KAI Kenai Resources Ltd.

Kenai Resources Ltd (TSX VENTURE:KAI) ("Kenai") announces that drilling at its
Hope Butte, Oregon gold project located just west of the Idaho border is
scheduled to commence around the end of September. Kenai's immediate drilling
program of approximately 3,000 metres is designed to replicate the results and
the mining potential recorded at Hope Butte in the 1996 to 2000 period by
Chevron Resources and its joint venturers, and to advance Hope Butte to NI
43-101 status. To this end, four initial holes are being drilled by twinning
Chevron's prior results, including several very high grade intercepts. Assay
results from the initial drilling at Hope Butte will be released as soon as
available.


Kenai also advises that, following the completion of the initial drilling at
Hope Butte, the rig will be remobilised for a planned 1,000 metre drilling
program at the Albisu farm-in exploration project in northern Nevada. This
program is currently anticipated to commence during November. The Albisu gold
project was drilled by Chevron Resources in 1979 and 1981 and Western Energy
Development Corp. ("WEDC") followed up with four core holes in 2008 to twin
Chevron's AL-14 drill hole that reportedly intercepted 6.5 meters at 6.2 gram
per tonne ("gpt"). The WEDC holes confirmed the gold zone by intercepting 1.6
meters of 12.46 gpt and 8 meters of 1.94 gpt. To date WEDC has drilled a total
of 3,729 meters of core at Albisu in 2008 and 2009. That drill program defined a
mineralized stockwork sulphide-quartz-calcite zone that is up to 73 m thick.
Gold values range from 14.6 gpt over 1.8 meters to intervals between 3 and 32
meters of 0.2 to 0.5 gpt.


Kenai Entry to Brazil via Strategic Joint Venture with Gold Anomaly on its Sao
Chico Gold Project 


Kenai has executed an Option Agreement with Gold Anomaly Limited (ASX:GOA) for
Kenai to acquire 50% of the Sao Chico gold project in Brazil, by funding project
exploration ahead of a possible decision to acquire equity in the project, with
key terms as under: 




1.  Kenai has an 18 months option to acquire 50% of Sao Chico following an
    advance to GOA of A$1m and committing to provide A$2m project funding,
    these funds will be in the form of a loan from Kenai to GOA until
    exercise of the option. If Kenai does not exercise the option, the loan
    funds advanced will be repaid to Kenai by GOA. 
2.  Kenai has a further option to acquire further 25% by payment to GOA of
    A$1m and committing to provide A$1m project funding. 
3.  GOA has right to continuing participation at 25% level or can sell 25%
    to Kenai based on US$30/oz for attributable CIM Mineral Resources gold
    ounces plus US$60/oz for attributable CIM Mineral Reserves gold ounces
    at that time. 
4.  Kenai to pay a 10% Net Profits Interest (NPI) for 5 years to GOA over
    Kenai's attributable interest, whether at 50% or 75%. 



Kenai's objectives in this transaction are to undertake local and regional
exploration and development, over the tenement area covering 1,416 hectares,
initially targeting one million gold ounces in the 56 hectare core area, the
site of extensive prior garimpeiro surface workings. Kenai's project funding is
to generate the necessary data to accelerate a Mining Lease application.


Kenai will assume the role of project manager, utilizing existing GOA personnel
as well as its own personnel. The focus is on fast tracking initial gold
production and defining a NI 43-101 compliant mineral resource. GOA has been
planning the commencement of production by the end of 2010 at the rate of 20,000
gold ounces per annum. Production is planned from an expected high grade gold
deposit using a minimal capital cost, low operating cost gravity recovery
operation. On exercise of the Option, Kenai's participation will be as an
incorporated joint venture with GOA, covering GOA's rights under contract with
the local garimpeiro landowner. This landowner has recently been granted a 12
month trial mining permit or GUIA, with a possible 12 month extension to the
permit, during which time a feasibility study for a full scale project is
planned to be completed. As Greg Starr, President of Kenai is also a Director of
Gold Anomaly; the intended transaction may be determined by the TSX Exchange as
a non-arms length acquisition. 


About the Sao Chico Gold Project, Para State, Brazil:

The Sao Chico project is located 340 kilometres south-east of the major city of
Manaus. It lies within a prominent north-west to south-east trend in Brazil's
Tapajos Mineral Field, exploited over only the past 30 years by a gold rush of
some 500,000 garimpeiros, ie artisanal alluvial miners, for the production of
unofficially estimated 20 to 30 million ounces of gold. With little underground
mining expertise, the garimpeiros were urged by government to consolidate their
claims and joint venture with established mining companies. The field has had
little modern exploration undertaken.


San Chico is in cleared low grade farming land adjacent to the Transgarimpeiro
Highway, at a road distance of about 350 kilometres or 8 hours' drive from the
regional city of Itaituba, to the north-east. Light aircraft from Itaituba
service Sao Chico via two local airstrips. 


Extensive surface mining has been undertaken by garimpeiros at Sao Chico for
over 20 years, with minor underground workings in primary rock which occurs at
less than 20 metres depth. There are several sub-parallel gold-bearing coarse
grained quartz/sulphide veins, with a strike length so far known of 1000 metres.



Investigations by GOA to date have determined the following:



--  Veins weathered up to around 10 metres depth, free dig by excavator to
    the depth of oxidation. 
--  Underground sampling by GOA along about 70 metres of drives from a 20
    metre deep shaft in free-standing primary rock, with average gold grades
    of 15 g/t, from over 100 samples.  
--  Good metallurgical recoveries, both by gravity and cyanidation methods. 



Current plans are for delivery during October of a 100 tonnes per day capacity,
integrated gravity processing plant, which will allow commencement of the GUIA
trial mining at the permit rate of 50,000 tonnes per annum by year end. There
are abundant local water supplies and ample tailings dam capacity.


From its due diligence investigations, Kenai considers there is excellent
potential at Sao Chico for delineation of NI 43-101 mineral resources of
sufficient tonnage and grade to support a substantial gold project operation. An
independent NI 43-101 report is currently being prepared for the project.


The Tapajos gold region is situated in the south-central part of the vast Amazon
Craton, which is divided into two, the Guyana Shield north of the Amazon River
and the Brazilian Shield, with its nucleus as the Archaean greenstone-granitoid
terrane, south of the Amazon. As shown in the appended regional geology plan
(http://media3.marketwire.com/docs/k921c.pdf), Sao Chico is in the same
geological unit, the intrusive Parauari Suite, as the Tocantinzinho (TZ), Palito
and Sao Domingo projects. TZ is a major gold project acquired for CAD$122
million in July 2010 by Eldorado Gold (TSX:ELD, ASX:EAU). In June 2010, ELD
acquired 26.8% equity in Serabi Mining plc, the AIM-listed company which owns
100% of the Palito underground mine. From Sao Chico, the TZ project is 54
kilometres north-west and Palito is 23 kilometres east north-east. 


Kenai Chairman Daniel Kunz said today, "Kenai is pleased to be joint venturing
with Gold Anomaly on the Sao Chico project. We are committed to bringing the
project into production in the short term and have expectations of defining a
significant resource at Sao Chico leading to a long term mining project. Kenai
has negotiated a deal structure that overall is low-risk in terms of financial
exposure in the event that our positive expectations for Sao Chico are not
realised during the Option Agreement period."


GOA Non Executive Director Tom Fermanis said today, "We believe our shareholders
will view this agreement as favourable. The agreement with Kenai injects funds
into the Sao Chico project, fast tracking production and exploration, and should
a JORC or CIM NI 43-101 compliant resource be developed at Sao Chico, both GOA
and Kenai will share in the upside. Kenai are targeting a potential million
ounce deposit, potentially enabling GOA to benefit from a strong cash flow from
the project. The agreement with Kenai will enable GOA management to fully focus
on developing its flagship Crater Mountain project in PNG".


About Kenai Resources:

Kenai is a Canadian company focussed on precious mineral project exploration and
development, towards early significant gold production. In addition to the
Albisu, Nevada, advanced gold exploration project, Kenai's principal project
assets are the wholly-owned Quartz Mountain and Hope Butte gold projects in
South-Eastern Oregon, both located in Malheur County, close to the Oregon border
with Idaho. All three of these projects are epithermal gold projects.


Kenai's current gold resources from the two Oregon projects, aggregating
approximately 500,000 contained gold ounces, are summarized as follows:




Project             Tonnes       Grade Ounces Au Status/Classification    
Quartz Mountain 15,050,200 0.80 g/t Au   352,667 Indicated Resources, NI  
                                                  43-101 compliant         
Hope Butte       5,000,000 0.91 g/t Au   146,300 Historical, not NI 43-101
                                                  compliant                



Footnotes:



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. 



Shares Outstanding: 31,231,734

On behalf of the Board of Kenai Resources Limited

Daniel Kunz, Chairman

Forward-Looking Statements: Statements in this release that are forward-looking
statements are subject to various risks and uncertainties concerning the
specific factors disclosed and elsewhere in the company's periodic filings with
Canadian securities regulators. The economic viabilities of the resources
estimates discussed in the release have not been established and may not be.
Such information contained herein represents management's best judgment as of
the date hereof based on information currently available. The company does not
assume the obligation to update any forward-looking statement.

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