Alhambra Resources Ltd.: Financial and Operating Results for Second Quarter Ending June 30, 2013

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


HIGHLIGHTS FOR THE QUARTER:



--  Alhambra has been informed by its legal counsel that an extension to
    December 25, 2013 to raise funds has been approved by the Kazakhstan
    Ministry of Industry and New Technology ("MINT") 
--  Revenue from gold sales amounted to $1.3 million based on the sale of
    930 ounces ("ozs") at an average price of $1,387/oz 
--  Cash operating costs were $946 per oz of gold sold 
--  Kazakhstan mining operations recorded a net loss of $0.2 million
    ($0.00/share)  
--  The Corporation recorded net cash used in operating activities of $1.1
    million ($0.01/share) and a net loss of $0.7 million ($0.01/share) 
--  The suspension of mining operations continued in the quarter; no fresh
    ore was stacked on the heaps 
--  Gold sales were realized from the drawdown of recoverable gold inventory
    from work in progress ("WIP") 
--  The estimated recoverable gold in WIP as of June 30, 2013 was 36,488 ozs
--  No field work was carried out in the quarter due to financial
    constraints 
--  Continued pursuing various financing alternatives  
--  Assay results on 2,593 drill samples were pending 
--  6,755 drill and soil samples were prepared for export for analysis 
--  Subsequent to June 30, 2013, three 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



FINANCIAL HIGHLIGHTS



----------------------------------------------------------------------------
(in US$000 except                                                           
 per share               Three Months ended           Six Months ended      
amounts)                       June 30                     June 30          
----------------------------------------------------------------------------
                             2013          2012          2013          2012 
----------------------------------------------------------------------------
Revenue from gold                                                           
 sales               $      1,290  $      2,506  $      1,831  $      5,633 
----------------------------------------------------------------------------
Net income (loss)            (682)       (1,112)       (1,243)       (1,272)
----------------------------------------------------------------------------
  Per share (basic                                                          
   and diluted)             (0.01)        (0.01)        (0.01)        (0.01)
----------------------------------------------------------------------------
Weighted average                                                            
 shares outstanding                                                         
----------------------------------------------------------------------------
  Basic and diluted   104,132,059   104,128,123   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 second quarter of 2013, the Corporation recognized $1.3 million in
revenue from the sale of 930 ozs of gold at an average price of $1,387/oz. This
compares to $2.5 million in revenue from the sale of 1,542 ozs of gold at an
average price of $1,625/oz during the second quarter of 2012.


Kazakhstan mining operations recorded a net loss of $0.2 million for the second
quarter of 2013. This compares to a net loss of $0.5 million for the second
quarter of 2012. The Corporation recorded a net loss of $0.7 million ($0.01 per
basic and diluted share) for the second quarter of 2013. This compares to a net
loss of $1.1 million ($0.01 per basic and diluted share) for the second quarter
of 2012. 


OPERATING HIGHLIGHTS 

During the second quarter of 2013, no fresh ore was stacked on its heap leach
pads (2012 - 107,800 tonnes ("t')) nor was any waste mined during the same
period (2012 - 81,999 t). Gold sales were realized from the drawdown of
recoverable gold inventory from WIP. As of June 30, 2013, the estimated
recoverable gold classified as WIP was 36,488 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. 


The decrease in sales volume for the second quarter of 2013 was as a result of
the Corporation not mining any fresh ore to stack on the heaps plus the
inability to maintain optimum operating conditions (such as ripping and fluffing
of leach pads, maintenance of optimum levels of cyanide and resin) due to the
Corporation's current financial constraints. Revenues from gold sales were also
negatively impacted by a 15% decline in the average price of gold in the second
quarter of 2013 as compared to the second quarter of 2012. 


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 June 30, 2013 were $0.9 million or
$1,018/oz of gold sold as compared to $1.2 million or $789/oz of gold sold for
the three months ended June 30, 2012. 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. There was no comparable amount for the three
months ended June 30, 2012. Included in the three months 2013 operating cost
amount is $0.07 million or $72/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 second quarter were therefore $946/oz (compared to
$703/oz for the second quarter of 2012). 


The $0.3 million decrease in operating costs in the second quarter of 2013 as
compared to the second quarter of 2012 is due to the reduction in the quantity
of recoverable gold mined and sold during 2013. The $243/oz increase in per unit
operating costs for the second quarter of 2013 as compared to the second quarter
of 2012 is primarily the result of the $105/oz of mining costs charged directly
to operating expenses instead of charging such costs to WIP. 


Operating costs for the six months ended June 30, 2013 totaled $1.4 million or
$1,069/oz of gold sold as compared to $2.9 million or $844/oz of gold sold for
the same period in 2012. The 2013 figure includes $0.2 million ($160/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 six months ended
June 30, 2012. Included in the six months ended June 30, 2013 operating cost
amount is $0.1 million or $73/oz (six months ended June 30, 2012 - $0.2 million
or $72/oz of gold sold) related to the amortization of the bump-up to fair value
from the estimated cost of WIP on re-valuation in 2009. Cash operating costs for
the six months ended June 30, 2013 were therefore $966/oz as compared to $772/oz
for the six months ended June 30, 2012. 


CAPITAL EXPLORATION PROGRAMS

During the three months ended June 30, 2013, no field work was carried out in
Kazakhstan. This was as a result of the Corporation's lack of financial
resources. Proposed 2013 drilling and soil sampling locations were prepared. 


As of June 30, 2013, there were 2,593 Shirotnaia assay results pending (2,586
core and 7 QA/QC core re-sampling) from the laboratory. The assays will be
released once the laboratory's outstanding account has been paid. In addition,
6,755 samples (including 887 QA/QC samples) were prepared for export as follows:




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



GOVERNMENT OF KAZAKHSTAN PRE-EMPTIVE RIGHT 

Alhambra's original application to the relevant Kazakhstan authority (MINT)
included a floor price for the issuance of common shares at $0.60 per share.
Unfortunately, during the time period that MINT was considering the
Corporation's application, the trading price of Alhambra's common shares dropped
below that floor. The Corporation applied to MINT to have that floor price
reduced to $0.20 per share. The Corporation received the approval effective
December 25, 2012 and it was effective until June 25, 2013. As provided for
under Kazakhstan legislation, the Corporation has applied for an extension.
Subsequent to June 30, 2013, Alhambra was informed by its legal counsel that an
extension to December 25, 2013 has been approved by MINT. The Corporation
expects to receive the formal documentation from MINT shortly.


LEGAL CLAIMS AGAINST THE CORPORATION

Subsequent to June 30, 2013, three claims from creditors totaling $0.7 million
were filed in the courts of Kazakhstan against Saga Creek for the collection of
outstanding accounts payable. Saga Creek's mining contractor submitted a claim
to the International Arbitration Court in Kazakhstan ("IUS"), demanding payment
of indebtedness of approximately $0.37 million for work performed. In order to
securitize its claim, the contractor also applied to the Specialized
Interdistrict Economic Court of Akmola oblast ("Economic Court") and obtained
the Resolution of the Economic Court to attach property of Saga Creek within the
limits of the claim amount. On August 5, 2013 the hearing of the claim by the
IUS took place and the decision was made in favor of the contractor. The
decision came into force on the date of the hearing, August 5, 2013. The
contractor is now able to apply to the Economic Court and obtain an enforcement
order which will allow it to realize on its security in order to cover the
outstanding liabilities. Also, two of Saga Creek's exploration contractors
submitted statements of claim to the Economic Court for the repayment by Saga
Creek of a total of $0.33 million. On August 13, 2013 the Economic Court
accepted the exploration contractors' claims which allow the exploration
contractors to proceed to the courts to attach property of Saga Creek within the
limits of the claim amounts and eventually realize on the outstanding
liabilities.


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 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. However, these programs as well as the Corporations ability to continue
on a going concern are dependent of Alhambra completing one or more of the
financing deals it is currently investigating. 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 second 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 the formalization
of a financing, 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, the formalization of a financing, 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. 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. 


This news release contains forward-looking statements based on assumptions,
uncertainties and management's best estimates of future events. When used
herein, words such as "intended" and similar expressions are intended to
identify forward-looking statements. Forward-looking statements are based on
assumptions by and information available to the Corporation. Investors are
cautioned that such forward-looking statements involve risks and uncertainties.
Actual results may differ materially from those currently anticipated. The
forward-looking statements contained herein are expressly qualified by this
cautionary statement.


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]
www.alhambraresources.com