Arehada Mining Limited announces second quarter 2007 results

TORONTO, Aug 14 - Arehada Mining Limited (TSX: AHD), (the "Company") announced today announced financial results and operational highlights for the second quarter and six months ending June 30, 2007. During this period, the Company completed the start up of its flagship Arehada zinc/lead/silver mine.

Total revenue for the second quarter was $4,989,547 from the mining of 118,445 tonnes of ore resulting in earnings after tax of $421,448 or $0.003 per share.

Total revenue for the first six months was $9,618,000 from the mining of 223,000 tonnes of ore resulting in earnings after tax of $2,803,600 or $0.017 per share including a non-cash charge of $1,471,900 for stock based compensation in the second quarter. Excluding those charges, the earnings would have been $4,275,500 or $0.026 per share.

Cash flow for the six month period was $4,853,890 or $0.03 per share. In the first half of 2007, Arehada conducted mining operations at approximately 1,500 tonnes per day and operated 149 days during the period which is in line with expectations for the period based on a projected 300 day per annum operation.

Head grades of approximately 1.0% zinc and 0.9% lead resulted in an average combined recovery rate of 81%. Silver head grades of 29 grammes per tonne met a 84% recovery factor into the lead concentrate.

These grades are substantially below the overall head grades for the resource cited in the RPA technical report completed in but partially reflect the mining of above normal amounts of waste rock and lower grade material customary at the commencement of mining operations.

Operating costs have increased to US$15.92 per tonne largely reflecting an anticipated increase in labour rates. It is expected that these costs will level out during the second half of 2007 as mining operations progress.

Nevertheless, overall we do not feel these results are satisfactory and changes to senior management in mine operations have already been implemented in the second quarter in order to address these shortcomings.

The Company is beginning to see a significant improvement in grades early in the third quarter and expects production to rise slightly above the projected rate of 450,000 tonnes per annum.

Resource Upgrade

For the past 15 months, subsequent to receipt of a 43-101 compliant report, the Company has been conducting an extensive development drilling programme utilizing six drills to outline further mineral resources. We are engaging an independent engineering firm to update our 43-101 report by the end of 2007.

The mineral resources are being developed to support an expansion of Arehada's underground mining capacity to 3,000 tonnes per with a concurrent doubling of capacity of milling capacity.

The Company is financing this development drilling from internal cash flow and can fund a gradual expansion of its underground capacity in the same manner.

As previously reported, construction of the first phase of our 50,000 tonnes per annum plant to produce zinc oxide and sulphuric acid from concentrate has now been completed. Arehada expects it to be fully operational by the end of 2007 at which time this plant, which is the only one in the region, will process ore from our Arehada mine and other zinc mines in the area.

To date, $17 million has been used in building the first phase and this has been funded through a five year term loan from a major Chinese bank. Management is looking to accelerate the plant start up process, which would require approximately $6 million to purchase sufficient initial feedstock, by raising capital through a private placement of equity.

About Arehada Mining

Arehada Mining Limited is engaged in the exploration, development, extraction and production of zinc, lead and silver in Dongwuzhumuqinqi, located in Inner Mongolia, China. Arehada produces zinc and lead concentrates, which are then sold to smelters in China.

Arehada is currently constructing its own zinc plant with a designed processing capacity of 100,000 tonnes per annum. The recently completed first phase, with a rated capacity of 50,000 tonnes per annum, will produce zinc oxide and sulphuric acid.

For further information:

Forward Looking Statements

The above contains forward looking statements that are subject to a number of known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in our forward looking statements. Factors that could cause such differences include: changes in world commodity markets, equity markets, costs and supply of materials relevant to the mining industry, extent of resources actually contained in mineral deposits, actual recoveries achieved in processing ore, technological change, change to regulations affecting the mining industry, risks associated with mining operation in China, environmental and safety regulations risks, and risk associated with failure to obtain required regulatory or third party consent. Forward-looking statements in this release include statements regarding future programs, review completion dates and opportunities. Although we believe the expectations reflected in our forward looking statements are reasonable, results may vary, and we cannot guarantee future results, levels of activity, performance or achievements.

Neither the TSXV or the TSX has in any way passed upon the merits of this press release and has neither approved nor disapproved the contents of this press release.