Rio Novo Gold Announces Board and Management Appointments and Provides Update on the Development of Its Almas Gold Project

TORONTO, ONTARIO--(Marketwire - Jan. 13, 2011) - Rio Novo Gold Inc. (TSX:RN)(TSX:RN.WT) ("Rio Novo" or the "Company") is pleased to welcome to its management team, Mr. Vitor Hugo Belo as General Manager, Operations and Mrs. Dione Queiroz as General Manager, Human Resources. In addition, Rio Novo is also pleased to announce that Mr. Eduardo de Toledo is now a member of Rio Novo's Board of Directors.

Mr. Vitor Hugo Belo, Mechanical Engineer, has nearly 22 years of mining experience, including 19 years with Rio Paracatu Mineração (Paracatu gold mine) in the positions of Procurement Manager, Administration and HR Manager, and, finally, General Manager of Operations. During his tenure at the Paracatu gold mine, he participated in four plant capacity expansions and implemented a number of innovative programs that contributed to substantial cost reductions, including leading the team in charge of the Continuous Improvement Program implemented by Rio Tinto at that mine. Mr. Belo worked at the Paracatu gold mine under Rio Tinto management for more than 15 years and under Kinross management for nearly 5 years.

Mrs. Dione Queiroz, General Manager, Human Resources brings over 16 years of experience in human resources for mining companies, with a focus on professional training programs and employee development and retention programs. She worked as Head of Human Resources with Rio Tinto Brazil for over 10 years (including the Paracatu gold mine, which had 535 employees at that time), and as HR Manager with Mineração Onça Puma (Onça Puma nickel mine with 1,000 employees; owned by Canico Resource Corp. and later by Vale S.A.) for nearly 6 years.

Mr. Eduardo de Toledo developed his career at Ultrapar Participações S.A., one of the largest Brazilian companies (NYSE:UGP), working in a number of high profile positions within the group of companies of this conglomerate, including tax planning, managerial accounting, Administrative and Controlling Officer at the chemical division of Ultrapar Participações S.A. (Oxiteno S.A.), Investors Relations, and liaising with Conselho Fiscal (the Brazilian equivalent of an audit committee). Between 2003 and 2008, he was Chief Operating Officer of Ultracargo Participações S.A., the logistics arm of Ultrapar Participações S.A. Since 1998, he has been a member of the board of Odontoprev S.A. (BM&FBOVESPA:ODPV3), the leading Brazilian dental benefits company; he was appointed Chairman of the Board in 2006 and member of the Audit Committee in 2009. Between 2006 and 2008, he was a member of the board of Farmasa S.A., a Brazilian pharmaceutical company. Currently, he is the Chairman of the Board of Consórcio BioVale, the largest palm oil venture in Brazil, formed by Biopalma da Amazônia S.A. and Vale S.A., and a member of the board of IBEF‐SP, the Brazilian Institute of Financial Executives.

Almas Gold Project Development and Contract Awards

PEA and DFS

It is the intent of Rio Novo to start project field construction of the Almas gold mine in the second quarter of 2011, immediately after the reinstatement of the Installation License (LI), in order to meet the corporate strategy of starting production by end of first quarter 2012. This objective requires that the Basic Engineering phase of the project will occur simultaneously with the Definitive Feasibility Study (DFS) preparation. Full commitment to the engineering and procurement phase will be dependent on the outcome of the Preliminary Economic Assessment (PEA) currently in progress.

P&K Projects e Consultoria (P&K), from Brazil, in conjunction with the Denver offices of Marston & Marston, Inc. and Samuel Engineering, Inc. and GeoSim Services of Vancouver, have been retained to prepare a PEA. The PEA will include a resource estimate based on the latest exploration drilling program. The metallurgical process will be based on the latest testwork performed by SGS Geosol Ltda. The capital and operating costs will incorporate tax concessions recently granted to the project.

For the preparation of the DFS and EPCM, Rio Novo has retained Conestoga-Rovers & Associados Engenharia S/A (CRA). CRA is the Brazilian branch of Conestoga-Rovers & Associates, a worldwide, full-service provider of engineering, environmental, construction, and IT services based in Waterloo, Ontario. P&K/Marston will work as mine design subcontractor to CRA and Samuel Engineering as process subcontractors alongside other specialist consultants as necessary.

CRA has also been contracted by Rio Novo to develop the Environmental Baseline studies to support the requirements of the Feasibility Study Report, the Environmental Control Plan (PCA) as required by DNPM as a component of the mining license renewal and the Simplified Environmental Impact Assessment (EA) for the reinstatement of the Installation License by the Environmental Authority of Tocantins, NATURATINS.

The company Integratio Mediação Social e Sustentabilidade (Integratio), from Belo Horizonte, has been retained to undertake the social component of the EA for the Almas Project, including identification and characterization of stakeholders, their interrelation, existing land uses in the Project area and along the access corridor to the Project, current and (potential) future interests, as well as approach and procedures for engagement. The work also includes mapping and characterization of the rural properties around the project's areas of direct impact.

The foregoing contracts were awarded after a thorough canvassing of a group of well known service providers of international reputation in the fields of mining and metallurgical engineering, environmental engineering and sustainability practice. More than 12 companies were interviewed, and 4 engineering and 3 environmental consultants were invited to submit proposals. Final selection of the successful proponents was based on the overall quality of their proposals, Brazilian experience and an ability to comply with Canadian National Instrument 43-101 requirements.

Pit-Dewatering

The aquatic fauna assessment for the Paiol pit and surrounding water bodies have been finalized and the results incorporated into the Environmental Project (EP), which, together with the proposed environmental control actions for the pit dewatering project, were submitted to Naturatins in the last week of November 2011. Pending approval by Naturatins, dewatering of the Paiol pit has been scheduled for April/May, 2011 to coincide with the end of the rainy season, minimizing potential impacts to the environment.

Tax Incentives from the State of Tocantins

A contract was signed between Rio Novo and the State of Tocantins granting Rio Novo ICMS (VAT) exemptions for a period of 15 years comprising the following exemptions: ICMS exemption on Machinery & Equipment and the principal consumables and supplies purchased in the State of Tocantins as well as on electric power consumption; exemption from the additional ICMS (10%) due on Plant, Machinery & Equipment and the principal consumables and supplies purchased in other States of Brazil (effective rate thus reduces from 17% to 7%); ICMS exemption on imported Machinery & Equipment and on consumables and supplies.

Additional tax incentives are being negotiated with the State of Tocantins and the Federal Government.

Rio Novo's President Julio Carvalho states, "I am very pleased to be able to bring to Rio Novo such high calibre and experienced professionals, who worked with me in the past. My professional relationship with Mr. Vitor Belo spans over 20 years, since the early days of the operation of the Paracatu gold mine. Vitor was instrumental for the success of that gold operation during the time it was controlled and managed by Rio Tinto Brazil where I was the CFO and Executive Director. Mrs. Dione Queiroz was also a member of the Paracatu gold mine team as Head of Human Resources of Rio Tinto Brazil. Later she joined me at Canico Resources/Onça Puma as HR Manager for the Onça Puma nickel project/mine, where she successfully managed the recruiting and training of over 1,000 new employees. We have total confidence in her ability to develop the human resources required for a successful start up of the Almas gold mine."

CEO David Beatty adds, "We are delighted to have been able to attract to Rio Novo such accomplished professionals. In addition, the appointment of Mr. Eduardo de Toledo as member of the Board of Director brings a wide breadth of high level experience from venture capital to large conglomerates that will further strengthen our company's corporate governance and board capability. Finally, the award of the PEA and DFS contracts represents key milestones and indicates we keep moving towards getting the Almas Gold mine back into production."

About Rio Novo

Rio Novo is currently focused on the acquisition, exploration and development of gold mineral resource properties in Brazil. 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 Tocantins State, and the Guarantã Gold Project, located in Mato Grosso State. 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.