The Uzboy Project

Introduction

Alhambra's wholly owned subsidiary, Saga Creek Gold Company LLP ("Saga Creek") hold the rights to two exploration and exploitation Licenses which covers approximately 2.7 million acres located in north central Kazakhstan. These Licenses combined make up the Uzboy Project (the "Project"). These Licenses were granted in 1997 for an initial term of 25 years and can pursuant to the SubSoil Use Laws of the Republic of Kazakhstan be extended for an addition two, ten year terms. The Licenses provide Saga Creek the right to explore for all metals, including gold, uranium, copper and molybdenum.

The Project is strategically located in the Charsk Gold Belt between the Vasilkovoskoe gold deposit on the northwest and the Asku gold deposits on the southeast.

Exploration targets within the Project include the Uzboy gold deposit, two past-producing gold mines (Dombraly and Stepnyak) and 122 other significant gold showings.

Historical Exploration

The area covering the Project was explored by Stepgeology Geological Expedition #41 while conducting regional exploration for uranium in 1990 1991. Stepgeology Geological Expedition #41 explored the Uzboy area in 1994-1995 and focused on the gold potential of the area resulting in the discovery of two zones of gold mineralization. Reverse circulation drilling (100 metres by 40 metres grid on West zone and 200 metres by 80 metres and locally 40 metres on the East zone), detailed geophysics (magnetics and ground resistivity surveys) and core drilling were completed. Twelve core holes (1,543.5 meters) was completed in the Uzboy area by the Kazzoloto Expedition with 8 of the holes located along an East West profile line testing an area that is now referred to as the West zone of the Uzboy gold deposit. The exploration completed in 1996 and in 1997 was supervised by Cameco Mining Corp.

Alhambra commenced exploration of the Project in 2002 with the Uzboy gold deposit being the main exploration target. During the period 2003 to 2005, Alhambra has conducted both detailed and regional scale exploration on specific gold targets within the Project.

2006 Exploration

The results of the 2006 exploration program performed on the Uzboy gold deposit, the Dombraly zone of mineralization and the other 9 gold occurrences are set out in news releases issued by Alhambra and filed on SEDAR at www.sedar.com.

Resources

The information on the mineral resources for the Uzboy gold deposit as at January 1, 2005 and December 31, 2006 are set out below. The resource estimate were completed using a 0.2 grams per tonne ("g/t") minimum cutoff and top cuts of 20 g/t and 22g/t for the East and West zones of the Uzboy gold deposit respectively. The Howe Report included all diamond drilling results for the Uzboy gold deposit up to the end of December 2006. A comparison of the resources estimated by Howe at January 1, 2005 and December 31, 2006 are set out below.

	December 31, 2006			January 1, 2005
Resource Category	Tonnes	Grade (g/t)	Ounces		Tonnes	Grade (g/t)	Ounces
Measured	19,071,001	1.08	661,645	13,392,291	0.85	365,908
Indicated	8,392,444	0.87	234,605	5,558,229	0.79	141,349
Measured + Indicated	27,463,445	1.02	896,250	18,950,520	0.83	507,257
Inferred	22,512,850	0.73	528,827	4,876,807	0.84	134,903

A wireframe restricted linear Ordinary Kriging grade interpolation method was used to estimate resources. The Measured, Indicated and Inferred resources for the East and West zones comply with the Canadian Institute of Mining, Metallurgy and Petroleum ("CIMM") resource category definitions.

Howe has been retained to complete a National Instrument 43-101 compliant resource estimation on the oxide and sulphide portions of the Uzboy gold deposit. The updated resource estimation is effective December 31, 2008 and is expected to be completed in the first quarter of 2008.

2007 Exploration Program

The Corporation has completed its 2007 exploration program on the Uzboy Property. The exploration program consisted of 15,690 metres of diamond drilling, 23,378 metres of KGK drilling, 50,379 metres of Reverse Air Blast drilling and 64,674 cubic metres of trenching and a small test geophysical program. The results of the 2007 exploration have been released in various news releases made by Alhambra in 2007.

Mining Operations

A detailed history of the mining and leaching operations conducted at the Uzboy heap leach site to the end of 2005 is set out in the Feasibility Study dated June 30th, 2006, a copy of which has been filed on SEDAR. A brief history of the work performed on the Uzboy Project during the period 2004 and 2005 related to the completion of a large scale "semi-industrial test" and the conversion to commercial operations is summarized below.

In 2004, Alhambra completed the exploration of the oxide portion of the Uzboy gold deposit. Mining operations began in July and stacking of oxide gold mineralization commenced in August 2004. Construction of the infrastructure required to complete a large scale "semi-industrial" heap leach test of the gold mineralization in oxide portion of the Uzboy gold deposit was completed in September 2004. Test leaching operations commenced in December 2004. The mining operation uses the services of a contract miner resulting in a significant reduction in the project's capital cost but increased operating costs.

In February 2005, Alhambra achieved its first sale of gold recovered from the test leaching operations. During 2005, Alhambra continued test leaching operations including the construction of two leach pads. In mid 2005, diamond drilling on a 40 metre by 40 metre grid pattern was commenced to define the limits of the primary (sulphide) gold mineralization of the Uzboy gold deposit.

In 2006 test leaching operations continued until April 30. Effective May 1, 2006, Alhambra declared commercial operations at its Uzboy heap leach mine. In September 2006, the Corporation commissioned its resin desorption plant located in Stepnagorsk, in the Republic of Kazakhstan. This facility provided Alhambra with control of its gold production and is expected to reduce operating costs by approximately US$30.00 per ounce.

Oxide Reserves

The "Feasibility Study reported that the recoverable Proven and Probable gold reserves in the Oxide and Transitional zones of mineralization for the Uzboy deposit totaled 107,955 ounces ("ozs").

The Howe Report updated the recoverable Proven and Probable reserve estimate for the Oxide and Transitional portions of the Uzboy gold deposit to 95,200 ozs as at December 31, 2006. During the two year period that transpired between the two reports prepared by Howe, Alhambra sold a total of 28,317 ozs with a further 21,142 recoverable ozs sitting in work in progress as at December 31, 2006. The net result was that during the two year period from January 31, 2005 to December 31, 2006, Alhambra added a total of 36,704 ozs of recoverable gold to its Proved and Probable reserve base for the Oxide and Transitional zones of the Uzboy deposit. This equates to an average annual growth rate of approximately 17%.

Pit optimization and discounted cash flow analysis using Whittle Proteus optimization software for the Feasibility Study and the Lerchs Grossman algorithim for the Howe Report was completed for the combined West and East zone resource block model. The mineral reserves are classified as Proven mineral reserves and Probable mineral reserves and are based on CIM Standards. The Proven and Probable Mineral reserves for the West and East zones of the Uzboy gold deposit are set out below.

Alhambra has commissioned Howe to complete an updated resource estimation for the oxide and sulphide portions of the Uzboy gold deposit effective December 31, 2007. As an extension of the updated resource estimation, Howe will estimate the oxide reserves for the Uzboy gold deposit.

The following tables show the mineable oxide reserves (using a 0.2 g/t cutoff) as at December 31, 2006 and January 1, 2005 as reported by Howe.

	December 31, 2006			January 1, 2005
Resource Category	Tonnes	Grade (g/t)	Ounces		Tonnes	Grade (g/t)	Ounces
Proven	3,416,719	1.17	123,641	4,737,000	1.00	152,296
Probable	631,035	0.82	21,893	288,000	0.82	7,593
Proven + Probable	4,047,754	1.11	145,534	5,025,000	0.99	159,889
Proven + Probable Recoverable gold*			95,200			107,955
* After dilution, mining losses and estimated gold recovery * Proven+Probable reserves related to pit only. Does not include 21,142 ozs. in Work in Progress

Notes:

1. The mineral reserves and resources reported herein are based on the CIM Council Standards on Mineral Resources and Reserves Definitions and Guidelines adopted by the CIM Council on August 20, 2000 ("CIM Standards"). Mineral resources that are not mineral reserves do not have demonstrated economic viability. Mineral Resources for the Uzboy gold deposit are in addition to Mineral Reserves.
2. The mineral reserves and resources reported herein were calculated using gold price of $US 600 per ounce.

Parameters utilized in the estimation of the Proven and Probable mineral reserves and pit design are as follows:

1. Assumption of a long-term gold price of US$600 per ounce of gold;
2. Gold recovery of 70% for the oxide ore grade stacked on the heaps;
3. An average mining cost of US$1.60 per tonne of ore or waste mined;
4. A mine administration cost of US$34,000 per month;
5. Processing costs of US$4.50 per tonne for oxide ore;
6. Pit slopes of 45 degrees as required in the Republic of Kazakhstan;
7. Roads and ramps designed for 30 and 40 tonne capacity trucks;
8. Final haul-road grade of no greater than eight (8%) percent and widths of 12 metres;
9. A 15 metre buffer zone between the pit crest;
10. Mining dilution of our 8.4%; and
11. Mining losses of 6.2%.

Mining and Stacking Operations

Alhambra, through its wholly owned subsidiary Saga Creek employs approximately 360 people in its 100% owned Uzboy heap leach mine. The oxide portion of the Uzboy gold deposit is being mined as an open pit. Alhambra uses contractors for blasting and loading and hauling waste and ore. The day to day supervision of mine design, grade control and selection of ore and waste are determined by Alhambra's technical services group.

Ore mined in 2007 was from both the West and East zones. A comparison of the mining and stacking activities completed in 2006 and 2007 is summarized below.

Stacking Operations	Q4 /07	12 Months /07	Q4 /06	12 Months /06
Ore Mined, (t)	356,500	1,041,500	178,750	640,057
Waste Mined, (t)	450,975	1,588,970	347,320	1,099,555
Waste: Ore Ratio	1.27	1.53	1.94	1.72
Ore Stacked, (t)	351,000	1,011,750	183,500	628,058
Grade of Ore Stacked, (g/t)	0.77	0.91	1.34	1.37
Gold Stacked on Heaps, (g)	269,330	918,250	245,088	861,584
Recoverable Gold Stacked, (g)	188,531	642,775	171,561	603,109
* Recoverable gold estimated to be 70% over life of mine

Leaching Operations

The gold recovery method used at the Uzboy heap leach mine is typical of other heap leach projects. The ore stacked on the heaps is referred to as "run of mine" material utilizing end dumping practice. The gold is recovered using ion resin adsorption/desorption techniques and electrowinning methods. The gold recovery plant design was based on results of metallurgical testing on representative material of the oxide gold mineralization from the West and East zones of the Uzboy gold deposit. The gold mineralization at the Uzboy gold mine is separated into three main classifications: oxide, transitional and primary (sulphide).

Oxide mineralization is located at the surface of the deposit and extends to a vertical depth of approximately 50 metres. The transitional and primary (sulphide) gold mineralization is not being processed at this time. The oxide ore accounts for 100% of the ore reserves being processed.

Gold and silver are leached from the stacked ores using solutions that contain low concentrations of cyanide. The solutions are applied to the surface of the heap with drip emitters, passed through the stacked ore, collected in lined-ponds, and then passed through resin columns to adsorb the precious metals from the leach solution. Loaded resin (typically containing 5,000 grams per tonne ("g/t") of gold and 2,000 g/t of silver) is periodically removed from the columns and stripped of precious metals using strong caustic/cyanide solutions. The precious metals are then recovered from the strip solution in electrowinning cells. The precious metal sludge (referred to as "cathodic sediment") is then removed from electrowinning cells, and dried and shipped off-site for refining.

Leaching operations are performed on a year round basis. A comparison of the stacking and leaching operations in 2007 and 2006 are shown below:

Production and Sales	Q4 /07	12 Months /07	Q4 /06	12 Months /06
Gold precipitated (grams)	4,222	18,869	4,853	17,099
Gold Sales, (ozs)	4,570	18,762	5,086	16,849
Change in WIP, (ozs)	1,488	1,903	431	2,554
Gold Production, (ozs)*	6,058	20,665	5,517	19,403
To convert from grams (g) to troy ounces (oz) divide by 31.104 Gold Production defined as sales+ change in WIP

The lower grade in 2007 was primarily due to 76% of the ore stacked during the year coming from the lower grade East Zone and 24% from the higher-grade West Zone.

In 2006, 88% of the oxide ore stacked was from the West zone and 12% was from the East zone. The lower average ore grade from the East zone contributed to the lower overall average ore grade stacked on the heaps in 2006 versus 2005.

The percentage of gold to be recovered from the leaching operations is expected to average 70% over the life of the mine.

Operating Information

In the first three quarters of 2007, the Corporation continued to mine oxide gold ore from the West and East zones of the Uzboy gold deposit while carrying out its exploration program over the numerous targets discovered to date. Equipment problems suffered by the Corporation's blasting contractor in the first quarter were rectified resulting in the Corporation resuming mining operations at forecasted levels. Average per oz operating costs for the third quarter of 2007 of Cdn$396.38 were 6% higher than the average of $372.93/oz incurred during the second quarter of 2007. The Operating costs to produce an oz of gold in 2006 averaged US$334.00 per oz.

In 2007, the Corporation achieved its stacking target of stacking 1.0 million tonnes of oxide ore for leaching.

At the end of the third quarter, the Corporation had 21,557 ozs of gold as work in progress after selling 5,843 ozs. Production for the quarter (defined as gold sales plus or minus the change in work in progress) therefore totalled 6,180 ozs.

The Corporation sold 5,843 ozs of gold in the third quarter of 2007 realizing total gold sales of Cdn$4.1 million for an average selling price of Cdn$707.14. This compared to second quarter 2007 gold sales of 4,838 ozs for total gold sales of Cdn$3.5 million and an average selling price of Cdn$729.50.

Geological Setting

The Project is located in the Altynshan gold belt in Northern Kazakhstan. In Kazakhstan, this belt is referred to as the Charsk Gold Belt which hosts seven multi-million ounce gold deposits. The Project is strategically located between the Vasilkovoskoe deposit on the West and the Aksu deposits on the southeast. The Vasilkovoskoe and Aksu deposits are "World Class" multi-million ounce gold deposits are located immediately adjacent to the Project.

The former Stepnyak and Dombraly gold mines are located with the boundaries of the Uzboy Project. The Uzboy Project covers a significant portion (approximately 250 kilometres) of three mineralized structural trends that cross the Project.

The east-west Shatskaya trend crosses the northern part of the Project. This trend hosts the world-class Vasilkovoskoe gold deposit (reported to contain 11.0 million ounces) which is located approximately 12 kilometres west of the Project. The Uzboy gold deposit occurs within the Shatskaya trend. The north-south Aksu-Bailusti trend crosses the east side of the property. This trend hosts the Aksu gold deposits (reported to contain 5.0 million ounces in mineable resources and 15.0 million ounces in resources (based on Soviet estimation methodology). The former Dombraly gold mine is also located within this mineralized trend. The Aksu gold deposits are located approximately three kilometres south of the Project. The third trend crosses the property in the vicinity of the former Stepnyak mine, which was mined to a depth of 400 metres. Gold production form this mine is reported to be approximately 800,000 ounces.

Mineralization

Both disseminated and quartz vein style gold mineralization occurs within the Project. Alhambra's primary focus is disseminated style gold mineralization such as that currently being explored in the Uzboy gold deposit, the Dombraly gold deposit and at Shirotnaia. The gold mineralization in these areas are hosted in broad zone of sheared quartz-sericite-pyrite altered andesite. The zone of alteration and shearing can be up to several hundred metres wide. Localized within the zone of alteration and shearing is the gold mineralization. Faulting and lithology are important features in the localization of the gold mineralization.

The diamond drilling completed on the West and East zones of the Uzboy gold deposit to the end of December 2007 has intersected gold mineralization to depths of 415 metres and to a depth of 230 metres respectively. The gold mineralization in both zones is open at depth.

Exploration Potential

The Project was extensively explored during the Soviet times. This resulted in the location of 110 significant exploration targets including two past producing gold mines (Stepnyak and Dombraly).

The exploration model used to explore the Uzboy gold deposit and other parts of the project is the Vasilkovoskoe gold deposit located 140 kilometres to the west of the Uzboy gold deposit. This deposit was extensively explored during the Soviet period and is reported to have a resource of 11.0 million ounces of gold based on Soviet C1 and C2 resource categories.

The information on the Vasilkovoskoe deposit is not necessarily indicative of the mineralization on the Uzboy property. The Qualified Person for the Corporation has been unable to verify the information from the Vasilkovoskoe deposit. The information related to the Vasilkovoskoe deposit is stated in a report titled "Preliminary Assessment Report on the Uzboy Gold Project" Akmola Oblast, Republic of Kazakhstan, prepared by Howe for the Corporation dated March 31, 2003. This report has been filed on SEDAR.

The Uzboy gold deposit occurs within the Shatskaya trend which crosses the north half of the Uzboy Project. This trend hosts the Vasilkovoskoe deposit.

Recent Exploration Results

The exploration results generated in 2006 and 2007 have been set out in News Releases. Please see "Investors" section of this website.

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