40-F

UNITED STATES	OMB APPROVAL
SECURITIES AND EXCHANGE COMMISSION	OMB Number:	3235-0381
Washington, D.C. 20549	Expires:	July 31, 2014
FORM 40-F	Estimated average burden
	hours per response.	427

[   ] REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934

OR

[ X ] ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2012     Commission File Number

Rio Alto Mining Limited
(Exact name of Registrant as specified in its charter)

N/A
(Translation of Registrant’s name into English (if applicable))

Alberta
(Province or other jurisdiction of incorporation or organization)

1040
(Primary Standard Industrial Classification Code Number (if applicable))

N/A
(I.R.S. Employer Identification Number (if applicable))

Suite 1950 – 400 Burrard Street
Vancouver, British Columbia, Canada V6C 3A6
(604) 628-1401

(Address and telephone number of Registrant’s principal executive offices)

The Corporation Trust Company
1209 Orange Street
Wilmington, DE 19801
(866) 261-9756
(Name, address (including zip code) and telephone number (including area code) of agent for service in the United States)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of Each Class:	Name of Each Exchange On Which Registered:
Common Stock, no par value	NYSE

Securities registered or to be registered pursuant to Section 12(g) of the Act: N/A

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: N/A

For annual reports, indicate by check mark the information filed with this Form:

[ X ] Annual information form   [ X ] Audited annual financial statements

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: 175,536,962.

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes [   ]   No[ X ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).

Yes [   ]   No[   ]

EXPLANATORY NOTE

Rio Alto Mining Limited (the “Company” or “Rio Alto”) is a Canadian issuer eligible to file its annual report pursuant to Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on Form 40-F pursuant to the multi-jurisdictional disclosure system of the Exchange Act. The Company is a “foreign private issuer” as defined in Rule 3b-4 under the Exchange Act. Equity securities of the Company are accordingly exempt from Sections 14(a), 14(b), 14(c), 14(f) and 16 of the Exchange Act pursuant to Rule 3a12-3.

FORWARD-LOOKING STATEMENTS

This annual report on Form 40-F and the exhibits attached hereto contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements concern our anticipated results and developments in our operations in future periods, planned exploration and development of our properties, plans related to our business and other matters that may occur in the future. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.

Statements concerning reserves and mineral resource estimates may also be deemed to constitute forward-looking statements to the extent that they involve estimates of the mineralization that will be encountered if the Company’s property is developed, and in the case of mineral reserves, such statements reflect the conclusion based on certain assumptions that a mineral deposit can be economically exploited. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects” or “does not expect”, “is expected” or “is not expected”, “anticipates” or “does not anticipate”, “plans”, “estimates” or “intends”, or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” (or the negative and grammatical variations of any of these terms and similar expressions) be taken, occur or be achieved,) are not statements of historical fact and may be forward-looking statements. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation:

• risks related to precious and base metal price fluctuations;
• risks related to fluctuations in the currency markets (particularly the Peruvian Nuevo Sol, Canadian dollar and United States dollar);
• risks related to the inherently dangerous activity of mining, including conditions or events beyond our control, and operating or technical difficulties in mineral exploration, development and mining activities;
• uncertainty in the Company’s ability to raise financing and fund the exploration and development of its mineral properties;
• uncertainty as to actual capital costs, operating costs, production and economic returns, and uncertainty that development activities will result in profitable mining operations;
• risks related to mineral reserves and mineral resource figures being estimates based on interpretations and assumptions which may result in less mineral production under actual conditions than is currently estimated and to diminishing quantities or grades of mineral reserves as properties are mined;
• risks related to governmental regulations and obtaining necessary licenses and permits;
• risks related to the business being subject to environmental laws and regulations which may increase costs of doing business and restrict our operations;
• risks related to mineral properties being subject to prior unregistered agreements, transfers, or claims and other defects in title;
• risks relating to inadequate insurance or inability to obtain insurance;
• risks related to potential litigation;
• risks related to the global economy;
• risks related to environmental laws;
• risks related to the volatility of the Company’s share price;
• risks related to the Company’s limited history of earning and operations;
• risks related to the Company's properties being located in Peru, which can lead to difficulty with changes in political conditions and regulations, currency exchange, obtaining financing, finding and hiring qualified people, permitting or obtaining all necessary services for the Company's operations in Peru;
• risks related to the Company’s status as a foreign private issuer; and
• risks related to officers and directors becoming associated with other natural resource companies which may give rise to conflicts of interests.

This list is not exhaustive of the factors that may affect our forward-looking statements. Some of the important risks and uncertainties that could affect forward-looking statements are described further in the exhibits attached to this

annual report on Form 40-F. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the forward-looking statements. The Company’s forward-looking statements are based on beliefs, expectations and opinions of management on the date the statements are made and the Company does not assume any obligation to update forward-looking statements if circumstances or management’s beliefs, expectations or opinions change, except as required by law. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.

NOTE TO UNITED STATES READERS-
DIFFERENCES IN UNITED STATES AND CANADIAN REPORTING PRACTISES

The Company is permitted, under a multijurisdictional disclosure system adopted by the United States, to prepare this annual report in accordance with Canadian disclosure requirements, which are different from those of the United States. The Company prepares its financial statements, which are filed as Exhibit 99.2 to this annual report on Form 40-F in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and they may not in all cases be comparable to financial statements of the United States companies.

RESOURCE AND RESERVE ESTIMATES

The Company’s Annual Information Form (“AIF”) filed as Exhibit 99.1 to this annual report on Form 40-F has been prepared in accordance with the requirements of the securities laws in effect in Canada, which differ from the requirements of United States securities laws. The terms “mineral reserve”, “proven mineral reserve” and “probable mineral reserve” are Canadian mining terms as defined in accordance with Canadian National Instrument 43-101—Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”)—CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended. These definitions differ from the definitions in SEC Industry Guide 7 under the United States Securities Act of 1933, as amended (the “Securities Act”).

Under SEC Industry Guide 7 standards, a “final” or “bankable” feasibility study is required to report mineral reserves, the three-year historical average price is to be used in any mineral reserve or cash flow analysis to designate mineral reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority.

In addition, the terms “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” are defined in and required to be disclosed by NI 43-101; however, these terms are not defined terms under SEC Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the SEC. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into mineral reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Mineral resource estimates do not account for mineability, selectivity, mining loss and dilution. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable. Disclosure of contained pounds and ounces in a mineral resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC Industry Guide 7 standards as in place tonnage and grade without reference to unit measures.

Accordingly, information contained in this registration statement and the documents incorporated by reference herein contain descriptions of the Company's mineral deposits that may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder. In order for Rio Alto to advance its interests, the projects will be subject to a number of federal, regional and local laws and regulations in Peru and will require permits to conduct its activities. The concessions are owned by La Arena, S.A., a company incorporated under the laws of Peru.

CURRENCY

Unless otherwise indicated, all dollar amounts in this annual report on Form 40-F are in United States Dollars. The Exchange rate of Canadian dollars into United States dollars, on December 31, 2012, based upon the noon exchange rate as quoted by the Bank of Canada, was US$1= CDN$0.9949.

ANNUAL INFORMATION FORM

The Company’s AIF for the fiscal year ended December 31, 2012 is filed as Exhibit 99.1 an incorporated by reference in this annual report on Form 40-F.

AUDITED ANNUAL FINANCIAL STATEMENTS

The audited consolidated financial statements of the Company for the year ended December 31, 2012, the seven-month financial year ended December 31, 2011 and the year ended May 31, 2011, including the report of the independent auditor with respect thereto, are filed as Exhibit 99.2 and incorporated by reference in this annual report on Form 40-F.

MANAGEMENT DISCUSSION AND ANALYSIS

The Company's Management Discussion and Analysis (“MD&A”) for the fiscal year ended December 31, 2012 is filed as Exhibit 99.3 and incorporated by reference in this annual report on Form 40-F.

TAX MATTERS

Purchasing, holding or disposing of securities of the Registrant may have tax consequences under the laws of the United States, Canada and Peru that are not described in this Annual Report on Form 40-F.

OFF-BALANCE SHEET TRANSACTIONS

The Company does not have any off-balance sheet financing arrangements or relationships with unconsolidated special purpose entities.

CONTRACTUAL OBLIGATIONS

Payments due by period as at December 31, 2012, in 000s of United States dollars.

		Within 1 year	2 to 5 years		Over 5 years			Total
Accounts payable	$	43,738	$	2,331	$	-	$	46,069
Derivative liability (note 20 of Exhibit 99.2)		1,102		942		-		2,044
Office leases		275		463		-		738
Asset retirement obligation (note 23 Exhibit 99.)		-		5,300		32,800		38,100
Long term debt and accrued interest of $258 (note 21 Exhibit 99.2)		-		3,258		-		3,258
Duran expenditures (note 10 of Exhibit 99.2)		-		1,500		-		1,500
Santa Barbara expenditures (note 32 of Exhibit 99.2)		1,500		-		-		1,500
Total	$	46,615	$	13,794	$	32,800	$	93,209

CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

At the end of the period covered by this annual report on Form 40-F for the fiscal year ended December 31, 2012, an evaluation, including the documentation and testing of disclosure controls, was carried out throughout the yeaer under the supervision of, and the with the participation of, the Company’s management, including its Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act). Based upon that evaluation, the Company’s CEO and CFO have concluded that the disclosure controls and procedures as of December 31, 2012 were designed and effective to give reasonable assurance that the information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and (ii) gathered and reported to senior management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding public disclosure

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) under the Exchange Act. The Company’s management has employed a framework consistent with Exchange Act Rule 13a-15(c), to evaluate the Company’s internal control over financial reporting described below. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. It should be noted that a control system, no matter how well conceived or operated, can only provide reasonable assurance, not absolute assurance, that the objectives of the control system are met. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies and procedures may deteriorate.

Management, including the CEO and CFO, is responsible for establishing and maintaining adequate internal control over financial reporting, and used the framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) to evaluate the effectiveness of our controls for the fiscal year ended December 31, 2012. Based on this evaluation, management concluded that our internal control over financial reporting was effective as at December 31, 2012.

This Annual Report does not include an attestation report of the Company’s registered public accounting firm due to a transition period established by rules of the SEC for newly public companies. Additionally, under the Jumpstart Our Business & Startups Act (“JOBS Act”), emerging growth companies are exempt from Section 404(b) of the Sarbanes-Oxley Act, which generally requires public companies to provide an independent auditor attestation of management’s assessment of the effectiveness of their internal control over financial reporting. The Company qualifies as an emerging growth company under the JOBS Act and therefore has not included an independent auditor attestation of management’s assessment of the effectiveness of its internal control over financial reporting.

Changes in Internal Control over Financial Reporting

Management, including the CEO and CFO, have evaluated the Company’s internal controls over financial reporting to determine whether any changes occurred during the period covered by this annual report on Form 40-F that may

have materially affect or are reasonably likely to materially affect, the Company’s internal control over financial reporting. Management has concluded there have been no changes in the Company’s internal control over financial reporting during its fiscal year ended December 31, 2012 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

CORPORATE GOVERNANCE

The Company’s Board of Directors (the "Board of Directors") is responsible for the Company's Corporate Governance policies and has separately designated standing Corporate Governance and Compensation and Audit Committees. On an annual basis, the Board of Directors reviews the relationship each director has with the Corporation to determine whether or not their independence is maintained. The Board of Directors determined that all the member s of the Corporate Governance and Compensation Committee and the Audit Committee are based on the criteria for independence prescribed by Section 303A.02 of the NYSE Listed Company Manual.

Corporate Governance and Compensation Committee

The role of the Corporate Governance and Compensation (“CGC”) Committee is to provide recommendations to the Board of Directors with regards to compensation of officers, directors and employees of the Company pursuant to Section 303A.05 of the NYSE Listed Company Manual. The Corporate Governance and Compensation Committee performs annual reviews and provides recommendations to the Board regarding the compensation policies and guidelines for corporate benefits, bonuses and other incentives, including stock options, for supervisory and management personnel of the Company. The CGC committee is composed of three independent directors: Roger Norwich (Chair), Klaus Zeitler and Sidney Robinson. The Company’s CGC Committee’s charter is available on the Company’s website at http://rioaltomining.com/corporate/governance/

Audit Committee

The Company’s Board of Directors has a separately designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act and Section 303A.06 of the NYSE Listed Company Manual. The primary function of the audit committee of the Board of Directors of the Corporation is to assist the Board of Directors in fulfilling its financial oversight responsibilities by reviewing the financial reports and other financial information provided by the Corporation to regulatory authorities and shareholders, the Corporation’s systems of internal controls regarding finance and accounting, and the Corporation’s auditing, accounting and financial reporting processes. Consistent with this function, the Committee will encourage continuous improvement of, and should foster adherence to, the Corporation’s policies, procedures and practices at all levels. The members of the Company’s Audit Committee are: Ram Ramachandran (Chair), Drago Kisic and Dr. Roger Norwich. In the opinion of the company’s Board of Directors all members of the Audit Committee are “independent” (as determined by Rule 10A-3 of the Exchange Act and Section 303A-02 of the NYSE Listed Company Manual) and are financially literate. The Board has determined that Ram Ramachandran qualifies as a financial expert, as defined in Item 407(d)(5)(ii) of Regulation S-K under the Exchange Act.

The audit committee meets the composition requirements set forth by Section 303A.07 of NYSE Listed Company Manual.

The full text of the audit committee charter is attached as Schedule A to the Company’s AIF, which is filed as Exhibit 99.1 to this annual report on Form 40-F.

PRINCIPAL ACCOUNTING FEES AND SERVICES – INDEPENDENT AUDITORS

Grant Thornton LLP acted as the Company's independent auditor for the fiscal year ended December 31, 2012. See page 49 of the Company’s Annual Information Form, which is attached hereto as Exhibit 99.1, for a detail of the amounts billed to the Company by Grant Thornton LLP.

PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES PROVIDED BY INDEPENDENT AUDITORS

The Audit Committee pre-approves all audit and audit-related services and the fees and other compensation related thereto, and any non-audit services to be provided to the Company by its independent auditors. The pre-approval requirement may be waived with respect to the provision of non-audit services if the aggregate amount of all such non-audit services provided to the Corporation constitutes not more than five percent (5%) of the total amount of revenues paid by the Corporation to its external auditors during the fiscal year in which the non-audit services are provided; such services were not recognized by the Corporation at the time of the engagement to be non-audit services; and if such services are promptly brought to the attention of the Committee by the Corporation and approved prior to the completion of the audit by the Committee or by one or more members of the Committee who are members of the Board of Directors to whom authority to grant such approvals has been delegated by the Committee.

No non-audit services were approved pursuant to the de minimis exemption to the pre-approval requirement.

OFF-BALANCE SHEET TRANSACTIONS

The company does not have any off-balance sheet financing arrangements or relationships with unconsolidated special purpose entities.

CODE OF ETHICS

The Board has adopted a Code of Business Conduct and Ethics (the "Code") that applies to all the Company's directors, executive officers and employees. This Code has been adopted by our Board of Directors to summarize the standards of business conduct that must guide the actions of all of the directors, officers, employees and certain contractors of the Company. Contractors, including consultants and advisors, are expected to conduct themselves in accordance with this Code (or the equivalent of) when dealing with, or acting as a representative of the Company. The Board encourages any concerns regarding ethical conduct in respect of the Company’s operations to be raised, orally or in writing and, if preferred, anonymously with the Corporate Governance and Compensation Committee of the Board of Directors. A copy of the Code is available on the Company’s website at http://rioaltomining.com/corporate/governance/.

NOTICES PURSUANT TO REGULATION BTR

There were no notices required by Rule 14 of Regulation BTR sent by the Company during the year ended December 31, 2012 concerning any equity security subject to a blackout period under Rule 101 of Regulation BTR.

NYSE CORPORATE GOVERNANCE

The Company’s common shares are listed on the NYSE. Sections 103.00 and 303A.11 of the NYSE Listed Company Manual permit foreign private issuers to follow home country practices in lieu of certain provisions of the NYSE Listed Company Manual. A foreign private issuer that follows home country practices in lieu of certain provision of the NYSE Listed Company Manual must disclose any significant ways in which its corporate governance practices differ from those followed by domestic companies either on the its website or in the annual report that it distributes to shareholders in the United States. A description of the significant ways in which the Company’s governance practices differ from those followed by domestic companies pursuant to NYSE standards is as follows:

Shareholder Meeting Quorum Requirement: The NYSE is of the opinion that the quorum required for any meeting of shareholders should be sufficiently high to insure a representative vote. The Company’s quorum requirement is set forth in its Bylaws. A quorum for a meeting of shareholders of the Company is two persons who are present and authorized to cast, in person or by proxy, an aggregate of not less than 5% of the shares entitled to be voted at the meeting.

Proxy Delivery Requirement: The NYSE requires the solicitation of proxies and delivery of proxy statements for all shareholder meetings, and requires that these proxies shall be solicited pursuant to a proxy statement that conforms to SEC proxy rules. The Company is a “foreign private issuer” as defined in Rule 3b-4 under the Exchange Act, and the equity securities of the Company are accordingly exempt from the proxy rules set forth in Sections 14(a), 14(b), 14(c) and 14(f) of the Exchange Act. The Company solicits proxies in accordance with applicable rules and regulations in Canada.

Shareholder Approval for Equity Compensation Plans: Section 303A.08 of the NYSE Listed Company Manual requires shareholder approval of equity compensation plans, defined as a plan or other arrangement that provides for the delivery of equity securities (either newly issued or treasury shares) of the listed company to any employee, director or other service provider as compensation for services. While the Toronto Stock Exchange typically also requires shareholder approval of equity compensation plans, certain types of plans that fall within the shareholder approval requirements of the NYSE Listed Company Manual do not require shareholder approval under the rules of the Toronto Stock Exchange. The Company follows the rules of the Toronto Stock Exchange in relation to shareholder approval of its equity compensation plans and material revisions to such plans

The foregoing is consistent with the laws, customs and practices in Canada.

Please see Company’s Statement of Corporate Governance Practices at
http://www.rioaltomining.com/corporate/governance/

MINE SAFETY DISCLOSURE

Not applicable.

UNDERTAKING

The Company undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the SEC staff, and to furnish promptly, when requested to do so by the SEC staff, information relating to: the securities registered pursuant to Form 40-F; the securities in relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities.

CONSENT TO SERVICE OF PROCESS

The Company filed an Appointment of Agent for Service of Process and Undertaking on Form F-X with the SEC on December 19, 2012, which is hereby incorporated by reference, with respect to the class of securities in relation to which the obligation to file this annual report on Form 40-F arises.

EXHIBIT INDEX

The following exhibits have been filed as part of this annual report:

EXHIBIT	DESCRIPTION
Annual Information
99.1	Annual Information Form for the year ended December 31, 2012
99.2	Audited Annual Financial Statements for the year ended December 31, 2012, the seven-month financial year ended December 31, 2011 and the year ended May 31, 2011
99.3	Management’s Discussion and Analysis for the year ended December 31, 2012
99.4	Report of Independent Registered Public Accounting Firm
Certifications
99.5	Certificate of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Exchange Act
99.6	Certificate of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Exchange Act
99.7	Certificate of Chief Executive Officer Pursuant to 18 U.S. C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.8	Certificate of Chief Financial Officer Pursuant to 18 U.S. C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Consents
99.9	Consent of Grant Thornton LLP
99.10	Consent of Kirk Mining Consultants Pty Limited
99.11	Consent of Christopher Edward Kaye, BE (Chem), FAusIMM
99.12	Consent of Enrique Garay, M Sc P. Geo (MAIG)
99.13	Consent of Linton Kirk, BE (Mining), FAuslMM
99.14	Consent of Ian Dreyer, B.App.Sc.(Geology), MAuslMM(CP)

SIGNATURES

Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this registration statement to be signed on its behalf by the undersigned, thereto duly authorized.

Registrant	Rio Alto Mining Limited
By   /s/ "Alexander Black"
	Alexander Black
	President and Chief Executive Officer
Date	March 28, 2013

SIGNATURES

Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this registration statement to be signed on its behalf by the undersigned, thereto duly authorized.

Registrant	Rio Alto Mining Limited
By   /s/ "Anthony Hawkshaw"
	Anthony Hawkshaw
	President and Chief Executive Officer
Date	March 28, 2013

EX-99.1

Exhibit 99.1

RIO ALTO MINING LIMITED

ANNUAL INFORMATION FORM

For the Year Ended December 31, 2012

March 28, 2013

TABLE OF CONTENTS

INTRODUCTION	1
DISCLOSURE REGARDING FORWARD-LOOKING INFORMATION	1
GLOSSARY OF TERMS	3
PRELIMINARY NOTES	8
CORPORATE STRUCTURE	11
GENERAL DEVELOPMENT OF THE BUSINESS	13
DESCRIPTION OF THE BUSINESS	16
LA ARENA PROJECT	17
RISK FACTORS	33
DIVIDENDS	40
CAPITAL STRUCTURE	40
MARKET FOR SECURITIES	41
DIRECTORS AND OFFICERS	43
LEGAL PROCEEDINGS AND REGULATORY ACTIONS	49
INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS	49
TRANSFER AGENTS AND REGISTRARS	50
MATERIAL CONTRACTS	50
INTERESTS OF EXPERTS	50
ADDITIONAL INFORMATION	51
SCHEDULE A	52

INTRODUCTION

This is the Annual Information Form for Rio Alto Mining Limited (“Rio Alto” or the “Company”) dated as at March 28, 2013. Unless otherwise indicated, information in this Annual Information Form is provided as of December 31, 2012.

DISCLOSURE REGARDING FORWARD-LOOKING INFORMATION

Certain statements contained in this Annual Information Form may constitute forward-looking statements. These statements relate to future events or the Company’s future performance. All statements, other than statements of historical fact, may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", “propose”, "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Company believes that the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this Annual Information Form should not be unduly relied upon by investors as actual results may vary. These statements speak only as of the date of this Annual Information Form and are expressly qualified, in their entirety, by this cautionary statement.

In particular, this Annual Information Form contains forward-looking statements, pertaining to the following:

• capital expenditure programs and cash flow estimates;
  

• development of mineral resources and reserves;
  

• treatment under governmental regulatory and taxation regimes and other governmental financial regimes;
  

• expectations regarding the Company’s ability to raise capital;
  

• expenditures to be made by the Company to meet certain work commitments;
  

• work plans to be conducted by the Company;
  

• the production of gold and copper from the Company’s La Arena mineral project.

With respect to forward-looking statements listed above and contained in this Annual Information Form, the Company has made assumptions regarding, among other things:

• the legislative and regulatory environment;
  

• the impact of increasing competition;
  

• unpredictable changes to the market prices for gold, copper and other metals;
  

• that costs related to development and operation of mine properties remain consistent with historical experiences;
  

• anticipated results of exploration, development and production activities; and
  

• the Company’s ability to obtain additional financing on satisfactory terms.

The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of the risk factors set forth below and elsewhere in this Annual Information Form:

• uncertainties regarding regulatory, taxation and other governmental financial regimes;
  

• volatility in the market prices for mineral products and metals;
  

• uncertainties associated with estimating resources and reserves;
  

• geological, technical, drilling and processing problems;

2

• liabilities and risks, including environmental liabilities and risks, inherent in the mining and mineral exploration business;
  

• fluctuations in currency and interest rates;
  

• incorrect assessments of the value of acquisitions;
  

• unanticipated results of exploration activities;
  

• competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel;
  

• unanticipated community relations problems; and
  

• unpredictable weather conditions.

The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of these risk factors set forth above.

Additional information on these and other factors is available in the reports filed by the Company with Canadian securities regulators.

Readers are cautioned against placing undue reliance on forward-looking information, which is given as of the date it is expressed in this AIF, or the MD&A disclosure incorporated by reference herein, and not to use future-oriented information or financial outlooks for anything other than their intended purpose. The Company undertakes no obligation to publicly update or revise any forward-looking information in this AIF or the MD&A disclosure incorporated by reference herein whether as a result of new information, future events or otherwise, except as required by law.

3

GLOSSARY OF TERMS

In this Annual Information Form, the terms set forth below have the meanings indicated:

“2010 Technical Report” means the NI 43-101 compliant report prepared by Coffey Mining on the La Arena Project with an effective date of July 31, 2010;

“2011 Technical Report” means the NI 43-101 compliant report prepared by Kirk Mining Consultants on the La Arena Project with an effective date of September 30, 2011;

“ABCA” means the Business Corporations Act (Alberta), R.S.A. 2000 c.B-15, as amended, including all regulations promulgated thereunder;

“Affiliate” means a company that is affiliated with another company as described below.

A company is an "Affiliate" of another company if:
(a)	one of them is the subsidiary of the other, or
(b)	each of them is controlled by the same Person.
A company is "controlled" by a Person if:
(a)	voting securities of the company are held, other than by way of security only, by or for the benefit of that Person, and
(b)	the voting securities, if voted, entitle the Person to elect a majority of the directors of the company.
A Person beneficially owns securities that are beneficially owned by:
(c)	a company controlled by that Person, or
(d)	an Affiliate of that Person or an Affiliate of any company controlled by that Person;

“assay” is an analysis to determine the amount or proportion of the element of interest contained within a sample;

“Associate” when used to indicate a relationship with a Person, means:

(e)	an issuer of which the Person beneficially owns or controls, directly or indirectly, voting securities entitling him to more than 10% of the voting rights attached to outstanding securities of the issuer,
(f)	any partner of the Person,
(g)	any trust or estate in which the Person has a substantial beneficial interest or in respect of which a Person serves as trustee or in a similar capacity,
(h)	in the case of a Person, who is an individual:
	(i)	that Person’s spouse or child, or

4

(ii) any relative of the Person or of his spouse who has the same residence as that Person;

but

(i) where the Exchange determines that two Persons shall, or shall not, be deemed to be associates with respect to a Member firm, Member Company or holding company of a Member Company, then such determination shall be determinative of their relations in the application of Rule D with respect to that Member firm, Member Company or holding company;

“CDN” means Canadian Dollars;

“Coffey Mining” means Coffey Mining Pty Ltd.;

“Common Shares” means the common shares in the capital of the Company;

“concentrate” is a processed product containing valuable ore mineral from which most of the waste mineral has been removed;

“contained ounces” represents total ounces in a mineral reserve before reduction to account for ounces not able to be recovered by the applicable metallurgical process;

“Company” or “Rio Alto” means Rio Alto Mining Limited (formerly Mexican Silver Mines Ltd. “Mexican Silver”);

“concession” is that portion of applicable mineral lands that a party has staked or marked out in accordance with applicable mining laws to acquire the right to explore for and exploit the minerals under the surface;

“crushing” means the breaking of ore from the size delivered from the mine into smaller more uniform fragments;

“cut-off grade” is the minimum metal grade at which material can be economically mined and processed at designated metal sale prices and is used in the calculation of ore reserves;

“development” is work carried out for the purpose of opening up a mineral deposit. In an open pit mine this includes the removal of overburden or waste rock. In an underground mine this includes shaft sinking, ramping, crosscutting, drifting and raising;

“dilution” is sub-economic material unavoidably included with mined ore, lowering the overall mined grade;

“doré” is unrefined gold and silver bullion bars usually consisting of approximately 90% precious metals that will be refined into almost pure metal;

“drift” is a horizontal or near horizontal tunnel driven within or alongside an ore body and aligned parallel to the long dimension of the ore;

“drilling” generally consists of core drilling, reverse circulation drilling, conventional rotary drilling and in-fill drilling. “Core drilling” is a drilling method that uses a rotating barrel and an annular-shaped, diamond impregnated rock-cutting bit to produce cylindrical rock cores and lift such cores to the surface, where they may be collected for examination. “Reverse circulation” drilling is a drilling method that uses a rotating cutting bit within a double-walled drill pipe that produces rock chips rather than core. Air or

5

water is circulated down to the bit between the inner and outer wall of the drill pipe. The chips are forced to the surface through the center of the pipe for examination. “Conventional rotary” is a drilling method that produces rock chips similar to reverse circulation drilling, except that the sample is collected using a single-walled pipe. Air or water circulates down the center of the pipe and returns chips to the surface around the outside of the pipe. “In-fill” drilling is the collection of additional samples between existing samples used to provide more geologic detail and provide more closely-spaced assay data;

“dump leaching” is a process whereby gold is extracted by heaping broken, uncrushed (run-of-mine) ore on sloping impermeable pads and applying a weak cyanide solution which dissolves a portion of the contained gold. The gold laden or pregnant solution is collected for gold recovery;

“Effective Date” means the date of this Annual Information Form, March 28, 2012;

“exploration” is prospecting, sampling, mapping, drilling and other work involved in locating the presence of potentially economic mineral deposits and establishing the nature, shape and grade of such deposits;

“flotation” is a process by which some mineral particles are induced to become attached to bubbles and float, and other particles to sink, so that the valuable minerals are concentrated and separated from the uneconomic gangue or waste;

“g/t Au” means grams per tonne gold;

“Gold Prepayment Facility” means the facility entered into between the Company and Red Kite dated October 15, 2010, as amended;

“grade” is the amount of metal in each tonne of ore, expressed as troy ounces per ton or grams per tonne for precious metals and as a percentage for most other metals;

“grinding (milling)” is powdering or pulverizing of ore, by pressure or abrasion, to liberate valuable minerals for further metallurgical processing;

“g/t Ag” means grams per tonne silver;

“IAMGold” means IAMGold - Quebec Management Inc., a company incorporated under the laws of the Province of Quebec;

“IAMGold Warrants” means the warrants to acquire 1,500,000 common shares of RAML with a conversion price of $0.30CDN per share issued to IAMGold pursuant to the La Arena Agreement and having an expiry date of June 25, 2012 which were subsequently exchanged for warrants to purchase Common Shares on the same terms pursuant to the Rio Alto Transaction;

“indicated mineral resource” is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed;

“inferred mineral resource” is that part of a mineral resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed but not verified, geological and grade continuity. The estimate is based on limited information and sampling

6

gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes;

“Kirk Mining Consultants” means Kirk Mining Consultants Pty Ltd;

“La Arena” means La Arena S.A., a Company incorporated under the laws of the country of Peru, which was a subsidiary of IAMGold;

“La Arena Agreement” means the option and earn-in agreement dated June 15, 2009 among Rio Alto, La Arena and IAMGold whereby Rio Alto acquired the La Arena Option and the La Arena Earn-In;

“La Arena Earn-In” means the earn-in right to acquire up to 38.7% of the issued and outstanding shares of La Arena by expending up to $30,000,000 on the La Arena Project, such right having been acquired by Rio Alto from IAMGold pursuant to the La Arena Agreement;

“La Arena Gold Oxide Mine” means the gold oxide mine located on the La Arena Project;

“La Arena Option” means the option to purchase all of the issued and outstanding shares of La Arena by making cash payments of $47.55 million (subject to adjustments) to IAMGold, such option having been acquired by Rio Alto from IAMGold pursuant to the La Arena Agreement;

“La Arena Project” means the mineral rights and interests to explore and exploit minerals from approximately 20,673 hectares consisting of the mining concessions held by La Arena;

“La Arena Project Sulphide Project” or (“Phase II”) means the copper-gold sulphide project located within the La Arena Project;

“measured mineral resource” is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity;

“Mexican Silver Guernsey” means Mexican Silver Mines (Guernsey) Limited, a body corporate incorporated under the laws of Guernsey, a wholly-owned subsidiary of the Company;

“Mexican Silver Mexico” means Materias Primas y Minerals La Iguana S.A. de C.V., incorporated under the laws of the country of Mexico, which was 99.99% owned by Mexico Silver Guernsey and was the company through which the Company owned the Mexico Property;

“Mexico Property” means, collectively, the Vallecillo project, Mamulique project and the La Blanca property;

“mill” is a processing facility where ore is finely ground or is also the device used to perform grinding (milling);

“Mineral Reserve” is the economically mineable part of a measured or indicated mineral resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A mineral reserve includes diluting materials and allowances for losses that may occur when the material is mined. Mineral reserves are sub-divided in order of increasing confidence into probable mineral reserves and proven mineral reserves;

7

“Mineral Resource” is a concentration or occurrence of diamonds, natural solid inorganic material, or natural solid fossilized organic material including base and precious metals, coal, and industrial minerals in or on the Earth’s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge. Mineral resources are sub-divided, in order of increasing geological confidence, into inferred, indicated and measured categories;

“mining concessions” means the 44 mining concessions held by La Arena;

“net profits interest royalty” is a royalty based on the profit remaining after recapture of certain operating, capital and other costs;

“net smelter return royalty” is a royalty based on a percentage of valuable minerals produced with settlement made either in kind or in currency based on the spot sale proceeds received less all of the offsite smelting, refining and transportation costs associated with the purification of the economic metals;

“NI 43-101” means National Instrument 43-101, Standards of Disclosure for Mineral Projects, promulgated by the Canadian Securities Administrators;

“NYSE” means New York Stock Exchange;

“open pit mine” is a mine where materials are removed from a working that is open to the surface;

“ore” is rock containing metallic or non-metallic minerals that can be mined and processed at a profit;

“ore body” is a sufficiently large amount of ore that is contiguous and can be mined economically;

“oxide ore” is mineralized rock in which some of the original materials have been oxidized. Oxidization tends to make ore more amenable to cyanide solutions so that minute particles of gold will be dissolved;

“Premier Transaction” means the acquisition by the Company of all the securities of Mexican Silver Guernsey completed on May 7, 2007 via the issuance of 15,434,782 Common Shares at a deemed price of $0.26CDN per share and 217,392 warrants exercisable at $0.50CDN until August 15, 2008;

“probable mineral reserve” is the economically mineable part of an indicated and, in some circumstances, a measured mineral resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified;

“proven mineral reserve” is the economically mineable part of a measured mineral resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction is justified;

“Qualified Person” means a “qualified person” as defined in NI 43-101;

“RAML” means Rio Alto Mining Limited, that was a wholly-owned subsidiary of the Company incorporated under the laws of British Columbia, which was acquired by the Company pursuant to the Rio Alto Transaction on June 25, 2009 and was amalgamated with the Company on July 24, 2009 pursuant to the Vertical Amalgamation;

“RAML Finder Warrants” means the warrants to purchase common shares of RAML issued pursuant to the private placement completed immediately prior to the Rio Alto Transaction with an exercise price of

8

$0.20CDN per share and expiry date of June 25, 2010 which were subsequently exchanged for warrants to purchase Common Shares on the same terms;

“RAML Transaction” means the acquisition by the Company, by way of three-cornered amalgamation, of all of the issued and outstanding securities of RAML which occurred on June 25, 2009 and whereby the Company issued 35,143,411 Common Shares, 2,500,000 RAML Transaction Warrants and 329,000 RAML Finder Warrants to former securities holders of RAML and exchanged the IAMGold Warrants for 1,500,000 warrants to purchase Common Shares with the same terms;

 “RAML Transaction Warrants” means the 2,500,000 warrants to purchase Common Shares issued pursuant to the Rio Alto Transaction with an exercise price of $0.20CDN per share and expiry date of June 25, 2012;

“recovery rate” is a term used in process metallurgy to indicate the proportion of valuable material physically recovered in the processing of ore. It is generally stated as the percentage of the material recovered compared to the total material originally present;

“Red Kite” means Red Kite Explorer Trust;

“refining” is the final stage of metal production in which impurities are removed from semi-processed metal;

“Rio Alto Peru” means Rio Alto S.A.C., a Company incorporated under the laws of the country of Peru, being a former wholly-owned subsidiary of RAML which subsequently became a wholly-owned subsidiary of the Company following the Vertical Amalgamation;

“shaft” is a vertical passageway to an underground mine for ventilation, moving personnel, equipment, supplies and material including ore and waste rock;

“TSXV” means the TSX Venture Exchange;

“TSX” means the Toronto Stock Exchange;

“USD” means United States dollars. All amounts are in USD except where otherwise defined;

“Vertical Amalgamation” means the vertical amalgamation of the Company and its wholly-owned subsidiary RAML whereby the Company changed its name to “Rio Alto Mining Limited” effective July 24, 2009 and Rio Alto Peru became a wholly-owned, direct subsidiary of the Company.

Words importing the singular number only include the plural and vice versa and words importing any gender include all genders. All dollar amounts set forth in this Annual Information Form are in Canadian dollars, except where otherwise indicated.

PRELIMINARY NOTES

Abbreviations and Conversions

In this Annual Information Form, the following abbreviations and conversions are used:

9

Abbreviations

Au	Gold
Ag	Silver
Cu	Copper

Conversions

To convert from	To	Multiply by
Troy ounces	Grams	31.10348
Troy ounces per short ton	Grams per tonne	34.28600
Pounds	Tonnes	0.00045
Tons	Tonnes	0.90718
Tonnes	Pounds	2,204.6
Part per million (ppm)	Grams	1.0
Feet	Meters	0.30480
Miles	Kilometres	1.6093
Acres	Hectares	0.40468

Scientific and Technical Information

Scientific or technical information in this Annual Information Form related to mineral resources or geology of the La Arena Project, Peru (see 2011 Technical Report, a copy of which is available at www.sedar.com), is based on information prepared by Enrique Garay, M Sc. P. Geo. (MAIG) of Rio Alto Mining Ltd., Linton Kirk, BE (Mining), FAusIMM of Kirk Mining Consultants Pty Ltd., Ian Dreyer B.App.Sc. (Geo), MAusIMM (CP) of Andes Mining Services S.A.C., and Chris Kaye, B E (Chem) FAusIMM of MQes. Each of Messrs. Garay, Dreyer, Kirk and Kaye is a “Qualified Person” as defined in NI 43-101. The 2011 Technical Report has been prepared in compliance with NI 43-101. Mineral Reserves of the La Arena Project were not updated in the 2011 Technical Report. As such, the scientific and technical information set out in the Technical Report dated July 31, 2010 regarding the Mineral Reserves of the La Arena Project remains current. The Report effective September 30, 2011 includes a summary of the still current parts of the July 31, 2010 Technical Report and includes references to that report where further details may be sourced.

The exploration programs described in this Annual Information Form are prepared and/or designed and carried out under the supervision of Mr. Enrique Garay, M Sc, P. Geo. (AIG Member), Vice President Geology of Rio Alto. The scientific and technical information in this Annual Information Form has been updated with current information where applicable.

The scientific and technical information regarding the La Arena Project included in this Annual Information Form has been reviewed and verified by each of Mr. Kirk and Mr. Garay, each of whom is a Qualified Person, for the purpose of this Annual Information, as defined by NI 43-101.

10

Classification of Mineral Reserves and Resources

In this Annual Information Form, the definitions of Proven and Probable Mineral Reserves and Measured, Indicated and Inferred Mineral Resources are those used by Canadian provincial securities regulatory authorities and conform to the definitions utilized by the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) in the “CIM Standards on Mineral Resources and Reserves – Definitions and Guidelines” adopted on November 27, 2010.

Cautionary Note to U.S. Investors Concerning Estimates of Measured, Indicated and Inferred Resources

This Annual Information Form and the documents incorporated by reference have been prepared in accordance with the requirements of Canadian securities laws, which differ from the requirements of U.S. securities laws. Unless otherwise indicated, all Mineral Reserve and Mineral Resource estimates included in this Annual Information Form and the documents incorporated by reference herein have been prepared in accordance with NI 43-101 and the CIM classification system. NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects.

Canadian standards, including NI 43-101, differ significantly from the requirements of the U.S. Securities and Exchange Commission (the “SEC”), and information with respect to mineralization and Mineral Reserves and Mineral Resources contained or incorporated by reference herein may not be comparable to similar information disclosed by U.S. companies. In particular, and without limiting the generality of the foregoing, these documents use the terms ‘‘Measured Resources’’, ‘‘Indicated Resources’’ and ‘‘Inferred Resources’’. U.S. investors are advised that, while such terms are recognized and required by Canadian securities laws, the SEC does not recognize them.

Under U.S. standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. The requirements of NI 43-101 for identification of “reserves’” are not the same as those of the SEC, and reserves reported by the Company in compliance with NI 43-101 may not qualify as “reserves” under SEC standards. U.S. investors should also understand that “Inferred Resources” have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. Under Canadian securities laws, disclosure must not be made of the results of an economic analysis that include “Inferred Resources”, except in certain cases. Disclosure of “contained ounces” in a Mineral Resource is a permitted disclosure under Canadian securities laws, however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC standards as in place tonnage and grade, without reference to unit measures. U.S. investors are cautioned not to assume that any part of a “Measured Resource” or “Indicated Resource” will ever be converted into a “reserve”. It cannot be assumed that all or any parts of “Inferred Resources” exist, are economically or legally mineable or will ever be upgraded to a higher category.

Documents Incorporated by Reference

The following document is incorporated by reference into this Annual Information Form:

• the 2011 Technical Report.

A copy of this document is available under the Company’s SEDAR profile at www.sedar.com.

11

CORPORATE STRUCTURE

Name, Address and Inter-Corporate Relations

The Company’s head office is at 1950, 400 Burrard Street, Vancouver, British Columbia, V6C 3A6. Its principal business office is Calle Esquilache 371, Oficina 1402, San Isidro, Lima 27 Peru and its registered office is located at 1000, 250 – 2^nd Street S.W., Calgary, Alberta, T2P 0C1.

The Company’s name is Rio Alto Mining Limited and it is incorporated under the ABCA. The following paragraphs describe amendments to the Company’s articles and constating documents since it was originally incorporated in 1987.

The Company was incorporated as "Waterford Resources Inc." pursuant to the Company Act (British Columbia) on April 3, 1987. By an Altered Memorandum, as altered by a special resolution passed on May 28, 1992, the Company’s Memorandum was altered to consolidate the number of issued and outstanding common shares on the basis of four old common shares for one new common share and the name of the Company was changed to "Premier Minerals Ltd.". A Certificate of Change of Name was issued on June 2, 1993, with respect to the name change to "Premier Minerals Ltd.". By an Altered Memorandum, as altered by a special resolution passed on March 20, 2000, the Company’s Memorandum was altered to consolidate the number of issued and outstanding common shares on the basis of two old common shares for one new common share and the name of the Company was changed to "Premier Diamond Corp.". A Certificate of Change of Name was issued on March 2, 2001, with respect to the name change to "Premier Diamond Corp.". On June 24, 2005, the Company was transitioned from the Company Act (British Columbia) to the Business Corporations Act (British Columbia). On May 7, 2007 Premier Diamond Corp. was continued from the Province of British Columbia into the Province of Alberta and changed its name to Mexican Silver Mines Ltd.

On June 25, 2009, the Company completed the RAML Transaction whereby the Company acquired all of the securities of Rio Alto. On July 24, 2009, the Company completed the Vertical Amalgamation whereby its name was changed to "Rio Alto Mining Limited".

On September 29, 2010, the shareholders of the Company revised the articles of the Company to permit the holding of shareholders’ meetings in Lima, Peru.

12

Inter-company Relationships

Currently and as at December 31, 2012, the Company has three direct wholly-owned subsidiaries and two indirectly held wholly-owned subsidiaries: Rio Alto S.A.C., incorporated under the laws of Peru, Mexican Silver (Guernsey) Limited, a body corporate incorporated under the laws of Guernsey, Rio Alto Insurance Ltd, a company incorporated under the laws of Barbados. Mexican Silver (Guernsey) Limited holds all of the issued and outstanding securities of La Arena S.A. and, in turn, La Arena S.A. holds all of the issued and outstanding securities of Empresa de Energía Yamobamba SAC, companies incorporated under the laws of Peru. A corporate organization chart showing the relationships between the companies is shown below.

Notes:

(1)	99.99% of the issued and outstanding securities of La Arena, being 14,999,000 shares, are owned by the Company. The remaining 1 share of issued capital being owned and held in trust by Jaime Soldi for the benefit of the Company.
(2)	99.99% of the issued and outstanding of the Empresa de Energía Yamobamba, being 999 shares, are owned by La Arena S.A.  The remaining 1 share of issued capital is owned and held in trust by Jaime Soldi for the benefit of the Company.

13

GENERAL DEVELOPMENT OF THE BUSINESS

Three Year History

The following is a summary of the general development of the Company’s business over the three most recently completed financial years. The financial year end of the Company was changed from May 31 to December 31 in November 2011, with the financial year ended December 31, 2011 being a seven month period commencing June 1, 2011.

Financial year ended May 31, 2011

On June 2, 2010, the Company announced that it closed a private placement of 10,200,000 Common Shares at $0.76CDN per share for gross proceeds of $7,451,000. A cash finder’s fee of $522,000 was paid for assistance in arranging the placement.

On July 20, 2010, La Arena received notification from the Peruvian Ministry of Energy and Mines that its Environmental Impact Assessment (“EIA”) had been accepted. In a news release on July 21, 2010, Rio Alto announced that it had selected a contractor to conduct the civil work for a leach pad, waste dumps, ponds and site infrastructure for the gold oxide leach mine at La Arena. At the same time the Company announced that it and Red Kite (“RKE”) had commenced preparation of definitive documentation for the Gold Prepayment Facility and that planning had commenced for a feasibility study of the La Arena Sulphide Project.

On September 15, 2010, the Company announced updated mineral resource and reserve estimates and financial estimates for the La Arena Property, with gold in probable oxide mineral resources of 821,000 ozs, recoverable gold in probable oxide mineral reserves of 634,000 ozs, gold in probable sulphide mineral reserves of 1,748,000 ozs and copper in probable sulphide mineral reserves of 1,574,000,000 pounds. Such estimates formed part of the 2010 Technical Report, which was filed on October 29, 2010 and are discussed in further detail in “La Arena Project - La Arena Reserves” below.

On October 15, 2010, the Company signed the definitive agreement for the $25 million Gold Prepayment Facility and drew down an initial tranche of $5 million. Pursuant to the terms of the Gold Prepayment Facility, the Company would start delivering up to 36,064 notional ounces of gold commencing in July 2011 in accordance with the following schedule: a notional amount of 575 ounces per month until October 2012, increasing to a notional amount of 1,150 ounces per month from November 2012 to October 2014. The actual monthly delivery of gold ounces will vary by 5% from the amounts stated above for every $100 dollar change in the gold price (up or down) from a base price of $1,150, subject to limits at $1,450 or $950 per ounce. The Company may prepay gold ounces remaining to be delivered under the facility, in whole or in part, at any time without penalty in either ounces of gold or the equivalent in cash at the then prevailing gold price. As part of the Gold Prepayment Facility, the Company granted Red Kite a charge over the shares of La Arena. Red Kite also provided the Company with a $3 million operating credit facility.

On October 15, 2010, the Company also entered into a Gold Purchase Agreement with RKE whereby RKE agrees to buy up to 622,210 ounces of gold based on the lower of prices quoted on either the London Gold Market AM Fixing Price as published by the London Bullion Market Association or the Comex (1st Position) Settlement Price over defined periods of time. The obligation to sell 622,210 ounces of gold is directly proportional to the amount of the $25 million facility drawn. The Gold Purchase Agreement is accounted for as a written option as RKE has the right, but not the obligation to purchase the gold. An option pricing model that considers changes in the gold price was used to estimate the fair value of the financial derivative relating to the written option. Subsequent changes in this fair value are reflected in operations.

14

On November 23, 2010, the Company completed a private placement of Common Shares for gross proceeds of approximately $20,000,000. In three tranches, closing on each of November 30, December 1 and December 2, 2010, the Company completed the private placement by issuing 12,066,257 Common Shares for gross proceeds of $19,939,000 (net proceeds of $18,480,000). The Company paid an agent’s fee and finders’ fees in connection with the placement of $1,163,217CDN and $172,046CDN, respectively.

On January 22, 2011, the Company completed a private placement with a syndicate of underwriters for gross proceeds of $57,517,000. The underwriters were paid a cash commission of $3,451,380CDN and were granted 1,683,600 compensation options entitling them to purchase an equal number of Common Shares at $2.05CDN for a period of two years.

On February 9, 2011, the Company exercised the La Arena Option and acquired 100 percent interest in La Arena for cash of $48,846,789.

On February 18, 2011, Mr. Feisal Somji resigned as a director and officer of the Company. The Board of Directors was augmented on March 8, 2011, via the appointment of Mr. Victor Gobitz and Mr. Sidney Robinson.

On April 19, 2011, the Company drew down $19.5 million (bringing the total to $24.5 million) of the $25 million available under the Gold Prepayment Facility.

On May 9, 2011, the Company announced that the first gold was poured at the La Arena Gold Oxide Mine, being an amount of 1,115 ounces of gold.

On May 11, 2011, the Company appointed Mr. Ram Ramachandran to its Board of Directors.

Seven-month financial year Ended December 31, 2011

On June 15, 2011, the Company announced further assay results from eighteen reverse circulation drilling holes within the Calaorco Pit in the La Arena Gold Oxide Mine. See “La Arena Project - Drilling”.

On July 20, 2011, the Company filed an independently prepared mine closure plan with Peruvian authorities. The plan will require the posting of a bond or other satisfactory security of approximately $3.2 million within the first twelve days of the calendar year after the plan was approved. The closure plan was prepared by a Peruvian government approved engineering firm and estimated that the cost of closing and remediating the mine would be approximately $34.7 million consisting of $12.4 million of progressive closure costs during the 7^th and 8^th years of the mine life; $17.1 million of closure costs to occur in the 9^th year of the mine life and $5.2 million of post-closure monitoring costs for five years after the mine.

Daniel Kenney’s term as a director of the Company ended on September 29, 2011, not having stood for re-election as a director at the shareholders’ meeting held on that date.

On October 21, 2011, the Company completed definitive documentation for a $25 million increase in the Gold Prepayment Facility with Red Kite and concurrently drew down the full amount available under the Gold Prepayment Facility. Settlement of the $25 million increase in the Gold Prepayment Facility will be by delivery of 24,512 notional ounces of gold commencing in April 2012 at a notional rate of 791 ounces per month for 31 months. The actual monthly delivery of gold ounces will vary by 5% from the amount stated above for every $100 dollar change in gold price (up or down) from a base price of $1,150, subject to limits at $1,450 or $950 per ounce. The Company may prepay gold ounces remaining to be delivered under the Gold Prepayment Facility, in whole or in part, at any time without penalty in either ounces of gold or the equivalent in cash at the then prevailing gold price. As security, the Company has granted Red Kite a charge over substantially all of the Company’s assets. The Company paid cash fees for

15

arranging the financing of $750,000, for deferral of deliveries of $312,500 and a $100,000 fee for the waiver of certain conditions in the Gold Prepayment Facility.

On November 8, 2011, the board of directors resolved to change the Company's financial year-end to December 31 from May 31. This change will align the consolidated accounts with those of La Arena, which under Peruvian law has a calendar year-end, and will result in Rio Alto providing its continuous disclosure information on a more comparable basis with most other mining companies.

Financial year ended December 31, 2012

On January 5, 2012, the Company announced updated mineral resource estimates for the La Arena Project. The updated oxide mineral resource estimate is limited to the Calaorco and Ethel deposits plus a zone of oxide material containing 300ppm – 1000ppm copper to the east of Calaorco. The updated mineral resource estimate for the La Arena sulphide project incorporates an additional 3,879 meters of diamond drilling and 21,904 meters of reverse circulation drilling when compared to the previous resource estimate provided in the 2010 Technical Report. Detailed results can be found in the 2011 Technical Report and is also discussed in more details under “La Arena Project” section below.

On January 23, 2012, the Company announced the appointment of Alex Black as Chief Executive Officer and Victor Gobitz as Chief Operating Officer. On February 17, 2012, the Company filed the 2011 Technical Report. The Company graduated from the TSXV to the TSX and from the “junior sector” to the “senior sector” of the Bolsa de Valores de Lima and the Company’s Common Shares began trading on the TSX effective February 24, 2012.

On July 30, 2012, Empresa de Energia Yamobamba was incorporated and will own a future power distribution network in Peru.

On September 17, 2012, the Company entered into a letter of intent (“LOI”) with Duran Ventures Inc. (“Duran”) that sets out the basic terms and conditions whereby Rio Alto may earn up to a 70% interest in Duran’s Minasnioc Gold-Silver Property and a 65% interest in Duran’s Ichuña Copper-Silver Property. The LOI also provides for a $750,000 equity investment by Rio Alto in Duran.

On October 2, 2012, the Company incorporated Rio Alto Insurance Ltd. as a captive insurance company. The purpose of the captive is to partially insure various risks at La Arena.

On December 21, 2012, the Company commenced trading on the New York Stock Exchange under the ticker symbol “RIOM”.

Subsequent to Year Ended December 31, 2012

On January 11, 2013, the Company announced that its La Arena Gold Mine had produced 201,113 ounces of gold in 2012.

On February 13, 2013, the Company completed a non-brokered private placement with Santa Barbara, purchasing 2,500,000 common shares of Santa Barbara at a purchase price of $0.08CDN per share, for total proceeds of $200,000CDN. The common shares are subject to a hold period in Canada, expiring on June 14, 2013.

On February 7, 2013, the Company signed a non-binding letter of intent (“LOI”) with Santa Barbara Resources Limited (“Santa Barbara”). The Company will have the option to acquire up to 51% interest in the Sancos gold property (“Sancos”) in Peru within a three year period by incurring $4,500,000 in expenditures at a minimum rate of $1,500,000 a year and by paying Santa Barbara $250,000 on signing the LOI, as well as $500,000 not later than at the 51% option exercise date. The Company may earn an

16

additional 15% interest in the Sancos project within the subsequent two year period by undertaking all necessary actions required to prepare Sancos for a production decision. The Company will pay Santa Barbara an additional $500,000 to Santa Barbara upon its acquisition of the 15% interest.

On February 25, 2013, the Company announced that its 2013 gold production was anticipated to be in the range of 190,000 to 210,000 ounces.

On March 6, 2013, the Company announced that it had intersected 78 meters of 1,34 grams per tonne gold at La Colorada.

Significant Acquisitions

The Company did not have any significant acquisitions during the year ended December 31, 2012.

DESCRIPTION OF THE BUSINESS

General Information

The Company’s main business is the mining, production and sale of gold.

The Company is also engaged in exploration and development of mineral properties with its current focus on the further development of the La Arena Project, which is discussed in detail below.

Competitive Conditions

The mineral exploration and mining business is a competitive business. The Company competes with numerous other companies and individuals in the search for (i) the acquisition of attractive mineral properties; (ii) qualified service providers and labour; and (iii) equipment and suppliers. The ability of the Company to acquire gold and other mineral properties in the future will depend not only on its ability to operate and develop its present properties, but also on its ability to select and acquire suitable producing properties or prospects for exploration and development. See "Risk Factors - Competition".

Employees

As at December 31, 2012, the Company and its subsidiaries had a total of 860 employees and 1,093 people hired through subcontractors.

Social and Environmental Protection Policies

The current and future operations of the Company, including development and mining activities, are subject to extensive federal, provincial and local laws and regulations governing environmental protection, including protection and remediation of the environment and other matters. Compliance with such laws and regulations increases the costs of and delays planning, designing, drilling and developing the Company’s properties.

The Company has assisted members of the communities directly affected by the planned development of the La Arena Gold mineral project by:

• helping them to establish a company, Consorcio La Arena SA, that acts as a hiring agent for the provision of skilled and unskilled workers to the project development;

• completed the design of a new school and completed its construction;

• providing a service to bus children to school; 

17

• providing medical services; and

• providing various training programs, such as, safety training and driver education.

The Company has 15 full-time employees in charge of co-ordinating community relations.

Peruvian legislation includes a comprehensive system of laws and regulations designed to protect the environment and the country’s culture heritage. The Company engages consultants as needed and has 5 full-time employees to ensure compliance with such Peruvian legislation.

LA ARENA PROJECT

A more complete description of the La Arena Project may be found within the 2011 Technical Report, a copy of which is available on the Company’s profile on SEDAR at www.sedar.com. Unless stated otherwise, information in this section is summarized, complied, extracted or incorporated by reference from the 2011 Technical Report. Portions of the following information are based on assumptions, qualifications and procedures, which are set out in the 2011 Technical Report. The reference numbers of the tables and figures set out in this section are those attributed by the 2011 Report as applicable. For a complete description of the assumptions, qualifications and procedures associated with the following information, reference should be made to the full text of the 2011 Technical Report, which is available electronically at www.sedar.com.

Current Status

Section 25 “Interpretations and Conclusions” (page 156) of the 2011 Technical Report stated that “From the work completed to date on the La Arena Project the gold oxide dump leach project is deemed by the Qualified Persons to be at pre-production level and the sulphides project is at pre-feasibility, as defined by NI43-101, and is reasonably robust technically, socially and environmentally and is expected to make a reasonable return on expected funds to be expended”.

Development and construction activities continue and currently the gold oxide dump leach project is mining ore and producing doré at commercial production levels. Deliveries of gold in connection with the Gold Prepayment Facility have satisfied delivery obligations up to and including October 2013.

The Company owns approximately 879.35 hectares (“ha”) of surface rights (land) which extend over the gold oxide resource. There are no royalties, overriding interests, back-in rights or other payments, agreements or encumbrances that would affect the mining concessions. The payment terms for the surface rights acquired differ from purchase transaction to purchase transaction. Most land is acquired for a one-time cash payment; however, there are a few land purchase agreements under which payments are made in instalments, which in aggregate are immaterial.

The Peruvian mining tax system was revised during 2011. Rio Alto is subject to the revised system.

The two amended laws applicable to the Company may be summarized as:

Special Mining Tax (“SMT”): The SMT is applied on operating mining income based on a sliding scale with progressive marginal rates ranging up to 8.40%. The tax liability would be determined and payable on a quarterly basis. As a tax on operating profit, normal operating costs excluding interest are deducted from revenue, an operating profit margin is determined and a progressive tax rate would be applied on the Operating Profit Margin Ratio.

Modified Royalty Based on Operating Income (“MR”): The MR revises the mining royalty enacted in 2004 that required a payment ranging from 1% to 3% of the commercial sales value of mineral resources.

18

The MR is applied on a company’s operating income, rather than sales, and is payable quarterly (the previous royalty was payable monthly). The amount payable is determined on a sliding scale with marginal rates ranging up to 12% applied to operating margin. As a company’s operating margin increases the marginal rate of the royalty increases. If a company has a zero or negative operating margin, a minimum royalty of 1% of revenue is payable. The basis of the royalty (operating income) and the effective royalty rate would be calculated by following the same rules used to determine the tax liability under the SMT.

The Company is subject to the mine closure and re-meditation laws of Peru and has filed a mine closure plan as required by legislation as described elsewhere herein under “General Description of the Business”.

Project Description and Location

The La Arena Project is located in northern Peru, 480 km NNW of Lima, Peru, in the Huamachuco District. The project is situated in the eastern slope of the Western Cordillera, close to the Continental Divide at an average altitude of 3,400 metres above sea level. The region displays a particularly rich endowment of metals (Cu-Au-Ag) occurring in porphyry and epithermal settings.

The La Arena Project consists of approximately 20,673 hectares in 44 concessions approximately 18 km from Huamachuco, a town of approximately 22,000 people. The La Arena Project lies within a multi-million ounce gold district that includes the Lagunas Norte mine (Barrick Gold Corporation) located at Alto-Chicama, the Comarsa mine (Compania Minera Aurifera Santa Rosa S.A.), the La Virgen mine (Compania Minera San Simon S.A.), the Shahuindo gold-silver exploration project (Sulliden Exploration Inc.) and the Tres Cruces gold exploration project (New Oroperu Resources Inc.).

Accessibility, Climate, Local Resources, Infrastructure and Physiography

The project can be accessed via a 160km national roadway from the coastal city of Trujillo directly east towards Huamachuco, passing through Chiran, Shorey/Quiruvilca and the Lagunas Norte project (Barrick Gold Corporation). The road is paved for approximately 100km and the remainder is a good compacted material road. An air strip is also present at Huamachuco that accommodates small airplanes.

The topography in the project area is relatively smooth with undulating hills. Elevations vary between 3,000 and 3,600 meters above sea level. In general, the slopes are stable with grades varying between 16° and 27° and the land is covered with typical vegetation from the area.

On the northern and southern flanks of the deposit localised unstable areas exist where landslides have occurred during previous rainy seasons.

The average annual temperature from compiled data is 12°C. The maximum recorded temperature varies between 16 to 18°C and the minimum lies between 8 and 10°C.

Total annual rainfall varies between 750 and 850 millimetres per annum (“mm/a”) and the average total annual evaporation rate ranges between 950 and 1,000mm/a. The average relative humidity varies monthly between 73 and 90%.

Maximum precipitation usually occurs during the months of January through March while the months of June to August are the driest. The maximum daily precipitation recorded to date at the La Arena site is 34.6mm and occurred in March of 1999 while minimum precipitation was recorded in July 1998 with a total of 1.2mm.

Based on a Pre-Feasibility Study completed by IAMGold in November 2006 (the “November 2006 PFS”), which was reviewed by the authors of the 2011 Technical Report and formed part of the 2011

19

Technical Report, in the area of study of the sub-basin of the Yamobamba River there are 2,559 inhabitants residing in five communities. There are 1,899 inhabitants within the local area of study, 75% are from La Arena and the remainder from La Ramada.

A little more than half of the population (52.6%) is aged 20 years or younger and less than a fifth of the population (18.2%) is aged of 40 years or older. 29.2% of the population is between 19 and 40 years old. These results show a predominantly young population, which follows the demographic pattern of the country's rural population.

The majority of the heads of household are men (87.5%). Nuclear families prevail, i.e. parents and children, with 62.5%. The average number of members in a household is 5.27 persons.

The young population moves temporarily or permanently in search for a job and educational services to the cities of Trujillo and the Sanchez Carrion province, mainly to Huamachuco (within the region), and to Lima (outside the region).

Immigration to the local area is lower than that of emigration. The majority of those who now live in the local area come from surrounding rural communities.

There are no formal water supply schemes in the La Arena Project area. Water for the project will be extracted from groundwater, adjacent water courses and through recycling and reuse of water wherever reasonably practicable.

History

The deposit was first discovered by Cambior (a company later acquired by IAMGold) geologists in December 1994. Cambior staked a claim for mining concessions of 1,800ha over the deposit in January 1995. A further 70,000ha of mining concessions were claimed in 1996, most of which have been allowed to lapse or have been sold. The mining concessions making up the La Arena Project passed to IAMGold following its acquisition of Cambior in 2006.

The Company completed its acquisition of La Arena on February 9, 2011 and is now the sole owner of the La Arena Project by virtue of its ownership of La Arena. See “General Development of Business -Three Year History”.

The geological exploration work completed at the La Arena Project prior to June 2009 when the Company entered into the La Arena Agreement includes:

• First half 1996 -- detailed surface geochemistry and 1,502m of diamond drilling (“DD”) in 6 holes.

• Second half 1996 - 2,240m of DD in 10 holes.

• 1997 - 4,958m of DD in 32 holes.

• 1998 – 10,900m of DD in 58 holes.

• Between 1999 and 2003 -- following a pre-feasibility study, unfavourable economic conditions did not allow the project to progress.

• Between 2003 and 2006 - five drilling campaigns were completed for 33,705m of DD in 213 holes and 1,186m of reverse circulation (“RC”) drilling in 11 holes.

• 2007 - 5,500m of DD in 21 holes.

The accumulated drilling over the La Arena Project area to end of December 2007 reached 59,991m in 351 holes and 4,120m dug in 60 trenches completed in 2004.

20

The results of the drilling campaigns have been incorporated in a number of resource estimates reported from October 1997 to February 2007, as detailed in the 2010 Technical Report effective July 31, 2010.

The last Mineral Reserve estimate by Iamgold of the La Arena Project was completed in August 2007 and reviewed and validated by Coffey Mining in 2008. Resources were confined within a pit shell based on $550/oz Au, $1.50/lb Cu, $10/lb Mo and $10/oz Ag. Coffey Mining did not support the Measured Resource classification of the 2007 resource and reclassified the Measured Resource category to the Indicated resource category. The Iamgold August 2007 Mineral Resource estimate of La Arena Project is summarized in Table 6.3_1. The estimates set out in the following table are considered historical in nature and are provided for informational purposes only.

Table 6.3_1 Updated In-Pit Mineral Resource by Iamgold (August 31st 2007)
	Tonnes (Mt)	Au Grade (g/t)	Cu Grade (%)	Ag Grade (g/t)	Mo Grade (ppm)	Au (‘000 oz)	Cu (‘000 lbs)	Ag (‘000 oz)	Mo (‘000 lbs)
“measured”	25.5	0.51	0.17	0.31	26.3	414	97,962	250	1,477
”indicated”	123.0	0.41	0.40	0.20	42.3	1,636	1,078,760	781	11,472
“measured” +
“indicated”	148.5	0.43	0.36	0.22	39.6	2,050	1,176,722	1,031	12,949
“inferred”	10.7	0.26	0.34	0.17	53.4	91	80,835	58	1,265

Using the same resources block model, the Mineral Resource of the La Arena Project was revised by Coffey Mining in 2010 based on updated metal prices and pit optimization parameters. The Mineral Resource set out in the 2010 Technical Report is given in Table 6.3_2. Resources were confined within an optimum undiscounted cashflow pit shell based on $1,050/oz Au and $12/oz Ag for copper-poor mineralization largely in oxide sandstrone (Cu < 300 ppm) and a shell based on $3.00/lb Cu and $1,050/oz Au for copper-rich mineralization largely in primary and secondary porphyry.

Table 6.3_2 Coffey Mining Mineral Resource (July 31st 2010)
Material	Cuttoff	Category	Tonnes (Mt)	Au Grade (g/t)	Cu Grade (%)	Ag Grade (g/t)	Au (‘000 oz)	Cu (‘Mlb)	Ag (‘000 oz)
Oxide	0.11g/t	Indicated	79.6	0.41	0.01	0.08	1,050		172
	Au	Inferred	9.2	0.19	0.01	0.29	57		66
Secondary	0.1% Cu	Indicated	225	0.27	0.35		1,932	1,722
& Primary		Inferred	178	0.21	0.30		1,216	1,171

The average molybdenum grade was of the order of 40 ppm. Although not included in the resources, recovery of Mo did present an economic opportunity of interest.

Historically, there was no production from the La Arena Project. The Company commenced pre-commercial production activities on the La Area Gold Oxide Mine in May 2011, with commercial production commencing in January 2012. See “General Development of Business - Three Year History”.

Geological Setting

The La Arena Project is located on the eastern flank of the Andean Western Cordillera in northern Peru. The area is underlain by sediments of the Mesozoic West Peruvian Basin, which were folded and faulted during the Cenozoic deformation.

21

The regional stratigraphy (Figure 7.1_1 and Table 7.1_1) is dominated at outcrop by the folded Upper Jurassic (Chicama Formation) to the Lower Cretaceous (Goyllarisquizga Group), which are mainly siliciclastic sediments, with lesser amounts of younger Lower-to-Upper-Cretaceous carbonate sediments occupying the cores of synclines. West of La Arena Project, the Cretaceous sediments are unconformably overlain by the Cenozoic volcanics of the Calipuy Group. The regional stratigraphical column is summarised in Table 7.1_1 and a plan of the regional geology is shown in Figure 7.1_1.

Table 7.1_1 Regional Stratigraphic Column of La Arena and Surrounding Areas
Erathem	System	Series	Group	Formation	Extrusive Lithology	Intrusive Lithology Abbreviation	Gold Mineralisation
Cenozoic	Quaternary	Recent		Alluvial, Fluvial	Q-al/Q-fl
		Pleistocene		Glacial, Lacustrine	Q-gl/Q-la
	Neogene		Calipuy		Pn-ca	P-da	AC
	Paleogene					P-and
Mesozoic	Cretaceous	Upper		Yumagual	Ks-yu
		Lower		Pariatambo	Ki-pa
				Chulec	Ki-chu
				Inca	Ki-In
			Goyllarisquizga	Farrat	Ki-fa
				Carhuaz	Ki-ca		S
				Santa	Ki-sa
				Chimu	Ki-chi		AC, ET, LA, LV, SR
				Oyón	Ki-o
	Jurassic	Upper		Chicama	Js-ch
after Reyes R. L, 1980 and Navarro et. al. 2010).
Gold mineralization: AC: Lagunas Norte, ET: El Toro, LA: La Arena, LV: La Virgen, S: Shahuindo, SR: Santa Rosa

22

23

From oldest to youngest, the regional stratigraphy is described as follows:

Palaeozoic (and Precambrian): Constitute basement rocks to the east of the La Arena Project along the River Marañon and the Eastern Cordillera. They are not exposed at La Arena Project, nor in the immediately surrounding area.

Mesozoic: The oldest outcropping rocks in the region belong to the Upper Jurassic Chicama Formation and consist of soft, laminated marine black shales with thin sandstone intercalations.

These pass upwards into the Lower Cretaceous shallow marine siliciclastic Goyllarisquizga Group, the lowest unit of which, the Oyon Formation, consists of fine-to-medium-grained sandstone and thinly-bedded shale, with some coal seams. Overlying the Oyon Formation are thickly-bedded, medium grained quartzitic sandstones of the Chimu Formation which constitutes the principal host rock for gold mineralization at Lagunas Norte, El Toro, the La Arena Project, La Virgin and Santa Rosa. The remainder of the Goyllarisquisga Group (Santa, Carhuaz and Farrat formations) consists of generally finer grained siliciclastic units with interbedded minor carbonates. The Carhuaz Formation provides the host for gold mineralization at Shahuindo.

Overlying the Goyllarisquisga Group sediments are Lower-Cretaceous shallow marine carbonates of the Inca, Chulec, Pariatambo formations and the Upper Cretaceous Yumagual Formation.

The Mesozoic sediments were folded and faulted towards the end of the Cretaceous by the early stages of the developing Andean Orogeny.

Cenozoic: Calipuy Group, cordilleran arc volcanics unconformably overlie the folded and faulted Mesozoic strata south and west of the La Arena Project. These sub-aerial volcanics are associated with Upper Miocene sub-volcanic intrusive bodies of andesitic to dacitic composition. The Calipuy volcanics are mainly tuffs with agglomerate horizons at the base, and inter-bedded with andesitic lavas. They constitute the host rock for high sulphidation, low sulphidation and polymetallic mineralization at Lagunas Norte, Tres Cruces and Quiruvilca respectively.

To the west of the area shown in Figure 7.1.1, the Coastal Batholith is emplaced in volcano-sedimentary strata of the Mesozoic Western Peruvian Trough, time equivalents of the rocks described above.

Cenozoic intrusive rocks, including granodiorites, diorites and quartz–feldspar porphyries, are intruded as isolated stocks into both the Mesozoic sedimentary sequence and the overlying Calipuy volcanics. The age of those intrusions vary from c.a. 23 to 25 M.y. One of these intrusions hosts the porphyry-style mineralization at the La Arena Project.

Structure: The main structural features of the region are associated with the Jurassic-Cretaceous sedimentary sequence and consist of a series of folds, reverse faults and over-thrusts trending generally NW-SE (see Figure 7.1_1.). Individual folds range up to 80km in length and 5km in width, and display various forms depending on the relative competency of the various stratigraphic levels. The highly competent sections of the Chimu Formation for example form structurally complex cores to the main anticlines, where they have resisted erosion better than the enclosing strata.

The fold belt which passes through La Arena has a WNW-ESE trend around Sayapullo to the west, swinging to a NW-SE trend immediately west of the La Arena Project and locally N-S in the La Arena Gold Oxide Mine area before swinging back to a more southeasterly trend in an easterly direction. This deflection in the orientation of fold axes is observed 90 km to the north of the La Arena Project between Cachachi and Lluchubamba (Figure 7.1_1).

24

Much of the southeastern corner of the La Arena Project is covered by Quaternary morainic/alluvial/colluvial deposits (Figure 7.1_1), implying the presence of a geomorphological depression which may have been influenced by structure.

Exploration

In addition to the La Arena Gold Mine and La Arena Sulphide Deposit, the property comprising La Arena Project includes several prospects that have been defined by a combination of soil geochemistry and exploration diamond drilling. These are Cerro Colorado, El Alizar Porphyry, Agua Blanca epithermal and porphyry occurrences, Pena Colorado and La Florida as shown in Figure 9.1_1.

There was a fallow period from 2007 until 2010 (with the exception of trenching in 2009) on the La Arena Project when no exploration was conducted during the sale and acquisition of the Project by Rio Alto.

From 2009 to 2012 Rio Alto carried out the following exploration on the La Arena Project:

• Detailed geological mapping at La Arena and surrounding areas (3,000 ha at 1:2,000), and regional geological mapping (23,000 ha at 1:25,000 scale).

• Prior to mine development, 7,296 m of RC holes were drilled at 93 platforms to sterilize areas for the location of future mine facilities.

• The San Andres Project was initiated to the northeast of the Calaorco Open Pit (near the initial leach pad, refer Figures 9.1_1 and 9.1_2). This mineralized zone was discovered by surface mapping and sampling (149 samples). The gold mineralization is hosted in a highly-oxidized sandstone breccia zone, and 3,050 m of RC drilling from 15 platforms provided an inferred Mineral Resource of 10.7 Mt @ 0.21 g/t Au (73,600 oz), which is not included in the 2011 Technical Report.

• The Astrid Project is located 1.0 km NW of the Calaorco Open Pit. Work to date included detailed geological mapping (1:1,000 scale), 840 rock samples (200 of which reported values of more than 100 ppb Au), 14 km of IP and ground-magnetic geophysical lines, and 3,856 m of diamond drilling in 16 holes. Gold mineralization was encountered close to surface, hosted in an oxidized sandstone breccia near its contact with an intrusive stock. The gold mineralization is similar to that in the Calaorco deposit, and exploration is ongoing.

• The Calaorco and Ethel Projects were intensively explored by Cambior and Iamgold and on the basis of these studies a Mineral Reserve of 820,000 oz of Au was reported in the 2010 Technical Report. Subsequently, Rio Alto carried out two drilling campaign. The first drilling program undertaken at the end of 2010 involved 8,938 m of RC drilling at a 25 m x 25 m spacing from 194 locations. The second program, completed during 2011, involved 13,674 m of diamond drilling in a total of 50 holes. The updated resource of this Au/FeOx mineralization in the 2011 Report includes the data from these two drilling programs.

• The 2011 resource estimation update as reported in the 2011 Technical Report utilised some new data from this program, consisting of 3,879 m of DC holes from 5 locations and 21,904 m of RC holes from 67 locations. The average hole depth from surface was 775 m and 350 m for DC and RC drilling respectively. The resource of sulphide mineralization in the 2011 Technical Report is based on initial results from this drilling program and the historical data.

• During 2012 there were 46,428 meters of reverse drilling at the Au-Oxide Calaorco deposit, and 63,020 meters of diamond drilling (“DD”) and 5,892 meters of RC drilling at the sulfide project.

25

26

Figure 9.1_2

2011 Exploration Targets - La Arena Project

 

Au and Cu Geochemical Map showing where drilling has been undertaken

Mineralization

The La Arena project area contains epithermal style gold mineralization in sandstone-hosted oxidized fractures and breccia, and porphyry Cu-Au (Mo) mineralization. Both styles of mineralization are

27

probably linked because they likely emanate from the same source, namely residual magmatic activity related to intrusives of intermediate composition.

The mineralization extends over a length of 2.2 km south-to-north, a width of 1.1 km west-to-east and a 1,000 m vertical range. Continuity of the mineralization is generally excellent, and improves with lower-grade cut-offs, which is a characteristic of this type of deposit.

Drilling

The principal methods used for exploration drilling at the La Arena Project have been DD and RC.

The deposit was relatively well drilled, with approximately 60,000 m of drilling, on a nominal spacing of 50 m in the sandstone and 65 m in the porphyry, from discovery in 1994 to 2007 with predominantly HQ and to a lesser degree NQ core. Diamond drilling accounted for 98 % of the metres drilled at this stage. Drilling recommenced in September 2010 and has focussed on three programs:

• Infill RC grade control drilling, totalling 8,938 m, on a 25 m x 25 m grid to assist with grade control models and preliminary mine scheduling. This has been included in the updated Resource Model. This drilling was conducted between September 2010 and January 2011.

• Infill RC resource drilling, totalling 12,966 m to close off gaps within the Resource to a more rigorous 50 m x 50 m pattern in the sandstone, and to close off a major geographical gap between the sandstone and the porphyry. This drilling commenced in January 2011 and is ongoing.

• Depth and strike extensions to the porphyry. These are all DD. There are 5 new holes drilled to date totalling 3,879 m. This drilling commenced in January 2011 and is ongoing. All core is HQ diameter to a depth of 450-500 m depending upon ground conditions, and then NQ diameter thereafter.

• During 2012 there were 46,428 meters of reverse circulation (“RC”) drilling at the Au-Oxide Calaorco deposit, and 63,020 meters of diamond drilling (“DD”) and 5,892 meters of RC drilling at the sulfide project. All core is HQ diameter to a depth of 450-500 m depending upon ground conditions, and then NQ diameter thereafter.

Drilling Procedures

Up until 2007, DD holes were drilled by Sociedad Minera Cambior Peru S.A (SMCP) and RC holes were drilled by AK Drilling International S.A. (“AK Drilling”). Most DC holes were drilled with HQ diameter until 1999 and about 40% of the holes were drilled NQ diameter from 1999 to 2005. The historical database does not clearly record core size. DD recoveries, in general, are very good, except where there are heavily oxidised zones. It is clear that in these areas there are wash outs and loss of fines from the core. RC drilling recoveries were noted as poor in general due to bad ground conditions and abundant underground water. There were 11 RC holes collared in low-lying, wet areas.

The recent drilling programs commencing in 2010 were by AK Drilling (RC) and Explomin del Peru (DC). DD recovery is high, and RC sample recovery has increased markedly as a result of better drilling technology and placement of hole locations.

Drilling Orientation

Drilling prior to 2008 was generally drilled to the west at between 60 to 70 degrees dip. Holes were targeted to perpendicularly intersect the expected main trend of global mineralization.

28

Recent mapping in 2010 has determined that a primary orientation of 40 degrees has not been systematically tested for both gold and copper mineralisation. The majority of the drilling in 2011 has been orientated orthogonal to this trend, and this has probably contributed to an elevated Au and Cu grade returned in assays. This has not yet been analysed in any detail.

Accuracy of Drilling Collar Locations

Historical drillhole collars were surveyed by Eagle Mapping Ltd. using total station and differential GPS. Survey accuracy is reported as +/-0.5 m. Recent drillhole collars have been surveyed using a Total Station GPS.

Down-hole Surveying Procedures

Prior to the 2005 drilling campaign, holes were down-hole surveyed using acid test every 50 m. This method uses acid, in a glass test tube, with the acid etching the tube and indicating the inclination or dip of the hole. It is carried out by lowering the tube down the hole to the desired depth, for each reading. Magnetic azimuth readings are not obtained by this method.

Also tropari survey measurements are noted in the drillhole logs. A tropari is a directional surveying instrument that gives inclination and magnetic azimuth and can be used in open holes or through rods 36 mm (1.40 inches) or larger. Accuracy to +/-0.5 degrees is claimed by the manufacturer.

After hole 172, down-hole surveys were collected with a SingleSmart Flexit tool with a reported accuracy of +/-0.2 degrees, recording both dip and azimuth. Real-time recording tools were used from 2007 onwards.

Accuracy of the down-hole survey measurements meets acceptable industry standards. Post acid test holes were found to deviate in azimuth by an average 3.2º and have a tendency to steepen in dip by an average 2.9º.

All except 5 RC holes drilled in 2010/2011 have not yet been down hole surveyed in 2011 due to magnetic interference. A non-magnetic downhole Gyro tool has subsequently been purchased for down-hole surveys for RC holes.

Ian Dreyer of Andes Mining Services S.A.C., Qualified Person, considers the locations of the total data set of DC and RC holes have sufficient accuracy to make no material impact on the quality of the resource estimation.

Sterilisation Drilling

A total of 48 RC holes were drilled between September and November 2009 to ensure planned gold oxide Project infrastructure would not be placed in areas of potential economic mineralization. The holes were drilled to the south, east and north of the expected sulphide project pit limits to assess a planned waste dump to the south, planned gold oxide project infrastructure to the east and the planned gold oxide dump leach pad and ADR plant to the north.

There has been no further sterilisation drilling.

Sampling

Sampling Method and Approach

Core mark-up and sampling has been conventional and appropriate. Samples are generally 2 m long, except on geological contacts. Core has not been orientated for structural measurements.

29

During earlier exploration programs the core was chiselled in half. It has been noted previously that when the core had been split using the chisel method, the remaining half core was completely fractured, and that silicified core was not well split using this technique. More recently the core has been cut lengthways with a diamond saw and half-core is sent for assay.

Diamond core samples are numbered and collected in individual plastic bags with sample tags inserted inside. Each sample batch is made up of approximately 73 samples, including 3 quality control blanks, 3 standards and 3 field duplicates. Each work order consisted of a rice bag with samples along with an order list of which one copy was sent to the laboratory in Lima and another copy retained on site. Bags were closed with tie-wraps.

RC samples were collected at 2 m intervals and quartered in riffle splitters. Sub-samples weigh approximately 6 kg and are collected in cloth-lined sample bags. The quality control insertion rate is identical to the DC procedure.

The surface trench sampling is now of little use to this Project and has not been utilised in any interpretation or grade estimation.

Diamond core is logged in detail for geological, structural and geotechnical information, including RQD and core recovery. Whole core is routinely photographed.

Diamond core and RC chip logging is conventional and appropriate.

Core recovery has been recorded for all drillholes at 2 m intervals. Core recovery is generally 90-95% or higher and infrequently 70-80% or less. The lower recoveries occur mainly in the more weathered, upper parts of the deposit.

Sample Preparation and Analysis

The sample preparation methods for the samples submitted prior to 2003 are not documented. Since 2003 the sample preparation methods have been constant as outlined below.

Samples were digitally weighed, dried to a maximum of 120ºC (for wet samples), crushed to 70% < 2 mm (10 mesh), riffle split to 250 g, and pulverized to 85 % < 75 µm (200 mesh). 50 g pulps were submitted for chemical analysis. These procedures have been in place since 2003.

Chemical analysis at the primary laboratory (ALS Chemex since 2005) and the secondary laboratory (CIMM Peru) consisted of fire assay (FA) with atomic absorption spectrometry (AAS) finish, using 50 g sub-samples. Those samples that analysed ≥5 g/t Au were analysed using gravimetric methods.

For Cu and Ag (and Mo, Pb, Zn, As, Sb and Bi) multi-acid (four) digestion AAS was used. Hg was analysed using cold vapour AAS. Until the end of 2004 the core samples from drillholes 1 to 125 were processed by CIMM Peru as the primary laboratory. The assay methods for the samples submitted prior to 2005 are not documented.

The primary laboratory has now switched back to CIMM Peru since 2010 with the secondary laboratory being ALS Chemex.

For a detailed discussion on sampling and analysis, including a description of sampling methods, location, number, type, etc., identification of drilling, sampling and recovery factors that materially impact the accuracy or reliability of the results, a discussion of the sample quality, and quality control measures and data verifications procedures, please refer to sections 11 and 12 of the 2011 Technical Report.

30

La Arena Mineral Resources and Reserves

Mineral Resources

The Mineral Resource for the La Arena Project as set out in the 2011 Technical Report is shown in Table 14.12_1 to Table 14.12_4. The Resource is separated into the three clear mineralisation styles of Oxide Low Copper (<300 ppm Cu); Oxide High Copper (300–1000 ppm Cu) and Sulphide Resource.

The Resource is reported within an optimised undiscounted cash flow pit shell using metal prices of $1,600 / oz for Au and $3.00 / lb for Cu.

The effective cut-off grade is 0.095 g/t Au (rounded up to 0.1 g/t for reporting) for the Au Oxide Resource and 0.18% copper equivalent (CuEq) for the Sulphide Resource. No credits have been used for Ag or Mo to derive the CuEq cut-off grade.

The CuEq grade for the Sulphide Resource was calculated by assigning a copper equivalent value to the contained gold. The copper equivalent value is obtained by dividing the gold grade in the Sulphide Resource by a factor and adding the resulting quotient to the Cu grade. The factor is the product of 31.1035 (grams per ounce) and 2204.62 (lbs per tonne) and the price of Cu ($3.00 / lb) divided by the price of Au ($1600 / oz) with the result divided by 100. The equation is represented below:

CuEq	= Cu + CuEq (Au)
Where CuEq (Au)	= 31.1035 x 2204.62 x $3.00 / 100
	$1600

This calculation was tested by determining the gross metal value of contained gold and copper within the Sulphide Resource and dividing this value by the price of copper to calculate an equivalent number of pounds of copper contained in the resource, which was divided by 2,204.62 and multiplied by 100.

All numbers have been rounded to reflect the appropriate degree of precision of each estimate.

Table 14.12_1 Mineral Resource – Oxide - Low Copper (<300 ppm Cu) (In Situ as at September 30th 2011) Within Optimised Pit Shell
Resource	Tonnes (Mt)	Au (g/t)	Cu (%)	Ag(ppm)	Mo(ppm)	Au (‘000 oz)	Cu (‘000 lbs)
Measured	9.8	0.67	0.01	0.6	6.9	210	NA
Indicated	76.9	0.46	0.01	0.5	6.5	1,136	NA
Measured and Indicated	86.7	0.48	0.01	0.5	6.6	1,346	NA

Table 14.12_2 Mineral Resource – Oxide - High Copper (300–1000 ppm Cu) (In Situ as at September 30th 2011) Within Optimised Pit Shell
Resource	Tonnes (Mt)	Au (g/t)	Cu (%)	Ag(ppm)	Mo(ppm)	Au (‘000 Oz)	Cu (‘000 lbs)
Measured	0.5	0.66	0.06	0.7	36.0	11	NA
Indicated	13.5	0.29	0.06	0.6	41.4	127	NA
Measured and Indicated	14.0	0.31	0.06	0.6	41.2	138	NA
Inferred	1.4	0.18	0.06	0.6	55.7	8	NA

31

Table 14.12_3 Mineral Resource – Oxide Total (In Situ as at September 30th 2011) Within Optimised Pit Shell
Resource	Tonnes (Mt)	Au (g/t)	Cu (%)	Ag(ppm)	Mo(ppm)	Au (‘000 Oz)	Cu (‘000 lbs)
Measured	10.3	0.67	0.01	0.6	8.3	221	NA
Indicated	90.4	0.43	0.02	0.5	11.7	1,263	NA
Measured and Indicated	100.7	0.46	0.02	0.5	11.4	1,484	NA
Inferred	10.4	0.27	0.01	0.5	13.1	90	NA

Table 14.12_4 Mineral Resource – Sulphide Total (In Situ as at September 30th 2011) Within Optimised Pit Shell
Resource	Tonnes (Mt)	Au (g/t)	Cu (%)	CuEq (%)	Ag(ppm)	Mo(ppm)	Au (‘000 Oz)	Cu (‘000 lbs)
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 pit was constrained by the following optimization parameters:

La Arena Project Resources Parameters - September 30, 2011
Parameter		Dump Leach
Market Price		$1600 per ounce Au / $3.00 per lb Cu
Mining cost	Oxides	$2.12 ore and waste
($/t mined)	Sulphides	$1.82 ore and waste
Processing Cost ($/t Ore)		$1.47
G & A Cost		$0.69
Mill Recovery	Au	40%
	Cu	88%

Mineral Reserves

There has not been an update of mineral reserve estimates of the La Arena Project since the 2010 Technical Report. The La Arena mineral reserve estimates from the 2010 Technical Report are set forth in the following table.

32

La Arena Project Rio Alto Mineral Reserve (31 July 2010)
Ore Type	Oxide Ore			Secondary Ore			Primary Ore			All Ore
	Mt	g Au/t	%Cu	Mt	g Au/t	%Cu	Mt	g Au/t	%Cu	Mt	g Au/t	Oz Au	%Cu	000’s lbs Cu
Gold Oxide Pit Design
Sediments	57.4	0.44								57.4	0.44	821,000
Sulphide Pit Shell (excluding Oxide Pit)
Sediments	2.0	0.57	0.11	0.1	0.34	0.32	0.1	0.81	0.60	2.1	0.58	39,000	0.14	7,000
Porphyry	13.1	0309	0.20	1320	0.36	0.52	160.1	0.28	0.38	185.2	0.29	1,709,000	0.38	1567,000
Total	15.1	0.34	0.19	1331	0.36	0.52	160.2	0.38	0.38	187.3	0.29	1,748,000	0.38	1,574,000

*Rounded numbers may not sum exactly.

All key inputs for both the gold oxide feasibility work set out in the 2010 Technical Report and the previous IAMGold Pre-Feasibility Study work have been reviewed by Coffey Mining and a pit optimisation using these updated parameters undertaken using Whittle software by Coffey Mining. The key input parameters used for estimating the mineral reserves are shown in the following table within the 2010 Technical Report.

La Arena Project Coffey Mining Pit Optimisation Parameters – July 31, 2010
Parameter		Dump Leach	Mill
Market Price		$950 per ounce Au / $2.30 per lb Cu
Mining cost	Sediment	$1.74 ore and waste	$1.74 ore and waste
($/t mined)	Porphyry	$1.82 ore and waste	$1.82 ore and waste*
Processing Cost ($/t Ore)		$2.22	$3.73
G & A Cost		$0.72**	$0.95
Mill Recovery	Au	80%	40%
	Cu	0%	88%
Slope Angles		38º and45º
Royalty		1.7%

*	Note that the mining cost was increased by $0.03/t for every 12m bench mined below elevation 3328mRL.
**	Note the G&A cost assumed an ore processing rate of 8.6Mtpa when Whittle work was done.

The mineral reserves have been estimated using the following cutoff grades:

• For oxide ore with Cu<300ppm (dump leach feed) 0.11 Au g/t.

• For oxides with Cu>300ppm, secondary and primary sediments and porphyry (mill feed) 0.13% Cu.

33

Mining Operations

For the La Arena mineral project, the mining methods include oxide, open pit, drill blast, dump and leaching. 190,000 – 210,000 ounces for fiscal 2013 are expected to be processed. There is an expected mine life of 5 to 7 years, and the expected payback period of capital is one year.

RISK FACTORS

Overview

The Company's business consists of the exploration, development and exploitation of mineral properties and is subject to certain risks. Some of these risks apply to the mining industry in general and others that apply to La Arena Project. These risks could have a significant impact on the Company’s business, revenues, cash flows, earnings, financial condition, results of operations and prospects for the future.

This section describes the risks that the Company believes are most material to its business. This is not a complete list of the risks that the Company is subject to. There are other risks that the Company does not currently believe to be material that could become material in the future and other risks that are not presently known to the Company. The Company has systems and procedures in place to identify and manage these risks, but many of these risks are beyond the Company’s control and there is no assurance that the Company will be successful in preventing the harm that the Company could suffer should any of these events actually occur.

The risks described in this section and the other information contained and incorporated by reference in this Annual Information Form should be carefully considered by readers.

General Risk Factors

Risks inherent given the nature of mining, mineral exploration and development projects in general

Mining operations generally involve a high degree of risk. The Company's operations are subject to the hazards and risks normally encountered in the exploration, development and production of minerals, including environmental hazards, explosions, unusual or unexpected geological formations or pressures and periodic interruptions in both production and transportation due to inclement or hazardous weather conditions. Such risks could result in damage to, or destruction of, mineral properties or producing facilities, personal injury, environmental damage, delays in mining, monetary losses and possible legal liability.

Development and mine start up projects have no operating history upon which to base estimates of future cash operating costs. For such projects, resource estimates and estimates of cash operating costs are, to a large extent, based upon the interpretation of geologic data obtained from drill holes and other sampling techniques, and feasibility studies, which derive estimates of cash operating costs based upon anticipated tonnage and grades of ore to be mined and processed, ground conditions, the configuration of the ore body, expected recovery rates of minerals from the ore, estimated capital and operating costs, anticipated climatic conditions and other factors. As a result, actual production, cash capital and operating costs and economic returns could differ significantly from those estimated. It is not unusual for new mining operations to experience problems during the start-up phase, and delays in the commencement of production often can occur.

Mineral exploration is highly speculative in nature. There is no assurance that exploration efforts will be successful. Even when mineralization is discovered, it may take several years until production is possible, during which time the economic feasibility of production may change. Substantial expenditures are required to establish proven and probable mineral reserves. Because of these uncertainties, no assurance can be given that exploration programs will result in the identification or expansion of mineral

34

resources or mineral reserves. There is no certainty that the expenditures made towards the search and evaluation of mineral deposits will result in discoveries or development of commercial quantities of ore.

Company has limited revenue history

The Company has a limited history of revenue from operations. There can be no assurance that significant losses will not occur in the near future or that the Company will be profitable in the future. The Company's operating expenses and capital expenditures may increase in subsequent years as costs related to consultants, personnel, operating supplies and equipment associated with advancing exploration, development and commercial production of the La Arena Project or other properties in which the Company has an interest increase. The development of the Company's properties will require the commitment of substantial resources to conduct time-consuming development. The Company commenced commercial production in January 2012, and recorded revenues during the year ended December 31, 2012, however, there can be no assurance that the Company will continue to achieve profitability.

Liquidity concerns and future financings

The Company will require significant capital and incur operating expenditures in connection with the development of the La Arena Project or other properties in which the Company has an interest. There can be no assurance that the Company will be successful in obtaining required financing as and when needed. Disruptions in credit and financial markets have adversely affected financial institutions, inhibited lending and limited access to capital and credit for many companies. If future financing is not available to the Company when required, as a result of limited access to credit markets or otherwise, or is not available on acceptable terms, the Company may be unable to invest the capital for the Company’s development and exploration programs, take advantage of business opportunities or respond to competitive pressures, any of which could cause the Company to postpone or slow down its development plans, forfeit rights in some or all of the Company's properties or reduce or terminate some or all of its activities.

Risks Relating to the Company’s Business

Changes in the market prices for gold, copper, other minerals and commodities, which in the past have fluctuated widely, will affect the profitability of the Company’s operations and financial condition.

The Company’s profitability depends upon the world market price of gold, copper, other metals and oil. Prices fluctuate widely and are affected by numerous factors beyond the Company’s control. The prices of metals and oil are influenced by factors including:

• industrial and retail supply and demand;

• exchange rates;

• expectations with respect to inflation rates;

• interest rates;

• changes in global economies;

• confidence in the global monetary system;

• forward sales of gold, copper, other metals and oil by producers and speculators; and

• other global or regional political, social or economic events.

The supply of gold, copper and other metals consists of a combination of new mine production, recycled material and existing stocks held by governments, producers, speculators and consumers.

If the market prices for gold, copper or other metals fall below the Company’s full production costs and remain at such levels for any sustained period of time, it may not be economically feasible to commence or continue production. This would materially and adversely affect production, profitability and the

35

Company’s financial position. The Company may, depending on hedging practices, experience losses and may determine to discontinue operations or development of a project or mining at one or more of its properties. If the price of gold or copper declines significantly, the economic prospects of the projects in which the Company has an interest could be significantly reduced or rendered uneconomic. Gold and copper prices have fluctuated widely in recent years. There is no assurance that, even as commercial quantities of gold, copper and other metals are produced, a profitable market will exist for them. A decline in the market price of gold, copper or other minerals may also require the Company to write down its mineral properties which would have a material and adverse effect on its earnings and profitability and the Company’s ability to continue as a going concern.

The Company has a limited operating history and there can be no assurance of its ability to operate its projects profitably.

The Company has a short history of producing metals from La Arena Gold Oxide Mine and no history of production from La Arena Sulphide Project. As a result, the Company is subject to all of the risks associated with establishing new mining operations and business enterprises including:

• the timing and cost, which can be considerable, of the construction and expansion of mining and processing facilities;

• the availability and costs of skilled labour and mining equipment;

• the availability and cost of appropriate smelting or refining arrangements;

• the need to obtain necessary environmental and other governmental approvals and permits, and the timing of those approvals and receipt of permits; and

• the availability of funds to finance construction and development activities.

The costs, timing and complexities of mine construction and development are increased by the remote location of the La Arena Project. It is common in new mining operations to experience unexpected problems and delays during construction, development, and mine start-up. In addition, delays in the commencement of mineral production often occur. Accordingly, there are no assurances that the Company’s activities will result in profitable mining operations.

Mining is inherently dangerous and subject to conditions or elements beyond the Company’s control, which could have a material adverse effect on the Company’s business.

The Company’s business operations are subject to risks and hazards inherent in the mining industry. The exploration for and the development of mineral deposits involve significant risks which even a combination of careful evaluation, experience and knowledge may not eliminate. The risks and hazards involved in mining include:

• environmental hazards;

• industrial accidents;

• labour disruptions;

• metallurgical and other processing problems;

• unusual or unexpected rock formations;

• structural cave-ins or slides;

• flooding;

• fires;

• metal losses; and

• periodic interruptions due to inclement or hazardous weather conditions.

The Company’s operations may be further hampered by mining, heritage and environmental legislation, industrial disputes, cost overruns, land claims and compensation and other unforeseen contingencies. The

36

success of the Company also depends on the delineation of economically recoverable reserves, the availability and cost of required development capital, movement in the price of commodities, securing and maintaining title to its exploration and mining tenements as well as obtaining all necessary consents and approvals for the conduct of its exploration and future production activities.

Exploration on the Company’s existing exploration and mining tenements may prove unsuccessful. Mineable resources may become depleted resulting in a reduction of the value of those tenements and a diminution in the cash flow and cash reserves of the Company as well as possible relinquishment of the exploration and mining tenements.

The Company depends heavily on limited properties, and there can be no guarantee that the Company will successfully acquire additional commercially mineable mineral rights.

The La Arena Project accounts for the Company’s mineral resources and reserves and the potential for the future generation of revenue. Any adverse development affecting the progress of the La Arena Project such as, but not limited to, obtaining financing on commercially suitable terms, hiring suitable personnel and mining contractors, or securing supply agreements on commercially suitable terms, may have a material adverse effect of the Company’s financial performance and results of operations.

Risks Relating to the La Arena Project

There can be no assurance that the La Arena Project will be profitable.

The Company is primarily focused on the development of the La Arena Project and has commenced production in the La Arena Gold Oxide Mine. However, there can be no assurance that the La Arena Gold Oxide Mine will continue to be profitable.

Failure to meet production targets and cost estimates will affect the La Arena Project

Production costs on the La Arena Gold Oxide Mine may also be affected by increased stripping costs, increases in level of ore impurities, labour costs, raw material costs, inflation and fluctuations in currency exchange rates. Failure to achieve production targets or cost estimates could have a material adverse impact on the Company’s ability to meet its obligations under the Gold Prepayment Facility, sales, profitability, cash flow and overall financial performance.

Regulatory Requirements and Permitting

The current and future operations of the Company, including exploration or development activities and commencement of production on its properties require permits from various governmental authorities, and such operations are and will be governed by laws and regulations governing prospecting, development, mining, production, taxes, labour standards, occupational health, waste disposal, water use, toxic substances, land use, environmental protection, mine safety, community involvement and other matters. Companies engaged in the development and operation of mines and related facilities generally experience increased costs and delays in production and other schedules as a result of the need to comply with the applicable laws, regulations and permits. There can be no assurance that all permits which the Company may require for the construction of mining facilities and conduct of mining operations will be obtainable in a timely manner or that such laws and regulations would not have an adverse effect on any mining project which the Company might undertake.

Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment or remedial actions. Parties engaged in mining operations may be required to

37

compensate those suffering loss or damage by reason of the mining activities and may have civil or criminal fines or penalties imposed upon them for violation of applicable laws or regulations.

Amendments to current laws, regulations and permits governing operations and activities of mining companies, or more stringent implementation thereof, could have a material impact on the Company and cause increases in capital expenditures or production costs or reduction in levels of production at producing properties or require abandonment or delays in the development of new mining properties.

Company’s business is subject to potential political, social and economic instability in Peru

The Company’s mineral property interests are located in the Republic of Peru. For more than two decades Peru has made progress in restructuring its political institutions and revitalizing its economy. In previous decades Peru’s history was one of political and economic instability during which governments intervened in the national economy and social structure, including periodically imposing various controls the effects of which were to restrict the ability of both domestic and foreign companies to freely operate.

Local opposition to mine development projects has arisen in Peru in the past, and such opposition has at times been violent. There is also the risk of political violence and increased social tension in Peru as a result of the increased civil unrest, crime and labour unrest. Roadblocks by members of local communities, unemployed people and unions can occur on national and provincial routes. The Company enjoys good relationships with the surrounding communities, but there is no assurance that such relationships will continue in the future.

Changes in Peruvian regulations could increase the Company’s operating costs

The Company’s ability to conduct future exploration and development activities is subject to changes in government regulations and shifts in political attitudes over which it has no control.

Social and community issues may affect operations

In recent years communities and non-governmental organizations ("NGO's") have become more vocal and active with respect to mining activities at or near their communities. These communities and NGO's have taken such actions as road closures, work stoppages, and law suits for damages. These actions relate not only to current activities, but often in respect of decades old mining activities by prior owners of mining properties. Such actions by communities and NGO's may have a material adverse effect on the Company's financial position, cash flow and results of operations.

During the latter part of September 2011, a group of approximately thirty people from the communities within the La Arena Gold Mine’s area of influence illegally blockaded the entrance to the mine preventing workers from entering or leaving. As a result, nearly ten effective development and construction working days were lost during September. The loss of productive time pushed completion of the leach pad and process plant expansion from October into November and also delayed pit development with a corresponding loss of waste and ore production. During the blockade it became clear that certain individuals had misinformed members of the community and had made unfounded accusations about the Company in order to further their own personal ambitions. Once a proper dialogue was re-established the blockade dissolved peacefully.

Currency fluctuations may affect the costs of doing business

The Company’s activities and principal business office is located in Peru. Gold, copper and other metals are sold in international markets at prices denominated in USD. However, some of the costs associated with the Company’s activities in Peru may be denominated in currencies not directly related to the price of the USD. Any appreciation of these currencies vis a vis the USD could increase the Company’s cost of

38

doing business. In addition, the USD is subject to fluctuation in value vis a vis the Canadian dollar. The Company does not currently utilize hedging programs to mitigate the effect of currency movements.

Mineral resource and mineral reserve estimates may be inaccurate

There are numerous uncertainties inherent in estimating mineral resources and mineral reserves, including many factors beyond the Company's control. Such estimates are a subjective process, and the accuracy of any mineral resources and mineral reserves estimate is a function of the quantity and quality of available data and of the assumptions made and judgments used in engineering and geological interpretation. These amounts are estimates only and the actual level of recovery of minerals from such deposits may be different. Differences between management's assumptions, including economic assumptions such as metal prices, market conditions and actual events could have a material adverse effect on the Company's mineral reserve estimates, financial position and results of operations.

Environmental, health and safety regulation and enforcement will affect the Company’s activities

The Company's activities are subject to extensive laws and regulations governing environmental protection and employee health and safety. Environmental, health and safety legislation is evolving in a manner that is creating stricter standards, while enforcement, fines and penalties for non-compliance are more stringent. The cost of compliance with changes in governmental regulations has the potential to reduce the profitability of operations. Furthermore, any failure to comply fully with all applicable laws and regulations could have significant adverse effects on the Company, including the suspension or cessation of operations.

Title to property interests may be unreliable

No assurances can be given that title defects to the properties in which the Company has an interest do not exist. These properties may be subject to prior unregistered agreements, interests or other land claims and title may be affected by undetected defects. If title defects do exist, it is possible that the Company may lose all or a portion of its right, title, estate and interest in and to the properties to which the title defect relates.

Title to mineral interests in some jurisdictions, is often not susceptible of determination without incurring substantial expense. In accordance with industry practice, the Company conducts such title reviews in connection with its properties as it believes are commensurate with the value of such properties.

Uninsured risks exist and may affect certain values

The Company maintains insurance to cover normal business risks. In the course of exploration and development of mineral properties, certain risks, and in particular, unexpected or unusual geological operating conditions including explosions, rock bursts, cave-ins, fire and earthquakes may occur. It is not always possible to fully insure against such risks as a result of high premiums or other reasons. Should such liabilities arise, they could reduce or eliminate any future profitability and result in increasing costs and a decline in the value of the Common Shares.

Key-Man performance and liability insurance factors should be considered

The success of the Company will be largely dependent upon the performance of its key officers. The Company has not, as yet, purchased any "key-man" insurance with respect to any of its directors, officers, key employees and has no current plans to do so.

Although the Company obtains liability insurance in an amount which management considers adequate, the nature of the risks for mining companies is such that liabilities might exceed policy limits, the liabilities and hazards might not be insurable, or the Company might not elect to insure itself against such

39

liabilities due to high premium costs or other reasons, in which event the Company could incur significant costs that could have a material adverse effect upon its financial condition.

The Company’s Operations in Peru

La Arena Project is located in Peru. As in any jurisdiction, mineral exploration and mining activities may be affected in varying degrees by government regulations relating to the mining industry or political instability. Any changes in regulations or shifts in political conditions are beyond the control of the Company may adversely affect its business. The Company does not maintain and does not intend to purchase political risk insurance, as, for 20 years now, the Peruvian economy is very much a market ruled economy. Operations may be affected in varying degrees by government regulations with respect to restrictions on production, price controls, export controls, income taxes, expropriation of property, environmental legislation and mine safety. The status of Peru as a developing country may make it more difficult to obtain any required exploration financing for projects. The effect of all of these factors cannot be accurately predicted. There are risks relating to an uncertain or unpredictable political environment in Peru.

Foreign Subsidiaries

The Company conducts operations through foreign (Peruvian) subsidiaries, and substantially all of its assets are held in such entities. Accordingly, any limitation on the transfer of cash or other assets between the parent corporation and such entities, or among such entities, could restrict the Company’s ability to fund its operations efficiently. Any such limitations, or the perception that such limitations may exist now or in the future, could have an adverse impact on the Company’s valuation and stock price.

Competition could have material adverse effects

The Company competes with many other companies that have substantially greater resources. Such competition may result in the Company being unable to acquire desired properties, recruit or retain qualified employees or acquire the capital necessary to fund the Company's operations and develop its properties. The Company's inability to compete with other companies for these resources would have a material adverse effect on the Company's results of operations and business.

Dependence on outside parties and their performance are a factor

The Company has relied upon consultants, engineers and others and intends to rely on these parties for development, construction and operating expertise. Substantial expenditures are required to construct mines, to establish mineral reserves, to carry out environmental and social impact assessments, to develop metallurgical processes to extract metal from ore and, in the case of new properties, to develop the exploration and plant infrastructure at any particular site. If parties whose work is relied upon are negligent or whose work is deficient or is not completed in a timely manner, it could have a material adverse effect on the Company.

Ability to attract and retain qualified personnel will determine the Company’s success

Recruiting and retaining qualified personnel is critical to the Company's success. The number of persons skilled in the acquisition, exploration, development and operation of mining properties is limited and competition for such persons is intense. As the Company's business activity grows, it will require additional key financial, administrative and mining personnel as well as additional operations staff. If the Company is not successful in attracting and training qualified personnel, the efficiency of its operations could be affected, which could have a material adverse impact on the Company's future cash flows, earnings, results of operations and financial condition.

40

Availability of reasonably priced raw materials and mining equipment

The Company will require a variety of materials in its business as well as a wide variety of mining equipment. To the extent these materials or equipment are unavailable or available only at significantly increased prices, the Company's production and financial performance could be adversely impacted.

Share price fluctuations will likely occur

The market price of securities of many companies, particularly development stage and start up companies, experience wide fluctuations in price that are not necessarily related to the operating performance or the underlying asset values of prospects of such companies. There can be no assurance that fluctuations in the Common Share price will not occur.

Dilution and future sales of Common Shares will be at the discretion of the Company

The Company may issue additional shares in the future, which may dilute a shareholder's holdings in the Company. The Company's articles permit the issuance of an unlimited number of Common Shares and an unlimited number of preferred shares issuable in series and shareholders will have no pre-emptive rights in connection with further issuances. The directors of the Company have the discretion to determine the provisions attaching to any series of preferred shares and the price and terms of further issuances of Common Shares.

Dividends may not be payable

The future payment of dividends on the Common Shares will be dependent upon the financial requirements of the Company to finance future growth, the Company’s financial condition and other factors, which the Board of Directors may consider appropriate in the circumstances. The Company has not paid any dividends since its inception and it is not anticipated that dividends will be paid in the immediate or foreseeable future.

Conflicts of interest may arise

There are potential conflicts of interest to which the directors and officers of the Company may be subject in connection with the operations of the Company. Some of the directors and officers of the Company are engaged in the mining industry, and situations may arise where such directors and officers interests’ could be in conflict with those of the Company. Such conflicts must be disclosed in accordance with, and are subject to such other procedures and remedies applicable under, the ABCA, and the applicable statutes of the jurisdictions of the Company of the Company's subsidiaries.

DIVIDENDS

The Company has no dividend policy. No dividends have been declared in the three most recently completed financial years of the Company. Any decision to pay dividends on the Common Shares will be made by the Board of Directors on the basis of the Company's earnings, financial requirements and other conditions existing at the relevant time.

CAPITAL STRUCTURE

General Description of Share Capital

The Company is authorized to issue an unlimited number of Common Shares and an unlimited number of preferred shares (the “Preferred Shares”) issuable in series. No Preferred Shares have been issued. As at December 31, 2012, 175,536,962 Common Shares were issued and outstanding as fully paid and non-

41

assessable shares and no Preferred Shares were issued and outstanding. At the Effective Date, there are 175,885,682 Common Shares issued and outstanding as fully paid and non-assessable shares.

Common Shares

The holders of the Common Shares are entitled to receive notice of and attend any meeting of the Company's shareholders and are entitled to one vote for each Common Share held (except at meetings where only the holders of another class of shares are entitled to vote). Subject to the rights attaching to any other class of shares, the holders of the Common Shares are entitled to receive dividends, if, as and when declared by the Board of Directors of the Company and are entitled to receive the remaining property upon liquidation of the Company.

Preferred Shares

The Company is authorized to issue an unlimited number of Preferred Shares. The Preferred Shares may be issued from time to time in one or more series, each series consisting of a number of Preferred Shares as determined by the Board of Directors of the Company, who may fix the designations, rights, privileges, restrictions and conditions attaching to the shares of each series of Preferred Shares. As at the date hereof, there are no Preferred Shares issued and outstanding. The Preferred Shares of each series shall, with respect to dividends, liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, or any other distribution of the assets of the Company among its shareholders for the purpose of winding up its affairs, shall be entitled to preference over the Common Shares and the shares of any other class ranking junior to the Preferred Shares. The Preferred Shares of any series may also be given such other preferences and priorities over the Common Shares and any other shares of the Company ranking junior to such series of Preferred Shares.

MARKET FOR SECURITIES

Trading Price and Volume

The Common Shares of the Company are listed and posted for trading on the TSX under the stock market symbol "RIO". The following table sets forth the price range (high and low) of the Common Shares and volume traded on the TSXV and TSX for the periods indicated. The Common Shares of the Company were moved from the TSXV to the TSX effective February 24, 2012.

Price (C$)
	High	Low	Volume
Jan-12	$4.07	$3.29	19,935,600
Feb-12	4.70	3.76	8,483,231
Mar-12	4.54	4.37	11,917,981
Apr-12	4.38	4.18	9,010,378
May-12	4.13	3.91	11,035,688
Jun-12	4.39	4.23	13,473,511
Jul-12	4.35	4.23	10,000,508
Aug-12	4.64	4.52	9,766,212
Sep-12	5.20	5.03	26,803,161
Oct-12	5.62	5.45	15,189,584
Nov-12	5.48	5.27	10,920,432
Dec-12	5.09	4.95	8,176,208

42

The Common Shares of the Company have been listed and posted for trading on the Bolsa de Valores de Lima since October 28, 2009, with no trades occurring in October 2009. The following table sets forth the price range (high and low) of the Common Shares in U.S. dollars and volume traded on the Bolsa de Valores de Lima for the periods indicated.

Price (US$)
	High	Low	Volume
Jan-12	$3.68	$3.59	5,579,463
Feb-12	4.22	4.12	4,084,603
Mar-12	4.52	4.41	3,638,312
Apr-12	4.39	4.25	3,216,720
May-12	4.04	3.91	3,489,406
Jun-12	4.25	4.14	4,462,874
Jul-12	4.25	4.18	2,596,215
Aug-12	4.61	4.53	3,804,322
Sep-12	5.27	5.16	3,237,639
Oct-12	5.68	5.58	2,141,382
Nov-12	5.43	5.32	1,838,044
Dec-12	5.12	5.03	2,335,218

The Common Shares of the Company have been listed and posted for trading on the New York Stock Exchange since December 21, 2012. The following table summarizes the issuances of securities convertible into Common Shares for the financial year ended December 31, 2012.

Prior Sales

Date of Issuance	Securities	Number of Securities	Price per Security
January 23, 2012	Stock Options	200,000(1)	Not Applicable
September 12, 2012	Stock Options	600,000(2)	Not Applicable

(1)	These options were issued to a Director and Officer of the Company. The exercise price is $3.75CDN per Common Share and the expiration date is January 23, 2017.
(2)	These options were issued to Directors and Officers of the Company, as well as the corporate secretary. The exercise price is $3.22CDN per Common Share and the expiration date is September 10, 2017.

All options were granted under the Company's Stock Option Plan approved by shareholders of the Company on September 29, 2011.

43

DIRECTORS AND OFFICERS

Name, Occupation and Security Holdings

The following table sets forth the names and municipalities of residence of the current directors and executive officers of the Company, their respective positions and offices with the Company and date first appointed or elected as a director and/or executive officer and their principal occupation(s) within the past five years.

Name and Municipality of Residence	Position(s) held with the Company and Period of Service as a Director	Principal Occupation
Klaus Zeitler(2) West Vancouver, BC, Canada	Chairman and a Director since June 25, 2009	Dr. Zeitler received his professional education at Karlsruhe University from 1959 to 1966 and obtained a PHD in economic planning. Dr. Zeitler is a member of the Canadian Institute of Mining and Metallurgy and the Prospectors and Developers Association. Dr. Zeitler financed, built and managed base metal and gold mines throughout the world (Europe, Africa, North America, South America, and Pacific Region) with a total investment value of $4 billion. Dr. Zeitler was a managing director of Metallgeschaft AG, a German metals conglomerate and in 1986 founded and was a director and CEO of Metall Mining, later Inmet, a Toronto Stock Exchange listed company with assets of over $5 billion and base metal and gold mines in different parts of the world. After having been a director of Teck and Cominco for many years, Dr. Zeitler joined Teck in 1997 as Senior Vice President and had responsibilities for the exploration and development of mines in Peru, Mexico and the USA. Since his retirement from Teck Cominco in 2002, and in addition to being President, CEO and a director of Amerigo Resources Limited, Dr. Zeitler has been actively involved as a director in various junior base and precious metal companies.

44

Name and Municipality of Residence	Position(s) held with the Company and Period of Service as a Director	Principal Occupation
Alexander Black(3) San Isidro, Lima, Peru	Chief Executive Officer since January 23, 2012, and a Director since June 25, 2009 and President since June 2, 2010(4)	Alex Black lives in Lima, Peru and has 30 years experience in the mining industry. Mr. Black holds a BSc in Mining Engineering from the University of South Australia and is a member of the Australasian Institute of Mining and Metallurgy. Prior to moving to Peru in 2000, Mr. Black was the founder and Managing Director of international mining consulting services group Global Mining Services from 1994 to 2000. In 1996, Mr. Black also founded and was Chairman of OFEX listed AGR Limited with exploration projects in Ghana and Mongolia. In 2002, Mr. Black took control of Chariot Resources Limited as a listed TSXV shell and played a key role in the acquisition of the Marcona Copper Project and formation of the Korean joint venture with Chariot Resources. Upon his resignation as Chairman & Executive VP of Chariot Resources in 2006, Mr. Black returned to Peru and founded the Peruvian registered Rio Alto S.A.C. Mr. Black was the Chief Executive Officer, President and a director of Rio Alto prior to the acquisition of the company by Mexican Silver Mines (since renamed Rio Alto Mining Limited).
Anthony Hawkshaw Vancouver, BC, Canada	Chief Financial Officer and a Director since June 25, 2009	Anthony Hawkshaw was a Chartered Accountant for 29 years and holds a Bachelor Degree in Business Management from the Ryerson University in Toronto. From 2005 to 2007, Mr. Hawkshaw was the CFO of Grove Energy Limited, a London and Toronto listed oil and gas development company. In 2005, Mr. Hawkshaw was the CFO of Chariot Resources Limited. Prior to Chariot, Mr. Hawkshaw was CFO of Pan American Silver Corp. from 1995 to 2003. With more than 30 years’ experience in the mining industry in countries including Canada, the United States, Mexico, Russia and Peru, Mr. Hawkshaw has extensive experience in the marketing of metals in refined and concentrate form throughout the world and in metals trading. He has arranged numerous debt, equity and convertible debt financings with institutional investors, commercial banks and multilateral lending agencies. Mr. Hawkshaw is a director of various junior base and precious metals companies and was a director and Chief Financial Officer of Rio Alto prior to the acquisition of the company by Mexican Silver Mines (since renamed Rio Alto Mining Limited).

45

Name and Municipality of Residence	Position(s) held with the Company and Period of Service as a Director	Principal Occupation
Roger Norwich(1)(2) St. Magloire, Sark, Channel Islands	Director since May 2007	Dr Roger Norwich a dual graduate of Manchester University worked as an oil exploration Geologist for Texaco after graduation and gained experience in the North Sea, the Gulf of Mexico and the Permian Basin. Having served as Chairman of a London AIM listed oil and gas exploration company he was a founding Director of TSXV listed Mexican Silver Mines and subsequent to the take over and merger with Rio Alto Mining has remained on the Board as an Independent Director. Dr Norwich is non-Executive Chairman of Grupo Minero Panuco based in Mexico with extensive Copper, Gold and Molybdenum production assets. In June 2011 he joined the Board of Directors of Inkron Limited, a private company based in Hong Kong which is involved in nanometal production for the electronics industry especially nanocopper and nanosilver and in October 2012, he joined the Board of Otis Gold (TSXV:OOO).
Drago Kisic(1) (3) Lima, Peru	Director since March 15, 2010	Drago Kisic Wagner holds a B.S. from Pontificia Universidad Católica del Perú and a Master’s degree (B-Phil) from Oxford University. As a founding partner and current Director of MACROCONSULT and MACROINVEST, Mr. Kisic advised the Government of Peru during the privatization of Centromin, Minero-Peru, Hierro-Peru and Peru's telephone and telecommunications companies CPT and ENTEL-Peru. Mr. Kisic is a member of the board of UNACEM (a cement company); Mapfre and Mapfre Peru Vida (insurance companies); Haug (a steel contractor); Corporación Rey and Teditex (textile related companies); and Banco Financiero (a commercial bank). Currently, he is President of Macrocapitales Safi and Bodega San Nicolás and is a member and former President of the Peruvian Center for International Studies (CEPEI) and the Peruvian Institute of Business Management (IPAE). Drago was advisor to the Executive Director of the World Bank, and was President of CONASEV (the Peruvian securities and companies' regulatory authority) and Vice-president of the Lima Stock Exchange (BVL). Mr. Kisic was the former head of the Economic Office and Manager of the Balance of Payments & External Sector Bureau of Peru's Central Reserve Bank and a former member of the Advisory Committee of the Ministry of Foreign Affairs. He was also the Head of the Border Integration Team during the peace negotiations between Peru and Ecuador, ten years ago.

46

Name and Municipality of Residence	Position(s) held with the Company and Period of Service as a Director	Principal Occupation
Victor Gobitz(3) Lima, Peru	Director since March 8, 2011, Chief Operating Officer since February 1, 2012	Mr. Gobitz is a Mining Engineer who received his professional education at the Pontificia Universidad Católica del Perú from 1981 to 1986 and obtained a Masters degree in Business Administration (MBA) from Escuela de Administración de Negocios – ESAN in 1998. Mr. Gobitz sits on the Boards of Directors of two public mining companies listed on Bolsa de Valores de Lima, Volcan Compañía Minera and Castrovirreyna Compañía Minera. Mr.Gobitz has extensive experience in the start up and expansion of mining projects and currently is the CEO of Corporación Minera Castrovirreyna, Director of the Peruvian Mining Safety Institute – ISEM and Member of the Board of the Peruvian Corps of Engineers, Chapter of Mining Engineers - CIP.
Sidney Robinson(2) Toronto, Ontario, Canada	Director since March 8, 2011	Mr. Robinson is a retired Senior Partner of Torys LLP, Toronto and New York, who practised corporate/commercial law, with emphasis on financings, mergers and acquisitions and international projects. He represented business clients based in Canada, France, Germany, Italy, Japan, Sweden and the United States. In his practice, Sidney acted as strategic and legal advisor to senior management and Boards of Directors. Mr. Robinson currently sits on the Boards of Directors of two public companies listed on the Toronto Stock Exchange, Amerigo Resources Inc. and Chartwell Retirement Residences and one private company, Butterfield & Robinson Inc. He has served on the Boards of Directors of a number of public and private Canadian and U.S. companies including the Boards of Directors of AGIP Canada Ltd., BMW Canada Inc., C.I. Fund Management Inc., Loring Ward International Inc., Inmet Mining Corporation, Purolator Courier Ltd. and Pelmorex Media Inc. (The Weather Network).

47

Name and Municipality of Residence	Position(s) held with the Company and Period of Service as a Director	Principal Occupation
Ram Ramachandran (1) Toronto, Ontario, Canada	Director since May 11, 2011	Mr. Ramachandran has over 25 years of financial reporting experience in a multitude of capacities. During the past 12 years Ram has consulted extensively on financial reporting and regulatory matters for public companies, accounting and law firms. Mr. Ramachandran's contributions to the capital markets include authoring and launching the "Canadian Securities Reporter", a proprietary public company subscription service currently available through the CICA's Knotia website. Mr. Ramachandran has previously served as Associate Chief Accountant and Deputy Director, Corporate Finance at the Ontario Securities Commission and served as a senior member in the national office of an international accounting firm. Mr. Ramachandran was also a member of the OSC's Continuous Disclosure Advisory Committee (2004-2007) and has completed the IFRS Certification program offered by the Institute of Chartered Accountants in England & Wales. Mr. Ramachandran originally qualified as a Chartered Accountant in England & Wales and subsequently became a C.A. in Ontario in 1984.

Notes:
(1)	Member of the Audit Committee.
(2)	Member of the Corporate Governance and Compensation Committee
(3)	Member of Health, Safety and Community Committee.
(4)	Alex Black Served as Chief Operating Officer from June 25, 2009 to January 23, 2012

As at the date hereof, the directors and executive officers of the Company, as a group, beneficially owned, directly or indirectly or exercised control or direction over, 13,953,846 Common Shares or approximately 7.94% of the issued and outstanding Common Shares of the Company.

Cease Trade Orders, Bankruptcies, Penalties or Sanctions
Corporate Cease Trade Orders or Bankruptcies

Except as disclosed below, no director, officer or shareholder holding a sufficient number of securities of the Company to affect materially the control of the Company, within 10 years before the date hereof, has been, a director or executive officer of any corporation that, while that person was acting in that capacity:

1.	was the subject of a cease trade or similar order, or an order that denied the relevant corporation access to any exemption under securities legislation, for a period of more than 30 consecutive days;
2.	was subject to an event that resulted, after the director or executive officer ceased to be a director or executive officer, in the corporation being the subject of a cease trade or similar order or an order that denied the relevant corporation access to any exemption under securities legislation, for a period of more than 30 consecutive days; or
3.	within a year of that person ceasing to act in such capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any

48

proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets.

Mr. Ramachandran was a director of Century Mining Corporation (“Century”), a wholly owned subsidiary of White Tiger Gold Limited (“White Tiger”), from October 21, 2011 to May 30, 2012. On May 18, 2012 Century’s secured lender realized its security consisting of White Tiger’s interest in Century upon default by Century under the secured loan. Mr. Ramachandran resigned as a director of Century effective May 30, 2012 upon the appointment of a receiver to the assets of Century.

Personal Bankruptcies:

No director, officer or shareholder holding a sufficient number of securities of the Company to affect materially the control of the Company has within 10 years before the date hereof, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or was subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of such person.

Penalties or Sanctions:

No director, officer or shareholder holding a sufficient number of securities of the Company to affect materially the control of the Company has been subject to:

1.	any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or
2.	any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision.

Audit Committee

The composition of the Audit Committee is as follows.

Mr. Drago Kisic is both financially literate and independent. Mr. Kisic holds a B.S. from Pontificia Universidad Católica del Peru and a Masters of Philosophy degree from Oxford University. He serves as a director of several companies, and has been the President of the Peruvian securities and companies’ regulatory authority, a Vice-President of the Lima Stock Exchange, and an advisor to the Executive Director of the World Bank. Mr. Kisic was the founding partner and is a director of MACROCONSULT and MARCOINVEST and as such has worked with a number of international banks to advise the Peruvian Government during its privatization process for mining companies and telephone and telecommunications companies. Mr. Kisic’s education and business experience provides him with an understanding of the accounting principles used by the Company to prepare its consolidated financial statements and to access the general application of such accounting principles in connection with the accounting for estimates, accruals and reserves. His experience also includes an understanding of internal control procedures for financial reporting and an ability to analyze and evaluate financial statements with a level of complexity comparable to the breadth and level of complexity involved in the preparation of the Company’s financial statements.

Dr. Roger Norwich is independent and financially literate. Dr. Norwich has been a director of numerous reporting issuers and has experience in the analysis and evaluation of financial statements, an understanding of internal control systems and financial reporting procedures.

49

Mr. Ram Ramachandran is the Chairman of the Audit Committee and is independent and financially literate. Mr. Ramachandran is currently the Chief Financial Officer of a TSX listed company and a TSXV listed company and has over 25 years of financial reporting experience in a multitude of capacities.

The Audit Committee has procedures requiring that certain non-audit services be pre-approved. Such procedures are set out in the text of the Audit Committee Charter attached as Schedule A to this Annual Information Form.

The aggregate fees billed by the Company’s external auditors in each of the three fiscal years noted below for audit and other fees are as set out in the following table.

Year Ended	Audit Related	Taxation Related	Other	Total
31-May-11	$197,523	$8,421	$37,485	$243,429
31-Dec-11	$308,273	$9,379	$0	$317,652
31-Dec-12	$372,772	$20,662	$0	$393,434

Conflicts of Interest

Certain directors and officers of the Company and its subsidiaries are associated with other reporting issuers or other Companies which may give rise to conflicts of interest. In accordance with corporate laws, directors who have a material interest or any person who is a party to a material contract or a proposed material contract with the Company are required, subject to certain exceptions, to disclose that interest and generally abstain from voting on any resolution to approve the contract. In addition, the directors are required to act honestly and in good faith with a view to the best interests of the Company. Some of the directors of the Company have either other employment or other business or time restrictions placed on them and accordingly, these directors of the Company will only be able to devote part of their time to the affairs of the Company. Conflicts, if any, will be subject to the procedures and remedies available under the ABCA. The ABCA provides that in the event that a director has an interest in a contract or proposed contract or agreement, the director shall disclose his interest in such contract or agreement and shall refrain from voting on any matter in respect of such contract or agreement unless otherwise provided by the ABCA.

LEGAL PROCEEDINGS AND REGULATORY ACTIONS

To the best of the Company’s knowledge, there were no legal proceedings during the year ended December 31, 2012, to which the Company is a party or of which any of its property is the subject matter, and there are no such proceedings known to the Company to be contemplated.

There are no penalties or sanctions imposed against the Company by a court relating to securities legislation or by a securities regulatory authority during legal proceedings material to the Company to which the Company is a party or of which any of its property is the subject matter, and there are no such proceedings known to the Company to be contemplated during the financial year ended December 31, 2012.

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

Other than as set forth herein, or as previously disclosed, the Company is not aware of any material interests, direct or indirect, by way of beneficial ownership of securities or otherwise, of any director or executive officer or any shareholder holding more than 10% of the Common Shares or any Associate or Affiliate of any of the foregoing in any transaction within the three most recently completed financial years or during the current financial year or any proposed or ongoing transaction of the Company which has or will materially affect the Company.

50

AUDITORS The Company’s auditors are Grant Thornton LLP, at its Vancouver office located at 333 Seymour Street, Vancouver, BC, V6B 0A4. Grant Thornton LLP was appointed as auditor of the Company on October 26, 2010.

TRANSFER AGENTS AND REGISTRARS

The Company's transfer agent and registrar is Computershare Investor Services Inc. at its Vancouver office located at 510 Burrard Street, 3^rd Floor, Vancouver, British Columbia V6C 3B9.

The Company’s co-transfer agent and registrar is Computershare Trust Company, Inc. at its Golden, Colorado office, located at 350 Indiana Street, Suite 800, Golden, Colorado, USA 80401.

MATERIAL CONTRACTS

Other than contracts which were entered into in the ordinary course of business, the only contract the Company has entered into the following material contracts during the most recently completed financial year ended December 31, 2012 or before the most recently completed financial year but that are still in effect is the Gold Prepayment Facility.

The Gold Prepayment Facility was increased by $25 million on October 21, 2011. Settlement of the $25 million increase in the Prepayment Facility will be by delivery of 24,512 ounces of gold commencing in April 2012 at a notional rate of 791 ounces per month for 31 months. The actual monthly delivery of gold ounces will vary by 5% from the amount stated above for every $100 dollar change in gold price (up or down) from a base price of $1,150, subject to limits at $1,450 or $950 per ounce. Rio Alto may prepay gold ounces remaining to be delivered under the Prepayment Facility, in whole or in part, at any time without penalty in either ounces of gold or the equivalent in cash at the then prevailing gold price. As security, Rio Alto has granted Red Kite a charge over substantially all of the Company’s assets. The Company paid cash fees for arranging the financing of $750,000, for deferral of deliveries of $312,500 and a $100,000 fee for the waiver of certain conditions in the Prepayment Facility.

INTERESTS OF EXPERTS

There is no person or company whose profession or business gives authority to a statement made by such person or company and who is named as having prepared or certified a statement, report or valuation described or included in a filing, or referred to in a filing, made under NI 51 102 by the Corporation during, or related to, the Corporation’s most recently completed financial year other than Kirk Mining Consultants, Linton Kirk, Ian Dreyer, Chris Kaye, Enrique Garay and Grant Thornton LLP.

As at the date of hereof, Kirk Mining Consultants, Linton Kirk, Ian Dreyer, Chris Kaye, as a group, beneficially own, directly or indirectly, less than 1% of the outstanding Common Shares. Enrique Garay, Vice President Geology of the Company, beneficially owns, directly or indirectly, less than 1% of the outstanding Common Shares and 225,000 stock options.

As at the date of hereof, the partners and associates of Grant Thornton LLP, Chartered Accountants, the external auditors of the Corporation, as a group, did not beneficially own any of the Corporation’s outstanding Common Shares and are independent in accordance with the auditors’ rules of professional conduct in Canada.

Daniel Kenney, the Corporate Secretary of the Company, is a lawyer at Davis LLP, which law firm provides legal services to the Company. As of the date hereof, the associates and partners of Davis LLP, as a group, beneficially own, directly or indirectly, less than 1% of the outstanding Common Shares. Daniel Kenney holds 465,000 stock options.

51

ADDITIONAL INFORMATION

Additional information, including directors' and executive officers' remuneration and indebtedness, principal holders of the Company's securities and securities authorized for issuance under equity compensation plans will be contained in the Company's Management Information Circular and Proxy Statement for its annual meeting of shareholders to be held on May 31, 2013 and in the Company's Management Information Circular and Proxy Statement for the annual meeting of shareholders held on May 10, 2012. Additional financial information is provided in the Company's Consolidated Financial Statements and Management's Discussion and Analysis for the financial year ended December 31, 2012, which are available on SEDAR.

Copies of the foregoing documents and this Annual Information Form and any document, incorporated by reference in this Annual Information Form may be obtained by accessing SEDAR, the electronic system recording Canadian public securities filings, at www.sedar.com.

52

SCHEDULE A

AUDIT COMMITTEE CHARTER

1. Role and Objective

The Audit Committee (the “Committee”) is a committee of the Board of Directors of the Corporation to which the Board has delegated its responsibility for oversight of the nature and scope of the annual audit, management's reporting on internal accounting standards and practices, financial information and accounting systems and procedures, financial reporting and statements and recommending, for Board of Director approval, the audited financial reports and other mandatory disclosure releases containing financial information. The objectives of the Committee, with respect to the Corporation and its subsidiaries, are as follows:

• To assist Directors to meet their responsibilities in respect of the preparation and disclosure of the financial reports of the Corporation and related matters.

• Provide an open avenue of communication among the Corporation's auditors, financial and senior management and the Board of Directors.

• To ensure the external auditors' independence and review and appraise their performance.

• To increase the credibility and objectivity of financial reports.

• To strengthen the role of the outside directors by facilitating in depth discussions between directors on the Committee, management and external auditors.

2. Composition

The Committee shall be composed of at least three individuals appointed by the Board from amongst its members, all of which members will be independent (within the meaning of National Instrument 52-110 Audit Committees) unless the Board determines to rely on an exemption in NI 52-110. “Independent” generally means free from any business or other direct or indirect material relationship with the Corporation that could, in the view of the Board, reasonably interfere with the exercise of the member's independent judgment.

The Secretary to the Board shall act as Secretary of the Committee.

A quorum shall be a majority of the members of the Committee.

All of the members must be financially literate within the meaning of NI 52-110 unless the Board has determined to rely on an exemption in NI 52-110. Being “financially literate” means members have the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Corporation's financial statements.

3. Meetings

The Committee shall meet at least four times per year and/or as deemed appropriate by the Committee Chair. As part of its job to foster open communication, the Committee will meet at least annually with management and the external auditors in separate sessions.

53

Agendas, with input from management, shall be circulated to Committee members and relevant management personnel along with background information on a timely basis prior to the Committee meetings.

The minutes of the Committee meetings shall accurately record the decisions reached and shall be distributed to the Committee members with copies to the Board of Directors, the Chief Financial Officer or such other officer acting in that capacity, and the external auditor.

The Chief Executive Officer and the Chief Financial Officer or their designates shall be available to attend at all meetings of the Committee upon the invitation of the Committee.

The Controller, Treasurer and/or such other staff as appropriate to provide information to the Committee shall attend meetings upon invitation by the Committee.

4. Mandate and Responsibilities

To fulfill its responsibilities and duties, the Committee shall:

(A)	undertake annually a review of this mandate and make recommendations to the Corporate Governance and Compensation Committee as to proposed changes;
(B)	satisfy itself on behalf of the Board with respect to the Corporation's internal control systems, including, where applicable, relating to derivative instruments:

(1)	identifying, monitoring and mitigating business risks; and
(2)	ensuring compliance with legal and regulatory requirements;

(C) review the Corporation's financial reports, MD&A, any annual earnings, interim earnings and press releases before the Corporation publicly discloses this information and any reports or other financial information (including quarterly financial reports), which are submitted to any governmental body, or to the public, including any certification, report, opinion, or review rendered by the external auditors; the process should include but not be limited to:

(1)	reviewing changes in accounting principles, or in their application, which may have a material impact on the current or future years' financial reports;
(2)	reviewing significant accruals, reserves or other estimates such as the ceiling test calculation;
(3)	reviewing accounting treatment of unusual or non-recurring transactions;
(4)	ascertaining compliance with covenants under loan agreements;
(5)	reviewing financial reporting relating to asset retirement obligations;
(6)	reviewing disclosure requirements for commitments and contingencies;
(7)	reviewing adjustments raised by the external auditors, whether or not included in the financial reports;
(8)	reviewing unresolved differences between management and the external auditors;
(9)	obtain explanations of significant variances with comparative reporting periods; and

54

(10) determine through inquiry if there are any related party transactions and ensure the nature and extent of such transactions are properly disclosed;

(D)	review the financial reports and related information included in prospectuses, management discussion and analysis (MD&A), information circular-proxy statements and annual information forms (AIF), prior to Board approval;
(E)	with respect to the appointment of external auditors by the Board:

(1)	require the external auditors to report directly to the Committee;
(2)	review annually the performance of the external auditors who shall be ultimately accountable to the Board of Directors and the Committee as representatives of the shareholders of the Corporation;
(3)	obtain annually, a formal written statement of external auditors setting forth all relationships between the external auditors and the Corporation and confirming their independence from the Corporation;
(4)	review and discuss with the external auditors any disclosed relationships or services that may impact the objectivity and independence of the external auditors;
(5)	be directly responsible for overseeing the work of the external auditors engaged for the purpose of issuing an auditors' report or performing other audit, review or attest services for the Corporation, including the resolution of disagreements between management and the external auditor regarding financial reporting;
(6)	review management's recommendation for the appointment of external auditors and recommend to the Board appointment of external auditors and the compensation of the external auditors;
(7)	review the terms of engagement of the external auditors, including the appropriateness and reasonableness of the auditors' fees;
(8)	when there is to be a change in auditors, review the issues related to the change and the information to be included in the required notice to securities regulators of such change; and
(9)	take, or recommend that the full Board of Directors take, appropriate action to oversee the independence of the external auditors;
(10)	at each meeting, consult with the external auditors, without the presence of management, about the quality of the Corporation's accounting principles, internal controls and the completeness and accuracy of the Corporation's financial reports;

(F)	review all public disclosure containing audited or unaudited financial information before release;
(G)	review financial reporting relating to risk exposure;
(H)	satisfy itself that adequate procedures are in place for the review of the Corporation's public disclosure of financial information from the Corporation's financial reports and periodically assess the adequacy of those procedures;

55

(I)	review and approve the Corporation's hiring policies regarding partners, employees and former partners and employees of the present and former external auditors of the Corporation;
(J)	review annually with the external auditors their plan for their audit and, upon completion of the audit, their reports upon the financial reports of the Corporation and its subsidiaries;
(K)	review and pre-approve all audit and audit-related services and the fees and other compensation related thereto, and any non-audit services, provided by the Corporation's external auditors and consider the impact on the independence of the auditors; The pre-approval requirement is waived with respect to the provision of non-audit services if:

(1)	the aggregate amount of all such non-audit services provided to the Corporation constitutes not more than five percent (5%) of the total amount of revenues paid by the Corporation to its external auditors during the fiscal year in which the non-audit services are provided;
(2)	such services were not recognized by the Corporation at the time of the engagement to be non-audit services; and
(3)	such services are promptly brought to the attention of the Committee by the Corporation and approved prior to the completion of the audit by the Committee or by one or more members of the Committee who are members of the Board of Directors to whom authority to grant such approvals has been delegated by the Committee;

provided the pre-approval of the non-audit services is presented to the Committee's first scheduled meeting following such approval, such authority may be delegated by the Committee to one or more independent members of the Committee;

(L)	review any other matters that the Audit Committee feels are important to its mandate or that the Board chooses to delegate to it;
(M)	with respect to the financial reporting process:

(1)	in consultation with the external auditors, review with management the integrity of the Corporation's financial reporting process, both internal and external;
(2)	consider the external auditors' judgments about the quality and appropriateness of the Corporation's accounting principles as applied in its financial reporting;
(3)	consider and approve, if appropriate, changes to the Corporation's auditing and accounting principles and practices as suggested by the external auditors and management;
(4)	review significant judgments made by management in the preparation of the financial reports and the view of the external auditors as to appropriateness of such judgments;
(5)	following completion of the annual audit, review separately with management and the external auditors any significant difficulties encountered during the course of the audit, including any restrictions on the scope of work or access to required information;
(6)	review any significant disagreement among management and the external auditors regarding financial reporting;

56

(7)	review with the external auditors and management the extent to which changes and improvements in financial or accounting practices have been implemented;
(8)	review the certification process;
(9)	establish procedures for the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls, or auditing matters; and
(10)	establish procedures for the confidential, anonymous submission by employees of the Corporation of concerns regarding questionable accounting or auditing matters.

5. Authority

Following each meeting, in addition to a verbal report, the Committee will report to the Board by way of providing copies of the minutes of such Committee meeting at the next Board meeting after a meeting is held (these may still be in draft form).

Supporting schedules and information reviewed by the Committee shall be available for examination by any director.

The Committee shall have the authority to investigate any financial activity of the Corporation and to communicate directly with the internal and external auditors. All employees are to cooperate as requested by the Committee.

The Committee may retain, and set and pay the compensation for, persons having special expertise and/or obtain independent professional advice to assist in fulfilling its duties and responsibilities at the expense of the Corporation.

EX-99.2

Exhibit 99.2

CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012,
the seven-month financial year ended December 31, 2011 and
the year ended May 31, 2011

RIO ALTO MINING LIMITED

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As at December 31, 2012 and 2011 and May 31, 2011

(Expressed in thousands of United States dollars)

	Notes		December 31,		December 31,			May 31,
			2012		2011			2011
Assets
Current
Cash and cash equivalents	8	$	38,613	$	25,907		$	11,526
Accounts receivable	9		28,849		1,158			537
Other financial assets	10		595		-			-
Inventory	11		16,894		14,907			3,910
Prepaid expenses	12		1,324		1,099			2,554
IGV receivable	13,33		60,286		25,635			14,000
Total current assets			146,561		68,706			32,527
Restricted cash	14		2,175		-			-
Plant and equipment, net	15		116,511		62,082			47,286
Mineral properties and development costs, net	16		80,539		63,796			78,131
Deferred tax asset	18		7,695		1,950			-
Total Assets		$	353,481	$	196,534		$	157,944
Liabilities and equity
Current
Accounts payable and accrued liabilities	17	$	43,738	$	27,481		$	8,265
Taxes payable	18		42,675		990			-
Deferred revenue	19		3,446		4,251			1,790
Derivative liability	19		1,102		934			2,136
Total current liabilities			90,961		33,656			12,191
Accounts payable and accrued liabilities	17		2,331		-			-
Long-term debt	20		3,258		3,000			-
Asset retirement obligation	22		16,921		15,685			14,800
Deferred revenue	19		11,486		25,259			8,626
Derivative liability	19		942		3,625			10,292
Total liabilities			125,899		81,225			45,909
Equity
Share capital	23		139,570		127,537			125,972
Share option and warrant reserve	23		10,242		10,420			8,164
Translation reserve			4,522		4,522			4,522
Retained earnings (deficit)			73,248		(27,170	)		(26,623	)
Total Equity			227,582		115,309			112,035
Total Equity and Liabilities		$	353,481	$	196,534		$	157,944

Commitments (Note 31)
Subsequent events (Note 33)

Approved on behalf of the Board of Directors:

“Ram Ramachandran” Director “Anthony Hawkshaw”  Director

See accompanying notes to the consolidated financial statements

RIO ALTO MINING LIMITED

CONSOLIDATED STATEMENTS OF NET INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011 and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share amounts)

						For the seven-month
			For the year ended			financial year ended			For the year ended
	Notes		December 31, 2012			December 31, 2011			May 31, 2011
Sales	25	$	316,505		$	-		$	-
Cost of sales	26		(118,911	)		-			-
Amortization			(21,573	)		-			-
Gross profit			176,021			-			-
General and administrative expenses	27		(12,120	)		(5,963	)		(8,746	)
Exploration and evaluation expense	28		(10,540	)		-			(37	)
Operating earnings (loss)			153,361			(5,963	)		(8,783	)
Unrealized gain on derivative liability	19		2,515			7,869			1,649
Accretion of asset retirement obligation	22		(1,648	)		(847	)		-
Insurance expenses			(276	)		-			-
Foreign exchange gain/(loss)			137			(48	)		(385	)
Other income/(loss)			420			(1,540	)		(986	)
Income (loss) before income taxes			154,509			(529	)		(8,505	)
Provision for income taxes			(54,091	)		(18	)		(201	)
Net income (loss)		$	100,418		$	(547	)	$	(8,706	)
Other comprehensive loss			-			-			4,522
Comprehensive income (loss)		$	100,418		$	(547	)	$	(4,184	)
Basic earnings (loss) per share	24	$	0.58		$	(0.00	)	$	(0.06	)
Diluted earnings (loss) per share	24	$	0.57		$	(0.00	)	$	(0.06	)
Weighted average number of common shares outstanding - basic			173,004,808			168,978,823			140,245,551
Weighted average number of common shares outstanding - diluted			176,883,797			168,978,823			140,245,551

See accompanying notes to the consolidated financial statements

RIO ALTO MINING LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011 and the year ended May 31, 2011

(Expressed in thousands of United States dollars) 

						Seven-month
			Year ended			financial year ended			Year ended
			December 31,			December 31,			May 31,
	Notes		2012			2011			2011
OPERATING ACTIVITIES
Net income (loss)		$	100,418		$	(547	)	$	(8,706	)
Reclamation expenditures			(423	)		-			-
Items not affecting cash:
Amortization			21,682			65			59
Deferred revenue	19		(14,578	)		-			-
Share-based compensation			4,672			3,126			4,894
Unrealized gain on derivative liability	19		(2,515	)		(7,869	)		(1,649	)
Unrealized loss on Duran Ventures	10		168			-			-
Accretion expense	22		1,648			847			-
Deferred income taxes			(5,745	)		(1,950	)		200
Other			12			38			25
Changes in non-cash working capital items	8		(7,701	)		(10,423	)		5,340
Net cash provided by (used for) operating activities			97,638			(16,713	)		163
FINANCING ACTIVITIES
Proceeds from issuing share capital			-			-			84,907
Share issue costs			-			-			(5,703	)
Proceeds from exercise of options and warrants	23		7,183			695			8,634
Subscription receipts receivable									583
Proceeds from gold prepayment facility			-			25,500			24,500
Proceeds from operating loan			-			3,000			-
Changes in non-cash working capital items	8		258			-			-
Net cash provided by financing activities			7,441			29,195			112,921
INVESTING ACTIVITIES
Restricted cash	14		(2,175	)		-			-
Purchase of property, plant and equipment	15		(68,981	)		(15,774	)		(18,729	)
Mineral property expenditures	16		(22,472	)		(41,280	)		(1,244	)
Investment in Duran Ventures	10		(763	)		-			-
Cash generated by pre-production sales			-			65,214			-
Investment in La Arena			-			-			(35,511	)
Acquisition of La Arena			-			-			(48,847	)
Cash acquired in La Arena			-			-			5,534
Changes in non-cash working capital items	8		2,018			(6,261	)		(8,632	)
Net cash provided by (used for) investing activities			(92,373	)		1,899			(107,429	)
Increase in cash and cash equivalents			12,706			14,381			5,655
Cash and cash equivalents, beginning of the period			25,907			11,526			5,440
Effect of foreign exchange on cash			-			-			431
Cash and cash equivalents, end of the period		$	38,613		$	25,907		$	11,526

Taxes payable (Note 18)
Supplemental cash flow disclosures (Note 8)

See accompanying notes to the consolidated financial statements

RIO ALTO MINING LIMITED

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011 and the year ended May 31, 2011

(Expressed in thousands of United States dollars)

		Share capital
							Share
							Option and					Retained
							Warrant			Translation		Earnings
	Note	Shares		Amount			Reserve			Reserve		(Deficit)			Total
Balance, June 1, 2010		108,035,575	$	39,007		$	2,397		$	-	$	(17,917	)	$	23,487
Shares issued for private placements	23	50,326,257		84,907			-			-		-			84,907
Share issue costs related to private placements	23	-		(5,703	)		-			-		-			(5,703	)
Fair value of broker warrants for private placement	23	-		(2,087	)		2,087			-		-			-
Shares issued on conversion of warrants	23	8,468,250		8,027			-			-		-			8,027
Shares issued on exercise of options	23	1,727,500		1,821			(1,214	)		-		-			607
Share-based compensation	23	-		-			4,894			-		-			4,894
Other comprehensive income		-		-			-			4,522		-			4,522
Net loss for the year		-		-			-					(8,706	)		(8,706	)
Balance, May 31, 2011		168,557,582	$	125,972		$	8,164		$	4,522	$	(26,623	)	$	112,035
Shares issued on conversion of warrants	23	126,270		401			(152	)		-		-			249
Shares issued on exercise of options	23	1,062,500		1,164			(718	)		-		-			446
Share-based compensation	23	-		-			3,126			-		-			3,126
Net loss for the financial year		-		-			-			-		(547	)		(547	)
Balance, December 31, 2011		169,746,352	$	127,537		$	10,420		$	4,522	$	(27,170	)	$	115,309
Shares issued on conversion of warrants	23	2,720,610		4,563			(1,669	)		-		-			2,894
Shares issued on exercise of options	23	3,070,000		7,470			(3,181	)		-		-			4,289
Share-based compensation	23	-		-			4,672			-		-			4,672
Net income for the period		-		-			-					100,418			107,502
Balance, December 31, 2012		175,536,962	$	139,570		$	10,242		$	4,522	$	73,248		$	234,666

See accompanying notes to the consolidated financial statements

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

1.	NATURE OF OPERATIONS
	Rio Alto Mining Limited (“Rio Alto” or the "Company") is the parent company of a consolidated group. Rio Alto Mining Limited is incorporated under the laws of the Province of Alberta, with its registered office at Suite 1000 - 250 2nd Street S.W., Calgary, Alberta, T2P 0C1 and its head office at Suite 1950 - 400 Burrard Street, Vancouver, BC, V6C 3A6. On February 9, 2011 the Company completed the purchase of 100 per cent of La Arena S.A. (“La Arena”). La Arena owns the La Arena mineral project, which has two separate deposits, a gold oxide deposit (“Phase I”) and a copper/gold sulphide deposit (“Phase II”). Throughout the year ended May 31, 2011, Phase I was in development stage. Phase I commenced preproduction in May 2011 and achieved commercial production levels at the end of December 2011. A feasibility study on the economic viability of developing Phase II is underway.
	In November 2011, Rio Alto Mining Limited changed its financial and fiscal year end from May 31 to December 31. The change was made to allow it to align its year end with that of La Arena. The Company’s consolidated statements of financial position are as at December 31, 2012, December 31, 2011 and May 31, 2011 and the consolidated statements of income and comprehensive income, cash flows and changes in equity are for the financial year ended December 31, 2012 compared to the seven-month financial year ended December 31, 2011 and the financial year ended May 31, 2011.
2.	BASIS OF PREPARATION
	These consolidated financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). IFRS include IFRSs, International Accounting Standards (“IAS”) and interpretations issued by the IFRS Interpretations Committee (“IFRIC”) and the former Standing Interpretations Committee (“SIC”).
	The policies applied in the consolidated financial statements are presented in Note 5 and are based on IFRS issued and outstanding as at December 31, 2012.
	These consolidated financial statements are presented in United States dollars (“USD”), which is the functional currency of the parent company and La Arena. These consolidated financial statements were approved by the Board of Directors on March 28, 2013.
3.	CRITICAL JUDGEMENTS IN APPLYING ACCOUNTING POLICIES
	The critical judgements made in the process of applying the Company’s accounting policies, apart from those involving estimation (Note 4), that have the most significant affect on the amounts recognized in the Company’s consolidated financial statements are as follows:

a. Commencement of commercial production

The Company assesses the stage of each mine under construction to determine when a property reaches the stage when it is substantially complete and ready for its intended use. Criteria used to assess when a property has commenced commercial production include, among other considerations:

• The level of capital expenditures incurred relative to the expected costs to complete;

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

• The completion of a reasonable period of testing of the mine plant and equipment;

• The ability to produce saleable metals;

• The attainment of relevant permits;

• The ability to sustain ongoing production; and

• The achievement of pre-determined production targets.

When management determines that a property has reached commercial production, costs capitalized during development are amortized. Management determined that Phase I achieved commercial production levels in late December 2011 and that commercial production commenced effective January 1, 2012.

b. Mineral reserves

Proven and probable mineral reserves are the economically mineable parts of the Company’s measured and indicated mineral resources. The Company estimates its proven and probable mineral reserves and measured and indicated and inferred mineral resources based on information compiled by appropriately qualified persons. The estimation of future cash flows related to proven and probable mineral reserves is based upon factors such as assumptions related to foreign exchange rates, commodity prices, future capital requirements, metal recovery factors and production costs along with geological assumptions and judgements made in estimating the size and grade of ore bodies. Changes in proven and probable mineral reserves or measured and indicated and inferred mineral resource estimates may impact the carrying value of mineral properties, plant and equipment, asset retirement obligations, recognition of deferred tax amounts and amortization expense.

c. Functional currency

The functional currency for each of the Company’s subsidiaries, joint ventures and investments in associates, is the currency of the primary economic environment in which the entity operates. The Company has determined the functional currency of each material entity is the US dollar. Determination of functional currency may involve certain judgements to determine the primary economic environment and the Company reconsiders the functional currency of its entities if there is a change in events or conditions which determined the primary economic environment.

d. Own Use Contracts

Certain commodity purchase and sale contracts will meet the definition of a derivative and their values will vary in accordance with the value of the underlying commodity. A commodity contract within the scope of IAS 39 Financial Instruments: Recognition and Measurement (IAS 39) that is also a derivative is accounted for at fair value through profit and loss (FVTPL).

Contracts, such as the Gold Prepayment Agreement (Note 19), that are capable of being net cash settled because the contract terms permit net cash settlement; or when the non-financial item is readily convertible into cash are outside the scope of IAS 39 if they were entered into and continue to be held for the purpose of the receipt or delivery of the non-financial item in accordance with the entity's expected purchase, sale or usage requirements and are not written option contracts. Contracts that are exempt from IAS 39 on these grounds are commonly referred to as "own use contracts" and are accounted for as executory contracts.

Gold is considered to be readily convertible to cash and that the Gold Prepayment Agreement (“the Agreement”), which is not a written option, will be settled by delivering gold ounces in accordance with the Company’s normal sale and usage requirement. Accordingly, management determined that the Agreement qualifies as an own use contract under which revenue is recognized as the notional

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

ounces are delivered under the Agreement (Note 19).

4. SOURCES OF ESTIMATION UNCERTAINTY

Preparation of the Company’s consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are based on management’s experience and expectations of future events are continually evaluated. Management believes such estimates and assumptions are reasonable under the circumstances. Actual results could differ from estimated amounts by a material amount.

Matters that require management to make estimates and assumptions include, but are not limited to, the following:

a. Cost of sales and mineral inventory

In determining cost of sales recognized in the consolidated statements of net income (loss) and comprehensive income (loss), management estimates the quantity of ore stacked on leach pads and solutions in process and the recoverable gold in this material to determine the average cost of finished goods sold during the period. Changes in these estimates can result in a change in costs of sales of future periods and the carrying amount of inventories.

Minerals inventory consists of doré, work-in-process and mined ore valued at the lower of average production cost or net realizable value. Doré represents a bar containing predominantly gold by value which must be refined offsite to return gold or silver in readily saleable form. Net realizable value is the estimated receipt from sale of inventory in the normal course of business, less any anticipated costs to be incurred prior to sale. The production cost of mineral inventories is determined on a weighted average basis and includes cost of raw materials, direct labour, contract mining charges, overhead and amortization.

Costs are removed from mineral inventory as ounces of doré are produced at the average cost per recoverable ounce of gold. Estimates of recoverable gold are calculated from measured quantities of ore placed on the leach pad, the grade of ore placed on the leach pad (based on assay analysis), testing of leach solutions and a recovery percentage (based on testing of solution and ongoing monitoring of the rate of gold recovery).

b. Asset retirement obligation

Changes to the provision for reclamation and remediation are recorded with a corresponding change to the carrying value of the related asset. If this increase in the asset results in the asset exceeding its recoverable amount, the excess portion of the increase is charged to expense.

The Company assesses its provision for reclamation and remediation on an annual basis or when new information or circumstances merit a re-assessment. Significant estimates and assumptions are made in determining the provision for reclamation and remediation, including estimates of the extent and costs of the activities, technological changes, regulatory changes, foreign exchange rates, inflation rates and discount rates. The provision for asset retirement obligations represents management’s best estimate of the present value of the future reclamation and remediation obligation. Actual expenditures may differ from the recorded amount.

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

c. Income taxes

In assessing the probability of realizing income tax assets recognized, management makes estimates related to expectations of future taxable income, expected timing of reversals of existing temporary differences and the likelihood that tax positions taken will be sustained upon examination by applicable tax authorities. Estimates of future taxable income are based on forecasted cash flows from operations and the application of existing tax laws in each jurisdiction. Forecasted cash flows from operations are based on life of mine projections internally developed and reviewed by management. The likelihood that tax positions taken will be sustained upon examination by applicable tax authorities is assessed based on individual facts and circumstances of the relevant tax position evaluated in light of available evidence. Where applicable tax laws and regulations are either unclear or subject to ongoing varying interpretations, it is possible that changes in these estimates can occur that materially affect the amounts of income tax assets recognized. At the end of each reporting period, the Company reassesses unrecognized income tax assets.

d. Derivative liability

An option pricing model that considers changes in the US dollar price of gold is used to estimate the fair value of the Company’s Gold Purchase Agreement described in Note 19 to the Financial Statements. The principal assumption used in the option pricing model is the volatility of the US dollar price of gold. Changes in this assumption may significantly affect the fair value estimate.

e. Share-based payments

Share-based payments are determined using the Black-Scholes Option Pricing Model to estimate the fair value of share-based awards at the date of grant. The Black-Scholes Option Pricing Model utilizes assumptions; such as, expected price volatility, the expected life of the option, risk-free interest rates and the number of options that may be forfeited, to estimate fair values. Changes in these assumptions may affect the fair value estimate.

f. Impairment of long-lived assets

Whenever there is a change in events or circumstances (such as, a substantive decrease in metal prices, an increase in operating costs, a decrease in mineable resources or a change in foreign taxes or exchange rates), reviews are undertaken to evaluate the carrying value of mineral properties and plant and equipment considering, among other factors: the carrying value of each type of asset; the economic feasibility of continued operations; the use, value or condition of assets when not in operation; and changes in circumstances that affect decisions to reinstall or dispose of assets. For assets in the development stage reviews are undertaken to evaluate the carrying value of mineral properties on an annual basis or when circumstances require.

Future cash flows used to assess recoverability are estimated based on expected future production, recoverability of resources, commodity prices, foreign exchange rates, discount rates, operating costs, reclamation costs and capital costs. Management’s estimate of future cash flows is subject to risks and uncertainties, and it is possible that changes in circumstances or unanticipated events may occur, that affect management’s estimate of the recoverability of investments in assets. To the extent that the carrying amount of assets exceeds the recoverable amount, the excess is charged to expense.

Impairment for an asset exists if the expected recoverable amount from the use of the asset is less than its carrying amount. The determination of recoverable amount is based on fair value estimations.

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

Fair value is determined with reference to estimates of future discounted cash flow or to recent transactions involving dispositions of similar properties. Management believes that the estimates applied in the impairment assessment are reasonable; however, such estimates are subject to significant uncertainties and judgements. Although management has made its best estimate of these factors based on current and expected conditions, it is possible that the underlying assumptions could change and impairment charges may be required in future periods. Such charges could be material.

5. SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES

These consolidated financial statements have been prepared using the following significant accounting policies:

a. Foreign currencies

Functional and presentation currency

The consolidated financial statements are presented in US dollars, which is also the functional currency of the parent company and each subsidiary.

Foreign currency transactions and balances

Transactions in foreign currencies are translated into the functional currency of the company using exchange rates prevailing at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies at a reporting date are translated into the functional currency at the exchange rate at that date. An exchange gain or loss arising on translation or settlement of a foreign currency-denominated monetary item is included in profit or loss.

Non-monetary items are not translated at year-end exchange rates. They are measured at historical cost (using the exchange rates at the transaction date), except for non-monetary items measured at fair value which are translated using the exchange rates at the date when fair value is determined.

Change in functional currency

Once La Arena started to produce gold it represented the principal business of the Company. This led management to review of the functional currency of the Canadian parent company. Effective June 1, 2011, the functional currency of the Canadian parent company was changed to the US dollar.

Prior to the change in functional currency foreign exchange gains and losses arising from monetary items in the accounts of foreign operations were considered to form part of the net investment in the foreign operation and were recognized in other comprehensive income and accumulated within the translation reserve account as part of shareholders’ equity. On disposal of part or all of a foreign operation, a proportionate share of the related cumulative translation gains or losses previously recognized in the translation reserve will be recognized in profit or loss.

b. Basis of measurement

These consolidated financial statements have been prepared on the accrual basis of historical cost accounting except for derivative assets and liabilities, which are carried at fair value.

c. Basis of consolidation

Subsidiaries are entities over which the Company directs the financial and operating policies of the

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

entity to obtain benefits from its activities. These consolidated financial statements include the accounts of the Company and its subsidiaries as follows:

Name	Location	Percentage ownership by the Company
		December 31
		2012	2011	May 31, 2011
Rio Alto S.A.C.	Peru	100%	100%	100%
Mexican Silver Mines (Guernsey) Limited	Guernsey	100%	100%	100%
La Arena S.A. (“La Arena”)	Peru	100%	100%	100%
Empresa de Energia Yamobamba SAC	Peru	100%	na	na
Rio Alto Insurance Ltd.	Barbados	100%	na	na

Empresa de Energia Yamobamba was incorporated on July 30, 2012 for nominal consideration, and will construct a power distribution network. Rio Alto Insurance Ltd. was incorporated on October 2, 2012 as a captive insurance company to accumulate capital to fund the Company’s asset retirement obligation (Note 22) and self-insure certain mining risks.

All inter-company transactions and balances are eliminated on consolidation.

d. Revenue recognition

Gold is delivered under the Purchase Agreement (Note 19). Revenue is recognized when:

• The significant risks and rewards of ownership have been transferred;

• Neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold has been retained;

• The amount of revenue can be measured reliably;

• It is probable that the economic benefits associated with the transaction will flow to the Company; and

• The costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue is measured at the fair value of consideration received or receivable. Revenue related to ounces of gold delivered under both the Gold Prepayment Agreement and Purchase Agreement (Note 19) is measured based on the contractual terms of those agreements.

Revenue from the Gold Prepayment Agreement and Purchase Agreement is recognized upon delivery of ounces (Note 19).

Proceeds from the sale of metals produced prior to commercial production are credited to costs deferred during development.

e. Earnings (loss) per share

Basic earnings (loss) per common share is calculated by dividing the earnings (loss) for the period by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share is calculated by adjusting the weighted average number of shares outstanding for the dilutive effect of options and warrants. The computation of diluted earnings per share assumes the conversion, exercise or contingent issuance of securities when such conversion would have a dilutive effect on earnings. It is assumed that outstanding options, warrants and similar items are exercised or converted into shares and that the proceeds that would be realized upon such exercise or conversion are used to purchase common shares at the average market price per share during the

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

relevant reporting period with such hypothetically purchased shares causing a corresponding reduction in the number of shares used in the computation of diluted earnings per share.

f. Cash and cash equivalents

Cash and cash equivalents include cash on hand and short-term money market instruments that are readily convertible to known amounts of cash within ninety days of original purchase.

g. Plant and equipment

Plant and equipment are recorded at cost less accumulated amortization and impairment losses, if any. Plant and equipment are amortized over the estimated useful lives of the related assets. Assets under construction are amortized over their estimated useful lives when they are substantially complete and available for their intended use. Repair and maintenance costs not considered to enhance the service potential of an asset are expensed as incurred. Costs incurred to enhance the service potential of an asset are capitalized and amortized over the remaining useful life of the improved asset. When assets are retired or sold, the resulting gains or losses are reflected in earnings. At the end of each earnings period management assesses the carrying value of plant and equipment. If management determines that the carrying value of an asset cannot be recovered, the asset is written down to recoverable value with the amount of the write down charged to profit or loss.

Amortization is recorded on the following basis:

Heap leach pad and pond	Units of Production (“UOP”)
Mobile and field equipment	25% per annum
Plant and equipment	UOP
Other mine assets	10% - 20% per annum
Other assets	10% - 25% per annum
Leasehold improvements (included in other assets)	term of lease

Assets that will only be utilized at a certain phase of the mine (heap leach pad and pond, plant and equipment specific to certain phases of a mine) are amortized over UOP. Assets that can be used at more than one phase of the mine are amortized over their useful lives.

Amortization incurred prior to commercial production is capitalized as part of mineral properties and development costs.

h. Consumable inventory

Consumable supplies and spare parts to be used in production are valued at the lower of weighted average cost or net realizable value. Replacement cost of supplies is generally used as the best estimate of net realizable value.

Any write-down of inventory is recognized as an expense in profit or loss in the period the write-down occurs.

i. Exploration and evaluation expenditures

Acquisition costs for exploration and evaluation stage properties are deferred once it is determined that a future economic benefit is more likely than not to be realized.
Upon demonstrating technical feasibility and commercial viability, capitalized exploration and evaluation costs are transferred to capitalized development costs within mineral properties and development costs. Technical feasibility and commercial viability generally coincides with the

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

establishment of mineral reserves; however, this determination may be affected by management's assessment of other factors including legal, environmental, social and governmental factors.Prospecting and initial exploration costs to define and delineate a mineral deposit that has no demonstrable reserves are capitalized and included in the carrying amount of the related property in the period incurred, when management determines that it is probable that the expenditures will result in a future economic benefit to the Company.

The carrying values of capitalized amounts are reviewed annually, or when there are indications of potential impairment.

j. Mineral properties and development costs

Mineral properties are carried at cost less accumulated depletion and include:

(i)	Costs of acquiring production, development and exploration stage properties in asset acquisition transactions, including earn-in agreements;
(ii)	Expenditures incurred to develop mining properties;
(iii)	Economically recoverable exploration and evaluation expenditures;
(iv)	Borrowing costs incurred that are attributable to qualifying mining properties;
(v)	Certain costs incurred during production, net of proceeds from sales, prior to reaching commercial production; and
(vi)	Estimates of reclamation and closure costs.

The recorded amount of capitalized costs may not reflect recoverable value, which is dependent on development programs, the nature of the mineral deposit, commodity prices, development and operating costs and the Company’s ability to bring projects into production.

Once a property reaches commercial production capital costs are amortized on UOP over the expected life of the property’s proven and probable reserves and costs of any additional work on that property are expensed as incurred, except for development programs that extend the life or enhance the value of a property, which are capitalized and depleted over the useful life of the related assets.

A mineral property is derecognized upon disposal or considered to impaired when no or limited future economic benefits are expected to arise from continued use of the asset. Any gain or loss on derecognition or impairment of an asset, determined as the difference between the proceeds received or expected to be received and the carrying amount of the asset. Capitalized costs relating to property interests that are impaired, surrendered or abandoned are written off and recognized in the determination of profit or loss.

k. Asset retirement obligations

Asset retirement obligations encompass legal, statutory, contractual or constructive obligations associated with the retirement of a long-lived tangible asset that result from the acquisition, construction, development or normal operation of a long-lived asset. The retirement of a long-lived asset results from another-than-temporary removal from service, including sale of the asset, abandonment or disposal in some other manner such as depletion of reserves.

The Company recognizes the fair value of an estimated liability for the future cost of restoring exploration, development and mine sites with a corresponding increase to the carrying value of the related mineral property interest. The Company amortizes the amount added to mineral property interests using the amortization method established for the related asset. Changes in asset retirement obligations due to the passage of time are measured by an interest method of allocation whereby the change is recognized as an increase in the associated liability and by an accretion

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

expense in profit or loss. Changes resulting from revisions to the timing or amount of the original estimate of undiscounted asset retirement obligation cash flows are recognized as an increase or decrease in the carrying amount of the asset retirement obligation with a corresponding increase or decrease in the carrying value of the related asset.

l. Stripping costs

The Company accounts for stripping costs in accordance with IFRIC 20 – Stripping Costs in the Production Phase of Surface Mine (IFRIC – 20), which applies to the costs incurred to remove mine waste materials to gain access to mineral ore deposits during production. Stripping costs incurred during the development of a mine are capitalized within mineral properties. Stripping costs incurred subsequent to commencement of commercial production are variable production costs that are included in the cost of inventory produced during the period in which they are incurred, unless the stripping activity can be shown to give rise to future benefits from the mineral property, in which case the stripping cost would be deferred. Future benefits arise when stripping activity increases the future output of the mine by providing access to an extension of an ore body or to a new ore body. Capitalized stripping costs are depleted based on the UOP method using proven and probable mineral reserves as the depletion base.

The main features of IFRIC 20 are as follows:

• If the benefit from the stripping activity is realized in the form of inventory produced, the entity accounts for the costs in accordance with IAS 2 Inventories. If the benefit is improved access to the ore, the entity recognizes the costs as an addition to an existing asset.

• The stripping activity asset is measured in the same way as the existing asset of which it is a part (at cost or revalued amount less depreciation or amortization and less impairment losses).

• Depreciation or amortization is calculated over the expected useful life of the identified component of the ore body that becomes more accessible as a result of the stripping activity.

IFRIC – 20 is effective for annual periods beginning on or after January 1, 2013. The Company adopted the provisions of this interpretation in 2012. The application of IFRIC 20 did not have a material impact on the Company’s consolidated financial statements.

m. Impairment of non-financial assets

For the purposes of assessing impairment, the recoverable amount of an asset, which is the higher of its fair value less costs to sell and its value in use, is estimated. If it is not possible to estimate the recoverable amount of an individual asset, the asset is included in the cash-generating unit to which it belongs and the recoverable amount of the cash generating unit is estimated. As a result, some assets are tested individually for impairment and some are tested at the cash-generating unit level. A cash-generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or group of assets.

Individual assets in the development stage are tested for impairment annually or whenever events or changes in circumstances indicate that the asset may be impaired such as decreases in metal prices, an increase in operating costs or taxes, a decrease in mineable and recoverable reserves or a change in foreign exchange rates. The Company also considers the net book value of the asset, the ongoing costs required to maintain and operate the asset, and the use, value and condition of the asset. All other assets are only tested when indicators of impairment are present.

An impairment loss is recognized for the amount by which the asset's or cash-generating unit's carrying amount exceeds its recoverable amount. To determine an asset’s value-in-use, management

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

estimates expected future cash flows from each asset or cash-generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows. Future cash flows used in the determination of value in use are estimated based on expected future production, recoverability of reserves, commodity prices, operating costs, reclamation costs and capital costs. Fair value is determined with reference to estimates of discounted future cash flows or to recent transactions involving dispositions of similar properties.

An impairment loss for a cash-generating unit is first allocated to reduce the carrying amount of any goodwill allocated to that cash-generating unit. Any remaining impairment loss is allocated on a pro rata basis to the other assets in the cash-generating unit. All assets are subsequently reassessed for indications that an impairment loss previously recognized may no longer exist or may have decreased. An impairment charge is reversed if the cash-generating unit’s recoverable amount exceeds its carrying amount. Where an impairment loss subsequently reverses, the carrying amount of the asset or cash generating unit is increased to the revised estimate of its recoverable amount; however, only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash generating unit in prior reporting periods. A gain on the increase of the value of the asset is also realized.

n. Provisions

Liabilities are recognized when the Company has an obligation, either legal or constructive, that has arisen as a result of a past event and it is probable that a future outflow of resources will be required to settle the obligation. Provided that a reliable estimate can be made of the amount of the obligation, a provision for a liability of uncertain timing or amount is recorded.

Provisions are measured at the present value of the outflow of resources expected to be required to settle the obligation using a pre-tax rate that reflects the current market assessments of the time value of money and the risk specific to the obligation. Any increase in a provision due to the passage of time is recognized as a financing expense.

o. Income taxes

Tax expense recognized in profit or loss comprises the sum of current and deferred taxes, except where they relate to items that are recognized in other comprehensive income or directly in equity, in which case the related current and deferred tax is recognized in other comprehensive income or equity.

Current tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period and is payable on taxable profit which differs from profit or loss in the financial statements. Current income tax liabilities or assets are obligations to, or claims from, fiscal authorities relating to the current or prior reporting periods that are unsettled at the reporting date.
Deferred taxes are calculated by applying the liability method to temporary differences between the carrying amounts of assets and liabilities and their tax bases. Deferred tax assets and liabilities are calculated at tax rates expected to apply during the anticipated periods of realization, provided that such rates are enacted or substantively enacted by the end of the reporting period. Deferred tax assets are recognized to the extent that it is probable that they will be able to be utilized to reduce future taxable income. Deferred tax is not provided on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit. Deferred tax on temporary differences associated with shares in subsidiaries and joint ventures is not provided if reversal of these temporary differences can be controlled by the Company and it is probable that reversal will not occur in the foreseeable future. Deferred tax assets and liabilities are offset when the Company has a right and intention to offset current tax assets and liabilities from the same taxation

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

authority.

Royalties and revenue-based taxes are accounted for as an income tax when they have the characteristics of an income tax. This is considered to be the case when such taxes are imposed under government authority and the amount payable is based on income - rather than being determined on the basis of production or as a percentage of revenue – after adjustment for temporary differences. For such arrangements, current and deferred tax is provided for on the same basis as described for other forms of taxation. Obligations arising from royalty arrangements that do not satisfy these criteria are recognized as current provisions and included in cost of sales.

p. Share-based payments

The Company accounts for share-based payments using a fair value based method (Black-Scholes Option Pricing Model) with respect to all share-based payments. For directors and employees, the fair value of options is measured at the date of grant. Share-based payments to non-employees, whereby the Company receives goods or services as consideration for its equity instruments are, when determinable, recorded at the fair value of the goods or services received. If the fair value of the goods and services received are not determinable, then the fair value of the share based payment is used and is measured on the date services are received.

The fair value of options granted as share-based payments is accrued and charged to profit or loss with a corresponding credit to share option reserve within shareholders’ equity. For directors and employees the charge is recognized over the option vesting period based on the best available estimate of the number of share options expected to vest. Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from the previous estimate. No adjustment is made to expenses recognized in prior periods when options vested. For non-employees the charge is recognized over the related service period. When stock options are exercised the corresponding amount credited to the share option reserve is transferred to share capital.

In the event stock options are forfeited prior to vesting the amount related to such options that was recognized in prior periods is reversed. The fair value of any vested and expired stock options remains in the share option reserve.

q. Derivative instruments

Derivative instruments, including derivative instruments embedded in other contracts and instruments designated for hedging activities, are recognized as either assets or liabilities in the balance sheet and measured at fair value. The Company has not used derivative instruments to hedge exposures to cash flow or foreign currency risks. Any change in the fair value of a derivative or an embedded derivative not designated as a hedging instrument is recognized as a gain or loss in the profit or loss.

r. Non-derivative financial instruments

The Company classifies financial assets as fair value through profit or loss, available-for-sale financial assets, held-to-maturity investments or as loans and receivable. The Company classifies financial liabilities as either at fair value through profit or loss or at amortized cost using the effective interest method. Financial assets and financial liabilities are recognized initially at fair value. Transaction costs, other than those related to financial instruments classified as financial assets and liabilities at fair value through profit or loss, are added to the fair value of the financial asset and financial liability on initial recognition and amortized using the effective interest method.

Financial assets and financial liabilities classified as fair value through profit or loss are re-measured

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

at fair value at the end of each reporting period, with gains or losses recognized in profit and loss.

Financial assets classified as available for sale are re-measured at fair value at the end of each reporting period with gains or losses recognized in other comprehensive income until assets are derecognized or become impaired.

Financial assets classified as loans and receivables and held-to-maturity investments and financial liabilities that are not classified as fair value through profit or loss are subsequently measured at amortized cost using the effective interest method.

The Company assesses, at the end of each reporting period, whether there is objective evidence that financial assets are impaired. A financial asset is impaired and impairment losses are incurred if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset that has a negative impact on the estimated future cash flows of the financial asset that can be reasonably estimated.

6.	CHANGES IN ACCOUNTING STANDARDS
	a.	Accounting standards effective January 1, 2013
	(i)	Consolidation

In May 2011, the IASB issued IFRS 10 - Consolidated Financial Statements (“IFRS 10”), which supersedes SIC 12 and the requirements relating to consolidated financial statements in IAS 27 -Consolidated and Separate Financial Statements. IFRS 10 is effective for annual periods beginning on or after January 1, 2013, with earlier application permitted under certain circumstances. IFRS 10 establishes control as the basis for an investor to consolidate its investees; and defines control as an investor’s power over an investee with exposure or rights to variable returns from the investee and the ability to affect the investor’s returns through its power over the investee.

In addition, the IASB issued IFRS 12 - Disclosure of Interests in Other Entities (“IFRS 12”), which establishes the disclosure requirements for the Company’s subsidiaries, joint arrangements, associates and unconsolidated structured entities. The requirements of IFRS 12 include reporting of the nature of risks associated with the Company’s interests in other entities and the effects of those interests on the Company’s consolidated financial statements.

Concurrently with the issuance of each of IFRS 10, IAS 27 and IAS 28 - Investments in Associates (“IAS 28”) were revised and reissued as IAS 27 - Separate Financial Statements and IAS 28 - Investments in Associates and Joint Ventures to align with the new consolidation guidance.

(ii) Joint arrangements

In May 2011, the IASB issued IFRS 11 - Joint Arrangements (“IFRS 11”), which supersedes IAS 31 - Interests in Joint Ventures and SIC-13 - Jointly Controlled Entities - Non-Monetary Contributions by Venturers. IFRS 11 is effective for annual periods beginning on or after January 1, 2013, with earlier application permitted under certain circumstances.

Under IFRS 11, joint arrangements are classified as joint operations or joint ventures based on the rights and obligations of the parties to the joint arrangements. A joint operation is a joint arrangement where the parties that have joint control of the arrangement (“joint operators”) have the right to the assets and have obligations for the liabilities relating to the arrangement. A joint venture is a joint

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

arrangement where the parties that have joint control of the arrangement (“joint venturers”) have rights to the net assets of the arrangement. IFRS 11 requires that a joint operator recognize its portion of assets, liabilities, revenues and expenses of a joint arrangement, while a joint venturer recognizes its investment in a joint arrangement using the equity method.

The Company does not anticipate this standard to have a material impact on its consolidated financial statements.

(iii) Fair value measurement

In May 2011, the IASB issued IFRS 13 - Fair Value Measurement (“IFRS 13”). IFRS 13 is effective for annual periods beginning on or after January 1, 2013, with earlier application permitted. IFRS 13 defines fair value and sets out a framework for measuring fair value, which is applicable to all IFRSs that require or permit fair value measurements or disclosures about fair value measurements. IFRS 13 requires that when using a valuation technique to measure fair value, the use of relevant observable inputs should be maximized while unobservable inputs should be minimized.

The Company does not anticipate the application of IFRS 13 to have a material impact on its consolidated financial statements.

(iv) Financial statement presentation

In June 2011, the IASB issued amendments to IAS 1 - Presentation of Financial Statements (“IAS 1”) that require an entity to group items presented in the Statement of Comprehensive Income into two groups on the basis of whether they may be reclassified to earnings subsequent to initial recognition or not reclassified to earnings subsequent to initial recognition. For those items presented before taxes, the amendments to IAS 1 also require that the taxes related to the two separate groups be presented separately. The amendments are effective for annual periods beginning on or after July 1, 2012, with earlier adoption permitted.

The Company does not anticipate the application of the amendments to IAS 1 to have a material impact on its consolidated financial statements.

(v) Employee Benefits

In June 2011, the IASB issued amendments to IAS 19 - Employee Benefits (“IAS 19”) that introduced changes to the accounting for defined benefit plans and other employee benefits. The amendments include elimination of the option to defer, or recognize in full in earnings, actuarial gains and losses and instead mandates the immediate recognition of all actuarial gains and losses in other comprehensive income and requires use of the same discount rate for both the defined benefit obligation and expected asset return when calculating interest cost. Other changes include modification of the accounting for termination benefits and classification of other employee benefits. The Company does not anticipate the application of the amended IAS 19 to have a material impact on its consolidated financial statements.

b. Accounting standards effective January 1, 2015

Financial instruments

The IASB intends to replace IAS 39 in its entirety with IFRS 9 - Financial Instruments (“IFRS 9”) in three main phases. IFRS 9 will be the new standard for the financial reporting of financial instruments that is principles-based and less complex than IAS 39. In November 2009 and October 2010, phase 1 of IFRS 9 was issued and amended, respectively, which addressed the classification and

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

measurement of financial assets and financial liabilities. IFRS 9 requires that all financial assets be classified as measured at amortized cost or at fair value based on the Company’s business model for managing financial assets and the contractual cash flow characteristics of the financial assets. Financial liabilities are classified as subsequently measured at amortized cost except for financial liabilities classified at fair value through profit and loss, financial guarantees and certain other exceptions. In response to delays to the completion of the remaining phases of the project, on December 16, 2011, the IASB issued amendments to IFRS 9 which deferred the mandatory effective date of IFRS 9 from January 1, 2013 to annual periods beginning on or after January 1, 2015. The amendments also provided relief from the requirement to restate comparative financial statements for the effects of applying IFRS 9.

The Company will monitor the evolution of this standard to evaluate the impact it may have on its consolidated financial statements.

7. LA ARENA ACQUISITION

The Company had an agreement (the “Agreement”) with IAMGOLD-Quebec Management Inc. (“IMG”) that provided for the Company to earn-in to the La Arena mineral project or purchase 100 per cent of all of the issued and outstanding shares of La Arena, a wholly-owned subsidiary of IMG. La Arena owns 100 per cent of the La Arena mineral project in Peru. The exercise price of the option to acquire 100 per cent of La Arena was $47,550, subject to adjustments, (the “Exercise Price”).

Under the earn in provisions of the Agreement, the Company had the right to convert up to $30,000 of expenditures incurred on the La Arena mineral project by June 15, 2011 to earn up to a 38.7 per cent of the shares of La Arena.

On February 9, 2011, the Company acquired 100 per cent of the shares of La Arena upon payment of $48,847 representing the Exercise Price and an amount of $1,297 to reimburse IMG for the cost of additional land purchases within the La Arena mineral project area and for metallurgical test work. This was accounted for as an asset acquisition. At February 9, 2011 the Company had earned 31.3% of the shares of La Arena.

The following table sets forth the allocation of the purchase price to assets and liabilities acquired, based on estimates of fair value.

Purchase Price
Equity investment in La Arena prior to acquisition	$	54,093
Payment to acquire common shares of La Arena not already owned		48,847
	$	102,940
Purchase price allocation:
Cash	$	5,534
Prepaid expenses and deposits		7,262
Value added tax receivable		9,768
Property, plant and equipment		27,464
Mineral property		60,625
Current liabilities		(7,713	)
	$	102,940

The investment in La Arena had an opening balance of $16,854 in the year ended May 31, 2011. The Company invested an additional $30,755 before the entire balance was reallocated to purchase

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

price.

8.	SUPPLEMENTAL CASH FLOW INFORMATION
	a.	Cash and cash equivalents, expressed in USD, include cash in bank accounts and term deposits as follows:

		December 31, 2012		December 31, 2011		May 31, 2011
United States dollars	$	21,365	$	24,600	$	10,836
Canadian dollars (i)		2,235		416		523
Peruvian Nuevo Sol (ii)		15,013		891		167
	$	38,613	$	25,907	$	11,526

i.	Canadian dollars of $2,224 was converted at a Canadian to US dollar exchange rate of 1.0051 (December 31, 2011 - $423 at 0.9833, May 31, 2011 - $506 at 1.0324).
ii.	Peruvian Nuevo Sol of $38,268 was converted at a Sol to US dollar exchange rate of 0.3923 (December 31, 2011 - $2,400 at 0.3711, May 31, 2011 - $458 at 0.3646).

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

b. Changes in non-cash working capital include the following:

					For the seven month
		For the year ended			financial year ended			For the year ended
		December 31, 2012			December 31, 2011			May 31, 2011
Operating:
Increase in accounts receivable	$	(27,691	)	$	(621	)	$	(453	)
Increase in inventory		(3,389	)		(8,959	)		(3,910	)
Increase (decrease) in prepaid expenses		(20	)		31			4,866
Increase in IGV		(18,286	)		(1,864	)		4,837
Increase in taxes payable		41,685			990			-
	$	(7,701	)	$	(10,423	)	$	5,340
Financing:
Accrued interest charges on
long-term debt		258			-			-
	$	258		$	-		$	-
Investing:
Increase (decrease) in prepaid expenses		(205	)		1,424			-
Increase in IGV		(16,365	)		(9,771	)		(8,672	)
Increase (decrease) in accounts payable and accrued liabilities		18,588			2,086			(4	)
Other		-			-			44
		2,018			(6,261	)		(8,632	)
	$	1,838		$	(16,684	)	$	(3,292	)

c.	Non cash transactions included in the statements of cash flow include:
	i.	Included in the decrease in inventory at December 31, 2012 was non cash cost amortization of $502 (December 31, 2011 - $2,037, May 31, 2011 - nil).
	ii.	Additions to mineral properties at December 31, 2012 were $4,806 in accounts payable (December 31, 2011 - $12,394 was included in accounts payable, year ended May 31, 2011 - $7,712).
	iii.	Additions to plant and equipment included in accounts payable at December 31, 2012 were $14,779 (December 31, 2011 - $4,658, May 31, 2011 - nil).

Refer to Note 18 for tax payments made during the year ended December 31, 2012, the seven-month financial year ended December 31, 2011 and the year ended May 31, 2011.

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

9. ACCOUNTS RECEIVABLE

Accounts receivable consist of the following:

		December 31, 2012		December 31, 2011		May 31, 2011
Trade receivable	$	22,938	$	-	$	-
Value-added tax receivable		53		49		382
Capital taxes receivable (ITAN)		1,257		517		-
Other receivables		4,271		212		155
Receivable from a related party		330		380		-
	$	28,849	$	1,158	$	537

Capital taxes receivable (ITAN) consists of a tax levied on La Arena’s net assets by the Government of Peru.

Other receivables consist primarily of insurance premium receivable owed to the Company’s captive insurance subsidiary by an unrelated insurance company.

10. OTHER FINANCIAL ASSETS

Other financial assets consist of the following investments in Duran Ventures Inc. (“Duran”):

		Shares			Warrants		Total
Acquisition, September 28, 2012	$	713		$	50	$	763
Change in value during the period		(235	)		67		(168	)
December 31, 2012	$	478		$	117	$	595

The Company holds 5,000,000 units of Duran. The units consist of one common share of Duran and one half of a Series A Warrant and one half of a Series B Warrant (the “Duran Units”). The Duran Units are held for investment purposes, but may be sold in the near term and are accounted for at fair value. Any gains or losses arising from periodic fair value adjustments are reflected in profit and loss. A whole Series A Warrant may be converted into one common share upon payment of $0.25 Canadian dollars (‘CDN’) at any time until the date that is the earlier of (i) February 28, 2014, and (ii) the date that is thirty days after the date notice is given to Rio Alto that the common shares have closed at or above CDN$0.25 for a period of twenty consecutive trading days on the TSX Venture Exchange (the “TSXV”) so long as such period occurs twelve months after September 28, 2012.

A whole Series B Warrant may be converted into one common share upon payment of CDN$0.35 at any time until the date that is the earlier of (i) February 28, 2015 and (ii) the date that is thirty days after notice is given to Rio Alto that the common shares have closed at or above CDN$0.35 for a period of twenty consecutive trading days on the TSXV so long as such period occurs twenty four months after September 28, 2012.

Rio Alto may earn up to a 70% interest in Duran’s Minasnioc Gold-Silver Property (“Minasnioc”) and a 65% interest in Duran’s Ichuña Copper-Silver Property (“Ichuña”). In order to complete its earn-in

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

option for the Minasnioc and Ichuña properties Rio Alto must exercise 100% of the warrants included in the Duran Units.

Under the terms of the LOI all time periods set for specific performance by Rio Alto are extendable. And under the LOI, Rio Alto has the option to acquire a 51% interest in Minasnioc within a three (3) year period by performing the work required to define a sufficient mineral resource to justify an economic assessment, and making a payment to Duran of $500. Rio Alto may earn an additional 19% interest in Minasnioc within the subsequent two (2) year period by preparing a feasibility study for a production decision and obtaining permits from the applicable Peruvian government ministry or agency for a production decision and by making a payment to Duran of $500.

Under the terms of the LOI, Rio Alto has the option to earn a 65% interest in Ichuña by incurring a total of $8,000 in exploration costs within a four (4) year period, which shall include a drill program of 8,000 metres and make a payment to Duran of $500.

11.      INVENTORY

Inventory consists of:

		December 31, 2012		December 31, 2011		May 31, 2011
Doré	$	-	$	772	$	372
Work-in-progress		7,981		917		1,236
Ore on leach pad		1,017		2,257		2,004
Ore in stockpile		-		8,701		-
Total mineral inventory		8,998		12,647		3,612
Consumable inventory		7,896		2,260		298
Total inventory	$	16,894	$	14,907	$	3,910

12.      PREPAID EXPENSES

Prepaid expenses consist of:

		December 31,		December 31,		May 31,
		2012		2011		2011
Prepayment for construction and other development services at La Arena	$	1,130	$	925	$	2,349
Other		194		174		205
	$	1,324	$	1,099	$	2,554

Other prepaid expenses consist of prepayments of insurance premiums.

13.      IGV RECEIVABLE

Under Peruvian law a tax, the Impuesto General a las Ventas (“IGV”), is imposed at a rate of 18 per cent of the value of any goods or services purchased. IGV is generally refundable within the year in

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

which it is paid. Refund applications may only be made by companies that are trading within Peru and collecting IGV from customers, by exporters or by companies that have an agreement with the tax authority for the early collection of IGV. The Company entered commercial production in 2012 and is eligible for refunds of IGV. Application for IGV recoveries were filed in October 2012 and are subject to audit by the tax authority.

Subsequent to year-end, a portion of the IGV receivable was received (Note 33).

14.      RESTRICTED CASH

Restricted cash consists of a $2,175 deposit made to secure a letter of credit in favour of the Ministry of Energy and Mines in Peru as a partial guarantee of its mine closure obligations (Note 22). The total amount of $2,175 consists of two deposits maturing in less than one year, which earn interest at 1.5% per annum. These funds will be reinvested upon maturity and kept on deposit until the mine closure.

Subsequent to December 31, 2012, the amount of restricted cash increased to $8,003 (Note 22).

15.      PLANT AND EQUIPMENT

Plant and equipment consists of:

										Mobile and
		Construction-			Heap leach					field			Plant and			Other mine
		in-Process			pad and ponds			Land		equipment			equipment			assets			Other assets			Total
Costs
May 31, 2010	$	128		$	-		$	-	$	-		$	-		$	-		$	163		$	291
Additions		46,733			-			-		-			-			-			461			47,194
May 31, 2011	$	46,861		$	-		$	-	$	-		$	-		$	-		$	624		$	47,485
Additions and reclassifications		(26,578	)		29,899			3,965		2,690			7,987			2,559			(12	)		20,510
December 31, 2011	$	20,283		$	29,899		$	3,965	$	2,690		$	7,987		$	2,559		$	612		$	67,995
Additions and reclassifications		(12,993	)		42,840			15,218		2,073			13,212			9,167			364			69,881
December 31, 2012	$	7,290		$	72,739		$	19,183	$	4,763		$	21,199		$	11,726		$	976		$	137,876
Accumulated amortization
May 31, 2010	$	(13	)	$	-		$	-	$	-		$	-		$	-		$	(18	)	$	(31	)
Amortization		(90	)		-			-		-			-			-			(78	)		(168	)
May 31, 2011	$	(103	)	$	-		$	-	$	-		$	-		$	-		$	(96	)	$	(199	)
Reclassification		103			-			-		(103	)		-			-			-			-
Amortization		-			(4,288	)				(56	)		(1,198	)		(155	)		(17	)		(5,714	)
December 31, 2011	$	-		$	(4,288	)	$	-	$	(159	)	$	(1,198	)	$	(155	)	$	(113	)	$	(5,913	)
Amortization					(9,965	)		-		(283	)		(4,691	)		(370	)		(143	)		(15,452	)
December 31, 2012	$	-		$	(14,253	)	$	-	$	(442	)	$	(5,889	)	$	(525	)	$	(256	)	$	(21,365	)
Net book value
May 31, 2011	$	46,758		$	-		$	-	$	-		$	-		$	-		$	528		$	47,286
December 31, 2011	$	20,283		$	25,611		$	3,965	$	2,531		$	6,789		$	2,404		$	499		$	62,082
December 31, 2012	$	7,290		$	58,486		$	19,183	$	4,321		$	15,310		$	11,201		$	720		$	116,511

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

Construction in progress consists of heap leach pad and pond and plant and equipment that was not ready for use as at December 31, 2012.

Other mine assets consist of the cost of camp office and accommodation, as well as equipment relating to the Yamobamba power line. Other assets consist of office equipment and leasehold improvements.

16.      MINERAL PROPERTIES AND DEVELOPMENT COSTS

The La Arena Project is wholly-owned by La Arena and consists of 44 mining concessions totaling approximately 20,673 hectares located about 480km north-northwest of Lima, Peru.

The La Arena Project has two separate deposits, a gold oxide deposit (“Phase I”) and a copper/gold sulphide deposit (“Phase II”). The Company is mining the gold oxide deposit.

An impairment test was performed on Phase II during the year and no impairment was recorded. Mineral property expenditures are:

										Accumulated
							Costs			amortization								Net
Costs		Phase I			Phase II		Total			Phase I			Phase I			Phase II		Total
May 31, 2010	$	-		$		$	-		$	-		$	-		$	-	$	-
Acquisition during the period		18,032			42,593		60,625			-			18,032			42,593		60,625
Concession and property payments		275			-		275			-			275			-		275
Development costs		981			-		981			-			981			-		981
Asset retirement obligation		14,800			-		14,800			-			14,800			-		14,800
Foreign currency translation		431			1,019		1,450			-			431			1,019		1,450
May 31, 2011	$	34,519		$	43,612	$	78,131		$	-		$	34,519		$	43,612	$	78,131
Development costs		29,493			4,283		33,776			-			29,493			4,283		33,776
Capitalized depreciation		4,658			-		4,658			-			4,658			-		4,658
Pre-production revenue		(71,621	)		-		(71,621	)		-			(71,621	)		-		(71,621	)
Preproduction cost		19,899			-		19,899			-			19,899			-		19,899
Amortization expense		-			-		-			(1,047	)		-			-		(1,047	)
December 31, 2011	$	16,948		$	47,895	$	64,843		$	(1,047	)	$	16,948		$	47,895	$	63,796
Development costs		-			22,472		22,472						-			22,472		22,472
Amortization expense		-			-					(5,729	)							(5,729	)
December 31, 2012	$	16,948		$	70,367	$	87,315		$	(6,776	)	$	16,948		$	70,367	$	80,539

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

17.      ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consist of the following:

		December 31, 2012		December 31, 2011		May 31, 2011
Trade payables	$	28,336	$	23,697	$	7,110
Salaries payables		1,721		456		87
Bonus payables		1,042		358		19
Vacation payables		1,046		391		160
Workers' profit share payables		8,919		569		-
National pension payables		12		11		-
Payroll tax payables		1,436		1,310		270
Long-term bonus payable		2,331		-		-
Other payables		1,226		689		619
		46,069		27,481		8,265
Less current portion		43,738		27,481		8,265
Long-term portion	$	2,331	$	-	$	-

None of the accounts payable and accrued liabilities are interest bearing. Substantially all of the trade payables relate to mining and development and construction activities. Trade payables are normally settled within 30 days. Workers’ profit share is being paid over a six month period ending March 31, 2013. Vacation payable is distributed when an employee requests, typically prior to a vacation leave.

The long-term bonus payable has been discounted using a period of five years and a discount rate of 7.38%. The long-term bonus payable is due in 2017.

18.      INCOME TAXES

The current and deferred tax expense reflected in the consolidated statements of net income (loss) and comprehensive income (loss) is as follows:

		Year ended			Seven months ended			Year ended
		December 31, 2012			December 31, 2011			May 31, 2011
Current income tax expense - Peru	$	59,836		$	1,968		$	201
Deferred tax recovery - Peru		(5,745	)		(1,950	)		-
	$	54,091		$	18		$	201

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

Income taxes differ from the amount that would be determined by applying the combined federal and provincial statutory income tax rate of 25% in the year ended December 31, 2012 (seven-month financial year ended December 31, 2011 – 26.5%, year ended May 31, 2011 – 26.5%) to loss before income taxes. The differences are the result of: 

		Year ended			Seven months ended			Year ended May 31,
		December 31, 2012			December 31, 2011			2011
Income (loss) before taxes	$	154,509		$	(529	)	$	8,505
Income tax (recovery) provision using statutory tax rates		38,317			(140	)		(2,254	)
Current tax expense:
Difference in foreign tax rates		17,105			4			(27	)
Non-deductible items		461			707			860
Deferred tax expense:
Foreign exchange		(3,425	)
Change in tax rates		-			366			(474	)
Deferred income tax related to movements of impairment of deferred tax assets		1,633			(919	)		2,096
Income tax expense (recovery)	$	54,091		$	18		$	201

Taxes payable consist of the following: 

		December 31, 2012		December 31, 2011		May 31, 2011
Special mining tax	$	1,204	$	-	$	-
Royalty		483		-		-
Income tax		40,988		990		-
	$	42,675	$	990	$	-

Taxes payable consists of the income tax obligation arising from taxable income, a special mining tax and a royalty imposed by Peruvian tax authorities, less tax instalments paid during the year and recognition of an increase in the deferred tax asset. The Company has obtained legal and other independent advice in determination of its tax liability. There can be no assurance that the tax authority will concur with such determination and may assess the Company for additional taxes.

The significant components of the Company’s deferred tax assets and liabilities not recognized are as follows:

		December 31, 2012		December 31, 2011		May 31, 2011
Deferred tax assets not recognized:
Non-capital losses carried forward	$	6,053	$	4,038	$	8,060
Mineral properties		493		505		-
Share issue costs		1,035		1,483		-
Other		78				-
	$	7,659	$	6,026	$	8,060

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

The Company recognized a deferred tax asset comprised of:

		December 31, 2012			December 31, 2011			May 31, 2011
Inventory	$	(469	)	$	1,007		$	-
Mineral properties and development costs		4,314			3,535
Plant and equipment		3,605			(2,592	)
Other		245
Net asset	$	7,695		$	1,950		$	-

The Company has unrecognized non-capital losses that may be carried forward amounting to $24.0 million (December 31, 2011 - $13,400, May 31, 2011 - $4,546) that expire between 2013 and 2032.

During the twelve months ended December 31, 2012, the following tax payments were made:

i.	Peruvian income tax instalments for 2012 of $7,348.
ii.	Peruvian income tax for 2011 of $412
iii.	Special mining tax of $4,993

iv.	Royalties of $5,661
v.	Workers’ profit share of $12, 506, of which $12,506 forms a part of cost of sales.

19.      DEFERRED REVENUE AND DERIVATIVE LIABILITY

The Company received $50,000 under a Gold Prepayment Agreement (“Prepayment”) and simultaneously entered into an off take agreement - the Gold Purchase Agreement (”Purchase Agreement”). The proceeds of the Prepayment were to partially fund development of the La Arena Gold Mine. The Purchase Agreement is a derivative liability (written option). An option pricing model that considers gold volatility is used to estimate the fair value of the derivative liability. Drawdowns of the Prepayment were initially apportioned to derivative liability based on estimated fair value with the residual amount allocated to deferred revenue related to the Prepayment.

a.      Deferred revenue is:

		Year ended			Seven months ended			Year ended
		December 31, 2012			December 31, 2011			May 31, 2011
Opening	$	29,510		$	10,416		$	-
Amounts drawn		-			25,500			10,423
Deliveries to recognize deferred revenue		(14,578	)		(6,406	)		-
Foreign exchange translation		-			-			(7	)
Closing	$	14,932		$	29,510		$	10,416
Less current portion		(3,446	)		(4,251	)		(1,790	)
Long-term portion	$	11,486		$	25,259		$	8,626

Under the Prepayment the Company is committed to deliver a notional amount 1,941 ounces of gold

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

each month until October 2014. Once the monthly deliveries total 61,312 notional ounces of gold, the Prepayment is settled. The actual monthly delivery of gold ounces may vary by 5 per cent from 1,941 ounces for every $100 dollar change in the gold price from a base price of $1,150 per ounce, subject to limits at $1,450 and $950 per ounce. At a price of $1,450 or more the monthly delivery would be 85 per cent of 1,941 ounces and 115 per cent of 1,941 ounces if the price of gold was $950 or less. The ounces of gold to be delivered are as follows:

Gold price per ounce	Based on $50,000 drawdown	Remaining commitment at December 31, 2012
$950 or lower	70,509	29,013
$950 to $1,050	67,443	27,752
$1,050 to $1,150	64,378	26,490
$1,150 to $1,250	61,312	25,229
$1,250 to $1,350	58,246	23,968
$1,350 to $1,450	55,181	22,706
$1,450 or higher	52,115	21,445

At December 31, 2012, the price of gold was $1,664 per ounce. At that price there would be 21,445 ounces to be delivered in the amount of 1,650 ounces each month from October 2013 and including October 2014.

The Company may prepay gold ounces remaining to be delivered under the Prepayment, in whole or in part, at any time without penalty in either ounces of gold or the equivalent in cash at the then prevailing gold price. During the year ended December 31, 2012, the Company delivered 20,467 ounces of gold to settle 24,079 ounces or 12 months of the notional delivery requirement. The next required monthly delivery is in October 2013.

The table summarizes the delivery requirements in notional ounces of gold:

					Obligation settled			Obligation
		Based on			in the seven-month			settled in the
		$50,000		Drawdown	financial year		As at	year ended		As at
	Ounces	draw	As at May	of the	ended December		December	December 31,		December
	per month	down	31, 2011	facility	31, 2011		31, 2011	2012		31, 2012
July 2011 to March 2012	575	5,175	5,175	-	(5,175	)	-	-		-
April 2012 to October 2012	1,366	9,560	4,025	5,535	(6,828	)	2,732	(2,732	)	-
November 2012 to October 2014	1,941	46,577	26,864	19,713	-		46,577	(21,348	)	25,229
Total ounces to be delivered		61,312	36,064	25,248	(12,003	)	49,309	(24,080	)	25,229

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

b.      Derivative liability consists of:

		Year ended			Seven months ended			Year ended
		December 31, 2012			December 31, 2011			May 31, 2011
Opening balance	$	4,559		$	12,428		$	-
Initial valuation of derivative liability		-			-			14,077
Change in fair market value of derivative liability		(2,515	)		(7,869	)		(1,649	)
Closing	$	2,044		$	4,559		$	12,428
Less current portion		(1,102	)		(934	)		(2,136	)
Long-term portion	$	942		$	3,625		$	10,292

Under the Purchase Agreement the Company granted an option that allows the holder to purchase gold produced from two oxide pits up to an estimated amount of 634,000 ounces. At December 31, 2012 the remaining number of ounces available for purchase, net of estimated deferred revenue obligations, was approximately 360,000 ounces. The option holder may elect to pay one of either the London Gold Market AM Fixing Price or the Comex (1^st Position) Settlement Price over predetermined periods of time. The option holder’s election represents an embedded derivative and is accounted for as a written call option. Changes in the fair value of the liability are reflected in profit or loss.

20.      LONG TERM DEBT

The Company borrowed $3,000 in September 2011 that bears interest at 3-month LIBOR plus 6 per cent compounded annually (6.36% as at December 31, 2012 – 6.36%, December 31, 2011 – 6.38%). Interest of $258 is accrued on the balance of the loan. The debt matures in October 2014. As security for the Prepayment and the $3,000 loan, the Company granted a charge over its shares of La Arena and substantially all of the Company’s assets.

21.      CAPITAL MANAGEMENT

The capital of the Company consists of items included in shareholders’ equity and debt, net of cash and cash equivalents.

		December 31, 2012		December 31, 2011		May 31, 2011
Shareholders' equity	$	218,269	$	115,309	$	112,035
Long term debt		3,258		3,000		-
		221,527		118,309		112,035
Less: Cash and cash equivalents		38,613		25,907		11,526
	$	182,914	$	92,402	$	100,509

The Company has no externally imposed capital requirements. The objectives of the Company’s capital risk management program are to safeguard the Company’s ability to continue as a going concern, to provide returns to shareholders, protect shareholder value, provide benefits for other

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

stakeholders, and ensure the growth of the business. The Company considers the items in equity and long-term debt as capital and manages its capital structure by issuing treasury shares, engaging in commodity-backed transactions, the potential sales of assets, the incurrence of debt or the return of capital to shareholders in light of economic conditions and the characteristics of the Company’s assets.

The Company’s capital structure reflects the Company’s focus on growth in a capital intensive industry with lengthy development times as well as the risks associated with exploration and development activities due to factors that are beyond the Company’s control including, without limitation, the receipt of necessary permits, the availability of financial and human resources and the volatility of commodity prices. The adequacy of the Company’s capital structure is assessed on an on-going basis and is adjusted as necessary and as financial markets permit in order to fund exploration and development programs. Exploration and development activities may be delayed or accelerated as circumstances or events change.

22.      ASSET RETIREMENT OBLIGATION

Asset retirement obligation consists of:

		December 31, 2012			December 31, 2011		May 31, 2011
Opening balance	$	15,685		$	14,800	$	-
Estimated liabilities incurred		-			-		14,800
Accretion expense		1,648			847		-
Reclamation spending		(423	)		-		-
Foreign exchange		11			38		-
	$	16,921		$	15,685	$	14,800

The Company’s current reclamation and closure plan for the La Arena Gold Mine was approved by the Ministry of Energy and Mines in Peru in October 2012. The estimated undiscounted closure obligation at that  time was $38,100, which when discounted results in the asset retirement obligation.

A discount rate of 10.25% has been used to estimate future costs (December 31, 2011 and May 31, 2011 – 10.18%). The carrying value of the obligation is increased by periodic accretion charges reflected within profit and loss. The Company posted a letter of credit in the amount of $3,760 (Note 14) in August 2012 as a partial guarantee of its closure obligations. This letter of credit was subsequently reduced to $2,175 in December 2012, and then increased to $8,003 subsequent to December 31, 2012. Reclamation and closure activities include land and water rehabilitation, demolition of buildings and mine facilities, on-going care and maintenance and other costs. To date, $423 has been spent on reclamation activities. The majority of the closure activities will be carried out during the 2018 through 2019 period. Care and maintenance activities are expected to continue until 2025.

23.      EQUITY

a.      Share capital

Authorized share capital consists of an unlimited number of common shares of which 175,536,962 were issued and outstanding at December 31, 2012 (December 31, 2011 – 169,746,352, May 31, 2011 – 168,557,582). The Company also has authorized an unlimited number of preferred shares of which none have been issued.

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

During the year ended May 31, 2011 the Company issued common shares as follows:

	Shares					Cash			Non-cash
	issued	Price per				transaction			transaction costs
Issue Date	(000’s)	share		Proceeds		costs			(i)
June 2, 2010	10,200	C$0.76	$	7,451	$	(522	)	$	-
November 30, 2010	7,627	C$1.68		12,481		(969	)		-
December 1, 2010	3,906	C$1.68		6,562		(459	)		-
December 2, 2010	533	C$1.68		896		(31	)		-
January 20, 2011	28,060	C$2.05		57,517		(3,722	)		(2,087	)
For the year ended May 31, 2011	50,326		$	84,907	$	(5,703	)	$	(2,087	)

i.      Non-cash transaction costs consisted of 1,683,600 broker warrants entitling the brokers to purchase an equal number of common shares at C$2.05 per common share expiring January 20, 2013. The fair value of the broker warrants was recorded as share issue costs.

Common shares issued in the year ended December 31, 2012, the seven-month financial year ended December 31, 2011 and the year ended May 31, 2011 upon the exercise of options and warrants are set out in (b) and (c) below.

b.      Share-based payments

The Company’s stock option plan authorizes the directors to grant options to executive officers, directors, employees and consultants enabling them to acquire from treasury up to that number of shares equal to 10 per cent of the issued and outstanding common shares of the Company.

The exercise price of options granted is determined by the directors, subject to regulatory approval, if required. Options may be granted for a maximum term of 10 years and vest as determined by the board of directors. The Black-Scholes Option Pricing Model is used to estimate the fair value of options granted. Vesting periods range from immediate vesting to vesting over a 3-year period.

Stock option transactions are summarized as follows:

	Number of Options		Weighted Average
	(000’s)		Exercise Price
			(C$/option)
Outstanding, May 31, 2010	5,545		0.32
Granted	3,665		1.75
Exercised	(1,727	)	0.34
Forfeited	(100	)	0.30
Outstanding, May 31, 2011	7,383		1.02
Granted	4,240		3.07
Exercised	(1,063	)	0.42
Forfeited	(50	)	0.80
Outstanding, December 31, 2011	10,510		1.91
Granted	800		4.88
Exercised	(3,070	)	1.39
Forfeited	(344	)	1.20
Outstanding, December 31, 2012	7,896		2.44
Options exercisable, December 31, 2012	5,464		1.96

Proceeds from the exercise of options were $4,289 during the year ended December 31, 2012 (December 31, 2011 - $446, May 31, 2011 - $607).

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

Stock options outstanding at December 31, 2012 were:

	Options outstanding					Options exercisable
				Weighted					Weighted
				average	Weighted				average	Weighted
				exercise	average				exercise	average
		Options		price	remaining life		Options		price	remaining life
		(000's)		(C$/option)	(months)		(000's)		(C$/option)	(months)
$0.25 - $0.70		1,523	$	0.30	19		1,523	$	0.30	19
$1.25 - $1.50		460	$	1.50	33		460	$	1.50	33
$1.80 - $2.39		1,455	$	1.93	35		1,455	$	1.01	35
$3.08 - $3.75		3,858	$	3.15	47		1,876	$	3.16	47
$5.25 - $5.25		600	$	5.25	57		150	$	5.25	57
		7,896	$	2.44	39		5,464	$	1.71	35

The fair value of options issued to executive officers, directors and employees is measured at the grant date. The fair value of options issued to non-employees, where the fair value of the goods or services is not determinable, is measured by way of reference to the equity instruments granted and measured at the date the goods or services are rendered. The assumptions used to estimate the fair value of options granted during the period were:

		Year ended
		December 31,
		2012
Number of options		800,000
Fair value	$	1,563
Weighted average:
Exercise price (C$)	$	4.88
Risk-free interest rate		1.21%
Dividend yield		0%
Expected life (years)		3
Volatility		65%

c.      Warrants

Warrant transactions are summarized as follows:

				Weighted Average
	Number of Warrants			Conversion Price
	(000’s)			(C$/warrant)
Outstanding, May 31, 2010	10,604		$	0.88
Granted	1,683			2.05
Converted	(8,468	)		0.95
Expired	(636	)		1.26
Outstanding, May 31, 2011	3,183		$	1.23
Converted	(126	)		2.05
Outstanding, December 31, 2011	3,057		$	1.19
Converted	(2,720	)		1.09
Outstanding, December 30, 2012	337		$	2.05

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

Subsequent to year end, the remaining warrants were converted for proceeds of $700.

Proceeds from the conversion of warrants were $2,894 during the year ended December 31, 2012 (December 31, 2011 - $249, May 31, 2011 - $8,027).

24.      EARNINGS PER SHARE

Earnings (loss) per share, calculated on a basic and diluted basis, are:

				Seven-month
				financial year
		Year ended		ended			Year ended
		December 31,		December 31,			May 31,
		2012		2011			2011
Earnings (loss) per share
Basic	$	0.58	$	0.00		$	(0.06	)
Diluted	$	0.57	$	0.00		$	(0.06	)
Net income (loss) available (attributable) to common shareholders	$	100,418	$	(547	)	$	(8,706	)

Weighted average number of shares outstanding
Weighted average number of shares outstanding - basic	173,004,808	168,978,823	140,245,551
Dilutive securities:
Warrants	186,074	-	-
Share options	3,692,915	-	-
Weighted average number of shares outstanding - diluted	176,883,797	168,978,823	140,245,551

For the seven-month financial year ended December 31, 2011 and the year ended May 31, 2011, outstanding warrants and share options were not included in the calculation as their effect would be anti-dilutive.

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

25.      REVENUE

Phase I of La Arena commenced preproduction in May 2011 and achieved commercial production effective January 1, 2012. Preproduction revenues were capitalized to mineral properties. Since commercial production commenced, revenue consists of:

	For the year ended December 31, 2012
	$	ounces
Gold - cash sales	301,632	183,971
Gold - deferred revenue	14,578	20,467
Silver - cash sales	295	9,490
	316,505

26.      COST OF SALES

				For the seven-month
		For the year ended		financial year ended		For the year ended
		December 31, 2012		December 31, 2011		May 31, 2011
Salaries	$	18,985	$	-	$	-
Consumables		45,249		-		-
Equipment rental		29,760		-		-
Mining services		24,917		-		-
	$	118,911	$	-	$	-

27.  GENERAL AND ADMINISTRATIVE EXPENSES

 General and administrative expenses comprise of:

				For the seven-
				month financial year
		For the year ended		ended December		For the year ended
		December 31, 2012		31, 2011		May 31, 2011
Salaries and bonuses	$	5,093	$	897	$	1,504
Share-based compensation		4,672		3,126		4,894
Professional fees		710		589		710
Regulatory and transfer agent fees		492		66		144
Directors’ fees		331		145		182
Office and miscellaneous		264		745		535
Travel		264		186		392
Investor relations		185		144		326
Amortization		109		65		59
	$	12,120	$	5,963	$	8,746

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

28.      EXPLORATION AND EVALUATION EXPENSE

Exploration and evaluation expense, by project is:

				Seven-month
		Year ended		financial year
		December 31,		ended December		Year ended
		2012		31, 2011		May 31, 2011
La Arena Exploration Drilling	$	6,287	$	-	$	-
La Colorada		688		-		-
Colombian projects		1,889		-		-
Other projects		1,676		-		37
	$	10,540	$	-	$	37

29.      FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The Company’s financial instruments consist of cash and cash equivalents, restricted cash, accounts receivable, other financial assets (investment in Duran Ventures Inc.), accounts payable and accrued liabilities, due to related parties, long-term debt and the derivative liability.

Cash and cash equivalents, restricted cash, and accounts receivable, are classified as loans and receivables and measured at amortized cost. Accounts payable and accrued liabilities, long-term debt and due to related parties are classified as other financial liabilities. Other financial assets and derivative liability are classified as fair value through profit or loss.

Fair values

The financial assets and liabilities that are recognized on the balance sheet at fair value are in a

hierarchy that is based on significance of the inputs used in making the measurements. The levels in the hierarchy are:

Level 1 – Quoted prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly as prices or indirectly derived from prices; and

Level 3 – Inputs for the asset or liability that are not based on observable market data.

Other financial assets as described in Note 10 consist of shares and warrants in Duran and are measured at fair value. The shares are classified as Level 1 and are valued at quoted market value (trading price on the TSXV) and the warrants are classified as Level 2 using the Black Scholes model.

The derivative liability is measured at fair value and is classified as Level 3 and is described in Note 19. An option pricing model that considers changes in the US dollar price of gold is used to estimate the fair value of the financial derivative embedded in the Company’s Gold Purchase Agreement described in Note 19 to the Financial Statements. The principal assumption used in the option pricing model is the volatility, over time, of the gold price.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

due. The Company manages liquidity risk by forecasting its cash flows from operations and anticipating investing and financing activities. Senior management is actively involved in the review and approval of planned expenditures. Management believes that the ability to fund operations through cash generated from operations should be sufficient to meet the ongoing capital and operating requirements. At December 31, 2012, the Company’s working capital of $55,600 was sufficient to meet its short-term business requirements.

In the normal course of business the Company enters into contracts and conducts business activities that give rise to commitments for future minimum payments, as summarized in Note 31.

Credit risk

The Company’s credit risk is primarily attributable to its liquid financial assets and doré and would arise from the non-performance by counterparties of contractual financial obligations. The Company limits its exposure to credit risk on liquid assets by maintaining its cash with high-credit quality financial institutions and shipments of doré are insured with reputable underwriters. Management believes the risk of loss of the Company’s liquid financial assets and doré to be minimal.

The Company’s maximum exposure to credit risk is as follows:

		December 31, 2012		December 31, 2011		May 31, 2011
Cash and cash equivalents	$	38,613	$	25,907	$	11,526
Restricted cash		2,175		-		-
Accounts receivable		28,849		1,158		537
Doré		-		772		372
	$	69,637	$	27,837	$	12,435

Currency risk

The Company operates in Canada, Peru and Barbados and is exposed to foreign exchange risk arising from transactions denominated in foreign currencies.

The operating results and the financial position of the Company are reported in United States dollars. Fluctuations of the operating currencies in relation to the United States dollar will have an impact upon the reported results of the Company and may also affect the value of the Company’s assets and liabilities.

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

The Company’s financial assets and liabilities as at December 31, 2012 are denominated in United States, Canadian dollars and Peruvian Nuevo Sol set out in the following table:

		United States		Canadian		Peruvian
		Dollar		Dollar		Nuevo Sol			Total
Financial assets
Cash and cash equivalents	$	21,365	$	2,235	$	15,013		$	38,613
Accounts receivable		27,088		53		1,708			28,849
		48,453		2,288		16,721			67,462
Financial liabilities
Accounts payable and accrued liabilities		3,550		701		41,818			46,069
Net financial assets	$	44,903	$	1,587	$	(25,097	)	$	21,393

The Company’s reported results will be affected by changes in the US dollar to Canadian dollar and US dollar to Nuevo Sol exchange rate. As of December 31, 2012, a 10 per cent appreciation of the Canadian dollar relative to the US dollar would have decreased net financial assets by approximately US$158. A 10 per cent depreciation of the US Dollar relative to the Canadian dollar would have had the equal but opposite effect. A 10 per cent appreciation of the Nuevo Sol relative to the US dollar would have decreased net financial assets by approximately US$2,509 and a 10 per cent depreciation of the Nuevo Sol would have had an equal but opposite effect.

The Company has not entered into any agreements or purchased any instruments to hedge possible currency risk.

Interest risk

The Company invests its cash in instruments that are redeemable at any time without penalty, thereby reducing its exposure to interest rate fluctuations. The Company’s long-term debt bears interest at Libor + 6% (Note 20). The Company is subject to Libor rate fluctuations.

Other interest rate risks arising from the Company’s operations are not considered material.

Commodity price risk

The Company is exposed to price risk with respect to commodity prices. The ability of the Company to develop its mineral properties and future profitability of the Company are directly related to the market price of gold and copper. The Company monitors commodity prices to determine whether

changes in operating or development plans are necessary. Future gold production is un-hedged in order to provide shareholders with full exposure to changes in the market gold price. A 10 per cent increase in the price of gold would result in a US$183 increase to the derivative liability and a 10 per cent decrease in the price of gold would have an equal but opposite effect.

30.      SEGMENT REPORTING

The Company has three operating segments in three geographic areas - mining, acquisition and development of mineral properties, in Latin America, the corporate office in Canada and a captive

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

insurance company in Barbados. The Company’s revenue is generated in Peru. Segmented disclosure and Company-wide information is as follows:

						As at December 31, 2012
		Canada		Peru		Barbados		Total
Mineral properties and development costs, net	$	-	$	80,539	$	-	$	80,539
Plant and equipment, net		100		116,411		-		116,511
Other assets		3,016		144,025		9,390		156,431
Total assets	$	3,116	$	340,975	$	9,390	$	353,481

		Canada		Peru		Barbados		Total
Accounts payable and accrued liabilities	$	4,205	$	41,819	$	46	$	46,070
Taxes payable		-		42,675		-		42,675
Deferred revenue		14,932		-		-		14,932
Derivative liability		2,044		-		-		2,044
Long-term debt		3,258		-		-		3,258
Asset retirement obligation		-		16,921		-		16,921
	$	24,439	$	101,415	$	46	$	125,899

						As at December 31, 2011
		Canada		Peru		Barbados		Total
Mineral properties and development costs, net	$	-	$	63,796	$	-	$	63,796
Plant and equipment, net		116		61,966		-		62,082
Other assets		8,314		62,342		-		70,656
Total assets	$	8,430	$	188,104	$	-	$	196,534

		Canada		Peru		Barbados		Total
Accounts payable and accrued liabilities	$	527	$	26,954	$	-	$	27,481
Taxes payable		-		990		-		990
Deferred revenue		29,510		-		-		29,510
Derivative liability		4,559		-		-		4,559
Long-term debt		3,000		-		-		3,000
Asset retirement obligation		-		15,685		-		15,685
	$	37,596	$	43,629	$	-	$	81,225

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

								As at May 31, 2011
		Canada		Peru		Barbados		Total
Mineral properties and development costs, net	$	-	$	78,131	$	-	$	78,131
Plant and equipment, net		62		47,224		-		47,286
Other assets		8,879		23,648		-		32,527
Total assets	$	8,941	$	149,003	$	-	$	157,944

		Canada		Peru		Barbados		Total
Accounts payable and accrued liabilities	$	408	$	-	$	7,857	$	8,265
Taxes payable		-		-		-		-
Deferred revenue		10,416		-		-		10,416
Derivative liability		12,428		-		-		12,428
Asset retirement obligation		14,800		-		-		14,800
	$	38,052	$	-	$	7,857	$	45,909

								Year ended December 31, 2012
		Corporate			Mine Operations			Insurance			Total
Revenue	$	-		$	316,505		$	-		$	316,505
Cost of sales		-			(118,911	)		-			(118,911	)
Amortization		-			(21,573	)		-			(21,573	)
General and administrative expenses		(12,120	)		-			-			(12,120	)
Exploration and evaluation expense		(1,976	)		(8,564	)		-			(10,540	)
Unrealized gain on derivative liability		2,515			0			-			2,515
Accretion of asset retirement obligation		-			(1,648	)		-			(1,648	)
Foreign exchange gain (loss)		93			44			-			137
Insurance expenses		-			-			(276	)		(276	)
Other gain (loss)		(437	)		857			-			420
Provision for income taxes		-			(54,091	)		-			(54,091	)
Net income (loss) for the period	$	(11,925	)	$	112,619		$	(276	)	$	100,418

					Seven-month financial year ended December 31, 2011
		Corporate			Mine Development			Insurance		Total
General and administrative expenses	$	(5,199	)	$	(764	)	$	-	$	(5,963	)
Unrealized loss on derivative liability		7,869			-			-		7,869
Accretion of asset retirement obligation		-			(847	)		-		(847	)
Foreign exchange gain (loss)		(398	)		350			-		(48	)
Other gain (loss)		(1,540	)		-			-		(1,540	)
Provision for income taxes		-			(18	)		-		(18	)
Net income (loss) for the period	$	732		$	(1,279	)	$	-	$	(547	)

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

								Year ended May 31, 2011
		Corporate			Mine Development			Insurance		Total
General and administrative expenses	$	(8,038	)	$	(708	)	$	-	$	(8,746	)
Exploration and evaluation expense		-			(37	)		-		(37	)
Unrealized loss on derivative liability		1,649			-			-		1,649
Foreign exchange gain (loss)		(214	)		(171	)		-		(385	)
Other gain (loss)		(986	)		-			-		(986	)
Provision for income taxes		(148	)		(53	)		-		(201	)
Net income (loss) for the period	$	(7,737	)	$	(969	)	$	-	$	(8,706	)

31.      COMMITMENTS

	December 31, 2012
		Within 1 year		2 to 5 years	Over 5 years			Total		31-Dec-11
Accounts payable	$	43,738	$	2,331	$	-	$	46,069	$	27,481
Derivative liability (note 20)		1,102		942		-		2,044		4,559
Office leases		275		463		-		738		1,044
Asset retirement obligation (note 23)		-		5,300		32,800		38,100		34,740
Long term debt (note 21)		-		3,258		-		3,258		3,000
Duran expenditures (note 10)		-		1,500		-		1,500		-
Santa Barbara expenditures (note 32)		1,500		-		-		1,500		-
Total	$	46,615	$	13,794	$	32,800	$	93,209	$	70,824

32.      RELATED PARTY TRANSACTIONS

Amounts owing to or from related parties are non-interest bearing, unsecured and due on demand. The transactions were in the normal course of operations.

a.      The following related party transactions and balances for the year ended December 31, 2012, the seven-month financial year ended December 31, 2011 and the year ended May 31, 2011 are:

i.

Included in accounts receivable at the end of the period is $nil (December 31, 2011 - $5, May 31, 2011 - $27) from related parties.

ii.

Included in accounts payable and accrued liabilities at the end of the period is $3,008 (December 31, 2011 - $10, May 31, 2011 - $215) owed to related parties. Of this amount, $2,331 is included in long term accounts payable and accrued liabilities as it relates to a long- term bonus plan. The accounts payable balance as at December 31, 2012 consists of directors’ fees and expenses, as well as bonuses to executives.

RIO ALTO MINING LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2012, the seven-month financial year ended December 31, 2011, and the year ended May 31, 2011

(Expressed in thousands of United States dollars, except for per share and per ounce amounts)

b.      Key management are those people having the authority and responsibility for planning, directing and controlling the Company and includes the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and Directors. Remuneration for key management is:

		For the year ended		For the seven months ended		For the year ended
		December 31, 2012		December 31, 2011		May 31, 2011
Salaries (i)	$	1,324	$	282	$	442
Benefits (i)		12		6		7
Bonuses (i)		4,399		440		219
Directors fees		364		158		182
Share options (ii)		1,731		634		1,486
	$	7,830	$	1,520	$	2,336

(i)	Salaries, benefits and bonuses are included in general and administrative expenses or cost of sales.
(ii)	Share options are included in administrative expenses as share-based compensation expense.

33.      SUBSEQUENT EVENTS

a.	After December 31, 2012 the Company received $737 from issuing 348,720 shares pursuant to the exercise of 12,000 options and conversion of 336,720 warrants. There are no outstanding warrants remaining.
b.	After December 31, 2012, Rio Alto Insurance Limited obtained a $5,000 line of credit in favour of the Canadian insurance company that wrote various policies on behalf of Rio Alto Insurance Limited.

c.      After December 31, 2012, the Company signed a non-binding letter of intent (“LOI”) with Santa Barbara Resources Limited (“Santa Barbara”). Upon signing the LOI the Company paid Santa Barbara $250. The Company will have the option to acquire up to a 51% interest in the Sancos gold property (“Sancos”) in Peru within a three year period by incurring $4,500 in expenditures at a minimum rate of $1,500 a year and paying Santa Barbara $500 not later than the 51% option exercise date. The Company may earn an additional 15% interest in the Sancos project within the subsequent two year period by undertaking all necessary actions required to prepare Sancos for a production decision. The Company will pay Santa Barbara an additional $500 upon its acquisition of the 15% interest.

After December 31, 2012, the Company purchased 2,500,000 common shares of Santa Barbara at a price of CDN$0.08 per share, for total consideration of CDN$200. These common shares are subject to a hold period in Canada, expiring on June 14, 2013.

d.	After December 31, 2012, the Company received an IGV refund of $38,447.
e.	After December 31, 2012, the Company executed a definitive agreement with Duran replacing the LOI referred to within Note 10.

EX-99.3

Exhibit 99.3

MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 2012

The following management’s discussion and analysis (‘‘MD&A’’) of the financial condition and results of operations of Rio Alto Mining Limited (the “Company” or “Rio Alto”) together with its subsidiaries is as of December 31, 2012. It is intended to be read in conjunction with the Company’s audited consolidated financial statements (the “Financial Statements”) for the year ended December 31, 2012, the seven-month financial year ended December 31, 2011 and the year ended May 31, 2011 and other corporate filings, including the Company’s Annual Information Form for the year ended December 31, 2012, available at www.sedar.com (“SEDAR”). The Financial Statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and the Financial Statements and MD&A are presented in United States dollars.

This MD&A, dated March 28, 2013, contains forward-looking information and forward looking statements. Readers are referred to the cautionary statement regarding forward-looking information under the heading “Cautionary Statement on Forward Looking Information”, which forms part of this MD&A.

Management is responsible for the Financial Statements referred to in this MD&A, and provides officers’ disclosure certifications filed with securities commissions on SEDAR.

Additional information about Rio Alto may be found at the Company’s website at www.rioaltomining.com or within the Company’s SEDAR profile at www.sedar.com.

Company Overview

The Company was formed in 1987 under the laws of British Columbia, Canada. Following a continuation under the laws of Alberta, Canada and a number of name changes, the Company became Rio Alto in July 2009. The principal business of the Company is mining the gold oxide deposit at the La Arena Gold Mine (“Phase I”) and conducting a feasibility study on the economic viability of further developing the adjacent copper/gold sulphide deposit (“Phase II”) together the “La Arena Project” in northwestern Peru. La Arena S.A. (“La Arena”) owns 100 per cent of the La Arena Project. La Arena is an indirect, wholly owned, Peruvian subsidiary of the Company. In January 2012, Phase I began commercial production.

Rio Alto changed its fiscal and financial year end from May 31 to December 31 in November 2011; consequently, the consolidated financial statements are for the year ended December 31, 2012 compared to the seven month period ended December 31, 2011. The change was made to allow the Company to align its year-end with that of La Arena.

Rio Alto has five wholly-owned subsidiaries – La Arena, Rio Alto S.A.C. and Empresa de Energia Yamobamba SCA, each incorporated under the laws of Peru, Rio Alto Insurance Limited, incorporated under the laws of Barbados and Mexican Silver Mines (Guernsey) Limited (“MSMG”) incorporated under the laws of Guernsey.

The Company is a reporting issuer in British Columbia, Ontario and Alberta and its common shares trade on the Toronto Stock Exchange (“TSX”) and the Bolsa de Valores de Lima under the symbol “RIO”, the New York Stock Exchange under the symbol “RIOM”, and the Frankfurt Stock Exchange under the symbol “A0MSLE”.

The Company has included non-IFRS performance measures – cash production cost and total cost per gold ounce sold – throughout this document. The Company uses these performance measures to monitor its operating cash costs and spending and believes these measures provide investors and analysts with useful information about the Company’s underlying cost structure. These measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The Company reports cash production cost and total cost per ounce on a sales basis. In the gold mining industry these are common performance measures, but they do not have standardized meanings. Refer to La Arena Gold Mine Costs for a description of how cash production cost and total cost are determined.

Objectives and Highlights for 2012

Rio Alto’s objectives for its first year of commercial production were to:

• Further expand capacity at the La Arena Gold Mine to 36,000 tonnes per day (“tpd”) of ore to the leach pad;

• Replace mined gold oxide resources through exploration;

• Produce between 150,000 and 160,000 ounces of gold;

• Expand the copper-gold sulphide resource and reserve through exploration;

• Infill drill the first five years of anticipated copper-gold sulphide production as part of the feasibility study;

• Advance the copper-gold sulphide feasibility study toward completion;

• Review project and corporate development opportunities;

• Continue to improve the community relations, environment, and safety teams; and

• Complete these objectives without diluting shareholders.

The Company’s achievements during 2012 are summarized in the following table:

Objective	Achievement	Observations
Expand capacity to 36,000 tonnes	Accomplished in Q4 2012	Objective met on schedule
Replace mined oxide resources	Completed 46,428 meters of RC drilling since the most recent resource report in September 2011	In April 2013 an updated resource and reserve report will be provided
Produce 150,000 to 160,000 ounces of gold	Produced 201,113 ounces of gold	Production exceeded expectations
Expand the copper-gold sulphide resources	Completed 63,020 meters of DD and 5,892 meters of RC drilling since September 2011	An updated resource and reserve report will be provided in April 2013
In-fill drill the first five years of anticipated copper-gold sulphide production	Completed the drilling within the scope of the 68,912 meters of drilling described immediately above	An internal feasibility study incorporating a mine plan for the first five years of mining is in process
Advance the copper-gold feasibility study	Significant progress has been made on the study	The feasibility study should be completed during 2013
Review corporate development opportunities	Several producing and development properties and acquisition possibilities were reviewed. No potential investment was determined to be accretive.	Earn-in agreements have been entered into to explore and possibly acquire a majority interest in three exploration prospects
Improve community relation, environmental and safety teams	Teams were improved and positive results are being obtained	There have been no significant community issues and excellent safety and environmental results have been achieved
Complete objectives without shareholder dilution	No equity or other dilutive fiancings were intered into. A total of 5,790,610 shares were issued upon the exercise of stock options or conversion of warrants.	There are 7,896,000 stock options outstanding that are potentially dilutive

Objectives for 2013

Rio Alto’s objectives for 2013 are to:

• Replace mined gold oxide resources through exploration;

• Identify a mineral resource at the La Colorada exploration prospect approximately 8.4 kms from the La Arena Gold Mine;

• Produce between 190,000 and 210,000 ounces of gold;

• Issue updated resource and reserve estimates for the La Arena Gold Mine and Phase II copper-gold deposit in early 2013;

• Complete the copper-gold sulphide feasibility study;

• Build a power line connecting the La Arena Project to the national grid;

• Review project and corporate development opportunities;

• Continue to improve the community relations, environment, and safety teams; and

• Complete these objectives without diluting shareholders.

2

Operating Activities

In January 2012 the La Arena Gold Mine entered into commercial production. From January through December 2012 ore mined amounted to 8.0 million tonnes and waste mined was 13.4 million tonnes as set out in the table below.

	Dry Metric			Dry Metric
	Tonnes of			Tonnes of	Waste to
Month	Ore	Au g/t	Au Ozs	Waste	Ore Ratio
Q1	1,328,022	1.34	57,437	2,412,345	1.8
Q2	1,734,680	1.09	60,666	2,138,641	1.2
Q3	2,369,259	0.59	44,737	3,641,155	1.5
Q4	2,571,532	0.63	51,725	5,213,822	2.0
Total/Average	8,003,493	0.84	214,565	13,405,963	1.7

During Q2 2012, management revised the mine plan to accelerate waste removal and focus ore production from the smaller, lower grade Ethel Pit in order to mine out this pit and prepare it for use as a leach pad. Exploration drilling adjacent to and between the Ethel Pit and the Calaorco Pit identified additional gold mineralization, which should be mined during the first two quarters of 2013. This additional mineralized material is hidden beneath overburden that will need to be removed. Management believes that the cost of removing this overburden should be expensed as part of cost of sales and not deferred and amortized because the incremental gold production is not deemed to be material. However, this additional work will delay completion of the leach pad until the latter half of 2013. During 2013 leach pad capacity will be expanded to accommodate 67.4 million tonnes of ore. The estimated cost of this work is in the order of $30 million. Similarly, waste dump capacity will ultimately be expanded to 158.2 million tonnes over the next two or three years, which should be sufficient for gold oxide mine and ultimately to contain some waste from Phase II. An amount of approximately $6 million is to be spent on the waste dump in 2013.

Plant operations were expanded during 2012 to handle solution from 36,000 tpd of ore at a cost of $13.2 million. Plant capital costs of $0.6 million are planned for 2013. Plant operations and gold production for the year was:

	Ounces of gold from 2012 Production
			To Settle
Month	Refined	Sold	Prepayment
Q1	55,973	52,002	3,971
Q2	58,081	43,235	14,846
Q3	30,548	28,898	1,650
Q4	56,511	56,511	-
Total	201,113	180,646	20,467

In addition to the 180,646 ounces of gold sold for cash from 2012 production there were 3,325 ounces of gold produced in 2011 and sold in 2012 bringing total cash sales to 183,971 ounces at an average realized price of $1,640 per ounce generating $301.6 million dollars. Including the ounces delivered under the Prepayment Agreement total ounces of gold sold amounted to 204,438 in 2012.

Future gold delivery requirements in respect of the Gold Prepayment Agreement will, depending on the price of gold at the time of delivery, fall within a range between 21,445 ounces and 29,013 ounces as follows:

	Gold ounces to be delivered
	Maximum	Notional	Minimum
Gold price	Less than $950	$1,150- $1250	More than $1,450
Monthly – October 2013 to October 2014	2,232	1,941	1,650
Total	29,013	25,229	21,445

3

La Arena Gold Mine Costs

Mine productivity during production expansion of the La Arena Gold Mine during the year was hampered by various civil construction challenges and start up efforts. Additionally, changes to the mine plan to accelerate waste production resulted in cost increases in the second half of 2012. Mine site costs per tonne of ore for 2012 were:

The major elements making up the cost per tonne of ore were as follows:

The major cost elements for mining include equipment rental, materials (mostly diesel and blasting materials) and labour. Processing costs are dominated by materials (chemicals), diesel generated electrical power and labour. Other cost elements include services such as insurance and security, health, safety, training and community relations costs. Equipment rental is for the mining fleet which consists of 21 one hundred tonne trucks, three 18.5 cubic meter shovels, 2 blast hole drilling rigs and various support equipment for road maintenance, personnel movement and other services.

Diesel is used to operate the mining fleet, the support vehicles and electrical generators. Materials include blasting agents and chemicals used to leach and process doré. Services include blasting, assaying and security. Health, safety, environment and community relations include supplies, training and donations.

4

By functional area mine site costs per tonne of ore were:

The Peruvian economy has been growing for several years at an annual rate of 5% to 8% and is estimated to grow at approximately 7% in 2013. As a result the competition for qualified labour is intense and Rio Alto granted wage increases of 5% for general labourers and up to 15% for skilled workers. This increase along with ongoing skills training programs should allow La Arena to retain people.

Operating costs may also be affected by changes in the Peruvian nuevo sol (“sol” or “S/.”) to US dollar exchange rate. From January 2009 to December 2012 the sol has consistently appreciated relative to the US dollar from S/.1 = $0.32 to S/.1 = $0.39. During that four-year period, the sol was as low as S/.1 = $0.31, but finished 2012 at S/.1 = $0.39. Costs most affected, in the short term, by continued appreciation of the sol relative to the dollar are labour and diesel. In the long term virtually all costs incurred in Peru would be affected. If during 2013 the sol appreciates by 5% relative to the dollar, diesel costs would likely increase by approximately $0.085 per tonne of ore mined and labour would likely increase by $0.081 per tonne of ore mined.

Although operating costs would increase by continued sol appreciation, at December 31, 2012 the Company had approximately S/.155 million ($60.3 million) Impuesto General a las Ventas (“IGV”) receivable from the Peruvian government that would also appreciate and partially offset the cash impact of the cost increase. In March 2013 the Company received a refund of IGV amounting to S/.99.9 million or approximately $38.4 million. Refund applications for the balance of the IGV receivable have been filed.

Cash production cost and total production cost per ounce for the 204,438 ounces of gold sold for 2012 was:

Item	US$(000 ’s)	$ Per Oz
Labour costs	13,865	68
Materials	27,591	135
Equipment	13,274	65
Mining services	21,443	105
Geology & other	27,296	134
Worker profit share	12,334	60
Cash production cost	115,803	567

Under Peruvian law workers are entitled to a portion (8%) of a company’s income before income tax. This cost is considered to be an employee benefit and is included in cost of sales. For 2012 the Company paid $12.3 million to its employees under this law. Cash production cost plus a $3,108 change in gold in-process inventory equals cost of sales of $118,911 as set out in Note 26 of the Financial Statements.

5

Total production cost for 2012 was:

Item	US$(000 ’s)	$ Per Oz
Cash production costs	115,803	567
Selling, general & admin	12,396	61
Exploration	10,540	52
Sustaining capital	40,477	198
Taxes	60,031	294
Total production costs	239,247	1,172

Selling, general and administration includes insurance costs of $276 and general and administration expenses of $12,120 as shown on the Consolidated Statements of Net Income (Loss) included in the Financial Statements.

Sustaining capital includes $42,840 related to the heap leach pad and process ponds, $2,073 of mobile equipment and $364 of other assets as described in Note 15 of the Financial Statements net of $4,800 included in accounts payable.

Taxes include income taxes of $47,514, the Special Mining Tax of $5,971 and Modified Royalty of $6,546. The tax provision of $54,286 on the consolidated Statements of Net Income (Loss) included in the Financial Statements is less than the cash taxes of $60,031 included in the calculation of Total Production Cost due to the recognition in the Financial Statements of an increase during the year in the Company’s deferred income tax assets of $5,745 as described in Note 18 to the Financial Statements.

Operating Outlook for 2013

During 2013 Rio Alto expects that the La Arena Gold Mine will produce between 190,000 and 210,000 ounces of gold from 13.4 million tonnes of ore. Assuming that gold production and sales amount to 200,000 ozs for the year, budgeted mine site operating costs, Cash Production and Total Production Costs per ounce are:

Item	US$(000 ’s)	$ Per Oz
Mining ore	21,015	105
Mining waste	44,232	221
Other direct costs	4,908	23
Worker profit share	14,410	72
Mining contractor charges	8,769	44
Cash production costs	93,334	465

For 2013, labour costs will increase, but the cost of materials should decrease because the La Arena Gold Mine has storage capacity for bulk orders diesel, explosives and chemicals as a result of infrastructure investments made during 2012. This allows the Company to enter into volume purchase agreements at lower unit costs.

In addition to cash production costs there are selling, general and administrative costs, exploration, sustaining capital which affect the Company’s cash flow. The budgeted amounts for those items are set out below:

Item	US$(000 ’s)	$ Per Oz
Mine site costs	93,334	465
Selling, general & admin	34,978	175
Exploration	10,000	50
Sustaining capital	26,200	131
Taxes	67,433	337
Total production costs	231,945	1,158

Estimated taxes are based on a budget profit estimate, which may or may not approximate actual results generated by actual production, sales and costs.

The Company’s existing working capital and cash flow from operations will be more than sufficient to fund planned expansion capital of approximately $63.8 million.

6

Results of Operations

The following table provides selected annual information for the three most recent completed financial periods ended December 31, 2012 and December 31, 2011 and the year ended May 31, 2011:

(thousands of US	Prepared using international financial reporting standards
dollars, except per
share amounts)
		For the year ended		For the seven-month financial year ended			For the year ended
		December 31,		December 31,			May 31,
		2012		2011			2011
Revenue	$	316,505	$	-		$	-
Total assets		353,481		196,534			157,944
Working capital		55,600		35,050			20,336
Shareholders’ equity		227,582		115,309			112,035
Cash dividends declared		-		-			-
Net income (loss) & income (loss) before discontinued operations and extraordinary items		100,418		(547	)		(8,706	)
Income (loss) per share from continuing operations		0.58		-			(0.06	)
Diluted income (loss) per share		0.57		-			(0.06	)

The Company had income of $100.4 million in the year ended December 31, 2012, an improvement of $101.0 million compared to the seven-month financial year ended December 31, 2011. This was due to the commencement of commercial production on January 1, 2012.

7

General and administration costs

General and administrative costs were $12.1 million for the year ended December 31, 2012, compared to $5.9 million in seven months ended December 31, 2011. General and administrative costs are comprised of costs of Vancouver office that provides services related to public company management and administration. In the prior year, general and administrative costs also included the Lima office which supports the La Arena Project. The table below annualizes, where appropriate, the general and administration costs to compare consistent time periods and include the following:

	(000 ’s)
		For the year ended	For the seven months ended December 31,
		December 31, 2012	2011
					Per financial
			Annualized			statements
Share-based compensation	$	4,672	$	3,126	$	3,126
Salaries		1,169		783		457
Target bonuses		3,924		440		440
Office and miscellaneous		264		1,246		745
Accounting and audit		435		562		328
Travel		264		319		186
Investor relations		185		247		144
Legal fees		159		225		131
Consulting		116		224		130
Directors’ fees		331		249		145
Regulatory and transfer agent fees		492		113		66
Amortization		109		111		65
	$	12,120	$	7,645	$	5,963

The discussion below compares the annualized costs to the previously reported annual period. Variances beyond this are due to comparing seven months to twelve months.

The increase in general and administration expenses in the year ended December 31, 2012 of $12.1 million compared to $7.6 million for the annualized period ended December 31, 2011 is due primarily to increased share-based compensation and target bonuses.

Stock-based compensation expense was $4.7 million for the year ended December 31, 2012 compared to $3.1 million in the year ended December 31, 2011 (and would be the same on an annualized basis because options are granted once during the year, except that newly hired executives usually receive options as an incentive). Stock based compensation is comprised of the amortization of the fair value of granted options over the vesting period. In the year ended December 31, 2012, the Company granted 800,000 options with a fair value of $1.6 million. In the seven months ended December 31, 2011, the Company issued 4.2 million options with a fair value of $9.1 million. Fair value is recognized over the periods in which the options vest which range from immediately to over a three year period. In the year ended December 31, 2012, there was expense was recognized on options that vested during the year but were granted in prior periods.

Salaries were $1.2 million for the year ended December 31, 2012 compared to $783,000 in the annualized period ending December 31, 2011. The difference is due to salary raises granted.

Management bonuses for the year December 31, 2012 of $3.9 million were awarded, consisting of cash flow and share price target bonuses for key executives, as well as a workers’ profit share for administrative employees. In the annualized year ended December 31, 2012, the Company had management bonuses of $440,000 relating to productivity targets achieved.

The decrease in office and miscellaneous expenses for the year ended December 31, 2012 to $264,000 compared to $1.2 million in the annualized period ended December 31, 2011 is due to the costs of the Lima office being included in general and administrative expenses. These costs are now charged as a management fee to La Arena, as it has been determined that these services are provided to directly support the mine, and are now included in cost of sales.

Accounting and audit expense of $435,000 for the year ended December 31, 2012 decreased by $127,000 due to costs incurred in the annualized year ended December 31, 2011 related to work done in connection with the required conversion to “IFRS”, a change in the functional and reporting currency, increased annual costs due to

8

the acquisition and development of La Arena Gold Mine and other complex transactions undertaken by the Company.

Directors’ fees were significantly higher in 2012 for the year ended December 31, 2012 compared to the annualized year ended December 31, 2011, due to the increase in directors’ fees after an external review determined directors’ fees should be raised to be competitive with market rates for comparable companies.

Regulatory and transfer agent fees were $492,000 on for the year ended December 31, 2012 compared to $113,000 the annualized year ended December 31, 2011, due to an increase in listing fees due to a one time listing fee of $196,000 due to changing the Company’s public listing to the TSX from the TSX Venture Exchange (“TSXV”), the Company’s listing on the New York Stock Exchange which consisted of fees of $173,000.

Other expense/income items

Other expense/income items amounted to a gain of $1.1 million during the year ended December 31, 2012 compared to a gain of $5.4 million in the comparable year ended December 31, 2011 due to an unrealized gain of $2.5 million on the Purchase Agreement, offset by accretion expense related to the asset retirement obligation at the La Arena Gold Mine, as well as insurance expenses and foreign exchange loss.

				(000’s)
		For the year		For the seven
		ended December		months ended
		31, 2012		December 31, 2011
Unrealized gain on derivative liability	$	2,515	$	7,869
Accretion of asset retirement obligation		(1,648)		(847)
Insurance expenses		(276)		-
Foreign exchange gain ( loss)		137		(48)
Other income (expense)		420		(1,540)
	$	1,148	$	5,434

An unrealized gain on the derivative liability of $2.5 million was recognized as a fair value adjustment of the derivative liability in the year ended December 31, 2012 compared to an unrealized gain of $7.9 million in the seven months ended December 31, 2011. The derivative liability relates to the Purchase Agreement described in Note 19 to the Financial Statements. The mechanics for the calculation of the liability reflect the effects of a written call option based on the volatility of the gold price. Generally, the liability increases if the price of gold increases during a reporting period. Should the price of gold decrease or should the volatility of the gold price decrease during a period the liability would decrease resulting in an unrealized gain. The economic reality is that when the price of gold increases the Company and its shareholders should benefit despite increases in the fair value of the derivative liability. At December 31, 2012 the remaining number of ounces available for purchase, net of estimated deferred revenue obligations, was approximately 360,000 ounces. As the number of ounces available for purchase decrease, the impact of the gain or loss on the derivative liability will be lower.

The Company’s current reclamation and closure plan for the La Arena Gold Mine was approved by the Ministry of Energy and Mines in Peru in October 2012. The estimated undiscounted closure obligation at that time was $38.1 million, which when discounted results in the asset retirement obligation. The accretion related to this obligation was $1.6 million for the year ended December 31, 2012. The majority of the closure activities will be carried out during the 2018 through 2019 period. Care and maintenance activities are expected to continue until 2025.

A foreign exchange gain of $137,000 was recognized in the year ended December 31, 2012 compared to a foreign exchange loss of $48,000 in the seven months ended December 31, 2011. The foreign exchange loss for the year ended December 31, 2012 was due to the depreciation of the US dollar against the Peruvian Sol.

Other income in the year ended December 31, 2012 amounted to $420,000. This consisted of net interest income. During the year ended December 31, 2012, the Company began earning interest on term deposits held by La Arena. This was offset by interest expense on a $3 million loan bearing interest at 3-month LIBOR plus 6 per cent compounded annually and maturing in October 2014. See the Liquidity and Capital Resources section for cash balances.

9

Peru Taxes

The Peruvian mining tax system was revised during 2011. The Company is subject to the revised system that created two new forms of taxation on mining enterprises and one bill modified the existing royalty on sales of mineral resources. Of the two new forms of tax, one applies to Rio Alto. The modified royalty also applies to the Company.

The two amended bills applicable to Rio Alto may be summarized as:

Special Mining Tax (“SMT”)

The SMT is applied on operating mining income based on a sliding scale of rates ranging up to 8.40%. The tax liability would be determined and payable on a quarterly basis. As a tax on operating profit, normal operating costs excluding interest are deducted from revenue, an operating profit margin is determined and a progressive tax rate would be applied on the Operating Profit Margin Ratio. The Operating Profit Margin Ratio is determined by the following formula:

Ratio = Operating Income / Mining Operating Revenue X 100.

Where:

Mining Operating Revenue equals revenue from the sale of mineral resources adjusted for final settlement payments to account for weight, assay and final metal pricing differences, and

Operating Income equals Mining Operating Revenue less cost of goods sold, amortization and operating expenditures calculated for accounting purposes. Exploration expenditures must be allocated on a pro rata basis over the life of the producing mine to which they relate and are not deductible in the period in which they are incurred.

Modified Royalty Based on Operating Income (“MR”)

The MR revises the mining royalty enacted in 2004 that required a payment ranging from 1% to 3% of the commercial sales value of mineral resources. The MR is applied on the Company’s operating income, rather than sales and is payable quarterly (the previous royalty was payable monthly). The amount payable is determined on a sliding scale with marginal rates ranging up to 12% applied to operating margin, subject to a minimum royalty of 1% of the sales value of mineral resources. As the Company’s operating margin increases the marginal rate of the royalty increases. The basis of the royalty (operating income) and the effective royalty rate would be calculated by following the same rules used to determine the tax liability under the SMT.

Under Peruvian law, workers in the mining industry are entitled to participate in a company’s income before income tax. This participation amounts to 8% of income before income subject to income tax. The corporate income tax after deduction of worker participation is 30%. The following table sets out, for illustration purposes, the calculation of the total Peruvian tax burden under the assumptions illustrated and further assumes that a 45% operating profit margin was achieved:

10

	Per Cent of
	Revenue
Mineral product sales proceeds	100.00	%
Costs:
Supplies & services
Salaries
Depreciation of plant & equipment
Amortization of intangibles
Exploration related to sales proceeds
Subtotal	55.00	%
Operating Margin	45.00	%
Modified Royalty	3.33	%
Special Mining Tax	4.80	%
Interest Expense	1.00	%
Tax Losses Applied	2.00	%
Income Before Worker Profit Share	33.87	%
Worker Profit Share	2.71	%
Income Before Income Tax	31.16	%
Income Tax	9.35	%
Net Income	21.81	%
Total Taxes	20.19	%

The integration of elements of the Peruvian tax system serves to align the Government’s economic interest with mining companies’ interest; such that, as a company’s net income increases the Government and the company share in the increase in virtually the same manner. The following chart, using the same assumptions as applied in the preceding table and varying the assumed operating profit margin, illustrates that as a company’s operating margin increases the percentage of revenue resulting in net income increases and the total tax burden increases at virtually the same rate.

Liquidity and Capital Resources

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity risk by forecasting its cash flows from operations and anticipating investing and financing activities. Senior management and the board of directors review and approve planned expenditures. Management believes that the ability to fund operations through cash generated from operations is sufficient to meet sustaining capital and operating requirements. Completion of the feasibility study for the copper-gold deposit will be funded from the Company’s working capital. Development of Phase II may, depending on the timing of the expenditures, require additional financing.

The Company’s cash receipts are from the sale of mineral products; however, the profitability of developing and producing mineral products is affected by many factors including the cost of operations, variations in the grade of ore mined, metal recovered and the price of metals. Depending on the price of metals and other factors, the

11

Company may determine that it is impractical to continue production. Metals prices have fluctuated widely in recent years and are affected by factors beyond the Company’s control including changes in international investment patterns, economic growth rates, political developments, sales or accumulation of metal reserves by governments, and shifts in private supplies of and demands for metals. The supply of metals consists of a combination of mine production, recycled material and existing stocks held by governments, producers, financial institutions and consumers. If the market price for metals falls below the Company’s full production cost and remains at such levels for a sustained period of time, the Company will experience losses and may decide to discontinue operations or development of other projects at one or more of its properties.

The Company’s cash balance at December 31, 2012 was $38.6 million, which was an increase of $12.7 million from the financial period ended December 31, 2011. Working capital of $55.6 million (including the IGV receivable of $60.3 million) at December 31, 2012 increased by $20.5 million from $35.1 million at December 31, 2011 due to cash proceeds from the commencement of commercial production.

At December 31, 2012 cash and cash equivalents include cash in bank accounts and interest bearing term deposits held in Peru, Canada and Barbados as follows:

(000’s of US Dollars)		Peru		Canada		Barbados		Total
Cash	$	29,270	$	2,147	$	5,240	$	36,657
Deposits at 0.79%		-		76		-		76
Deposits at 1.15%		1,880		-		-		1,880
	$	31,150	$	2,223	$	5,240	$	38,613

The increases in cash, cash equivalents and working capital were due to the following activities:

Operating Activities:

Cash generated from operating activities were $97.6 million in the year ended December 31, 2012 compared to $16.7 million used in the seven months ended December 31, 2011. The cash from operating activities generated in the year ended December 31, 2012 stems from net earnings of $100.4 million, adjusted for non-cash items, totaling $5.3 million and changes in non-cash working capital of $7.7 million. The non-cash items include amortization of $21.7 million, stock-based compensation of $4.7 million, and accretion of the asset retirement obligation of $1.6 million, which were partially offset by deferred revenue of $14.6 million and recognition of deferred income tax assets of $5.7 million. There was also reclamation expenses of $423,000 paid during the year ended December 31, 2012.

During the seven months ended December 31, 2011, the Company had a loss of $0.5 million, which after adjusting for non-cash items of $5.7 million resulted in cash outflows before changes in non-cash working capital of $6.3 million, which primarily reflects general and administrative cost of $2.8 million and $1.5 million of cost relating to the Prepayment Agreement and current taxes of $2.0 million.

Under Peruvian law the Impuesto General a las Ventas (“IGV”) is a tax imposed at a rate of 18 per cent of the value of any goods or services purchased. IGV is generally refundable within the year in which it is paid. Refund applications may only be made by companies that are trading within Peru and collecting IGV from customers, by exporters or by companies that have an agreement with the tax authority for the early collection of IGV. Once the Company exports mineral production and files the necessary tax statements, it will be eligible for refunds of IGV. As at December 31, 2012, the Company has an IGV receivable of $60.3 million (December 31, 2011 - $25.6 million) of which approximately $38.4 million was received in March 2013.

Financing Activities:

Net cash received from financing activities during the year ended December 31, 2012 was $7.4 million compared to $29.2 million in the seven months ended December 31, 2011.

In the year ended December 31, 2012, proceeds of $2.9 million were received on conversion of 2,720,610 common share purchase warrants and $4.3 million were received on the exercise of 3,070,000 stock options.

12

There were also changes of $258,000 of non-cash working capital items, consisting of interest charges accrued on the operating loan.

In the seven months ended December 31, 2011 proceeds of $0.3 million were received on the conversion of 126,270 common share purchase warrants and $0.4 million were received on shares issued upon the exercise of 1,062,500 stock options.

On October 15, 2010 the Company entered into a $25 million Prepayment Agreement with RKE. Concurrently the Company entered into a Purchase Agreement with RKE described in the Commitments section of this MD&A and in Note 19 to the Financial Statements and a $3 million Operating Loan Agreement, as described in Note 20 to the Financial Statements. On October 20, 2011, the Company expanded the Prepayment Agreement to $50 million with amendments to the Prepayment Agreement and the Purchase Agreement. In the year ended May 31, 2011, the Company drew down $24.5 million and in the seven month period December 31, 2011 drew the remaining $25.5 million available under the Purchase Agreement and also drew the $3 million operating loan. Cost relating to this financing was $1.0 million in the year ended May 31, 2011 and $1.5 million in the seven months ended December 31, 2011.

Investing Activities:

During the year ended December 31, 2012, net cash of $92.4 million was used in investing activities. In the seven month period ended December 31, 2011, investing activities provided net cash of $1.9 million due to preproduction cash receipts that were capitalized.

There was an increase of $2.2 million in restricted cash, due to a letter of credit posted by the Company as a partial guarantee of its mine closure obligations. The Company also invested $0.8 million in Duran Ventures Inc.

The remainder of the investing activities in the year ended December 31, 2012 were to principally further develop the La Arena Project. Additions to plant and equipment were $69.0 million, of which $63.4 million was paid in cash and the remaining amount was in accounts payable at the end of the year. Additions to mineral properties were $22.5 million, of which of which $7.7 million was paid in cash and $14.8 million was included in accounts payable as at December 31, 2012. There were changes in non-cash working capital items of $2.0 million during the year, consisting of an increase of $205,000 in prepaid expenses and $16.4 million of IGV, which was partially offset by an increase in accounts payable of $18.6 million.

The investing activities in the seven months ended December 31, 2011 were to principally develop the La Arena Project and consisted of additions to mineral properties and plant and equipment. Additions to plant and equipment were $20.5 million, of which $15.8 million was paid in cash and the remaining amount was in accounts payable at the end of the period. Additions to mineral properties were $58.3 million, of which $41.3 million was paid in cash, $12.4 million was included in accounts payable at December 31, 2011, and $4.7 million was related to depreciation of plant and equipment which is capitalized to mineral properties during the pre-production phase. Mineral property additions included $20.4 million of pre-production costs. The pre-production revenues of $71.6 million on the sale of 48,071 ounces were included in mineral properties, of which $6.4 million was a non-cash delivery of gold partially to settle the Prepayment Agreement. All of the development work was for the La Arena Gold Mine, except $4.3 million related to the copper-gold sulphide project.

13

Summary of Quarterly Results

The following table provides selected quarterly financial information:
(thousands of US dollars, except per share amounts¹)

		For the three months ended, except for the period ended December 31, 2011, which is four months
		December		September		June 30,		March 31,		December		August 31,			May 31,			February
		31,		30,						31,								28,
		2012		2012		2012		2012		2011		2011			2011			2011
Revenue	$	82,198	$	60,924	$	78,789	$	94,594	$	-	$	-		$	-		$	-
Total assets		353,481		320,275		290,156		260,200		196,534		166,287			157,944			127,847
Working capital		55,600		47,457		66,498		60,931		35,050		7,739			20,337			6,242
Shareholders’ equity		227,582		198,223		184,518		152,365		115,309		102,090			112,036			111,752
Net income(loss)		26,796		10,804		29,640		33,178		9,715		(10,263	)		(1,377	)		(2,587	)
Basic earnings(loss) per share		0.16		0.06		0.17		0.19		0.00		(0.06	)		(0.01	)		(0.02	)
Diluted earnings(loss) per share		0.17		0.06		0.16		0.18		0.00		(0.06	)		(0.01	)		(0.02	)
1 Effective May 31, 2011, the Company changed its functional currency to US dollars from CDN dollars. The reason for the change was to present financial statements in the currency of the Company’s principal business activities. Therefore, all quarters preceding the quarter ended August 31, 2011 are stated in thousands of US dollars in the table above, but are CDN functional currency.

During the quarter ended December 31, 2012, the Company had a net income of $26.8 million compared to a net income of $10.8 million in the quarter ended September 30, 2012, a net income of $29.6 million in the quarter ended June 30, 2012, and a net income of $33.2 million in the quarter ended March 31, 2012. Income and expense are determined by metal prices and operations.

Commitments:

In the normal course of business the Company enters into contracts and performs business activities that give rise to commitments for future minimum payments. The following table summarizes the maturities of the Company’s financial liability and commitments:

(in thousands of US dollars)

		December 31, 2012
		Within 1 year		2 to 5 years		Over 5 years		Total		31-Dec-11
Accounts payable	$	43,738	$	2,331	$	-	$	46,069	$	27,481
Derivative liability (note 20)		1,102		942		-		2,044		4,559
Office leases		275		463		-		738		1,044
Asset retirement obligation (note 23)		-		5,300		32,800		38,100		34,740
Long term debt (note 21)		-		3,258		-		3,258		3,000
Duran expenditures (note 10)		-		1,500		-		1,500		-
Santa Barbara expenditures (note 32)		1,500		-		-		1,500		-
Total	$	46,615	$	13,794	$	32,800	$	93,209	$	70,824

Refer to events subsequent to December 31, 2012 for commitments entered into after the year ended December 31, 2012.

14

Capital Spending Plans

For 2013 Rio Alto intends to make capital investments or make non-operating expenditures of about $90 million.

A brief description of these spending plans follows:

Item	US$ millions	Observations
Phase I Gold
Leach pad	29.9	Increase capacity to 67.4 million tonnes
Waste dump	6.1	Increase capacity by 30 million tonnes
Other	5.6	Various projects
Community relations & infrastructure	4.5
La Colorada resource definition	7.0	Drilling, assays and test work
Phase II Copper/Gold
Process design	2.0
Power supply	8.7	Switch station 220Kv to 22.9Kv and power line
Highway diversion	13.5	Relocate highway to facilitate future mining
Water supply	2.0	Design and testing
Engineering & environmental permitting	4.3
Condemnation drilling & surface rights	6.5
Total	90.0

Once leach pad capacity is increased ongoing capital spending requirements for Phase I will be reduced to a modest level and to consist of waste dump expansions in 2014 and 2015.

Work to develop the Phase II copper-gold mine is progressing as the feasibility study is being prepared. Construction of a substation and power line is underway and should be completed during 2013. The capacity of the transformer ordered is 35Mw which is in excess of the estimated 25Mw requirement for Phase II and the 4.5Mw requirement for Phase I. Power for gold production is provided by diesel fired generators at a cost of between $0.30 and $0.35 per KwH. Management expects this cost to be reduced to $0.05 to $0.075 per KwH in 2014. The existing highway falls within the likely ultimate copper/gold pit. Although relocating the highway is not required for a few years, management believes it is prudent to start the process at this time.

Following the initial exploration success at La Colorada the management expects that another $7 million of work will result in a maiden resource at this prospect.

Community relations and infrastructure projects will involve an expansion of the school that the Company built in 2011, the provision of enhanced medical facilities for the region, assistance with the development of a landfill site for the district capital and other various projects.

Related Party Transactions

Transactions with related parties, for the year ended December 31, 2012, are described in Note 32 to the Financial Statements and are summarized below:

Amounts owing to or from related parties are non-interest bearing, unsecured and due on demand. The transactions were in the normal course of operations.

a.	The following related party transactions and balances for the year ended December 31, 2012, the seven-month financial year ended December 31, 2011 and the year ended May 31, 2011 are:
	i.	Included in accounts receivable at the end of the period is $nil (December 31, 2011 - $5,000, May 31, 2011 - $27,000) from related parties.
	ii.	Included in accounts payable and accrued liabilities at the end of the period is $3.0 million (December 31, 2011 - $10,000, May 31, 2011 - $215,000) owed to related parties. Of this amount, $2.3 million is included in long term accounts payable and accrued liabilities as it relates to a long-term bonus plan. The accounts payable balance as at December 31, 2012 consists of directors’ fees and expenses, as well as bonuses to executives.

   15

b.      Key management are those people having the authority and responsibility for planning, directing and controlling the Company and includes the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and Directors. Remuneration for key management is:

		For the year ended		For the seven months ended		For the year ended
(In 000s of US dollars)		December 31, 2012		December 31, 2011		May 31, 2011
Salaries (i)	$	1,324	$	282	$	442
Benefits (i)		12		6		7
Bonuses (i)		4,399		440		219
Directors fees		364		158		182
Share options (ii)		1,731		634		1,486
	$	7,830	$	1,520	$	2,336

(i)	Salaries, benefits and bonuses are included in general and administrative expenses or cost of sales.
(ii)	Share options are included in administrative expenses as share-based compensation expense.

Financial Instruments and Risk Management

The Company’s financial instruments consist of cash and cash equivalents, restricted cash, accounts receivable, other financial assets (investment in Duran Ventures Inc.), accounts payable and accrued liabilities, due to related parties, long-term debt and the derivative liability.

Cash and cash equivalents, restricted cash, and accounts receivable, are classified as loans and receivables and measured at amortized cost. Accounts payable and accrued liabilities, long-term debt and due to related parties are classified as other financial liabilities. Other financial assets and derivative liability are classified as fair value through profit or loss.

Fair values

The financial assets and liabilities that are recognized on the balance sheet at fair value are in a hierarchy that is based on significance of the inputs used in making the measurements. The levels in the hierarchy are:

Level 1 – Quoted prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly as prices or indirectly derived from prices; and

Level 3 – Inputs for the asset or liability that are not based on observable market data.

Other financial assets as described in Note 10 to the Financial Statements and consist of shares and warrants in Duran and are measured at fair value. The shares are classified as Level 1 and are valued at quoted market value (trading price on the TSXV) and the warrants are classified as Level 2 using the Black Scholes model.

The derivative liability is measured at fair value and is classified as Level 3. An option pricing model that considers changes in the US dollar price of gold is used to estimate the fair value of the financial derivative embedded in the Company’s Gold Purchase Agreement described in Note 19 to the Financial Statements. The principal assumption used in the option pricing model is the volatility, over time, of the gold price.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity risk by forecasting its cash flows from operations and anticipating investing and financing activities. Senior management is actively involved in the review and approval of planned expenditures. Management believes that the ability to fund operations through cash generated from operations should be sufficient to meet the ongoing capital and operating requirements. At December 31, 2012, the Company’s working capital of $55,600 was sufficient to meet its short-term business requirements.

In the normal course of business the Company enters into contracts and conducts business activities that give rise to commitments for future minimum payments, as summarized above in Commitments.

16

Credit risk

The Company’s credit risk is primarily attributable to its liquid financial assets and doré and would arise from the non-performance by counterparties of contractual financial obligations. The Company limits its exposure to credit risk on liquid assets by maintaining its cash with high-credit quality financial institutions and shipments of doré are insured with reputable underwriters. Management believes the risk of loss of the Company’s liquid financial assets and doré to be minimal.

The Company’s maximum exposure to credit risk is as follows:
(in thousands of US dollars)

		December 31, 2012		December 31, 2011		May 31, 2011
Cash and cash equivalents	$	38,613	$	25,907	$	11,526
Restricted cash		2,175		-		-
Accounts receivable		28,849		1,158		537
Doré		-		772		372
	$	69,637	$	27,837	$	12,435

Currency risk

The Company operates in Canada, Peru and Barbados and is exposed to foreign exchange risk arising from transactions denominated in foreign currencies.

The operating results and the financial position of the Company are reported in United States dollars. Fluctuations of the operating currencies in relation to the United States dollar will have an impact upon the reported results of the Company and may also affect the value of the Company’s assets and liabilities.

The Company’s financial assets and liabilities as at December 31, 2012 are denominated in United States, Canadian dollars and Peruvian Nuevo Sol set out in the following table:

(in thousands of US dollars)

		United States Dollar		Canadian Dollar		Peruvian Nuevo Sol			Total
Financial assets
Cash and cash equivalents	$	21,365	$	2,235	$	15,013		$	38,613
Accounts receivable		27,088		53		1,708			28,849
		48,453		2,288		16,721			67,462
Financial liabilities
Accounts payable and accrued liabilities		3,550		701		41,818			46,069
Net financial assets	$	44,903	$	1,587	$	(25,097	)	$	21,393

The Company’s reported results will be affected by changes in the US dollar to Canadian dollar and US dollar to Nuevo Sol exchange rate. As of December 31, 2012, a 10 per cent change in the exchange rate between the Canadian dollar and the US dollar (“USD”) would have changed net financial assets by approximately USD$158,000. A 10 per cent change in the exchange rate between the Nuevo Sol and the USD dollar would have changed net financial liabilities by approximately USD$2,509,000.

The Company has not entered into any agreements or purchased any instruments to hedge possible currency risk.

Interest risk

The Company invests its cash in instruments that are redeemable at any time without penalty, thereby reducing its exposure to interest rate fluctuations. The Company’s long-term debt bears interest at Libor + 6% (Note 20 to the financial statements). The Company is subject to Libor rate fluctuations.

Other interest rate risks arising from the Company’s operations are not considered material.

17

Commodity price risk

The Company is exposed to price risk with respect to commodity prices. The ability of the Company to develop its mineral properties and future profitability of the Company are directly related to the market price of gold and copper. The Company monitors commodity prices to determine whether changes in operating or development plans are necessary. Future gold production is un-hedged in order to provide shareholders with full exposure to changes in the market gold price. A 10 per cent increase in the price of gold would result in a USD$183,000 increase to the derivative liability and a 10 per cent decrease in the price of gold would have an equal but opposite effect.

Critical Judgements in Applying Accounting Policies

The critical judgements made in the process of applying the Company’s accounting policies, apart from those involving estimation, that have the most significant effect on the amounts recognized in the Company’s consolidated financial statements are as follows:

a. Commencement of commercial production

The Company assesses the stage of each mine under construction to determine when a property reaches the stage when it is substantially complete and ready for its intended use. Criteria used to assess when a property has commenced commercial production include, among other considerations:

• The level of capital expenditures incurred relative to the expected costs to complete;

• The completion of a reasonable period of testing of the mine plant and equipment;

• The ability to produce saleable metals;

• The attainment of relevant permits;

• The ability to sustain ongoing production; and

• The achievement of pre-determined production targets.

When management determines that a property has reached commercial production, costs capitalized during development are amortized. Management determined that Phase I achieved commercial production levels in late December 2011 and from January 1, 2012 commercial production commenced.

b. Mineral reserves

Proven and probable mineral reserves are the economically mineable parts of the Company’s measured and indicated mineral resources. The Company estimates its proven and probable mineral reserves and measured and indicated and inferred mineral resources based on information compiled by appropriately qualified persons. The estimation of future cash flows related to proven and probable mineral reserves is based upon factors such as assumptions related to foreign exchange rates, commodity prices, future capital requirements, metal recovery factors and production costs along with geological assumptions and judgements made in estimating the size and grade of ore bodies. Changes in proven and probable mineral reserves or measured and indicated and inferred mineral resource estimates may impact the carrying value of mineral properties, plant and equipment, asset retirement obligations, recognition of deferred tax amounts and amortization expense.

c. Functional currency

The functional currency for each of the Company’s subsidiaries, joint ventures and investments in associates, is the currency of the primary economic environment in which the entity operates. The Company has determined the functional currency of each material entity is the US dollar. Determination of functional currency may involve certain judgements to determine the primary economic environment and the Company reconsiders the functional currency of its entities if there is a change in events and conditions which determined the primary economic environment.

d. Own Use Contracts

Certain commodity purchase and sale contracts will meet the definition of a derivative and their value will vary in accordance with the value of the underlying commodity in question. A commodity contract within the scope of IAS 39 Financial Instruments: Recognition and Measurement (IAS 39) that is also a derivative is accounted for at fair value through profit and loss (FVTPL).

18

Contracts, such as the Gold Prepayment Agreement, that are capable of being net cash settled because the contract terms permit net cash settlement; or when the non-financial item is readily convertible into cash fall outside the scope of IAS 39 if they were entered into and continue to be held for the purpose of the receipt or delivery of the non-financial item in accordance with the entity's expected purchase, sale or usage requirements and are not written option contracts. Contracts that are exempt from IAS 39 on these grounds are commonly referred to as "own use contracts" and are accounted for as executory contracts.

Gold is considered to be readily convertible to cash and therefore it is management’s judgement that the Gold Prepayment Agreement (“the Agreement”) which is not a written option will be settled by delivering gold ounces in accordance with the Company’s normal sale and usage requirement. Accordingly the Agreement qualifies as an own use contract. Revenue is recognized as the notional ounces are delivered.

Changes in Accounting Standards

Accounting standards effective January 1, 2013

(i) Consolidation

In May 2011, the IASB issued IFRS 10 - Consolidated Financial Statements (“IFRS 10”), which supersedes SIC 12 and the requirements relating to consolidated financial statements in IAS 27 - Consolidated and Separate Financial Statements. IFRS 10 is effective for annual periods beginning on or after January 1, 2013, with earlier application permitted under certain circumstances. IFRS 10 establishes control as the basis for an investor to consolidate its investees; and defines control as an investor’s power over an investee with exposure or rights to variable returns from the investee and the ability to affect the investor’s returns through its power over the investee.

In addition, the IASB issued IFRS 12 - Disclosure of Interests in Other Entities (“IFRS 12”), which establishes the disclosure requirements for the Company’s subsidiaries, joint arrangements, associates and unconsolidated structured entities. The requirements of IFRS 12 include reporting of the nature of risks associated with the Company’s interests in other entities and the effects of those interests on the Company’s consolidated financial statements.

Concurrently with the issuance of each of IFRS 10, IAS 27 and IAS 28 - Investments in Associates (“IAS 28”) were revised and reissued as IAS 27 - Separate Financial Statements and IAS 28 - Investments in Associates and Joint Ventures to align with the new consolidation guidance.

(ii) Joint arrangements

In May 2011, the IASB issued IFRS 11 - Joint Arrangements (“IFRS 11”), which supersedes IAS 31 - Interests in Joint Ventures and SIC-13 - Jointly Controlled Entities - Non-Monetary Contributions by Venturers. IFRS 11 is effective for annual periods beginning on or after January 1, 2013, with earlier application permitted under certain circumstances.

Under IFRS 11, joint arrangements are classified as joint operations or joint ventures based on the rights and obligations of the parties to the joint arrangements. A joint operation is a joint arrangement where the parties that have joint control of the arrangement (“joint operators”) have the right to the assets and have obligations for the liabilities relating to the arrangement. A joint venture is a joint arrangement where the parties that have joint control of the arrangement (“joint venturers”) have rights to the net assets of the arrangement. IFRS 11 requires that a joint operator recognize its portion of assets, liabilities, revenues and expenses of a joint arrangement, while a joint venturer recognizes its investment in a joint arrangement using the equity method.

The Company does not anticipate this standard to have a material impact on its consolidated financial statements.

(iii) Fair value measurement

In May 2011, the IASB issued IFRS 13 - Fair Value Measurement (“IFRS 13”). IFRS 13 is effective for annual periods beginning on or after January 1, 2013, with earlier application permitted. IFRS 13 defines fair value and sets out a framework for measuring fair value, which is applicable to all IFRSs that require or permit fair value measurements or disclosures about fair value measurements. IFRS 13 requires that when using a valuation technique to measure fair value, the use of relevant observable inputs should be maximized while unobservable

19

inputs should be minimized.

The Company does not anticipate the application of IFRS 13 to have a material impact on its consolidated financial statements.

(iv) Financial statement presentation

In June 2011, the IASB issued amendments to IAS 1 - Presentation of Financial Statements (“IAS 1”) that require an entity to group items presented in the Statement of Comprehensive Income into two groups on the basis of whether they may be reclassified to earnings subsequent to initial recognition or not reclassified to earnings subsequent to initial recognition. For those items presented before taxes, the amendments to IAS 1 also require that the taxes related to the two separate groups be presented separately. The amendments are effective for annual periods beginning on or after July 1, 2012, with earlier adoption permitted.

The Company does not anticipate the application of the amendments to IAS 1 to have a material impact on its consolidated financial statements.

(v) Employee Benefits

In June 2011, the IASB issued amendments to IAS 19 - Employee Benefits (“IAS 19”) that introduced changes to the accounting for defined benefit plans and other employee benefits. The amendments include elimination of the option to defer, or recognize in full in earnings, actuarial gains and losses and instead mandates the immediate recognition of all actuarial gains and losses in other comprehensive income and requires use of the same discount rate for both the defined benefit obligation and expected asset return when calculating interest cost. Other changes include modification of the accounting for termination benefits and classification of other employee benefits.

The Company does not anticipate the application of the amended IAS 19 to have a material impact on its consolidated financial statements.

Accounting standards effective January 1, 2015

Financial instruments

The IASB intends to replace IAS 39 in its entirety with IFRS 9 - Financial Instruments (“IFRS 9”) in three main phases. IFRS 9 will be the new standard for the financial reporting of financial instruments that is principles-based and less complex than IAS 39. In November 2009 and October 2010, phase 1 of IFRS 9 was issued and amended, respectively, which addressed the classification and measurement of financial assets and financial liabilities. IFRS 9 requires that all financial assets be classified as measured at amortized cost or at fair value based on the Company’s business model for managing financial assets and the contractual cash flow characteristics of the financial assets. Financial liabilities are classified as subsequently measured at amortized cost except for financial liabilities classified at fair value through profit and loss, financial guarantees and certain other exceptions. In response to delays to the completion of the remaining phases of the project, on December 16, 2011, the IASB issued amendments to IFRS 9 which deferred the mandatory effective date of IFRS 9 from January 1, 2013 to annual periods beginning on or after January 1, 2015. The amendments also provided relief from the requirement to restate comparative financial statements for the effects of applying IFRS 9.

The Company will monitor the evolution of this standard to evaluate the impact it may have on its consolidated financial statements.

Proposed Transactions

As at the date of this MD&A there are no proposed transactions being considered by the Company; however, the Company continuously evaluates possible property acquisitions and may in the future enter into a transaction.

Events subsequent to December 31, 2012

a.	After December 31, 2012 the Company received $737,000 from issuing 348,720 shares pursuant to the exercise of 12,000 options and conversion of 336,720 warrants. There are no outstanding warrants remaining.
b.	After December 31, 2012, Rio Alto Insurance Limited obtained a $5,000,000 letter of credit in favour of the

20

	Canadian insurance company that wrote various policies on behalf of Rio Alto Insurance Limited.
c.	After December 31, 2012, the Company signed a non-binding letter of intent (“LOI”) with Santa Barbara Resources Limited (“Santa Barbara”). Upon signing the LOI the Company paid Santa Barbara $250,000. The Company will have the option to acquire up to a 51% interest in the Sancos gold property (“Sancos”) in Peru within a three year period by incurring $4,500,000 in expenditures at a minimum rate of $1,500,000 a year and paying Santa Barbara $500,000 not later than the 51% option exercise date. The Company may earn an additional 15% interest in the Sancos project within the subsequent two year period by undertaking all necessary actions required to prepare Sancos for a production decision. The Company will pay Santa Barbara an additional $500,000 upon its acquisition of the 15% interest.
	After December 31, 2012, the Company purchased 2,500,000 common shares of Santa Barbara at a price of CDN$0.08 per share, for total consideration of CDN$200,000. These common shares are subject to a hold period in Canada, expiring on June 14, 2013.
d.	After December 31, 2012 the Company received an IGV refund of approximately $38.4 million.
e.	After December 31, 2012 the Company executed a definitive agreement with Duran Ventures Inc. replacing the letter of intent described in Note 10 to the Financial Statements.

Off Balance Sheet Arrangements

The Company has no off balance sheet arrangements.

Outstanding Shares, Warrants and Options

As at the date of this MD&A, the Company has common shares, warrants convertible into common shares and options exercisable into common shares outstanding as follows:

Number of common Shares
December 31, 2011		169,746,352
Exercise of stock options		3,070,000
Exercise of warrants		2,720,610
December 31, 2012		175,536,962
Exercise of stock options		12,000
Conversion of warrants		336,720
Total as at March 28, 2013		175,885,682
Number of Warrants	Conversion Price	Expiry Date
Nil	n/a	n/a

		Weighted
	Number of	Average
Number of	Underlying	Exercise
Options	Shares	Price (C$)	Grant Date	Date of Expiry
1,522,500	1,522,500	$0.30	July 24, 2009	July 24, 2014
460,000	460,000	$1.50	September 20, 2010	September 20, 2015
750,000	750,000	$1.80	September 20, 2010	September 20, 2015
250,000	250,000	$1.90	November 5, 2010	November 5, 2015
250,000	250,000	$2.00	December 6, 2010	December 6, 2015
205,000	205,000	$2.39	March 11, 2011	March 11, 2016
2,721,750	2,721,750	$3.08	November 18, 2011	November 16, 2016
925,000	925,000	$3.22	November 18, 2011	November 16, 2016
200,000	200,000	$3.75	January 23, 2012	January 23, 2017
600,000	600,000	$5.25	September 10, 2012	September 10, 2017
7,884,250	7,884,250	$2.44

21

Evaluation of Disclosure Controls and Procedures and Internal Controls Over Financial Reporting

Disclosure controls and procedures ("DC&P") are designed to provide reasonable assurance that all material information is gathered and reported to senior management, including the Corporation's Chief Executive Officer and Chief Financial Officer (the "Certifying Officers"), on a timely basis so that appropriate decisions can be made regarding public disclosure within the required time periods specified under applicable Canadian securities laws. The Certifying Officers are responsible for establishing and monitoring the Corporation's DC&P. Internal control over financial reporting ("ICFR") is designed to provide reasonable assurance that such financial information is reliable and complete. The Certifying Officers are also responsible for establishing and maintaining adequate ICFR for the Corporation.

As at December 31, 2012, management of the Company, with the participation of the Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of the Corporation's DC&P and ICFR as required by Canadian securities laws. Based on that evaluation, the Certifying Officers have concluded that, as of the end of the period covered by this MD&A, the DC&P were effective to provide reasonable assurance that material information relating to the Corporation was made known to senior management by others and information required to be disclosed by the Corporation in its annual filings, interim filings (as such terms are defined under National Instrument 52-109 – Certification of Disclosure in Issuers' Annual and Interim Filings) or other reports filed or submitted by it under securities legislation were recorded, processed, summarized and reported within the time periods specified in securities legislation. The Certifying Officers have evaluated the effectiveness of the Company's ICRF as at December 31, 2012 and have concluded that such ICFR is effective. The Certifying Officers have also concluded that, as of the end of the period covered by this MD&A, the ICFR provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. To design its ICFR, the Corporation used the Internal Control –Integrated Framework (COSO Framework) published by the Committee of Sponsoring Organizations of the Treadway Commission. There are no material weaknesses in the Corporation's ICFR as of December 31, 2012. Due to inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation relating to the effectiveness in future periods are subject to the risk that controls may become inadequate as a result of changes in conditions, or that the degree of compliance with policies and procedures may deteriorate.

During the year ended December 31, 2012, there were no changes to the Corporation's ICFR that materially affected, or are reasonably likely to materially affect, the Corporation's ICFR.

Business Risk Factors

Natural resources exploration, development, production and processing involve a number of risks, many of which are beyond the Company's control. Without limiting the foregoing, such risks include:

• Changes in the market price for mineral products, which have fluctuated widely in the past, will affect the future profitability of the Company’s operations and financial condition.

• Community groups or non-governmental organizations may initiate or undertake actions that could delay or interrupt the Company’s activities. See Social and Community Issues below.

• The Company has limited operating history and there can be no assurance of its continued ability to operate its projects profitably.

• Mining is inherently dangerous and subject to conditions or elements beyond the Company’s control, which could have a material adverse effect on the Company’s business.

• Actual exploration, development, construction and other costs and economic returns may differ significantly from those the Company has anticipated and there are no assurances that any future development activities will result in profitable mining operations.

• Increased competition could adversely affect the Company’s ability to attract necessary capital funding or acquire suitable producing properties or prospects for mineral exploration and development in the future.

• The Company’s insurance coverage does not cover all of its potential losses, liabilities and damage related to its business and certain risks are uninsured or uninsurable.

• The Company depends heavily on limited mineral properties, and there can be no guarantee that the Company will successfully acquire other commercially mineable properties.

• The Company’s activities are subject to environmental laws and regulations that may increase the cost of doing business or restrict operations.

22

• The Company requires numerous permits in order to conduct exploration, development or mining activities and delays in obtaining, or a failure to obtain, such permits or failure to comply with the terms of any such permits that have been obtained could have a material adverse effect on the Company.

• Exploration, development and mining activities on land within Peru generally require both ownership of mining concessions and ownership of or a leasehold interest over surface lands (“surface rights”). The Company constantly seeks to expand its activities and may experience delays in obtaining surface rights or may not be able to acquire surface rights because of unwillingness by the owner of such rights to transfer ownership or the right to use at a reasonable cost or in a timely manner.

• The Company may experience difficulty in attracting and retaining qualified management to meet the needs of its anticipated growth, and the failure to manage the Company’s growth effectively could have a material adverse effect on its business and financial condition.

• Insofar as certain directors and officers of the Company hold similar positions with other mineral resource companies, conflicts may arise between the obligations of these directors and officers to the Company and to such other mineral resource companies.

• Title to the Company’s mineral properties may be subject to prior unregistered agreements, transfers or claims or defects.

• The Company’s business is subject to potential political, social and economic instability in the countries in which it operates.

• Changes in taxation legislation or regulations in the countries in which the Company operates could have a material adverse effect on the Company’s business and financial condition.

• Currency exchange rate fluctuations may affect the cost of the Company’s operations and exploration and development activities.

• The Company has no dividend payment policy and does not intend to pay any dividends in the foreseeable future.

Readers should also refer to other risk factors outlined in the Company’s Annual Information Form (the "AIF") dated March 28, 2013 as filed on SEDAR.

Social and Community Issues

In recent years communities and non-governmental organizations ("NGO’s") have become more vocal and active with respect to mining activities at or near their communities. Some communities and NGO’s have taken such actions as road closures, work stoppages, and the filing of law suits for damages. Actions by communities and NGO’s may have a material adverse effect on the Company's financial position, cash flow and results of operations.

Cautionary Statement on Forward-Looking Information

Certain information in this MD&A, including information about the Company’s financial or operating performance and other statements expressing management’s expectations or estimates of future performance and exploration and development programs or plans constitute “forward-looking statements”. This includes the 2013 gold production guidance, cost and capital spending guidance included in this MD&A. Words such as “expect”, “will”, “intend”, “estimate”, “anticipate”, “plan” and similar expressions of a conditional or future oriented nature identify forward-looking statements. Forward-looking statements are, necessarily, based upon a number of estimates and assumptions. While considered by management to be reasonable in the context in which they are made, forward-looking statements are inherently subject to business risks and economic and competitive uncertainties and contingencies. The Company cautions readers that forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Rio Alto’s actual financial results, future performance and results of exploration and development programs and plans to be materially different than those estimated future results, performance or achievements and that forward-looking statements are not guarantees of future performance, results or achievements.

Risks, uncertainties and contingencies and other factors that might cause actual performance to differ from forward-looking statements include, but are not limited to, changes in the worldwide price of precious metals and commodities, changes in the relative exchange rates for the dollar, the Canadian dollar, and the Peruvian Nuevo sol, interest rates, legislative, political, social or economic developments both within the countries in which the Company operates and in general, contests over title to property, the speculative nature of mineral exploration and development, operating or technical difficulties in connection with the Company’s operating, development or exploration programs, increasing costs as a result of inflation or scarcity of human resources and input materials or equipment. Known and unknown risks inherent in the mining business include potential uncertainties related to title to mineral claims, the accuracy of mineral reserve and resource estimates,

23

metallurgical recoveries, capital and operating costs and the future demand for minerals. Please see Business Risk Factors, elsewhere herein.

Management continuously reviews its development plans and business running costs and, if necessary, revises them as business risk factors, uncertainties, contingencies and other factors change.

The forward-looking information and statements contained in this MD&A speak only as of the date of this MD&A, and the Company does not assume any obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable laws.

Qualified Person Review

The disclosure in this MD&A of scientific and technical information regarding the La Arena Project has been reviewed and verified by Enrique Garay, M Sc. P. Geo (AIG Member) Vice President Geology, Rio Alto. Mr. Garay is a Qualified Person for the purposes of National Instrument 43-101.

Technical and Scientific Information

All technical and scientific information contained in this MD&A regarding the La Arena Project has been taken from the La Arena Project, Peru – Technical Report (“Report”) with effective date of September 30, 2011, prepared by Kirk Mining Consultants Pty Limited (“Kirk Mining Consultants”). A copy of the Report is available under the Company’s SEDAR profile. Readers are encouraged to read the Report in its entirety, including all qualifications, assumptions and exclusions that relate to the scientific and technical information set out in this MD&A. Technical and scientific information set out in this MD&A is subject to the qualifications, assumptions and exclusions set out in the Report. Readers are advised that mineral resources that are not mineral reserves do not have demonstrated economic viability. The Report was supplemented with information taken from the La Arena Project, Peru – Technical Report with effective date of July 31, 2010, prepared by Coffey Mining Pty Ltd. (“Coffey Mining”). A copy of the report dated July 31, 2010 is available under the Company’s SEDAR profile.

Approval

The Board of Directors has approved the disclosure in this MD&A.

A copy of this MD&A, the Financial Statements, the AIF and previously published financial statements, management discussions and analysis as well as other information is available on the SEDAR website at www.sedar.com.

24

EX-99.4

Exhibit 99.4

Independent auditor’s report

Grant Thornton LLP

Suite 1600, Grant Thornton Place

333 Seymour Street

Vancouver, BC

V6B 0A4

T + 1 604 687 2711

F + 1 604 685 6569

www.GrantThornton.ca

To the shareholders of Rio Alto Mining Limited

We have audited the accompanying consolidated financial statements of Rio Alto Mining Limited, which comprise the consolidated statements of financial position as at December 31, 2012, December 31, 2011 and May 31, 2011, the consolidated statements of net income (loss) and comprehensive income (loss), changes in equity, and cash flows for the year ended December 31, 2012, seven month period ended December 31, 2011, and year ended May 31, 2011, and a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the financial statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Audit • Tax • Advisory

Grant Thornton LLP. A Canadian Member of Grant Thornton International Ltd

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.

Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of Rio Alto Mining Limited as at December 31, 2012, December 31, 2011, and May 31, 2011, and its financial performance and its cash flows for the year ended December 31, 2012, seven months ended December 31, 2011, and year ended May 31, 2011, in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Vancouver, Canada
March 28, 2013	Chartered accountants

Audit • Tax • Advisory

Grant Thornton LLP. A Canadian Member of Grant Thornton International Ltd

EX-99.5

Exhibit 99.5

CERTIFICATIONS REQUIRED BY RULE 13a-14(a) OR RULE 15d-14(a)

I, Alexander Black, certify that:

1. I have reviewed this annual report on Form 40-F of Rio Alto Mining Limited (the “Issuer”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Issuer as of, and for, the periods presented in this report;

4. The Issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Issuer’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Issuer’s internal control over financial reporting; and

5. The Issuer’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Issuer’s auditors and the audit committee of the Issuer’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Issuer’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Issuer’s internal control over financial reporting.

/s/ Alexander Black
Alexander Black
President and Chief Executive Officer
March 28, 2013

EX-99.6

Exhibit 99.6

CERTIFICATIONS REQUIRED BY RULE 13a-14(a) OR RULE 15d-14(a)

I, Anthony Hawkshaw, certify that:

1. I have reviewed this annual report on Form 40-F of Rio Alto Mining Limited (the “Issuer”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Issuer as of, and for, the periods presented in this report;

4. The Issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Issuer’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Issuer’s internal control over financial reporting; and

5. The Issuer’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Issuer’s auditors and the audit committee of the Issuer’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Issuer’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Issuer’s internal control over financial reporting.

/s/ Anthony Hawkshaw
Anthony Hawkshaw
Chief Financial Officer
March 28, 2013

EX-99.7

Exhibit 99.7

CERTIFICATION PURSUANT TO
18 U.S.C. §1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Rio Alto Mining Limited (the “Issuer”) on Form 40-F for the period ended December 31, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Alexander Black, President & Chief Executive Officer of the Isuer, hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer.

March 28, 2013
/s/ Alexander Black
Alexander Black
President & Chief Executive Officer

EX-99.8

Exhibit 99.8

CERTIFICATION PURSUANT TO
18 U.S.C. §1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Rio Alto Mining Limited (the “Issuer”) on Form 40-F for the period ended December 31, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Anthony Hawkshaw, Chief Financial Officer of the Issuer, hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer .

March 28, 2013
/s/ Anthony Hawkshaw
Anthony Hawkshaw
Chief Financial Officer

EX-99.9

Exhibit 99.9

 

Consent of independent registered
public accounting firm	Grant Thornton LLP
	Suite 1600, Grant Thornton Place
	333 Seymour Street
	Vancouver, BC
	V6B 0A4
	T +1 604 687 2711
	F +1 604 685 6569
	www.GrantThornton.ca

We have issued our report dated March 27, 2013 with respect to the consolidated financial statements in the Annual Report of Rio Alto Mining Limited for the year ended December 31, 2012. We hereby consent to the inclusion of said report in this Annual Report on Form 40-F for the year ended December 31, 2012.

Vancouver, Canada
March 28, 2013	Chartered accountants

Audit • Tax • Advisory
Grant Thornton LLP. A Canadian Member of Grant Thornton International Ltd

EX-99.10

Exhibit 99.10

CONSENT OF KIRK MINING CONSULTANTS PTY LIMITED

To:	United States Securities and Exchange Commission Washington, D.C. 20549
	Alberta Securities Commission
	British Columbia Securities Commission
	Ontario Securities Commission
	Rio Alto Mining Limited

Ladies and Gentlemen:

Re: Technical report entitled “La Arena Project, Peru”, effective September 30, 2011 (the “Report” prepared for Rio Alto Mining Limited (the “Company")

We do hereby consent to the filing of the written disclosure regarding the technical report entitled the “La Arena Project, Peru”, effective September 30, 2011 (the “Technical Report”), prepared by Enrique Garay, M Sc. P. Geo. (MAIG), Ian Dreyer, B.App. Sc, MAusIMM (CP), Linton Kirk, B.E. (Min), FAusIMM (CP) and Chris Kaye, B E (Chem) FAusIMM and of extracts from or a summary of the technical report and of certain mineral resource or reserve estimates and other information pertaining to the project, the use of our name in the Company's Annual Information Form for the fiscal year ended December 31, 2012 (the "AIF") and to being named in the AIF.

The undersigned further acknowledges that the AIF will be filed as an Exhibit to the Company's Annual Report on Form 40-F for the fiscal year ended December 31, 2012 (the "Form 40-F") and consents to being named in the Form 40-F and authorize the use of the information represented therein relating to the Report.

DATED the 28 day of March, 2013

By:	/s/ Linton Kirk
	Company: KIRK MINING CONSULTANTS PTY LIMITED
	Name: Linton Kirk, B.E. (Min), FAusIMM (CP
	Title: Director and Principal Mining Engineer

EX-99.11

Exhibit 99.11

CONSENT OF EXPERT

To:	United States Securities and Exchange Commission Washington, D.C. 20549
	Alberta Securities Commission
	British Columbia Securities Commission
	Ontario Securities Commission
	Rio Alto Mining Limited

Ladies and Gentlemen:

Re: Technical report entitled “La Arena Project, Peru”, effective September 30, 2011 (the “Report” prepared for Rio Alto Mining Limited (the “Company")

I, Chris Kaye, do hereby confirm that I am a qualified person under National Instrument 43-101 and a co-author of the Report.

The undersigned, for himself, pursuant to Section 8.3 of National Instrument 43-101 Standards of Disclosure for Mineral Projects confirms that this letter is being filed to use extracts from, or summaries of, the Report in the Company's Annual Information Form for the fiscal year ended December 31, 2012 (the "AIF") and to being named in the AIF.

The undersigned further acknowledges that the AIF will be filed as an Exhibit to the Company's Annual Report on Form 40-F for the fiscal year ended December 31, 2012 (the "Form 40-F") and consents to being named in the Form 40-F and authorize the use of the information represented therein relating to the Report.

DATED the 28 day of March, 2013

By:	/s/ Chris Kaye
	Name: Chris Kaye, B.E. (Chem), FAusIMM
	Company: MQes
	Title: Principal Process Engineer

EX-99.12

Exhibit 99.12

CONSENT OF EXPERT

To:	United States Securities and Exchange Commission Washington, D.C. 20549
	Alberta Securities Commission
	British Columbia Securities Commission
	Ontario Securities Commission
	Rio Alto Mining Limited

Ladies and Gentlemen:

Re: Technical report entitled “La Arena Project, Peru”, effective September 30, 2011 (the “Report” prepared for Rio Alto Mining Limited (the “Company")

I, Enrique Garay, do hereby confirm that I am a qualified person under National Instrument 43-101 and a co-author of the Report.

The undersigned, for himself, pursuant to Section 8.3 of National Instrument 43-101 Standards of Disclosure for Mineral Projects confirms that this letter is being filed as the consent to the use of extracts from, or summaries of, the Report in the Company's Annual Information Form for the fiscal year ended December 31, 2012 (the "AIF") and to being named in the AIF.

The undersigned further acknowledges that the AIF will be filed as an Exhibit to the Company's Annual Report on Form 40-F for the fiscal year ended December 31, 2012 (the "Form 40-F") and consents to being named in the Form 40-F and authorize the use of the information represented therein relating to the Report.

DATED the 28 day of March, 2013

By:	/s/ Enrique Garay
	Name: Enrique Garay, M Sc. P. Geo. (MAIG)
	Company: Rio Alto Mining Limited
	Title: Vice President Geology

EX-99.13

Exhibit 99.13

CONSENT OF EXPERT

To:	United States Securities and Exchange Commission Washington, D.C. 20549
	Alberta Securities Commission
	British Columbia Securities Commission
	Ontario Securities Commission
	Rio Alto Mining Limited

Ladies and Gentlemen:

Re: Technical report entitled “La Arena Project, Peru”, effective September 30, 2011 (the “Report” prepared for Rio Alto Mining Limited (the “Company")

I, Linton Kirk, do hereby confirm that I am a qualified person under National Instrument 43-101 and a co-author of the Report.

The undersigned, for himself, pursuant to Section 8.3 of National Instrument 43-101 Standards of Disclosure for Mineral Projects confirms that this letter is being filed as the consent to the use of extracts from, or summaries of, the Report in the Company's Annual Information Form for the fiscal year ended December 31, 2012 (the "AIF") and to being named in the AIF.

The undersigned further acknowledges that the AIF will be filed as an Exhibit to the Company's Annual Report on Form 40-F for the fiscal year ended December 31, 2012 (the "Form 40-F") and consents to being named in the Form 40-F and authorize the use of the information represented therein relating to the Report.

DATED the 28 day of March, 2013

By:	/s/ Linton Kirk
	Name: Linton Kirk
	Title: Principal Mining Engineer

EX-99.14

Exhibit 99.14

CONSENT OF EXPERT

To:	United States Securities and Exchange Commission Washington, D.C. 20549
	Alberta Securities Commission
	British Columbia Securities Commission
	Ontario Securities Commission
	Rio Alto Mining Limited

Ladies and Gentlemen:

Re: Technical report entitled “La Arena Project, Peru”, effective September 30, 2011 (the “Report” prepared for Rio Alto Mining Limited (the “Company")

I, Ian Dreyer, do hereby confirm that I am a qualified person under National Instrument 43-101 and a co-author of the Report.

The undersigned, for himself, pursuant to Section 8.3 of National Instrument 43-101 Standards of Disclosure for Mineral Projects confirms that this letter is being filed as the consent to the use of extracts from, or summaries of, the Report in the Company's Annual Information Form for the fiscal year ended December 31, 2012 (the "AIF") and to being named in the AIF.

The undersigned further acknowledges that the AIF will be filed as an Exhibit to the Company's Annual Report on Form 40-F for the fiscal year ended December 31, 2012 (the "Form 40-F") and consents to being named in the Form 40-F and authorize the use of the information represented therein relating to the Report.

DATED the 28 day of March, 2013

By:
	/s/ Ian Dreyer
	Name: Ian Dreyer, B.App. Sc, MAusIMM (CP)
	Company: Andes Mining Services
	Title: Principal Geologist