UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 40-F

[   ] 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

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:

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: 176,767,682.

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 [ X ]   No[   ]

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 “Registrant”) 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 United States Securities and Exchange Commission (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 annual report 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 the Company 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, 2013, based upon the noon exchange rate as quoted by the Bank of Canada, was US$1= CDN$1.0636 and CDN$1= US$0.9402 .

ANNUAL INFORMATION FORM

The Company’s AIF for the fiscal year ended December 31, 2013 is filed as Exhibit 99.1 and 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, 2013, including the report of the independent auditor with respect thereto, are filed as Exhibit 99.2 and 99.4 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, 2013 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.

TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

Payments due by period as at December 31, 2013, in 000s of United States dollars.

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, 2013, an evaluation, including the documentation and testing of disclosure controls, was carried out under the supervision of, and 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, 2013 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 Annual 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 in the 1992 Internal Control – Integrated 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, 2013. Based on this evaluation, management concluded that our internal control over financial reporting was effective as at December 31, 2013.

Attestation Report of the Registered Public Accounting Firm

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, 2013 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.

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 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. The Audit Committee is also responsible for the selection, evaluation and replacement of the outside auditors and ensuring auditor’s independence. 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 Audit Committee has the authority to engage independent legal counsel and other advisors as necessary to carry out its duties. 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 ACCOUNTANT FEES AND SERVICES

Grant Thornton LLP acted as the Company's independent auditor for the fiscal years ended December 31, 2013 and 2012. The aggregate fees billed by Grant Thornton in each of the last two fiscal years for professional services rendered are as follows:

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.

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. The Code meets the requirements for a “code of ethics” within the meaning of that term in General Instruction 9(b) of the Form 40-F. 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/. The Code is also available to any person, without charge, by written request to the Company, Attn: Alejandra Gomez, Manager Investor Relations, at the address provided on page 1 of this form.

All amendments to the Code, and all waivers of the Code with respect to any of the officers covered by it, will be posted on the Company’s website, http://rioaltomining.com/corporate/governance/ within five business days of the amendment or waiver and provided in print to any shareholder who requests them. During the period covered by the Annual Report there were not modifications or waivers to the Company’s Code of Ethics.

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, 2013 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.

In addition, the Company may from time-to-time seek relief from NYSE corporate governance requirements on specific transactions under Section 303A.11 of the NYSE Listed Company Manual, in which case, the Company shall make the disclosure of such transactions available on its website at http://rioaltomining.com/corporate/governance/. Information contained on the Company’s website is not part of this annual report on Form 40-F.

The Company has elected not to adopt Section 303A.02 and 303A.05 of the NYSE Listed Company Manual applicable to charters and independence of Compensation Committee members and advisors for U.S. domestic issuers. As a foreign private issuer, the Company is not required to comply with these rules.

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. Any change to the name or address of the agent for service of process will be communicated promptly to the SEC by amendment to Form F-X referencing the Company’s file number.

EXHIBIT INDEX

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

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 annual report 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, 2014

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 annual report to be signed on its behalf by the undersigned, thereto duly authorized.

Registrant Rio Alto Mining Limited

By  /s/ “Anthony Hawkshaw”

Anthony Hawkshaw
Chief Financial Officer

Date March 28, 2014

RIO ALTO MINING LIMITED

ANNUAL INFORMATION FORM

For the Year Ended December 31, 2013

March 28, 2014

TABLE OF CONTENTS

INTRODUCTION

This is the Annual Information Form for Rio Alto Mining Limited (“Rio Alto” or the “Company”) dated as at March 28, 2014. Unless otherwise indicated, information in this Annual Information Form is provided as of December 31, 2013.

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;

• 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.

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;

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• 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.

The Corporation has included the above summary of assumptions and risks related to forward-looking statements provided in this Annual Information Form in order to provide investors with a more complete perspective on the Corporation’s current and future operations and such information may not be appropriate for other purposes.

Additional information on these and other factors is available in the reports filed by the Company with Canadian securities regulators at www.sedar.com or with the Edgar filing system at www.sec.gov in the United States.

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.

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GLOSSARY OF TERMS

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

“2010 Technical Report” means the report entitled “La Arena Project, Peru” prepared by Coffey Mining on the La Arena Project on behalf of the Company with an effective date of July 31, 2010;

“2011 Technical Report” means the report entitled “La Arena Project, Peru” prepared by Kirk Mining Consultants on the La Arena Project on behalf of the Company 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 company is "controlled" by a Person if:

A Person beneficially owns securities that are beneficially owned by:

“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:

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but

“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;

“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;

“December 2013 Technical Report” means the report entitled “La Arena Project, Peru” prepared by Mining Plus Peru SAC on the La Arena Project on behalf of the Company with an effective date of December 31, 2013;

“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 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;

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“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 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;

“EDGAR” is the Electronic Data Gathering, Analysis, and Retrieval system of the U.S. Securities and Exchange Commission (SEC) available at www.sec.gov;

“Effective Date” means the date of this Annual Information Form, March 28, 2013;

“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” means grams per tonne;

“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;

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

“January 2013 Technical Report” means the report entitled “La Arena Project, Peru” prepared by Kirk Mining Consultants on the La Arena Project on behalf of the Company with an effective date of January 1, 2013;

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“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;

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

“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 which host the La Arena Gold Oxide Mine and Phase II;

“La Arena 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;

“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;

“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 39 mining concessions held by La Arena under Peruvian law;

“MP Peru SAC” means Mining Plus Peru SAC;

“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;

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“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;

“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;

“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, a wholly-owned subsidiary of the Company;

“SEDAR” is the System for Electronic Document Analysis and Retrieval for all Canadian public companies operated by the Canadian Securities Administrators (CSA) available at www.sedar.com;

“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; and

“Yamobamba” means Empresa de Energia Yamobamba S.A.C. a wholly-owned subsidiary of La Arena.

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 United States dollars, except where otherwise indicated.

PRELIMINARY NOTES

Abbreviations and Conversions

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

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Abbreviations

Conversions

Scientific and Technical Information

Scientific or technical information in this Annual Information Form related to the La Arena Project, Peru (see December 2013 Technical Report, a copy of which is available at www.sedar.com and www.sec.gov), is based on information prepared by Enrique Garay, M Sc. P. Geo. (MAIG) of Rio Alto Mining Ltd., Ian Dreyer B.App.Sc. (Geo), MAusIMM (CP) of MIC S.A.C., Marek Mroczek, P. Eng. of Mining Plus, Greg Lane, FAusIMM of Ausenco, Mark E. Smith, M Sc, PE, GE, RM(SME), D GE(AGP) of RRD International Corp, Linton Kirk, B E(Min), FAusIMM(CP) of Kirk Mining Consultants and Chris Kaye, B E(Chem) FAusIMM, MQes. Each of Messrs. Garay, Dreyer, Mroczek, Lane, Smith, Kirk and Kaye is a “Qualified Person” as defined in NI 43-101. The December 2013 Technical Report has been prepared in accordance with NI 43-101.

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 Mr. Garay, who is a Qualified Person, for the purpose of this Annual Information, as defined by NI 43-101.

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

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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 December 2013 Technical Report.

A copy of this document is available under the Company’s SEDAR profile at www.sedar.com and on Form 40F under the Company’s EDGAR profile at www.sec.gov, respectively.

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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 acquired all of the securities of Rio Alto and on July 24, 2009, completed an 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.

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Inter-company Relationships

Currently and as at December 31, 2013, 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:

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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.

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 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

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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 moved 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 is constructing a power distribution network in Peru to service La Arena and possibly others in the immediate area.

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 and Yamobamba.

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

Financial Year Ended December 31, 2013

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

On January 24, 2013, the Company and Duran entered into an Option and Joint Venture Agreement (the “Duran Agreement”) in respect of the Minasnioc and Ichuna properties.

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 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.

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On April 16, 2013, the Company announced that it had increased mineral reserves and resources at La Arena, effective January 1, 2013. The updated oxide mineral resource estimate in the January 2013 Technical Report was:

• 122.0 million tonnes grading 0.42 g/t gold in the measured and indicated categories containing 1,658,000 ounces of gold, which after mining 295,018 ounces during the September 30, 2011 to December 31, 2012 period represents an increase of 174,000 gold ounces (12%) from the oxide mineral resource estimate in the 2011 Technical Report.

• 5.4 million tonnes grading 0.37 g/t gold in the inferred category containing 65,000 ounces of gold representing a decrease of 25,000 gold ounces from the oxide mineral resource estimate in the 2011 Technical Report.

The updated sulphide mineral resource estimate was:

• 561.7 million tonnes grading 0.30% copper per tonne and 0.21 g/t gold in the indicated category containing 3,746 million pounds of copper and 3.83 million ounces of gold representing an increase of 1,739 million pounds of copper (87%) and 1,407,000 gold ounces (58%) from the indicated sulphide mineral resource estimate in the 2011 Technical Report.

• 32.5 million tonnes grading 0.19% copper per tonne and 0.11 g/t gold in the inferred category containing 137 million pounds of copper and 0.116 million ounces of gold representing a decrease of 1,997 million pounds of copper and 1,959,000 gold ounces from the inferred sulphide mineral resource estimate in the 2011 Technical Report.

On June 3, 2013, the Company announced Victor Gobitz stepped down from the role of Chief Operating Officer of the Company, effective June 30, 2013. Mr. Gobitz retained his position as a member of the Board of Directors. The Company also announced the appointment of Augusto Chung to the role of Project Director – La Arena Phase II.

Effective June 24, 2013, the Company and Santa Barbara entered into an Option and Joint Venture Agreement with respect to the Sancos property.

On October 23, 2013, the Company announced the appointment of Eduardo de Mola to the role of Chief Operating Officer.

Subsequent to the year ended December 31, 2013

On January 6, 2014, the Company announced it that it has received formal notification from the General Bureau of Environmental Affairs (DGAA) of the Ministry of Energy and Mines (MEM) of Peru Directorial Resolution N° 515-2013-MEM/AAM dated December 27, 2013, by which it approves modifications to the current Environmental Impact Study (EIA) for the La Arena Project Gold Oxide Mine. This EIA modification allows Rio Alto to apply for permits for a future Phase II open pit sulphide mine, construct an 18,000 tonne per day copper/gold flotation plant and concentrator, expand the current waste dump facilities to accommodate sulphide waste and to use the Calaorco Pit for tailings deposition once open pit oxide reserves are exhausted. A feasibility study underway on the Company’s Phase II copper/gold sulphide project is currently scheduled for completion in Q2 2014. Study work is focused on maximizing future financial returns from the project and keeping start-up capital costs as low as practicably possible.

On January 20, 2014, the Company terminated the Option and Joint Venture Agreement with Santa Barbara in respect of the Sancos property.

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On January 21, 2014, the Company announced it produced a record 214,742 ounces of gold in 2013.

On February 24, 2014, the Company announced increased oxide reserves of 1.08 million ounces of gold, comprising 78.2 million tonnes at an average grade of 0.43 g/t gold, effective December 31, 2013. The Company anticipates production of 190,000 to 210,000 ounces of gold in 2014, roughly the same as for the year ended December 31, 2013. Adjusted operating costs for 2014 are forecasted to be in the range of $625 to $700 per ounce of gold sold. For 2014 all-in sustaining costs – including selling, general and administrative costs, exploration, and sustaining capital – are forecast to fall within a range of $825 to $900 per ounce and all-in costs within a range of $1,000 to $1,100 per ounce for the year.

On March 11, 2014, the Company and Duran amended the Duran Agreement to modify the expiration date of the Series A Warrants from March 28, 2014 to December 31, 2014 and to terminate the Ichuna Option.

On March 28, 2014, the Company filed the La Arena Project, Peru Technical Report (NI 43-101) (the “December 2013 Technical Report”) on SEDAR and EDGAR. As a result the Company anticipates production of 200,000 to 220,000 ounces of gold in 2014.

Significant Acquisitions

The Company did not have any significant acquisitions during the year ended December 31, 2013.

DESCRIPTION OF THE BUSINESS

General Information

The Company’s main business is the mining, production and sale of gold from the La Arena Gold Oxide Mine. Revenue from the sale of gold amounted to $284.6 million or 99.8% for 2013 and $316.2 million (99.9%) for 2012.

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 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, 2013, the Company and its subsidiaries had a total of 747 employees and 1,000 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.

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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;

• assisted people to establish several small business initiatives;

• providing medical services; and

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

The Company has 18 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 7 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 December 2013 Technical Report, a copy of which is available on the Company’s profiles on SEDAR and EDGAR. Unless stated otherwise, information in this section is summarized, complied, extracted or incorporated by reference from the December 2013 Technical Report. Portions of the following information are based on assumptions, qualifications and procedures, which are set out in the December 2013 Technical Report. The reference numbers of the tables and figures set out in this section are those attributed by the December 2013 Technical 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 December 2013 Technical Report, which is available electronically at www.sedar.com and www.sec.gov.

The summary of La Arena Project set out below has been extracted from the summary section of the December 2013 Technical Report that was filed on SEDAR at www.sedar.com and on EDGAR at www.sec.gov on March 28, 2014, and which is incorporated by reference herein. The December 2013 Technical Report was prepared on behalf of the Company in accordance with NI 43-101 by Qualified Persons. Defined terms used in this summary shall have the meanings ascribed to such terms in the December 2013 Technical Report. The reference numbers of the tables and figures set out in this section are those attributed by the December 2013 Technical Report as applicable. The information included or incorporated by reference herein is based on assumptions, qualifications and procedures which are set out in the December 2013 Technical Report. 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 December 2013 Technical Report.

Property 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, including the Lagunas Norte mine at Alto Chicama, the Comarsa mine, La Virgen mine, Shahuindo exploration project and Tres Cruces development project.

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Ownership

The La Arena copper and gold deposit was discovered in December 1994 and in January 1995 Cambior initially staked a 1,800 hectares claim group. Since 1994 Cambior, and later Iamgold, staked additional claims to a total of 20,673 hectares.

Cambior was acquired by Iamgold in November 2006 and Iamgold decided to sell La Arena. To effect the sale 44 mining concessions totalling 20,673 hectares were transferred by Iamgold to a new Peruvian company, La Arena S.A. and these concessions are fully owned and registered to La Arena S.A.

In addition to the La Arena Project, the property includes several prospects such as Cerro Colorado, El Alizar porphyry, Agua Blanca epithermal and porphyry, Pena Colorado and La Florida.

Rio Alto obtained the right to acquire La Arena S.A. pursuant to the terms of an Option and Earn-in Right Purchase Agreement dated June 15, 2009 among Iamgold Quebec Management Inc., a wholly-owned subsidiary of Iamgold, La Arena S.A. and Rio Alto.

On February 9, 2011 Rio Alto exercised its option and acquired 100% of La Arena Project upon payment of the exercise price of US$49 million cash.

Geology and Mineralization

The La Arena (Au, and Cu-Au) project is located in a prolific metallogenic province that contains many precious and polymetallic mines and projects such as; Lagunas Norte (Au-Ag), Santa Rosa (Au), La Virgen (Au), Quiruvilca (Ag-Base Metals), Tres Cruces (Au), Shahuindo (Au-Ag) and Igor (Au-Cu).

The La Arena project contains gold oxide mineralization which is predominantly of an Epithermal High Sulphidation style, hosted in oxidized sandstone within the Chimu Formation. Oxide intrusive has been included as resource in this update due to positive results from recent metallurgical test work. Also, a colluvium deposit close to the Calaorco Open Pit has also been included in the resource.

More exposure of high grade Au “feeder” or Tilsa style structures has been evident in the Calaorco Open Pit in 2013 and thus these structures have been domained and incorporated into the updated gold oxide resource estimate. These structures are narrow ductile zones that strike along the general Andean trend and have variable sub-vertical dips. Very high gold grades are encountered in these structures.

The Cu-Au-(Mo) sulphide mineralization is a porphyry type, which is hosted in a multi-stage porphyry intrusion. The La Arena Porphyry Cu-Au-(Mo) outcrops to the east from Calaorco and Ethel zones. The style of mineralization is typically porphyritic. There are at least four stages of intrusion. The intrusive rocks vary from dacitic to andesitic; they are differentiated by texture and composition.

In the upper portion of the porphyry, pyrophyllite has been identified, overprinted by sericitic alteration (fine muscovite), which is pervasive. This characteristic indicates that the porphyry and the epithermal events are likely to be genetically related. Alteration is zoned both vertically and laterally with strong argillic alteration (kaolinite) occuring from 10 to 50 m depth. Pervasive phyllic alteration (muscovite-quartz-pyrite) occurs below this zone. At depths below 700 m strong potassic alteration (secondary biotite-magnetite-chlorite, K-feldspar) occurs. This alteration is overprinted by sericitic alteration. Propylitic alteration occurs only in barren Andesitic Dykes.

There has been no significant change in understanding, drilling, or modelling of the Cu-Au sulphide deposit in 2013. The contact of the intrusive with the sandstone has been remodelled and re-blocked at finer cell sizes than in 2013, although grades have not been re-estimated.

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Status of Exploration

Exploration at La Arena on and near the Gold Oxide Project in 2013 has concentrated on:

Mapping and drilling (141 holes for 2,456m) of Colluvium immediately east of the Calaorco Open Pit, which has defined an additional moderate sized oxide resource.

Definition drilling of the Astrid gold oxide deposit (9 holes for 1,874m) which has defined a very small additional oxide resource and reserve.

Drilling definition in the southern extension of the Ethel gold oxide deposit (6 holes for 1,800 m) defined additional oxide resource, this drilling identified primary sulphide mineralization at depth, which is associated with the root of epithermal mineralization. This target will be drilled in 2014.

Exploration on the La Arena exploration leases, away from the gold oxide project in 2013 has concentrated on:

Mapping, geochemical surveys and drilling at La Colorada project (10,105 m at 49 holes of RC and 2,854 m at 10 holes of DDH) with a small additional resource defined. The results were such that no further exploration work is planned at this time at La Colorada.

El Alizar project, located 2 km W from La Arena. This project will be drilled the second half of 2014.

Carmen Project, located 11 Km NE from La Arena.

Rio Alto is actively exploring 27,340 hectares and evaluating third party projects around the La Arena.

Operations

Operations on site are currently exploiting the gold oxide reserve and are called the Gold Oxide Project. Ore has been mined from 2 open pits, Calaorco and Ethel, with the Ethel Open Pit now being exhausted. Ore is being truck dumped in 8 m lifts onto the dump leach pad, with no crushing or agglomeration required prior to irrigation. The open pits are (contract) mined by conventional drill and blast, load and haul methods. Pit benches have been increased from 6m to 8 m high in 2013. Loading is with 170 t face shovels and a fleet of predominantly 92t dump trucks.

The mining fleet has been reduced in 2013 from 4 fleets to 3 fleets (October 2013) as the majority of a major west wall cutback on the Calaorco Open Pit is well advanced and the waste to ore strip ratio has reduced. Also, the Ethel pit is complete. A quarterly summary of material movement for the project to date is presented in Table 1.6-1.

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Table 1.6-1 As Mined Production (Truck Dry Tonnes) – Oxide Total

Cyanide leach solution is sprayed onto each leach pad cell for a nominal period of 60 days. The pregnant solution flows onto the geomembrane underlying the pad to a central collection point and into the pregnant solution pond. Pontoon mounted pumps in this pond are used to pump the solution to the adsorption, desorption and refining (ADR) plant located approximately 300 m north of the leach pad. The plant currently has the capacity to treat 36,000 tpd of ore. The process includes absorption onto carbon pellets and desorption in high caustic/high temperature leach columns. The carbon is sent to regeneration and the enriched solution is sent to electro winning cells where a cathode is used to produce a fine-grained precipitate.

The precipitate is filtered and dried at approximately 420^oC which also evaporates the mercury which is then captured for later disposal. This dried precipitate is smelted to produce doré bars of approximately 80% Au.

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A quarterly summary of processing for the project to date is presented in Table 1.6-2.

Table 1.6-2 Leach Pad Vital Statistics – Oxide Total

An accommodation camp, offices, workshops and warehouse exists to support the gold oxide operations. This infrastructure also supports the ongoing exploration program and the company´s community relation’s team that works closely with all of the stakeholders in the area.

Mineral Resource Estimate

This is a material update to the 2013 Gold Oxide Mineral Resource Estimate. No change has been made to the estimate for the Cu-Au Sulphide Mineral Resource Estimate as no new drilling has been completed. Refer to Section 6.3 – Previous Resources Estimates or the January 2013 Technical Report for the most recent Mineral Resource Estimate on the Sulphide Cu-Au material.

The gold oxide resource has been increased due to the following sources of additions:

• Reporting the oxide intrusive material, due to the completion of new metallurgical recovery test work.

• Including an estimate on the Calaorco Colluvium Deposit for the first time.

• Domaining the Tilsa (high grade) structures within the Calaorco Deposit.

• Including an estimate on the Astrid Deposit for the first time.

• Re-estimating the reminder of the bulk low grade domains with new blast hole data.

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All estimation methods remain the same as the January 2013 Resource Estimate.

Composite lengths in the oxide domain have been increased to 8 m given this is now the minimum mining bench height. Upper cuts have not been applied to the gold oxide composites due to continued positive grade reconciliation as displayed in Table 1.7-1.

Table 1.7-1 Reconciliation of 2013 Resource Model – Oxide Total

The oxide mineral resource is open to the north-west and south-east and at depth. The resource was evaluated within an undiscounted and optimised Whittle pit shell using a US$1400 Au price and all other relevant costs and revenues for the project. The cut-off grade used was 0.07 g/t Au. The cut-off grade has dropped since January 2013 due to lower power costs and cyanide costs, and the inclusion of more near-surface material into the resource, when compared to the 2013 resource model. The Mineral Resources are summarised in Table 1.7-2.

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Table 1.7-2 Mineral Resource – Oxide Total (In Situ as at December 31st 2013)

(Within Optimised Pit Shell 0.07 g/t Au cut-off)

Mineral Reserve Estimate

Oxide Mineral Reserves have been updated as a result of material changes in the mine operations. The reasons for these material changes are:

• A major update to the Gold Oxide Mineral Resources.

• It has been confirmed that the Oxide Intrusive can be leached with economically acceptable recoveries when blended with other ore sources.

• Updated market parameters with price of gold at US$1,200/ounce.

• The cost and operating information gained from an additional year of commercial production of the gold oxide dump leach mine.

Oxide mineral reserves have been constrained to the final pit design based on an optimised pit shell. The Mineral Reserve has been estimated only with measured and indicated oxide mineral resources. The pit optimisation input parameters used are listed in Table 1.8-1.

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Table 1.8-1 Pit optimisation input parameters

The Oxide Mineral Reserve, based on the December 31, 2013 Measured and Indicated Resource only, is summarized in Table 1.8-2. All Inferred Resource was treated as waste.

Table 1.8-2 La Arena - Oxide Mineral Reserve (In Situ as at December 31, 2013)

(Within Pit Design, cut-off Grade: 0.07 g/t Au sediments and 0.1 g/t Au Intrusive)

Rounded numbers may not sum exactly
Allows for 98% mining recovery and 5% mining dilution
Mined surface at December 31, 2013

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Intrusive ore hosted within the Oxides cannot be separated as a different ore type for processing, as it needs to be blended with Sediments in order to be leached effectively.

Colluvium material was excluded from the Mineral Reserve Statement due to the financial and operational benefits of not moving the road crossing the deposit in the medium term.

There has been no change to the Sulphide Mineral Reserves and the reader should reference Section 15 of the January 2013 Technical Report for a detailed explanation, or Section 6.4 of this report for the previous mineral reserves.

Further information on La Arena Project

La Arena Project - Accessibility, Climate, Local Resources, Infrastructure and Physiography is described in Section 5 of the December 2013 Technical Report.

La Arena Project - History is described in Section 6 of the December 2013 Technical Report.

La Arena Project - Geological Setting is described in Section 7 of the December 2013 Technical Report.

La Arena Project - Exploration is described in Section 9 of the December 2013 Technical Report.

La Arena Project - Mineralization is described in Section 7 of the December 2013 Technical Report.

La Arena Project - Drilling is described in Section 10 of the December 2013 Technical Report.

La Arena Project - Sampling and Analysis and Security of Samples are described in Section 11 of the December 2013 Technical Report.

La Arena Project - Mineral Resource and Reserve Estimates are described in Sections 14 and 15, respectively, of the December 2013 Technical Report.

La Arena Project - Mining Operations are described in Section 16 of the December 2013 Technical Report.

La Arena Project - contemplated exploration is described in Section 9 of the December 2013 Technical Report.

La Arena Project - contemplated development activities are described in subsection 21.1 of the December 2013 Technical Report.

Peruvian Taxation

The Peruvian mining tax system was revised in 2011. Rio Alto is subject to the revised system. The Peruvian tax system is described in subsection 22.2 of the December 2013 Technical Report.

Environmental Liabilities and Mine Closure Obligations

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. Peruvian environmental and mine closure legislation is described in subsections 4.3 and 4.5, respectively, of the December 2013 Technical Report.

Mineral Tenure and Status is described in subsection 4.2 of the December 2013 Technical Report.

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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 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.

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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 years ended December 31, 2012 and 2013, 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 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

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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 does not hedge the price of metals or oil.

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 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

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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 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.

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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 Oxide 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.

In late May 2013, a group from the communities in the province of Sanchez Carrion-La Libertad declared an indefinite blockade on all the public access roads in the area. They were protesting the Peruvian judicial system, the local district attorney and the state police force. The La Arena Gold Oxide Mine was able to function normally due to a back-up of fuel supplies; however, in early June 2013, mining and civil construction had to cease for 3 days, due to a reduction of fuel stocks.

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

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with the Company’s activities in Peru may be denominated in currencies not directly related to the USD cost. Any appreciation of these currencies vis a vis the USD could increase the Company’s cost of 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.

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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 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

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could be affected, which could have a material adverse impact on the Company's future cash flows, earnings, results of operations and financial condition.

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.

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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, 2013, 176,767,682 Common Shares were issued and outstanding as fully paid and non-assessable shares and no Preferred Shares were issued and outstanding. At the Effective Date, there are 176,987,682 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 TSX for the periods indicated.

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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.

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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, 2013.

All options were granted under the Company's Stock Option Plan approved by shareholders of the Company on September 28, 2011.

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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.

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Notes:

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, 12,428,846 Common Shares or approximately 7.03% 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:

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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:

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 the Central Bank of Peru and is 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

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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.

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.

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, 2013, 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, 2013.

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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.

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, 2013 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 MP Peru SAC, Enrique Garay, Ian Dreyer, Marek Mroczek, Greg Lane, Mark E. Smith, Linton Kirk, Chris Kaye and Grant Thornton LLP.

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As at the date of hereof, MP Peru SAC, Ian Dreyer, Marek Mroczek, Greg Lane, Mark E. Smith, Linton Kirk and Chris Kaye did not beneficially own any Common Shares of the Company. 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 Company’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 565,000 stock options.

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 12, 2014 and in the Company's Management Information Circular and Proxy Statement for the annual meeting of shareholders held on May 31, 2013. 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, 2013, which are available on SEDAR and EDGAR.

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 and EDGAR.

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SCHEDULE A

AUDIT COMMITTEE CHARTER

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.

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.

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.

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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.

To fulfill its responsibilities and duties, the Committee shall:

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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;

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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.

CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2013 and 2012

Subsequent events (Note 33)

See accompanying notes to the consolidated financial statements

APPROVED BY THE BOARD

See accompanying notes to the consolidated financial statements

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

See accompanying notes to the consolidated financial statements

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. The Company’s wholly-owned subsidiary La Arena S.A. (“La Arena”) owns the La Arena mineral project in Peru. The La Arena mineral project has two separate deposits, a gold oxide deposit (“Phase I”) and a copper/gold sulphide deposit (“Phase II”), and several exploration prospects. Phase I is in production and a feasibility study on the economic viability of developing Phase II is underway.

The policies applied in the consolidated financial statements are presented in Note 5 and are based on IFRS, as issued by the International Accounting Standards Board (“IASB”) and outstanding as at December 31, 2013. These consolidated financial statements are presented in United States dollars (“USD”).

The Board of Directors approved these consolidated financial statements on March 27, 2014.

Judgments, estimates and assumptions about the recognition and measurement of assets, including mineral properties, liabilities, income and expenses are made during the preparation of financial statements. Actual financial results may not equal estimated results due to differences between anticipated events and actual events. Critical judgments 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:

The Company estimates its proven and probable mineral reserves on the basis of information compiled by appropriately qualified persons. The estimation of future cash flows expected to result from exploiting reserves includes assumptions about future foreign exchange rates, commodity prices, capital requirements, metal recovery and production costs. Changes in proven and probable mineral reserves estimates will impact the carrying value of mineral properties, plant and equipment, asset retirement obligations, recognition of deferred tax amounts and amortization expense.

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 requires judgement to determine the primary economic environment. The Company reconsiders the functional currency of its entities in light of new events or change in circumstances.

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 may be net cash settled under the contract; 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.

The Gold Prepayment Agreement (Prepayment) will be settled by delivering gold ounces in accordance with the Company’s normal sale and usage requirement; therefore, the Prepayment qualifies as an own use contract under which revenue is recognized as the notional ounces are delivered.

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 are based on management’s experience and expectations of future events. Such estimates and assumptions are continually evaluated and 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:

In determining cost of sales management estimates the quantity of ore stacked on leach pads and metal content in process and the recoverable gold in this material to determine the average cost of 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 mined ore, work-in-process and doré 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 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).

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 is charged to expense.

The provision for reclamation and remediation is assessed on an annual basis or when new information or circumstances merit a re-assessment. 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.

In assessing the probability of realizing income tax assets, management makes estimates related to expectations of future taxable income, the timing of reversals of temporary differences and the likelihood that tax positions taken will be accepted by tax authorities. Estimates of future taxable income are based on forecasted cash flows from operations and the application of existing tax laws. Where applicable, tax laws and regulations are unclear or subject to varying interpretations. It is possible that such changes to recorded tax amounts may be material. At the end of each reporting period, the Company reassesses unrecognized income tax assets.

An option pricing model based on historic US dollar gold price volatility is used to estimate the fair value of the Company’s Gold Purchase Agreement described in Note 19. Differences in assumed volatility and actual volatility may significantly affect the fair value estimate.

Whenever there is a change in 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 whether carrying values are recoverable are estimated based on expected future production, 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 assets. To the extent that the carrying amount of assets exceeds the recoverable amount, the excess is charged to expense.

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

Fair value is determined with reference to estimates of future discounted cash flow or to recent transactions involving dispositions of similar assets. Management believes that the estimates applied in impairment assessment are reasonable; however, such estimates are subject to significant uncertainties. 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. Such charges could be material.

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

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 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.

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.

Subsidiaries are entities over which the Company directs the financial and operating policies of the entity and expects to obtain benefits from its activities. These consolidated financial statements include the accounts of the Company and its subsidiaries as follows:

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

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.

Basic earnings per common share is calculated by dividing the earnings 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 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.

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.

Plant and equipment are recorded at cost less accumulated amortization and impairment losses, if any. Plant and equipment are amortized over the lesser of their estimated useful lives or the life of the related ore body. Repair and maintenance costs that do not 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 gain or loss is reflected in earnings.

Amortization is recorded on the following basis:

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 based on proven and probable reserves. 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.

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 the period the write-down occurs.

Acquisition costs for exploration and evaluation stage properties are deferred if 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 development costs within mineral properties. Technical feasibility and commercial viability generally coincides with the 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 expensed.

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

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

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 remaining life of the ore body.

A mineral property is derecognized upon disposal or considered to be 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, are recognized in the determination of profit or loss.

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 an other-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 expense in profit or loss. Changes resulting from revisions to the timing of restoration spending or the 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 resulting in a corresponding increase or decrease in the carrying value of the related asset.

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 Company has no capitalized stripping costs.

For the purposes of assessing impairment, the recoverable amount of an asset 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.

An impairment loss is recognized for the amount by which the asset's or cash-generating unit's carrying amount exceeds its recoverable amount. Recoverable amounts are either value-in-use or fair value less cost of disposal. To determine an asset’s value-in-use, management 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 commodity prices, operating costs, reclamation costs and capital costs. Fair value less cost of disposal is determined with reference to estimates of discounted future cash flows or to recent transactions involving dispositions of similar assets.

An impairment loss for a cash-generating unit is allocated on a pro rata basis to the 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 impaired asset or cash generating unit is increased to the revised estimate of its recoverable amount 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 periods.

Liabilities are recognized when the Company has an obligation, either legal or constructive, 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 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 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. Any increase in a provision due to a change in estimate is expensed.

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 within 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 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 changes and included in cost of sales.

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 charged to profit or loss over the vesting period 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.

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.

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 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.

The Company has adopted the following new and revised standards, along with any consequential amendments, effective January 1, 2013. These changes were made in accordance with the applicable transitional provisions.

IFRS 13 Fair Value Measurement (“IFRS 13”) is effective for annual periods beginning on or after January 1, 2013. IFRS 13 was issued to remedy the inconsistencies in the requirements for measuring fair value and for disclosing information about fair value measurement in various current IFRSs. IFRS 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

IFRS 13 describes how to measure fair value, not what should be measured at fair value. The Company adopted IFRS 13 on a prospective basis. The adoption of IFRS 13 did not require any adjustments to the valuation techniques used by the Company to measure fair value and did not result in any measurement adjustments as at January 1, 2013.

IFRIC 20 clarifies the requirements for accounting for the costs of stripping activities in the production phase of an open-pit mine when two benefits accrue: (i) usable ore that can be used to produce inventory and (ii) improved access to further quantities of material that will be mined in future periods. The application of IFRIC 20 did not result in an adjustment to the Company’s consolidated financial statements.

The amendments to IAS 1 – Presentation of Financial Statements (“IAS 1”) are effective for annual periods beginning on or after July 1, 2012 and require companies preparing financial statements in accordance with IFRS to group together items presented in within other comprehensive income (“OCI”) on the basis of whether they may be reclassified to the profit or loss section of the Consolidated Statement of Net Income subsequent to the initial recognition. For those items presented before tax, the amendment to IAS 1 also requires that the tax related to the two separate groups be presented separately. The amendments also reaffirm existing requirements that items in OCI and profit or loss should be presented as either a single statement or two consecutive statements. The Company applied the amendments to IAS 1 and they had no impact on the Company’s consolidated financial statements.

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. 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.

The application of IFRS 10 and 12 did not result in an adjustment to the Company’s consolidated financial statements.

IFRS 11, Joint Arrangements (“IFRS 11”), supersedes IAS 31, Interests in Joint Ventures, and requires joint arrangements to be classified either as joint operations or joint ventures depending on the contractual rights and obligations of each investor that jointly controls the arrangement. A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement (“joint operators”) have rights to the assets, and obligations for the liabilities, relating to the arrangement. A joint venture is a joint arrangement whereby 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 venture recognizes its investment in a joint arrangement using the equity method as set out in IAS 28, Investments in Associates and Joint Ventures.

The Company adopted IFRS 11 on a retrospective basis. There was no impact on the Company’s financial statements in the prior period.

Amendments to IAS 19 - Employee Benefits (“IAS 19”) 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 adopted IAS 19 on a retrospective basis. There was no impact on the Company’s financial statements in the prior period.

The IASB intends to replace IAS 39 – Financial Instruments: Recognition and Measurement in its entirety with IFRS 9 – Financial Instruments (“IFRS 9”) which is intended to reduce the complexity for the classification and measurement of financial instruments. The IASB recently suspended the originally planned effective date of January 1, 2015 and at present the effective date has not been determined. The Company is currently evaluating the impact the final standard is expected to have on its consolidated financial statements.

In May 2013, the IASB issued IFRIC 21 – Levies (“IFRIC 21”), an interpretation of IAS 37 – Provisions, Contingent Liabilities and Contingent Assets (“IAS 37”), on the accounting for levies imposed by governments. IAS 37 sets out criteria for the recognition of a liability, one of which is the requirement for the entity to have a present obligation as a result of a past event (“obligating event”). IFRIC 21 clarifies that the obligating event that gives rise to a liability to pay a levy is the activity described in the relevant legislation that triggers the payment of the levy. IFRIC 21 is effective for annual periods commencing on or after January 1, 2014. The Company is currently evaluating the impact the final interpretation is expected to have on its consolidated financial statements.

Refer to Note 18 for tax payments made during the years ended December 31, 2013 and 2012.

Accounts receivable consist of the following:

Other financial assets consist of the following investments in Santa Barbara Resources Inc. (“Santa Barbara”) and Duran Ventures Inc. (“Duran”). These investments may be sold in the near term and are accounted for at fair value. Any fair value adjustments are reflected in income.

In February 2013, 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.

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”).

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) March 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 after September 28, 2013. Series A Warrants were not exercised subsequent to year end. Prior to year end, the expiration date of the warrants was changed to December 31, 2014. See Note 33.

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) March 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 after September 28, 2014.

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

Under the terms of the agreement all time periods set for specific performance by Rio Alto are extendable. Also under the agreement, 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 supporting a production decision and obtaining permits from the applicable Peruvian authorities for a production decision and by making a payment to Duran of $500.

Under the terms of the agreement, 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 by making a payment to Duran of $500. To date, $2,316 has been incurred.

Inventory consists of the following:

The change in inventory recognized in income in the year ended December 31, 2013 is $18,831 (2012 – $4,085).

Prepaid expenses consist of:

Under Peruvian tax law, 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 which it is paid.

Restricted cash consists of funds on deposit amounting to $4,002 (December 31, 2012 - $2,175) to secure a letter of credit in favour of the Ministry of Energy and Mines in Peru as a partial guarantee for mine closure obligations (Note 22), as well as $25 in the form of credit card collateral. The amount 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.

Plant and equipment consists of: