Alhambra Resources Ltd.
TSX VENTURE : ALH
PINK SHEETS : AHBRF
FRANKFURT : A4Y

Alhambra Resources Ltd.
John J. Komarnicki

August 20, 2010 16:01 ET

Alhambra, John J. Komarnicki and Hillcrest Investments Ltd. Announce the Conversion of Secured Debentures Into Common Shares

CALGARY, ALBERTA--(Marketwire - Aug. 20, 2010) - Alhambra Resources Ltd. (TSX VENTURE:ALH)(PINK SHEETS:AHBRF)(FRANKFURT:A4Y) ("Alhambra" or the "Corporation"), John J. Komarnicki and Hillcrest Investments Inc. ("Hillcrest") jointly announce that the holders of the twelve (12%) percent secured debentures of the Corporation (the "Debentures") due August 11, 2010, in the aggregate principal and accrued interest amount of $1,266,446.84, namely John J. Komarnicki and Hillcrest (the "Debenture holders"), have converted the Debentures into 4,221,488 common shares of the Corporation.

Under the terms of the Debentures, the Debenture holders had the option, prior to maturity, to convert the principal amount and unpaid interest at any time prior to maturity into common shares of the Corporation at a conversion price of $0.30 per common share. In addition, the Debenture holders previously received 2,500,450 warrants to purchase up to 2,500,450 common shares of the Corporation at a purchase price of $0.45 per common share (the "Warrants"). The Warrants expire on August 11, 2011.

John J. Komarnicki, Chief Executive Officer and a director of the Corporation, has acquired 2,110,744 common shares of the Corporation upon conversion of his Debenture in the aggregate principal and accrued interest of $633,223.42. On a post-conversion basis, John J. Komarnicki, directly or indirectly, owns or controls 11,375,325 common shares representing approximately 11.8% of the issued and outstanding common shares of the Corporation. In the event Mr. Komarnicki exercises his Warrants to purchase 1,250,225 common shares and stock options ("Options") to purchase 850,000 common shares, John J. Komarnicki would then exercise direct or indirect ownership and control in respect of 13,475,550 common shares or approximately 13.7% of the issued and outstanding common shares of the Corporation. For purposes of this calculation, the Corporation's issued and outstanding common shares include the common shares issuable upon conversion of the Debentures and exercise of the Warrants and Options owned or controlled by John J. Komarnicki at the time of calculation as required by securities law.

Hillcrest, a private corporation, controlled by Clarence K. Wagenaar, a director of the Corporation, has acquired 2,110,744 common shares of the Corporation upon conversion of his Debenture in the aggregate principle and accrued interest of $633,223.42. On a post-conversion basis, Clarence K. Wagenaar, directly or indirectly, owns or controls 10,922,048 common shares representing approximately 11.4% of the issued and outstanding common shares of the Corporation. In the event Mr. Wagenaar exercises his Warrants to purchase 1,250,225 common shares and Options to purchase 275,000 common shares, Clarence K. Wagenaar would then exercise direct or indirect ownership and control in respect of 12,447,273 common shares or approximately 12.8% of the issued and outstanding common shares of the Corporation. For purposes of this calculation, the Corporation's issued and outstanding common shares include the common shares issuable upon conversion of the Debentures and exercise of the Warrants and Options owned or controlled by Clarence K. Wagenaar at the time of the calculation as required by securities law.

John J. Komarnicki and Hillcrest are acquiring the common shares of the Corporation for investment purposes and may from time to time acquire additional securities of the Corporation, dispose of some or all of the existing or additional securities they each hold or will hold, or may continue to hold their current common share position.

ABOUT ALHAMBRA

Alhambra is a Canadian based international exploration and gold production corporation celebrating its eighth year of operations in the Republic of Kazakhstan. Alhambra holds exploration and exploitation rights to a 2.7 million acre (11,000 km2), 100% owned, license called the Uzboy Project, located in the prolific Charsk Gold Belt which hosts numerous world-class gold deposits. Over 100 mineral targets, including 5 advanced exploration plays are contained within the Uzboy Project.

Alhambra common shares trade in Canada on The TSX Venture Exchange under the symbol ALH, in the United States on the Over-The-Counter Market under the symbol AHBRF and in Germany on the Frankfurt Open Market under the symbol A4Y. The Corporation's website can be accessed at www.alhambraresources.com.

Forward-Looking Statements

Certain statements contained in this news release constitute "forward-looking statements" as such term is used in applicable Canadian and US securities laws. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. In particular, statements concerning the obtaining of regulatory body approval and other factors or events described in this news release should be reviewed as forward-looking statements to the extent they involve estimates thereof.

Such forward looking statements including but without limitation, future investment decisions regarding securities of the Corporation involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Corporation to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such risks and other factors include, among others, the inability or unwillingness of Mr. Komarnicki and Mr. Wagenaar to convert warrants into common shares of the Corporation, and such other business risks as discussed herein and other publicly filed disclosure documents. Although the Corporation has attempted to identify important factors that could cause actual events or results to differ materially from those described in forward-looking statements, there may be factors that cause actions, events or results not to be as anticipated, estimated of intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could vary or differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements contained in this news release.

Forward-looking statements are made based on management's beliefs, estimates and opinions on the date the statements are made and the Corporation undertakes no obligation to update forward-looking statements should these beliefs, estimates and opinions or other circumstances change, except as required by applicable law. Investors are cautioned that such forward-looking statements involve risks and uncertainties. The forward-looking statements contained herein are expressly qualified by this cautionary statement.

Neither the TSX Venture Exchange Inc. nor its Regulation Services Provider (as that term is defined in the Policies of the TSX Venture Exchange Inc.) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Alhambra Resources Ltd.
    Ihor P. Wasylkiw
    Chief Information Officer
    +1 (403) 508-4953
    or
    Alhambra Resources Ltd.
    Don D. McKechnie
    Vice President Finance and CFO
    + 1 (403) 228-2855
    www.alhambraresources.com