Ms. Kathryn Johnson reports

RIO ALTO SECURES USD$70 MILLION FINANCING

Rio Alto Mining Ltd. has obtained a commitment letter from Banco de Credito del Peru that provides for a financing for aggregate proceeds of $70-million (U.S.).

The financing will be composed of a term loan in the amount of $50-million (U.S.) and a lease agreement whereby La Arena SA acquires the operating assets of its electrical power subsidiary, Empresa de Energia Yamobamba SAC, for proceeds of $20-million (U.S.). The loan will have a one-year term and will bear an expected interest rate in the range of 2.5 per cent to 2.75 per cent per annum, and the lease will have a three-year term and an expected interest rate of 4.50 per cent per annum. The lease agreement transaction will allow Rio Alto to accelerate the refund of value-added tax (IGV) paid of up to $3.6-million (U.S.) (18-per-cent IGV levied on equipment and construction costs), which will be an additional cash inflow to the $70-million (U.S.) in financing. The financing has been structured by Credicorp Capital Servicios Financieros SA, and the funds lent by Banco de Credito del Peru. The completion of the financing is subject to the negotiation and execution of definitive agreements and the satisfaction of other customary closing conditions.

Kathryn Johnson, chief financial officer, commented: "We are delighted to have achieved the necessary financing to continue growing our company in Peru while deepening ties with local Peruvian financial institutions. I thank Credicorp Capital and Banco de Credito del Peru for the confidence and support they have shown Rio Alto through the years."

We seek Safe Harbor.