Alhambra Resources Ltd. Announces Financial and Operating

Alhambra Resources Ltd. Announces Financial and Operating Results for
Third Quarter Ending September 30, 2012 
CALGARY, ALBERTA -- (Marketwire) -- 11/30/12 -- Alhambra Resources
Ltd. (TSX VENTURE:ALH)(PINKSHEETS:AHBRF)(FRANKFURT:A4Y) ("Alhambra"
or the "Corporation") announces its financial and operating results
for the quarter ended September 30, 2012. All amounts related to the
financial results are expressed in thousands of United States dollars
unless otherwise indicated. 
HIGHLIGHTS FOR THE QUARTER: 


 
--  Received approval from the Kazakhstan Ministry of Industry and New
    Technology ("MINT") to proceed at the Corporation's discretion with the
    issue of new shares 
--  Executed a non-binding term sheet to complete a financing 
--  Suspended mining operations 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") 
--  Revenue from gold sales amounted to $2.4 million based on the sale of
    1,452 ounces ("ozs") 
--  The estimated recoverable gold in WIP as of September 30, 2012 was
    38,619 ozs 
--  Cash operating costs were $751 per oz of gold sold 
--  Kazakhstan mining operations recorded net income of $0.1 million
    ($0.00/share) 
--  The Corporation recorded a net loss of $0.4 million ($0.01/share) 
--  A reverse circulation ("RC") exploration drilling program was completed
    at Shirotnaia and a RC drilling program was initiated at Zhusaly 
--  Exploration expenditures were $0.4 million 
--  Announced board of director changes 
 
                                                                            
FINANCIAL HIGHLIGHTS                                                        
                                                                            
----------------------------------------------------------------------------
(in US$000 except per    Three Months ended          Nine Months ended      
 share amounts)              September 30               September 30        
----------------------------------------------------------------------------
                              2012          2011         2012          2011 
---------------------------------------------------------------------------
-
Revenue from gold                                                           
 sales                $      2,447  $      7,012 $      8,080  $     12,555 
----------------------------------------------------------------------------
Net income (loss)             (365)        2,550       (1,637)       (1,201)
----------------------------------------------------------------------------
 Per share (basic and                                                       
  diluted)                   (0.01)         0.02        (0.02)        (0.01)
----------------------------------------------------------------------------
Weighted average                                                            
 shares outstanding                                                         
----------------------------------------------------------------------------
 Basic                 104,132,059   104,132,059  104,132,059   104,094,115 
----------------------------------------------------------------------------
 Diluted               104,132,059   106,079,287  104,132,059   104,094,115 
----------------------------------------------------------------------------
Shares outstanding at                                                       
 end of period         104,132,059   104,132,059  104,132,059   104,132,059 
----------------------------------------------------------------------------

 
For the third quarter of 2012, the Corporation recognized $2.4
million in revenue from the sale of 1,452 ozs of gold at an average
price of $1,686/oz. This compares to $7.0 million in revenue from the
sale of 3,858 ozs of gold at an average price of $1,817/oz during the
third quarter of 2011. 
Kazakhstan mining operations recorded net income of $0.1 million for
the third quarter of 2012. This compares to net income of $3.5
million for the third quarter of 2011. The Corporation recorded a net
loss of $0.4 million ($0.01 per basic and diluted share) for the
third quarter of 2012. This compares to net income of $2.6 million
($0.02 per basic and diluted share) for the third quarter of 2011.  
OPERATING HIGHLIGHTS  
During the third quarter of 2012, no fresh ore was stacked on its
heap leach pads (2011 - 257,003 tonnes ("t")) nor was any waste mined
during the same period (2011 - 279,846 t). Gold sales were realized
from the drawdown of recoverable gold inventory from WIP. As of
September 30, 2012, the estimated recoverable gold classified as WIP
was 38,619 ozs.  
During the nine months ended September 30, 2012, the Corporation
mined a total of 403,952 t of waste and stacked 136,220 t of ore at
an average gold grade of 0.57 grams/t ("g/t"). This compares to
1,178,980 t of waste mined and 570,068 t of ore stacked at an average
gold grade of 0.85 g/t during the nine months ended September 30,
2011. The reduction in tonnes mined for the nine months ended
September 30, 2012 as compared to the comparable period in 2011 is a
result of issues with the mining contractor. Earlier in 2012 the
mining contractor had mechanical issues with its equipment which
impacted their ability to mine ore. In addition, because of the
Corporation's constrained financial resources, both the mining
contractor and the Corporation agreed at the end of the second
quarter of 2012 to suspend mining operations in order to conserve
cash during this period of financial hardship. As previously
announced, the Corporation has executed a non-binding term sheet to
complete a financing and is currently completing the due diligence
process related to that financing. Should this financing be
successfully concluded, a portion of the use of the proceeds will go
towards resuming the mining of ore.  
The decrease in revenue for the nine months ended September 30, 2012
over the comparable nine month period in 2011 was a result of a 37%
decrease in sales volume which was offset partially by a 2% increase
in the average price of gold. The majority of the decrease in sales
volume occurred in the first and third quarters of 2012 as a result
of the Corporation not mining any fresh ore to stack on the heaps due
to the contractor equipment issues and the Corporation's current
financial constraints described above. Revenues from gold sales were
also negatively impacted by a 7% decline in the average price of gold
in the third quarter of 2012 as compared to the third quarter of
2011.  
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. 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. 
Operating costs for the three months ended September 30, 2012 totaled
$1.2 million or $831/oz of gold sold as compared to $3.2 million or
$819/oz of gold sold for the same period in 2011. Included in this
amount is $0.1 million or $80/oz (three months ended September 30,
2011 - $0.4 million or $107/oz) related to the amortization of the
bump-up to fair value from the estimated cost of WIP. Cash operating
costs for the third quarter were there
fore $751/oz (compared to
$712/oz for the third quarter of 2011). This was $48/oz higher than
the $703/oz incurred during the second quarter of 2012.  
Operating costs for the nine months ended September 30, 2012 totaled
$4.1 million or $840/oz of gold sold as compared to $6.5 million or
$853/oz of gold sold for the same period in 2011. Included in this
amount for the nine months ended September 30, 2012 is $0.4 million
or $74/oz (nine months ended September 30, 2011 - $0.9 million or
$120/oz of gold sold) related to the amortization of the bump-up to
fair value from the estimated cost of WIP. Cash operating costs for
the nine months ended September 30, 2012 were therefore $766/oz as
compared to $733/oz for the nine months ended September 30, 2011.  
CAPITAL EXPLORATION PROGRAMS 
Nine months ended September 30, 2012 
During the three months ended September 30, 2012 the Corporation
recorded capital expenditures of $0.4 million which relates to the
Corporation's 2012 exploration program which is detailed below. 
During the three months ended September 30, 2012, Alhambra completed
a reverse circulation ("RC") drilling program at Shirotnaia, one of
its advanced exploration projects, and initiated a RC drilling
program and completed a soil sampling program at Zhusaly, one of its
early stage exploration projects.  
Since the beginning of 2012, two batches of core drill samples
(totaling 5,146 samples) 
from Shirotnaia and Zhanatobe have been sent
to the Kyrgyzstan Stewart Group laboratory for assaying.  
As of the end of the third quarter of 2012, there were 1,987
Shirotnaia assay results pending (1,978 core and 7 QA/QC core
re-sampling) from the Stewart Kyrgyzstan laboratory.  
In addition, as of the end of the third quarter of 2012, 3,942
samples were being prepared for export as follows: 


 
--  Shirotnaia - 2,525 (RC samples), 
--  Vasilkovskoe East - 844 (soil samples), 
--  Zhusaly - 573 (soil samples). 

 
Shirotnaia 
During the third quarter of 2012, 1,596 assay results for eight of 18
core holes (3,691 metres ("m")) completed in the first half of 2012
were received. The assays were being interpreted. All drill holes
encountered intervals of strong chlorite sericite alteration and
sulphide mineralization as well as intervals of carbonate-quartz
veins and veinlets.  
Late in the third quarter of 2012, a RC drilling program which was
initiated earlier in the quarter, was completed. The objective of
this drilling program was to check for possible extensions of gold
mineralization to the north where it is marked on the surface by
anomalous soil and trench samples taken earlier. This area has
significant potential according to the recently prepared structural
model. A total of 26 (2,434 m) RC holes were completed and 2,525
samples were taken which have been prepared for export.  
U
zboy 
Alhambra's independent consultants (Micromine and ACA Howe
International) continued to work on updating the Uzboy National
Instrument ("NI") 43-101 resource estimate and Preliminary Economic
Assessment. Upon completion of these studies, the Corporation will
press release the study results. 
Zhusaly  
In the third quarter of 2012, soil sampling on the Zhusaly early
stage project, which commenced in the second quarter, was completed.
573 soil samples were taken along 15 lines. They have been dried,
screened and prepared for export.  
A planned seven hole (1,050 m) RC drilling program was initiated at
Zhusaly prior to the end of the third quarter. The purpose of this
drill program is to check the soil anomaly established in 2011. Two
NW orientated RC lines are planned. The proposed drill lines will be
250 m apart with the planned distance between holes being 150 m along
the SW line (scissor holes) and 75 m along the NE line (fence holes). 
Zhanatobe  
The assay results from the Zhanatobe diamond drilling program were
received late in the quarter and were being interpreted. The drilling
program included nine holes totaling 1,449 m. The assay results will
be released once interpreted. 
Capital Expenditure Activity Subsequent to September 30, 2012  
Shirotnaia 
Assay results for eight of 18 diamond drill holes completed were
interpreted and released. They were very encouraging. Diamond
dr
illing intersected higher-grade gold mineralization (+1.0 grams per
tonne gold ("g/t Au")) over core intervals ranging from 6.4 m to
135.6 m (down-hole). These higher-grade intervals define a core gold
mineralization zone interpreted to be at least 1,200 m long enveloped
by an aureole of lower grade (less than 1.0 g/t) gold mineralization
with dimensions of 1,800 m by 750 m which remains open in three
directions and at depth. These assay results included one of the best
drill holes to date on the project which entered strong
mineralization from surface and returned an interval of 135.6 m
averaging 1.12 g/t Au. Seven of the holes returned intercepts with
gold grades greater than 1.0 g/t Au and in four of the holes these
grade intervals have core lengths greater than 6.0 m. Thirty eight
mineralized intervals (of variable widths) with gold grades of
greater than 0.2 g/t Au were intersected in the eight holes assayed.
The best mineralization intersected included: 1.12 g/t Au over 135.6
m, 1.47 g/t Au over 27.4 m, 1.73 g/t over 17.5 m and 1.56 g/t Au over
18.2 m. 
OUTLOOK 
Currently, Alhambra's focus is on financing. With the receipt of
MINT's approval on September 11, 2012 of the Corporation's
application requesting the pre-approval of possible future equity
financings, one of the hurdles related to financing has been
overcome. Alhambra previously announced that it had negotiated and
executed a non-bindi
ng financing term sheet complying with the
financing terms approved by MINT. The due diligence is progressing
toward the completion of the financing which, if and when completed,
will allow the Corporation to proceed with its objective to
accelerate exploration and development activities in Kazakhstan.  
Alhambra's exploration focus will continue to be its advanced
exploration targets (including Uzboy, Shirotnaia and Dombraly) as
well as the seven other early stage projects. Production development
will focus on advancing Uzboy through Pre-Feasibility and Feasibility
Studies and to assess the other advanced targets for production
potential and follow-up as appropriate with Pre-Feasibility
assessments.  
BOARD OF DIRECTOR CHANGES 
During the third quarter of 2012, two Alhambra directors Mr. Mike
Hriskevich and Mr. Mr. Clarence K. Wagenaar, retired. Appointed as
their replacements were Mr. John I. Huhs and Mr. Robin M. Merrifield. 
Mr. John I. Huhs, fluent in Russian, is a lawyer and graduated with
honours from both the Stanford Graduate School of Business and
Stanford Law School. He is a retired Senior Partner and Special
Counsel of Dewey & LeBoeuf, and chaired the Firm's International
Practice for almost two decades and founded the Firm's practice in
the former Soviet Union, including the Moscow and Almaty (Kazakhstan)
offices. Mr. Huhs has over 40 years of experience in energy, mining,
aerospace, h
i-tech (including intellectual property) and
manufacturing. He has focused on negotiations, concluding and
implementing hundreds of international mergers and acquisitions,
production sharing agreements, joint operating agreements,
financings, joint ventures and other complex transactions worldwide.
He lived in the Republic of China from 1954 to 1957.  
Mr. Merrifield, a chartered accountant, has over 30 years of
experience in the international mining industry of South Africa,
North America and in a number of Central Asian countries including
Kazakhstan, Kyrgyzstan, Armenia, Georgia and Tajikistan. Mr.
Merrifield has gained his experience both in the corporate offices
and on operating sites of a number of major international mining
companies focused mainly on the uranium, gold and copper/nickel
businesses. Mr. Merrifield is a Director of a number of junior
exploration mining companies. He currently continues to assist
Uranium One Inc. in regard to their Kazakhstan operations as a senior
staff consultant. He previously served as its CFO for four years.
Prior to this position Mr. Merrifield was an international consultant
focused on financial and general management and was the Vice
President, Finance of the Kumtor Gold Company located in Bishkek,
Kyrgyzstan from 1997 to 2001. 
GOVERNMENT OF KAZAKHSTAN PRE-EMPTIVE RIGHT 
The Subsoil and Subsoil Use Act (the "Act") in Kazakhstan grants the
Government of Kazakhstan the first right of refusal to purchase any
direct or indirect interest in any subsoil license or legal entity
holding that license or the legal entity controlling the holder of
the subsoil use license at market prices should the license or shares
or instruments convertible or giving rights to shares (joint, the
"Subsoil Use Assets") come up for sale. As a result, before a company
can accept an offer to sell its Subsoil Use Assets, it must first get
approval from relevant Kazakhstan authority (MINT). The Act extends
this obligation to require a company whose main business is connected
with subsoil use in Kazakhstan to get approval should it desire to
issue any common shares or issue any derivative instruments that are
convertible into common shares. On April 21, 2011, the Corporation
completed and filed an application with MINT to have pre-approved,
any shares that may be issued upon conversion of outstanding warrants
and options as well as requested that MINT pre-approve a private
placement that the Corporation would contemplate doing in the near
future to finance its exploration and development activities. This
application was amended on August 16 and October 25, 2011 which
included responses to certain questions received from MINT. On
September 11, 2012 the Corporation received MINT's approval. This
approval is effective for six months. Under Kazakhstan legislation
the Corporation can apply to have the effective date extended a
further six months.  
Alhambra's original application included a floor price for the
issuance of common shares of $0.60 per share. Unfortunately, during
the time period that MINT was considering the Corporation's
application, the trading price of Alhambra's common share dropped
below that floor. The Corporation has applied to MINT to have that
floor price reduced. The Corporation is waiting for MINT's response
on this request. While the Corporation is currently negotiating a
potential financing that's in compliance with the terms approved by
MINT, this price reduction should provide additional financing
opportunities. 
UNAUDITED FINANCIAL STATEMENTS AND MANAGEMENT DISCUSSION AND ANALYSIS
("MD&A") 
The Corporation's third quarter 2012 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 with NI 43-101 gold resources as per ACA Howe
International UK and Micromine Consulting Services UK as noted below: 


 
                                                                          
--------------------------------------------------------------------------
                             Measured (M)             Indicated (I)       
--------------------------------------------------------------------------
Project                           Grade                      Grade        
--------------------------------------------------------------------------
                           Tonnes (g/t)  Ounces     Tonnes   (g/t)  Ounces
--------------------------------------------------------------------------
                                                                          
--------------------------------------------------------------------------
Uzboy (1)              14,317,200  1.52 700,000  7,009,500    1.22 275,500
--------------------------------------------------------------------------
Dombraly (2)                    -             -    559,000    1.22  22,000
--------------------------------------------------------------------------
Shirotnaia (3)                  -             -  2,900,000    0.76  71,000
--------------------------------------------------------------------------
TOTAL                  14,317,200  1.52 700,000 10,468,500    1.09 368,500
--------------------------------------------------------------------------
 
                                                                            
----------------------------------------------------------------------------
                                 M + I                     Inferred         
----------------------------------------------------------------------------
Project                           Grade                      Grade          
----------------------------------------------------------------------------
                           Tonnes (g/t)    Ounces     Tonnes (g/t)    Ounces
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Uzboy (1)              21,326,700  1.42   975,500 11,258,200  1.17   421,700
----------------------------------------------------------------------------
Dombraly (2)              559,000  1.22    22,000  9,317,000  1.01   301,000
----------------------------------------------------------------------------
Shirotnaia (3)          2,900,000  0.76    71,000 34,577,000  0.58   645,000
----------------------------------------------------------------------------
TOTAL                  24,785,700  1.34 1,068,500 55,152,200  0.77 1,367,700
----------------------------------------------------------------------------
                                                                            
(1) Effective as of Dec 31/07 as per ACA Howe per news release dated Apr    
    8/08 at a 0.40 g/t cut-off.                                             
(2) Effective as of Nov 27/11 as per ACA Howe per news release dated Feb    
    7/12 using natural cut-off grades of 0.13 g/t, 0.1 g/t and 0.2 g/t for  
    the low grade stockpile, pit infill and in-situ mineralized zones       
    respectively.                                                           
(3) Effective as of Jan 9/12 as per ACA Howe per news release dated Feb     
    28/12 using cut-off grades of 0.1 g/t for oxide gold mineralization and 
    0.2 g/t for transitional and primary gold mineralization respectively.  

 
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. 
Elmer B. Stewart, MSc. P. Geol., a technical consultant, is the
Corporation's nominated Qualified
 Person. Mr. Stewart has reviewed
the technical information contained in this news 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, completing a financing, availability of
capital to fund drilling programs, initiating the Uzboy
pre-feasibility and feasibility studies, 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, completing a financing, availability of
capital to fund drilling programs, initiating the Uzboy
pre-feasibility and feasibility studies; 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. 
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. 
Contacts:
Alhambra Resources Ltd.
Ihor P. Wasylkiw
VP & Chief Information Officer
+1 (403) 508-4953 
Alhambra Resources Ltd.
Donald D. McKechnie
VP Finance & Chief Financial Officer
+1 (403) 228-2855
www.alhambraresources.com
 
 
Press spacebar to pause and continue. Press esc to stop.