Kenai Resources Ltd.: Further Update-Diamond Drilling Program, Sao Chico Gold Project, Brazil

Kenai Resources Ltd. ("Kenai") (TSX VENTURE:KAI) is pleased to provide a further
update on drilling at the Sao Chico gold project in north central Brazil. The
drilling program currently underway at Sao Chico from core holes 11-SC-001 to
11-SC-005 has demonstrated that it is drilling into deeper zones which may be
the source of the multiple parallel veins mined on the Sao Chico garimpo.
Surface mining by garimpeiros was estimated to have produced two tonnes of gold
(64,000 gold ounces) in the period of 1999 to 2001 by rudimentary methods and
where the grades were lower than evidenced from recent underground extensions of
the surface veins sampled, due to extensive weathering of the host granite and
leaching of the gold veins. 


Drilling Update: Early Signs of Potential for Extensive Gold System 



--  Drilling of the first 5 holes (574 metres) of a total of about 25 holes
    planned for the current 3,000 metre program identify wide altered
    granite zones with major quartz structures with abundant sulphides. 
--  These zones are regarded as deeper extensions of near surface zone which
    hosted gold mineralization in a 20 metre deep drive which sampled at an
    averaged over 17.7 g/t gold over an east-west length of 58 metres. 
--  Mineralization to date identified from drilling over a strike length of
    80 metres and a vertical depth of 154 metres. 
--  Multiple zones are being identified below the surface expression of the
    system which has been mined by garimpeiros since 1985 in the local
    surrounding area. 



The extensions of the surface gold veins are expected to be more concentrated
(higher grade) than that experienced on surface as there has not been weathering
and leaching at depth. This has been evidenced by the sampling of a 20 metre
deep underground drive in an altered zone which hosts gold-bearing
quartz/sulphide vein structures that averaged 17.7 g/t gold over a sampled 58
metre east-west strike length in primary (unoxidised) rocks at a depth of 20
vertical metres. Within this altered zone, massive galena and pyrite were
identified. This type of mineralization is what is being observed in the altered
zones of drill holes 11-SC-002 to 11-SC-005. 


Evidence of the immediate potential is also 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 focussed on the area of known high grade mineralization
observed in the underground drive, with the completion of five diamond drill
holes for a total to date of 574 metres. Quartz/sulphide vein zones between 30
centimetres and 6 metres in apparent width have been intercepted in drillholes
11-SC-002 to 11-SC-005. Quartz vein zones contain individual quartz veinlets
less than 3 mm wide and quartz veins up to 30 cm wide, with a moderate to strong
pyrite-chlorite-k-feldspar selvedge. Disseminated to massive galena-pyrite is
observed in hole 11-SC-004 (49 to 56 metres) as a selvedge to quartz veins. 


These intercepts so far demonstrate mineralization over a strike length of 80
metres and to a downhole 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 in a larger fault zone. Where
drilling intercepts the fault zone mineralization is commonly, but not always,
observed. 


Ongoing drilling is planned to explore the 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.  


To view Figures 1-4, please visit the following link:
http://media3.marketwire.com/docs/kai1019i.pdf.


The first five diamond drillholes (11-SC-001 to 005, to downhole depths of 86.2
metres, 80.5 metres, 111.9 metres, 104.4 metres and 191.2 metres respectively)
have now been completed. In the third, fourth and fifth holes, wide quartz veins
with massive abundant pyrite have been intersected at predictable downhole
depths, flanked by smaller veins with massive observed pyrite and some galena. 


The drilling program commenced with one shift per day and has now been increased
to two shifts per day. A second Minexplor rig is planned to be at the site by
the third week of October. 


The initial drillholes are targeting vein structures near the Waldimiro Vein
down dip, beneath the high grade eastern end of the existing underground drive,
along the broadly east-west strike of vein structures mapped at the surface and
laterally to the north and south. Preliminary assay results are expected from
these first holes in November. 


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. Despite the gold rush, little modern exploration has been conducted
over the region to date, with excellent potential to expand gold operations at
Sao Chico. The Sao Chico project team has extensive experience and expertise of
operating within the region, which will provide a focussed and systematic effort
to gold production and exploration at Sao Chico. 


As previously advised, Gold Anomaly via a wholly owned subsidiary will receive
all cash flow generated by GOAB at Sao Chico until Kenai exercises its options
to acquire 50% and then 75% equity in the Sao Chico mineral rights to the Sao
Chico project. The options expire at end-September 2012.


About Kenai Resources 

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:




Project              Tonnes        Grade  Ounces AuEq  Status/Classification
Quartz Mountain  15,050,200  0.80 g/t Au      352,667  Indicated Resources  
                                                       NI43-101 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. 



On behalf of the Board of Directors of Kenai Resources Ltd.

Greg Starr, President and CEO

Shares Outstanding: 62,406,734

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.


The technical content of this news release has been reviewed by Kenai's Vice
President Technical Services, Neil Cole, who has sufficient experience which is
relevant to the style of mineralization under consideration and to the activity
which is being undertaken and planned to qualify as a Qualified Person under NI
43-101.