Alhambra Resources Ltd.
TSX VENTURE : ALH
PINK SHEETS : AHBRF
FRANKFURT : AY4

Alhambra Resources Ltd.

May 19, 2011 08:00 ET

Alhambra Resources Ltd. Announces Dombraly Drilling Leads to Discovery of Four New Zones of Gold Mineralization and Proves Significant Gold Contained in Low-Grade Stockpile and Open Pit Back Fill

CALGARY, ALBERTA--(Marketwire - May 19, 2011) - Alhambra Resources Ltd. (TSX VENTURE:ALH)(PINK SHEETS:AHBRF)(FRANKFURT:A4Y) ("Alhambra" or the "Corporation"), an international gold producer and explorer, announces that its diamond drilling program at Dombraly has resulted in the discovery of four new zones of gold mineralization. In addition, reverse-circulation drilling intersected significant gold mineralization in both the low-grade stockpile and material used to back fill the old open pit. The former Dombraly gold mine ("Dombraly") is located within Alhambra's 100% owned Uzboy Project in Kazakhstan (see Figure 1).

HIGHLIGHTS

  • The successful diamond drilling program intersected four new zones of gold mineralization (see Figure 2),
  • The new zones of gold mineralization located south of the Dombraly open pit have increased the strike length of the Dombraly mineralized zone by 300 metres ("m"). Mineralization is mainly oxide with average gold grades ranging from 0.45 to 3.95 grams per tonne ("g/t") and a high peak sulfide gold grade of 40.50 g/t over 1.0 m,
  • The new zone located north of the Dombraly open pit is outside of the previously known areas of gold mineralization, is open to the north, is estimated to be more than 100 m long and varies in width from 9 to 14 m. Mineralization is sulfide with average gold grades range from 0.48 g/t over 10.0 m to 4.08 g/t over 4.3 m included in a gold grade of 2.06 g/t over 10.3 m and a high peak gold grade of 10.30 g/t,
  • RC drilling intersected significant gold mineralization in both the low-grade stockpile and the material used to back fill the old open pit (see Figures 3a and 3b). The low-grade stockpile gold grades ranged from less than 0.1 to 19.3 g/t while the back fill material gold grades ranged from 0.1 to 11.2 g/t.

Mr. John J. Komarnicki, Alhambra's Chairman and Chief Executive Officer stated, "The discovery of four new zones of gold mineralization at Dombraly has very exciting implications for Alhambra! Dombraly was one of our 2010 priority exploration targets and will continue to be a priority for 2011. We are very excited about this drilling program for the positive results should allow us to re-classify the historical Soviet resource and reserve data (which has been acknowledged by the Kazakhstan State Reserve Committee) into a compliant National Instrument 43-101 resource estimate for Dombraly, as it should be."

DRILLING PROGRAM OBJECTIVE

Alhambra's focus was to further define the extent and continuity of the gold mineralization at Dombraly, leading to a National Instrument ("NI") 43-101 compliant resource estimate (see News Release dated May 10, 2010). Alhambra has engaged the independent geological and mining consultants, ACA Howe International Limited to consult on the drilling program in preparation for the resource estimate.

DRILLING PROGRAM SUMMARY

The 2010 drilling program at Dombraly consisted of 8,511 m (see News Release dated May 3, 2011) of core and non-core drilling (see Figure 2). Three different types of drilling were conducted and the meterages are as follows:

  • 3,788 m of diamond drilling (a 15 core hole program),
  • 883 m of reverse-circulation ("RC") drilling (37 holes), and
  • 3,840 m of rotary air-blast ("RAB") drilling (192 holes).

1. DIAMOND DRILLING

Of the 3,788 m of diamond drilling, 1,682 m were drilled south of the known zones of gold mineralization where the gold mineralization is open-ended and 2,106 m were drilled at the northern flank of the Dombraly main zone of gold mineralization.

Three new zones of gold mineralization were discovered south of the mineralization that has been explored by previous core drilling (see Figure 2). These new zones, mainly represented by shallow oxide material, have increased the known mineralization strike length by 300 m and are up to 7 m in width with average gold grades ranging from 0.45 to 3.95 g/t (see Table 1). However, DDD 00-03 also intersected sulfide mineralization with a gold grade of 40.50 g/t over 1.0 m. At least one of the zones could be extended further to the south with additional drilling and all together, they could significantly add to the resources at Dombraly.

Drilling north of the open pit resulted in the discovery of a new zone of sulfide gold mineralization (see Figure 2). As this zone was open to the north, it could only be approximated as being more than 100 m. Its total width ranges from 9 to 14 m and is traced up to 250 m along the dip. This new zone, intersected in DDH 48-03, has an average gold grade of 4.08 g/t over 4.3 m included in an interval with a gold grade of 2.06 g/t over 10.3 m (see Table 1). Individual gold grades ranged from 0.13 to 10.3 g/t. This zone is a blind zone (not outcropping on the surface) and being established northward of the known limit of the mineralization, could significantly increase the size potential of the Dombraly deposit. This northern extension has revealed a new expanded area for further exploration drilling.

2. RC DRILLING

The gold mineralization in the existing low-grade stockpile and associated open pit back-fill, generated by a mining cooperative in the mid 1980s, was drilled via RC drilling to validate and reclassify the historical Soviet resource and reserve data. Alhambra anticipates this data would be included in a NI 43-101 resource estimate (Note: Soviet resources and reserves are not compliant with NI 43-101 and, although meaningful, no resources or reserves to date have been defined at Dombraly). Another objective of the RC drilling was to check for near surface oxide gold mineralization northward of the open pit.

The locations of the 37 RC holes completed at Dombraly are shown in Figures 2 and 3. The depth of the RC holes ranged from 40 to 57 m.

Gold grades in the low-grade stockpile are not homogeneous in distribution (see Table 2 and Figure 3a) and ranged from less than 0.1 g/t to 19.3 g/t. The significant range in gold concentration suggests a significant nugget effect. The thickness of the mineralized intervals in the low-grade stockpile outlined using a 0.1 g/t gold cut-off varies from 2 to 20 m. It is anticipated that the data from this RC drilling program would be used in an initial NI 43-101 resource estimate.

The open pit back fill material ranged in depth from 24 m to 74 m (see Table 3 and Figure 3b). The objective of this drilling was to prove the presence of a significant amount of gold in the material used to back fill the old open pit. The average gold concentration of the back fill material is approximately the same as in the low-grade stockpile and ranges from 0.1 g/t to 11.2 g/t. The gold distribution in the back fill material is more homogenous than the low-grade stockpile.

3. RAB DRILLING

RAB drilling was completed south of the low-grade stockpile, as well as 900 m north-east of the open pit, to follow-up gold anomalies in both rock and soil. Previously reported grab rock samples in these areas returned up to 5.6 g/t gold. Alhambra will announce the results of the RAB drill program upon receipt and interpretation of drill assays.

Table 1 – Summary Dombraly Diamond Drilling Results

ZoneSec-
tion
DDH
#
Len-
gth
Azi-
mu-
th
DipFrom
(m)
To
(m)
In-
ter-
val
(m)
Gra-
de
Au(g/t)
Min-
eral-iza-
tion
Type
Main Zone Southern Extension0DDD
00-01
201.0090-6017.5022.505.000.50Oxide
184.00185.001.001.55Sulfide
0DDD
00-02
120.70270-6026.0042.0016.001.01Oxide
inclu-
ding
26.0030.004.002.13Oxide
96.8098.802.000.62Tran-
sition
0DDD
00-03
200.30270-6033.5040.507.001.09Oxide
106.90107.901.001.07Sulfide
110.90111.901.0040.50Sulfide
7DDD
07-02
130.00270-6097.70101.704.003.62Oxide
7DDD
07-03
200.30270-6018.0023.605.601.16Oxide
inclu-
ding
19.0022.003.003.95Oxide
187.60190.002.400.89Sulfide
15DDD
15-01
200.0090-6023.0024.001.001.88Oxide
39.0043.004.001.49Oxide
72.0075.003.000.45Oxide
81.0082.001.001.29Oxide
94.0095.001.001.15Oxide
151.00156.005.000.68Sulfide
15DDD
15-02
120.10270-600.001.001.002.03Oxide
44.0047.003.000.84Oxide
103.00105.002.001.85Oxide
15DDD
15-03
203.20270-6075.0077.002.000.76Oxide
Main Zone Northern Extension48DDD
48-03
450.00270-60216.10226.4010.302.06Sulfide
inclu-
ding
222.10226.404.304.08Sulfide
296.50298.502.000.54Sulfide
48DDD
48-04
510.20270-60218.00224.006.000.27Sulfide
298.60303.605.000.64Sulfide
312.60322.6010.000.48Sulfide
329.60332.603.000.68Sulfide
415.40417.402.003.06Oxide
The intervals set out in the above table are not true widths and the assay results are uncut.
Table 2 – Summary Dombraly RC Drilling Results – Stockpile
SectionDDH
#
LengthFrom
(m)
To
(m)
Interval
(m)
Grade Au
(g/t)
1RCW 01-0120.002.009.007.000.37
16.0019.003.000.60
RCW 01-0220.000.0011.0011.000.25
RCW 01-0320.000.004.004.000.26
12.0019.007.000.27
2RCW 02-0120.000.004.004.000.62
13.0019.006.000.38
RCW 02-0220.000.007.007.000.63
RCW 02-0320.000.003.003.000.66
RCW 02-0420.0012.0017.005.000.20
3RCW 03-0120.000.002.002.000.46
RCW 03-0220.000.0020.0020.001.42
4RCW 04-0110.000.0010.0010.000.58
RCW 04-0210.000.0010.0010.002.24
RCW 04-0310.000.001.001.001.37
5.008.003.000.30
5RCW 05-0110.000.0010.0010.003.20
RCW 05-0210.000.0010.0010.000.34
RCW 05-0310.000.0010.0010.001.24
RCW 05-0410.000.0010.0010.001.01
RCW 05-0510.000.002.002.000.35
6RCW 06-0110.000.008.008.000.50
RCW 06-0210.000.009.009.001.60
RCW 06-0310.000.005.005.000.64
RCW 06-0410.000.009.009.000.60
RCW 06-0510.00NSR
7RCW 07-0110.000.007.007.000.93
RCW 07-0210.000.009.009.001.02
RCW 07-0310.002.0010.008.000.22
Table 3 – Summary Dombraly RC Drilling Results – Open Pit Back Fill
Secti-onDDH
#
LengthAzimuthDipFrom
(m)
To
(m)
Interval
(m)
Grade Au(g/t)Mineralization
Type
14RCD 14-0130.000900.003.003.000.35Back fill
RCD 14-0229.00270-601.0029.0028.000.67Back fill
RCD 14-0356.00270-600.0045.0045.000.62Back fill
49.0052.003.000.51In situ
RCD 14-0448.00270-600.0048.0048.001.31Back fill
RCD 14-0574.00270-600.0014.0014.000.63Back fill
8RCD 08-0126.00270-600.0026.0026.001.06Back fill
RCD 08-0224.00270-600.008.008.000.67Back fill

Based on the results of the 2010 diamond drilling program at Dombraly, the Corporation anticipates a more aggressive 2011 drilling program at Dombraly including a large number of core holes.

As a part of Alhambra's 9,800 square kilometre ("km2") mineral license located within the Central Asia-Chinese Altayshan Gold Belt traversing northern Kazakhstan, the Corporation controls at least 50 kilometres ("kms") of a rapidly emerging significant gold trend. This trend extends from the gold mineralization exposed at North Balusty in the north to Shirotnaia in the south and includes the Dombraly gold deposit and gold mineralization exposed at Kerbay (see Figure 4 and previous news releases made by Alhambra regarding North Balusty, Shirotnaia and Kerbay). This gold trend extends south of Alhambra's license and hosts the multi-million ounce Aksu and Quartzite Hills gold deposits held by KazakhGold Group Limited located approximately 3 kms southeast of Alhambra's Shirotnaia Project.

DRILLING AND SAMPLING PROCEDURES

For the core drilling, an NQ diamond drilling core barrel was utilized and average core recovery was 99%. The core was split by the drilling contractor under the supervision of the Corporation's geologists with one half used for sampling and another half left for references. Every meter of core was sampled and the exact borders of the sampling interval were determined according to the lithological contacts. The average sample weight was 2 kilograms.

For the RC drilling, a standard technique was utilized and sample recovery was excellent. The rock chips coming to the cyclone through dual tubes were split using a riffle splitter by the drilling contractor under the supervision of the Corporation's geologists. Every meter of hole was sampled. The average sample weight was 5 kilograms.

Sample preparation was completed by Stewart Assay and Environmental Laboratories located in Kyrgyzstan using the following procedure: samples were crushed to minus 2 mm, mixed and split into two 200 gram sub-samples. One sub-sample was pulverized to – 200 mesh and the other sub-sample was retained for reference purposes. A 30 gram sample of the –200 mesh material was used for fire assay atomic absorption finish. Stewart Assay and Environmental Laboratories is independent of Alhambra and does have an International Standard Organization ("ISO") 17025 accreditation.

QUALITY ASSSURANCE QUALITY CONTROL

The Kyrgyzstan Stewart Assay and Environmental Laboratories, as a part of Stewart Group, have stringent quality assurance and quality control ("QA/QC") procedures. Alhambra also follows a rigorous QA/QC program consisting of inserting standards, blanks and duplicates into the sample stream submitted to the laboratory for analysis to ensure that the sampling and analysis of all samples is conducted in accordance with the best possible practices.

Elmer B. Stewart, MSc. P. Geol., a technical consultant, is the Corporation's nominated Qualified Person as defined by National Instrument 43-101, and has reviewed and verified the technical information contained in this news release.

ABOUT DOMBRALY

Dombraly is one of Alhambra's 2011 drilling targets within the Corporation's 100% owned, 2.4 million acre (9,800 km2), Uzboy Project located in north central Kazakhstan (see location map, Figure 1). Dombraly is located approximately 90 kms southeast of Alhambra's Uzboy gold deposit and 60 kms north of the city of Stepnogorsk, Alhambra's Kazakhstan operating base. It is a former producing open pit gold mine.

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 2.4 million acre (9,800 km2), 100% owned, license called the Uzboy Project, located in the Northern Kazakhstan Metallogenic Province 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 Pink Sheets 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 reclassification of Soviet resource and reserve data into western compliant NI 43-101 resources and the anticipated 2011 exploration drilling program, and other factors and events described in this news release should be viewed as forward-looking statements to the extent that they involve estimates thereof. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects" or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans, "estimates" or "intends", or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and should be viewed as "forward-looking statements". Such forward looking statements 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, lack of certainty that the Soviet resource and reserve data can be reclassified into western compliant NI 43-101 resources and what the anticipated 2011 exploration drilling program will be, the availability of capital to fund exploration; political, social and other risks inherent in carrying on business in a foreign jurisdiction 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 actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or 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 and if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable law.

This news release contains forward-looking statements based on assumptions, uncertainties and management's best estimates of future events. When used herein, words such as "intended" and similar expressions are intended to identify forward-looking statements. Forward-looking statements are based on assumptions by and information available to the Corporation. Investors are cautioned that such forward-looking statements involve risks and uncertainties. Actual results may differ materially from those currently anticipated. The forward-looking statements contained herein are expressly qualified by this cautionary statement.

To view Figure 1, 2, 3 and 4, please visit the following link:

http://media3.marketwire.com/docs/519alh1.pdf

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
    VP & Chief Information Officer
    +1 (403) 508-4953

    Alhambra Resources Ltd.
    John J. Komarnicki
    Chairman & CEO
    +1 (403) 228-2855
    www.alhambraresources.com