Alhambra Resources Ltd. - Fourth Quarter & Year 2007 Operational Updates

    CALGARY, Jan. 17 /CNW/ - Alhambra Resources Ltd. (TSX-V: ALH) ("Alhambra"
or the "Corporation") is pleased to provide an operational update for the
fourth quarter and year 2007 on its Uzboy Project located in north central
Kazakhstan. These updates include:

    -   Stacking operations - exceeded 2007 budget
    -   Production and sales - exceeded the revised 2007 forecast
    -   Exploration program overview - drilling and trenching meterage
        exceeded forecast


    For the year ended 2007, Alhambra stacked 1,011,750 tonnes of oxide ore
("ore") on its heaps. This exceeded the Corporation's 2007 plan of stacking
1.0 million tonnes of ore.
    Mining and stacking parameters for the fourth quarter and year 2007 along
with comparative information for 2006 are set out in the table below.

    Stacking Operations           Q4/07      Q4/06    Year 2007    Year 2006
    Waste Mined, (t)            450,975    347,320    1,588,970    1,009,555
    Waste:Ore Ratio                1.27       1.94         1.53         1.72
    Ore Stacked, (t)            351,000    183,500    1,011,750      628,058
    Grade of Ore Stacked,
     (g/t)                         0.77       1.34         0.91         1.37
    Gold Stacked on Heaps,
     (g)                        269,330    245,088      918,250      861,584
    Recoverable Gold Stacked,
     (g)                        188,531    171,561      642,775      603,109
    (*) Recoverable gold estimated to be 70% over life of mine

    The majority of the ore mined during the fourth quarter 2007 came from
the East zone. Mining operations completed in the West zone was primarily
related to pushing back the bank wall to reduce the slope angle of the pit
    Waste rock ("waste") mined during the fourth quarter 2007 increased by
30% totalling 450,975 tonnes compared to 347,320 tonnes in the corresponding
quarter of 2006 mainly due to a substantial increase in ore mined. Tonnes of
waste mined increased by 57% bringing the 2007 yearly total to
1,588,970 tonnes compared to 1,009,555 tonnes in 2006.
    The waste to ore ratio for the fourth quarter is lower (35%) than in the
corresponding quarter in 2006 due to the substantial increase (100%) in ore
mined and a 30% increase in the volume of waste mined. The waste to ore ratio
for the 2007 is approximately 11% lower than that experienced in 2006.
    The waste to ore ratio in the fourth quarter 2007 is lower than that
experienced in the fourth quarter 2006 due to mining ore from the upper levels
of the East zone and completion of the push back of the pit walls in the West
zone to reduce the angle of the pit walls from 60 to 45 degrees.
    During the fourth quarter 2007, 19,000 tonnes of ore at an average grade
of 1.08 grams per tonne ("g/t") gold were mined from the West pit. This ore
was exposed as a result of pushing back of the pit walls to decrease the pit
slope angle. Ore mining operations in the West pit was suspended during the
third quarter 2007 on a temporary basis due to reaching the deeper ore which
is harder and is not being optimally fragmented by drilling and blasting
operations alone. Crushing of the ore from the West pit is required to ensure
optimal fragmentation to maximize gold recovery. It is planned that a crushing
unit will be installed in 2008.
    During the fourth quarter 2007, the Corporation stacked 351,000 tonnes of
ore from the West and East pits at an average grade of 0.77 g/t gold. The
average grade of the ore stacked during the fourth quarter 2007 was lower due
to mining lower-grade ore blocks from the East zone in the normal course of
mining operations. The amount of ore stacked in the fourth quarter 2007
increased 7% over that achieved during the third quarter 2007 when
328,000 tonnes at an average grade of 0.84 g/t gold were stacked. The higher
grade achieved in the corresponding quarter 2006 was due to mining a
substantial portion of the ore stacked from the higher-grade West zone.
    The amount of ore stacked in 2007 was up 61% versus that stacked in 2006
while the average gold grade decreased by 34%. The lower grade in 2007 was
primarily due to the fact that 77% of the ore stacked during the year was from
the lower-grade East zone, while only 23% came from the higher-grade West
    When oxide material is mined at the margins of ore blocks, this material
is stockpiled (locally referred to as an "ore warehouse") for additional
sampling to determine its gold content. During the fourth quarter 2007,
45,750 tonnes of material were stockpiled. Of the total tonnes placed in the
stockpile during the quarter, 40,250 tonnes (88%) with an average grade of
0.66 g/t gold was transferred to the heaps. In 2007, a total of 145,250 tonnes
of material was stockpiled of which 115,500 tonnes (80%) at an average grade
of 0.86 g/t gold was transferred to the heaps.


    For the year ended 2007, Alhambra exceeded its revised production and
sales forecasts of 20,000 and 18,500 ounces ("ozs"), respectively. Alhambra
sold 18,763 ozs of gold and produced 20,665 ozs.
    A summary table follows:

    Production and Sales          Q4/07   Year 2007       Q4/06    Year 2006
    Gold Sales, (ozs)             4,570      18,763       5,086       16,849
    Change in work in progress,
     (ozs)                        1,487       1,902         431        2,554
    Gold Production, (ozs)        6,057      20,665       5,517       19,403
    Gold Production defined as sales+ change in work in progress

    During the fourth quarter 2007, precious metals sales amounted to
4,570 ozs of gold and 1,588 ozs of silver. Silver is recovered as a by-product
of the gold production process. Revenue from silver sales is credited against
the cost to produce an ounce of gold. Gold sales during the fourth quarter
2007 decreased by 1,273 ozs or 22% compared to the third quarter 2007 and
440 ozs compared to that sold in the third quarter 2006.
    The Corporation began the fourth quarter 2007 with 21,557 ozs of
recoverable gold in work in progress. After stacking 6,057 ozs of recoverable
gold and selling 4,570 ozs, the Corporation exited the fourth quarter 2007
with 23,044 ozs of recoverable gold in work in progress, up 1,487 ozs.
    With the change in the recoverable gold contained in work in progress
being 1,487 ozs as of the end of 2007, production for the fourth quarter was
6,057 ozs. This compares to 3,286, 5,142 and 6,180 ozs produced in the first,
second and third quarters of 2007 respectively.


    The main focus of the exploration program in the fourth quarter of 2007
was to test the down dip and strike extension of the gold mineralization in
the West zone and complete in-fill drilling on the East zone in an attempt to
upgrade the inferred resource to the measured and indicated categories. The
main activities completed in the fourth quarter 2007 consisted of diamond
drilling, reverse air blast circulation ("RAB") drilling, hydro-core lift
("KGK") drilling and trenching. The exploration statistics for the fourth
quarter and for year 2007 are set out below.

    Exploration                        Q4/07                       Year 2007
    Diamond Drilling (m)               4,505                          15,690
    RAB Drilling (m)                   7,128                          50,379
    KGK Drilling (m)                  12,841                          23,378
    Total Drilling (m)                24,474                          89,447
    Trenching (m(3))                  23,041                          64,674

    During the fourth quarter 2007, diamond drilling concentrated on the
West zone of the Uzboy gold deposit. Diamond drilling was also completed at
the Aygabak zone located approximately seven kilometres southwest of the Uzboy
gold deposit. The area between the Uzboy gold deposit and the Kirtoge zone is
referred to as the Uzboy Extension. RAB drilling was completed on the Uzboy
Extension and at the Shirotnaia zone located immediately north of the Aksu
mine operated by KazGold. The KGK drilling was completed in the Uzboy
Extension area where overburden and wet ground conditions prevented RAB
drilling. Trenching operations were completed on the North Balusti zone.

    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., 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.

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

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