Alhambra's Chairman and CEO John J. Komarnicki at the Vancouver Resource Investment Conference

Success isn't measured by what you do at the best of times. It's how you get through the worst of times. That's true whether you're into self-improvement, the economy, or whether you're a junior resource company facing challenging times. And while many companies face challenging times and pretend that nothing is wrong, Alhambra Resources Ltd. (TSX-V: ALH) is quite frank about the challenges they've faced and how they've succeeded since.

Alhambra Resources Ltd is a Canadian-owned gold resource company that owns (through a wholly-owned subsidiary), 11,000 square kilometers of property in the central Asian country of Kazakhstan.

Recently, while at Cambridge House's Vancouver Resource Investment Conference, we spoke to Alhambra's Chairman, CEO, and interim president, John J. Komarnicki. Mr. Komarnicki told us about the challenges that Alhambra has faced in the past and he was optimistic about recent successes and what the future has in store for the company.

"We've had some difficulties when the market crashed in late 2007," began Mr. Komarnicki. "We weren't able to do a major financing, which was going to lead us to the next level of gold production and accelerated exploration activities." This was a challenge faced by many companies at the time. But then another challenge struck: "Just as the market started to flatten out and we thought that we had reached the base in our stock price, a raid was levied against our company and we lost our Kazakhstan assets for a number of months."

Many investors would naively stop there, but that is definitely not the end of story. As Mr. Komarnicki related, there was some good that came out of that difficulty: "We got our assets back when the Supreme Court of Kazakhstan ruled in our favour. That proved that the rule of law does prevail in Kazakhstan, which made us and our shareholders very happy. Until that point, some of our shareholders and certainly some members of the financial community felt that Kazakhstan was a country that was uncertain and fraught with political risk. The fact that the Supreme Court returned the assets to us really turned us into the poster child for the rule of law in Kazakhstan."

Not only did that experience prove that Kazakhstan is a good country to invest in and work in, it also strengthened the company's resolve to move forward: "We would not want to experience the raid again given the tremendous amount of stress that was associated with it, and it was also costly. The experience cost us approximately $2.5 million, money which should have gone into growing the assets of Alhambra. The raid was also a tough time for our directors and staff who maintained their faith and commitment, and continued to work even though we had lost the asset! We continued to maintain faith in the government of Kazakhstan and indeed in its commitment to the rule of law."

Their project is indeed an exciting opportunity for Alhambra. And for that reason, it's no surprise that Mr. Komarnicki and Alhambra are eager to forget yesterday's challenges and focus instead on today and the opportunities of tomorrow. "We believe we have a fabulous property, one that has world-class potential, as it is located in a very significant gold mineralization belt of northern Kazakhstan that hosts numerous multi-million ounce gold deposits.”

We asked him to describe the project further. Mr. Komarnicki said: "When we first started, we had over 100 significant gold targets. We have systematically assessed a number of them, leading to a production base now that will grow in the future and we are still far from having assessed all of the gold targets. We believe we have a first-class gold exploration property, one that is the cornerstone for developing a real winning asset for our shareholders."

Next, we went into detail about the project itself and the successes they've had in that past year, as well as what they expect in the short-term future. Mr. Komarnicki said: "We finished our exploration drilling program for 2010. Our focus continued to be on the Uzboy gold deposit, which is where we have our heap leach mine and from where we are currently producing gold. We also have a NI 43-101 compliant resource report for that property as well as a preliminary economic assessment or scoping study, both of which are being updated in 2011. That scoping study was done [when gold prices were] at $850 per ounce and we are using that scoping study which has exhibited very robust economics as a basis for moving forward with a pre-feasibility study and then a feasibility study. Ultimately these are precursors for expanding gold production."

Not only is it great to see these strides, their estimate of future gold production is very exciting: "We're looking to expand our gold production by more than a factor of ten – a significant potential increase," said Mr. Komarnicki.

"In addition to these activities," added Mr. Komarnicki, "we are also continuing to drill at Uzboy with the objective of increasing our resource base. We expect to have our 2010 drill results assayed in the next couple of months. Once those assays have been completed, we'll use them as a basis for finalizing our 2011 exploration program."

Alhambra Projects - 2.7 million Acres

Along with the work they are doing on Uzboy, other areas are also getting their attention: "We’ve received some assay results from Shirotnaia and we are excited about the new zones of high grade gold mineralization discovered there with peak gold grades of 77.7 grams per tonne. We expect that it's going to be a significant resource base for us. To date, we have identified a large target area, as indicated by gold soil anomaly measuring approximately 3.4 kms by 1.5 kms and is contained within an even larger target area of 10.0 kms by 2.0 kms which remains to be explored by more modern methods. Our drilling results have confirmed that the Shirotnaia project is an extension of a gold deposit that emanates just south of our licensed area, which is owned by KazakhGold. KazakhGold has reported a gold resource of approximately 15 million ounces there that they are producing."

"We control at least 50 kms of a rapidly emerging significant gold trend that extends in a northerly direction from Shirotnaia through Kerbay, Dombraly and North Balusty. Given the encouraging early results in these areas, we plan on continuing to drill this trend in 2011." Mr. Komarnicki explained. Even their Dombraly property, which was a former producing gold mine, has significant upside potential: "At Dombraly, we have a waste ore pile that still contains about 1.52 grams per tonne of gold and core drilling has intersected a mineralized zone up to 27 metres wide averaging 5.98 grams per tonne of gold. We will continue drilling to test the depth extensions of the known zones of gold mineralization and focus on locating new zones of gold mineralization in and around the former pit. We will have our independent consultants prepare a NI 43-101 compliant resource report later this year."

So, how would Mr. Komarnicki rate this past year? And, what is Alhambra looking forward to? "We've been very busy. We've had positive assay results and announced a number of new gold discoveries (although we don't have all of the 2010 drill results available yet). Further positive results will lead to a more aggressive exploration program in 2011. We anticipate that our 2011 exploration program could range from two to three times larger than that of 2010. That will be a significant exploration effort. The future does look very bright and we believe we have the potential to establish world-class gold resources and I'm optimistic that we won't just have one or two significant gold deposits on our property, but that we'll have a number of them. "

Mr. Komarnicki is quick to point out that moving forward on these opportunities is about one thing: shareholder value. "Going ahead, our objective is to aggressively build resources, reserves, production, and cash flow… we want to create wealth for our shareholders."

Regardless of the challenges that the company has faced, that is an exciting view of the future!

REFERENCES

http://www.alhambraresources.com

Alhambra Resources Ltd.

Head Office

Suite 3A, 4015 - 1St Street S.E.

Calgary, Alberta, Canada T2G 4X7

 (403) 228 2855

ir@alhambraresources.com

Cambridge House's Vancouver Resource Investment Conference http://cambridgehouse.com/conference-details/vancouver-resource-investment-conference-2011/15