KazakhGold Group Proposed Acquisition and Propo...

28 February 2008

              NOT FOR DISTRIBUTION IN THE UNITED STATES

     KazakhGold Group Proposed Acquisition and Proposed Placing

KazakhGold Group  Limited  ("Company")  announces today  that  it  is
currently in negotiations with  respect to the potential  acquisition
by the  Company of  certain gold  mining assets  ("Assets") with  the
owners of the Assets, although, as of the date of this press release,
no written agreement has been  reached. The acquisition price of  the
Assets is expected to be approximately US$60 million.

The Company intends to finance the acquisition of the Assets with the
proceeds from a private placing ("Placing") of up to 2.3 million  new
ordinary shares in  the form of  Global Depository Receipts  ("GDRs")
with  institutional  investors.   Mirabaud  Securities  Limited   and
JPMorgan Cazenove Limited are acting as placing agents of the Company
in relation  to the  Placing.   The new  GDRs, when  issued, will  be
admitted to listing on the Official List of the UK Listing  Authority
("Official List") and to trading on  the Main Market of London  Stock
Exchange plc's Main Market for listed securities.

Based on  a  competent  persons'  report,  the  Assets  include  JORC
classified  mineable   reserves   which  have   been   estimated   at
approximately 4.4 million  tonnes at  a grade of  7.3g/t gold  (1.039
million ounces of  gold), plus over  117 thousand ounces  of gold  at
inferred category, and  an additional  C2 resource  estimated at  4.7
million tonnes at  a grade of  6.8g/t gold (1.028  million ounces  of
gold). The JORC  resources and  reserves were estimated  at a  3.0g/t
gold cut-off grade, based on significant historical exploration work.
A feasibility study on the  project has been carried out.  Historical
testwork results show an average gold recovery rate of  approximately
85%. The  reserves are  suitable for  bulk mechanised  mining and  an
average of  140,000 ounces  of  gold per  year  are projected  to  be
produced over the first six years of production. The operations  hold
valid exploration  permits and  mining licences,  which are  in  good
standing.

There can  be  no  assurance  that  agreement  with  respect  to  the
acquisition of the  Assets will  be reached or  that the  acquisition
will be completed at  all. In the event  that the acquisition is  not
completed, the  proceeds of  the Placing  will be  used to  fund  the
development and operation of the Company.

The Company  also confirms  that it  continues to  intend to  seek  a
listing of its ordinary shares on the Official List of the UK Listing
Authority and admission to trading on the London Stock Exchange plc's
Main Market for listed securities.


Disclaimer:
To the extent this press release contains forward-looking statements,
these statements involve known  and unknown risks, uncertainties  and
other  factors  which  may   cause  the  actual  results,   financial
condition, performance or  achievements of the  Company, or  industry
results,  to  be  materially  different  from  any  future   results,
performance  or   achievements   expressed   or   implied   by   such
forward-looking  statements  .Given  these  uncertainties,  no  undue
reliance on  such forward-looking  statements should  be placed.  The
Company does  not  accept  any  liability  whatsoever  for  any  loss
howsoever arising from any use of this press release or its  contents
or otherwise arising in  connection therewith. These forward  looking
statements speak only as  at the date of  this press release and  the
Company disclaims any obligation to  update any such forward  looking
statements  in  this  press  release  to  reflect  future  events  or
developments.

The GDRs or  the ordinary shares  in the Company  have not been,  and
will not be,  registered under  the United States  Securities Act  of
1933, as amended  (the "US  Securities Act") or  with any  securities
regulatory authority of any state or other jurisdiction of the United
States and may not be offered or sold within the United States or to,
or for the  account or  benefit of,  any US  Person as  that term  is
defined  in  Regulation  S  under  the  US  Securities  Act   without
registration under,  or absent  an  exemption from  the  registration
requirements of, the US  Securities Act. Any offering  to be made  in
the United  States will  be made  to a  limited number  of  qualified
institutional buyers, as such term is defined in Rule 144A under  the
US Securities Act. The Company has  not been registered and will  not
register under the United States Investment Company Act of 1940.

This  announcement  (together  "This   Announcement"),  is  not   for
distribution directly or  indirectly in  or into  the United  States,
Canada, Australia or Japan  or any jurisdiction  into which the  same
would be unlawful. This Announcement does not constitute an offer  to
sell or  issue or  the solicitation  of an  offer to  buy or  acquire
shares in the capital  of the Company in  the United States,  Canada,
Australia or Japan  or any  jurisdiction in  which such  an offer  or
solicitation is unlawful.  No public offering  of securities will  be
made  in  the  United  Kingdom,  United  States  or  elsewhere.  This
Announcement has been issued by and is the sole responsibility of the
Company.  No  representation or  warranty express or  implied, is  or
will be  made as  to, or  in relation  to, and  no responsibility  or
liability is  or will  be accepted  by JPMorgan  Cazenove Limited  or
Mirabaud Securities Limited ("Managers") or by any of its  affiliates
or agents as to  or in relation to,  the accuracy or completeness  of
this Announcement  or  any other  written  or oral  information  made
available to or  publicly available  to any interested  party or  its
advisers, and any liability therefore is expressly disclaimed.

The Managers  are  acting for  the  Company in  connection  with  the
Placing and no one else and  will not be responsible to anyone  other
than the Company for providing the protections afforded to clients of
the Managers nor for providing advice in relation to the Placing.

The distribution of this Announcement and the offering of the GDRs in
certain jurisdictions may be restricted by  law.  No action has  been
taken by the Company or the Managers that would permit an offering of
such GDRS or possession or  distribution of this Announcement or  any
other offering or  publicity material  relating to such  GDRs in  any
jurisdiction where action for that purpose is required.  Persons into
whose possession this Announcement comes are required by the  Company
and the Managers to inform themselves about, and to observe, and such
restrictions.

The price of GDRs and the income from them may go down as well as  up
and investors may not get back  the full amount invested on  disposal
of the GDRs.

Further Information:

Alex Buck
BuckBias
W: [phone]
M: [phone]

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