Mr. Christopher Verrico of Rio Silver reports

RIO SILVER COMPLETES DEFINITIVE AGREEMENT FOR THE SALE OF NINOBAMBA, ANNOUNCES PLANNED RESTRUCTURING

Rio Silver Inc. has completed a definitive agreement with Magma Silver Corp. for the sale of the Ninobamba gold-silver property.

Under the terms of the option agreement, Magma Silver has the right to earn a 100-per-cent interest in the project upon full exercise of the option. The option agreement requires Magma Silver to make payments of an aggregate $260,000, of which $160,000 of that amount has been paid. Magma Silver will make further milestone payments of up to $2-million (U.S.), $500,000 (U.S.) of which will constitute advanced royalty payments and will be paid over the next five years, deductible from the net smelter return royalty of 2 per cent granted to Rio Silver. Magma Silver retains the right to buy back 1 per cent of the NSR for $1-million (U.S.) at any time prior to commercial production on the project. The option agreement also requires Magma Silver to issue to Rio Silver a total of 2.5 million common shares of Magma Silver upon receipt of regulatory approval, and a further 2.5 million common shares on the first anniversary of the approval date.

Rio Silver also announces its intention to consolidate its common shares on a one-new-for-five-old basis subject to regulatory approval.

Upon completion of the consolidation, it is intended that the 99,832,844 common shares of Rio Silver currently issued and outstanding will be reduced to approximately 19,966,569 common shares. No fractional shares will be issued under the consolidation. Each fractional share following the consolidation that is less than one-half of a share will be cancelled, and each fractional share that is at least one-half of a share will be rounded up to the nearest whole share. As applicable, the exercise or conversion price and the number of shares issuable under any of the company's outstanding stock options and convertible instruments will be proportionately adjusted upon the completion of the consolidation. A letter of transmittal will be sent to registered shareholders providing instructions to surrender the certificates evidencing their shares for replacement certificates representing the number of postconsolidation shares to which they are entitled as a result of the consolidation. Until surrendered, each certificate representing shares prior to the consolidation will be deemed, for all purposes, to represent the number of shares to which the holder thereof is entitled as a result of the consolidation.

The consolidation remains subject to the acceptance of the TSX Venture Exchange, and the preconsolidated shares will continue to be traded on the exchange under the current trading symbol RYO. Upon acceptance by the exchange, the company's trading symbol will remain the same, but the Cusip number and international securities identification number will change upon the completion of the consolidation.

This transaction and consolidation will allows the company to focus on the express development of its newly acquired Maria Norte high-grade silver exploration/exploitation project in the dynamic Huachacolpa mining district, south-central Peru, where recent merger-and-acquisition activity is changing the investment landscape.

About Rio Silver Inc.

Rio Silver is a Canadian exploration and development company with a large percentage of insider, friends and family ownership, focused on Peru. Rio Silver continues to review precious and base metal properties in Peru while maintaining its interest in its Ontario Gerow Lake, a critical metal project. This transaction enables the company to complete certain planned acquisitions that bring significant potential for near-term, cash-flowing production, allowing the company to leverage other similar opportunities, going forward, in a non-dilutive shareholder-friendly way.

We seek Safe Harbor.