Rio Novo Agrees to Acquire Initial 75% of the Toldafria Gold Project With NI 43-101 Resource of 947,000 oz at 2.38 g/t in Central Colombia

TORONTO, ONTARIO--(Marketwire - April 12, 2011) - Rio Novo Gold Inc. (TSX:RN) (TSX:RN.WT)("Rio Novo" or the "Company") is pleased to announce that it has entered into binding Letter of Intent ("LOI"), subject to confirmatory due diligence, with Core Values Mining & Exploration Company ("CVME") to acquire a 75% operating interest in the Toldafria Gold Project. Toldafria is located in central Colombia on an approximate north south line, between Medoro Resources' Marmato project and Anglogold Ashanti's La Colosa deposit.

• Toldafria is a large area of potentially mineable gold mineralization, which occurs in a stockwork and sheeted vein epithermal complex located about 12 km southeast from Manizales, a city with population of over 400,000 people. Toldafria is in the adjacent Villamaria municipality, Department of Caldas, Colombia. Manizales has good infrastructure, daily air service, abundant main grid hydropower, services, and an available workforce. The elevation of the prospect ranges from 2,600 to 2,900 meters above sea level within Colombia's Central Cordillera.

• The area has been mined by artisanal miners for over 100 years. They have left an extensive 10 km network of underground workings that have been meticulously sampled by the present owners with 1,939 samples taken to date. The sampled tunnels define an area of mineralization that measures about 550 X 500 meters in the central 25 hectares of the 164 hectare property. However, the mineralization may be more extensive and is found in trenches and soil samples adjacent to and topographically below the presently defined resource. Infill drilling may support the existence of a larger minable deposit. A stamp mill still operates on the property recovering gold from a small scale underground mining operation.

Rio Novo's CEO David Beatty comments: "Colombia appears to be one of the most exciting developing gold regions in the world. After site visits to over ten central Colombia mineral properties in the past twelve months by our geologic team, Toldafria stood out as by far the best prospect for a multi-million ounce, good grade mineable deposit. Toldafria represents an immediate priority drill target for a substantial program. It increases our Inferred resources in about 75% at a modest cost and on favorable terms. We are pleased to establish a Colombian office to access deal flow in the Middle Cauca District."

Rio Novo is in negotiations to acquire the remaining 25% interest in the Toldafria Project.

NI 43-101 Resource

An independent NI 43-101 compliant Technical Report on the Toldafria project has been prepared by Gustavson Associates, LLC ("Gustavson") of Denver, Colorado, and is planned to be filed with the Toronto Stock Exchange by April 30, 2011.

According to Gustavson's Technical Report, mineral resources are estimated at 12,370,000 tonnes with an uncut grade of 2.38 g/t for 947,000 oz Inferred, plus 5,000 oz Indicated at 3.88 g/t at 0.5 g/t cut-off. This estimate was based on a multi-pass estimation methodology with a maximum 40m isotropic search utilizing only channel sample assays from the various tunnels. The multi-pass search enhances the understanding of the estimated confidence limits.

The database contains a total of 1,664 samples that were used in the estimate. Two types of channel samples were collected: 1) from drifts parallel to mineralization by zigzagging obliquely across the back of the drift from rib to rib crossing the vein structure with each cut; 2) from drifts cross cutting mineralization by channeling along the wall from floor to back with angled channels normal to the foliation. There are an additional 275 samples assayed (so a total of 1,939 samples taken to date), which has not been used in the current Inferred resource estimate.

The estimate is based entirely on underground sampling - no drilling has been done on the property to date. Future diamond drilling from both surface and underground as well as surface trenching have the potential to increase the resource estimate. At this stage of exploration no geological model or grade shell model has been constructed for the prospect.

Background on the Project

The Toldafria Project is a 164 hectare mining property, exploited by the same permit holder ("the Permit Holder") for the last 40 years. The Permit Holder agreed to sell his interest in the Project to CVME pursuant to an agreement dated February 19, 2009. As purchaser of the CVME interest, Rio Novo is bound by the February 19th Agreement and inherits US$750,000 in remaining payments to the Permit Holder. CVME subsequently optioned a portion of the Project to Universal Gold Mining Corporation ("Universal") pursuant to an option agreement dated April 23, 2010, wherein Universal has the right to earn-in up to 50% interest in the Project (the "Option Agreement"). Universal is still in process of earning its first 25% interest in the Project. CVME holds the remaining 75% interest.

Rio Novo and the Permit Holder will work together to convert the existing 10 year license to a 30 year concession contract. The Project has an Environmental License for small-scale mining, which will have to be modified for a modern mine under the Colombian mining code process. Rio Novo intends to manage all such processes, conversion to concession contract, exploration permits, environmental approvals and mining consents & authorizations at the local level, establishing community relations, sustainability and institutional relations efforts as a priority in the development of the project.

Terms of the Transaction

Under the terms of the transaction, Rio Novo agrees to purchase the 75% interest, subject to due diligence. Rio Novo will pay the following:

1. on closing US$500,000 in cash and 1,500,000 ordinary shares of Rio Novo (or about $5.00 per Inferred oz based on the Gustavson estimate);

2. an additional 2,300,000 ordinary shares of Rio Novo (or about an additional $6.00 per Inferred oz) upon (i) the conversion of the License into a 30 year concession contract, and (ii) the receipt of the approvals and permits from environmental authorities that allow exploration and mining activities to go forward on the Project; and finally,

3. an amount equal to US$10.00 per ounce of the recoverable, proven and probable reserves, up to a maximum of 3 million ounces, as evidenced in a definitive feasibility study on the Commencement of Commercial Production on the Project. This will be payable in ordinary shares of Rio Novo shares calculated based on the then current market price of the shares.

Rio Novo Colombia

Rio Novo Gold Inc. is in the process of opening a Colombian Branch in order to manage the project. Local geological staff familiar with Toldafria will be a key element. An initial diamond drilling program of up to 20,000 meters will be implemented to increase the Indicated resource base, to confirm the existing Inferred resources and to determine whether grade capping is required and gain a better understanding of gold distribution around the structure. In addition, adjacent properties, which may have synergies with Toldafria, will also be evaluated for potential acquisition and incorporation into the project.

Geology and Mineralization

Toldafria is a low sulphidation epithermal deposit hosted in strongly deformed Palaeozoic metavolcanic rocks within the prolific mid Cauca belt of Colombia and within the Cajamarca Formation. Gold mineralization and alteration are defined within the area of sampled tunnels that extend over about 550 meters X 500 meters. Gold occurs in structurally controlled quartz veins, quartz filled fractures, and strike persistent sheeted vein sets with multiple orientations. Wall rocks also carry gold and are strongly altered with pervasive pyrite. Gold grade appears to be related to the frequency of veins and to the intensity of alteration in the wall rocks.

Exploration drilling is needed to determine both the lateral and vertical extent of mineralization around the 10 km of sampled tunnels, the continuity and grade distribution within the mineralized area, and the potential of other identified targets of similar mineralization.

Metallurgy

Initial scoping metallurgical test work was performed as part of the Technical Report. Significant observations were: 1) the wide variation in duplicate assays for the samples indicating that coarse, liberated gold is present in the deposit; and there is a lot of variance and it may be nuggety; 2) and that gravity concentration test results indicated that gold in the deposit is free milling. It appears likely that a simple gravity concentration process could recover a large portion of the gold at a relatively coarse grind of 80% passing 48 mesh.

To view the maps associated with this Press Release, please click in the following link: http://media3.marketwire.com/docs/Toldafria%20Press%20Release%20Maps_April%2012%202011.pdf.

About Rio Novo

Rio Novo is currently focused on the acquisition, exploration and development of gold mineral resource properties in Brazil and is initiating similar efforts in Colombia. The Company's goal is to become a producer of gold in the short term by bringing into production its two Brazilian properties, the Almas Gold Project, located in the State of Tocantins State, and the Guarantã Gold Project, located in the State of Mato Grosso. Both projects enjoy established infrastructure in mining friendly jurisdictions. In addition to exploring and developing the Almas and the Guarantã Gold Projects, the Company intends to identify, explore and develop or acquire additional precious metals properties in Brazil and other established mineral jurisdictions in South America.

This press release contains forward-looking statements. All statements, other than of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future (including, without limitation, statements regarding the estimation of mineral resources, exploration results, potential mineralization, potential mineral resources and mineral reserves) are forward-looking statements. Forward-looking statements are often identifiable by the use of words such as "anticipate", "believe", "plan", may", "could", "would", "might" or "will", "estimates", "expect", "intend", "budget", "scheduled", "forecasts" and similar expressions or variations (including negative variations) of such words and phrases. Forward-looking statements are subject to a number of risks and uncertainties, many of differ materially from those discussed in the forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations include, among other things, without limitation, failure to establish estimated mineral resources, the possibility that future exploration results will not be consistent with the Company's expectations, the price of gold and other risks identified in the Company's most recent annual information form filed with the Canadian securities regulatory authorities on SEDAR.com. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement.