Alhambra Resources Ltd. - Proposed Corporate Reorganization

    CALGARY, June 20 /CNW/ - Alhambra Resources Ltd. ("Alhambra" or the
"Corporation") announces that it intends to proceed with a reorganization by
way of an arrangement under the Business Corporations Act (Alberta) (the
"Arrangement") involving Alhambra, its shareholders and a newly incorporated
corporation, DOT Resources Ltd. ("DOT").
    If completed, the Arrangement will have the result of dividing Alhambra's
mineral assets between two separate publicly traded corporations. Upon
implementation of the Arrangement, Alhambra will continue to hold and operate
its gold producing assets situated in the Republic of Kazakhstan, while DOT
will hold and conduct exploration activities on Alhambra's Canadian DOT copper
property, situated near Kamloops, British Columbia ("DOT Property").

    Details of Arrangement

    Pursuant to the Arrangement:

    (a) the DOT Properties of Alhambra will be transferred to DOT in exchange
        for common shares ("DOT Common Shares") of DOT;

    (b) every Alhambra shareholder will receive one (1) new Common Share
        ("New Alhambra Common Share") of Alhambra and approximately 0.2142 of
        a DOT Common Share for every one (1) Alhambra share held on the
        effective date of the Arrangement;

    (c) DOT will complete a private placement of units comprised of one DOT
        Common Share and one half (1/2) of one DOT Common Share purchase
        warrant for aggregate proceeds up to $2,300,000.00; and

    (d) each DOT unit will have a purchase price of $0.20 per unit and will
        be comprised of one (1) DOT Common Share and one half (1/2) of one
        DOT Common Share purchase warrant, each full warrant entitling the
        holder thereof to acquire one (1) DOT Common Share for an exercise
        price of $0.35 for the term of two years from the date of issuance.
        If after the closing date of the private placement the closing
        trading price of the DOT Common Shares is equal to or exceeds $0.55
        for fifteen (15) consecutive trading days, then the expiry time of
        the DOT Common Share purchase warrants shall automatically accelerate
        to a date which is thirty (30) days following the date of a news
        release issued by DOT announcing the reduced expiry time without
        further notification made by DOT, after which the DOT Common Share
        purchase warrant shall be null and void.

    Upon completion of the Arrangement and after giving effect to the private
placement, the shareholders of Alhambra will continue to hold Alhambra in the
same proportions as their current ownership and DOT will be owned, as to
approximately 37.5% by Alhambra, as to approximately 37.5% by the Alhambra
shareholders and as to approximately 25% (assuming full subscription of the
private placement) by subscribers who acquired DOT Common Shares under the
private placement.
    Proceeds from the private placement are required to meet TSX Venture
Exchange minimum listing requirements and is anticipated to be used by DOT for
start up capital including completing a $1.1 million exploration program on
the DOT Property and for general working capital. Full information regarding
the DOT Property including a technical report, dated May 31, 2007, prepared by
Aurora Geosciences can be found on SEDAR at
    DOT will initially have the same board of directors and management as
    The Arrangement is subject to various conditions including the approval
of the Alhambra shareholders by special resolution, the Court of Queen's Bench
of Alberta and the TSX Venture Exchange Inc.
    The Arrangement will be submitted to the Alhambra shareholders for
consideration at an annual and special general meeting of the Alhambra
shareholders, contemplated to be held in either late July or early August,
2007. Alhambra has traditionally held its annual meeting in late June however
it has delayed this year's meeting in order to be able to include the
Arrangement as part of the business to be considered at the meeting. The
specific date of the meeting will be dependent upon completing all the
necessary documentation and receiving all the necessary approvals required
related to the proposed Arrangement. Shareholders of Alhambra will receive
full particulars of the proposed Arrangement by way of a Management
Information Circular in the near future.
    The reorganization is intended to enhance shareholder value as management
believes that the value of the DOT copper property is not currently being
recognized in the trading price of Alhambra's common shares. By retaining an
interest in DOT, Alhambra will still be able to participate in any increase in
the value that DOT may realize through successful exploration of its copper
property. The proposed Arrangement also allows Alhambra's current shareholders
to participate in any increase in the value of both DOT and Alhambra as they
will hold shares in two publicly traded corporations. Management also believes
that two publicly traded companies, exploring for different minerals in
different geographical jurisdictions can enable both corporations to access
capital to finance its programs that might otherwise not be available if the
assets remained in a single entity. Initially both Alhambra and DOT will have
the same board of directors and management however when deemed appropriate,
these functions will be separated to ensure that both corporations can focus
on the growth of their own respective assets.

    About Alhambra

    Alhambra is a Canadian based gold exploration and production corporation
engaged in the exploration of and production from its 100% owned Uzboy
Project. Alhambra is currently in its sixth year of operations in the Republic
of Kazakhstan.
    Alhambra common shares trade on The TSX Venture Exchange under the symbol
ALH and in Germany on the Frankfurt Open Market under the symbol A4Y. The
Corporation's website can be accessed at
    Elmer B. Stewart, MSc. P. Geol., President of Alhambra, is the
Corporation's nominated Qualified Person responsible for monitoring the
supervision and quality control of the programs completed within the Uzboy
Project. Mr. Stewart has reviewed and verified the technical information
contained in this news release.

    The TSX Venture Exchange Inc. has neither approved nor disapproved the
    information contained herein.

    This news release contains forward - looking information including but
not limited to comments regarding the timing and content of upcoming work
programs and potential mineral recovery processes. Forward - looking
information includes disclosure regarding possible future events, conditions
or results of operations that is based on assumptions and courses of action,
and therefore, involves inherent risks and uncertainties. For any forward
looking information given, management has assumed that the analytical results
it has received are reliable and the metallurgical testing methodologies
applied are consistent with industry standards. Although management has a
reasonable basis for the conclusions drawn, actual results may differ
materially from those currently anticipated in such statements. For such
statements, we claim the safe harbor for future.

For further information:

For further information: Elmer B. Stewart, President & Chief Operating
Officer, (403) 228-2855; Ihor P. Wasylkiw, Chief Information Officer, (403)
508-4953; Jim Clarke, Investor Relations, (888) 290-1335 (Toll Free)

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