Cylinder block

[splitfire]

Please look at these pics:

http://i038.radikal.ru/1109/9c/7c0afa918077t.jpg (http://radikal.ru/F/i038.radikal.ru/1109/9c/7c0afa918077.jpg.html) http://i082.radikal.ru/1109/88/dd48478274b6t.jpg (http://radikal.ru/F/i082.radikal.ru/1109/88/dd48478274b6.jpg.html) http://s39.radikal.ru/i085/1109/d1/24b77fe52da6t.jpg (http://radikal.ru/F/s39.radikal.ru/i085/1109/d1/24b77fe52da6.jpg.html)

This is rust, am I right? Can anyone explain me how it appeared in aluminium cylinder block?
Just wondering how to fix it. Should I bore the block or this rust will be eliminated during the engine break-in?

P.S. I'll greatly appreciate the detailed answer

[4x4le]

because you have steel sleeves?

[rcdad123]

4x4le is right. just get it honed. and if you are going to store the block, coat the cylinders with engine oil and put it in a big thrash bag and seal it so moisture does not get in it.