Management’s Discussion & Analysis

Three and Nine Months Ended

September 30, 2013

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RIO NOVO GOLD INC. MANAGEMENT’S DISCUSSION AND ANALYSIS

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2013

The following management’s discussion and analysis [“MD&A”] of the financial condition and results of the operations of Rio Novo Gold Inc. [“Rio Novo” or the “Company”] constitutes management’s review of the factors that affected the Company’s financial and operating performance for the three and nine months ended September 30, 2013. This MD&A was written to comply with the requirements of National Instrument 51-102 – Continuous Disclosure Obligations. This discussion should be read in conjunction with the audited annual consolidated financial statements of the Company for the years ended December 31, 2012 and 2011, together with the notes thereto and the unaudited condensed interim consolidated financial statements for the three and nine months ended September 30, 2013, together with the notes thereto. Results are reported in United States dollars, unless otherwise noted. The Company’s consolidated financial statements and the financial information contained in this MD&A are prepared in accordance with International Financial Reporting Standards [“IFRS”] as issued by the International Accounting Standards Board [“IASB”] and interpretations of the IFRS Interpretations Committee [“IFRIC”]. Information contained herein is presented as of November 13, 2013, unless otherwise indicated. For the purposes of preparing this MD&A, management, in conjunction with the Board of Directors, considers the materiality of information. Information is considered material if: [i] such information results in, or would reasonably be expected to result in, a significant change in the market price or value of Rio Novo ordinary shares; [ii] there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision; or [iii] it would significantly alter the total mix of information available to investors. Management, in conjunction with the Board of Directors, evaluates materiality with reference to all relevant circumstances, including potential market sensitivity. Further information about the Company and its operations is available at Rio Novo’s offices or on SEDAR at www.sedar.com. Forward-Looking Statements and Additional Information This MD&A contains certain forward-looking information and forward-looking statements, as defined in applicable securities laws [collectively referred to herein as “forward-looking statements”]. These statements relate to future events or the Company’s future performance. All statements other than statements of historical fact are forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “continues”, “forecasts”, “projects”, “predicts”, “intends”, “anticipates” or “believes”, or variations of, or the negatives of, such words and phrases, or statements that certain actions, events or results “may”, “could”, “would”, “should”, “might” or “will” be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in such forward-looking statements. The forward-looking statements in this MD&A speak only as of the date of this MD&A or as of the date specified in such statement. The following table outlines certain significant forward-looking statements contained in this MD&A and provides the material assumptions used to develop such forward-looking statements and material risk factors that could cause actual results to differ materially from the forward-looking statements.

Forward-looking statements Assumptions Risk factors The Company’s anticipated plans, costs, timing and capital for future development of the Company’s Almas Gold Project in Brazil

Financing will be available in the future for the construction of Rio Novo’s Almas Gold Project; the actual results of Rio Novo’s development activities will be favorable; operating, development

Gold price volatility; uncertainties involved in interpreting geological data and confirming title to acquired properties; the possibility that future development results will not be consistent with Rio

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costs will not exceed Rio Novo’s expectations; the Company will be able to retain and attract skilled staff; all requisite regulatory and governmental approvals for development projects and other operations will be received on a timely basis upon terms acceptable to Rio Novo, and applicable political and economic conditions are favorable to Rio Novo; the price of gold and/or other applicable metals and applicable interest and exchange rates will be favorable to Rio Novo; no title disputes exist with respect to the Company’s properties.

Novo’s expectations; availability of financing for and actual results of Rio Novo’s development activities; increases in costs; environmental compliance and changes in environmental and other local legislation and regulation; interest rate and exchange rate fluctuations; changes in economic and political conditions; the Company’s ability to retain and attract skilled staff.

The Company’s ability to meet its working capital needs at the current level for the twelve-month period ending September 30, 2014

The operating and development activities of the Company for the twelve-month period ending September 30, 2014, and the costs associated therewith, will be consistent with Rio Novo’s current expectations; the Company’s anticipated plans to sell plant and equipment in order to fund its current low levels of expenditure. It also expects the cash generated from small mining activities in Colombia in the 1st half of 2014.

Changes in debt and equity markets; timing and availability of external financing on acceptable terms; inability to sell plant and equipment on acceptable terms and conditions; increases in costs; environmental compliance and changes in environmental and other local legislation and regulation; interest rate and exchange rate fluctuations; changes in economic conditions.

The Company’s ability to carry out anticipated exploration on its property interests

The Company is not planning to have any exploration activities during the remaining months for the year ended December 31, 2013.

Changes in debt and equity markets; timing and availability of external financing on acceptable terms; increases in costs; environmental compliance and changes in environmental and other local legislation and regulation; interest rate and exchange rate fluctuations; changes in economic conditions; receipt of applicable permits.

Plans, costs, timing and capital for future exploration and development of Rio Novo’s property interests, including the costs and potential impact of complying with existing and proposed laws and regulations

Financing will be available for Rio Novo’s development activities and the results thereof will be favorable; actual operating and exploration costs will be consistent with the Company’s current expectations; the Company will be able to retain and attract skilled staff; all applicable regulatory and governmental approvals for exploration projects and other operations will be received on a timely basis upon terms acceptable

Gold price volatility, changes in debt and equity markets; timing and availability of external financing on acceptable terms; the uncertainties involved in interpreting geological data and confirming title to acquired properties; the possibility that future exploration results will not be consistent with Rio Novo’s expectations; increases in costs; environmental compliance and changes in environmental and

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to Rio Novo; the Company will not be adversely affected by market competition; debt and equity markets, exchange and interest rates and other applicable economic and political conditions are favorable to Rio Novo; the price of gold and/or other applicable metals will be favorable to Rio Novo; no title disputes exist with respect to Rio Novo’s properties

other local legislation and regulation; interest rate and exchange rate fluctuations; changes in economic and political conditions; the Company’s ability to retain and attract skilled staff.

Management’s outlook regarding future trends

Financing will be available for Rio Novo’s development and operating activities; the price of gold and/or other applicable metals will be favorable to Rio Novo.

Gold price volatility; changes in debt and equity markets; interest rate and exchange rate fluctuations; changes in economic and political conditions.

Asset values for the third quarter of fiscal 2013

Management’s belief that no write-down is required for its plant and equipment and exploration and evaluation assets due to the Company’s anticipated financing [debt or equity, or a combination of both] to implement planned work programs on the Company’s projects

If the Company does not obtain equity or debt financing on terms favourable to the Company or at all, a decline in asset values that could be deemed to be other than temporary, may result in impairment losses

Sensitivity analysis of financial instruments

Interest rates will not be subject to change in excess of plus or minus 1%; foreign exchange rates against the Canadian dollar, Brazilian real and the Colombian peso will not be subject to change in excess of plus or minus 5%.

Changes in debt and equity markets; interest rate and exchange rate fluctuations.

Prices and price volatility for gold The price of gold will be favorable; debt and equity markets, interest and exchange rates and other economic factors which may impact the price of gold will be favorable.

Changes in debt and equity markets and the spot price of gold; interest rate and exchange rate fluctuations; changes in economic and political conditions.

Inherent in forward-looking statements are risks, uncertainties and other factors beyond Rio Novo’s ability to predict or control. Please also make reference to those risk factors referenced in the “Risk Factors” section below. Readers are cautioned that the above chart does not contain an exhaustive list of the factors or assumptions that may affect the forward-looking statements, and that the assumptions underlying such statements may prove to be incorrect. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this MD&A. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Rio Novo’s actual results, performance or achievements to be materially different from any of its future results, performance or achievements expressed or implied by forward-looking statements. All forward-looking statements herein are qualified by this cautionary statement. Accordingly, readers should not place undue reliance on forward-looking statements. The Company undertakes no obligation to

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update publicly or otherwise revise any forward-looking statements whether as a result of new information or future events or otherwise, except as may be required by law. If the Company does update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements, unless required by law. Company Business The Company’s registered office is located at the Morgan & Morgan Building, Pasha Estate, Road Town, Tortola, British Virgin Islands. The Company maintains operating offices at Av. das Americas 8445, sala 517, Barra da Tijuca, Rio de Janeiro, Brazil, and Cra 19 N° 72-61, Urb. Santa Clara, Manizales, Colombia, and has a corporate office at 155 University Avenue, Suite 1240, Toronto, Ontario. In this MD&A, references to the Company also include the Company’s subsidiaries, as the context requires. Rio Novo began a restructuring process of the legal entities in Brazil which includes the creation of a new company, Rio Novo [Brazil] Holdings Ltda, the spin-off of Rio Novo Mineração Ltda, which will have the name changed to Rio Novo [Almas] Mineração S.A., and the creation of a new company called Rio Novo [Matupá] Mineração Ltda. The restructuring process was initiated in January 2013 and was submitted to the authorities in Brazil for approval. In March 2013, the first part of the spin-off process, which separated the accounting balances of both entities and created Rio Novo [Matupá] Mineração Ltda was approved. The remaining portion of the restructuring process is currently under review and is expected to be completed by the end of this year. Rio Novo is currently focused on the exploration and development of gold properties in Brazil and Colombia. The Company has Measured & Indicated resources of 1,191,252 oz. and 1,464,831 Inferred oz. of gold at two projects in Brazil [Almas Gold Project and Matupá Gold Project [former Guarantã Gold Project] and one in Colombia [Tolda Fria Gold Project]. Both the Almas Gold Project, located in Tocantins State, and the Matupá Gold Project [former Guarantã Gold Project], located in Mato Grosso State, enjoy established infrastructure, including paved highways, main grid power, cellular phone service and nearby towns in mining friendly jurisdictions. The Almas Gold Project is also permitted for construction. The Almas and Matupá Gold Projects were previously owned by Vale S.A. [“Vale”], a major Brazilian mining company [formerly Companhia Vale do Rio Doce]. The Almas Gold Project consists of three deposits [Paiol, Vira Saia and Cata Funda] and several exploration targets including: Nova Prata/Espinheiro, Jacobina, Morro do Carneiro and Conceição. Of these, only the three deposits have seen significant exploration work. From 1996-2001, Vale operated an open-pit mine and heap leach operations that produced almost 87,000 ounces from 2.0 million tonnes [Mt] ore from the Paiol deposit, but operations were suspended due to the low gold prices in 2001. All installations were dismantled and disposed of and the area rehabilitated. The Matupá Gold Project consists of one deposit [the X1 deposit] and several exploration targets [the Matupá, Guarantã Ridge, V4, V5, V6, and Fuscão targets]. In 2007, the prior owner of the Matupá Gold Project commenced an exploration program, the majority of which concentrated on drilling the X1 deposit to develop measured and indicated resources. The program continued into 2008 and was assumed by the Company when it acquired the project in early 2010. During the period of 2010-2011, the Company carried out additional drilling at the X1 deposit and started preliminary internal studies to define a geological resource and to investigate the deposit’s metallurgical characteristics. The Tolda Fria Gold Project, located in Caldas State, Colombia, was acquired by the Company in May 2011.

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Each of the Brazilian properties, comprising the initial Almas Gold property covering 15,324 hectares or about 17% of the land position of the Almas Gold Project, and the Matupá Gold Project, other than the Matupá target and two additional claims [866.618/2011 and 866.219/2011], is subject to a 1.2% net smelter return royalty payable to Mineração Santa Elina Industria e Comercio S/A. At the date of this MD&A, Rio Novo plans to fund its activities from its available cash and cash equivalents and from the sale of plant and equipment, as well as from future anticipated financings, by either the issue of debt or securities. In this respect, the following transactions have occurred:

On September 9, 2013, the Company completed a private placement of 5,821,195 ordinary shares at a price of Cdn $0.045 per share for aggregate gross proceeds of $252,267 [approximately Cdn $262,000] with Zoneplan Ltd. ["Zoneplan"], a private Cyprus based company and controlling shareholder of Rio Novo. Zoneplan is not permitted to trade the purchased shares for a period of four months plus one day from the closing of the private placement.

On July 25, 2013, Rio Novo received a loan of $250,000 [Principal Sum] from Zoneplan, in exchange for a promissory note due on January 25, 2014. Zoneplan has elected to convert the promissory note and on September 9, 2013, the Company issued an aggregate of 5,555,555 ordinary shares to Zoneplan in satisfaction of the Company’s obligation under the promissory note.

Due to the current market environment, funding has been very difficult for small companies such as Rio Novo. As a result, the Almas Gold Project has been put on care and maintenance and corporate costs have been reduced to extremely low levels. All exploration and development activities have been suspended and all exploration and project development teams have been dismissed. The Company may lose the Vira-Saia and Nova Prata exploration licenses at the Almas project and the Matupá prospect exploration license at the Matupá project if it does not raise sufficient financing to meet its commitments. Rio Novo will continue to undertake additional measures to further reduce corporate overhead costs. Due to the positive Feasibility Study for its Almas Gold Project, project construction will be re-initiated when adequate financing is obtained. The majority of the Company's expenses at this stage of operations are discretionary and subject to change. Technical Reports The Almas Gold Project's Technical Report [the "Almas Technical Report"], entitled "Feasibility Study Technical Report for the Almas Gold Project, Almas Municipality, Tocantins, Brazil", has been prepared by RungePincockMinarco [formerly Pincock Allen and Holt] and Tetra Tech Inc. The Almas Technical Report, which is compliant with National Instrument 43-101, has an effective date of February 20, 2013 and is available under the Company's profile on SEDAR at www.sedar.com and on the Company's website at www.Rnovogold.com. In addition, for detailed information on the Tolda Fria Gold Project please refer to the technical report dated May 31, 2011, entitled “NI 43-101 Technical Report on the Toldafria Project, Manizales, Colombia” prepared by William J. Crowl, R.G., and Donald Hulse, P.E., of Gustavson Associates, LLC, which is available on SEDAR at www.sedar.com and on the Company's website at www.Rnovogold.com. Corporate Update [a] The Company has accepted the resignation of Mr. Julio Carvalho as President and Chief Executive Officer [“CEO”] effective August 31, 2013. Mr. Carvalho will remain as a director of Rio Novo.

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Rio Novo has appointed Mr. Patrick Panero as President and CEO of the Company. [b] Due to cash flow constraints, the Company has decided to settle current and future director fees by issuing deferred share units [“DSUs”]. General Update – Almas Gold Project On December 28, 2012, Rio Novo signed a land surface agreement with unrelated parties in the district of Almas in the State of Tocantins, encompassing a total area of 69,548.72 hectares. Currently, this area is farmland where the tailings dam deposit will be located. The owners of the property are not entitled to any royalties from mining operations. During Q2 2013 and to the date of this MD&A, the Almas Gold Project has been placed on care and maintenance due to the lack of financing through debt and/or equity. At the time of this report, the Company had not approved a budget for the construction of the Almas mine/plant. The approval of such budget is dependent upon a successful arrangement of project financing. Until such financing is arranged, the Company has minimized costs by dismissing the Exploration and Almas Project Construction teams in Brazil and nearly all employees in the Rio de Janeiro and Toronto offices, except for two key senior employees and six junior staff members required for security and reporting purposes. All agreements with suppliers/contractors have been cancelled. The accounting, payroll and accounts payable functions have been outsourced to a small accounting firm in Brazil. General Update - Tolda Fria Gold Project In the beginning of 2013, the Company decided to lease the Tolda Fria property/mine to a contractor/operator. A lease agreement was signed in January 2013 with BID Mining Group [“BID”] agreeing to build, at its own cost and risk, a small 8 ton-a-day plant and operate it for a period of nine months. BID will pay all the costs, including office costs, related to the operation and are required to keep the property in good standing. The Company will receive 40% of the free cash flow of the operation, which will cover part of its administrative and management costs in Colombia not incurred by the contractor/operator of the mine. The aim is to preserve the 30 year mining license for the Tolda Fria property as well as to better understand the deposit by operating a small pilot plant at minimal cost. Rio Novo retains supervision and oversight rights over all aspects of the operation by BID on the project. BID is required to comply with all Colombian Federal and Caldas State mining laws and codes as well as Federal and State environmental regulations, procedures, processes, guidelines and codes. Rio Novo Colombia has the right to interrupt and close down operations, in its sole judgment, if it determines infringement of any State or Federal laws. Operation of the pilot plant and areas to be mined is being focused on testing various high grade areas within the Tolda Fria concession contract and directed by Rio Novo Colombia. As such the operations by BID are providing the Company with a complement to previously generated geological understanding of the Tolda Fria resource. Bulk sampling, as executed by the pilot plant, and increased vertical mining of the high grade zones should be of significant value in the future. To the end of September 2013, BID had completed work on construction of the pilot plant. Operations had been hampered by difficulties in obtaining explosives permits, which kept daily output at the pilot plant at approximately 2-3 tons per day. Subsequent to additional efforts of Rio Novo Colombia management during the month of June 2013, the explosives permit is now valid, allowing for a ramp up of operations to the 8-10 ton per day level. BID’s contract with the Company will end in November 2013. The Company will evaluate BID’s progress in December 2013 to determine if Rio Novo will extend the contract with BID.

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Budgeted Expenditures – Exploration and Project Development At the date of this MD&A, the Company does not have sufficient funds to finance the construction of the Almas Gold mine. Management continues to procure sources of financing to build this mine. Though debt financiers have expressed their interest in financing the Almas Gold Project [subject to their internal credit approvals], despite the recent decline in gold prices, and the Company being well advanced to a point of mandating senior lenders, the equity portion of the financing requirement is proving to be quite difficult in the current market environment. Management continues to seek potential investors with a view to obtain such equity financing for this project. The Financial Advisory Agreement with Endeavour Financial, which had been signed in mid-2012 with the specific purposes to arrange the debt financing for the Almas Gold Project, was suspended in the early part of May 2013 but may be re-instated at any time, as soon as the necessary equity financing is arranged. A budget will be prepared as soon as the project financing for the Almas Gold Project is arranged. Trends Although there can be no assurance that additional funding will be available to the Company, management is of the opinion that the gold price will be favourable and hence, it may be possible to obtain additional funding for its projects. However, the Company remains cautious in case the economic factors that impact the mining industry deteriorate. Currently, access to capital to fund small companies is practically non-existent. In view of this market environment, the Company decided to change its focus to the development of small mine gold production at its Tolda Fria Gold Project and/or with joint ventures with other companies operating in that area. Discussions on financing the small Capex to implement these mines are currently being held. The Company’s main goal remains to become a producer of gold from its Almas gold mine, soon after the project financing is arranged and the mine is built. The property enjoys established infrastructure in a mining friendly jurisdiction and has completed the related Feasibility Study Technical Report for the Almas Gold Project in February 2013. As soon as financial conditions allow, the Company intends to continue exploration activities on two of its properties [the Matupá Gold Project in Brazil and the Tolda Fria Gold Project in Colombia]. Apart from these and the risk factors noted under the heading “Risk Factors”, management is not aware of any other trends, commitments, events or uncertainties that would have a material effect on the Company’s business, financial condition or results of operations. Discussion of Operations Nine months ended September 30, 2013, compared to nine months ended September 30, 2012 During the nine months ended September 30, 2013, the Company had no operating revenues and reported a net loss of $3,506,966 with basic and diluted loss per share of $0.03. That compares to a net loss of $4,828,123, with basic and diluted loss per share of $0.04 in the comparable period of 2012. The decrease of $1,321,157 in net loss can be attributed to:

Gain on share purchase warrant revaluation amounted to $14,449 for the nine months ended September 30, 2013, compared to a gain of $2,080,980 for the comparative period in 2012. The decrease in gain of $2,066,531 can be attributed to negative variances in the Company’s stock price, impacting the Black-Scholes fair market value of the warrants.

Gain on disposal of plant and equipment amounted to $52,150 for the nine months ended September 30, 2013 [nine months ended September 30, 2012 - $nil]. The Company sold Company vehicles for immediate cash flow needs. The Company received cash proceeds of $310,828 from the sale.

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Write-off of plant and equipment amounted to $97,120 for the nine months ended September 30, 2013 [nine months ended September 30, 2012 - $nil]. The Company determined the net realizable value of the assets written off to be $nil.

Salaries and benefits amounted to $866,305 for the nine months ended September 30, 2013, compared to $3,555,804 for the comparative period in 2012. The decrease of $2,689,499 is attributable to:

[a] The portion of the estimated fair value of options granted in the prior years and that vested during the nine months ended September 30, 2013, amounted to [$257,173] [nine months ended September 30, 2012 - $775,851].

[b] The Company recorded share-based payments of $66,224 for the nine months ended September 30, 2013 [nine months ended September 30, 2012 - $298,567]. This amount can be attributed to the issue of 2,030,000 [nine months ended September 30, 2012 - 1,295,000] stock options to officers, employees and directors of the Company in the latest period.

[c] During the nine months ended September 30, 2013, the Company expensed $30,263 [nine months ended September 30, 2012 – recovery of $161,965] to salaries and benefits in respect of restricted share units [“RSUs”] that have vested during the period. The recovery in 2012 is attributed to the resignation of the former CEO, Mr. David Beatty, which resulted in the reversal of unvested compensation cost previously recognized.

[d] During the nine months ended September 30, 2013, the Company expensed $148,403 [nine months ended September 30, 2012 – $nil] to salaries and benefits in respect of DSUs that have been issued. The Company issued a total of 4,331,733 DSUs as compensation for directors in lieu of cash and severance for employees of the Company who were terminated.

Professional fees amounted to $589,818 for the nine months ended September 30, 2013,

compared to $1,280,454 for the comparative period in 2012. The decrease of $690,636 is attributable to decreased corporate activity requiring consulting fees, legal fees and business development costs from outside service providers to the Company.

Office and general costs decreased by $409,036 during the nine months ended September 30, 2013, compared with the same period in 2012. This decrease was primarily due to lower support costs for the Company’s Brazilian and Colombian operations. The Company continues to assess these costs to ensure that cost-effective choices are being made.

Travel expense decreased by $141,707 during the nine months ended September 30, 2013, compared with the same period in 2012. The Company is attempting to minimize costs.

Differences in foreign exchange resulted in a gain of $2,951 during the nine months ended September 30, 2013, compared to a loss of $315,156 during the same period in 2012, attributed to US dollar, Brazilian real and Colombian peso exchange rate fluctuations.

Interest income and other income [expense] decreased by $862,392 during the nine months ended September 30, 2013, compared with the same period in 2012, reflecting a decline in invested funds from previous financings.

Income tax provision – deferred taxes decreased to an expense of $1,323,286 during the nine months ended September 30, 2013 [nine months ended September 30, 2012 – expense of $1,343,192]. Under IFRS deferred taxes are recognized on differences related to non-monetary assets and liabilities that are measured in the local currency for tax purposes. As a result of

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significant foreign exchange fluctuations in the Brazilian real, a large deferred tax liability is being recognized on exploration and evaluation assets and plant and equipment located in Brazil.

All other expenses related to general working capital purposes.

Three months ended September 30, 2013, compared to three months ended September 30, 2012 During the three months ended September 30, 2013, the Company had no operating revenues and reported a net loss of $236,483 with basic and diluted loss per share of $0.00. That compares to a net loss of $311,150, with basic and diluted loss per share of $0.00 in the comparable period of 2012. The decrease of $74,667 in net loss can be attributed to:

Gain on share purchase warrant revaluation amounted to $nil for the three months ended September 30, 2013, compared to a gain of $251,644 for the comparative period in 2012. The decrease in gain of $251,644 can be attributed to negative variances in the Company’s stock price, impacting the Black-Scholes fair market value of the warrants.

Gain on disposal of plant and equipment amounted to $52,150 for the three months ended

September 30, 2013 [three months ended September 30, 2012 - $nil]. The Company sold Company vehicles for immediate cash flow needs. The Company received cash proceeds of $310,828 from the sale.

Write-off of plant and equipment amounted to $97,120 for the three months ended September 30, 2013 [three months ended September 30, 2012 - $nil]. The Company determined the net realizable value of the assets written off to be $nil.

Salaries and benefits amounted to [$80,736] for the three months ended September 30, 2013,

compared to $345,355 for the comparative period in 2012. The decrease of $426,091 is attributable to:

[a] The portion of the estimated fair value of options granted in the prior years and that vested during the three months ended September 30, 2013, amounted to $51,912 [three months ended September 30, 2012 - $44,578].

[b] The Company recorded share-based payments of $23,346 for the three months ended September 30, 2013 [three months ended September 30, 2012 - $52,582]. This amount can be attributed to the issue of 2,030,000 [three months ended September 30, 2012 - 1,295,000] stock options to officers, employees and directors of the Company.

[c] During the three months ended September 30, 2013, the Company expensed $9,062 [three months ended September 30, 2012 – recovery of $419,678] to salaries and benefits in respect of RSUs that have vested during the period. The recovery in 2012 is attributed to the resignation of the former CEO, Mr. Beatty, which resulted in the reversal of unvested compensation cost previously recognized.

[d] During the three months ended September 30, 2013, the Company had a salaries and benefits recovery of $143,471 [three months ended September 30, 2012 – $nil] in respect of DSUs that have been issued. The recovery can be attributed to the Rio Novo ordinary share price decrease from Cdn $0.09 on June 28, 2013 to Cdn $0.04 on September 30, 2013 as quoted on the Toronto Stock Exchange. The Company issued a total of 920,700 DSUs as compensation for directors in lieu of cash and severance for employees of the Company who were terminated.

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Professional fees amounted to $81,238 for the three months ended September 30, 2013, compared to $399,479 for the comparative period in 2012. The decrease of $318,241 is attributable to decreased corporate activity requiring consulting fees, legal fees and business development costs from outside service providers to the Company.

Office and general costs decreased by $107,886 during the three months ended September 30, 2013, compared with the same period in 2012. This decrease was primarily due to lower support costs for the Company’s Brazilian and Colombian operations. The Company continues to assess these costs to ensure that cost-effective choices are being made.

Travel expense decreased by $74,028 during the three months ended September 30, 2013, compared with the same period in 2012. The Company is attempting to minimize costs.

Differences in foreign exchange resulted in a gain of $49,398 during the three months ended September 30, 2013, compared to a gain of $207,844 during the same period in 2012, attributed to US dollar, Brazilian real and Colombian peso exchange rate fluctuations.

Interest income and other income [expense] decreased by $156,007 during the three months ended September 30, 2013, compared with the same period in 2012, reflecting a decline in invested funds from previous financings.

Income tax provision – deferred taxes decreased to a recovery of $7,305 during the three months ended September 30, 2013 [three months ended September 30, 2012 – recovery of $208,315]. Under IFRS deferred taxes are recognized on differences related to non-monetary assets and liabilities that are measured in the local currency for tax purposes. As a result of significant foreign exchange fluctuations in the Brazilian real, a large deferred tax liability is being recognized on exploration and evaluation assets and plant and equipment located in Brazil.

All other expenses related to general working capital purposes. Financial Condition On September 30, 2013, the Company’s total assets amounted to $79,831,929, which compares to the $82,238,936 recorded on December 31, 2012. Excluding cash and certain other items, total assets are mostly composed of exploration and evaluation assets, which at September 30, 2013, totalled $73,165,442 [$68,764,350 at December 31, 2012], being $46,196,296 incurred at the Almas Gold Project [December 31, 2012 - $43,192,743], $17,225,531 incurred at the Matupá Gold Project [former Guarantã Gold Project] [December 31, 2012 - $16,457,157], and $9,743,615 incurred at the Tolda Fria Gold Project [December 31, 2012 - $9,114,450]. The Company’s total assets also included the amount of $6,398,077 [$6,783,744 on December 31, 2012] related to plant and equipment. Liquidity and Capital Resources The Company does not generate cash from mining operations. In order to fund its exploration work and administrative activities, the Company is dependent upon financing through the issuance of shares or debt sources. The Company’s aggregate operating, investing and financing activities during the period resulted in a net cash position of $163,555 [$6,136,842 at December 31, 2012] and a working capital deficit of $510,849 [$5,212,721 at December 31, 2012]. In total, the Company’s shareholders’ equity at September 30, 2013, was $75,608,366, a decrease of $3,016,982 from the balance of December 31, 2012, mainly as a result of the net loss for the nine months ended September 30, 2013, of $3,506,966.

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At the date of this MD&A, the Company will continue to monitor its cash outflows until financing is sourced. Until such financing is arranged, the Company has minimized costs by dismissing the Exploration and Almas Project Construction teams in Brazil and nearly all employees in the Rio de Janeiro and Toronto offices, except for two key senior employees and six junior staff members required for security and reporting purposes. The Company’s use of cash is currently and is expected to continue to be focused on funding of its general corporate expenditures. The Company’s total liabilities at September 30, 2013, include accounts payable to suppliers and other liabilities of $779,259 [$1,478,121 at December 31, 2012]. In addition, the Company has recorded the estimated fair value of share purchase warrants of $nil at September 30, 2013 [$14,449 at December 31, 2012] as a liability in compliance with IFRS. Based on current circumstances, Rio Novo share purchase warrants will be settled by ordinary shares of the Company at the option of the warrant holder. The Company’s cash and cash equivalents at September 30, 2013, are not sufficient to satisfy its accounts payable and other liabilities. As a result, the Company will limit its corporate expenses, defer payments where possible and sell certain assets. Due to the Company’s cash shortfall, the Company issued 11,376,750 ordinary shares for proceeds of $502,267 to Zoneplan, a private Cyprus based company and controlling shareholder of Rio Novo. Based on the current rate of expenditure, Rio Novo will require additional funds from the sale of plant and equipment or from equity sources in order to pay overdue debts and cover corporate costs for the next 12 months. There is no assurance that equity funding can be raised upon terms acceptable to the Company or at all. See “Risks Factors” below.

If the Company does not obtain equity or debt financing on terms favourable to the Company or at all, a decline in asset values that could be deemed to be other than temporary, may result in impairment losses. Critical Accounting Estimates The preparation of the unaudited condensed interim consolidated financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. The unaudited condensed interim consolidated financial statements include estimates that, by their nature, are uncertain. The impact of such estimates is pervasive throughout the unaudited condensed interim consolidated financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Significant assumptions about the future that management has made that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate to, but are not limited to, the following:

the estimated recoverable value of exploration and evaluation assets which is recorded in the unaudited condensed interim consolidated statements of financial position;

the estimated useful lives and residual value of plant and equipment which are included in the unaudited condensed interim consolidated statements and the related depreciation included in profit or loss;

management determination of the ability to raise additional capital and/or obtain financing to advance mineral projects;

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the inputs used in measurement for warrant transactions in profit or loss in the current and prior periods;

the inputs used in accounting for share-based payment transactions in profit or loss in the current and prior periods;

the measurement of deferred income tax liabilities; management applied judgment in determining the functional currency of the Company as the

United States dollar; and management determination of no material restoration, rehabilitation and environmental exposure,

based on the facts and circumstances that existed in the current and prior periods. Off-Balance-Sheet Arrangements As of the date of this filing, the Company does not have any off-balance-sheet arrangements that have, or are reasonably likely to have, a current or future effect on the financial performance or financial condition of the Company, including, and without limitation, such considerations as liquidity and capital resources. Outstanding Share Data As of the date of this MD&A, the Company had 125,144,263 issued and outstanding ordinary shares and an aggregate of 14,375,000 warrants outstanding. At the date of this MD&A, the Company had 5,422,000 stock options outstanding, each entitling the holder to acquire one ordinary share, and 55,500 RSUs outstanding. In addition, the Company issued a total of 4,331,733 DSUs as compensation for directors in lieu of cash and severance for employees of the Company who were terminated. Transactions with Related Parties [a] For the three and nine months ended September 30, 2013, the Company expensed $12,349 and $58,441, respectively [three and nine months ended September 30, 2012 - $16,269 and $50,703, respectively] to Marrelli Support Services Inc. [“Marrelli Support”] for the services of Carmelo Marrelli to act as Chief Financial Officer [“CFO”] of the Company. In addition, Marrelli Support also provides bookkeeping services to the Company. Carmelo Marrelli is the president of Marrelli Support. The amounts charged by Marrelli Support are based on what Marrelli Support usually charges its regular clients. The Company expects to continue to use Marrelli Support for an indefinite period of time. As at September 30, 2013, Marrelli Support was owed $16,987 [December 31, 2012 - $12,565] and this amount was included in accounts payable and other liabilities. [b] For the three and nine months ended September 30, 2013, the Company expensed $6,974 and $31,896, respectively [three and nine months ended September 30, 2012 - $nil] to DSA Corporate Services Inc. [“DSA”] for certain corporate secretarial functions. The fees also include charges paid to regulatory bodies in Canada. DSA is a private company controlled by Carmelo Marrelli, the CFO of the Company. Carmelo Marrelli is also the corporate secretary and sole director of DSA. The amounts charged by DSA are based on what DSA usually charges its regular clients. The Company expects to continue to use DSA for an indefinite period of time. As at September 30, 2013, DSA was owed $4,798 [December 31, 2012 - $10,775] and this amount was included in accounts payable and other liabilities. [c] On September 9, 2013, Cyprus River Holdings Ltd. [“Cyprus River”], a shareholder of the Company, acquired ownership and control, through its wholly-owned subsidiary Zoneplan, 11,376,750 ordinary shares of Rio Novo. The ordinary shares were acquired in two separate transactions as follows: [i] an aggregate of 5,821,195 ordinary shares were purchased pursuant to a private placement at a price of Cdn $0.045 per ordinary share for aggregate gross proceeds of $252,267 [approximately Cdn $262,000; and [ii] an aggregate of 5,555,555 ordinary shares were acquired upon conversion of a $250,000 unsecured convertible promissory note. As of September 30, 2013, Cyprus River owns or has control or

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direction over an aggregate of 67,846,134 ordinary shares of Rio Novo, representing approximately 54% of Rio Novo’s issued and outstanding ordinary shares. The remaining 57,298,129 ordinary shares, representing approximately 46% of Rio Novo’s issued and outstanding ordinary shares are widely held, except for 1,389,480 shares held by the other directors and officers of the Company. These holdings can change at any time at the discretion of the owner. [d] Remuneration, other than consulting fees, of directors and key management personnel of the Company was as follows:

Names

Nine Months Ended September 30, 2013

$

Nine Months Ended September 30, 2012

$ Salaries and benefits [a][b] 459,305 1,917,509Share based payments [b] 126,430 650,542Total 585,735 2,568,051

Names

Three Months Ended September 30, 2013

$

Three Months Ended September 30, 2012

$ Salaries and benefits [a][b] [73,905] 442,706Share based payments [b] 41,723 [182,978]Total [32,182] 259,728 [a] Director fees owed at September 30, 2013 amounted to $43,899 [December 31, 2012 - $90,838]. [b] The amounts charged are conducted on normal market terms and are recorded at their exchange value. Selected Quarterly Information

Three Months Ended

Total Revenue

[$]

Profit or Loss

Total [$]

Basic and Diluted

Profit/Loss Per Share

[$]

2013-September 30 - [236,483] [1] [0.00]

2013-June 30 - [1,468,531] [2] [0.01]

2013- March 31 - [1,801,952] [3] [0.02]

2012-December 31 - [1,455,996] [4] [0.02]

2012-September 30 - [311,150] [5] [0.00]

2012-June 30 - [3,781,109] [6] [0.03]

2012-March 31 - [735,864] [7] [0.01]

2011-December 31 - 590,283 [8] 0.00

[1] Net loss of $236,483 includes administrative expenses of $122,345;

[2] Net loss of $1,468,531 includes administrative expenses of $512,890, offset by interest and other income of $7,353;

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[3] Net loss of $1,801,952 includes administrative expenses of $1,353,298, offset by interest and other income of $48,177;

[4] Net loss of $1,455,996 includes administrative expenses of $1,310,817 and foreign exchange loss of $218,832, offset by a gain on share purchase warrant revaluation of $58,654;

[5] Net loss of $311,150 includes administrative expenses of $1,042,458 and foreign exchange income of $207,844, offset by a gain on share purchase warrant revaluation of $251,644;

[6] Net loss of $3,781,109 includes administrative expenses of $2,156,253 and foreign exchange loss of $1,421,755, offset by a gain on share purchase warrant revaluation of $1,091,245;

[7] Net loss of $735,864 includes administrative expenses of $2,704,746 and foreign exchange income of $898,755, offset by a gain on share purchase warrant revaluation of $738,091; and

[8] Net profit of $590,283 includes administrative expenses of $2,836,353, offset by foreign exchange income of $356,536 and a gain on share purchase warrant revaluation of $3,148,251. The Company’s profit and loss have fluctuated from period to period due to the share purchase warrant revaluation in each period. In particular, as the expiration date of each share purchase warrant issue approaches, the Company realizes a gain from the share purchase warrant revaluation, creating a profit for the specific period. In addition, administrative expenses have fluctuated from period to period depending on higher or lower support costs for Canada, Brazil and Colombia. Commitments In addition to commitments otherwise reported in this MD&A, the Company’s contractual obligations as at September 30, 2013, include:

Contractual Obligations [3]

Total Up to 1 year 1 - 3 years 4 - 5 years After 5 years

Capital Lease Obligations

$nil $nil $nil $nil $nil

Operating Leases $nil $nil $nil $nil $nil Purchase Obligations [1] $2,180,000 $830,000 $1,350,000 $nil $nil Other Long Term Obligations

$nil $nil $nil $nil $nil

Brazil, Colombia and Canada Obligations [2]

$1,350,404 $1,350,404 $nil $nil $nil

Total $3,530,404 $2,180,404 $1,350,000 $nil $nil

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[1] Purchase obligations:

Purchase obligations in Brazil and Colombia

Detail [3] Up to 1 year 1 - 3 years Total

Mineração Bom Futuro Ltda. [Re Matupá prospect] [*] $100,000 $300,000 $400,000

Matupá Sul Mineração Ltda. [Re Matupá prospect] [*] $180,000 $nil $180,000

Mineradora Santo Expedito Ltda./Terra Goyana Mineradora Ltda.[*] $400,000 $600,000 $1,000,000

Brazil Americas Investiments Participation Mineração – BAIP [*] $150,000 $450,000 $600,000

$830,000 $1,350,000 $2,180,000

[*] These amounts have not been paid and are under review

[2] Brazil, Colombia and Canada Obligations: Obligations in Brazil, Colombia and Canada

Detail [3] Due at

September 30, 2013

Up to 1 year 1 - 3 years Total

Almas Project Consulting   $127,986 $75,055 $nil $203,041

Consulting and Accounting Services $37,105 $66,279 $nil $103,384

Redundancy Costs $nil $237,911 $nil $237,911

Drilling and Geophysical Services $61,288 $58,192 $nil $119,480

Environmental Services $nil $38,107 $nil $38,107

Legal Services $nil $16,159 $nil $16,159

Past Due Taxes $237,982 $2,219 $nil $240,201

Telecommunication $nil $1,420 $nil $1,420

Administrative costs in Canada $146,351 $13,280 $nil $159,631

Other Services $20,144 $41,308 $nil $61,452

DSU payments owing $148,403 $nil $nil $148,403

Rent $nil $21,215 $nil $21,215

$779,259 $571,145 $nil $1,350,404 [3] The Company may lose the Vira-Saia and Nova Prata exploration licenses at the Almas project and the Matupá prospect exploration license at the Matupá project if it does not raise sufficient financing to meet its commitments. Proposed Transactions There are no proposed transactions of a material nature being considered by the Company other than seeking project financing for the Almas Gold Project. Disclosure Controls and Procedures Management has designed and evaluated the effectiveness of the Company’s disclosure controls and procedures and the internal controls on financial reporting and has concluded that, based on its evaluation, they are sufficiently effective as of September 30, 2013, to provide reasonable assurance that

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material information relating to the Company and its consolidated subsidiaries is made known to management and disclosed in accordance with applicable securities regulations. Internal Controls over Financial Reporting [“ICFR”] Management is responsible for certifying the design of the Company’s ICFR as required by Multilateral Instrument 52-109 – “Certification of Disclosure in Issuers’ Annual and Interim Filings” and CSA staff notice 52-316 – “Certification of Design of Internal Control over Financial Reporting”. The Company’s ICFR are intended to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with applicable accounting standards. ICFR should include those policies and procedures that establish the following:

maintenance of records in reasonable detail that accurately and fairly reflect the transactions and dispositions of the Company’s assets;

reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with applicable accounting standards;

receipts and expenditures are only being made in accordance with authorizations of management and the Board of Directors; and

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.

Because of their inherent limitations, ICFR may not prevent or detect misstatements. 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 the policies or procedures may deteriorate. Management, including the CEO and CFO, have evaluated the design of the Company’s internal controls over financial reporting as of September 30, 2013, pursuant to the requirements of Multilateral Instrument 52-109. Management follows the Committee of Sponsoring Organizations of the Treadway Commission 1992 framework (COSO framework). The Company has designed appropriate ICFR for the nature and size of its business, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with applicable accounting standards. There have been no changes in ICFR during the three and nine months ended September 30, 2013, that have materially affected, or are reasonably likely to materially affect, the Company’s ICFR. Change in Accounting Policies Certain pronouncements were issued by the IASB or the IFRIC that are mandatory for accounting periods after December 31, 2012. The following new standards have been adopted: [i] IFRS 10 – Consolidated Financial Statements [“IFRS 10”] was issued by the IASB in May 2011. IFRS 10 is a new standard which identifies the concept of control as the determining factor in assessing whether an entity should be included in the consolidated financial statements of the parent company. Control is comprised of three elements: power over an investee; exposure to variable returns from an investee; and the ability to use power to affect the reporting entity’s returns. At January 1, 2013, the Company adopted this pronouncement and there was no material impact on the Company’s unaudited condensed interim consolidated financial statements. [ii] IFRS 11 – Joint Arrangements [“IFRS 11”] was issued by the IASB in May 2011. IFRS 11 is a new standard which focuses on classifying joint arrangements by their rights and obligations rather than their legal form. Entities are classified into two groups: parties having rights to the assets and obligations for the liabilities of an arrangement, and rights to the net assets of an arrangement. Entities in the former

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case account for assets, liabilities, revenues and expenses in accordance with the arrangement, whereas entities in the latter case account for the arrangement using the equity method. At January 1, 2013, the Company adopted this pronouncement and there was no material impact on the Company’s unaudited condensed interim consolidated financial statements. [iii] IFRS 12 – Disclosure of Interests in Other Entities [“IFRS 12”] was issued by the IASB in May 2011. IFRS 12 is a new standard which provides disclosure requirements for entities reporting interests in other entities, including joint arrangements, special purpose vehicles, and off balance sheet vehicles. At January 1, 2013, the Company adopted this pronouncement and there was no material impact on the Company’s unaudited condensed interim consolidated financial statements. [iv] IFRS 13 – Fair Value Measurement is effective for the Company beginning on January 1, 2013, provides the guidance on the measurement of fair value and related disclosures through a fair value hierarchy. At January 1, 2013, the Company adopted this pronouncement and there was no material impact on the Company’s unaudited condensed interim consolidated financial statements given the existing asset and liability mix of the Company to which fair value accounting applies. [v] IAS 1 – Presentation of Financial Statements was amended by the IASB in June 2011 in order to align the presentation of items in other comprehensive income with US GAAP standards. Items in other comprehensive income will be required to be presented in two categories: items that will be reclassified into profit or loss and those that will not be reclassified. The flexibility to present a statement of comprehensive income as one statement or two separate statements of profit and loss and other comprehensive income remains unchanged. At January 1, 2013, the Company adopted this pronouncement and there was no material impact on the Company’s unaudited condensed interim consolidated financial statements. [vi] IAS 27 - Separate Financial Statements ["IAS 27"] was effective for annual periods beginning on or after January 1, 2013, as a result of the issue of the new consolidation suite of standards, IAS 27 has been reissued, as the consolidation guidance will now be included in IFRS 10. IAS 27 will now only prescribe the accounting and disclosure requirements for investments in subsidiaries, joint ventures and associates when an entity prepares separate financial statements. At January 1, 2013, the Company adopted this pronouncement and there was no material impact on the Company’s unaudited condensed interim consolidated financial statements. [vii] IAS 28 - Investments in Associates and Joint Ventures [“IAS 28”] was issued by the IASB in May 2011 and supersedes IAS 28 - Investments in Associates and prescribes the accounting for investments in associates and sets out the requirements for the application of the equity method when accounting for investments in associates and joint ventures. IAS 28 defines 'significant influence' and provides guidance on how the equity method of accounting is to be applied [including exemptions from applying the equity method in some cases]. It also prescribes how investments in associates and joint ventures should be tested for impairment. At January 1, 2013, the Company adopted this standard and there was no material impact on the Company’s unaudited condensed interim consolidated financial statements. [viii] In October 2011, the IASB issued IFRIC 20 - Stripping Costs in the Production Phase of a Surface Mine. This interpretation requires the capitalization and depreciation of stripping costs in the production phase if an entity can demonstrate that it is probable future economic benefits will be realized, the cost can be reliably measured and the entity can identify the component of the ore body for which access has been improved. Retrospective application of this interpretation is effective for annual periods beginning on or after January 1, 2013. At January 1, 2013, the Company adopted this interpretation and there was no material impact on the Company’s unaudited condensed interim consolidated financial statements. [ix] IFRS 7 - Financial Instruments: Disclosures [“IFRS 7”] was amended by the IASB in December 2011 to amend the disclosure requirements in IFRS 7 to require information about all recognised financial

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instruments that are set off in accordance with paragraph 42 of IAS 32 - Financial Instruments: Presentation ["IAS 32"] The amendments also require disclosure of information about recognised financial instruments subject to enforceable master netting arrangements and similar agreements even if they are not set off under IAS 32. The IASB believes that these disclosures will allow financial statement users to evaluate the effect or potential effect of netting arrangements, including rights of set-off associated with an entity's recognised financial assets and recognised financial liabilities, on the entity's financial position. At January 1, 2013, the Company adopted the amendments to IFRS 7 and there was no material impact on the Company’s unaudited condensed interim consolidated financial statements. [x] IAS 19 - Employee Benefits [“IAS 19”] was amended by the IASB in June 2011 to include revised requirements for pensions and other post-retirement benefits, termination benefits and other changes. The key amendments include:

Requiring the recognition of changes in the net defined benefit liability [asset] including immediate recognition of defined benefit cost, disaggregation of defined benefit cost into components, recognition of remeasurements in other comprehensive income, plan amendments, curtailments and settlements [eliminating the 'corridor approach' permitted by the existing IAS 19];

Introducing enhanced disclosures about defined benefit plans; Modifying accounting for termination benefits, including distinguishing benefits provided in

exchange for service and benefits provided in exchange for the termination of employment and affect the recognition and measurement of termination benefits;

Clarifying various miscellaneous issues, including the classification of employee benefits, current estimates of mortality rates, tax and administration costs and risk-sharing and conditional indexation features; and

Incorporating other matters submitted to the IFRIC. At January 1, 2013, the Company adopted the amendments to IAS 19 and there was no material impact on the Company’s unaudited condensed interim consolidated financial statements. [xi] The Company has a deferred share unit plan [the “DSU Plan”] that provides recipients under the DSU Plan, other than Directors, the option of receiving payment for services in the form of share units rather than ordinary shares or cash. At the annual and special meeting of shareholders on June 11, 2013, Rio Novo’s directors elected to reduce their director fees by 75%, with the remaining 25% payable only in DSUs. This decision was retroactive to March 2013. Officers may also receive compensation under the DSU Plan as determined by the Board of Directors. Share units entitle the individual to elect to receive a cash payment equal to the market price [as defined in the DSU Plan] of an ordinary share [less applicable withholding taxes] on the termination date [as defined in the DSU Plan] or, at the sole discretion of the Board of Directors, one [1] fully paid and non-assessable ordinary share, on the termination date. For units issued under this plan, the Company records an expense and a liability equal to the market value of the shares issued. The accumulated liability is adjusted for market fluctuations on a quarterly basis. Recent Accounting Pronouncements  

[i] IFRS 9 – Financial Instruments [“IFRS 9”] was issued by the IASB in October 2010 and will replace IAS 39 - Financial Instruments: Recognition and Measurement [“IAS 39”]. IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost or fair value, replacing the multiple rules in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments in the context of its business model and the contractual cash flow characteristics of the financial assets. Most of the requirements in IAS 39 for classification and measurement of financial liabilities were carried forward unchanged to IFRS 9. The new standard also requires a single impairment method to be used, replacing the multiple impairment methods in IAS 39. IFRS 9 is effective for annual periods beginning on

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or after January 1, 2015. Earlier adoption is permitted. The Company is currently assessing the impact of this pronouncement. [ii] IAS 32 - Financial Instruments, Presentation ["IAS 32"] was effectively for annual periods beginning on or after January 1, 2014. IAS 32 was amended to clarify that the right of offset must be available on the current date and cannot be contingent on a future date. Earlier adoption is permitted. The Company is currently assessing the impact of this pronouncement. Outlook The Company wholly-owns three gold properties [the Almas, Matupá [former Guarantã] and Tolda Fria Gold Projects]. The Almas Gold Project is in the pre-construction stage and the other two are in the advanced exploration stage. For the remainder of 2013 and fiscal 2014, the Company will focus on procuring financing to build the Almas mine/plant as well as to build a small scale gold production plant in Colombia. To preserve cash resources, the Almas and Matupá projects have been put on care and maintenance. The future exploration activities in Brazil are entirely dependent on arranging debt or equity financing. The Tolda Fria mine has been leased for a small scale mining [8 tons/day], aiming chiefly to preserve its 30-year mining license and to better understand the deposit by operating a small scale/pilot plant at zero cost to the Company. Capital Management The Company manages its capital with the following objectives:

to ensure sufficient financial flexibility to achieve the ongoing business objectives including funding of future growth opportunities, and pursuit of accretive acquisitions; and

to maximize shareholder return. The Company is not subject to any capital requirements imposed by a lending institution at the present time. The Company monitors its capital structure and makes adjustments according to market conditions in an effort to meet its objectives given the current outlook of the business and industry in general. The Company may manage its capital structure by issuing new shares, repurchasing outstanding shares, adjusting capital spending, or disposing of assets. The capital structure is reviewed by management and the Board of Directors on an ongoing basis. The Company considers its capital to be equity comprising contributed capital, equity settled share-based payments reserve and deficit which at September 30, 2013, totaled $75,608,366 [December 31, 2012 - $78,625,348]. The Company manages capital through its financial and operational forecasting processes. The Company reviews its working capital and forecasts its future cash flows based on operating expenditures, and other investing and financing activities. The forecast is updated based on activities related to its mineral properties. Selected information is provided to the Board of Directors of the Company. The Company’s capital management objectives, policies and processes have remained unchanged during the three and nine months ended September 30, 2013. Financial Risk Factors The Company is exposed to a variety of financial risks: credit risk, liquidity risk and market risk [including interest rate and foreign exchange rate risks] as explained below. Risk management is carried out by the Company's management team. The Board of Directors also provides regular guidance for overall risk management.

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Credit risk Credit risk is the risk of loss associated with a counterparty’s inability to fulfill its payment obligations. The Company's credit risk is primarily attributable to cash and cash equivalents and accounts receivable included in sundry assets. Cash and cash equivalents are held with select financial institutions in Canada, Brazil and Colombia for which management believes the risk of loss to be low. Financial instruments included in sundry assets consist of sales tax receivable in Canada and deposits with service providers in Brazil and Colombia. Management believes that the credit risk concentration with respect to financial instruments included in amounts receivable is low. Liquidity risk Liquidity risk is the risk that the Company will not have sufficient cash resources to meet its financial obligations as they come due. The Company’s liquidity and operating results may be adversely affected if its access to the capital market is hindered, whether as a result of a downturn in stock market conditions generally or as a result of conditions specific to the Company. As at September 30, 2013, the Company had a cash and cash equivalents balance of $163,555 [December 31, 2012 - $6,136,842] to settle current liabilities of $779,259 [December 31, 2012 - $1,478,121]. All of the Company's financial liabilities have contractual maturities of less than 30 days and are subject to normal trade terms, except for share purchase warrants. The Company expects to fund its corporate costs throughout 2013 with its existing cash and cash equivalents balance, loans from related parties, if available and the sale of certain assets. The Company will require a financing in order to pay overdue debts and cover corporate costs for the next 12 months. There is no assurance that equity funding can be raised upon terms acceptable to the Company or at all. See “Risks Factors” below. Market risk

Interest rate risk

The Company has cash balances and no debt at September 30, 2013. The Company's current policy is to invest excess cash in Government of Canada treasury bills and certificates of deposit at major Canadian and Brazilian chartered banks. The Company periodically monitors the investments it makes and is satisfied with their creditworthiness. As of September 30, 2013, the Company's cash and cash equivalents balance consisted of cash [December 31, 2012 – cash and certificates of deposit]. Foreign exchange risk

The Company's reporting and functional currency is the United States dollar and major purchases are transacted in Canadian dollars, US dollars, Brazilian real and the Colombian peso. The Company funds major exploration expenses in Brazil and Colombia. Accordingly, it maintains a Brazilian real bank account in Brazil and a Colombian peso account in Colombia.

Sensitivity analysis As of September 30, 2013, both the carrying and fair value amounts of the Company's financial instruments are approximately equivalent due to their short-term nature. Based on management's knowledge and experience of the financial markets, the following movements are reasonable over a nine month period:

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[i] Cash and cash equivalents balances are subject to variable interest rates. Sensitivity to a plus or minus one percentage point change in interest rates affects net loss and comprehensive loss by approximately $1,200 with all other variables held constant. [ii] The Company is exposed to foreign currency risk on fluctuations related to cash, amounts receivable included in sundry assets, and accounts payable and other liabilities that are denominated in Canadian dollars, Brazilian real and the Colombian peso. Sensitivity to a plus or minus 5% change in the foreign exchange rate would affect net loss and comprehensive loss by approximately $15,000 with all other variables held constant. The sensitivity analysis shown in the notes above may differ materially from actual results. Risk Factors An investment in the securities of the Company is highly speculative and involves numerous and significant risks. Such investment should be undertaken only by investors whose financial resources are sufficient to enable them to assume these risks and who have no need for immediate liquidity in their investment. Prospective investors should carefully consider the risk factors that have affected, and which in the future are reasonably expected to affect, the Company and its financial position. Please refer to the section entitled "Risk Factors" in the Company's MD&A for the fiscal year ended December 31, 2012, available on SEDAR at www.sedar.com. In addition to the risks outlined in the Company’s December 31, 2012 MD&A, Rio Novo has identified extreme volatility occurring in the financial markets as a significant risk for the Company. As a result of the market turmoil, investors are moving away from assets they perceive as risky to those they perceive as less so. Companies like Rio Novo are considered risk assets and as mentioned above are highly speculative. The volatility in the markets and investor sentiment may make it difficult for Rio Novo to access the capital markets to raise the capital it will need to fund its current level of expenditures. Subsequent Event On October 4, 2013, the Company issued an aggregate of 509,227 DSU's to directors of the Company in lieu of cash at a deemed price of $0.035 per ordinary share. The DSU's vest on the date each director resigns from the Company. Additional Information Additional information relating to the Company, including its Annual Information Form, is available on SEDAR at www.sedar.com.