Rye Patch Gold Corp.

Rye Patch Gold Corp.

August 15, 2012 09:00 ET

Rye Patch Updates Status of Lawsuit Against Coeur Rochester, Inc.

VNACOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 15, 2012) - Rye Patch Gold Corp (TSX VENTURE:RPM)(OTCQX:RPMGF)(FRANKFURT:5TN) (the "Company") announces recent events in the lawsuit among the Company and its wholly-owned subsidiary Rye Patch Gold US Inc. against Coeur Rochester, Inc. ("CRI"). The lawsuit involves ownership of unpatented mining claims which Rye Patch Gold US Inc. located in the fall of 2011 on public lands owned by the United States of America. The lands became open for the location of unpatented mining claims on September 1, 2011, when CRI failed to pay the federal annual mining claim maintenance fees required by United States law. Because CRI did not pay the fees, its former unpatented mining claims became void, and the public lands became open for the location of unpatented mining claims by any United States citizen or company.

In 2012, the United States Bureau of Land Management issued its decision officially declaring that the former CRI claims are void. CRI's parent corporation Coeur d'Alene Mines Corporation reported that CRI failed to pay the claim maintenance fees and their former claims are void.

In order to protect its rights under the United States mining law principle of pedis possessio - a doctrine established by the United States Supreme Court to protect the owner of a senior unpatented mining claim who is working on his claim to complete a discovery of minerals - and to prevent CRI from entering on the Rye Patch Gold US Inc. senior mining claims, Rye Patch Gold US Inc. filed a motion for preliminary injunction. The District Court referred the hearing of the matter to a Special Master. On August 6, 2012, the Special Master issued a report recommending denial of the motion for preliminary injunction on the basis that Rye Patch Gold US Inc. had not shown evidence it would be harmed by the activities of CRI on Rye Patch Gold US Inc.'s senior unpatented mining claims before the trial.

The Special Master held that evidence of Rye Patch Gold US Inc.'s activities regarding the discovery of minerals will be the subject of discovery proceedings in the lawsuit and presentation at trial in November 2012.

William C. Howald, President of the Company and Rye Patch Gold US Inc. stated: "The motion for preliminary injunction was intended to freeze the status quo until trial of the lawsuit. We believe that under the doctrine of pedis possessio, Rye Patch Gold US Inc. as the owner of the senior unpatented mining claims is entitled to court protection against other parties who attempt to overstake our claims. Pedis possessio is intended to protect a senior mining claim locator who is working diligently to develop the minerals on his mining claim. That is exactly what we have been doing since we located our claims last fall, and we have discovered gold and silver on our claims. Pedis possessio does not require a discovery of minerals. It is designed to let the senior locater make a discovery. If the court accepts the master's recommendation, it means that the owner of an unpatented mining claim in Nevada who is diligently working on his claim has no pedis possessio protection against someone who overstakes his mining claim. This will jeopardize title to thousands of mining claims in Nevada. We intend to file an objection to the Special Master's recommendation."

The District Court entered an order denying CRI's motion to avoid the filing of a reply to the counterclaim filed by Rye Patch Gold US Inc. against CRI. The District Court also denied CRI's motion to dismiss the separate lawsuit filed by Rye Patch Gold US Inc. on December 5, 2011. As a result of the District Court's orders, CRI will be required to file an answer to the Rye Patch Gold US Inc. complaint and a reply to the Rye Patch Gold US Inc. counterclaim.

Rye Patch Gold US Inc. controls over 100 square kilometres (40 sq. miles) along the Oreana trend. The Rochester Property - LH and OG Claims - cover over 30 square kilometres (7,500 acres), and the mineral title is disputed by Coeur Rochester Inc. The Sixth District Court of Nevada has enjoined Rye Patch Gold US Inc., for safety reasons, from conducting exploration activities on approximately 7.4 square kilometres (1,839.3 acres) covering the active open pit, mine dumps and leach pads in the immediate Rochester Mine area. It is the position of Rye Patch Gold US Inc. that all the LH and OG claims are valid senior unpatented lode mining claims, including those claims within the court-ordered enjoined area. Geologic assessment and drilling confirm discoveries on the LH claims and the land area which covers up to 20% of Rochester's published proven and probable silver and gold reserve along with a significant portion of the published silver and gold resource based on Coeur's December 5, 2011, news release.

The Company is a Tier 1, Nevada-focused and discovery-driven company seeking to build a sizeable inventory of gold and silver resource assets in the mining friendly state of Nevada, USA. The Company's seasoned management team is engaged in the acquisition, exploration, and development of quality resource-based gold and silver projects. Rye Patch Gold US Inc. is developing gold and silver resources along the emerging Oreana trend, located in west-central Nevada, and is exploring 66 square kilometres along the Cortez trend near Barrick's two new gold discoveries. The Company has established gold and silver resource milestones and time frames in order to build a premier resource development company. For more information about the Company, please visit our website at www.ryepatchgold.com.

On behalf of the Board of Directors

William C. (Bill) Howald, CEO & President

This news release contains forward-looking statements, which address future events and conditions, which are subject to various risks and uncertainties. The Company's actual results, programs and financial position could differ materially from those anticipated in such forward-looking statements as a result of numerous factors, some of which may be beyond the Company's control. These factors include: the availability of funds, the financial position of Rye Patch to pursue legal undertakings; the outcome of legal action relating to the Rochester property and the LH unpatented claims, the timing and content of work programs; results of exploration activities and development of mineral properties, the interpretation of drilling results and other geological data, the uncertainties of resource and reserve estimations, receipt and security of mineral property titles; project cost overruns or unanticipated costs and expenses, fluctuations in metal prices; currency fluctuations; and general market and industry conditions. Litigation is inherently uncertain and factors that could cause actual results to differ materially from those in forward-looking statements include unexpected judicial findings of fact, previously unknown facts arising, and decisions which depart from past legal precedent and similar events.

Forward-looking statements are based on the expectations and opinions of the Company's management on the date the statements are made. The assumptions used in the preparation of such statements, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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