Alhambra Resources Ltd. - Financial and Operating Results for Second Quarter ending June 30, 2008



    CALGARY, Sept. 2 /CNW/ - Alhambra Resources Ltd. ("Alhambra" or the
"Corporation") announces its financial and operating results for the quarter
ended June 30, 2008. All amounts related to the financial results are
expressed in United States dollars unless otherwise indicated.

    
    HIGHLIGHTS:
    -----------
    -   Revenue from gold sales amounted to $2.9 million based on the sale of
        3,272 ounces
    -   Generated $0.7 million of positive funds flow and marginal net income
        from mining operations
    -   The Corporation recorded funds flow provided from operating
        activities of $0.2 million ($0.00/share) and a net loss of
        $1.0 million ($0.01/share)
    -   Received an updated National Instrument 43-101 reserve estimate
    -   Spent $2.0 million on capital expenditures of which $0.7 million was
        on exploration
    -   Cash operating costs were $589.86 per ounce of gold sold
    -   Completed 15,306 metres of Reverse Air Blast drilling
    -   Stacked 4,116 ounces of recoverable gold
    -   The recoverable gold in work in process as of June 30, 2008 was
        24,124 ounces
    -   $0.7 million in exploration capital planned for second half of 2008

    OVERVIEW
    --------
    The crushing unit was commissioned at the Uzboy gold deposit in the second
quarter of 2008. This unit is being used to crush the higher grade oxide gold
ore from the West zone of the Uzboy gold deposit. It will ensure optimal
crushing and it is expected that blending of the ore from both the West and
East zones will lead to an overall higher average gold grade.

    FINANCIAL HIGHLIGHTS
    --------------------
    -------------------------------------------------------------------------
    (in US$ except per       Three Months ended         Six Months ended
     share amounts)                June 30                   June 30
    -------------------------------------------------------------------------
                              2008         2007         2008         2007
                              ----         ----         ----         ----
    -------------------------------------------------------------------------
    Revenue from gold
     sales                $ 2,927,788  $ 3,215,853  $ 5,827,782  $ 5,442,632
    -------------------------------------------------------------------------
    Net loss                 (973,943)    (871,412)  (1,789,663)  (1,470,289)
    -------------------------------------------------------------------------
      Per share (basic
       and diluted)             (0.01)       (0.01)       (0.02)       (0.02)
    -------------------------------------------------------------------------
    Weighted average
     shares outstanding
    -------------------------------------------------------------------------
      Basic and diluted    75,676,609   69,771,837   75,627,378   69,511,411
    -------------------------------------------------------------------------
    Shares outstanding
     at end of period      75,774,147   70,408,980   75,774,147   70,408,980
    -------------------------------------------------------------------------
    

    For the second quarter of 2008, the Corporation recorded a net loss of
$1.0 million, or $0.01 per basic and diluted share. This compares to a loss of
$0.9 million or $0.01 per basic and diluted share in 2007. Funds flow provided
from operating activities for the quarter was $0.2 million or $0.00 per basic
and diluted share as compared to funds flow utilized in operations of
$0.1 million or $0.00 per basic and diluted share in 2007. This represents a
positive increase of just over $0.2 million.
    Revenue from the sale of gold amounted to $2.9 million. This was realized
from the sale of 3,272 ounces ("ozs") of gold at an average price of $894.80
per ounce ("/oz"). The per oz operating cost for the second quarter of 2008
was $589.86/oz sold. This was higher than the $339.81/oz incurred during the
second quarter of 2007. This per unit operating cost increase was due to three
reasons: a lower average gold grade ore mined, a decrease in gold sales and a
general escalation of costs in Kazakhstan. As mentioned in the first quarter
2008, Alhambra anticipates that as production and sales continue to increase
in the third and fourth quarters of 2008, the unit operating costs will
decline. However, mining activity is increasing in the mining business in
Kazakhstan which has resulted in upward pressure on costs of goods and
services.

    
    OPERATIONS PREVIEW
    ------------------
    
    During the second quarter of 2008, a total of 510,128 tonnes of waste was
mined and 212,250 tonnes of ore at a grade of 0.86 grams per tonne ("g/t") of
gold was stacked on the heap leach pads. This gold grade is 21% lower than
that achieved in the second quarter of 2007, but is 6% higher than that
achieved in the first quarter of 2008.
    Alhambra began the quarter with 23,280 ozs of recoverable gold in work in
progress and exited the quarter with 24,124 ozs after selling 3,272 ozs.
Production for the quarter (defined as gold sales plus or minus the change in
work in progress) totaled 4,116 ozs.
    For the six months ended June 30, 2008, the Company produced 7,492 ozs of
gold and sold 6,412 ozs of gold.

    
    UPDATED RESERVE ESTIMATE
    ------------------------
    
    In the second quarter of 2008, the Corporation received an updated
independent National Instrument 43-101 compliant reserve estimate from ACA
Howe International Ltd. ("Howe"). This estimate is for the oxide and
transitional zones of the Uzboy gold deposit with an effective date of
December 31, 2007. The Uzboy gold deposit consists of three distinct styles of
gold mineralization, being the upper oxide zone, a transitional zone and a
lower primary zone for the West and East zones. This updated reserve estimate
was filed on Sedar and can be accessed at www.sedar.com.

    
    EXPLORATION PREVIEW
    -------------------
    
    In the second quarter, Alhambra spent $0.7 million exploring the Uzboy
gold deposit and the Shirotnaia zone. At the end of the first quarter,
Alhambra shifted the focus of its exploration program to allow geophysical
exploration of the main target areas prior to testing by diamond drilling.
Yet, in the second quarter, Alhambra's drilling program consisted of
15,306 metres ("m") of Reverse Air Blast ("RAB") drilling.
    Certain results related to the activities discussed below have been
previously released by way of news releases made by the Corporation.

    
    1.  Uzboy Gold Deposit

    Diamond Drilling
    

    The logging and sampling of 11 diamond drill holes (2,553 m) completed
during the first quarter of 2008 was completed in the second quarter of 2008.
The analytical results for these samples are expected shortly.

    Geophysical Surveys

    The Uzboy gold deposit is characterized by sericite-pyrite-carbonate
alteration and exhibits a strong structural control (faulting and shearing).
These features are being used to guide the exploration for other zones of gold
mineralization within the area surrounding the Uzboy gold deposit. During the
quarter, a total field magnetometer survey was completed over a 132 square
kilometre ("km(s)") area (approximately 17 kms long by 8 kms wide) that
extended from the Uzboy gold deposit southwest towards the Aygabak zone. The
objective of this work was to outline zones of metasomatic alteration,
faulting and shearing and andesite that could host additional zones of gold
mineralization. The preliminary results of the total field magnetometer survey
are being compiled and are expected to be received in September. Based on the
interpretation of this work, additional geophysical surveys consisting of
Induced Polarization/Resistivity ("IP") are planned over areas interpreted to
be underlain by andesite that demonstrate alteration and faulting/shearing.
    At the end of March, 2008 the diamond drilling program on the Uzboy
Project was suspended to allow receipt of all outstanding analytical results,
compile the technical information for the Uzboy, Dombraly and Shirotnaia areas
and completion of geophysical surveys prior to commencement of further diamond
drilling activities.

    Metallurgical Test Work

    The work program related to the metallurgical test work to be completed
on the primary gold mineralization of the Uzboy gold deposit was finalized
during the second quarter. The metallurgical test work will be completed by
SGS Lakefield located in Cornwall, UK and Kazmechanobr, a certified
metallurgical laboratory in the Republic of Kazakhstan. The regulatory process
related to mineral project development in Kazakhstan requires certification by
geological engineering and metallurgical companies that are approved by the
Government of Kazakhstan. The metallurgical test work program consists of the
collection of three representative samples of the primary gold mineralization.
The samples will cover a grade range from 1.0 to 5.0 g/t gold to reflect the
open pit and underground development potential of the Uzboy gold deposit.

    RAB Drilling

    During the quarter, a total of 2,522 m in 416 holes of RAB drilling was
completed in an area located approximately 450 m northeast of the East zone of
the Uzboy gold deposit. This work was completed to test the interpreted strike
extension of several narrow intervals of low-grade oxide gold mineralization
located in 2007. Analytical results for these RAB holes are pending.

    
    2.  Shirotnaia Zone

    Bedrock Geochemical Survey
    

    During the second quarter, a total of 10,758 m in 1,850 holes of RAB
drilling was completed to delineate the dimensions of three bedrock gold
anomalies discovered in late 2007 and in the first quarter of 2008 and to
explore the eastern portion of the Shirotnaia zone.
    The Shirotnaia zone covers a 20 km strike length of a major flexure in
the Aksu-Balusti Mineral Trend that hosts the gold and uranium deposits
currently being mined at Aksu.
    The bedrock geochemical survey completed during the quarter located three
new gold anomalies and has delineated the dimensions of several other
previously discovered anomalies. These anomalies were outlined using a
0.05 g/t gold cut-off.
    The centres of the three new bedrock geochemical gold anomalies are
located approximately 6 kms east of the Shirotnaia diamond drilling discovery 
announced in 2007. These anomalies cover a 6 km strike length of the northwest
trending Atansorsky Fault zone. The maximum width of the largest anomaly is
approximately 1.5 kms.
    Two shorter and narrower parallel gold anomalies occur to the north and
south of the larger anomaly. Gold values within these anomalies range from
0.05 g/t to a maximum of 1.65 g/t.
    The surface dimensions of the two bedrock geochemical gold anomalies
discovered during the first quarter of 2008 located northwest of the Quartzite
Hills gold deposit were further defined during the quarter. Gold values within
these two anomalies range from 0.05 to 1.45 g/t. These anomalies are
interpreted to be located along the same faults that host the Quartzite Hills
gold deposit.
    The analytical results for the bedrock geochemical sampling program for
the northern portion of the Shirotnaia zone failed to locate anomalous
concentrations of gold.

    Geophysical Surveys

    The gold mineralization intersected by diamond drilling at Shirotnaia in
2007 exhibits a strong structural control (faulting and shearing) and is
hosted in andesite that exhibits intense pyrite-sericite-carbonate alteration.
These characteristics of the gold mineralization are being used to guide the
future exploration for other zones of gold mineralization that could occur
within the Shirotnaia zone. A total field magnetometer survey was commenced
during the quarter to outline zones of metasomatic alteration, faulting and
shearing and andesite that could host additional zones of gold mineralization.
The area surveyed covers a 287 square kms (approximately 20 kms long by 14 kms
wide) area of the major flexure in the Aksu-Balusti Mineral Trend. The
preliminary results of the total field magnetometer survey are expected in the
third quarter of 2008.

    Topographic Survey

    During the quarter, a detailed topographic survey was completed over a
portion of the Shirotnaia zone. This survey is required to comply with the
regulations related to mineral exploration in Kazakhstan.

    
    3.  Aygabak and Kirtoge

    A limited RAB drilling program was completed on both zones to test the
results of a limited geophysical exploration program completed in late 2007. A
total of 2,026 m were completed in 295 holes on both zones. Analytical results
for these samples are pending.

    CAPITAL EXPENDITURES
    --------------------
    Expenditures on mining assets for the three months ended June 30, 2008
totaled $2.0 million. Of this total, $0.7 million was spent on exploration
with the remaining $1.3 million spent on capital projects. The majority of the
$1.3 million spent on capital projects was for the acquisition of the crushing
unit.

    EXPLORATION PROGRAM FOR REMAINDER OF 2008
    -----------------------------------------
    
    Subsequent to the end of the second quarter, Alhambra modified its 2008
exploration to reflect a change in exploration techniques and methodologies to
be used on the Uzboy gold project. During the balance of 2008, Alhambra plans
to focus its exploration efforts on completion of geophysical surveys,
delineation of bedrock geochemical anomalies at Shirotnaia, additional RAB
drilling at Dombraly and additional metallurgical test work on the primary
(sulphide) gold mineralization from the East and West zones of the Uzboy gold
deposit.
    It is expected that the above planned activities should be completed by
the end of 2008 at an estimated cost of approximately $0.7 million. The
results and interpretation of this work should form the basis for the 2009
exploration budget for the Uzboy Project.

    
    MANAGEMENT DISCUSSION AND ANALYSIS ("MD&A") and FINANCIAL RESULTS
    -----------------------------------------------------------------
    
    A full MD&A and Financial Report of the Second Quarter of 2008 is
available on the Corporation's website, can be obtained on application from
the Company and is available under the Corporation's profile on SEDAR at
www.sedar.com.
    Elmer B. Stewart, MSc. P. Geol., a director of Alhambra and a technical
consultant, 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 celebrating its seventh year of operations in
the Republic of Kazakhstan.
    Alhambra shares trade in Canada 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.

    Forward-Looking Statements
    

    This press release includes certain "forward-looking statements" within
the meaning of the United States Private Securities Litigation Reform Act of
1995. All statements, other than statements of historical fact, included
herein, including without limitation, statements regarding potential
mineralization, exploration results and timing and future plans, actions,
objectives and achievements of Alhambra, are forward-looking statements.
Forward-looking statements involve various risks and uncertainties. There can
be no assurance that such statements will prove to be accurate, and actual
results and future events could differ materially from those anticipated in
such statements.
    Important factors that could cause actual results to differ materially
from Alhambra's expectations include fluctuations in gold prices and currency
exchange rates; uncertainties relating to interpretation of drill results and
the geology, continuity and grade of mineral deposits, the possibility of
adverse developments in the financial markets generally, and other risks and
uncertainties disclosed under the heading "Cautionary Note Concerning Reserve
and Resource Estimates" and in other information released by Alhambra and
filed with the appropriate regulatory agencies.





For further information:

For further information: Ihor P. Wasylkiw, Chief Information Officer,
(403) 508-4953; Jim Clarke, Investor Relations, 1-888-290-1335 (Toll Free)

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ALHAMBRA RESOURCES LTD.

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