Latest news: Rio Alto Mining Limited: US$24.25 Million Accessed to Build La Arena Gold Mine
CALGARY, ALBERTA, Apr 20, 2010 Rio Alto Mining Limited is pleased to announce that it has entered into terms for a gold prepayment agreement in the amount of US$24.25 million with a New York-based, private institutional investor. At closing the Company will pay a cash fee of US$750,000 for assistance in arranging the prepayment agreement. Net proceeds from the agreement will be used to develop the La Arena gold oxide project in Peru.
Funding under the agreement is subject to completion of legal documentation, regulatory, including the TSX Venture Exchange, approval and conditions precedent typical of a transaction of this nature. Under the terms of the agreement, funds will be placed in escrow upon Rio Alto receiving environmental approval from the Peruvian Ministry of Energy and Mines ("MEM") for development of a 24,000 tonne per day gold oxide mine. Funds will be released from escrow upon receipt of construction permits for the mine development. The Company anticipates receipt of MEM approval in late May or June and receipt of construction permits approximately two months later.
The US$24.25 million is to be repaid by delivery of 36,800 ounces of gold over a forty-month period from first gold production.
Anthony Hawkshaw, CFO, commented that "Committing a small portion of La Arena's expected gold oxide production to fund completion of the mine is significantly less dilutive than funding the mine construction with equity. This gold pre-sale not only represents a less dilutive financing option it also maintains existing shareholders' interest in more than 90 per cent of the expected oxide gold production and preserves their interest in the existing copper/gold resource of approximately 3 billion pounds of copper and 3 million ounces of gold as well as the potential exploration upside from the Company's 21,000 hectares of nearby mining concessions."
This news release contains certain forward-looking information including statements concerning the expected timing of MEM approval and the receipt of construction permits and expected production from the La Arena gold mine. All statements included herein, other than statements of historical fact, are forward-looking information and such information involves various risks and uncertainties. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information. A description of assumptions used to develop such forward-looking information and a description of risk factors that may cause actual results to differ materially from forward-looking information can be found in Rio Alto's disclosure documents on the SEDAR website at www.sedar.com. Rio Alto does not undertake to update any forward-looking information except in accordance with applicable securities laws.
To learn more about Rio Alto Mining Limited, please visit: www.rioaltomining.com. Technical information relating to La Arena project contained in this news release is derived from the technical report (the "Report") entitled "La Arena Project, Peru Technical Report" dated March 31, 2008. The Report was prepared in accordance with NI 43-101 and a copy is available under Rio Alto's SEDAR profile at www.sedar.com.
ON BEHALF OF THE BOARD OF RIO ALTO MINING LIMITED
Anthony Hawkshaw, Chief Financial Officer
SOURCE: Rio Alto Mining Limited
CONTACT: Rio Alto Mining Limited
Feisal Somji
President & CEO
403.236.5089
403.398.0693 (FAX)
feisals@rioaltomining.com
Rio Alto Mining Limited
Alejandra Gomez
Investor Relations
604.628.1401
866.393.4493 (FAX)
alejandrag@rioaltomining.com
www.rioaltomining.com
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INDUSTRY KEYWORD: Manufacturing and Production/Mining and Metals
SUBJECT CODE: BUSINESS CONTRACTS
