Rio Alto Mining Limited
TSX VENTURE : RIO

Rio Alto Mining Limited

August 05, 2009 09:30 ET

Rio Alto Mining Limited: La Arena Surface Rights and Project Update

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 5, 2009) - Rio Alto Mining Limited ("Rio Alto") (TSX VENTURE:RIO)(WKN:A0MSLE) (formerly Mexican Silver Mines) is pleased to announce that La Arena S.A. has acquired 100% of the surface rights over the gold oxide resource at the La Arena Project, located in Peru, and to provide an update of recent activities.

In accordance with terms of the Option and Earn-In Right Purchase Agreement entered into between Rio Alto Mining Limited and IAMGOLD, on June 15, 2009, Rio Alto's wholly-owned subsidiary Rio Alto Mining S.A.C. has been appointed manger of La Arena S.A. and its La Arena Project. Since the appointment Rio Alto has made the following progress.

Senior Management Team Appointments

A group of experienced Peruvian mining professionals have been appointed to the management team of Rio Alto S.A.C. including: Jaime Soldi, General Manager; Max Schwarz, Project Manager; Juan Rodriguez, Operations Manager; Zinha Urrunaga, Financial Controller and Alejandro Portal, Site Administrator.

Peru's mining tradition and history spans several hundred years. It is the world's fifth largest producer of gold, third largest producer of copper, a major producer of zinc and lead and the number one producer of silver. Rio Alto is proud to have been able to attract the calibre of people that make up its senior management team in Peru. They allow the Company to implement its strategy for development, construction and operation of the La Arena Gold Oxide Project utilizing Peruvian personnel, service providers and contractors.

Acquisition of Surface Rights

La Arena S.A. completed the acquisition of 100% of the surface rights over the current oxide resource at the La Arena Project. To date, La Arena S.A. has acquired 72% (528 hectares) of the 732 hectares of surface rights required to build the La Arena Gold Oxide Project. Additional land will be acquired under an ongoing surface rights acquisition program.

Oxide Project Development Activities

There is a two-phase development plan for the La Arena Project: Phase 1 - Gold Oxide Project; Phase 2 - Copper / Gold Sulphide Project. The focus of Rio Alto's development activities during the next 18 to 20 months is to bring the La Arena Gold Oxide Project into production.

To minimize capital expenditures, production will begin at a nominal rate of 5,000 tonnes of ore per day and cash flow will be used to ramp up to 24,000 tonnes of ore per day within the first two years after start-up. Rio Alto and its consultants estimate that start-up capital required would be in the range of US$ 20M to US$ 23M. Development work during the coming months will confirm start-up capital for the project.

Rio Alto has engaged the services of the following engineering companies to complete all the necessary development work to bring the La Arena Gold Oxide Project into production as soon as practicable.

Coffey Mining Pty Ltd - Reserve Estimate and Quality Control and Quality Assurance

Vector Peru S.A.C. - Feasibility Study and Detailed Engineering of Site Infrastructure

Tecnologia XXI S.A. - Environmental Impact Assessment

Heap Leaching Consulting S.A.C. - Metallurgical Testing and Detailed Plant Design

Coffey Mining

Coffey Mining is preparing an updated reserve estimate for the La Arena Gold Oxide Project and recently spent two weeks in Peru meeting with service providers, suppliers and mining contractors to gather current cost information for input into the reserve estimate. As part of this work, Coffey Mining invited six Peruvian mining contractors to submit detailed quotations for the provision of drill and blast, excavate, load and haul contracting services for the estimated six-seven year life of the oxide project. The reserve estimate being prepared is expected to be completed in September with a NI43-101 technical report to be filed shortly thereafter.

Vector Peru

Vector Peru has completed a review and optimized the site layout for the oxide project. The focus of the optimization process was to minimize haul distances to the project's leach pad and waste dumps and to locate facilities such as the processing plant, site offices and other infrastructure in the most practical locations. Now that a new site layout has been determined, a geotechnical and condemnation drilling program will commence to confirm selected locations.

Tecnologia XXI

Tecnologia XXI is incorporating the new site layout into an Environmental Impact Assessment (EIA) and upon completion, Rio Alto will file the EIA with Government authorities. The first of a number of planned community consultation workshops was held two weeks ago at La Arena. Rio Alto is pleased that this workshop was well attended with more than 140 people from the immediate and surrounding communities participating. A dedicated community participation office is being established at the La Arena camp to provide the local population with an open line of communication with Rio Alto management and provide registration services for work opportunities at the project.

Heap Leaching Consulting (HLC)

HLC has prepared a metallurgical sampling program from the oxide pit to complete column leach tests for the definitive gold oxide leach plant design at La Arena. Sampling will begin in the first week of August and leach test work will commence shortly thereafter.

Rio Alto Mining Limited (TSX VENTURE:RIO)(WKN:A0MSLE) is focused on developing the La Arena Gold Oxide Project in Peru within the next 20 months and exploring for silver on three former silver producing properties in north eastern Mexico. The Company's principal objective is to become the next company in Peru to bring a gold project into production and to use cash flow from production to further develop its assets in Peru and Mexico. To learn more about Rio Alto Mining Limited, please visit: www.mexicansilvermines.com. Financial information and other information can also be found at www.sedar.com.

ON BEHALF OF THE BOARD OF RIO ALTO MINING LIMITED

Feisal Somji, B.Sc., MBA, President and Chief Executive Officer

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts the responsibility for the adequacy or accuracy of this release.

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