Kazakhstan Court Overturns US$1.6 Million Historical Cost Assessment and Will be Re-considering Corporate Income Tax Assessment October 19, 2011

CALGARY, Alberta – Alhambra Resources Ltd. (TSX-V: ALH) (“Alhambra” or the “Corporation”), an international gold explorer and producer, announces that on September 27, 2011, the Cassation Chamber of the Akmola Oblast Court in Kazakhstan (the “Cassation Court”) overturned the decision of the Appeal Court of the Akmola Oblast with regard to the tax assessment as related to Historical Costs put forth by the city of Stepnagorsk tax office (the “Tax Office”) filed against the Corporation’s 100% owned operating subsidiary, Saga Creek Gold Company LLP (“Saga Creek”), and sent back to the lower court the Corporate Income Tax assessment for re-consideration (see News Release dated August 26, 2011).

HIGHLIGHTS

A copy of the Cassation Court’s ruling was received on October 5, 2011. While the Corporation is still interpreting and analyzing the legal and financial implications of the Cassation Court’s ruling, the decisions made are as follows:

• The 2009 assessment for Historical Costs amounting to approximately US$1.6 million was cancelled,
• The assessment for Corporate Income Tax (“CIT”) amounting to approximately US$0.4 million was cancelled and sent back to the lower court for review and re-consideration by a different judge,
• The assessment for Mineral Extraction Tax (“MET”) in the amount of approximately US$1.0 million was upheld.

“We are extremely happy with the ruling of the Cassation Court,” stated John J. Komarnicki, Chairman and CEO of Alhambra who was in the courtroom in Kazakhstan when the ruling was announced. “The court’s ruling on Historical Costs was in line with our understanding and interpretation of the law. Regarding the other two aspects of the assessment, we continue to believe our legal position is correct, and we are working with our legal counsel to fully understand the decision and determine our next steps.”

For the full release, please download a PDF version here or visit Alhambra’s official Investor Relations site.