Alhambra Resources Ltd.

Alhambra Resources Ltd.

February 25, 2005 06:00 ET

Alhambra Resources Ltd.: $6 Million Brokered Financing Completed


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: ALHAMBRA RESOURCES LTD.

TSX VENTURE SYMBOL: ALH

FEBRUARY 25, 2005 - 06:00 ET

Alhambra Resources Ltd.: $6 Million Brokered Financing
Completed

CALGARY, ALBERTA--(CCNMatthews - Feb. 25, 2005) - Alhambra Resources
Ltd. (TSX VENTURE:ALH) announces that the Brokered Private Placement of
10,920,000 units of the Corporation through Canaccord Capital
Corporation ("Agent") at a purchase price of $0.55 per unit for a gross
proceeds of $6,006,000 as previously announced on January 28, 2005 has
been concluded. The transaction included an over allotment of 1,820,000
units for a gross proceeds of $1,001,000. The net proceeds from this
Brokered Private Placement will be used for, inter alia, exploratory
drilling on the Corporation's Uzboy deposit, together with four other
zones of gold mineralization on the Corporation's licenses and for
working capital.

Each unit consisted of one (1) common share and one-half (1/2) of a
transferable common share purchase warrant. Each whole warrant will
entitle the holder thereof to purchase a further common share at an
exercise price of $0.75 per common share on or before the expiration of
18 months from the date of issuance thereof. The units issued under this
Brokered Private Placement are subject to a four (4) month hold period
expiring on June 24, 2005.

The Corporation paid a cash commission equal to 7% of the gross proceeds
raised and issued agent's warrants to purchase 1,920,000 common shares
of the Corporation at an exercise price of $0.60 per share exercisable
on or before August 24, 2006. The Corporation also paid the Agent a
corporate finance fee of 60,000 units for providing corporate services
and has reimbursed the Agent for all out of pocket expenses, legal fees,
travel and other reasonable expenses related to the Brokered Private
Placement. Each unit issued to the Agent is exercisable on the same
terms and conditions as those provided in the Brokered Private Placement.

Alhambra also announces that, subject to regulatory approvals, the
Corporation intends to sell an additional 349,000 units of the
Corporation at a purchase price of $0.55 per unit for a gross proceeds
of $191,950. These units will be issued under the same terms and
conditions as the Brokered Private Placement and subject to the same
fees as identified above. Closing of the sale of these additional units
together with the sale of the non-brokered private placement also
announced on January 28, 2005, is expected to take place shortly.

-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Alhambra Resources Ltd.
    Jim Clarke
    Investor Relations
    Toll Free: 1-888-290-1335
    or
    Alhambra Resources Ltd.
    Don McKechnie
    Vice President Finance and & Chief Financial Officer
    (403) 228-2855
    The TSX Venture Exchange Inc. has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this news release.