Now, let’s shift gears to consider Alhambra’s other major exploration areas.

      The ‘Dombraly-Shirotnaia gold trend’, approximately 60 kilometers in length, is anchored by two promising gold deposits where mineralized domains remain open along strike and at depth; with  both Dombraly and Shirotnaia containing enormous promise. And, between these two, numerous highly prospective tectonic features are just now being sharply defined by recently completed geophysical surveys (gravity and magnetic) and a remote sensing survey, - collectively identifying a vast inventory of potential mineral targets (all part of the same regional framework) to intensify drilling against. Despite still being early on (for such an immense area) with respect to illuminating the subsurface southeastern flank of its license area, it is already clear that this rapidly emerging ‘significant gold trend’ is likely to be full of many pleasant surprises. For here, the point of convergence of an immense expanse (where a Middle Ordovician volcano-sediment sequence is truncated by Late Ordovician to Devonian intrusions), mineralization belonging to the volcano-sediment hosted Orogenic style (defined by anticline-syncline inflexions and fluid barriers formed by volcanic rocks covering sediments) is more likely than not to host numerous large gold deposits. Geologically speaking, - exploration activity to date, a mere ‘drop in the bucket’ (for a trend of this size) has been proceeding along very solid lines and is amassing meaningful resources, but the best is still out there.

        Situated centrally between Shirotnaia and Dombraly is an unusually ‘exceptional’ sliver of the Northern Kazakhstan Metallogenic Province, a propitious ‘point of convergence’ wherein a Middle Ordovician volcano-sediment sequence (truncated by Late Ordovician to Devonian intrusions) hosts numerous gold deposits. Here, where mineralization of the volcano-sediment hosted Orogenic style is defined by anticline-syncline inflexions and fluid barriers (formed by volcanic rocks covering sediments), tectonic evolution provided a very favorable geological setting for the formation of lode gold deposits.

     Yes. It is here, innermost to this extensive trend (the great Central Asian orogenic belt’s Altaid orogenic collage), that Alhambra’s North Balusty, Dombraly, Kontaktovy, Kerbay, Zhusaly, and Shirotnaia zones of gold mineralization reside.

      The Dombraly Project area, situated in the eastern part of Alhambra’s Northern Kazakhstan license block, enjoys a geological setting of Middle-Upper Ordovician volcano-sediment sequences; with horizons of sandstone, tufaceous sandstone, siltstone, siliceous sandstone and limestone underlying the project area. The upper sequence is composed of porphyritic pyroxene andesite-basalt lava and tuff interbedded with felsic volcanic; with the entire package intruded by Late Ordovician subvolcanic dolerite, andesite and trachyandesite. The intensely folded supracrustals form an isoclinal anticline with limbs dipping Northeast (“NE”) and axis plunging to the north; and this fold hinge is complicated by a secondary syncline. While an ENE striking brittle-ductile shear zone with reverse kinematics truncates the western limb of the anticline, it’s Northwest ("NW") splays indicate sinistral movement and control zones of chlorite-sericite-quartz and sericite-quartz alteration host the known Dombraly mineralization. Since these structural controls combine with fluid barriers formed by volcanic rocks covering sediments to localize alteration and mineralization, similar mineralization may be expected about 1 km NE of Dombraly where the same geological and tectonic factors are observed. This is supported by numerous, wide-spaced, rock samples that returned greater than 0.5 grams per ton gold ("g/t Au") (with peak of 1.2 g/t Au) taken there as well as by arsenic anomalism in soil.

     Dombraly (a former producing open pit gold mine) was discovered in 1952, and since then its uppermost part (first 30 m) consisting of oxide ore has been intensely explored by trenches, pits and a shallow shaft; with sparser drilling probing the transitional material and sulphides to a depth of 170 m. Open cast mining of the deposit from 1985 to 1988 carried out by a small mining cooperative is reported to have produced 140,000 tons of ore grading 6.96 g/t Au, using a 2.5 g/t Au mining cut-off.

      It comes as no surprise that when selling gold reserves in the ground ‘un-projectized’, the price received is a relative pittance compared to what can be realized by providing a turn-key project-ready blueprint, marrying gold deposits with a way to capitalize on their intrinsic value.      Accordingly, since a mechanism already exists at Dombraly to link this shallow gold deposit with a way to capitalize on its intrinsic value (in the form of a well articulated open pit heap-leach operation), its resources are worth more.

  • Confirming 301,000 ounces of ‘inferred’ current mineral resources at 1.01 g/t, and 22,000 ozs of ‘indicated’ current mineral resources grading 1.22 g/t, this near-surface gold (comprised of a low grade stockpile, pit infill zone, and in-situ structurally controlled mineralization types) constitutes an easily-reached resource to heap leach.
  • To put this into perspective: 323,000 ounces, at $250 an ounce, adds an additional $80 million to ‘known’ shareholder valuation, - an additional 78 cents to each share currently outstanding. Or, if you prefer, 65 cents fully diluted. In either case, this ‘incremental’ estimation far exceeds ALH’s current market cap.

     By the way, this ‘Maiden NI 43-101 Gold Resource Estimate for Dombraly’ represents primarily the down dip and strike extension of the gold mineralization under the open pit level as well as sampling of the material used for its backfill, plus that stored in the waste dump; - and merely a very preliminary test of the depth extensions of known gold mineralization zones. In other words, this initial NI 43-101 compliant resource estimate ‘only’ includes those diamond drill core and trench assay results from prior years, up to and including the 2010 core drilling program.

      To repeat: due to the timing of this ‘Maiden Estimate’, it does not incorporate any  analytical results from the 32 hole (5,528 meters) core drilling program completed at the end of October 2011. This core drilling program has resulted in the discovery of two new zones of higher grade gold mineralization; extending the known areas of gold mineralization both north and south. Moreover, at least five known zones of gold mineralization have been significantly extended or the mineralization in these zones has been upgraded in terms of both grade and width.

      In short, the presence of numerous new significant mineralized lenses, especially in the hanging wall of the Main zone, should lead to a significant increase of resources, as compared to the resources estimated in the maiden NI 43-101 for Dombraly.

     Meanwhile, Shirotnaia enjoys an enormous exploration ‘target area’ of 10 kilometers by 2 kilometers, where a Middle Ordovician volcano-sediment sequence, truncated by Late Ordovician to Devonian intrusions, underlies the prospect. Attendant mineralization belonging to the volcano-sediment hosted Orogenic style is related to the anticline-syncline inflexion line, with fluid barriers formed by volcanic rocks covering sediments.

     Locally, Shirotnaia and the massive world-class Aksu/Quartzite Hills orogenic gold deposits are within the same major flexure of the “Aksu-Balusti Mineral Trend”; where, throughout, gold deposits are genetically and spatially related to granite-like rocks; with the larger gold deposits closely linked to intrusions characterized by multi-stage, complex activity. Intrusion formation reflects various structures and ages, with small intrusions and dykes lying inside them.

     At both of these favorable locations, gold deposits are found along a trend of deep seated lineaments (orientated within the Stepnyak and Selentinsky synclines) that is comprised mainly of Ordovician sediments; with major gold deposits situated within Late-Ordovician or Silurian low-normal-sulphur gold-quartz veins. Here, gold is derived from ancient Pre-Cambrian rocks, with deposit size depending primarily on the intensity of Caledonian intrusive activity, for structure is fundamentally the most important factor in gold deposit formation. All in all, these gold deposits are to be found in clusters within the most complex structures, - where tectonic activity has formed large and deep breaks/faults, schistosity zones, and areas of faulting tectonics of pre-intrusion and ore stages. Also, with gold deposits chiefly situated close to prominent horst and graben structures, among the pre-Cambrian and Palaeozoic basement, the deeper one drills, the better results will tend to be.

     Just such an ‘environment’ has been ‘disclosed’ at Shirotnaia, where a very large area of mineralization has been discovered. When you examine a visual map of Shirotnaia that plots the results of extensive drilling activity, everywhere there are solid ‘hits’, where dozens (almost too many to count) core hole positions have turned up positive results. Going forward, focus can now be shifted to closer-spaced ‘infill drilling’ to fully delineate the dimensions and scope of numerous ‘new’ zones, whose potential is as of yet still unknown, but could be just ‘the tip of the iceberg’.

     Also, consider that the average depth of these holes was a mere 139 m, while, at Uzboy, ‘deep holes’ ranged in depth from 520 m to 700 m. Just imagine what ‘deep drilling’ at Shirotnaia will reveal. After all, the probable continuation of the high grades to depth is usual for this style of mineralization; and, within this particular gold belt, there are typically large very-high-grade ‘deep’ gold deposits. In this regard, recall that Alhambra’s recent diamond drilling program at Shirotnaia disclosed two significant widths of high grade gold mineralization encountered within a large area of lower grade gold mineralization, suggesting the probable continuation of the high grades to depth; as is usual for this style of mineralization.

     The initial independent National Instrument ("NI") 43-101 gold resource estimate for Shirotnaia was 645,000 ounces ("ozs") of Inferred current mineral resources grading 0.58 grams per tonne gold ("g/t Au") and an additional 71,000 ozs of Indicated current mineral resources at  0.76 g/t Au. Worldwide, undeveloped gold deposits of this size and grade are relatively scarce, and many with similar characteristics are being produced with attractive economic returns using heap leaching and other low cost assets. Someday, this easily-mined bulk tonnage gold deposit is sure to spin off serious cash flow.

     For those who do not already know, - the immense world-class Aksu/Quartzite Hills orogenic gold deposits are located a mere 3 kilometers to the south (of Shirotnaia); with both the massive Aksu gold deposits and Shirotnaia situated within the same area of a major flexure of the Aksu-Balusti Mineral Trend.  [A while back, KazakhGold estimated that the B and C1 gold reserves and C2 and P1 gold resources under the FSU Classification at the Aksu and nearby Quartzite Hills deposits were approximately 5.4 million ounces and 15.0 million ounces, respectively; and, at Aksu (including Quartzite Hills), mineable resources average 2.70 g/t gold, - being 8.26 g/t Underground, 2.06 g/t Open Pit, 0.97 g/t Tailings, and 1.00 g/t at the Waste Dumps.] On a very positive note, a significant proportion of the ore reserves (at both Aksu and Quartzite Hills) are in the form of oxide ore, which can be mined through open pit methods, - significantly cheaper than extracting ore from underground mining.

     As can be see, a key exploration challenge is to get a better handle on the potential contained within the ‘Dombraly-Shirotnaia gold trend’.

     As a first step toward fixing a vast inventory of potential mineral targets into a single comprehensive regional framework, Alhambra is currently interpreting gravity and magnetic geophysical surveys linked to a remote sensing survey; elucidating satellite imagery and ground-based information to interpret geological information from diverse spectral intervals (with an eye towards sharply illuminating the subsurface southeastern flank of its license area).

     Which is what? Where does Alhambra operate anyway?

     The Altai Mountains (called ‘Altay Shan’ in Chinese) is a complex Central Asian mountain system extending some 1,200 miles (2,000 kilometers) in a southeast-northwest direction from the Gobi Desert to the western Siberian plain through parts of China, Mongolia, Russia, and Kazakhstan; with its jagged mountain ridges deriving their name from the Turkic-Mongolian ‘altan’, - meaning “golden.” 

     Although formed during the great orogenic (mountain-building) upthrusts that transpired between 500 and 300 million years ago, the Altai have since been worn down, turning this part of Kazakhstan into a gently undulating plateau. Over the course of geologic time, extreme dislocations suffered by the Altai have occasioned a variety of rock types, many altered by magmatic and volcanic activity; resulting in large accumulations of geologically young, unconsolidated sediments in numerous intermontane depressions where tectonic structures bear commercially exploitable deposits of minerals, - such as gold (‘altan’).

     The “Central Asia-Chinese Altay Shan Gold Belt” (in which Alhambra operates) is one component of the great Central Asian Orogenic Belt (also known as the Altaid), shaped by a complex geological history; where ore-forming processes (‘creating’ many world-class deposits) transpired within the context of large-scale geodynamic events of plate and plume tectonics (e.g., assembly/breakup of supercontinents).

     Here, a complex cycle of rifting, subduction, accretion and collision culminated in the ‘present’ complex assembly in which major mineral deposits distributed across central Eurasia were formed during a range of magmatic episodes (from the Ordovician to the Jurassic) in connection with magmatic arcs within this extensive subduction-accretion complex, - resulting in large ore deposits being sourced from the Earth’s crust.

     The Ordovician is a geologic period, the second of six in the Paleozoic Era; beginning approximately 490 million years ago with the end of the Cambrian and ending roughly 443 million years ago with the beginning of the Silurian. During this Ordovician period, volcanism was extensive, with all of the major tectonic plates in motion forming subduction zones and back-arc basins (where two plates converge, forcing one plate under another), - such as ‘Kazakhstan’.  Worldwide, during this ‘period’, numerous large deposits (of precious and nonferrous metals) were generated during riftogene, subduction and collision stages; resulting from repeated redistribution of chemical elements coupled with the combined activity of several ore substance sources.

     More specifically: ore formation is a process of multistage localized concentration and accumulation (of previously dispersed trace metals), with typical metallogene commencing within a favorable geological foundation ("geosite" / "play"); commencing with metal source(s), followed by conditions of metal liberation, flux towards the ore site with concurrent or subsequent metal enrichment, and (finally) ore deposition. The terminal stage includes orebody enhancement, modification (through metamorphism) and preservation; with "giants" most likely to form when most, or at least the crucial components of a system, operate at peak efficiency, - so that there is a trend of steady metal increase throughout. Moreover, there must be a role for regional rock mass as a source of metal; with the depletion zones being the mobilization environments.

     However, extensive multi-element geochemical mapping (in ore regions) has shown that ore deposits and zones of enrichment as a whole constitute only a part of the geochemical field. The process may be quite complex, including both enrichment and depletion zones; and, since these appear to be spatially linked to each other, they are a single geochemical system. And, as these geochemical ‘circumstances’ would have it, the size of ore deposit systems vary, ranging from a few hundred square kilometers to thousands of square kilometers (in the case of giant ore deposits).

     Fortunately, for Alhambra and its lucky investors, this region’s late Paleozoic-early Mesozoic tectonic evolution provided a very favorable geological setting for the formation of gold deposits (along sutures between the major Eastern Asia cratonic blocks), including Alhambra’s Altay Shan, where Orogenic gold deposits are known to be very widespread. In fact, within its unique geologic setting (the Northern Kazakhstan Metallogenic Province), numerous world-class gold deposits reside; and, pay zones within these immense gold fields ‘resemble’ those found at Uzboy, Dombraly and Shirotnaia in every way, except that they are ‘just’ much larger (in topographic extent); which is why recent successful expansion drilling activity at all three of Alhambra’s advanced projects is so extremely promising.

  • No unique special features set apart ‘giant ore deposits’ from the ‘smaller deposits’, and in most respects they are similar, except for the fact that they are mass-concentrative systems that are for fundamental reasons of mass-balance operating over very large scales.  And, in that these ‘giants’ become merely the final end-point of a much larger-scale system, for predictive targeting, it is essential to focus on this much ‘larger entity’, - “the ore system” (a product of lithosphere-scale processes); rather than keying in primarily on the ‘deposit environment’ itself. In this light, the critical questions become “How large is the ore system?” and “What are its fundamental controls?” 

     This is why, as a first step toward agglomerating a vast inventory of potential mineral targets into one comprehensive regional framework, Alhambra is undertaking geophysical surveys (gravity and magnetic) and a remote sensing survey; to focus on this much ‘larger entity’, - “the ore system”.

     The Ordovician system (identified on all the continents except Antarctica) forms part of the structure of the sedimentary mantle of most platforms and is widely found in folded structures; and the thickness of deposits of the Ordovician system reaches 10,000 meters in the interior parts of geosynclinal belts, such as in ‘Kazakhstan’. Here, numerous volcanoes, and thick layers of lavas, tuffs, and siliceous rocks accumulated in addition to detrital sediments. Moreover, both shallow-water and deep-water sediments are found in these places; and, as a result of the Taconic orogeny (a  major mountain-building episode), folded structures and mountains were formed in the Caledonian geosynclines toward the end of the Ordovician.

  • As a sequel to all of this, immense gold deposits (and other metals) are associated with the widespread Ordovician intrusive rocks and geosynclines in Kazakhstan; and many of Kazakhstan’s hydrothermal-sedimentary polymetallic gold deposits are located in the continental riftogene structures, - in fact, all of the multi-million ounce Orogenic deposits (such as Vasilkovskoe, Aksu, Stepnyak, etc.) are genetically related to this.

     In recent years, excellent drilling results (at all three advanced projects) has set the stage during future drilling seasons for aggressive expansion/delineation of ‘gold occurrence’ mineralization along strike  into various ‘high-potential probability’ intervals as follow-up drilling couples with spatial and statistical geochemical analysis to begin the process of ‘corridor mapping’, - integrating geological data, structural information, and geographic (lat/long) coordinates to un-conceal the composition and structure of new ‘gold-bearing veins; so-called ‘resource deposit clusters’.

     And, as always, gold fields will continue to grow over time and space hand in hand with additional drilling that delineates their potential; with this elemental ‘strategy’ being pursued (at Uzboy, Dombraly and Shirotnaia) to increase mineralization by steadily enlarging along strike and depth.

     So, friends, what have we learned?

     From at least 3.5 billion years ago, the distribution of mineral deposits has been shaped by the geological processes which has formed them, - with such deposits commonly clustered in geological provinces, such as the one where Alhambra now operates.

     For economic quantities to be present, the source fluids and metals within a mineral system must be able to migrate in a focused way (‘main fluid pathways’) to a site of deposition, where they subsequently become ‘contained’ by the main regional control (‘trap’). In general, such mineral deposits exhibit extremely heterogeneous distributions, with each major deposit type showing a distinctive (typically unique) temporal pattern; with these individual temporal patterns reflecting a complex interplay between fundamental forces of formation and forces of preservation that (in turn) have largely been shaped by changing tectonic processes and environmental conditions.

     As such, the temporal distribution of gold deposits will reflect the forces that originally produced the deposits (global heat flows in a cooling Earth), the depositional environments in which they formed (changes in tectonic regime), and, finally, the preservation potential of the deposit-hosting environments (where such deposits currently reside). In this context, metallogenic belts and provinces will be dominated by deposits formed in one or more favored epochs, - and nearly twenty large (many world-class) gold deposits have already been disclosed in Kazakhstan, in addition to hundreds of small and medium-sized occurrences.

     Globally, most (if not all) metal accumulations of exceptional size are “the end of the spectrum” of decreasing size deposits of the same or similar types; where the 80/20 rule generally prevails, so that 20% of the largest deposits contain 80% of the total gold. In our case, within the metallogenic province of northern Kazakhstan, major gold deposits are located along a trend of deep seated lineaments (orientated within synclinal zones) composed mainly of Ordovician sediments. And, yes. Alhambra’s North Balusty, Dombraly, Kontaktovy, Kerbay, Zhusaly, and Shirotnaia zones are all located along the same ‘structure’ of volcano-sediment hosted Orogenic style mineralization; a very distinctive temporal pattern that also hosts the world-class Aksu/Quartzite Hills gold deposits.

     At every one of these sites, gold deposits are found in effusive-sedimentary Ordovician masses; where the gold deposits are genetically and spatially in granite-like rocks; with the larger gold deposits related to intrusions characterized by multi-stage complex activity; with intrusion formation made up of various structures and ages.

     Actually, (as if all this were not enough), there are three other ‘plays’ within Alhambra’s immense license area that also merit exploration interest; ‘Zhanatobe’, ‘Vasilkovskoe East’, and ‘Stepnyak’.

     In Kazakhstan, gold-mining has occurred since Stone Age times (with the earliest open-pit ‘workings’ dated to 4,000 B.C); and numerous underground mines began cropping up during the Bronze Age (1,500 BC). These deposits were later forgotten; that is, until antiquity gave way to modernity, - with most rich gold deposits found in Kazakhstan (during the prolific 1920s and 1930s) actually ‘re-discoveries’; sites disclosed with the help of ancient folk tradition, on the basis of old place-names (meaning ‘gold’), or through the whereabouts of shafts, pits and quarries. In just such a fashion, several of Alhambra’s ‘potential targets’ were ‘rediscovered’ in the early 1930’s.

      One such deposit is Zhanatobe, currently located in its very own license area (separate and distinct from the others) - where 1,448 meters were recently drilled and the company now eagerly awaits assay results from Kyrgyzstan. After underground mining in the 1940's (by a small mining cooperative), systematic exploration of this deposit was conducted in 1950-1951, to be followed by full scale mining (through the state owned Stepnyak mining company) until 1981; with the mine eventually consisting of 3 shafts and several drifts reaching the depth of 50 meters below the surface.

     Alhambra began its exploration of the Zhanatobe area during 2006-2008, commencing with soil sampling from an area of 5.5 square kilometers (around the known deposit); then, in 2009, it expanded the area of investigation (with soil sampling) to an area of 77.7 square kilometers. Moreover, for a part of that area, geological mapping accompanied by rock chip sampling was conducted (1,877 samples were taken); outlining two zones with a high density of anomalous gold concentrations (above 70 parts per billion gold ("ppb Au")) in volcano-sediment rocks. Around this period, geological mapping demonstrated the gold anomalies to be controlled by a NNE orientated district scale shear zone and its NW striking splays; and there were several clusters of higher (+0.1 grams per tonne gold ("g/t Au")) gold concentrations in rock chip samples inside both anomalous zones.

     A rotary air-blast ("RAB") drilling program completed in 2010 resulted in the discovery of two possible "Carlin-style" zones of gold mineralization, - one in the Central area and a second in the Northern area. Here, mineralization exhibits many similarities to sediment hosted disseminated style gold mineralization in Nevada ("Carlin-style" gold mineralization) which is completely new for the region; a very exciting development; and these two ‘possible’ Carlin-style zones of gold mineralization may suggest that a new very large, prolific area of gold mineralization has been located. As a result, the company anticipated implementing a more aggressive 2011 drilling program including deeper, more precise core drilling, with the objective of reclassifying Zhanatobe from early exploration status to advanced exploration status in 2012.

     Clearly, from an exploration perspective, something arousing a great deal of interest had turned up, for fragments of opaline-jarosite and jasperoid style silicification zones (in brecciated calcareous sediments) looking similar to Carlin-style collapse breccias were mapped in the Central Area, - indicating the potential presence of epithermal style gold mineralization; a style not recognized in the license before. And, yes, higher silver values very much supported this scenario.

     In 2011, an RAB drilling program of 922 holes (5,270 m) was completed during the year:

  • The objective of the RAB drilling program was to take samples from the bedrock immediately below the overburden, which was achieved. Twenty one lines of RAB holes were drilled at the five most prospective areas delineated by the 2009 rock chip sampling program and 922 samples were taken. Four areas returned data that suggests that these areas could be prospective for epithermal carbonate hosted or orogenic volcano sediment hosted gold mineralization while one area (Western), where the geological features are very similar to those at the Vasilkovskoe deposit, has potential for intrusion related gold mineralization.
  • Positive results were realized in the Northern area. The previously established gold anomaly was extended 200 m to the north, and after a 200 m interruption, the anomaly was also extended about 750 m to the south. The Northern anomalous area, where RAB holes returning +0.1 g/t Au are concentrated (although not forming a continuous anomaly) has been expanded to dimensions of 1,250 m by 480 m. The individual anomalies are of different orientations and have a maximum length of 450 m and a maximum width of 90 m. The peak grade is 0.52 g/t Au. All the anomalies could be interpreted as a leakage along permeable zones from a significant bulk gold mineralization at the contact with an intrusion which is probably situated underneath.

     As everyone already knows, the Carlin trend (discovered by Newmont geologists in 1961) forms the largest and most productive accumulation of gold deposits in North America; with a reported gold endowment (including past production, reserves, resources, and mineral inventory) exceeding 107 million ounces; consisting of more than 40 separate deposits. The Carlin trend is a 38-mile (60-kilometer) long north-northwest alignment of predominantly carbonate-hosted gold deposits (located in northeastern Nevada) where gold deposits are generally hosted in a variable stratigraphic package of Ordovician through Lower Mississippian rocks; where broad amplitude, northerly plunging anticlines within autochthonous carbonate assemblage rocks have been preserved in uplifted ‘tectonic windows’ along the Carlin trend, and all Carlin trend gold deposits discovered thus far occur within or proximal to these tectonic windows. Of course, to date, Zhanatobe has very little to show, - but there is a possibility (remote though it be) that something of real ‘importance’ resides around here. Only more drilling will tell.

     ‘Vasilkovskoe East’ is a 500 square kilometers area located on the western section of Alhambra's license that is functionally separate and distinct from Uzboy, the ‘Dombraly-Shirotnaia gold trend’, Zhanatobe, and Stepnyak. Here, Precambrian crystalline basement and Cambrian to Silurian submarine volcano-sediment formations are covered by Devonian continental volcanic and Carboniferous sediment complexes; truncated by intrusive sequences of different age.  More specifically, the geology of the prospect itself is dominated by an Early-Middle Ordovician volcano-sediment sequence (consisting primarily of siltstone, cherty mudstone, jasper, rarely diabase and rhyolite), intruded by several relatively big granite and granodiorite intrusions of Early Silurian (or older) age and some small Middle - Late Devonian granite porphyry stocks.

     Alhambra’s ‘Vasilkovskoe East’ is situated 22 kilometers to the west of Glencore’s world class Vasilkovskoe deposit (boasting resources of 12.6 million ounces of gold), - a typical intrusion related Orogenic style deposit. The 2011 exploration program for Vasilkovskoe East included soil sampling of two areas, identifying several anomalies that could be very important;  marking possible mineralization of significant size, (but the anomalies need to be checked in detail by sampling on denser soil grids). As part of the 2012 drilling program, 844 soil samples were taken in recent months at ‘Vasilkovskoe East’ that are now being readied for export to Kyrgyzstan.

                     This brings us to ‘Stepnyak’.

      Since antiquity, metals of various kinds have been sought and produced to be used for tools, weapons, utensils and adornments; and, in Kazakhstan, gold-mining operations have taken place since the Stone Age, - with the earliest open-pit workings having been dated to 4,000 B.C.

  • In Kazakhstan, gold has been mined ‘continuously’ since Bronze Age times (1,500 BC) in both opencast and underground mines; and the first archaeological survey in 1941 listed 70 ancient goldmines in Kazakhstan (whose exploitation since the Bronze Age can be traced).
  • According to one leading expert, “the whole of north Kazakhstan emerges as one huge quarry, especially the area around Stepnyak.”  A substantial number of ancient mining sites with datable tools (such as stone mallets, pick-axes, wedges etc.) have enabled experts to make relatively precise deductions regarding the quarrying processes of antiquity; and it would seem that the miners used wooden climbing-posts for the descent and ascent: with vertical shafts reaching a depth of up to 98 feet (30 meters).
  • The object of prehistoric mining was always to discover veins with a high gold content, and the composition of their waste heaps shows that only the larger grains of gold and nuggets were extracted, with the remainder going to waste. Then, after its extraction, the ore containing the gold was taken to be processed at sites which have also been established, - and a great number of implements have been found in Scythia (mortars, slabs, stone pestles, axes, sledge-hammers and knapping hammers) to crush and grind to powder the quartz ore which contained the gold.
  • During the Late Bronze Age, metallurgists of Kazakhstan were extremely active; and the earliest ‘Scythian type’ dates to the middle of the 7th century BC.

     Settlements in the area of the Stepnyak mine (once again to be explored by Alhambra) show that this was the largest gold mine operating in the Bronze Age; and, during the 7th century BC, there were several lakeside villages of ‘gold-miners’, - in one of these settlements there was an archaeological layer up to 0.6 meters thick with traces of ore-processing.

     As a matter of fact, it was in this very region where (according to ancient mythology) the dreaded mounted army of the one-eyed Arimaspians (arima being the Scythian word for ‘one’ and spu for ‘eye’, Herodotus IV, 28) was said to live by a river that flowed over gold. And, it was also through this ancient gold mining region that a major caravan route led (stretching from the Greek city of Olbia through Scythia and far into the Asian interior); used primarily by Greeks and Scythians to conduct their trade, - and the Scythians, it was reported, had to employ seven interpreters to communicate with the various peoples on this long route.  

     With this brief survey of one of the greatest mining centers of the Asian interior now complete, it is time to fast forward: As noted above, the rich gold deposits of Kazakhstan were almost all ‘re-discovered’ (in the 1920s and 1930s); with many such deposits exploited during the Bronze Age but later forgotten (and present-day mining frequently unearths traces of the ancient mine-workers, who had tunneled horizontally as well as in descending inclines). In northern Kazakhstan, a cluster of gold-lode settlements arose in the 1930’s, and have remained urban places since that time; including Stepnyak, which attained ‘town status’ in 1937; and, in the 1950’s, Stepnyak’s mill served the other mining settlements. As a matter of fact, according to Russian sources, in 1965, the most important mine in Kazakhsatan was the Stepnyak (surrounded by a number of lesser mines to the north). In 1946, the Stepnyak gold deposit was described as consisting of quartz veins grouped into several vein complexes in sedimentary effusive folded rocks.

     And this is why I believe that Alhambra Resources Ltd. should change its name to ‘Scythian Gold’; after all, - the exact area where the company now operates was through unnumbered ages the largest gold-ore source during the Bronze Age throughout all of Asia, and Africa as well.


     From the very earliest primeval age of the world ‘the gold industry’ rose from these sorts of subterranean excavated chambers in the rock, descending passages of very small bore carved out deep in the heart of the rock, - cutting their sloping way down to the necessary depths. From that silent dead obscurity when as yet nothing is recorded in the dissolute chasm of life, - at these Bronze Age sites, a small bored passage was pushed on into the rock a few feet at a time, with most holes left unfinished, and many similar laborious abortive attempts downwards undoubtedly left a comparative scene of up-and-down holes, rocks, and fragmentary confusion. However, in that ineffable successful gold-bearing passage, the light of day from the wide stretched heaven above would be reduced down to practically nothing, this frame a mere star-like point at the upper end of the long entrance-passage; overwhelmed in the Abyss of Being.

Anyway, - Alhambra Resources Ltd. should change its name to ‘Scythian Gold’.

                  Who’s with me on this?

                      O.K., enough of the past.

                           What about the future?

     Once a financing has been set to rights:

  • The capstone will be a listing on the Hong Kong exchange and a major road show.
  • Subsequently, production at Uzboy will gradually ramp up; eventually topping off at 200,000 ounces per year (over a long 8 to 9 year mine life).
  • A ‘mill’ approach rather than a ‘heap leach’ method will be utilized to significantly improve recovery rates while simultaneously facilitating the processing and crushing process of ore year round.
  • Increasingly casting off ever rising free cash flows, Alhambra will become self-financing.
  • From which the open pit operation at Dombraly will be self-funded (if it has not already been developed. Some permutations of discussions underway also include provisions for ramping up production here too).
  • Early in 2013, a significantly increased Dombraly resource report will be released taking into account considerable 2012 drilling activity and improving the quality of the grade. – “seems to have a fairly decent continuity of ore”.
  • Simultaneously facilitating ‘accelerating’ exploration crisscrossing the entire highly-prospective Dombraly-Shirotnaia trend.
  • Regional geophysical surveys have identified 8-11 “highly favorable targets to go after.”   The company plans “to drill up a lot more targets” in the future. “Numerous targets to explore and exploit.”
  • ‘Proven’ reserves will grow steadily; hand-in-hand with rising production, a lower cost structure, and serious free cash-flow.
  • ALH will become an institutional darling; widely held globally.
  • Alhambra is firmly on the glide path toward achieving eventual world class production and resources.
  • There have been many large Mineral companies that have visited Alhambra’s Kaz operation, and are interested (‘excited by the company’s prospects’); but it is still far too soon for ALH to do anything about it (with these players); for they must first further increase resources and production.
  • All large gold companies worldwide, and there are many of them, are increasingly looking at Kazakhstan as a meaningful ‘strategic target’ – It seems that practically everyone is now setting their sights on Kazakhstan.
  • Culminating (a few years out) in a furious bidding war;
  • - ALH ‘taken out’ at a very high price.

     Let’s conclude this discursive review of Alhambra’s investment merit by remembering that not long ago one of the world’s most distinguished authorities on ‘Exploration Targeting’ visited Alhambra; carefully ‘reviewing’ the company’s geology, projects, and prospects; declaring that he was extremely excited by what he found; and, as a result of this visit, he predicted to “expect numerous world class deposits in this area”. In fact, Professor David Groves regards this 2.4 million acres to be “very prospective” and “elephant country”, - perceiving this region’s late Paleozoic-early Mesozoic tectonic evolution to provide a very favorable geological setting for immense ‘orogenic gold deposit genesis’.  

     Globally, for decades, given every 1,000 gold mineral indications initially discerned, roughly 77 prospects will be identified; resulting in 13 mines of which only 7 will be profitable; yielding a ‘horrible’ ultimate success ratio of just 0.7%.  To its credit, Alhambra has successfully surmounted such intimidating odds, with Uzboy generating a ‘cash' operating’ profit; (and, to boot, doing it the hard way, - heap leaching mostly less-prolific East zones rather than tapping into far ‘richer’ West deposits). 

     Moreover, if Alhambra had access to sufficient capital, Dombraly waits in the wings, approved in 2008 for a 750,000 tonne large scale semi-industrial “bulk test” (of the oxide gold mineralization zone); and significant near-surface gold (in low-grade stockpiles and open pit back fill areas) is easily leached. …   So very, very close to a second ‘beating of the odds’.

     Given positive diamond drilling at Shirotnaia (disclosing several significant widths of high grade gold mineralization), here, ‘beating the odds’ could mean an elephant find; you think?

               To sum up:

     Alhambra (with a 2.4 million acre license area) possesses a solid foothold within a very geologically prolific “Gold Belt”, surrounded by world-class gold deposits. And, add on to this ‘strategic location’ an able management and existing production (throwing off enough cash flow to fund general and administrative expenses). At present, Alhambra is on the verge of ‘major success’, harboring very significant near-term (visible and predictable) positive catalysts, with all the right ingredients in place: gold production, three advanced projects proceeding smoothly, more than a few exciting exploration prospects underway, and more than 100 additional ‘gold occurrences’ (providing even more exploration opportunities); plus, pragmatically, a program for expediting delineation of significant gold resources.

     Growing ‘booked reserves’ is by far the most visible manifestation of exploration success; constituting an increase in intrinsic worth, and, already, Alhambra has posted 1.07 million ounces in the Measured and Indicated categories plus 1.38 million ounces Inferred; for a grand total of more than 2.4 million ounces.

     Consider this subject carefully, undertake to decompose it stone by stone, realize that superb ‘financing’ news looms on the near term horizon, and, once the dust (of uncertainty and angst) settles, both liquidity and price will improve steadily. At long last, as the fabric of a solid foundation is being forged, time and momentum are firmly operating on Alhambra’s side, propelling her into a rapid stride, full speed ahead, facilitating expeditious progress, advancing steadily (with great discernment and facility); harboring enormous potential and rapidly closing in on realizing it; time to chill, relax, enjoy, settle back with a big smile, loosen up; this is going to be very big indeed; and, above all else, remember that not free from external perturbations, this is how things transpire, can only be attained, in the ephemeral republic of Kazakhstan; so, sure, this journey has been ‘a slow boat to china’, - but the port is now in sight and the welcoming pavilions are pitched.