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Alhambra Resources Ltd (ALH - TSX.V) News Release dated October 16, 2008



Suite #330, 700 - 6th Avenue S.W.

Calgary, Alberta, Canada T2P 0T8
Telephone (403) 228-2855 Fax: (403) 228-2865

FOR IMMEDIATE RELEASE - October 16, 2008

FOR: Alhambra Resources Ltd.

SUBJECT: Updated Status Regarding Claim Filed Against Alhambra

CALGARY, Alberta - Alhambra Resources Ltd.

("Alhambra" or the "Corporation") announces that the
court hearing scheduled for October 15, 2008 in Kazakhstan which was to have dealt with a legal claim
filed in Kazakhstan that seeks to invalidate the original Partnership Unit Purchase and Exchange Agreement
dated March 21, 2002 (the "Agreement") whereby Alhambra purchased Saga Creek Gold Company LLP
(see Alhambra News Release dated October 6, 2008) was held.
Alhambra"s motion to dismiss the litigation for lack of jurisdiction in favor of arbitration in Stockholm,
Sweden in accordance with the United Nations" Commission on International Trade Law arbitration rules
for international arbitration as provided for under the Agreement was dismissed by the Kazakhstan court.
Alhambra is now appealing this ruling.

The court has adjourned this case until October 29, 2008 at which
time the court will review Alhambra"s motion that the applicant"s claim should not proceed for reasons of
procedural irregularities and the court may also hear the applicant"s claim at that time.
Alhambra disagrees with the claim and will continue to take all possible measures to vigorously defend its
position.

ABOUT ALHAMBRA
Alhambra is a Canadian based gold exploration and production corporation engaged in the exploration of
and production from its 100% owned Uzboy Project.

Alhambra is currently in its seventh year of operations
in the Republic of Kazakhstan.
Alhambra common shares trade on The TSX Venture Exchange under the symbol ALH and in Germany on
the Frankfurt Open Market under the symbol A4Y.

The Corporation"s website can be accessed at
www.alhambraresources.com.
The TSX Venture Exchange Inc.

has neither approved nor disapproved the information contained herein.
For further information please contact:
This news release contains forward - looking information including but not limited to comments regarding the timing and
content of upcoming work programs and potential mineral recovery processes.

Forward - looking information includes
disclosure regarding possible future events, conditions or results of operations that is based on assumptions and courses of
action, and therefore, involves inherent risks and uncertainties.

For any forward looking information given, management has
assumed that the analytical results it has received are reliable and the metallurgical testing methodologies applied are
consistent with industry standards.

Although management has a reasonable basis for the conclusions drawn, actual results
may differ materially from those currently anticipated in such statements.

For such statements, we claim the safe harbor for
future.

Ihor P.

Wasylkiw
Chief Information Officer
+1 (403) 508-4953
Don McKechnie
Vice President Finance and CFO
+ 1 (888) 522-8285 (Toll Free)
NEWS RELEASE

 




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