Alhambra Resources Ltd.


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CALGARY, ALBERTA - Alhambra Resources Ltd. ("Alhambra" or the "Corporation") announces its financial and operating results for the quarter ended June 30, 2014. All amounts related to the financial results are expressed in thousands of United States dollars unless otherwise indicated.

(in thousands of US$ except per share amounts) Three Months ended June 30 Six Months ended June 30

2014 2013 2014 2013

Revenue from gold sales $0 $1,290 $ $1,831
Net income (loss) (1,066) (682) (5,585) (1,243)
     Per share (basic and diluted) (0.01) (0.01) (0.05) (0.01)

Weighted average shares outstanding
     Basic and Diluted 104,132,059 104,132,059 104,132,059 104,132,059
Shares outstanding at end of period 104,132,059 104,132,059 104,132,059 104,132,059

Due to the suspension of operations, the Corporation did not sell any gold and consequently there was no gold sales revenue in the second quarter of 2014. This compares to $1.3 million in revenue from the sale of 930 ounces ("ozs") of gold at an average price of $1,387/oz during the second quarter of 2013.

Kazakhstan mining operations recorded a net loss of $0.5 million for the second quarter of 2014. This compares to a net loss of $0.2 million for the second quarter of 2013. The Corporation recorded a net loss of $1.1 million ($0.01 per basic and diluted share) for the second quarter of 2014. This compares to a net loss of $0.7 million ($0.01 per basic and diluted share) for the second quarter of 2013.


During the second quarter of 2014, no fresh ore was stacked on its heap leach pads nor was any waste mined during the same period. As of June 30, 2014, the estimated recoverable gold classified as WIP was 30,000 ozs.

As previously announced, the Corporation is pursuing a number of financing alternatives. Should a financing be successfully concluded, a portion of the proceeds will go towards resuming the mining of ore.


Despite having suspended operations, the Corporation does incur some fixed operating costs. Under normal operating conditions these costs would be charged to WIP and expensed as per the Corporation's accounting policy. These fixed operating costs totaled $0.2 million for the three months ended June 30, 2014. In the three months ended June 30, 2013 the Corporation expensed $0.9 million in cost of sales or $1,018/oz of gold sold.

The 2013 figure includes $0.1 million ($105/oz) of mining costs charged directly to operating costs for the months in which there was no new ore mined. Also included in cost of sales for the three months ended June 30, 2013, was $0.07 million or $72/oz of costs related to the amortization of the bump-up to fair value from the estimated cost of WIP on re-valuation on September 15, 2009. Cash operating costs were therefore $946/oz.


During the three months ended June 30, 2014, no field work was carried out in Kazakhstan. This was as a result of the Corporation's lack of financial resources.


During the three months ended June 30, 2014 the Corporation completed the issue of C$0.25 million in convertible notes (the "Notes") and 0.25 million warrants (the "Warrants"). In consideration for issuing the Notes and Warrants, the Corporation received C$0.25 million in cash.

With the completion of the C$0.25 million financing during the second quarter of 2014, the Corporation has now completed in 2014 a total financing of C$5.65 million in convertible notes (the "Notes") and 5.65 million warrants (the "Warrants"). The Notes have a term of three years from the date of issue with interest calculated at a rate of 12% per annum. In consideration for issuing the Notes and Warrants, the Corporation received C$0.65 million in cash and 2,764,500 ordinary shares of Global Resources Investment Trust plc ("GRIT") at a deemed price of 1 per GRIT share. At the time the Corporation sells the 2,764,500 of GRIT ordinary shares, the terms related to C$0.65 million in Notes that were issued for cash require that the Corporation repay any principal balance plus accrued interest outstanding plus C$0.0325 million in early redemption fees. Upon repayment, any Warrants then outstanding related to the C$0.65 million in Notes will expire.

While to date there have been some trades of GRIT shares on the London Stock Exchange, the trading activity has been very limited and sporadic. GRIT does however report publicly the net asset value per share ("NAV") daily. As of June 30 and August 27, 2014 the NAV of the GRIT ordinary shares as reported by GRIT was 0.6953 and 0.6985 per share, respectively. The GRIT shares however have actually traded at prices ranging from 0.30 and 0.70 per share with the majority of ordinary shares trading at or near the bottom of that range.

The Corporation's investment in the GRIT shares is classified available-for-sale and is measured with mark-to-market gains and losses recognized in other comprehensive income ("OCI") and accumulated in the investment revaluation reserve within equity until the GRIT shares are derecognized or there is objective evidence that the GRIT shares are impaired. When there is objective evidence that the value of the GRIT shares is impaired, the cumulative loss that had been previously recognized in OCI is reclassified to loss for the period. While there has been virtually no trading in the GRIT ordinary shares during the six months ended June 30, 2014, the Corporation has used 0.30 as the price in determining the carrying value of its investment in GRIT ordinary shares which is reflective of trading subsequent to June 30, 2014. As a result, the Corporation has charged $3.2 million as an impairment amount to its comprehensive income. For additional details, see the Corporation's second quarter financial statements.


As of June 30, 2014 there were a number of outstanding creditor actions which had been filed against Saga Creek and there were unpaid salaries which had been securitized by the property of the Corporation.

For details related to these legal challenges, see the Corporation's second quarter 2014 financial statements and MD&A.


On behalf of the Board of Directors of Alhambra, Mr. Komarnicki, Chairman of the Board and Chief Executive Officer of the Corporation announces that effective August 31, 2014, Mr. Patrick Highsmith has resigned as a Director of the Corporation for personal reasons including his expanding professional responsibilities.

"We would like to thank Patrick for his contributions to Alhambra and we wish him well," stated Mr. Komarnicki.


Currently Alhambra's efforts are focused on arranging financing, the use of proceeds from which will be directed towards the settlement of outstanding accounts payable, the re-initiation of the stacking of ore on the heap leach pads and the resumption of exploration and development programs. While the Corporation has been successful in the past, there is no guarantee that the Corporation will be successful in the future in raising sufficient funds to continue as a going concern.


The Corporation's second quarter 2014 financial statements and MD&A are available on the Corporation's website, can be obtained on application from the Corporation and are available under the Corporation's profile on SEDAR at


Alhambra is a Canadian based international exploration and production corporation in Kazakhstan.

Alhambra common shares trade in Canada on The TSX Venture Exchange under the symbol ALH, in the United States on the Over-The-Counter Pink Sheets Market under the symbol AHBRF and in Germany on the Frankfurt Open Market under the symbol A4Y. The Corporation's website can be accessed at

For further information please contact:
Ihor P. Wasylkiw
VP & Chief Information Officer
+1 (403) 508-4953
Donald D. McKechnie
Vice President Finance and CFO
+1 (403) 228-2855 (Toll Free)

Forward-Looking Statements

Alhambra Resources Ltd.
Head Office Suite 3, 4015 - 1St Street S.E. Calgary, Alberta, Canada T2G 4X7
Phone: (403) 228-2855 Fax: (403) 228-2865 E-mail: