Rio Novo Gold Inc.

TSX : RN
TSX : RN.WT


Rio Novo Gold Inc.

October 25, 2012 18:40 ET

Rio Novo Gold Upgrades Resources at Its Almas Gold Project

TORONTO, ONTARIO--(Marketwire - Oct. 25, 2012) - Rio Novo Gold Inc. (TSX:RN) (TSX:RN.WT) ("Rio Novo" or the "Company") is pleased to announce a new resource estimate for its 100%-owned Almas Gold Project ("Almas" or "the Project"), located in Tocantins State, Brazil. This new resource estimate was completed by Pincock Allen & Holt (PAH), Rio Novo's independent engineering consultant, and supersedes the resource estimate released on April 3, 2012. The new estimate, which complies with the requirements of National Instrument 43-101, increases the total number of ounces of gold and the level of confidence in the estimate.

  • An increase of 39,193 oz Au (5%) in the total M&I categories and 364,630 Oz Au in the Inferred category when compared with the previous announcement of April 3, 2012;
  • Continuing studies indicate a potentially high conversion rate from current M&I resources to reserves, which will be the basis for the Definitive Feasibility Study ("DFS") to be published within the next few weeks;
  • Exploration potential remains strong in the Almas gold district with many prospective targets within the 90,367 ha of Exploration License (including 9,137 ha of Mining Concession). Rio Novo also has 95,431 hectares under application for Exploration License.

"The updated resources are an important milestone in the completion of the DFS of the Almas Gold Project, which is now fast approaching its conclusion" commented Julio Carvalho, President and CEO of Rio Novo Gold. "Total resources have increased along with a higher level of confidence associated with DFS parameters. We are now running the final mine production schedule, which will feed into an updated Capex and Opex."

Total gold resources are distributed between three deposits: Paiol, the project's primary deposit, and two satellite deposits, Vira-Saia and Cata Funda, located 5km and 15km from Paiol, respectively. Gold contained in a spent heap leach pad left by Vale, the previous operator, is also included.

Rio Novo has completed a revised block model and updated mineral resource estimate for the Almas Gold Project incorporating updated geostatistical analysis of the Paiol pit. A stronger economic climate for gold price and mine materials has led to reduced operating costs and lower cut-off grade for the deposit. A cut-off grade of 0.255 Au g/t reported from a Whittle-optimized pit shell for the Paiol pit resulted in a Measured and Indicated mineral resource for the Almas Gold Project of 839,033 Au ounces grading 0.86 Au g/t and the Inferred resource is estimated to be 496,131 Au ounces grading 0.84 Au g/t.

The detail of total resources broken down by area and resource category is given below:

Almas Gold Project - Mineral Resource Statement (NI 43-101 Compliant):
Paiol Resources (COG=0.255 g/t Au) Tonnes (000's) Grade g/t Au Contained oz Au
Measured 15,389 0.79 390,861
Indicated 9,729 0.83 259,611
Total Measured & Indicated 25,117 0.81 650,472
Inferred 18,356 0.84 495,721
Paiol Heap Leach (COG=0.35 g/t Au) Tonnes (000's ) Grade g/t Au Contained oz Au
Measured 1,648 0.88 46,752
Measured 1,648 0.88 46,752
Vira Saia Resources (COG=0.286 g/t Au) Tonnes (000's ) Grade g/t Au Contained oz Au
Measured 2,126 1.07 73,131
Indicated 486 1.10 17,125
Measured & Indicated 2,612 1.07 90,256
Cata Funda Resources (COG=0.318 g/t Au) Tonnes (000's ) Grade g/t Au Contained oz Au
Measured 594 1.74 33,272
Indicated 367 1.55 18,280
Measured & Indicated 961 1.67 51,552
Inferred 9 1.38 410
Total Resources Tonnes (000's ) Grade g/t Au Contained oz Au
Measured 19,757 0.86 544,016
Indicated 10,582 0.87 295,016
Measured & Indicated 30,339 0.86 839,033
Inferred 18,365 0.84 496,131

Notes:

  1. The resource estimates shown in the table above meet the CIM Definition Standards for Mineral Resources and Mineral Reserves, prepared by the CIM Standing Committee on Reserve Definitions, adopted by CIM Council on November 27, 2010.

  2. In order to conform with NI 43-101 requirements for reasonable prospects of economic extraction all reported resources fall within a Whittle pit shell based on a gold price of $1485/oz and mining, processing and G&A costs derived from the ongoing Definitive Feasibility Study. Cut off grades vary for each deposit depending on prevailing mining and transportation costs for each size and location of deposit.

  3. Au grades were interpolated into 5m x 5m x 5m blocks in a block model constrained within mineralized domains generated based on geological modeling of the deposits.

  4. Rounding of tonnes as required by reporting guidelines may result in apparent differences between tonnes, grade and contained metal content.

Almas Definitive Feasibility Study (DFS)

The in-pit portion of the updated mineral resource will now be incorporated into a revised and upgraded mineral reserve, which will be the basis of the DFS, with results to be released within the next few weeks.

Exploration Potential

Rio Novo currently controls 90,367 hectares of Exploration Licenses, including 9,137 hectares of Mining Concession in the Almas region. In addition, the company has 95,431 hectares under application for Exploration License. These mineral rights cover the most prospective exploration ground in three greenstone belts: the Paiol-Cata Funda Belt, the Nova Prata Belt, and the Dianopolis Belt.

Regional exploration initiatives continue to define new prospects that represent an excellent opportunity to add incremental resources to the Almas Gold Project over the life of the project. At the moment, out of more than 30 targets identified over the entire land package, the following are considered as priorities:

1. Vira Saia Extension

Vira-Saia covers an area of strong geochemical anomaly with extensive historical artisanal mining activity. In 2012, Rio Novo focused on resource definition in this target for incorporation into the ongoing DFS mine planning. Parallel exploration activities continued to delineate additional mineralization west and northwest of the main Vira Saia target, extending about 2 km from the current resource area. Additional exploration will focus on proving up the continuity of the higher grade areas, as well as testing open margins of known mineralization.

2. Nova Prata Trend

The Nova Prata Trend is a 25 km greenstone belt parallel to the Paiol trend with over 9 gold occurrences that was object of intense artisanal mining in the past. The area is about 10 to 15 km east of the Almas Gold Project and therefore potentially accretive to any future operations.

Similar to the Almas Greenstone Belt, the Nova Prata Trend consists of metabasalts and metasedimentary rocks intruded by granitoid bodies. Orogenic-type mineralization is hosted in quartz veins along shear zones. At this time, Rio Novo has identified 9 priority targets through a combination of mapping and soil sampling. Initial trenching was conducted in mid-2012 and the company plans follow-up work in 2013.

3. Conceição

The Conceicao target is located about 50 km south of the Almas area and holds some 9,095 hectares of exploration rights under application. Conceicao is an area of Archean banded iron formation, where numerous small artisanal mines (garimpos) are active or were mined in the past.

Exploration at this stage focused primarily on mapping, sampling, and reconnaissance work to identify targets for further prospecting. Rio Novo has identified 4 targets for detailed work in 2013.

4. Paiol Deep

Based on geologic modeling and previous deep drilling (10.0m @ 8.0 g/t Au in FD-81 and 8.0m @ 9.2 g/t Au in FD-66), Rio Novo believes the Paiol deposit has open potential at depth. Thus it is a strong target to pursue in the future, after the start of operations.

In 2012, deep core drilling was initiated at the Paiol Deposit to test for higher grade extensions of the main gold zone. However, the +500m deep holes experienced technical difficulties resulting in major deviation (up to 60m from the target) missing the targeted higher grade shoot.

To view a map of the Almas target areas and current land holdings please visit the following link: http://media3.marketwire.com/docs/1025MAP.pdf.

Qualified Person

Mr. Brian Arkell, Senior Vice President of Exploration at Rio Novo Gold Inc., is a Qualified Person, as defined by Canadian National Instrument 43-101, and has reviewed and approved the scientific and technical 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 1,191,252 oz and 1,464,831 Inferred oz of gold at two projects in Brazil (Almas and Guarantã Gold Projects) and one in Colombia (Toldafria Gold Project).

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.

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