Alhambra Resources Ltd. - Financial and Operating Results for First Quarter ending March 31, 2007



    CALGARY, June 7 /CNW/ - Alhambra Resources Ltd. ("Alhambra" or the
"Corporation") announces its financial and operating results for the quarter
ended March 31, 2007. Effective May 1, 2006 the Corporation declared
commercial operations for accounting purposes. As a result, the financial
statements for the first quarter of 2007 have limited comparability related to
2006. All amounts related to the financial results are expressed in Canadian
dollars unless otherwise indicated.

    
    HIGHLIGHTS
    ----------

      -  Revenue from gold sales amounted to $2,609.0 thousand based on the
         sale of 3,512 ounces
      -  Generated $616.6 thousand of cash flow and $147.5 thousand of net
         income from mining operations
      -  The Corporation recorded positive cash flow of $153.5 thousand
         ($0.00/share) and a net loss of $955.8 thousand ($0.01/share)
      -  Debt free with $1,677.7 thousand of cash and cash equivalents
      -  Spent $1,870.3 thousand on mining assets
      -  Operating costs were $388.85 per ounce
      -  Completed 6,416 metres of drilling
      -  Stacked 3,286 ounces of recoverable gold
      -  The recoverable gold in work in process as of March 31, 2007 was
         20,916 ounces
    

    OVERVIEW
    --------
    In the first quarter of 2007, equipment problems suffered by the
Corporation's blasting contractor negatively impacted the amount of ore
stacked on the heaps. The amount of material stacked fell short of the
original target of 250,000 tonnes, however adjustments to blasting operations
have been made to increase stacking. The contractor is assuring the
Corporation that it can make planned production and subsequent to March 31,
2007, three drill and blast rigs were drilling at the Uzboy gold deposit.

    
    FINANCIAL HIGHLIGHTS
    --------------------

    -------------------------------------------------------------------------
    (in C$ except per share amounts)                     Three Months ended
                                                              March 31
    -------------------------------------------------------------------------
                                                         2007           2006
    -------------------------------------------------------------------------
    Revenue from gold sales                       $ 2,608,975            N/A
    -------------------------------------------------------------------------
    Net loss                                         (955,842)      (675,744)
    -------------------------------------------------------------------------
      Per share (basic and diluted)                     (0.01)         (0.01)
    -------------------------------------------------------------------------
    Weighted average shares outstanding
    -------------------------------------------------------------------------
      Basic and diluted                            69,248,091     52,135,059
    -------------------------------------------------------------------------
    Shares outstanding at end of period            69,313,980     55,509,643
    -------------------------------------------------------------------------
    

    For the first quarter of 2007, the Corporation recorded a net loss of
$955.8 thousand, or $0.01 per basic and diluted share. This compares to a net
loss of $675.7 thousand or $0.01 per basic and diluted share in 2006. Cash
flow from operating activities for the quarter was $153.5 thousand or $0.00
per basic and diluted share as compared to cash flow used in operating
activities of $353.7 thousand or $0.01 per basic and diluted share in 2006.
This represents a positive increase in cash flow of $507.2 thousand from 2006.
    Revenue from the sale of gold amounted to $2,609.0 thousand. This was
realized from the sale of 3,512 ounces ("ozs") of gold at an average price of
$742.85 per ounce ("/oz"). The per oz operating cost for the quarter was
$388.85/oz of gold sold, being only 3% higher than the average of $376.23/oz
incurred during 2006. Alhambra continues to be optimistic that its operating
cost per oz will be reduced when normal stacking operations are resumed.
    At March 31, 2007, the Corporation had $1,677.7 thousand in cash and cash
equivalents and remained debt free. The average rates of exchange for the C$
per US$1.00 was 1.1716 for the first quarter of 2007.

    OPERATIONS REVIEW
    -----------------
    The Uzboy gold deposit hosts the West and East zones of gold
mineralization which consists of an upper layer of oxide mineralization and a
lower layer of sulphide (primary) mineralization. Currently, Alhambra is
mining only the oxide mineralization on a year-round basis. The mining
operation consists of three main activities: mining and stacking of the ore,
leaching of the ore stacked on heap leach pads and recovery of gold from
solution utilizing ion resin technology.
    During the first quarter, a total of 138,430 tonnes of waste was mined
and 123,250 tonnes of ore at a grade of 1.19 grams per tonne ("g/t") of gold
was stacked on the heap leach pads. A further 29,250 tonnes of material was
mined and moved to the ore warehouse for additional sampling to determine the
average gold grade. A decision to stack this material will be made once the
gold grade is confirmed.
    The Corporation began the quarter with 21,142 ozs of recoverable gold in
work in progress. After stacking 3,286 ozs of recoverable gold and selling
3,512 ozs, the Corporation exited the quarter with 20,916 ozs of recoverable
gold in work in progress.

    EXPLORATION PROGRAM
    -------------------
    The 2007 exploration program commenced in mid January. The program's main
focus is to continue to delineate the sulphide (primary) gold mineralization
in the West and East zones of the Uzboy gold deposit and to diamond drill five
other zones of gold mineralization. The program consists of diamond drilling,
reverse air blast circulation ("RAB") drilling and hydro-core lift ("KGK")
drilling totaling 76,500 metres ("m") and 50,000 m of trenching.
    A total of 6,416 m were drilled in the first quarter of 2007. This was
comprised of 3,177 m of diamond drilling and 3,239 m of RAB drilling.
    The main components of the exploration program conducted during the first
quarter are highlighted below.

    Uzboy Gold Deposit

    The Uzboy gold deposit is the main focus of the Corporation's 2007
exploration program. Diamond drilling commenced on the West zone in mid
January, 2007. A total of four diamond drill holes ("DDH") (1,060 m) were
completed in the West zone during the quarter. Three DDH were completed on
Section 85 which represents a 240 m step out from the gold mineralization
intersected on Section 61 in 2006. These holes failed to intersect significant
gold mineralization. DDH C691 was completed on Section 69 to test the strike
extension of the gold mineralization intersected on Section 61 in 2006. This
hole intersected two narrow intervals of lower grade gold mineralization
including one interval from 230.0 to 236.0 m that averaged 0.55 g/t of gold.
Diamond drilling down dip of these mineralized intervals is planned to test
the possibility of a southwest plunging mineralized zone.
    Exploration on the East zone consisted of 1,364 m of RAB drilling on the
northwest flank of the East zone to test intervals of gold mineralization
previously located by KGK drilling. The analytical results for the RAB
drilling are pending.

    Uzboy Extension

    During the quarter, 1,875 m of RAB drilling were completed in an area
located approximately seven kilometres northeast of the Uzboy gold deposit.
This area contains 16 gold anomalies with gold values ranging from 0.10 g/t to
3.30 g/t within an area that is 6,000 m long by 2,500 m wide. The largest of
the gold anomalies measures 3,000 m long by 700 m wide. The analytical results
for the RAB drilling are still pending.

    Shirotnaia

    During the quarter, 18 DDH totaling 2,117 m were completed over a strike
length of 1,400 m. The diamond drilling was completed to test the depth extent
of the gold mineralization outlined by the 2005 and 2006 trenching programs.
The analytical results for 12 of the 18 holes have been received.
    The preliminary interpretation of the drilling results suggests that two
mineralized zones have been located. The first mineralized zone is located
between Sections 12 and 32 (a distance of 200 m), dips steeply (75 degrees) to
the west, ranges from 10 to 70 m in thickness and has been intersected to a
depth of 125 m below surface on Section 28. DDH 28-1 returned a weighted
average gold grade of 1.79 g/t over an interval of 73 m and DDH 28-2 returned
a weighted average grade of 1.80 g/t gold over an interval of 40 m. DDH 28-2
was terminated at a depth of 142.8 m. The last sample in this hole yielded a
grade of 1.33 g/t of gold.
    DDH 24-3 is interpreted to have intersected the second zone of gold
mineralization located approximately 50 m to the east of the mineralized
interval intersected in DDH 24-1. DDH 24-3 intersected an upper interval that
averaged 7.88 g/t of gold over 4.0 m and a lower interval that averaged
3.05 g/t of gold over 24.0 m (including 16.8 g/t of gold over an interval of
4.0 m).
    The preliminary interpretation of the analytical results suggests that
the two zones of mineralization appear to be open to the northeast and is open
at depth.
    The Shirotnaia zone is a priority area in the 2007 exploration program.
Further exploration of this zone includes a combination of diamond, RAB and
KGK drilling planned for later in 2007 when drier ground conditions are
expected. Bottle roll and column leach tests are planned for the oxide gold
mineralization to determine the percentage gold recovery.

    CAPITAL EXPENDITURES
    --------------------
    In the first quarter of 2007, $1,870.3 thousand was spent on mining
assets. Of this amount, 51% or $961.8 thousand was spent on exploration and
42% or $793.9 thousand was spent on machinery and equipment at the resin
stripping plant and the Uzboy mine site. The remaining 7% or $114.6 thousand
was spent on exploration of the Dot Property and in the capitalization of
stock-based compensation.

    MANAGEMENT DISCUSSION AND ANALYSIS ("MD&A") and FINANCIAL RESULTS
    -----------------------------------------------------------------
    A full MD&A and Financial Report of the First Quarter of 2007 is
available on the Corporation's website, can be obtained on application from
the Company and is available under the Company's profile on SEDAR at
www.sedar.com.

    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.

    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 www.alhambraresources.com.

    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, geological interpretations and potential mineral recovery processes.
Forward-looking information includes disclosure regarding possible future
events, conditions or results of operations that is based on assumptions about
future economic conditions 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 has applied geological interpretation methodologies which 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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ALHAMBRA RESOURCES LTD.

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