Mr. Alex Black reports
RIO ALTO INCREASES MINERAL RESOURCES AT LA ARENA
Rio Alto Mining Ltd. has received updated mineral resource estimates for its 100-per-cent-owned La Arena project. The updated oxide mineral resource estimate is limited to the Calaorco and Ethel deposits, and a zone of oxide material containing 300 parts per million to 1,000 ppm copper to the east of Calaorco. The updated mineral resource estimate for the La Arena sulphide project incorporates an additional 3,879 metres of diamond drilling and 21,904 metres of reverse circulation drilling when compared with the previous resource estimate. As part of the feasibility study for the La Arena sulphide deposit, the company expects to drill an additional 28,122 metres of DD and 11,412 metres of RC drilling that will complete the database for the sulphide feasibility study resource estimate which is due to be updated in third quarter 2012.
Both oxide and sulphide mineral resource estimates significantly increase the gold and copper resources previously described in the company's La Arena project technical report with an effective date of July 31, 2010, prepared on behalf of the company by Coffey Mining Pty. Ltd. The July, 2010, report may be referenced within Rio Alto's SEDAR profile.
Highlights of the updated mineral resource estimates
Oxide mineral resource (0.1-gram-per-tonne gold cut-off):
- 100.7 million tonnes grading 0.46 g/t gold in the measured and indicated
categories containing 1,484,000 ounces of gold representing an increase
of 434,000 gold ounces (41.33 per cent) from the oxide mineral resource estimate
in the July, 2010, report;
- 10.4 million tonnes grading 0.27 g/t gold in the inferred category
containing 90,000 ounces of gold representing an increase of 33,000 gold
ounces (57.89 per cent) from the oxide mineral resource estimate in the July,
2010, report.
The updated oxide mineral resource is based on drilling completed by Cambior and Iamgold (the previous owners) and drilling completed by Rio Alto during 2011. The oxide mineral resource remains open to the northwest and at depth. The company intends to further explore the oxide mineralization with an RC drill program during 2012.
Sulphide mineral resource (0.18-per-cent copper equivalent cut-off):
- 312.7 million tonnes grading 0.29 per cent copper per tonne and 0.24 g/t gold in
the indicated category containing 2.0 billion pounds of copper and
2,422,000 ounces of gold representing an increase of 285 million pounds
of copper (16.55 per cent) and 490,000 gold ounces (25.36 per cent) from the sulphide
mineral resource estimate in the July, 2010, report;
- 319.7 million tonnes grading 0.30 per cent copper per tonne and 0.20 g/t gold in
the inferred category containing 2.1 billion pounds of copper and
2,075,000 ounces of gold representing an increase of 963 million pounds
of copper (82.24 per cent) and 859,000 gold ounces (70.64 per cent) from the sulphide
mineral resource estimate in the July, 2010, report.
Drilling in the sulphide resource completed by the previous owners prior to 2006 was to an average depth of 450 metres. During the past six months, Rio Alto has drilled 12 DD holes to a depth of 800 metres and has received assay results for five of these deep DD holes, which are incorporated in the updated sulphide mineral resource estimate. A total of 40 RC holes drilled in the gap zone between the Calaorco oxide resource and the La Arena sulphide mineral resource and an additional 22 RC holes drilled in sulphides were also incorporated in the updated sulphide mineral resource estimate.
SIGNIFICANT SULPHIDE DRILL HOLE INTERCEPTS
Hole ID Interval Au g/t Cu % Ag g/t Mo ppm
LA-D11-001A 328 0.26 0.41 0.34 71
LA-D11-004 623 0.22 0.45 0.71 85
Including 135 0.38 0.82 2.23 287
LA-D11-008 635 0.30 0.48 0.54 82
Including 101 0.42 0.63 0.53 56
LA-D11-013 416 0.20 0.35 0.83 103
LA-D11-013 126 0.23 0.52 1.20 90
LA-D11-014 576 0.22 0.38 0.39 38
GAP-R11-015 360 0.23 0.26 0.30 40
GAP-R11-022 156 0.20 0.37 0.25 109
GAP-R11-030 334 0.35 0.31 0.46 22
GAP-R11-033 382 0.19 0.23 0.58 69
LA-R11-002 388 0.22 0.26 0.27 26
LA-R11-003 360 0.30 0.29 0.72 33
LA-R11-004 380 0.22 0.26 0.73 40
LA-R11-005 322 0.19 0.21 0.59 71
LA-R11-011 204 0.19 0.35 0.50 35
LA-R11-015 264 0.15 0.23 0.02 85
LA-R11-016 346 0.21 0.27 0.21 23
LA-R11-017 266 0.44 0.39 0.98 30
Including 98 0.88 0.78 1.69 18
LA-R11-020 190 0.39 0.52 0.41 43
LA-R11-022 302 0.23 0.34 0.31 37
Sulphide drilling results
The results of the additional 3,879 metres of DD holes and 21,904 metres of RC drilling completed by Rio Alto prior to the Sept. 30, 2011, effective date for the updated sulphide mineral resource are shown in the table, "Results of the additional 3,879 metres of DD holes and 21,904 metres of RC drilling."
RESULTS OF THE ADDITIONAL 3,879 METRES OF DD HOLES AND
21,904 METRES OF RC DRILLING
Hole ID From To Interval Au g/t Cu % Ag g/t Mo ppm
LA-D11-001A 86 414 328 0.26 0.41 0.34 71
Including 120 192 72 0.35 0.49 0.15 21
Including 240 356 116 0.28 0.50 0.69 126
LA-D11-001A 452 508 56 0.14 0.29 0.56 33
LA-D11-001A 570 785 215 0.17 0.40 0.77 85
Including 576 680 104 0.24 0.55 1.19 64
Including 764 785 21 0.22 0.54 0.42 73
LA-D11-004 188 811 623 0.22 0.45 0.71 85
Including 419 470 51 0.36 0.56 0.54 112
Including 590 724 135 0.38 0.82 2.23 287
LA-D11-008 20 36 16 0.28 0.27 0.28 54
LA-D11-008 94 125 31 0.24 0.24 1.17 54
LA-D11-008 174 809 635 0.30 0.48 0.54 82
Including 424 474 50 0.48 0.64 0.63 65
Including 570 670 101 0.42 0.63 0.53 56
Including 686 750 64 0.32 0.55 0.32 171
LA-D11-013 164 580 416 0.20 0.35 0.83 103
Including 500 569 70 0.49 0.77 2.30 109
LA-D11-013 614 740 126 0.23 0.52 1.20 90
Including 672 726 54 0.30 0.65 1.39 83
LA-D11-013 768 794 26 0.38 0.73 1.29 52
LA-D11-014 19 88 70 0.20 0.22 0.09 68
LA-D11-014 104 680 576 0.22 0.38 0.39 38
Including 218 248 30 0.40 0.55 0.75 17
Including 495 572 77 0.29 0.60 0.71 27
GAP-R11-006 316 354 38 0.09 0.16 0.01 36
GAP-R11-010 188 366 178 0.15 0.16 1.00 22
GAP-R11-011 44 122 78 0.22 0.10 0.38 23
GAP-R11-011 150 362 212 0.19 0.19 0.57 23
GAP-R11-014 60 258 198 0.14 0.17 0.31 66
Including 174 204 30 0.30 0.33 0.60 49
GAP-R11-014 302 334 32 0.11 0.14 0.18 54
GAP-R11-015 48 408 360 0.23 0.26 0.30 40
Including 112 262 150 0.29 0.32 0.37 32
GAP-R11-016 20 402 382 0.21 0.18 0.43 26
Including 66 90 24 0.34 0.44 0.63 33
GAP-R11-017 322 402 80 0.21 0.21 0.53 34
GAP-R11-020 314 360 46 0.09 0.14 0.01 31
GAP-R11-021 8 310 302 0.14 0.21 0.14 31
Including 50 80 30 0.20 0.53 0.07 20
GAP-R11-022 0 156 156 0.20 0.37 0.25 109
Including 36 138 102 0.22 0.47 0.30 118
GAP-R11-026 32 146 114 0.17 0.23 0.01 71
GAP-R11-027 0 150 150 0.12 0.17 0.22 72
Including 28 56 28 0.14 0.26 0.41 83
GAP-R11-028 50 76 26 0.17 0.21 0.42 42
GAP-R11-030 22 60 38 0.24 0.18 0.51 56
GAP-R11-030 68 402 334 0.35 0.31 0.46 22
Including 140 234 94 0.39 0.36 0.05 26
Including 322 392 70 0.64 0.53 1.30 13
GAP-R11-031 6 120 114 0.22 0.28 0.35 115
Including 76 120 44 0.27 0.45 0.09 164
GAP-R11-031 176 300 124 0.25 0.33 0.87 69
GAP-R11-032 190 300 110 0.20 0.20 0.01 40
GAP-R11-033 20 402 382 0.19 0.23 0.58 69
Including 42 72 30 0.19 0.47 0.14 44
GAP-R11-034 108 276 168 0.12 0.18 0.61 66
GAP-R11-035 272 286 14 0.52 0.49 13.61 25
GAP-R11-035 250 402 152 0.23 0.22 3.36 27
GAP-R11-036 256 300 44 0.12 0.14 0.65 26
GAP-R11-040 170 234 64 0.13 0.29 0.31 34
Including 202 224 22 0.15 0.47 0.18 33
LA-R11-002 14 402 388 0.22 0.26 0.27 26
Including 20 54 34 0.50 0.58 0.26 17
Including 306 342 36 0.44 0.54 1.06 39
LA-R11-003 42 402 360 0.30 0.29 0.72 33
Including 328 374 46 0.50 0.58 1.12 37
LA-R11-004 22 402 380 0.22 0.26 0.73 40
LA-R11-005 80 402 322 0.19 0.21 0.59 71
LA-R11-006 4 44 40 0.16 0.21 0.34 50
LA-R11-006 120 300 180 0.17 0.20 0.45 46
LA-R11-007 0 76 76 0.20 0.25 0.61 43
LA-R11-007 124 168 44 0.15 0.18 0.21 13
LA-R11-007 196 300 104 0.14 0.14 0.04 14
LA-R11-008 6 82 76 0.18 0.16 0.05 42
LA-R11-008 154 296 142 0.15 0.17 0.46 28
LA-R11-009 140 282 142 0.16 0.20 0.31 64
LA-R11-010 184 300 116 0.18 0.20 0.34 42
LA-R11-011 24 228 204 0.19 0.35 0.50 35
Including 52 120 68 0.26 0.46 0.58 48
LA-R11-012 48 136 88 0.20 0.29 0.66 78
LA-R11-012 228 402 174 0.12 0.17 0.66 53
LA-R11-013 76 124 48 0.24 0.33 0.13 353
LA-R11-014 34 104 70 0.32 0.57 0.48 17
LA-R11-015 124 388 264 0.15 0.23 0.02 85
Including 276 388 112 0.26 0.35 0.01 77
LA-R11-016 26 372 346 0.21 0.27 0.21 23
Including 26 82 56 0.28 0.44 0.08 55
Including 260 300 40 0.36 0.46 0.40 29
Including 330 346 16 0.41 0.55 0.91 14
LA-R11-017 34 300 266 0.44 0.39 0.98 30
Including 60 158 98 0.88 0.78 1.69 18
LA-R11-018 36 122 86 0.25 0.29 0.51 65
LA-R11-019 50 132 82 0.33 0.38 0.10 19
LA-R11-019 320 348 28 0.11 0.13 0.01 47
LA-R11-020 0 190 190 0.39 0.52 0.41 43
Including 8 134 126 0.48 0.69 0.35 55
LA-R11-020 250 402 152 0.12 0.19 0.45 36
LA-R11-021 14 154 140 0.37 0.42 0.55 38
Including 52 104 52 0.59 0.62 0.68 48
LA-R11-021 174 214 40 0.20 0.46 1.10 10
LA-R11-022 48 350 302 0.23 0.34 0.31 37
The company will release assay results for the additional and future drill holes once the results have been compiled. The five deep DD holes drilled, by Rio Alto, to date have all ended in mineralization. The sulphide mineral resource is open at depth and in all directions. In addition to completing the sulphide feasibility study drill program, the company intends to begin testing the extension of the sulphide mineralization during 2012.
Resource development drilling
There are two RC and four DD rigs operating at the La Arena project. The current work program is to complete an additional 21,904 metres of DD drilling and 11,412 metres of RC drilling in the sulphide, for an estimated total of 32,000 DD metres and 34,000 RC metres related to the continuing sulphide feasibility study. A total of 22,612 metres of RC drilling within the oxide mineral resource was completed during 2011 and results of that drilling were announced during the year.
Oxide mineral resource estimate
OXIDE MINERAL RESOURCE -- LOW COPPER (CU LESS THAN 300 PPM;
AU GREATER THAN EQUALS 0.1 G/T)
Ag Mo Au
Resource classification Mt Au (g/t) Cu (%) (ppm) (ppm) (000 oz)
Measured 9.8 0.67 0.01 0.6 6.9 210
Indicated 76.9 0.46 0.01 0.5 6.5 1,136
Measured and indicated 86.7 0.48 0.01 0.5 6.6 1,346
Inferred 9.0 0.28 0.01 0.5 6.7 82
OXIDE MINERAL RESOURCE -- HIGH COPPER (CU 300 PPM TO 1,000 PPM;
AU GREATER THAN EQUALS 0.1 G/T)
Ag Mo Au
Resource classification Mt Au (g/t) Cu (%) (ppm) (ppm) (000 oz)
Measured 0.5 0.66 0.06 0.7 36.0 11
Indicated 13.5 0.29 0.06 0.6 41.4 127
Measured and indicated 14.0 0.31 0.06 0.6 41.2 138
Inferred 1.4 0.18 0.06 0.6 55.7 8
OXIDE MINERAL RESOURCE -- TOTAL
Ag Mo Au
Resource classification Mt Au (g/t) Cu (%) (ppm) (ppm) (000 oz)
Measured 10.3 0.67 0.01 0.6 8.3 221
Indicated 90.4 0.43 0.02 0.5 11.7 1,263
Measured and indicated 100.7 0.46 0.02 0.5 11.4 1,484
Inferred 10.4 0.27 0.01 0.5 13.1 90
The updated oxide mineral resource estimate was based on a total of 22,612 metres of RC drilling and 24,658 metres of DD holes in a total of 427 holes. The previous owners completed 183 DD holes totalling 24,658 metres. Rio Alto completed the balance of 22,612 metres of RC drilling during 2011.
The updated oxide mineral resource estimate was generated from drill hole sample assay results and the interpretation of a geological model that relates to the spatial distribution of gold, copper and silver within the deposit. Mineralized oxide material containing copper amounts in excess of 1,000 ppm per tonne was considered to be waste material. As a result of limited testwork conducted during 2011, Rio Alto believes there is potential to either blend or separately leach the oxide-high copper material with oxide-low copper resource material. A metallurgical laboratory is under construction at the La Arena mine site and once completed will test the viability and economics of leaching the oxide-high copper material.
Grade estimates for the oxide mineral resource were made using ordinary kriging with parental block sizes measuring 20 m long, 10 m wide and six m in height. The resource is confined within an optimized undiscounted pit shell based on $1,600 (U.S.) per ounce gold, $3.00 (U.S.) per pound copper and $30 (U.S.) per ounce silver, and also constrained by anticipated metallurgical recovery, costs to produce and sell potential metal production as well as estimated leach pad expansion costs.
Sulphide mineral resource estimate
UPDATED SULPHIDE RESOURCE ESTIMATE FOR LA ARENA PROJECT
Resource Au
classifi- Mt Au Cu CuEq(1) Ag Mo (000 Cu
cation (millions) (g/t) (%) (%) (ppm) (ppm) oz) (000s lb)
Indicated 312.7 0.24 0.29 0.48 0.7 42.9 2,422 2,007,000
Inferred 319.7 0.20 0.30 0.46 0.6 46.1 2,075 2,134,000
The updated sulphide mineral resource estimate was based on 148 DD holes totalling 34,688 m and 62 RC holes totalling 21,904 m, including 72 holes totalling 25,783 m drilled by Rio Alto and 143 DD holes totalling 30,737 m drilled by the previous owners. Prior to the generation of the updated sulphide mineral resource estimate, Rio Alto's geologists relogged all the holes drilled by the previous owners and revised the geological model for the sulphide deposit.
The sulphide mineral resource estimate was generated from drill hole sample assay results and the interpretation of a geological model relating to the spatial distribution of copper and gold mineralization within the deposit. Grade estimates were made using ordinary kriging with a parental block size of 20 m long, 10 m wide and six m in height. The resource is confined within an optimized undiscounted pit shell based on $1,600 (U.S.) per ounce gold, $3.00 (U.S.) per pound copper, $30 (U.S.) per ounce silver and $12.00 (U.S.) per pound molybdenum, and also constrained by estimated metallurgical recoveries, costs to mine, process and sell copper and gold in the form of copper concentrate.
The updated oxide and sulphide mineral resource estimates were prepared and classified in accordance with the guidelines set out in the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves of December, 2004, as prepared by the joint ore reserves committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia (JORC). The resource classification is also in accordance with the classification standards of National Instrument 43-101 Standards for Disclosure for Mineral Projects and the reporting classification standards on mineral resources and reserves of the Canadian Institute of Mining, Metallurgy and Petroleum. These estimates will be incorporated in a National Instrument 43-101 technical report with an effective date of Sept. 30, 2011, to be filed on the company's SEDAR profile within 45 days.
Quality control and assurance
Sampling of RC drilling and sample preparation for holes drilled by the company were performed by Rio Alto personnel and carried out under strict protocols recommended in the July, 2010, report. Samples were taken every two metres and split in half to yield seven- to 10-kilogram samples. Drill sample recovery was generally in excess of 90 per cent.
Sampling of DD holes and sample preparation for holes drilled by the company were performed by Rio Alto personnel. In the case of each DD hole, an average depth of 450 to 500 metres was drilled with a HQ bit (63.5-millimetre core size), and the remainder of the hole drilled with an NQ bit (47.6 mm core size). Drill core sample recovery was generally in excess of 90 per cent. The core boxes were washed and photographed. The sample intervals are every two metres, except where sampling is broken up on specific geological contacts. The core is split in half using a rock saw with half of the core sent for laboratory analysis and half of the core remaining in storage.
The quality assurance/quality control procedures employed for sampling and assaying of holes drilled by the previous owners are described in the July, 2010, report and were considered satisfactory. There is a rigorous QA/QC program over the chain of custody of samples and the insertion of blanks, duplicates and certified reference standards in each batch of samples. This procedure was implemented based on a recommended protocol from Coffey Mining in 2011.
Samples were shipped to CIMM-Peru, in Lima, where they were processed and assayed. All gold assays were obtained by standard 50-gram fire assaying with AAS finish. All silver assays were obtained by aqua-regia dissolution followed by ICP measurement. All Cu and Mo assays were obtained by aqua-regia dissolution followed by ICP. Cu values over 10,000 parts per million are assayed by atomic absorption. The induced coupled plasma technique provides assays for 35 elements. CIMM-Peru is an ISO 9001:2000 certified laboratory.
Enrique Garay, MSc, PGeo (AIG member), vice-president geology of Rio Alto, is the qualified person (as defined by NI 43-101) responsible for managing the company's exploration programs and disclosure of drilling results. Ian Dreyer, BAppSc (AUSIMM 305241, CP), a qualified person (as defined by NI 43-101), formerly of Coffey Mining Pty. Ltd., designed and reviewed the quality control and assurance program of the company, and prepared the resource estimates. Mr. Garay and Mr. Dreyer have read and verified the scientific and technical information in this press release.
For additional information regarding La Arena project please refer to the July, 2010, report prepared by Coffey Mining Pty. Ltd., a copy of which is available on the company's SEDAR profile.
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