Alhambra Resources Ltd. Announces Financial and Operating Results for Third Quarter ending September 30, 2013

Alhambra Resources Ltd. (TSX VENTURE:ALH)(PINKSHEETS:AHBRF)(FRANKFURT:A4Y)
("Alhambra" or the "Corporation"), an international gold explorer and producer,
announces its financial and operating results for the quarter ended September
30, 2013. 


HIGHLIGHTS FOR THE QUARTER:



--  Alhambra announced subsequent to the third quarter that the Corporation
    has entered into a financing agreement with a UK based investment trust
    for a C$5.0 million convertible note financing 
--  Revenue from gold sales amounted to $0.7 million based on the sale of
    506 ounces ("ozs") at an average price of $1,307/oz 
--  Cash operating costs were $1,047 per oz of gold sold 
--  Kazakhstan mining operations recorded a net loss of $0.7 million
    ($0.01/share)  
--  The Corporation recorded net cash used in operating activities of $1.1
    million ($0.01/share) and a net loss of $1.0 million ($0.01/share) 
--  The suspension of mining operations continued in the quarter 
--  Stacked 42,630 tonnes ("t") of stockpiled ore on the heaps at an average
    grade of 0.43 grams/tonne ("g/t") 
--  Gold sales were realized from the drawdown of recoverable gold inventory
    from work in progress ("WIP") 
--  The estimated recoverable gold in WIP as of September 30, 2013 was
    36,365 ozs 
--  No field work was carried out in the quarter due to financial
    constraints 
--  Reported on 800 Shirotnaia core drill assays; the results constituted
    the best drill intercepts to date from Shirotnaia 
--  Assay results on 1,793 drill samples were pending 
--  Certain claims from creditors totaling $0.7 million were filed in the
    courts of Kazakhstan against Saga Creek, the Corporation's 100% owned
    operating subsidiary in Kazakhstan, for the collection of outstanding
    accounts payable. One claim totaling approximately $0.4 million has been
    settled in full. The remaining $0.3 million owed will be re-directed
    from Saga Creek's accounts to settle this outstanding amount.



FINANCIAL HIGHLIGHTS



----------------------------------------------------------------------------
(in US$000 except                                                           
 per share                   Three Months ended           Nine Months ended 
amounts)                           September 30                September 30 
----------------------------------------------------------------------------
                             2013          2012          2013          2012 
----------------------------------------------------------------------------
Revenue from gold                                                           
 sales               $        662  $      2,447  $      2,493  $      8,080 
----------------------------------------------------------------------------
Net income (loss)          (1,021)         (365)       (2,264)       (1,637)
----------------------------------------------------------------------------
  Per share (basic                                                          
   and diluted)             (0.01)        (0.01)        (0.02)        (0.02)
----------------------------------------------------------------------------
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 
----------------------------------------------------------------------------



For the third quarter of 2013, the Corporation recognized $0.7 million in
revenue from the sale of 506 ozs of gold at an average price of $1,307 /oz. This
compares to $2.4 million in revenue from the sale of 1,452 ozs of gold at an
average price of $1,686/oz during the third quarter of 2012. Lower sales volume
and lower average gold prices were the principal reasons for the decrease in
operating results.


Kazakhstan mining operations recorded a net loss of $0.7 million for the third
quarter of 2013. This compares to net income of $0.05 million for the third
quarter of 2012. The Corporation recorded a net loss of $1.0 million ($0.01 per
share) for the third quarter of 2013. This compares to a net loss of $0.4
million ($0.01 per share) for the third quarter of 2012. 


OPERATING HIGHLIGHTS 

During the third quarter of 2013, the Corporation stacked 42,630 t of stockpiled
ore containing an average grade of 0.43 g/t Au resulting in 383 ozs of
recoverable gold being stacked on the heap leach pads. There was no waste
associated with the ore stacked. No ore or waste was mined during the same
period in 2012. As of September 30, 2013, the estimated recoverable gold
classified as WIP was 36,365 ozs. 


A contributing cause of lower gold sales for the third quarter of 2013 was the
fact that due to the lack of sufficient funds, a number of standard operating
procedures which are carried out to enhance the recovery of gold stacked on the
heap leach pads could not be maintained. These procedures need to be followed
even if there is no mining of new ore in order to maximize the recovery of WIP
gold inventory. These procedures include work done on the pads such as ripping
and fluffing, and maintenance of optimum levels of cyanide and resin.


OPERATING EXPENSES

Operating expenses consist of all costs associated with the production of gold,
(including direct costs incurred in the mining, leaching and resin stripping
processes ("process operating costs"), Mineral Extraction Tax ("MET")),
transportation and refining of the cathodic sediment. Except in periods in which
no new ore is being mined, all process operating costs are charged to WIP and
are expensed on the basis of the quantity of gold sold as a percentage of total
recoverable gold mined. In those periods in which no new ore is being mined,
certain direct mining costs and depreciation of mining equipment are expensed
directly and not charged to WIP.


Operating costs for the three months ended September 30, 2013 were $0.6 million
or $1,117/oz of gold sold as compared to $1.2 million or $831/oz of gold sold
for the three months ended September 30, 2012. The 2013 figure includes $0.01
million ($192/oz) of mining costs charged directly to operating costs for the
months in which there was no new ore mined. There was no comparable amount for
the three months ended September 30, 2012. Included in the three months 2013
operating cost amount is $0.04 million or $70/oz 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 for the third quarter were therefore
$1,047/oz (compared to $751/oz for the third quarter of 2012). 


The $0.6 million decrease in operating costs in the third quarter of 2013 as
compared to the third quarter of 2012 is due to the reduction in the quantity of
recoverable gold mined and sold during 2013. The $286/oz increase in per unit
operating costs for the third quarter of 2013 as compared to the third quarter
of 2012 is primarily the result of the $192/oz of mining costs charged directly
to operating expenses instead of charging such costs to WIP. 


CAPITAL EXPLORATION PROGRAMS

During the three months ended September 30, 2013, no field work was carried out
in Kazakhstan. This was as a result of the Corporation's lack of financial
resources. 


As of September 30, 2013, there were 1,793 Shirotnaia assay results (1,786 core
and 7 QA/QC core re-sampling) plus 2 Vasilkovskoe East rock chip sample assays
pending from the laboratory. The assays will be released once the laboratory's
outstanding account has been paid. In addition, 6,753 samples (including 887
QA/QC samples) were prepared for export as follows:




--  Shirotnaia - 2,871 (reverse circulation ("RC") samples), 
--  Zhusaly - 386 (RC samples) and 650 (soil samples), 
--  Vasilkovskoe East - 959 (soil samples), 
--  Dombraly East - 1,887 (soil samples).



Shirotnaia

During the third quarter of 2013, 800 assay results for three of 18 core holes
(3,691 metres ("m")) completed in the first half of 2012 were received (see news
release dated September 25, 2013).


Diamond drilling intersected higher-grade gold mineralization in diamond drill
hole 28-08 that yielded a weighted average grade of 4.75 g/t Au over a core
interval of 33.4 m, including 14.71 g/t Au over 10.1 m. The highest grade
interval was intersected less than 100 m below surface. Together with several
other drill intercepts in this area, this higher-grade interval defines a new
high-grade zone of gold mineralization. These results constitute the best drill
intercepts to date from Shirotnaia.


CONVERTIBLE NOTE FINANCING

Subsequent to September 30, 2013, Alhambra entered into a financing agreement
with Global Resources Investment Limited ("GRIL") for a C$5.0 million
convertible note financing (see news release dated November 12, 2013). GRIL is a
UK based investment trust established to seek and exploit investment
opportunities in the junior mining and natural resource sectors. GRIL is seeking
admission of its ordinary shares on the main market for listed securities on the
London Stock Exchange ("LSE"), where it proposes to re-register as a public
company and constitute as a UK investment trust with the name Global Resources
Investment Trust PLC ("GRIT"). GRIT expects that tis ordinary shares will be
listed for trading before the end of 2013. Alhambra and GRIL have entered into a
convertible secured promissory note agreement, whereby Alhambra would, assuming
successful listing of the GRIT shares on the LSE, subscribe for 3,080,904 GRIT
shares at a deemed value of one British pound (GBP 1.00) per GRIT share.
Alhambra will then sell the GRIT shares on the LSE to realize the private
placement proceeds. The proceeds that Alhambra eventually receives will be
dependent on the price that will be realized when the GRIT shares are sold.


In exchange for the issuance of the GRIT shares, the Corporation will issue to
GRIT, a C$5.0 million convertible secured promissory note (the "Note") and
warrants. The Note will bear interest at an annual rate of 12%, will have a term
of three years and will be secured by the Corporation's WIP gold in Kazakhstan
if and when required by GRIT. GRIT has the option to convert both the principal
and interest portions of the Note into common shares of the Corporation at
C$0.25 per common share. Alhambra has the option to pay the interest in either
cash or shares of the Corporation. The Note may be repaid at any time prior to
maturity without penalty. The Corporation also has the option to force
conversion during the term of the Note into common shares of Alhambra at a
minimum of US$0.20 per share. In connection with the Note, Alhambra will issue
warrants to purchase 5.0 million common shares of the Corporation (the
"Warrants"). The Warrants have an exercise price of C$0.30 per common share and
are exercisable for three years from the date of issue. 


The financing should achieve four things; it will strengthen the Corporation's
balance sheet, allow Alhambra to deal with its creditors, advance the
Corporation's exploration and production development strategy and minimize
shareholders' dilution in a market environment which has undervalued the
Corporation's intrinsic value.


Completion of the financing is subject to receiving approvals from the TSX
Venture Exchange and GRIT successfully listing its shares for trading on the
LSE. 


LEGAL CLAIMS AGAINST THE CORPORATION

During the third quarter, certain claims from creditors totaling approximately
$0.7 million were filed in the courts of Kazakhstan against Saga Creek for the
collection of outstanding accounts payable. One of the claims totaling
approximately $0.4 million was settled in full on October 31, 2013 while the
plaintiffs for the other claims totaling $0.3 million agreed to withdraw their
claims and enter into Settlement Agreements that would see their accounts paid
by November 15, 2013. Saga Creek was unable to satisfy the outstanding
obligation of the exploration contractors by November 15, 2013. As a result,
these creditors have re-initiated their legal remedies including having funds
re-directed from Saga Creek's bank accounts to settle the outstanding amounts.


The Corporation recognizes the desire of these creditors to protect their
ability to collect on their outstanding liabilities and is in discussion with
these creditors to defer any further action given that the Corporation is
currently pursuing financing alternatives in order that the obligations to all
creditors can be settled to everyone's mutual satisfaction.


OBJECTIVES FOR 2013

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, optimization of operating processes to enhance recovery, and the
resumption of exploration and development programs. The Corporation has
identified a number of exploration targets it wishes to drill once additional
funds have been raised. In addition the Corporation plans to begin a
pre-feasibility study directed towards bringing into production the transitional
and sulphide zones of Uzboy. When the financing that was announced subsequent to
September 30, 2013 is completed and the funds realized, the Corporation can
begin to recover from its current financial difficulties. However, in order for
the Corporation to continue as a going concern and begin to properly develop its
exploration territory, it will be necessary to complete additional financings.
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.


UNAUDITED FINANCIAL STATEMENTS AND MANAGEMENT DISCUSSION AND ANALYSIS ("MD&A")

The Corporation's third quarter 2013 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
www.sedar.com. 


ABOUT ALHAMBRA

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


Alhambra holds exploration and exploitation rights to a 2.4 million acre (9,800
km2), 100% owned license called the Uzboy Project, located in the Northern
Kazakhstan Metallogenic Province which hosts numerous world-class gold deposits.
Over 100 mineral targets, including three advanced exploration areas, are
contained within the Uzboy Project.


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
www.alhambraresources.com.


Neither the TSX Venture Exchange Inc. nor its Regulation Services Provider (as
that term is defined in the Policies of the TSX Venture Exchange Inc.) accepts
responsibility for the adequacy or accuracy of this release. 


Forward-Looking Statements 

Certain statements contained in this news release constitute "forward-looking
statements" as such term is used in applicable Canadian and US securities laws.
These statements relate to analyses and other information that are based on
forecasts of future results, estimates of amounts not yet determinable and
assumptions of management. In particular, statements regarding finalizing the
financings, the amount of proceeds to be realized on financings, re-initiation
of the stacking of ore on the heap leach pads, the resumption of exploration and
development programs, initiating the Uzboy pre-feasibility study, availability
of capital to fund ongoing projects and other factors and events described in
this news release should be viewed as forward-looking statements to the extent
that they involve estimates thereof. Any statements that express or involve
discussions with respect to predictions, expectations, beliefs, plans,
projections, objectives, assumptions or future events or performance (often, but
not always, using words or phrases such as "expects" or "does not expect", "is
expected", "anticipates" or "does not anticipate", "plans, "estimates" or
"intends", or stating that certain actions, events or results "may", "could",
"would", "might" or "will" be taken, occur or be achieved) are not statements of
historical fact and should be viewed as "forward-looking statements". Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
the Corporation to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements. Such
risks and other factors include, among others, finalizing the financings
detailed herein, the amount of proceeds to be realized from the financings, the
re-initiation of the stacking of ore on the heap leach pads, the resumption of
exploration and development programs, initiating the Uzboy pre-feasibility
study, the availability of capital to fund exploration and production
development; political, social and other risks inherent in carrying on business
in a foreign jurisdiction and such other business risks as discussed herein and
other publicly filed disclosure documents. There is no assurance the financing
outlined herein will close on such terms, or at all. Although the Corporation
has attempted to identify important factors that could cause actual actions,
events or results to differ materially from those described in forward-looking
statements, there may be other factors that cause actions, events or results not
to be as anticipated, estimated or intended. There can be no assurance that such
statements will prove to be accurate as actual results and future events could
vary or differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking
statements contained in this news release.


Forward looking statements are made based on management's beliefs, estimates and
opinions on the date the statements are made and the Corporation undertakes no
obligation to update forward-looking statements and if these beliefs, estimates
and opinions or other circumstances should change, except as required by
applicable law.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Alhambra Resources Ltd.
Ihor P. Wasylkiw
VP & Chief Information Officer
[phone]


Alhambra Resources Ltd.
Donald D. McKechnie
VP Finance & Chief Financial Officer
[phone]