Alhambra Resources Ltd. - Financial and Operating Results for First Quarter ending March 31, 2008

    CALGARY, June 2 /CNW/ - Alhambra Resources Ltd. ("Alhambra" or the
"Corporation") announces its financial and operating results for the first
quarter ended March 31, 2008. All amounts related to the financial results are
expressed in United States dollars unless otherwise indicated. Previous
quarter financial information has always been expressed in Canadian dollars.

    At December 31, 2007, the Corporation changed its reporting currency from
Canadian dollars to United States dollars as it believes that the United
States dollar is more representative of the industry that it operates within
as well as the location where the majority of its assets are located. The
change was made retroactive.

    -   Revenue from gold sales amounted to $2.9 million on the sale of
        3,140 ounces
    -   Generated $0.2 million of funds flow and $0.3 million of net income
        from mining operations
    -   The Corporation utilized $0.1 million ($0.00/share) in funds flow and
        incurred a net loss of $0.8 million ($0.01/share)
    -   Debt free with $0.8 million of cash and cash equivalents
    -   Spent $1.4 million on its mining projects
    -   Operating costs were $563 per ounce sold
    -   Completed 7,774 metres of drilling
    -   Stacked 3,376 ounces of recoverable gold
    -   The recoverable gold in work in process as of March 31, 2008 was
        23,280 ounces

    Operations at Alhambra's 100% owned Kazakhstan subsidiary, Saga Creek
Gold Company LLP ("Saga Creek") are seasonal such that given no other
operational issues, it is expected that the gold sales during the cold weather
months will be less than other months. As a result, monthly sales of gold
during the months of December through May will be less than during other
months of the year.
    In the first quarter of 2008, the amount of gold stacked was in line with
what the Corporation had expected and the amount of gold sold was marginally
below expectations. While the amount of gold stacked increased by 3% relative
to the first quarter of 2007, sales were down by 11% versus the first quarter
of 2007. Sales were down due to two reasons. The first reason was due to
mining only of the lower average gold grade ore from the Uzboy East zone. In
the first quarter of 2007, a large proportion of the ore mined was sourced
from the higher average gold grade ore from the Uzboy West zone. As mining in
the West zone reached depths where the ore to be mined became harder, using
this ore was suspended until such time as a crushing unit could be installed
to ensure optimal fragmentation. A crushing unit has arrived in Kazakhstan and
Alhambra expects commissioning to commence before the end of June. The second
reason was the exceptionally cold weather conditions which occurred in the
first quarter of 2008.


    (in US$ except per share amounts)            Three Months ended March 31
                                                       2008          2007
                                                       ----          ----
    Revenue from gold sales                       $  2,899,994  $  2,226,779
    Net loss                                          (815,720)     (598,877)
      Per share (basic and diluted)                      (0.01)        (0.01)
    Weighted average shares outstanding
      Basic and diluted                             75,578,147    69,248,091
    Shares outstanding at end of period             75,578,147    69,313,980

    For the first quarter of 2008, the Corporation recorded a net loss of
$0.8 million, or $0.01 per basic and diluted share. This compares to a net
loss of $0.6 million or $0.01 per basic and diluted share in 2007. Funds flow
utilized in operating activities for the quarter was $0.1 million or $0.00 per
share as compared to funds flow provided from operating activities of
$0.2 million or $0.01 per share in 2007. This represents a decrease in funds
flow of $0.3 million from the first quarter of 2007.
    Revenue from the sale of gold amounted to $2.9 million. This was realized
from the sale of 3,140 ounces ("ozs") of gold at an average price of $923.56
per ounce ("/oz"). The per oz operating cost for the first quarter of 2008 was
$563.37/oz of gold sold. This was higher than the $331.88/oz incurred during
the first 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. Alhambra anticipates that as
production and sales continue to increase in subsequent quarters, 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.

    During the first quarter of 2007, a total of 453,798 tonnes of waste was
mined and 199,500 tonnes of ore at a grade of 0.75 grams per tonne ("g/t") of
gold was stacked on the heap leach pads.
    The Corporation began the quarter with 23,044 ozs of recoverable gold in
work in progress. After stacking 3,376 ozs of recoverable gold and selling
3,140 ozs, the Corporation exited the quarter with 23,280 ozs of recoverable
gold in work in progress.

    In the first quarter of 2008, Alhambra spent over $1.2 million on
exploring the Uzboy gold deposit and on the Shirotnaia zone. The drilling
program consisted of diamond drilling and reverse air blast circulation
("RAB") drilling. A total of 7,774 metres ("m') were drilled, 4,923 m of
diamond drilling and 2,851 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 was the primary focus of Alhambra's exploration
program during the first quarter of 2008. Six diamond drill holes ("DDH") for
a total of 2,726 m were completed to test the strike and dip extensions of the
mineralized intervals intersected in 2007.
    The results of the drilling show that the gold mineralization remains
open to the northeast and at depth in the central part of the West zone,
however, the limits of the gold mineralization in the southwest portion of the
West zone appear to have been delineated.
    A total of three DDH were completed to test oxide and primary gold
mineralization on the southwest end of the East zone. DDH 143 on the East zone
of the Uzboy gold deposit intersected a thick interval of gold mineralization
which represents one of the highest grade intervals recorded from the East
zone and is open at depth and along strike to the southwest. This hole
contains numerous higher-grade intervals of gold mineralization which is not
typical for the East zone. The gold mineralization in the East zone is open to
the northeast and the southwest as well at depth.
    In addition, six DDH (1,846 m) were completed to collect the samples for
metallurgical testing. The objective of this test work is to maximize gold
recovery, optimize the reagent consumptions and further define the processing
methodology. The test work is to be conducted by SGS Lakefield located in
Cornwall, England.


    The 100% Alhambra held Shirotnaia zone is located approximately three
kilometers ("kms") north of the KazakhGold Limited ("KazakhGold") Aksu gold
and uranium deposits. The Aksu deposits are currently being mined.
    The focus of the exploration program completed in the first quarter of
2008 is the result of a deep geochemical survey that was completed in 2007.
This survey was completed from the south end of Alhambra's Uzboy Project
boundary, which is located beside the mining allotment held by KazakhGold, to
the north over an 11 km long trend. The analytical results for the first half
of the survey located three large gold anomalies. Two of the large anomalies
coincide with the fault system that controls the gold deposit located within
the mining allotment held by KazakhGold. These two gold anomalies extend from
the Shirotnaia zone onto the mining allotment held by KazakhGold and are
interpreted to be extensions of the gold deposit.
    This survey also located a third large gold anomaly approximately 800 m
northeast of the area of diamond drilling completed in 2007. The analytical
results for the northern half of the deep geochemical survey are pending.
    Exploration completed in the first quarter of 2008 consisted of RAB
drilling on the two gold anomalies that are interpreted to be the extensions
of the KazakhGold gold deposit to further define the grade distribution and
shape of these anomalies.
    The Corporation has temporarily suspended drilling to allow receipt of
all outstanding analytical results and to compile the technical information
for each of the zones prior to commencement of further drilling activities. In
addition, Alhambra is assessing all data received from the geophysical survey.
This will allow the Corporation to explore its large license area more cost
effectively. Diamond drilling is expected to resume in the third quarter.

    In the first quarter of 2008, $1.4 million was spent on mining projects.
Of this amount, 86% or $1.2 million was spent on exploration and 14% or
$0.2 million was spent on capital projects.

    A full MD&A and Financial Report of the First Quarter of 2008 is
available on the Corporation's website, can be obtained on application from
the Company and is available under Alhambra's profile on SEDAR at
    Elmer B. Stewart, MSc. P. Geol., a Director of Alhambra, is the
Corporation's nominated Qualified Person and has reviewed and verified the
technical information contained in this news release.

    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
    The TSX Venture Exchange Inc. has neither approved nor disapproved the
information contained herein. For further information please contact:

    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, (888) 290-1335 (Toll Free)

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