Rio Novo Gold Announces First Quarter 2011 Results and Provides Update on Its Almas Gold Project

TORONTO, ONTARIO--(Marketwire - June 13, 2011) - Rio Novo Gold Inc. (TSX:RN)(TSX:RN.WT) ("Rio Novo" or the "Company") has today filed its interim operational and financial results for the first quarter ended March 31, 2011. Interim Financial Statements and the accompanying Management's Discussion and Analysis ("MD&A") have been filed on SEDAR. The Company is pleased to provide a general overview of some important milestones to date and an update for its ongoing work program at its Almas Gold Project.

During the first quarter of 2011, the Company incurred a net income of US$4.0 million (US$0.04 per share) compared to a loss of US$10.1 million (US$0.14 per share) in the corresponding period of 2010. Among the factors that contributed to net income in the period were a net gain of US$1.4 million, attributed to differences in foreign exchange due to US dollar and Brazilian real exchange rate fluctuations, and interest income of US$1.1 million earned on the Company's cash balances. The net income also reflected the gain on share purchase warrant revaluation of US$4.8 million attributed to the fair market value warrant adjustment on March 31, 2011.

As at March 31, 2011, the Company had working capital of US$59.9 million, including cash of US$62.9 million. As of the date of this press release, the company's cash position is US$53 million.

• In April 2011, Rio Novo acquired, at less than half the cost of new equipment, an unused ball mill with throughput capacity of 2 million tonnes per year (5,800 tpd) and several other processing equipment items for total consideration of US$3.8 million.
• In April 2011, Rio Novo announced its entrance into an Exploration and Option Agreement to acquire 100% interest in five mineral rights, covering an area adjacent to the east border of its Almas Gold Project. These areas, which add 30,766 hectares to the Almas Gold Project, in addition to other mineral rights applications covering 31,787 hectares, take Rio Novo's overall land package to 100,853 hectares at Almas, a increase of 163% since the Company's IPO.
• On June 1, 2011, Rio Novo announced that it completed the acquisition of the Toldafria Gold Project, assuming 100% operational control. The Toldafria Gold Project is located in central Colombia, with an Inferred resource of 952,000 ounces at 2.38 g/t. Terms of the acquisition were very attractive at an initial purchase price less than US$10 per ounce.
• At the Guaranta Gold Project, extension Hole FX1D-0021 intercepted significant intervals, 1.54g/t Au over 46.65m (55.35m-102.00m), 7.36 g/t Au over 8.00m (107-115m) and 1.92 g/t Au over 13m, lending weight to the hypothesis that the main mineralized zone of the X1 deposit continues to the west beyond the NE trending fault.
• Rio Novo's resource base now stands at 961,711 ounces Measured and Indicated, and 1,178,016 ounces Inferred, which compares to IPO's resources base (March 2010) of 653,300 ounces Measured and Indicated, and 259,300 ounces Inferred.

Almas Gold Project Update

Initial scoping work indicates a positive NPV for the project. However, the Board of Directors of Rio Novo has supported managements' recommendation that it would be prudent to have a longer mine life prior to making a production decision, and has therefore decided to extend the PEA Study with further optimization studies and additional drilling to increase the resource base. Current resources, which are almost entirely Measured and Indicated, support a mine life of 6 to 7 years of production. Rio Novo continues to work on the project permitting process, which will be submitted to the state environmental agency (Naturatins) and DNPM (DepartamentoNacional de Produção Mineral) as part of the requirements to reactivate the environmental and mining licenses that are currently "suspended."

The project economics, although positive, have been impacted by external factors affecting the capital and operating expenditures for all Brazilian projects, including inflation of about 15% over the past two years, high demand for mining equipment, a close to 20% appreciation of the Brazilian Real, and the increasing cost of consumables, which partially offset the benefit of a higher price of gold. Concurrently, economic evaluations and feasibility studies are generally being run at a gold price of about $1,200 per ounce, instead of $800 per ounce as it was run two years ago. This has enabled Rio Novo to dig deeper into the pit with an attendant increase in strip ratio and decrease in grade.

The current resource estimate for the Almas Gold Project, which forms the basis of the PEA, was last updated in May 2011, and contains 437,989 Measured and Indicated open pit and stockpile ounces at 1.0 gram per tonne. This includes the leach pad stockpile of 45,458 ounces at0.79 gram per tonne, plus an Indicated resource of 176,938 ounces at 2.08 grams per tonne and an Inferred resource of 202,423 ounces at 1.67 grams per tonne below the open pit. A Technical Report in support of the resources stated below is expected to be filed with SEDAR in July 2011.

Management's objective is to delineate an additional 150-200,000 oz of open pit gold resources to make the Almas Gold Project a more robust project under the prevailing cost regime, at long term gold prices of $1,200.

Rio Novo has added significantly to its property position in the current year and now has 100,853 hectares available for exploration over a 50 km greenstone belt with over 20 known gold occurrences, historically mined by Vale and artisanal miners. Exploration drilling continues to test priority targets, and regional evaluation is ongoing to identify new targets. To view Rio Novo's current Almas Gold Project holdings, please visit the following link: http://media3.marketwire.com/docs/riomap613.pdf.

The Paiol Deposit remains open down-dip to the west. Further infill and expansion drilling would be required to verify grade and continuity at depth, and to upgrade inferred blocks to Measured and Indicated categories. In addition, Vale's waste dump from the previous mining operation lies immediately west of the pit area, and the results from 5 RC drill holes completed in 2010 strongly suggest that it may contain significant gold mineralization, which could be added to current resources. Current mining plans require about one half of the old waste dump to be relocated.

Rio Novo's CEO David Beatty comments: "Although the Almas PEA requires additional ounces to extend the mine life, we are excited about the exploration potential on the new ground and properties at Almas, with 20 identified targets, Toldafria and the western extension of the X1 deposit. We have a strong cash and property position in both Brazil and Colombia to be a premier growth junior gold company."

Qualified Person

Mr. Ronald Simpson, 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 currently focused on the acquisition, exploration and development of gold mineral resource properties in Brazil and has commenced similar efforts in Colombia. The Company's goal is to explore and develop its three gold projects, the Almas Gold Project, located in the State of Tocantins State, the Guarantã Gold Project, located in the State of Mato Grosso, both located in Brazil, and the Toldafria Gold Project, located in the central Cordillera, Caldas State, Colombia. The three projects enjoy established infrastructure in mining friendly jurisdictions. In addition to exploring and developing the Almas, Guarantã and Toldafria Gold Projects, the Company intends to identify, explore and develop or acquire additional precious metals properties in Brazil and Colombia.

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.