MINE CLOSURE – Rio Narcea to end El Valle/Carles operations

SPAIN - High mining costs due to poor ground conditions, low grades and high dilution have led Toronto's RIO NARCEA GOLD MINES to announce the closure of both its El Valle and Carles gold mines in the Asturias province. Production will cease by the end of 2006.

The El Valle open pit mine began production in 1998, and the satellite Carles pit was opened in 2002. Mining moved underground at Carles in 2003 and at El Valle in 2004. The current high mining costs are an indirect result of poor ground conditions in the El Valle mine. While the Carles deposit has better ground and slightly higher grades than El Valle, it is too small to be more than a marginal project on its own, said the company.

Rio Narcea anticipates that total closure costs, including site rehabilitation and severance pay for employees, will be less than $7 million. Exploration will continue at Area 107, located near the El Valle mine. Other information is available at www.RioNarcea.com.