offer are 47,100,000.



•         The gross proceeds received by KazakhGold from the Global Offer was
approximately $107 million.  KazakhGold intends to use these proceeds in the
expansion of the Group's existing mines, to undertake further mining development
and exploration, to reduce the Group's borrowing and for general corporate
purposes, including working capital.



•         ING Bank N.V., London Branch ('ING') acted as financial adviser to
KazakhGold and as the lead manager and as stabilising manager in connection with
the Global Offer.  Troika Dialog (Bermuda) Ltd. acted as co-lead manager in
relation to the Global Offer.


                      This information is provided by RNS
            The company news service from the London Stock Exchange