Rio Alto Mining Ltd. ("Rio Alto")
(TSXV: RIO; Frankfurt WKN: A0MSLE), formally Mexican SIlver
Mines, is pleased to announce that La Arena S.A. has acquired 100% of the
surface rights over the gold oxide resource at the La Arena Project,
located in Peru, and to provide an update of recent activities.
In accordance with terms of the Option and Earn-In Right Purchase
Agreement entered into between Rio Alto Mining Limited and IAMGOLD, on
June 15, 2009, Rio Alto's wholly-owned subsidiary Rio Alto Mining S.A.C.
has been appointed manger of La Arena S.A. and its La Arena
Project. Since the appointment Rio Alto has made the following
progress.
Senior Management Team Appointments
A group of experienced Peruvian mining professionals have been appointed
to the management team of Rio Alto S.A.C. including: Jaime Soldi, General Manager; Max Schwarz, Project Manager;
Juan Rodriguez, Operations Manager; Zinha Urrunaga, Financial Controller and Alejandro Portal,
Site Administrator.
Peru's mining tradition and history spans several hundred years. It is
the world's fifth largest producer of gold, third largest producer of
copper, a major producer of zinc and lead and the number one producer of
silver. Rio Alto is proud to have been able to attract the calibre
of people that make up its senior management team in Peru. They
allow the Company to implement its strategy for development, construction
and operation of the La Arena Gold Oxide Project utilizing Peruvian
personnel, service providers and contractors.
Acquisition of Surface Rights
La Arena S.A. completed the acquisition of 100% of the surface rights
over the current oxide resource at the La Arena Project. To date, La
Arena S.A. has acquired 72% (528 hectares) of the 732 hectares of surface
rights required to build the La Arena Gold Oxide Project. Additional land
will be acquired under an ongoing surface rights acquisition program.
Oxide Project Development Activities
There is a two-phase development plan for the La Arena Project: Phase 1 -
Gold Oxide Project; Phase 2 - Copper / Gold Sulphide Project. The focus
of Rio Alto's development activities during the next 18 to 20 months is
to bring the La Arena Gold Oxide Project into production.
To minimize capital expenditures, production will begin at a nominal rate
of 5,000 tonnes of ore per day and cash flow will be used to ramp up to
24,000 tonnes of ore per day within the first two years after start-up. Rio
Alto and its consultants estimate that start-up capital required would be
in the range of US$ 20M to US$ 23M. Development work during the coming
months will confirm start-up capital for the project.
Rio Alto has engaged the services of the following engineering companies
to complete all the necessary development work to bring the La Arena Gold
Oxide Project into production as soon as practicable.
Coffey Mining Pty Ltd - Reserve Estimate and Quality Control and Quality
Assurance
Vector Peru S.A.C. - Feasibility Study and Detailed Engineering of Site
Infrastructure
Tecnologia XXI S.A. - Environmental Impact
Assessment
Heap Leaching Consulting S.A.C. - Metallurgical Testing and Detailed
Plant Design
Coffey Mining
Coffey Mining is preparing an updated reserve estimate for the La Arena
Gold Oxide Project and recently spent two weeks in Peru meeting with
service providers, suppliers and mining contractors to gather current
cost information for input into the reserve estimate. As part of this
work, Coffey Mining invited six Peruvian mining contractors to submit
detailed quotations for the provision of drill and blast, excavate, load
and haul contracting services for the estimated six-seven year life of
the oxide project. The reserve estimate being prepared is expected to be
completed in September with a NI43-101 technical report to be filed
shortly thereafter.
Vector Peru
Vector Peru has completed a review and optimized the site layout for the
oxide project. The focus of the optimization process was to minimize haul
distances to the project's leach pad and waste dumps and to locate
facilities such as the processing plant, site offices and other
infrastructure in the most practical locations. Now that a new site
layout has been determined, a geotechnical and condemnation drilling
program will commence to confirm selected locations.
Tecnologia XXI
Tecnologia XXI is incorporating the new site
layout into an Environmental Impact Assessment (EIA) and upon completion, Rio Alto will file the EIA with Government
authorities. The first of a number of planned community consultation workshops
was held two weeks ago at La Arena. Rio Alto is pleased that this
workshop was well attended with more than 140 people from the immediate
and surrounding communities participating. A dedicated community
participation office is being established at the La Arena camp to provide
the local population with an open line of communication with Rio Alto
management and provide registration services for work opportunities at
the project.
Heap Leaching Consulting (HLC)
HLC has prepared a metallurgical sampling program from the oxide pit to
complete column leach tests for the definitive gold oxide leach plant
design at La Arena. Sampling will begin in the first week of August and
leach test work will commence shortly thereafter.
Rio Alto Mining Limited (TSXV:RIO, WKN: A0MSLE) is focused on
developing the La Arena Gold Oxide Project in Peru within the next 20
months and exploring for silver on three former silver producing
properties in north eastern Mexico. The Company's principal objective is
to become the next company in Peru to bring a gold project into
production and to use cash flow from production to further develop its
assets in Peru and Mexico. To learn more about Rio Alto Mining Limited,
please visit: www.mexicansilvermines.com. Financial information and
other information can also be found at www.sedar.com
ON
BEHALF OF THE BOARD OF
Rio Alto Mining Ltd.
___________________________________
Feisal Somji, B.Sc., MBA
President and Chief Executive Officer
FOR FURTHER INFORMATION, CONTACT:
Mexican
Silver Mines Ltd.
Feisal Somji,
President & CEO
Phone: 403.236.5089
Fax:
403.398.0693
Email: fsomji@mexicansilvermines.com
Web: www.mexicansilvermines.com
Investor Relations
Jamie
Mathers
Phone: 604.684.4743 ext. 236
Toll Free: 1.866.684.4743 ext.
236
Email: jamie@ascentacapital.com
Alejandra
Gomez
Phone: 604.762.8918
Fax: 604.943.5364
Email: alejandrag@rioaltomining.com
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