Encouraging Drilling Results for Kenai Resources at Sao Chico Gold Project, Brazil

Kenai Resources Ltd. has provided a further update on drilling at the Sao Chico gold project in north central Brazil, with the receipt of preliminary assay results from several but not all high interest vein intercepts in drill holes 11-SC-002, 11-SC-003, 11-SC-004, and 11-SC-005.

To date, six core holes have been completed, with the seventh currently drilling ahead at a down hole depth of some 71 meters. The program has a current total of 902 meters drilled in this first phase 3000 meter program. Drilling to date has demonstrated high grade gold mineralization over a strike length of 80 metres and to a down hole length of 188 metres, equal to a vertical depth of 154 metres. Mineralization is interpreted to occur as lenticular bodies of quartz and disseminated to massive sulphide hosted within wider altered granite zones. The drilling is within an area where there are 200 small shallow garimpeiro shafts over a surface area of 1,000 metres east-west by 600 metres north-south and also within a broader exploration licence area of over 1,400 Ha.

For NI 43-101 reporting purposes, all core samples are forwarded to ACME Laboratories in Itaituba, the city closest to Sao Chico, for preparation of dried, crushed and pulverized pulps which are then forwarded to ACME facilities in Santiago, Chile and Vancouver for fire assaying and broad spectrum multi-element ICP analysis. To provide initial results, pulverized pulps from certain identified high interest intercepts have been extracted at Itaituba for short-form unofficial assay determination at the nearby Serabi Mining plc Palito mine assay laboratory.

From the first 20 high interest samples submitted, results have been received for 15 samples. All samples submitted in this batch are detailed in the Appendix hereto. The assaying method used at Palito is described as gold-DIBK, with a copper/aqua regia finish. It is emphasized the assay results from the Palito laboratory are unofficial and preliminary in nature, but are considered by Kenai as indicative of results likely to be reported by ACME Laboratories in due course.

Highlights from the preliminary assay results are:

• Hole 11-SC-002 1.86 meters at 19.4 grams per tonne ("g/t") gold from 38 meters down hole depth
• Hole 11-SC-004 1.2 meters at 60.9 g/t gold from 49 meters downhole depth
• Hole 11-SC-005 1.58 meters at 97.6 g/t gold from 142 meters downhole depth

For drill hole 11-SC-004, the average preliminary assay over the entire altered interval from 49.10 to 52.83 meters is 19.9 g/t gold, over 3.73 meters, for an estimated true width intercept of approximately 2.8 meters. Holes 4 and 5 intersect the same high grade vertical vein structure and define gold mineralization down dip over 100 meters. Holes 2 and 6 intersect the same high grade structure in a location some 60 meters to the west with a similar down dip vertical extent of some 100 meters. These intercepts so far demonstrate high grade gold mineralization over a strike length of 80 metres and to a down hole length of 188 metres, equal to a vertical depth of 154 metres. Mineralization is interpreted to occur as lenticular bodies of quartz and disseminated to massive sulphide hosted within wider altered granite zones.

Ongoing drilling is planned to explore the along-strike and down dip continuity of the mineralization observed to date, and also to explore the potential for other lenticular mineralized bodies hosted within the fault zone. As previously reported by Kenai, eevidence of the immediate potential at Sao Chico is demonstrated by more than 200 small garimpeiro shafts over a surface area of 1,000 metres east-west by 600 metres north-south. Drilling to date has focused on the area of known high grade mineralization observed in the existing shallow underground drive.

The Sao Chico drilling program commenced with one shift per day and has now been increased to two shifts per day. A second Minexplor rig is now operating at Sao Chico, with the overall 3,000 meter program anticipated to be completed during December.

About Sao Chico

The project is more completely described in Kenai's NI 43-101 Technical Report on the project, details of which were contained in Kenai's news release of January 20, 2011. It has since been filed on SEDAR and on Kenai's website at www.kenairesources.com.

Sao Chico is located within the Tapajos region in Brazil, the site of one of the biggest gold rushes in recent history. In the late 1970s and 1980s, approximately 500,000 garimpeiros rushed to the region to exploit extensive areas of newly discovered alluvial gold, producing approximately 20-30 million ounces of gold before the easily won alluvial gold deposits were largely depleted. Little modern exploration has been conducted over the region to date, with excellent potential to expand gold operations at Sao Chico.

As previously advised, ASX-listed Gold Anomaly Ltd via its wholly owned Brazilian subsidiary GOAB, until Kenai exercises its options to acquire 50% and then 75% equity in GOAB, holds the Sao Chico mineral rights to the Sao Chico project in consideration for loan funds provided by Kenai for activities to date at Sao Chico. The options expire at the end of September 2012.

Kenai is a Canadian company focused on precious mineral project exploration and development, towards early significant gold production. In addition to the Sao Chico gold project in Brazil, Kenai is also involved in exploration of the wholly-owned Quartz Mountain and Hope Butte epithermal gold projects in south-eastern Oregon, both located in Malheur County, close to the Oregon border with Idaho. Kenai's current indicated and historical gold resources from the two Oregon projects are summarized as follows:

Notes:

1. For Quartz Mountain, resources above a 0.34 g/t cutoff with silver converted to gold equivalent using a ratio of 49.5:1 silver to gold. Metallurgical recoveries were not considered. Indicated resources are as reported in an independent November 2006 NI 43-101 report, posted on SEDAR at that time.
2. The Hope Butte resources are considered historic in nature, do not comply with current NI 43-101 standards, have not been verified by the Company and therefore should not be relied upon. It is uncertain if further exploration will result in the discovery of an economic mineral resource.

Source: www.kenairesources.com