Key Gold Corporation

February 28, 2005 16:32 ET

Key Gold Corporation Signs Joint Venture with QGX on Three Licenses


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: KEY GOLD CORPORATION

OTC Bulletin Board SYMBOL: KYGC

FEBRUARY 28, 2005 - 16:32 ET

Key Gold Corporation Signs Joint Venture with QGX on
Three Licenses

BOULDER, Colo.--(CCNMatthews - Feb 28, 2005) -

Key Gold Corporation, a Nevada corporation (OTCBB:KYGC), announced today
that it has approved an agreement with QGX Ltd. ("QGX"), an
Ontario-based company, whereby Key Gold can earn an interest in the
following three exploration licenses in Mongolia held by QGX: Uhaa
Hudag, Bayan Bulag, and Tsaidam.

Key Gold can earn a 60% interest in the three licenses by spending US
$1.5 million on the properties and issuing 500,000 common shares of Key
Gold to QGX over a period of three years ending February 28, 2008. Key
Gold has committed to spend US$400,000 on the properties in the first
year. Should Key Gold fail to spend US$400,000 in the first year, it
will pay any shortfall in cash to QGX and the agreement will be
terminated. Upon completion of the 60% earn-in, Key Gold has the right
to increase its interest in any of the licenses to 75% by funding the
cost of obtaining a positive feasibility study for a mine on that
property.

John Anderson, CEO of Key Gold, commented as follows: "We are excited to
have the opportunity to work with the team of people at QGX who have
been instrumental in the success and development of Mongolia's mineral
industry. Having the ability to work on more advanced projects like Uhaa
Hudag, Bayan Bulag and Tsaidam allows us to commence drilling soon with
the goal of developing a gold project much earlier than grass-roots
exploration."

About Key Gold:

Key Gold Corporation is in the business of exploring, acquiring, and
developing advanced precious metals and base metals properties. The
company's main focus is exploring for gold, silver, and copper projects
in the People's Republic of China. The company currently has an
affiliated joint venture on a 106 square kilometer property in Fengsheng
City, approximately 600 kilometers northeast of Beijing. The company's
shares trade on the OTC Bulletin Board under the symbol "KYGC."

Statements herein express management's beliefs and expectations
regarding future performance and are forward-looking and involve risks
and uncertainties, including, but not limited to, the satisfactory
completion of various surveys, the availability of sufficient operating
capital in LTI, JHP Resources Limited, and Key Gold to effectuate the
parties' respective business plans; fluctuations in the price of
precious and non-precious metals; stock price fluctuations; and other
risks. These risks are and will be detailed, from time to time, in Key
Gold's Securities and Exchange Commission filings, including its
Schedule 14f-1 and Form 8-K, and subsequent Forms 10-KSB, 10-QSB, and
8-K. Actual results may differ materially from management's
expectations.

For information on Key Gold Corporation: please visit the company's Web
site at www.keygoldcorp.com.

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Key Gold Corporation
    Andy Hay, 866-939-6386
    www.keygoldcorp.com
    or
    Shareholder.com
    (investors) 1-866-888-3995