Rio Novo Gold Provides Exploration Update on its Toldafria Gold Project

TORONTO, ONTARIO--(Marketwire - Oct. 15, 2012) - Rio Novo Gold Inc. (TSX:RN) (TSX:RN.WT) ("Rio Novo" or the "Company") provided today an update on its Toldafria Gold Project ("Toldafria" or "the Project"), located in Caldas Department, Colombia. Rio Novo recently completed an exploration program at the project, consisting of a first-pass drilling program and a complementary bulk sampling program.

The drilling intersected broad zones of low-grade gold mineralization with a core of high-grade veins. However, coarse gold and high assay variance in individual samples suggest that individual assays may not be representative of the overall tenor of mineralization. Rio Novo carried out an underground bulk sampling program to try to mitigate the sampling issue within the high grade vein zones.

Discussion of the Results

The initial 5,034m drilling program identified a number of mineralized structural vein zones at depth which conform and correlate to vein structures previously identified in the tunnel sampling campaign. As expected, the drilling did repeatedly cut through the projected structures; however, the high-grade nature of much of the tunnel sampling was only intermittently replicated in the drilling program.

A bulk sampling program was then implemented as a complement to the DDH program and results are more encouraging than the drilling results. In all cases, bulk samples showed consistent high grade results in the 5-10 g/t range, with coarse and free gold identification being a collateral result of the exercise.

Rio Novo has come to the conclusion that, due to the coarse grained nature and clustered distribution of the gold (the "High-Nugget Effect"), conventional drilling alone is ineffective to determine vein grade and potential resources. However, despite the coarse gold nature of the system, the drilling was able to locate extensive mineralization and, most importantly, was able to intercept and confirm the location of structures, which had been identified within the tunnels, and extend their continuity at depth.

Cross sections of Holes DH-TF-004 and DH-TF-009 show the correlation of the DDH higher grade intercepts to the high grade tunnel samples (please refer to page 10 of the Toldafria Presentation at the following link: http://media3.marketwire.com/docs/Toldafria_exploration_update.pdf).

Senior VP Exploration, Brian Arkell stated, "The drilling delineated broad zones of mineralization, and most importantly, confirmed areas of higher grade that are potentially mineable by underground methods. The bulk sampling confirmed our previous assumptions that a significant amount of coarse, free gold is present in the system and that large samples are necessary to accurately access grade. We need to methodically evaluate the best methods to develop this attractive resource. Options would be additional drilling to help to further delineate the structures, as well as underground drifting and large samples to prove up continuity of economic grade. Rio Novo is currently evaluating its alternatives with the project."

Drilling Results

Phase 1 of the drilling program consisted of 17 drill holes totaling 5,034m. Holes were drilled to depths ranging from 150m to 400m, at 45 to 60 degree angles. Holes were drilled primarily east-west, or west-east, in order to cut the dominant north-south structures.

Analysis of the Phase 1 drilling results confirmed the at depth continuity of the vein structures, previously identified in near-surface tunnels. These structural zones generally exhibit a wide area (about 10m to 70m) of lower grade veinlet mineralization running from 0.3 g/t to 0.7 g/t Au, with internal higher grade veins assaying from 5.0 g/t Au to 36 g/t Au in some areas. The structural zones generally exhibit a sericite-chlorite-pyrite alteration halo that can be traced from the drill sections to the underground workings.

Previously executed structural geology suggests that the high-grade drill intercepts at depth are co-relatable to the high-grade in the tunnels. Although the gold zones can be correlated to the tunnels, the average grade assayed at depth in the drilling program is lower than the average grade sampled in the tunnels.

Rio Novo's analysis of the Phase 1 drilling results determined that: 1) Drilling effectively identified vein locations; 2) Coarse gold is common and presented severe sampling problems. High sample variance suggests that accurate representation of gold grade was not determined with any confidence.

A bulk sampling program was carried out to mitigate the effect of the high sample variance.

Results from the drilling and bulk sampling programs are provided in the following link: http://media3.marketwire.com/docs/Toldafria_DDH-BulkSampleResults.pdf.

Bulk Sampling Program

In addition to the Diamond Drilling Program, Rio Novo executed a Bulk Sampling Program consisting of 12 one-ton samples taken from the project's historical mining tunnels. Each one-ton sample was taken from a 3.0m x 0.4m x 0.3m slot from the back (roof) of existing underground drifts. The sample was then crushed, homogenized and split into 20 samples for fire assay. The remaining reject was further pulverized in a small ball mill and run over a shaker table. Assay services were provided by SGS Laboratories.

Summary assays revealed results averaging approximately 7 g/t Au, with a range of average values from 2.22 g/t to 10.09 g/t Au and individual assay results as high as 46.88 g/t. Moreover, the shaker table tests revealed a significant component of coarse and free gold (see bulk sampling results at Toldafria Presentation, page 6). These confirm the system of narrow, high-grade, coarse gold-bearing veins. The bulk sampling results confirm the coarse grain size of the gold and the resultant challenges around sampling with widely-spaced core drilling.

About the Toldafria Project

The Toldafria Gold Project ("Toldafria") is located 12 km southeast from Manizales, a city with a population of over 400,000 people and good infrastructure, daily air service, abundant main grid hydropower, services, and an available workforce.

Toldafria lies within the prolific Middle Cauca Gold Belt in central Colombia on an approximate North-South line, between Medoro Resources' Marmato project (9.8 Moz) and Anglogold Ashanti's La Colosa deposit (12.3 Moz). Gold mineralization is hosted in Paleozoic schists of the Cajamarca Complex. Geological work at Toldafria indicates gold mineralization took place in two events: an early, orogenic gold event with lower-grade gold in metamorphic quartz veins, later overprinted with higher-grade, sheeted, epithermal veins.

The gold at Toldafria has been mined for over 100 years by local, artisanal miners. Gold resources are currently estimated at 947,000 oz Au Inferred at a grade of 2.38 g/t and 5,000 oz Au Indicated at a grade of 3.88 g/t using 0.5 g/t cut-off. The block model and resource estimate were completed by Gustavson Associates (Denver-CO) and published in a National Instrument 43-101 Technical Report (for details please refer to the NI 43-101 Technical Report filed at SEDAR www.sedar.ca).

The resources were estimated using 1,664 underground channel samples taken over 15 km of tunnels at nominal 2.5m spacing along the drifts. After acquiring the property in mid-2011, Rio Novo focused on completing permits, road access to the site, and further underground sampling. A total of 1,600 additional samples were taken from the underground workings, bringing total coverage to about 16 km of underground workings covering an area of approximately 650m x 700m.

Qualified Person

Mr Brian Arkell, P.Geo, who is a Qualified Person as set out in Canadian National Instrument 43-101, has reviewed and verified the technical content of the information contained in this release.

About Rio Novo

Rio Novo is focused on the acquisition, exploration and development of gold properties in Brazil and Colombia. The Company has Measured & Indicated resources of 1,143,427 oz and 1,105,201 Inferred oz of gold at two projects in Brazil (Almas and Guarantã) and one in Colombia (Toldafria).

The Company's goal is to become a producer of gold by bringing into production the Almas Gold Project, located in the State of Tocantins in 2014. The Almas Project enjoys both established infrastructure, main grid hydropower in a proven and mining friendly jurisdiction and is permitted for construction.

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 which 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 statements.