Rio Fortuna Exploration Corp.
TSX VENTURE : RFT

Rio Fortuna Exploration Corp.

November 02, 2005 09:30 ET

Rio Fortuna Exploration Corp.: Newcrest to Earn Interest in Rio Fortuna's Highland Project in Nevada

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Nov. 2, 2005) - Rio Fortuna Exploration Corp. (TSX VENTURE:RFT) announced today that it has reached an agreement in principle with Newcrest Resources, Inc. ("Newcrest") whereby Newcrest can earn a 70% interest in Rio Fortuna's Highland low-sulphidation gold/silver project in Nevada. The Highland project is one of four that Rio Fortuna is exploring in a highly prospective area of the Walker Lane gold trend, approximately 125 miles east of Reno.

Terms agreed to include: Newcrest must spend US$5.0 million and produce a prefeasiblity study by the fifth anniversary of the agreement to earn the interest. Rio Fortuna will then have four choices with regard to funding its share of development costs. Rio Fortuna may:

a) Fund its full 30% of development costs and maintain its participating interest at 30 percent.

b) Fund less than 30%, but at least 10%, of development costs, with a reduction in its participating interest accordingly.

c) Request that Newcrest fund, in the form of a loan to Rio Fortuna, up to 10% of development costs, with Rio Fortuna having the option to fund an additional amount of up to 10% of development costs from its own funds. If this option is chosen, Rio Fortuna's participating interest shall be a minimum of 10% and a maximum of 20%, depending on the total funding attributed to Rio Fortuna from both sources, and Newcrest's participating interest shall be a minimum of 80% and a maximum of 90% accordingly.

d) Reduce its participating interest to zero and receive a 5% interest in net proceeds.

Newcrest has agreed to reimburse Rio Fortuna for 2005 claim fees and has made a firm commitment to pay various land fees during 2006 and spend a minimum of US$100,000 in work expenditures.

Newcrest and Rio Fortuna will work together to develop a work program expected to include assaying remaining intervals of unassayed core from the seven-hole, 2,190-meter core program completed earlier this year (see news release dated May 27, 2005), completing a 3D computer model of existing mineralization, and conducting a reverse-circulation drilling program expected to consist of at least ten holes beginning late spring of 2006. Drilling is expected to test new targets at this largely gravel-covered 260-claim property as well as mineralization previously outlined in part by Rio Fortuna, including a bonanza-grade RC drill intercept of 66.9 g/t Au and 397.7 g/t Ag over 1.5 meters from the A Zone (see news release December 19, 2003). The high-grade intercept occurs within a 12.2 metre section of 9.5 g/t Au and 109.4 g/t Ag.

Rio Fortuna also announced today that it has also amended the underlying agreement with Highland's private vendors to reduce scheduled annual payments through 2008.

About Rio Fortuna Exploration Corp.

Rio Fortuna Exploration Corp. is exploring for high-grade gold deposits within two prolific gold producing geologic provinces, Nevada and Ontario. The low-sulphidation Highland, Baxter, Mud Springs, and Buz projects in Nevada and the Archean-vein Drayton project in Ontario, all have significant high-grade gold potential.

Joe Kizis Jr., (P.Geo.) is the Qualified Person responsible for reviewing the technical results reported in this release.

On behalf of the Board,

Joseph Anthony Kizis, Jr. President

Rio Fortuna Exploration Corp.

Statements contained in this news release that are not historical facts are forward-looking statements as the term is defined in the private securities litigation reform act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from estimated results. Rio Fortuna relies upon litigation protection for forward looking statements.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the contents of this news release, which has been prepared by management.

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