Alhambra Resources Ltd.

Alhambra Resources Ltd.

January 05, 2005 06:00 ET

Alhambra Resources Ltd.: Uzboy Heap Leach Test Yields Positive Results




JANUARY 5, 2005 - 06:00 ET

Alhambra Resources Ltd.: Uzboy Heap Leach Test Yields
Positive Results

CALGARY, ALBERTA--(CCNMatthews - Jan. 5, 2005) - Alhambra Resources Ltd.
(TSX VENTURE:ALH) is pleased to provide an update on activities at its
100% owned Uzboy gold project located in north central Kazakhstan.
Important developments are highlighted as follows:

a) From December 6th to December 31st, 2004 the heap leach test resulted
in an estimated 31,931 grams of gold being precipitated on resin. The
sale of the gold produced from the test heap to the end of December
2004, is expected to be completed in January, 2005;

b) Bottle roll tests on representative core samples of gold
mineralization from the transition and primary zones indicate positive
results with gold recoveries averaging 80% and 73% respectively; and

c) Alhambra's wholly owned subsidiary Saga Creek Gold Company ("Saga
Creek") entered into a Gold Sales and Marketing Agreement and
Pre-Payment Gold Sales Facility Agreement for gold produced from the
Uzboy test heap leach.

Heap Leach Test Results

Results to date for the 140,000 tonne portion of the test heap currently
being leached are better than expected in view of the extremely cold
temperatures (down to minus 37O C.) experienced during December 2004.
The precipitation of gold on resin from the test heap commenced December
6th, 2004. The test heap is percolating well with minimal solution
losses. To the end of December, 2004 the estimated average gold
recovered on resin was 1,228 grams per day over the 26 day period.
Solution application to the test heap during this period averaged 1,847
cubic metres per day.

To the end of December 2004, approximately 280,000 tonnes of oxide gold
mineralization have been stacked for test leaching. Further to the news
release dated November 24th, 2004, the first 140,000 tonne portion of
the test heap has a weighted average gold grade of 1.84g/t and is
estimated to contain approximately (assuming a 70% gold recovery rate)
5,800 troy ounces of recoverable gold. The estimated contained ounces of
recoverable gold for the remaining 140,000 tonnes that have been stacked
on the test heap will be reported on receipt of the fire assays.
Leaching of the remaining 140,000 tonnes of the test heap is expected to
commence in early February 2005. Completion of the lining of the second
leach pad foundation has been re-scheduled to May 2005 due to the onset
of winter weather conditions.

Metallurgical Test Work:

The bottle roll tests on the mineralization in the transition and
primary zones have produced encouraging results that indicates the gold
may be recovered by direct cyanide leaching methods. The tests were
performed on 32 samples of diamond drill core representing gold
mineralization in the oxide, transition and primary zones collected
along the strike length of the Uzboy west gold deposit. The average gold
recoveries based on the tests are:

Material Number of samples Average Gold Recovery %
Oxide 13 90.92
Transition 12 80.10%
Primary 5 73%

The samples were prepared by grinding to 90% passing 74 microns. Two,
300-gram sub-samples of the prepared material were selected for testing.
Lime and cyanide concentrations of one kilogram per tonne and a solution
pH of between 10.5 and 11 were maintained during the bottle roll tests.
Atomic absorption was used to determine the gold concentration in the
solution that was tested at regular intervals over a 24-hour period. The
leached sample tails were washed and fire assayed to determine the gold
content. Scoping level metallurgical test work is planned in 2005 to
optimize the recovery of gold mineralization from the transition and
primary zones.

Kazmechanobr, an independent laboratory certified by the Republic of
Kazakhstan performed the bottle roll tests. Kazmechanobr is located in
Almaty, Kazakhstan and does not have an International Standards
Organization certification.

Gold Sales Agreement:

Saga Creek has entered into a Gold Sales and Marketing Agreement (the
"Sales Agreement") and a $US780,000 Pre-Payment Gold Sales Facility
Agreement (the "Pre-Payment Facility") with PLADIS Platinum Metals
Distribution AG ("PLADIS") of Switzerland. Under the Sales Agreement,
PLADIS has the right to purchase all the gold produced from the current
test heap leach and any additional gold that may be produced from the
Uzboy project for the next three years. Saga Creek will be responsible
for all costs related to transportation and refining and will pay a
marketing fee of 0.95% per troy ounce of gold sold.

Under the Pre-Payment Facility, Saga Creek has the right to receive up
to $US750,000 as a pre-payment for gold to be sold to PLADIS under the
Sales Agreement. Amounts drawn under the Pre-Payment Agreement bear
interest at LIBOR plus 8% and are secured by pledge of future deliveries
of gold up to a maximum value of $US1.0 million and a corporate
guarantee by Alhambra. Any unused portion under the Pre-Payment Facility
bears interest at LIBOR plus 3%.

Elmer B. Stewart, MSc. P. Geol., President of Alhambra, is the Company's
nominated Qualified Person responsible for monitoring the supervision
and quality control of the exploration programs completed on the Uzboy
Property. Mr. Stewart has reviewed and verified the technical
information contained in this news release.


Contact Information

    Alhambra Resources Ltd.
    Elmer B. Stewart
    President & Chief Operating Officer
    (403) 228-2855
    Alhambra Resources Ltd.
    Jim Clarke
    Investor Relations
    Toll Free: 1-888-290-1335
    The TSX Venture Exchange Inc. has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this news release.