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 October 11, 2007
Rusoro to Acquire Gold Fields' Venezuelan Assets to become Immediate Producer

 

NOT FOR DISTRIBUTION TO A US NEWSWIRE SERVICE OR FOR DISSEMINATION IN THE UNITED STATES

Overnight marketing agreement signed to raise a minimum of $160 million

Vancouver, Canada - Rusoro Mining Ltd. ("Rusoro"), is pleased to announce that it has agreed with Gold Fields Netherlands Services BV ("Gold Fields"), a wholly-owned subsidiary of Gold Fields Limited (JSE:GFI, NYSE:GFI) whereby Rusoro will acquire all of Gold Fields' Venezuelan assets, including the producing Choco 10 mine situated in the El Callao district of Bolivar State, Venezuela.

This strategic business combination provides Rusoro with immediate gold production and confirms Rusoro as a focused gold company with an exceptional growth profile. The business combination provides Rusoro with the following benefits:

Immediate Production. Choco 10 has been operational since 2006 and the annualized targeted production for the combined assets is 150,000 ounces per year by the end of 2008.

Significant Expansion Opportunities. Choco 10 is designed to allow significant capacity expansion.

Exceptional Regional Synergies. Choco 10 is approximately four kilometres from Rusoro's Increible 6 development property. The combination also contributes over 25,000 hectares of highly prospective exploration properties in the El Callao Region.

Unlocking Venezuelan Value. Rusoro's proven ability to operate in Venezuela will enable the company to unlock further value from these Venezuelan assets.

Regional Consolidation. Rusoro is well financed with approximately CDN$50 million in cash and is well placed to continue its regional consolidation strategy.

Significantly Increased Reserve and Resource Base. The combined company's Measured and Indicated Resources will total 6.6 million attributable ounces with additional Inferred Resources of 6.2 million attributable ounces. Choco 10 has 1.7 million attributable Reserve ounces, which are included in the Resource ounces described above.

Upon completion of the acquisition, Rusoro's management plans to use its Venezuelan operating experience to resolve certain hurdles encountered by Gold Fields at Choco 10. Rusoro's focus over the next 12 to 24 months at Choco 10 will be to optimize operating efficiency, lower costs and study production ramp-up alternatives.

The combined company's reserves and resources are set out in the tables below. Attributable ounces are based on Gold Fields' 95% interest in Choco 10. Updated NI43-101 technical reports on the Choco 10 property and the company's Increible 6 property, where the company has recently completed a 40,000 metre drill program, are in progress and are expected to be completed within the next 45 days.

Combined Assets - Reserves (Choco 10, 95% Basis)

Reserves

Tons (Mt)

Grade (g/t)

Gold ('000 oz)

Proven

1.9

3.0

180

Probable

13.6

3.4

1,482

Total Reserves

15.4

3.4

1,662


Combined Assets - Measured & Indicated Resources (inclusive of Reserves)

Project

Tons (Mt)

Grade (g/t)

Gold ('000 oz)

Measured

 

 

 

Choco 10 (95%)

2.3

2.9

221

Indicated

 

 

 

Increible

23.5

2.1

1,591

Emilia

-

-

-

San Rafael / El Placer

0.9

16.6

490

Valle Hondo

3.5

0.9

103

Ceiba

-

-

-

Choco 10 (95%)

53.8

2.4

4,225

Total Indicated

81.7

2.4

6,409

Total Measured and Indicated Resources

84.0

2.5

6,630


Combined Assets - Inferred Resources

Project

Tons (Mt)

Grade (g/t)

Gold ('000 oz)

Increible

17.5

2.0

1,099

Emilia

0.7

3.9

83

San Rafael / El Placer

0.7

15.7

367

Valle Hondo

47.0

0.9

1,344

Ceiba

1.6

9.2

458

Choco 10 (95%)

40.8

2.2

2,869

Total Inferred Resources

108.2

1.8

6,220


Choco 10 information is based on Gold Fields' current in-situ resource models as adjusted by Rusoro. The Gold Fields estimates used three-dimensional computerized models containing geological data and kriged estimated grades at a cutoff of 0.5 g/t Au. An NI43-101 compliant resource estimate commission by Rusoro on the Choco 10 property is currently in progress and is expected to be completed within the next 45 days.

Rusoro's presently filed NI43-101 (dated August 2006) compliant resource base totals 1.03 million Indicated ounces of gold (9.1 million tonnes @ 3.5 g/t Au) and 3.02 million Inferred ounces of gold (59.0 million tonnes @ 1.6 g/t Au) (see Rusoro news release dated November 9, 2006 for details). An updated NI43-101 compliant report on the company's Increible 6 property is currently in progress and is expected to be completed within the next 45 days.

Mr. Gregory Smith, P.Geo, the Vice-President Exploration of the Company, is the Qualified Person as defined by NI43-101, and is responsible for the accuracy of this news release.

Under the agreed terms, Rusoro is to acquire 100% of Gold Fields' Venezuelan assets for US$150 million in cash, US$30 million in a convertible vendor take-back loan plus the issuance of 140 million Rusoro shares.

Rusoro has entered into an overnight marketing agreement to raise a minimum of $160 million. Canaccord Adams is the co-lead agent with GMP Securities in the financing syndicate which includes PI Financial. The vendor take-back loan: is for a term of 3 years; is unsecured; provides for annual interest at 7%; and is convertible at the higher of a 33% premium to the financing price pursuant to the $160 million financing described above, and US$3.00.

Rusoro is pleased to confirm that on closing the transaction, Gold Fields will become a significant shareholder in the company, holding approximately 38% of the company's shares. Gold Fields has agreed that it will not sell any of its shares for the period of 8 months after closing and has agreed to restrictions on resales after that time in order to maintain an orderly market. Subject to Gold Fields maintaining certain shareholding thresholds, Gold Fields will be entitled to nominate up to 2 board members to the Rusoro board.

It is anticipated that the transaction will be structured as a statutory merger under BVI law. The business combination has the support of the Boards of Directors of both Rusoro and Gold Fields. In addition, the Rusoro Board and key shareholders have provided Gold Fields with irrevocable commitments, representing a majority of Rusoro's outstanding shares, to vote their shares in favour of the transaction. Closing of the business combination is expected to occur in early December 2007.

Gold Fields and Rusoro have agreed to cooperate on all operating, development and in-country discussions regarding the Venezuelan assets until closing. The business combination between Rusoro and Gold Fields is subject to customary conditions, including receipt of all requisite third party and regulatory approvals and consents and approval by shareholders of Rusoro.

Commenting on the transaction, Andre Agapov, CEO of Rusoro said, "The acquisition of Choco 10 provides our company with strategic and geographic synergies, providing Rusoro shareholders with an opportunity to rapidly grow the Company in an accretive manner."

Company President George Salamis stated that, "The successful completion of this transaction will dramatically expand and accelerate Rusoro's production growth profile and offers an excellent opportunity to fast track production at the Increible 6 project, while moving us significantly closer to positioning ourselves as an intermediate gold producer".

Rusoro's financial advisor is Endeavour Financial International Corporation and its legal advisor is Anfield Sujir Kennedy & Durno.
ON BEHALF OF THE BOARD

"Vladimir Agapov"
Vladimir Agapov, Chairman


CONTACT INFORMATION

George Salamis, President
Tel: 604-682-1545 Fax: 604-682-1514
Toll Free: 1-800-668-0091
Symbol: TSX-V:RML Email: info@rusoro.com
Website: www.rusoro.com


The TSX Venture Exchange has not reviewed and does not take responsibility for the adequacy or accuracy of this release. The foregoing information may contain forward-looking statements relating to the future performance of Rusoro Mining Ltd. Forward-looking statements, specifically those concerning future performance, are subject to certain risks and uncertainties, and actual results may differ materially. These risks and uncertainties are detailed from time to time in the Corporation's filings with the appropriate securities commissions.

 
 

You can view the Next News Releases item: Fri Oct 12, 2007, Rusoro Mining Ltd. Raises $210 Million for Acquisition of Gold Fields Venezuelan Assets

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