With a view to concentrate its management efforts in building the Almas gold mine, the Company decided to lease the Tolda Fria property/mine to a contractor/operator. A lease agreement was signed in January 2013 with BID Mining Group ("BID"), whereby BID has, at its own cost and risk, to build and operate a small 8 ton-a-day plant for a period of nine months. BID Mining will pay all the costs, including office and operational costs, and the ones required to keep the property in good standing. The Company will receive 40% of the free cash flow of the operation, which will be sufficient to cover any of its administrative and management costs in Colombia not incurred by the contractor/operator of the mine. The aim is to preserve the 30 year mining license for the Tolda Fria property as well as to better understand the deposit by operating a small pilot plant at minimal cost.
Rio Novo will retain supervision and oversight rights over all aspects of the operation by BID on the project. BID is required to comply with all Colombian Federal and Caldas State mining laws and codes as well as Federal and State environmental regulations, procedures, processes, guidelines and codes. Rio Novo Colombia has the right to interrupt and close down operations, in its sole judgment, if it determines infringement of any State or Federal laws.
Operation of the pilot plant and areas to be mined will be focused on testing various high grade areas within the Tolda Fria concession contract and directed by Rio Novo Colombia. As such, the operations by BID will provide the Company with a complement to previously generated geological understanding of the Tolda Fria resource. Bulk sampling, as executed by the pilot plant, and increased vertical mining of the high grade zones should be of significant value in the future.
The Almas Gold Project's Technical Report (the "Almas Technical Report" or "FS"), entitled "Feasibility Study Technical Report for the Almas Gold Project, Almas Municipality, Tocantins, Brazil", has been prepared by RungePincockMinarco ("RPM") (formerly Pincock Allen and Holt ("PAH")) and Tetra Tech Inc. ("Tetra Tech"). The Almas Technical Report, which is compliant with National Instrument 43-101 ("NI 43-101"), has an effective date of February 20, 2013 and is available under the Company's profile on SEDAR at www.sedar.com and on the Company's website at www.Rnovogold.com.
Brian Arkell, the former senior vice-president exploration and corporate development of Rio Novo, who is a Qualified Person as set out in NI 43-101 of the Canadian Securities Administrators, has reviewed and verified the geological and exploration information contained in this MD&A. In addition, for detailed information on the Tolda Fria Gold Project please refer to the technical report dated May 31, 2011, entitled "NI 43-101 Technical Report on the Tolda Fria Project, Manizales, Colombia" prepared by William J. Crowl, R.G., and Donald Hulse, P.E., of Gustavson Associates, LLC (the "Tolda Fria Technical Report"), which is available on SEDAR at www.sedar.com and on the Company's website at www.Rnovogold.com.
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 Guaranta Gold Projects) and one in Colombia (Tolda Fria Gold Project).
The Company's short-term goal is to become a producer of gold by bringing the Almas Gold Project, located in the State of Tocantins, into production 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.
Rio Novo Gold Inc.
President & CEO
+55 (21) 3956-5025
Rio Novo Gold Inc.
General Manager, Corporate Development
+1 (416) 368-1573
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