Rio Alto Mining Limited Enters into Letter of Intent to Acquire Rio Alto Mining Limited by 24hgold

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March 10, 2009

Mexican Silver Mines Ltd. Enters Into Letter Of Intent To Acquire Rio Alto Mining Limited

Mexican Silver Mines Ltd. ("Mexican Silver") (TSXV: MSM; Frankfurt WKN: A0MSLE) is pleased to announce the execution of a letter of intent for a proposed arm's length business combination (the "Proposed Transaction") with Rio Alto Mining Limited ("Rio Alto "). The Proposed Transaction is currently contemplated to be completed by the amalgamation of Rio Alto and a new wholly-owned subsidiary of Mexican Silver resulting in Rio Alto becoming a wholly owned subsidiary of Mexican Silver. The Proposed Transaction will result in the shareholders of Rio Alto exchanging their shares (each Rio Alto common share referred to herein as a "Rio Alto Share") of Rio Alto for common shares of Mexican Silver (each a "Mexican Silver Share "). The number of Mexican Silver Shares to be issued to the shareholders of Rio Alto shall be equal to 1.0 Mexican Silver Share for each 1.0 Rio Alto Share. The Proposed Transaction will not result in any consolidation or split of the outstanding Mexican Silver Shares nor any change to the terms and conditions of outstanding warrants to purchase Mexican Silver Shares and Mexican Silver stock options. The Proposed Transaction will not result in any change to the terms and conditions of outstanding Rio Alto warrants and Rio Alto stock options. The share exchange ratio was determined based on negotiation between Mexican Silver and Rio Alto.

About Rio Alto
Rio Alto is a privately-owned mineral exploration and development company incorporated under the laws of British Columbia on January 31, 2008. The Company was formed to earn into and eventually acquire the La Arena gold-copper project (the "La Arena Project") in Peru from Iamgold Quebec Management Inc. ("IAMGOLD") and to further explore and develop this project. Gold and copper mineral resource and mineral reserve estimates as at March 31, 2008 for the La Arena Project were previously disclosed by Rio Alto and may be referenced within the La Arena Project, Peru Technical Report at www.sedar.com.

Under an option agreement with IAMGOLD, Rio Alto will grant IAMGOLD a 5.5 per cent ownership interest in the company and may earn up to a 38.7 per cent interest in the La Arena Project by investing US$30 million to develop a gold mine. The remaining 61.3 per cent of the La Arena Project may be acquired by Rio Alto for cash payments, including the initial US$1 million option payment, to IAMGOLD totalling US$48.55 million over a two-year (extendable under certain conditions to three years) period.

Prior to the completion of the Proposed Transaction, Rio Alto will complete a private placement (the "Private Placement ") of a minimum of 15,000,000 Rio Alto Shares (the "Minimum Private Placement ") at the price of $0.20 per share for minimum gross proceeds of $3 million and that Mexican Silver will subscribe for and purchase 5,000,000 Rio Alto Shares ($1 million) under the Private Placement, subject to the Minimum Private Placement being completed. At its sole discretion, Mexican Silver may increase the number of Rio Alto Shares it purchases under the Private Placement to the Canadian dollar equivalent of US$1 million. The maximum number of Rio Alto Shares issued under the Private Placement is that number that results in the former shareholders of Rio Alto Shares holding not more than 49.5% of the total number of Mexican Silver Shares issued and outstanding upon completion of the Proposed Transaction. Haywood Securities Inc. is acting as advisor to Rio Alto.

The rationale for the Proposed Transaction is to:

proceed with the earn into the La Arena Project;
commence with the development into production of the La Arena Project,
further explore Mexican Silver's three former silver producing properties and the La Arena Project, and
combine the management skills of the two companies.

About Mexican Silver
Mexican Silver Mines is a silver focused junior resource company developing three former silver producing properties in northeastern Mexico. To learn more about Mexican Silver Mines, please visit: www.mexicansilvermines.com.

Definitive Agreement and Conditions
The parties will enter into a definitive agreement in relation to the Proposed Transaction which will contain a number of conditions to completing the Proposed Transaction, including but not limited to the receipt of applicable approvals of the boards and shareholders of both of the parties as well as the acceptance of the Proposed Transaction by the TSX Venture Exchange, satisfactory due diligence by each of the parties, completion of the Private Placement and there being no material adverse change in the business, results of operations, assets, liabilities, financial conditions or affairs of either of the parties from the date of the letter of intent through to the completion of the Proposed Transaction. The parties anticipate entering into the definitive agreement not later than April 15, 2009 or such other date as may be mutually agreed to in writing between the parties.

Pursuant to the Proposed Transaction, Rio Alto has agreed that it will not solicit or initiate any discussions concerning the pursuit of any other acquisition proposals. Rio Alto has also agreed to pay to Mexican Silver a termination fee of $500,000 in certain circumstances. Rio Alto and Mexican Silver have further agreed to pay, under certain circumstances, the other party an expense reimbursement fee equal to the out-of-pocket expenses incurred in connection with the Proposed Transaction, up to a maximum of $500,000, if the Proposed Transaction is terminated.

Mexican Silver and Rio Alto will consider and agree upon, during the negotiation of the documents of the Proposed Transaction, who will serve on the Board of Directors and as officers of Mexican Silver upon completion of the Proposed Transaction.

Financial information and other information in respect of Mexican Silver can be found on www.sedar.com. Further information in respect of the technical mining information for Mexican Silver and Rio Alto will be issued at a later date.

ON BEHALF OF THE BOARD OF
MEXICAN SILVER MINES LTD.
___________________________________
Feisal Somji, B.Sc., MBA
President and Chief Executive Officer

FOR FURTHER INFORMATION, CONTACT:

Mexican Silver Mines Ltd.
Feisal Somji, President & CEO
Phone: 403.236.5089
Fax: 403.398.0693
Email: info@mexicansilvermines.com
Web: www.mexicansilvermines.com

Investor Relations
Jamie Mathers, Ascenta Capital Partners Inc.
Phone: 604.684.4743 ext. 236
Phone: 866.684.4209
Email:jamie@ascentacapital.com

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

This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. More particularly and without limitation, this press release contains forward looking statements and information concerning completion of the Proposed Transaction. The forward-looking statements and information are based on certain key expectations and assumptions made by Mexican Silver. Although Mexican Silver believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward looking statements and information because Mexican Silver can give no assurance that it will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. There are risks also inherent in the nature of the Proposed Transaction, including agreement on a definitive agreement, incorrect assessment of the value of the respective properties of each of Mexican Silver and Rio Alto, and failure to obtain the required security holder, regulatory and other third party approvals. Readers are cautioned that the foregoing list of factors is not exhaustive. The forward-looking statements and information contained in this press release are made as of the date hereof and Mexican Silver undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Ascenta Capital Partners Inc. � Suite 1610, 1066 West Hastings Street � Vancouver � BC V6E 3X1 � Canada

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