Rusoro Reports 2011 Financial Results and Provides Update on the Nationalization of Its Mining Assets

VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 04/30/12 -- Rusoro Mining Ltd. (TSX VENTURE: RML) ("Rusoro" or "the Company") -

Rusoro reports its financial results for the year ended December 31, 2011 and provides update on the Nationalization of its Mining Assets. The Company's audited consolidated financial statements and management's discussion and analysis ("MD&A") for the year ended December 31, 2011 have been filed on SEDAR (www.sedar.com).

All amounts set out in this news release and the Company's annual audited consolidated financial statements and MD&A are expressed in United States dollars, unless otherwise stated.

The following is a synopsis of the year ended December 31, 2011 financial results and related information. For detailed information regarding Rusoro's 2011 year-end results, please refer to the audited consolidated financial statements and related MD&A which have been filed on SEDAR at www.sedar.com, and can be found on the Company's website at www.rusoro.com.

Expropriation of the Company's Mining Assets

On September 16, 2011, the Venezuelan government, through publication in the Official Gazette of Venezuela, enacted a law-decree ("the Decree") reserving to the government of Venezuela exclusive rights for the extraction of gold in Venezuela ("the Nationalization"). The Decree mandated the expiration of all mining concession held by the Company and their reversal to the Venezuelan government together with all related assets and operations. The Decree permitted the Company to reach an agreement with the Venezuelan government to continue operating jointly, in the form of a mixed-interest enterprise ("the Mixed Enterprise"), the mining concessions and mining assets affected by the Nationalization and in which the Company could not own more than a 45% share participation. The Decree provided for a 90-day period from September 16, 2011 for the government of Venezuela and the Company to negotiate the terms and conditions of the migration of the Company's mining assets to the Mixed Enterprise, including the compensation to the Company for the loss of ownership of its assets as a result of the Nationalization. This 90-day negotiation period was subsequently extended to March 14, 2012 by the Venezuelan government through decree No. 8683.

As of March 14, 2012, the Company was unable to reach an agreement with the Venezuelan government upon the terms and conditions of the migration of its mining assets to the Mixed Enterprise within the designated time periods. Therefore, effective March 14, 2012 in accordance with the procedures outlined in the Decree, all of the Company's mining concessions expired by force of the Decree and all related assets and operations reverted to the Venezuelan government who took possession and control in accordance with Venezuelan law becoming the new operator and employer.

In accordance to Venezuelan Labor Law and the Decree, beginning March 15, 2012 the Venezuelan government became the sole and exclusive employer for the workers and employees who provide services for the operations of the mining concessions. The Company is not responsible for the actions or omissions of those workers and employees, by the damages that they may cause or suffer in the exercise of their functions or for the payment of their salaries, bonuses, benefits or any other compensation or benefit generated from the above-mentioned date, as all the workers, starting March 15, 2012, provide their services and run their work daily activities under the exclusive direction, supervision and responsibility of the Venezuelan government.

Also starting March 15, 2012, the Company is relieved of all responsibilities associated to the mining concessions, assets and operations that were subject to expropriation, including without limitation, any contractual, mining, environmental, labor or criminal liability, and for the payment of any tax, fee or contribution of any kind, including any mining or surface tax related to such mining concessions and operations.

As a result of the Nationalization, on December 31, 2011 the Company wrote-down to zero the carrying value of its mineral properties and property plant and equipment and significantly wrote-down its inventories and value-added tax (VAT) receivables giving rise to large non-cash losses during 2011. Concurrent with these adjustments the Company fully reversed to income the total balance of deferred tax liability as at December 31, 2011. These adjustments are quantified below under the caption Results for 2011 and Financial Position as at December 31, 2011.

Outlook

As a result of the Nationalization, the Company's sole recourse is to file a Request for Arbitration under the Additional Facility Rules of the International Centre for Settlement of Investment Disputes ("ICSID") against the government of Venezuela alleging violations of the provisions of the Bilateral Treaty for the Protection of Investments entered between the governments of Canada and Venezuela (the "BIT"). The Request for Arbitration cannot be filed by the Company earlier than June 15, 2012 as the BIT requires the parties to resolve the dispute through amicable negotiations within six months from the date on which one party notifies the other of the dispute under the BIT and requests the other to commence such amicable negotiations, which occurred on December 15, 2011 when the Company delivered its notification to the Venezuelan government. In parallel the Company will continue to seek an amicable resolution with the Venezuelan government to reach an agreement for a fair compensation to the Company. The compensation must be monetary or include a monetary component that is appropriate to the Company and a participation in a Mixed Enterprise to jointly operate with the Venezuelan government mining concessions or projects in terms and conditions that are appropriate to the Company. Once the Request for Arbitration is filed, the Company's objective will be to diligently pursue the Arbitration Claim against the Venezuela government and to reduce the Company's general and administration expenses to a minimum so the Company's cash resources are available to fund the costs of the Arbitration Claim. The Company's additional objective is to secure debt financings in the near future to fund the costs of the Arbitration Claim and the Company's minimized general and administration expenses during the period of time that the Arbitration Claim will last as well as settling some of the outstanding liabilities. Additionally the Company's plan is to refinance the Loan all or in part and to enter into arrangements with its main vendors and creditors to restructure its payables.

The Company's highlights for 2011 were:

--  On September 16, 2011, the Decree announced the Nationalization and
    mandated that starting on that date, 100% of the gold produced in
    Venezuela be sold to the Central Bank of Venezuela ("CBV"), effectively
    terminating the Company's ability to export.

--  Gold production of 64,439 ounces of finished gold (dore form) for 2011
    (2010: 101,183 ounces) and gold sold of 71,702 ounces (2010: 148,928
    ounces).

--  On June 10, 2011, the Company did not repay its convertible loan for $30
    million which remains outstanding as of the date of this news release
    and accruing interest at the contractual interest rate of 11%.

--  As at December, 2011, the Company owed 6,643 ounces of finished gold to
    a third party and as a result of the Nationalization the Company will
    need to settle in cash, in lieu of gold deliveries, the outstanding
    6,643 ounces still owing as of the date of this news release. The amount
    will be determined based on their fair market value using the
    international spot price of gold at the time of payment.

The Company's highlights subsequent to 2011 were:

--  On January 10, 2012, the Company extended the expiration date of 30
    million share-purchase warrants with an exercise price of C$0.40 per
    share, from January 10, 2012, to January 10, 2013. These warrants are
    held by the lenders of the Company's convertible loan. On March 4, 2012,
    9.2 million share-purchase warrants with an exercise price of C$5.25
    expired unexercised.

--  On March 14, 2012, as a result of the Nationalization, all of the
    Company's Venezuelan mining concessions expired by force of the Decree
    and reverted to the Venezuelan government. As required by Venezuelan
    law, all of the Company's assets used in the operations of the mining
    concessions, such as property plant and equipment, mineral properties
    and inventories, were disposed on that date as they reverted to the
    Venezuelan government together with the mining concessions.

--  On February 27, 2012 the Company completed a positive feasibility study
    (the "Study") on the expansion of the Choco Mine from 5,000 to 20,000
    tonnes per day. For full details please read the Company's news release
    titled "Positive Feasibility Study on Expansion of Choco Mine to 20,000
    Tonnes per Day Completed" dated February 27, 2012 and filed on
    www.sedar.com. The news release can also be found on the Company's
    website at www.rusoro.com. The Company believes the Study will be of
    significant use in an Arbitration Claim with ICSID against the
    Venezuelan government, in determining the fair value of the Company's
    recently expropriated Choco Mine and Increible 6 mineral property.

Results for 2011 and Financial Position as at December 31, 2011

--  Revenue decreased to $107.3 million (71,702 ounces sold) in the 2011
    from $143.7 million (148,928 ounces sold) in 2010 due to lower gold
    production which more than offset the increase in the average realized
    price of gold to $1,497 in 2011 from $965 in 2010 and the effect of the
    change in 2010 of the rate used to translate Bolivar Fuerte ("BsF")
    transactions and balances to US dollars. The reduction in gold sales is
    substantially due to the sale of a significant amount of finished gold
    inventory during 2010, which had been stored from the latter portion of
    2009. There was no similar buildup of finished gold inventory from the
    prior year for sale in 2011. The reduction in gold sales is also
    attributable to lower production as a result of lower average ore grade
    at the Choco Mine and Isidora Mine.

--  During 2011, the CBV continued to incur delays in granting export
    permits to the Company, forcing the Company to sell gold to the CBV,
    proceeds of which are collectible in Venezuelan currency, BsF, at the
    official exchange rate of BsF 4.30/$1.00. This resulted in the Company
    not being able to maximize its export quota, which was paramount for the
    Company, hence negatively impacting mining operations through decreased
    ability to fund sustaining capital expenditure, key consumables and
    services payable in US dollar. The US dollar cash flow constrains
    generated by reduced exports in turn caused lower production levels, in
    an iterative cycle.

--  Mining operating expenses increased and depreciation and depletion
    decreased to $147.9 million and $13.4 million, respectively, in 2011
    from $111.7 million and $19.1 million in 2010. The increase in mining
    operating expenses is due to a $21.4 million non-cash impairment
    adjustment to inventories on December 31, 2011 mainly due to their
    expropriation by the Venezuelan government subsequent to year end on
    March 14, 2012 and a $10.7 million increase in the allowance for
    doubtful collection of VAT receivable as a result of the
    Nationalization. Other reason for the increase in mining operating
    expenses is the increase in the cash cost per ounce sold during 2011
    compared to 2010 as a result of the change in 2010 of the rate used to
    translate BsF transactions and balances to US Dollars, the impact of the
    Venezuelan inflation rate, and the lower gold production realized at the
    Choco Mine and Isidora Mine. The decrease in tonnes mined and milled,
    which affected gold production, is the result of cash constraints
    originated by a depressed gold production due to the inability to access
    US dollars to pay for imported spare-parts and consumables essential to
    sustain the Company's mining operations. Also as a result of the
    Company's inability to export gold as prohibited by the Decree, the
    Company had to sell gold to the CBV in BsF reducing the Company's
    purchasing power as there is no available means for the Company to
    exchange BsF to USD at the official exchange rate. The uncertainty
    created by the Decree about the Company's future operations created a
    negative impact on the operations as well, as it affected suppliers, on-
    site contractors and employees.

--  General and administrative expenses decreased to $6.6 million in 2011
    from $9.2 million in 2010 significantly due to cost reductions to
    preserve cash and termination benefits paid to two senior officers of
    the Company during 2010.

--  Interest on the Company's convertible loan decreased to $4.6 million in
    2011 from $8.0 million in 2010 due to the partial retirement of the
    convertible loan during 2010.

--  Gain on revaluation of derivative financial liabilities increased to
    $4.1 million in 2011 from a loss of $2.4 million in 2010 due to the
    issuance and subsequent revaluation of Canadian dollar warrants at lower
    current market prices. The warrants were issued in June 2010 as part of
    the convertible loan refinancing transaction.

--  Loss on revaluation of the gold sale contract increased to $4.2 million
    in 2011 from a loss of $nil in 2010, due to the reclassification of a
    gold delivery contract from deferred revenue to a derivative financial
    liability, and its subsequent revaluation to its fair value using the
    current international spot price of gold.

--  Impairment loss on write-down of property, plant and equipment and
    mineral properties increased to $924.3 million in 2011 from $1.5 million
    in 2010 as a result of a non-cash write-down adjustment done to these
    assets on December 31, 2011 due to their expropriation by the Venezuelan
    government on March 14, 2012.

--  Deferred tax recovery (non-cash gain) increased to $206.0 million in
    2011 from $26.6 million in 2010. The increase was the net effect
    produced by the reversal of the deferred tax liability and asset in the
    balance sheet as at December 31, 2011 as a result of the non-cash
    impairment adjustment mentioned above which eliminated the temporary
    difference between the tax and accounting value of those assets.

--  Foreign exchange gain was $0.4 million in 2011 compared to a foreign
    exchange gain of $5.3 million in 2010, primarily due to the fixing of
    the exchange rate in Venezuela to the official rate.

--  Net loss amounted to $780.1 million during 2011 compared to net profit
    of $20.8 million during 2010.

--  The Company's assets totaled $27 million as at December 31, 2011
    (December 31, 2010: $984 million). Total assets primarily consisted of
    $3 million in cash (December 31, 2010: $4 million), $6 million in
    receivables (current and non-current) (December 31, 2010: $27 million),
    $6 million in inventories (December 31, 2010: $38 million) which are
    recorded at the lower of cost and net realizable value, $12 million in
    prepaid expenses, deposits and advances to suppliers (December 31, 2010:
    $13 million).

--  A significant amount of the Company's liabilities, including accounts
    payable and accrued liabilities of $79 million as at December 31, 2011
    (December 31, 2010: $54 million) are monetary items and have been
    translated from BsF to US dollars at the official exchange rate of BsF
    4.30/$1.00 at December 31, 2011.

--  The Company's current assets less current liabilities (working capital)
    decreased $89 million since December 31, 2010 to a negative working
    capital as at December 31, 2011 of $119 million (December 31, 2010: $30
    million). This is a result of declining operating results during 2011,
    extending payment terms with vendors in order to conserve cash and the
    reclassification of the decommissioning and restoration provision and
    the accruals for termination benefits from non-current to current as a
    result of the Nationalization.

--  A convertible loan of $30 million (December 31, 2010: $29 million),
    which became due on June 10, 2011, represents the balance of the
    convertible loan's principal owing at December 31, 2011. The Company did
    not perform the repayment of the convertible loan on the June 10, 2011
    maturity date and as at the date of this news release, the original
    principal and accrued interest of $30 million and $3.80 million,
    respectively, continue to incur interest. The Company is in discussions
    with the lenders for the granting of a formal extension to the
    convertible loan repayment period for a sufficient amount of time to
    allow the Company to obtain a fair compensation from the Venezuelan
    government as a result of the Nationalization, either through settlement
    agreement or arbitration award. The loan is held in US dollars and is
    secured by share pledges over the Company's subsidiaries which prior to
    the Nationalization held the mining concessions for the Choco Mine and
    the San Rafael El Placer and Increible 6 mineral properties, but
    excluding the Isidora Mine.

--  As a result of the significant asset write-down mentioned above, as at
    December 31, 2011 the Company presents a shareholder's deficiency rather
    than equity on the face of its balance sheet, as the Company's
    liabilities exceed its assets.

Cautionary non-IFRS measures

Total cash costs per ounce sold is a non-IFRS measure. The Company believes that, in addition to conventional measures, prepared in accordance with IFRS, certain investors use the cash costs per ounce data to evaluate the Company's performance and ability to generate cash flow. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS as it does not have any standardized meaning prescribed by IFRS. Data used in the calculation of total cash costs per ounce may not conform to other similarly titled measures provided by other precious metals companies.

ON BEHALF OF THE BOARD

Andre Agapov, President & CEO

Forward-looking statements: This document contains statements about expected or anticipated future events and financial results that are forward-looking in nature and as a result, are subject to certain risks and uncertainties, such as general economic, market and business conditions, the regulatory process and actions, technical issues, new legislation, competitive and general economic factors and conditions, the uncertainties resulting from potential delays or changes in plans, the occurrence of unexpected events, and the Company's capability to execute and implement its future plans. Actual results may differ materially from those projected by management. For such statements, we claim the safe harbour for forward-looking statements within the meaning of the Private Securities Legislation Reform Act of 1995.

"Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release."

Contacts:

Rusoro Mining Limited

Andre Agapov

President & CEO

604-632-4044 or Toll Free 1 800-668-0091

604-632-4045 (FAX)
info@rusoro.com
www.rusoro.com