Kentor Gold Ltd"s exploration activities in the Kyrgyz Republic during the northern hemisphere summer have focused on systematic exploration of the Akbel, Bashkol, East Koksu and Z-Alai tenement areas.

The major focus remains on Akbel. An independent review of previous data by geological consultant Rod Dawney confirmed that Kentor's drill targets and priorities are valid.

The practical outcome of the review is that Kentor now has with a higher degree of confidence, clear and explicit targets for drilling below the moraine cover.

Drilling complications at Akbel have continued to delay the next stage of drill testing of the property. However, to address this problem, a much larger RD1500 rig has been located and is currently being transported to Kyrgyzstan from Mongolia. The smaller RD850 rig, previously used, will also return to the project to drill diamond "tails" once the pre-collars have been completed and cased by the RD 1500 rig.

With both of these drill rigs on site, it is expected that the 2006 drilling program will finally be able to be completed as planned.

Kentor's generative work in the Osh province this year has concentrated on the Alai Valley, including the East Koksu and Za-Alai tenements.

Kentor's primary focus is the discovery of multi-million ounce gold and gold-copper deposits in the Kyrgyz segment of the Tien Shan metallogenic belt of Central Asia.

Recent generative exploration has concentrated on the important southern extension of the Tien Shan belt within the Kyrgyz Republic. Field assessment of targets generated during the first half of 2006 in the Alai Valley has been completed and results are pending.

In addition, Kentor sees particular value in sourcing advanced projects. To that end we have been actively reviewing several gold projects, which work is ongoing, as is consideration of potential co-venturers to assist Kentor in moving ahead.

Akbel

The highest priority area remains at Akbel South where several strong MMI gold and coincident IP anomalies were identified. Attempts to drill Akbel South in late 2005 and this year have encountered glacial moraine cover (up to 150m thick) that has proven difficult to drill through using the drilling equipment at hand. Accordingly, all holes in this area were forced to be abandoned before reaching target depth, leaving the MMI gold anomalies untested.

To date a total of 1,100m of reverse circulation (precollars) and 1,011metres of diamond core tails have been completed to date.

To address the drilling difficulties a much larger RD1500 rig has been located and was transported to Kyrgyzstan last month month, to enable a focused 2400 metre drill program to test priority targets at Akbel to be completed by year end.

It is anticipated that with the greater power of the RD1500 rig, holes can be successfully drilled and cased through the moraine cover material to allow diamond drilling through the bedrock to the target zones. The smaller RD850 rig will also return to the Akbel project to drill diamond "tails" once the pre-collars have been completed and cased by the RD 1500 rig.

An independent review of Akbel by AUSMEC Geoscience (AUSMEC), headed by Rod Dawney, has significantly boosted Kentor's confidence in Akbel, being seen as having the right geological setting for a major discovery.

AUSMEC completed a synthesis of geological data, including Landsat images, geological mapping, geochemistry including Mobile Metal Ion (MMI) in soil, and ground geophysics. The geophysics consisted of conductivity, chargeability, and magnetics. The consistency between the data sets was striking, and led to the mapping of what appear to be the footwall and hanging wall structures of the Jetymtau Suite.

The Jetymtau Suite is host to the Kumtor orebody and satellite deposits immediately along strike to the north-east. The data synthesis also highlighted the presence of a transfer fault running approximately along the course of the Akbel River.

AUSMEC's data review provided a geologically sound explanation for the distribution of chargeability anomalies and MMI geochemical gold anomalies, and related these anomalies to discrete stratabound zones at Akbel South and Ishak Kechuu in a tensional structural setting. This is considered essential for the generation of gold deposits of the Kumtor type. The practical outcome of the review is that Kentor now has clear and explicit targets for drilling below the moraine cover.

There is now a high degree of confidence, especially resulting from the congruence of key indicators and the consistency of Kentor and AUSMEC findings.

MMI soil sampling of extensions to and in-fill of the existing grid was completed during the reporting period, and assays are now being carried out by ALS Chemex Perth. These results will better define the existing priority gold-tungsten anomalies and close off open-ended anomalies.

Bashkol

Systematic follow up of some of the more attractive prospect areas within the Bashkol Licence area at Karasai, Kuylu and Kurgak Tepchi was initiated in the 2006 summer field season to identify high-priority targets for early drill testing.

The highlight was the identification of several gold-arsenic geochemical soil anomalies at Kurkak Tepchi that suggest a bedrock source that warrant more detailed evaluation.

The highest priority of these anomalies lies in the structural footwall zone of Kentor's target area for Kumtorstyle gold mineralisation. Kentor will need special permission to conduct high impact exploration at Kurkak Tepchi, including trenching and drilling, as it lies just inside the boundary of the Sarychat-Ertash State Natural Reserve.

Permission will be sought, but it is expected to take a number of months before a decision is made by the various government agencies involved.

East Koksu

Follow-up of stream gold anomalies using detailed panning and catchment float analysis was completed during the reporting period to ascertain whether significant alteration or gold-shedding systems occur in drainage areas.

Based on visual observations no significant results had been obtained during the sampling conducted so far.

Za-Alai

Kentor was originally attracted to the Za-Alai area by ASTER generated alteration features. Subsequent compilation and analysis of Soviet era exploration work lead to the identification of four geochemical anomalies that indicated possible gold, copper and copper-gold mineralisation.

Re-sampling of the Mednoe "porphyry" (Targets Z3 & Z4) has confirmed the low tenor of gold and copper in this system. Of the 26 selective rock samples taken, for gold, all assay results are below or only slightly above detection limits (<0.005ppm). The maximum gold assay is 0.027 ppm. Similarly most copper assays are low and less than 100 ppm. However, several isolated samples assayed from 0.2 - 0.7% copper.

Follow up of Anomaly Z2 failed to identify any porphyry-related mineralisation and the area has been downgraded.

Attempts to follow-up the highly gold-anomalous area (Anomaly Z1) in the south-western corner of the licence area were hindered by high river levels and rugged mountainous terrain. The appropriateness of helicopter access to the area will be investigated next year.